Abreu v. Quality Meat Packers Holdings Limited, 2016 ONSC 7594
CITATION: Abreu v. Quality Meat Packers Holdings Limited, 2016 ONSC 7594
COURT FILE NO.: CV-16-552350 and CV-16-546464
DATE: 20161205
SUPERIOR COURT OF JUSTICE – ONTARIO
CV-16-552350
RE: Alex Abreu in His Personal Capacity, Plaintiff
AND:
Quality Meat Packers Holdings Limited et al., Defendants
CV-16-546464
AND RE: Sam Caetano, Plaintiff
AND:
Quality Meat Packers Holdings Limited et al., Defendants
BEFORE: Justice S. F. Dunphy
DATE: December 5, 2016
CASE CONFERENCE ENDORSEMENT
[1] I conducted a case conference on these two related matters on November 16, 2016. Three pending or intended motions were identified and I asked the parties to provide me with their submissions in writing as to the order and timing in which these matters ought to be heard. The three identified motions were:
[a] The “Weber” motion regarding jurisdiction and seeking a stay of proceedings (affects the Caetano v. Quality Meat Packers et al; CV-16-546464 matter only);
[b] The “Limitations” motion regarding the ability to add plaintiffs by amendments to the two actions (whether by way of representation order or in a Class Proceeding) (potentially affects all plaintiffs to both actions that have not yet been formally named as party plaintiffs); and
[c] The Certification Motion under the Class Proceedings Act assuming amendments claiming this are authorized.
[2] Written submissions were received from counsel for the defendant moving parties Quality Meat Packers Holdings Limited, BNJ Cold Storage Inc., Two Tecumseth Street Inc., Tasty Chip (2008) Inc. and David Schwartz. Although Mr. Brian Schwarts and Franklyn Bernard Company Limited and 1581337 Ontario Inc. are separately represented, they were invited to limit themselves to “me too” if their submissions were substantially identical to those of the other defendants and indeed, the submissions received from Hicks Morley were submitted on behalf of all of the above-named defendants. Written submissions were received the plaintiffs as well.
[3] Some background on the underlying actions is required.
[4] These two cases arise from the bankruptcy of Quality Meat Packers Limited, Toronto Abattoirs Limited and Great Lakes Specialty Meats of Canada Inc. The immediate cause of the bankruptcies (and receivership of a related company, the defendant 2268204 Ontario Inc. now in receivership) was the May 5, 2014 Notice of Intention to Enforce Security issued by a creditor of Great Lakes and 226 that resulted in the cessation of operations and mass lay-offs of employees of QMPL, TAL and Great Lakes as the case may be.
[5] The bankruptcy and receivership proceedings have been largely wound up at this point, at least sufficiently to enable the plaintiffs to conclude that it is quite unlikely that the employees will receive their full statutory entitlements to severance and termination pay arising from the mass lay-offs that occurred in 2014.
[6] The “Caetano” action (CV-16-546464) was commenced by Statement of Claim on February 11, 2016 – approximately three months before the second anniversary of the lay-offs. Mr. Caetano the plaintiff is named “as representative of the members of the United Food and Commercial Workers of Canada, Local 175, Region 6 who were employed by Quality Meat Packers Limited, Toronto Abattoirs Limited, Great Lakes Specialty Meats of Canada and/or any of the Defendants in this Action in 2014”. For want of a better term, I shall refer to the three named companies (and 226) – all of whom became insolvent or bankrupt - as the “main employers”.
[7] The Caetano statement of claim alleges that the employees he seeks to represent were wrongfully dismissed from their employment with the main employers. It claims $10,000,000 in damages for payment in lieu of notice, severance and termination pay, benefits and similar matters. The causes of action pleaded include oppression, conspiracy and the doctrine of common employer. The defendants are to have been fully integrated with each other and the main employers. They are alleged to have contributed to business decisions that they knew or ought to have known would lead to the insolvency of the main employers, to have stripped assets from the main employers to render them insolvent, to have been common employers of the employees of the main employers within the meaning of the Employment Standards Act, 2000, S.O. 2000, c. 41, to have acted in a manner that was oppressive or unfairly disregarded the interests of the plaintiffs, to have conspired with each other, to have been negligent in failing to cause the ESA to be adhered to by the main employers and to have received preferences contrary to s. 95 of the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3. The foregoing is, of necessity, a very high-level overview of the claims that are particularized in considerably more detail in the Caetano statement of claim.
[8] Schedule “A” to the Caetano statement of claim contains a complete list of each employee claimed to be represented by Mr. Caetano in bringing the action by name of employer, name of employee and tenure (in years, months and days). The list of employees so named is approximately 700 names long.
[9] A second action (CV-16-552350) was commenced by Debbie Abreu and Alex Abreu in their personal capacities and in their capacities as “proposed representatives of all non-union terminated employees and retirees” of the former employers “under Rule 10 of the Rules of Civil Procedure”. This action was commenced on May 6th 2014, days prior to the second anniversary of the mass lay-offs that gave rise to it.
[10] The Abreu statement of claim seeks statutory severance and termination pay under the ESA as well as common law damages for wrongful dismissal. Mr. Alex Abreu claims on behalf of himself and 49 former employees of TAL or Great Lakes; Ms. Debbie Abreu claims on behalf of herself and 77 employees of QMPL. Among the cause of action pleaded are (i) director liability; (ii) common employer liability; (iii) conspiracy; and (iv) negligence. Once again, I have not sought to summarize the particulars of each of these causes of action at this early stage.
[11] It bears repeating that matters remain at a very preliminary stage. Pleadings are not yet closed in either action.
[12] Both plaintiffs have indicated their intention to amend their pleadings to seek class action status although neither has yet done so. Pleadings not being closed, both claim the right to amend without consent or leave although have agreed not to alter the status quo while I am considering this motion in writing (and given my assurance that standing still at this point would not be to their detriment).
[13] From the written submissions of the parties, there appears to be broad agreement that the jurisdiction motion challenging the status of Mr. Caetano to represent all union members in this civil claim (referred to by the parties as the “Weber” motion by the parties in reference to the decision of the Supreme Court of Canada in Weber v. Ontario Hydro, [1995] 2 SCR 929, 1995 CanLII 108 (SCC)) should go first. There is a clear disagreement between the parties as to the applicability of Weber to the facts of this case and the disagreement goes to the very jurisdiction of this court to hear the Caetano claim at all given the fact that the contract of employment between Mr. Caetano (and the union members on whose behalf the statement of claim is brought) were all governed by a collective bargaining agreement during the course of their employment with the main employers.
[14] A decision on the Weber motion will not be dispositive of the Abreu claim at all and may or may not be dispositive of the Caetano claim. However, it makes good sense that this motion should be heard first. There is also consensus that the Limitation Motion should be heard immediately following the Weber motion (and on the same day).
[15] The defendants intend to argue that the plaintiffs in the Abreu action failed to obtain a representation order under either Rule 12 or Rule 10 of the Rules of Civil Procedