Whirlpool Canada Co. v. Chavila Holdings Limited, 2015 ONSC 2080

CITATION: Whirlpool Canada Co..v. Chavila Holdings Limited, 2015 ONSC 2080

COURT FILE NO.: CV -14-45942-OT

MOTION HEARD: 20150326

REASONS RELEASED: 20150409

SUPERIOR COURT OF JUSTICE – ONTARIO

In the Matter of an APPLICATION UNDER

Rules 14.05(3)(d) and 38 of the Rules of Civil Procedure.

BETWEEN:

WHIRLPOOL CANADA CO.

Applicant

• and-

CHAVILA HOLDINGS LIMITED, OUTRIGGER INVESTMENTS LIMITED AND 863880 ONTARIO LIMITED

Respondents

BEFORE: MASTER D. E. SHORT

COUNSEL: Rosalind H. Cooper Fax: 416.364.7813

-for the Moving Proposed Intervenors,

Canadian Pacific Railway Company & Oxford Properties Group Inc.

Jennifer Danamy Fax: 905.528.5833

-for the Applicant

H. Richard Bennett & Fax: 416.364.1697

Joseph Figliomeni

-for the Respondents

RELEASED: April 9, 2015

Reasons for Decision

"the person who for his own purposes brings on his lands and collects and keeps there anything likely to do mischief if it escapes, must keep it in at his peril, and, if he does not do so, is prima facie answerable for all the damage which is the natural consequence of its escape".

I. Overview

[1] On 11 December 1860, shortly after being filled for the first time, Rylands' reservoir burst and flooded a neighbouring mine, run by Fletcher, causing £937 worth of damage. In the decision in Rylands v Fletcher, (found at [1868] UKHL 1) the House of Lords established what was then a new area of English tort law. Over the past almost 150 years generations of law students have learned early in their careers the principle set out above, known simply as “The Rule in Rylands v. Fletcher.”

[2] Up until the 1990’s in Toronto, Inglis appliances were manufactured in a factory adjacent to lands in south west end of the city, owned by the CPR, directly or indirectly.

[3] To oversimplify the chain of title in this case, I note 863880 Ontario Limited (“863”) ultimately acquired the Inglis lands and other nearby properties. The Inglis lands were recognized as being contaminated, to some degree, at the time of purchase.

[4] As a consequence, the purchase transaction for the Inglis lands saw a significant price reduction in the price paid by the purchaser in exchange for that initial buyer and a sister company, indemnifying the vendor for any potential future liability flowing from what one could describe as anything“likely to do mischief if it escapes.” (the “Sale Indemnity”)

[5] The initial corporate buyer, its sister company and the plaintiff 863 are all controlled by the same individual.

[6] In 2005 863 sued the Canadian Pacific Railway Company (“CPR”) and Oxford Properties Group Inc. (“Oxford”), (collectively the “CPR Entities” or simply “CPR”) alleging that pollutants had escaped from the CPR lands and contaminated the property of 863 (the “Main Action”).The amount now sought by 863 in the Main Action is 55 million dollars. However, it was a result of Fletcher’s £937 claim the relevant legal principle was established.

[7] In response to the 863 action the two neighbouring CPR Entities commenced separate proceedings against Inglis, (then known as “Whirlpool Canada”) asserting that Inglis was responsible for all or part of the contamination upon which the plaintiff’s claims were based.

[8] In response to being sued for the alleged contamination Whirlpool triggered the Sale Indemnity.

[9] The meaning of the Sale Indemnity and in particular the determination on the rights of the parties with respect to the choice and instruction of counsel on behalf of Whirlpool gave rise to an Application to a judge of this court to construe the contract under Rule 14.05(3)(d) of the Rules of Civil Procedure.

[10] In December, 1997, , 921424 Ontario Limited (“921”) as purchaser, and 941600 Ontario Limited (“941”), as an additional covenantor, agreed to purchase from Inglis certain lands in the city of Toronto (the “Inglis Lands”).

[11] Chavila is the successor company to 921, and Outrigger is the successor company to 941. Chavila, Outrigger, and 863 are affiliated companies and the named Respondents on the Whirlpool Application.

[12] Specifically in the Application witthin which this motion is brought, Whirlpool is seeking a declaration regarding the obligation of Outrigger and Chavila to indemnify Whirlpool and to provide an independent defence which protects Whirlpool’s interests. Whirlpool asks that Outrigger and Chavila permit and pay for Whirlpool to retain and instruct counsel chosen by Whirlpool, or that Whirlpool be entitled to instruct independent counsel to represent Whirlpool with such independent counsel not reporting to or receiving instructions from any party related to Outrigger and Chavila. The CPR Entities seek to intervene in that Application in support of Whirlpool’s position.

[13] Can riders on the Clapham Omnibus intervene in a dispute between two other passengers or should they be regarded as officious bystanders and unwelcome intermeddlers?

II. Availability of Applications

[14] Rule 14.05 ( with my emphasis added) provides in part :

(3) A proceeding may be brought by application where these rules authorize the commencement of a proceeding by application or where the relief claimed is,…

(d) the determination of rights that depend on the interpretation of a deed, will, contract or other instrument, or on the interpretation of a statute, order in council, regulation or municipal by-law or resolution;

(e) the declaration of an interest in or charge on land, including the nature and extent of the interest or charge or the boundaries of the land, or the settling of the priority of interests or charges;

(g.1) for a remedy under the Canadian Charter of Rights and Freedoms; or

(h) in respect of any matter where it is unlikely that there will be any material facts in dispute.

[15] There was no assertion by CPR that they had any right under the contract that is sought to be interpreted on the present Application.

[16] Conceivably of relevance to the motion before me are the provisions of the adjacent subrule, dealing with the title of a proceeding:

14.06 (1) Every originating process shall contain a title of the proceeding setting out the names of all the parties and the capacity in which they are made parties, if other than their personal capacity.

(3) In an application, the title of the proceeding shall name the party commencing the application as the applicant and the opposite party, if any, as the respondent and the notice of application shall state the statutory provision or rule, if any, under which the application is made. [my emphasis]

[17] When I asked the moving counsel, if her clients were joined into the Application how they ought to be described, the response was neither as Applicants nor Respondents but rather as “Intervening Parties.” On its face, Rule 14.06 does not seem to contemplate that option.

[18] Obviously the proper identification only becomes relevant (if at all) if the intervention is permitted. I therefore turn to an overview of the intervention process.

III. The Present Motion to Intervene

[19] Although not parties to the agreements containing the Sale Indemnity, the defendants in the original action, Canadian Pacific Railway Company and Oxford Properties Group Inc., now seek to intervene in the pending application under Rule 13.

[20] Rule 13.01 (with my annotations added) provides as follows:

13.01 (1) A person who is not a party to a proceeding may move for leave to intervene as an added party if the person claims,

(a) an interest in the subject matter of the proceeding;

(b) that the person may be adversely affected by a judgment in the proceeding; or

(c) that there exists between the person and one or more of the parties to the proceeding a question of law or fact in common with one or more of the questions in issue in the proceeding.

(2) On the motion, the court shall consider whether the intervention will unduly delay or prejudice the determination of the rights of the parties to the proceeding and the court may add the person as a party to the proceeding and may make such order as is just.

[21] I interpret subsection (2) as providing me with a broad jurisdiction permitting me to make any order “as is just”.

[22] The original Notice of Motion simply indicated that the motion was being brought under Rule 13. I therefore was concerned on the hearing of the present motion as to which part of the Rule 13 the moving parties were resorting.

[23] In particular, Rule 13.02 deals with “Leave To Intervene as Friend of the Court” and provides:

13.02 Any person may, with leave of a judge or at the invitation of the presiding judge or master, and without becoming a party to the proceeding, intervene as a friend of the court for the purpose of rendering assistance to the court by way of argument.

[24] I believe clear that a master would not have jurisdiction in this case, to add an amicus curiae. However, I note that an entity intervening under this part of the rule does not become involved as a “party”. Counsel for the CPR was clear in her submissions that this was neither the nature of intervention, nor the degree of involvement, which was being sought by her clients.

[25] While not directly applicable, but of some assistance in evaluating some of the jurisprudence placed before me, I also observe that Rule 13.03 dealing with leave to intervene in the Divisional Court or the Court Of Appeal provides for either type of intervention on appeals:

(1) Leave to intervene in the Divisional Court as an added party or as a friend of the court may be granted by a panel of the court, the Chief Justice or Associate Chief Justice of the Superior Court of Justice or a judge designated by either of them.

(2) Leave to intervene as an added party or as a friend of the court in the Court of Appeal may be granted by a panel of the court, the Chief Justice of Ontario or the Associate Chief Justice of Ontario.

IV. Participants and Dealings

[26] In the Application, the Applicant Whirlpool seeks a determination of its rights pursuant to the following contracts:

“(a) An agreement of purchase and sale by which the respondent Outrigger Investments Limited (“Outrigger”) was the purchaser, and Inglis Limited (“Inglis”) (the predecessor of Whirlpool) was the vendor, and the respondent Chavila Holdings Limited (“Chavila”) was an additional covenantor (the “Purchase Agreement”); and

(b) An assumption of liability and indemnity agreement among Whirlpool Corporation, Inglis, Outrigger, and Chavila (the “Indemnity Agreement”).”

[27] Neither CPR nor Oxford is party to the Purchase Agreement or the Indemnity Agreement. Nonetheless, CPR and Oxford seek leave of this Court to intervene in the Application.

V. Indemnity Terms

[28] In March 1998, and pursuant to the Purchase Agreement, 921, 941, Inglis and Whirlpool Corporation entered into the Assumption of Liability and Indemnity Agreement (i.e. the “Indemnity Agreement” or “Sale Indemnity”).

[29] While the interpretation of the contractual terms is for the Judge hearing the Application, the nature of the contested obligations is of some relevance in determining the value of the proposed intervention.

[30] Section 4 of the Indemnity Agreement states in part:

“Inglis and Whirlpool or either of them shall deliver written notice to the Purchaser [921424] and 941600 of any Claims for which indemnification is sought pursuant to this Agreement within 14 days of actual notice by Inglis or Whirlpool or either of them of any such Claims….”

[31] The operative provisions of Section 5 of the Indemnity Agreement, with my emphasis added, state:

“921424 and 941600, at their own expense, shall be obligated to assume the carriage of and the diligent prosecution or defence of any legal or administrative proceeding, mediation or arbitration in connection with any and all Claims against one or both of Inglis and Whirlpool, to pay all costs and expenses of Inglis and Whirlpool of any nature whatsoever in relation to each such proceeding as and when the same are incurred and to reimburse Inglis and Whirlpool for all such costs and expenses forthwith upon written demand for reimbursement. 921424 and 941600 or either of them shall keep Inglis and Whirlpool informed from time to time on the status of each such legal or administrative proceeding, mediation or arbitration as Inglis and Whirlpool might reasonably require.”

[32] That there is an obligation to indemnify is not challenged by the respondents. The issues on the Application are thus directed to determining the extent of the contractually established ability of the indemnitors to direct and control the defence of the claims arising out of the Main Action.

VI. The Present Application

[33] On January 28, 2004 863 commenced an action for damages and certain injunctive relief in respect of environmental contamination on lands purchased by 863 from CPR and Oxford(the “Main Action”).. The lands purchased by 863 adjoin the Inglis Lands and were previously leased to Inglis by CPR and Oxford.

[34] In the Main Action, 863 commenced a claim in 2004 against CPR and Oxford seeking to recover $25,000,000 in damages relating to contamination found on a property purchased by 863 from CPR and Oxford in 1990.

[35] On June 30, 2010, after production of documents and examinations for discovery had been completed in the Main Action, 863 brought a motion to amend its claim. The amendments sought to substantially revise the original claim, increased the damages from $25,000,000 to $55,000,000 and increased a claim that was eight pages in length to 50 pages in length. 863880 was successful in its motion and obtained leave of the Court to amend its claim.

[36] The decision of Master Hawkins, granting 863880 leave to amend its claim, was issued on March 13, 2012. Initially, CPR and Oxford filed an appeal in respect of the decision of Master Hawkins, but the appeal was ultimately withdrawn on October 5, 2012.

[37] Whirlpool notified Outrigger and Chavila of its indemnity claim by way of letter dated June 27, 2013. By way of letter dated September 12, 2013, counsel for 863 advised Whirlpool that they were representing Outrigger and Chavila and would be dealing with the indemnity claim. On October 31, 2013, Whirlpool received a letter from new counsel indicating that they had been retained to act in the Whirlpool Actions, but that 863 and its counsel had determined that instructions with respect to the conduct of Whirlpool’s defences would come from 863.

12. Whirlpool could not be added as a third party to the Main Action because the original claim had been administratively dismissed by the Registrar and 863880, which also sought to set aside the dismissal as part of its motion to amend the claim, had not yet filed its amended claim with the Court. Therefore, there was no claim in the court system in respect of which CPR and Oxford could issue a third party claim. As a result, CPR and Oxford both commenced the Whirlpool Actions.

Application Record of Whirlpool, pages 130-147

13. It is the position of CPR and Oxford that the Whirlpool Actions ought to be consolidated with the Main Action and there is a pending motion before the Court in this respect. The hearing of that motion has been delayed pending the resolution of Whirlpool’s within application.

[38] Eventually on October 15, 2012, CPR and Oxford each issued a Statement of Claim naming Whirlpool as defendant (respectively, the “Whirlpool Actions”). Both of the Whirlpool Actions are essentially seeking reimbursement against Whirlpool in respect of the environmental contamination claims made by 863.

[39] On March 3, 2014, Whirlpool commenced the within Application (the “Whirlpool Application”) for a determination of its rights pursuant to the Purchase Agreement and the Indemnity Agreement. In particular, Whirlpool seeks a determination and declaration regarding the terms upon which Outrigger and Chavila will be required to assume carriage of the defence of the Whirlpool Actions.

[40] It is with respect to that Application that CPR and Oxford, while already parties in the Main action bring this motion to intervene as a party on the preliminary Application.

VII. Relief Sought on Motion

[41] Thus the moving CPR parties seek leave of the Court to intervene in the Application pursuant to Rule 13.01 of the Rules of Civil Procedure.

[42] In the Main Action, 863 seeks to recover in damages from the CPR Entities in relation to contamination found at a property which 863880 purchased from them in 1990.

[43] The Whirlpool Actions are, effectively, third party claims in which each of CPR and Oxford have sought full contribution, indemnity and relief over from Whirlpool in respect of claims asserted against them in the Main Action.

[44] Apparently the Whirlpool Actions were commenced as separate actions, rather than third party claims, because the Main Action had been administratively dismissed for delay and had not yet been reinstated at the time the Whirlpool Actions were commenced.

[45] Whirlpool has taken the position that this proposed arrangement with respect to legal representation creates a conflict since 863 is the plaintiff in the Main Action and would be controlling the defence of Whirlpool who is, effectively, a third party defendant to the Main Action commenced by 863. As a result of the inability to resolve the representation issue with the respondents, Whirlpool brought the Application in March of 2014 to obtain directions from the Court.

[46] Their counsel submits that CPR’s and Oxford’s interests in the Main Action are directly affected by the outcome of the within Application in that, if Whirlpool is unsuccessful in this Application, the principal of the plaintiff in the Main Action will be instructing counsel acting on behalf of the third party.

[47] CPR submits that if granted leave to intervene, they will not cause any undue delay or prejudice to the determination of the rights of the parties to the Application. CPR and Oxford will be represented by one counsel and submissions “will be focused on matters that they are uniquely placed to advance, as defendants in the Main Action for the last eleven years” and they further assert that:

“In that regard, CPR and Oxford are in a position to provide information to the Court that is different from and unavailable to Whirlpool and to advance arguments that Whirlpool may be constrained from advancing.”

[48] Counsel for CPR notes that the Applicant Whirlpool supports their motion to intervene and propounds the position that the circumstances of this Application overwhelmingly favour granting the CPR Entities intervenor status.

VIII. Issues on Motion

[49] The only issue in this motion is whether CPR and Oxford are entitled to intervene in this application pursuant to Rule 13.01 of the Rules of Civil Procedure. The Applicant Whirlpool supports the CPR motion.

[50] The 863 Respondents submit that leave to intervene should be denied on the following grounds:

(a) The subject matter of the Application is a determination of the rights and obligations of the parties to the Purchase Agreement and the Indemnity Agreement. Those parties are Whirlpool, Outrigger, and Chavila. The Proposed Intervenors are not parties to either the Purchase Agreement or the Indemnity Agreement. The Proposed Intervenors do not have an interest in the subject matter of the Application;

(b) The Proposed Intervenors will not be adversely affected by a judgment in the Application; and

(c) The Proposed Intervenors, not having been a party to the Purchase Agreement or the Indemnity Agreement, do not have a question of law or fact in common with the issues to be decided by the Judge hearing the Application.

[51] The Respondents further submit that intervention by the Proposed Intervenors is likely to unduly delay or prejudice the determination of the rights of the parties to the Application

IX. Existing Caselaw

[52] It would appear there is a dearth of Ontario cases dealing with an intervention by a third party on an Application that has no Charter of Rights component. While it is theoretically possible to intervene in a purely private dispute, the cases indicated that the moving party faces a serious challenge. In determining the elements of that challenge I turn to a consideration of the available Ontario decisions.

[53] In 2000, EGALE Canada Inc. moved before the Divisional Court for intervener status in a proceeding, which concerned the issuance of marriage licences to same sex couples. The applicants supported the motion to intervene . The Attorney General of Canada opposed the motion. The reasons of Justice Lang are found at Halpern v. Toronto (City) Clerk, [2000] O.J. NO. 4514; 51 O.R. (3d) 742; 139 O.A.C. 300; 3 C.P.C. (5th) 299. [with my emphasis added in the following extracts ]

[54] In those reasons Justice Lang observed that in determining intervention, the matters to be considered are the nature of the case, the issues which arise and the likelihood of the moving party being able to make a useful contribution to the proceeding without causing injustice to the immediate parties through delay or otherwise.

[55] Ultimately the appellate court granted EGALE intervenor status but with a number of strict terms limiting the extent of such participation.

[56] In coming to her decision Justice Lang noted:

Criteria of the Rule

12 A distinction must be made between rules 13.01 and 13.02. Under rule 13.01, an intervener as added party has the rights of a party to participate fully in the litigation. Under rule 13.02, the intervener is a "friend of the court" who renders "assistance to the court by way of argument."

13 As EGALE is seeking added party status under rule 13.01(1), I begin with the criteria set out in that rule, which permit a party to move for leave to intervene if the party claims any one of the following:

(a) an interest in the subject matter of the proceeding;

(b) that the person may be adversely affected by a judgment in the proceeding; or

(c) that there exists between the person and one or more of the parties to the proceeding a question of law or fact in common with one or more of the questions in issue in the proceeding.

14 If the moving party establishes that it meets any of these criteria, the court must then consider, under rule 13.01(2), "whether the intervention will unduly delay or prejudice the determination of the rights of the parties". If the court is satisfied that any such delay or prejudice will not be undue, it may then exercise its discretion to add the party "and may make such order as is just". Such an order will usually specify conditions of added party status.

[57] Justice Lang’s decision considers cases addressing “party” intervention but did not require any focus on the definition of the ”proceeding” in which involvement was sought:

15 The rule 13.01(1)(a) criteria of an "interest in the subject matter of the proceeding" has been interpreted to include a public interest in the proceeding, to the extent that the party's interest is over and above that of the general public. The party's interest must also be a genuine and direct interest in the outcome of the proceeding: Gould Outdoor Advertising v. London (City) (1997), 32 O.R. (3d) 355 (Gen. Div.); John Doe v. Ontario (Information and Privacy Commissioner) (1991), 87 D.L.R. (4th) 348 at 351 (Ont. Div.Ct); Ethyl Canada Inc. v. Canada (Attorney-General), [1997] O.J. No. 4225 (Gen. Div.).

16 Greater latitude is given to intervener motions in cases involving Charter challenges because such challenges generally involve a greater public interest. However, the proposed intervener in a Charter challenge case is not excused from satisfying the court that it has a direct interest and could make a useful contribution to the proceeding. See Ontario Federation of Anglers & Hunters v. Ontario (1999), 43 O.R. (3d) 760 at 764 (S.C.J.); Ethyl Canada Inc. v. Canada (Attorney-General), supra.

[58] Justice Lang’s view was that when considering the criteria of whether the proposed intervener will make a useful contribution to the proceeding, the court must balance any such contribution against any resulting delay or prejudice to the other parties. She particularly highlighted the observations of Epstein J., (as she then was) in M. v. H. (1994), 20 O.R. (3d) 70 (Gen. Div.) where her Honour helpfully described the balancing of the tension between contribution and delay as follows:

“Regardless of whether the proposed intervention is under rule 13.01 or rule 13.02, the court's focus should be on determining whether the contribution that might be made by the intervenors is sufficient to counterbalance the disruption caused by the increase in the magnitude, timing, complexity and costs of the original action.”

[59] In holding that intervenor status ought to be granted, Justice Lang commented:

27 However, EGALE's interests do extend beyond its involvement as lobbyist or witness. EGALE has developed its institutional legal knowledge and expertise on equality rights for gays and lesbians over many years, at both a national and at an international level. EGALE has conducted extensive legal research on the relevant issues and has canvassed the views of its members in depth. It can give factual context and can present legal argument on the issues. I am satisfied that in addition to its own longstanding, demonstrated interest in and acquisition of knowledge about equal marriage rights, EGALE represents a broad based spectrum of gays and lesbians across Canada. Those members will be directly affected by the outcome of this proceeding in one manner or another. It has also shown appreciation for diverse perspectives of gays and lesbians on equality issues. It is positioned to speak about the denial of marriage rights to its members who will be personally impacted by the results of this proceeding. EGALE has met the "interest in the subject matter" qualification under rule 13.01(1)(a).

[60] Lastly the role of the intervenor was reflected in the learned Judge’s reasons addressing the costs flowing from their involvement:

46 With respect to costs of this motion, I believe all parties have agreed there will be no costs. I also believe that the parties have agreed as a term of the intervention that EGALE will not have costs of the proceeding awarded against it, nor can it seek costs of the proceeding.

[61] It seems to me that this approach reflects the role the court expects an intervenor to play. I am not convinced in the matter before me that if intervenor status is granted, such a costs restriction would necessarily be appropriate in this non-Charter case.

[62] Ontario courts have interpreted Rule 13 more narrowly in conventional, non-constitutional litigation. My reading of most other cases indicates that our courts have indicated that intervention of third parties into essentially private disputes should be carefully considered as any intervention can add to the costs and complexity of litigation, regardless of an agreement to limit submissions.

[63] For example, Chief Justice McMurtry addressed an application to intervene on an appeal in Authorson (Litigation guardian of) v. Canada (AttorneyGeneral), [2001] O.J. No. 2768; 147 O.A.C. 355; 9 C.P.C. (5th) 218.

[64] That decision involved an Application by the National Council of Veteran Associations in Canada (NCVA) for intervenor status in the Attorney General's appeal from a summary judgment obtained by a class of disabled veterans who claimed that the Crown owed a fiduciary duty to pay them interest on surplus statutory benefits retained by Veterans Affairs Canada. NCVA claimed that because of its long-term involvement with veterans' issues, it could put into perspective the history and nature of the relationship between veterans and the government.

[65] The Chief Justice dismissed the application holding that there was insufficient information indicating that NCVA had any special contribution to make in relation to the interpretation of the relevant legislation and the scope of any fiduciary duty on the federal government in the circumstances of that appeal.

[66] In his reasons, the then Chief Justice observed:

6. I am guided in the exercise of my discretion on this motion by the reasons of Dubin C.J.O. in Peel (Regional Municipality) v. Great Atlantic & Pacific Co. of Canada Ltd (1990), 74 O.R. (2d) 164 (C.A.) ("Peel") who stated the test to be applied on motions such as this, as follows, at p. 167:

Although much has been written as to the proper matters to be considered in determining whether an application for intervention should be granted, in the end, in my opinion, the matters to be considered are the nature of the case, the issues which arise and the likelihood of the applicant being able to make a useful contribution to the resolution of the appeal without causing injustice to the immediate parties.

7. In Peel, Chief Justice Dubin noted that in constitutional cases, including cases decided under the Canadian Charter of Rights and Freedoms, there has been a relaxation of the rules heretofore governing the disposition of motions for leave to intervene. This approach ensures that the court will have the benefit of various perspectives of the historical and sociological context, as well as policy and other considerations that bear on the validity of legislation.

8. In contrast, Ontario courts have interpreted Rule 13 more narrowly in conventional, non-constitutional litigation. (See for example, Peixeiro v. Haberman (1994), 20 O.R. (3d) 666 at 670 (Gen. Div.)). Intervention of third parties into essentially private disputes should be carefully considered as any intervention can add to the costs and complexity of litigation, regardless of an agreement to restrict submissions.

9. Many appeals will fall somewhere in between the constitutional and strictly private litigation continuum, depending on the nature of the case and the issues to be adjudicated. In my view, the burden on the moving party should be a heavier one in cases that are closer to the "private dispute" end of the spectrum.

[67] McMurtry, C.J.O. ultimately, having considered the submissions on behalf of the proposed intervenor, held that he was satisfied that the public interest and that of the veterans would be fully and adequately represented by counsel for the Attorney General of Canada. In particular he observed:

18. While I recognize the valuable contributions that the NCVA has made and, continues to make in the political and legislative process, in speaking for the interests of veterans and their dependants, I am not persuaded that the NCVA has any special contribution to make in relation to the interpretation of the legislation and the scope of any fiduciary duty on the federal government in the circumstances of this action. [my emphasis]

[68] Also in 2001, in a motion heard in Thunder Bay, Justice McCartney dealt with a motion where an intervenor sought to be added as party in Canada (Attorney General) v. Anishnabe of Wauzhushk Onigum Band,9 C.P.C. (5th) 374; 2001 CarswellOnt2372. Again in this case his honour held that intervention should not be permitted where the proposed intervenor would be unable to make any useful contribution to the resolution of the issues in the proceeding and where intervention is likely to extend or complicate the application.

[69] That decision involved a motion by the Anishnabe Nation to be added as a party respondent or as an intervenor in an application by the Attorney General of Canada. The Attorney General's application was to determine which of various respondent Indian bands were entitled to the benefits of a reserve set up pursuant to an 1873 treaty. The treaty described one of the parties as the Salteaux Tribe of the Ojibbeway Indians. The Anishnabe Nation claimed to be the successor of the Salteaux Tribe, and as such sought to be added as a party. Four of the respondent bands objected to the motion. The Attorney General argued that the Anishnabe Nation was not a necessary party in that it did not raise the question of a beneficial interest and did not have such an interest in any event.

[70] His Honour dismissed the motion to intervene holding that the Anishnabe Nation had no beneficial interest in the reserve. In particular he held:

19. Here, with all the parties involved in the original Treaty as named Respondents, and the major issue being confined to a determination of who among them have rights in the reserve in question, and it having been determined that the Anishnaabe in Treaty 3 is not an entity that can have any beneficial interest in the reserve, then there is little likelihood that it can make a useful contribution to the resolution of the issues, and would only extend and complicate the proceedings unnecessarily.

[71] Some four years earlier in 1997, Justice Ground dealt with the interpretation of contents of Rule 13 in his decision in the litigation involving the estate of Harold Ballard in Ontario (Attorney General) v. Stavro, [1997] O.J. No. 6524; 10 C.P.C. (4th) 114.

[72] There Justice Ground, in part, observed:

1. The main motion in respect of which the Intervenors seek leave to intervene must be viewed in the context of the background and progress of this litigation…. Early in the litigation, an order was issued by Justice Lederman …. directing the disclosure to the plaintiffs of certain documents in respect of which the Executors claim solicitor/client privilege on the basis that there was no solicitor/client privilege as between the Executors and the charities who were potential beneficiaries of the estate and represented in this litigation by the Public Guardian and Trustee. The Executors continue to maintain solicitor and client privilege with respect to all those documents for any other purpose.

3 The main motion in respect of which intervention is sought was directed by me to be brought to resolve the question of whether solicitor and client privilege applied to certain documents produced to the plaintiffs as a result of the order of Justice Lederman but not intended to form part of the public record as privilege continued to be claimed by the Executors …

4 The main motion has been characterized as being in the nature of a sealing motion in that the result of the motion will be that certain documents provided to the court during the currency of the litigation will not form part of the public record. In my view, the motion could just as easily been characterized as a motion to determine whether documents produced to the plaintiffs as a result of the order of Justice Lederman and certain other references to those documents should not form part of the public record on the basis of solicitor/client privilege….

5 Both proposed Intervenors are proceeding under rule 13.01 to be added as a party to the main motion on the basis that they have an interest in the subject matter of the motion or that they may be adversely affected by the order made on the motion.

[73] Early in his reasons Justice Ground considers whether a motion within a “proceeding” is the type of “proceeding” to which the rule is addressed:

6. There were a number of submissions made to the effect that a motion was not a "proceeding" within the context of rule 13.01. Although the general interpretation provisions of the Rules of Civil Procedure provide in item 22 of rule 1.03 that "Proceeding" means an action or application, I am satisfied, on the basis of the authorities to which I was referred, that for certain purposes a motion may be deemed to be a proceeding or a proceeding within a proceeding (see M. v. H. (1994), 20 O.R. (3d) 70 (Ont. Gen. Div.); Rauscher v. Roltford Developments Ltd. (1989), 69 O.R. (2d) 749 (Ont. H.C.)). The leading case in which a motion was held not to be a proceeding for purposes of the intervenor rule was Crown Trust Co. v. Rosenberg (1986), 60 O.R. (2d) 87 (Ont. H.C.), which can certainly be distinguished from the case at bar on the facts but, in addition, was a case where Justice Anderson found that the motion before him was not a "motion related to a proceeding". I am satisfied that the main motion in respect of which intervention is sought is a motion related to a proceeding and that, in any event, this court has inherent jurisdiction to deal with motions related to a court record developed during the course of a proceeding before this court.

[74] Here the main proceeding is the Main Action. An Application to construe the meaning of a contract relating to the terms upon which a potential indemnification for a claim in what at present is a separate but related pair of actions seem to be a long way from the proceeding in which the potential intervenors are already named parties. Nevertheless I appreciate Justice Ground’s observation that in an appropriate case the court could use its inherent jurisdiction to permit an intervention.

[75] Is this such a case?

[76] Justice Ground’s evaluation of the appropriateness of permitting an intervention in the Ballard estate litigation continues:

10 Mr. William Ballard and his company, 961937 Ontario Inc. (collectively "Ballard"), appear to submit that they have an interest in the subject matter of the motion or may be adversely affected by the order made on the main motion on the basis that Ballard has instituted another action in this court containing allegations substantially similar to the allegations in the action out of which the main motion arises and that there are questions of fact and issues in common in the two actions. Counsel for Ballard also submits that his clients have a direct and unique interest different from the general public and can make a unique and useful contribution to the determination of the issues on the main motion. With respect to the documents as to which solicitor/client privilege is claimed, I fail to see how Ballard has any interest in the determination of that question. All of these documents are in possession of persons who will be parties to the Ballard action as it is now framed and, presumably, all of these documents will be included in affidavits on production and listed where solicitor/client privilege is claimed. The question of solicitor/client privilege with respect to those documents will therefore be decided in the context of the Ballard action and Ballard can make submissions at that time as to whether solicitor/client privilege ought to apply to such documents in the context of the Ballard action.

12 I also fail to see how Ballard can be adversely affected by whatever order I may make on the main motion with regard to either the documents in respect of which solicitor/client privilege is claimed ….

13 As to common questions of law or fact, there are undoubtedly common questions of law or fact in the Ballard action and in the action out of which the main motion arises, but that is not the issue. Ballard would have to establish that there exists, between Ballard and one of the parties to the action out of which the main motion arises, a question of law or fact in common with respect to the issues arising on the main motion, being the issues of solicitor and client privilege applying to certain documents provided to the court in that action …. Such questions solely relate to the applicability of orders made in the action out of which the main motion arises and to The application of procedures developed during the case management of such action. Ballard, not having been a party to such action and there not being at this time any issue in the Ballard action as to solicitor/client privilege with respect to the documents which are the subject matter of the main motion, … Ballard does not, in my view, have any question of law or fact, as between Ballard and a party to the action out of which the main motion arises, which is in common with any issue in the main motion.

[77] Justice Ground concludes:

14 As to the useful contribution test, if I were satisfied that Ballard qualifies to be an Intervenor under rule 13.01, I would have some difficulty seeing how Ballard can make any useful contribution to the question of solicitor/client privilege applying to the documents in question. This determination is normally made by the judge on examination of the documents and on hearing submissions as to the context in which the documents were produced and delivered….[my emphasis added throughout]

X. Applying the Tests

[78] CPR and Oxford assert that they have a substantial interest in the subject matter of the application and also stand to be adversely affected by the outcome of the application. If Whirlpool is unsuccessful in this application, the principal of the plaintiff in the Main Action will, effectively, be instructing counsel acting on behalf of Whirlpool, the third party. In particular they assert:

The representation of Whirlpool by counsel that is selected and instructed by 863, the plaintiff in the Main Action, will undoubtedly affect the conduct of the litigation including limiting the defences that may be brought forward by Whirlpool to the Main Action.

[79] Why does that matter to CPR? They will have to defend and assert their arguments regardless of who is instructing counsel. I am not satisfied that the rule was intended to work in this way.

[80] It is also argued that the submissions of CPR and Oxford will be focused on matters that “they are uniquely placed to bring to the attention of the Court”. It is submitted that as defendants in the Main Action, “CPR and Oxford are in a position to provide relevant information to the Court that is different from and unavailable to Whirlpool”.

[81] In particular it is argued:

“Whirlpool is not in a position to provide such information because it is not aware, for example, of the documents produced in the Main Action. Further, Whirlpool may be constrained by the terms of its indemnity and concerned about jeopardizing that indemnity. CPR and Oxford have no such constraints and are at liberty to advance all arguments and make all appropriate submissions regarding the consequences of Whirlpool not obtaining the relief sough in the within application.

Having been involved in the Main Action, CPR and Oxford are uniquely situated to provide evidence to the Court that might not otherwise be available in its determination of the within application. This evidence demonstrates the concerns associated with having the principal of the plaintiff in the Main Action provide instruction and direction to counsel acting on behalf of the third party, Whirlpool.”

[82] While it may be to CPR’s advantage to have additional evidence before the Judge hearing the ultimate application , I fail to see how that justifies an intervention in what is largely an issue of the interpretation of a contract to which they are not a party.

[83] A further argument to support an intervention on the indemnity interpretation motion is based on potentially differing views on relevance, The CPR factum asserts:

“25. If Whirlpool’s legal counsel is instructed by 863880, the disclosure provided by Whirlpool may be limited as a result of differing perspectives on the relevance of documentation. This has already been demonstrated as part of the within application in that certain documents have been produced by Whirlpool as part of the Application Record and Supplementary Application Record that are clearly relevant to the Main Action, but were not disclosed by 863880 in the Main Action. This is the case notwithstanding that the Affidavit of Documents in the Main Action was sworn by David Moscovitz, who is the sole director and officer of 863880 and the Respondent Indemnitors.”

[84] These allegations were vigorously contested by counsel for the Respondents. I do not see that issues that might well be addressed by a motion for further and better production need to be addressed by an intervention.

[85] It is also argued that the proposed arrangement by 863 for legal representation of Whirlpool “gives rise to a conflict of interest and impacts the public perception of the administration of justice in that the plaintiff in the Main Action, 863880, will be instructing on the conduct of the third party defence.”

[86] The potential for this result turns on the meaning of the parties’ agreements. If this potential result was a real concern, it could have been addressed when the agreements were entered more than 15 years ago. It is not unusual for an insurer to be added as a statutory third party and to have potential conflicts to address as a consequence of having to represent two possibly interests in an action. Practical solutions to those problems don’t require an “outsider” to the insurance contract to intervene as a party.

XI. Conclusion

[87] I am obliged to counsel for the quality of their arguments both orally and in detailed facta which I have considered in detail in coming to my decision in this case.

[88] Ultimately in applying Rule 13.01 I am required to specifically consider three possible justifications for an intervention.

(a) Do the Proposed Intervenors have an Interest in the Subject Matter of the Application?

[89] In my opinion the subject matter of the Application is properly characterized as a determination of the rights and obligations of the parties to the Purchase Agreement and the Indemnity Agreement.

[90] The Proposed Intervenors are not parties to either the Purchase Agreement or the Indemnity Agreement. Based on the analysis contained earlier in these reasons I am satisfied that Proposed Intervenors have no direct, commercial, or other substantial interest in that subject matter of the Application.

(b) Will the Proposed Intervenors be Adversely Affected by a Judgment in the Proceeding?

[91] In their factum the CPR Entities indicate that they seek a finding that the Respondents failed to disclose documents relevant to the Main Action and that, as a result, the Respondents cannot be trusted to instruct counsel for Whirlpool to advance every defence possible to 863’s claim in the Main Action. It is this reasoning which the Proposed Intervenors proffer as the basis for their “concerns associated with having the principal of the plaintiff in the Main Action provide instruction and direction to counsel acting on behalf of the third party, Whirlpool.”

[92] The Respondents seek to refute this position submitting that the position taken by the Proposed Intervenors “is disingenuous” in that :

(a) At all relevant times, the Proposed Intervenors had knowledge of the Respondents’ aborted purchase of the Inglis Lands in 1991;

(b) At all relevant times, the Proposed Intervenors knew that the Respondents purchased the Inglis Lands in 1998, at a reduced price than the price that Respondents were prepared to pay in 1991;

(c) There has been no judicial determination regarding the relevance of the documents that the Proposed Intervenors allege were not disclosed. The proper forum for such a determination is a Motion brought within the Main Action, not within this Application. …. and

(d) There is no evidentiary basis to support a finding that the Respondents would withhold information or instruct counsel for Whirlpool to do other than mount a vigorous defence to the Main Action and the Whirlpool Actions or to refrain from complying with any litigation strategy, the Rules of Civil Procedure, or the Rules of Professional Conduct.

[93] Without making any finding as to the weight to be given to any of these arguments, I fail to see how a finding as to the possible manner of carriage of the Whirlpool position in the Main Action can have any ultimate bearing on the specific interpretation of the relevant contractual terms.

(c) Does there Exist Between the Proposed Intervenors and the Parties to the Application a Question of Law or Fact in Common with One or More of the Questions in Issue in the Application?

[94] There are undoubtedly common questions of law or fact in the Main Action and in the Whirlpool Actions. However, that is not the issue before the Court on the instant Motion.

[95] To justify their intervention the Proposed Intervenors must establish that there exists, between them and one of the parties to the Application, a question of law or fact in common with respect to the issues on the Application. It is my conclusion that he Proposed Internvenors, not having been a party to the Purchase Agreement or the Indemnity Agreement, do not have any question of law or fact in common with any issue in the Application.

(2) Will the Intervention Unduly Delay or Prejudice the Determination of the Rights of the Parties to the Application or Prejudice the Determination of the Rights of the Parties to the Application?

[96] In determining a motion to intervene, a Court must consider whether the intervention will unduly delay or prejudice the determination of the rights of the parties to the proceeding.

[97] In this case, the application is to determine a representation issue, the application date has already been set for July of 2015.CPR and Oxford undertook on this motion that they will comply with existing and future schedules set by the Court and deliver all intervenor materials promptly.

[98] The Respondents submitted that:

35. Despite the fact that the Application was commenced in March 2014, the Proposed Intervenors have failed to serve the materials that they intend to rely on at the Application should they be granted leave to intervene. Delivery of the materials at this late stage, when the Application is scheduled to be heard in July, 2015, will likely result in an adjournment of the Application.

[99] They however went on to observe that the Main Action was commenced in 2004 and has moved forward at a “glacial pace.” The status of the Main Action remains on hold pending the disposition of the Application. No further steps, including any potential consolidation of the Main Action and the Whirlpool Actions, can be taken until such time as the issues on the Application are determined.

[100] It is hard to take seriously any concern about further delay in the light of that history. Nevertheless I agree with the Respondent’s submission that granting leave to intervene in the instant case is likely to complicate, extend, and delay the hearing of the Application and proceedings in the Main Action.

[101] In light of my conclusion that an intervention has not been justified in this case, I am not required to assess whether any otherwise resultant delay would be “undue” in the factual matrix of the Main Action.

XII. Disposition

[102] Ultimately, to paraphrase Justice Ground as to the useful contribution test, if I were satisfied that CPR qualified to be Intervenors under rule 13.01, I would have some difficulty seeing how the CPR Entities can make any useful contribution to the question of the proper interpretation of the documents in question. This determination is normally made by the judge on examination of the documents and on hearing submissions as to the context in which the documents were produced and delivered. CPR was a stranger to that process.

[103] The Motion is therefore dismissed with costs payable by the CPR Entities to the Respondents on a partial indemnity basis, payable within 60 days.

[104] If the parties are unable to resolve an appropriate quantum within 15 days, the Respondents shall serve their cost outline and up to five pages of written submissions upon CPR within 30 days of the release of these reasons. CPR will have 20 days to respond with a similar submission limitation. A period of 15 days shall be available for a written Reply of up to three pages.

[105] The Responding Parties counsel shall then submit the entire package to my Assistant Trial Co-ordinator. If the Costs Package is not received within 120 days of the release of these reasons there will be no order as to costs.

[106] In any event, with respect to Whirlpool, there shall be no order as to costs of this motion.

[107] I am obliged to counsel for their approach to this interesting issue.

R.95/DS __________________

Master D.E. Short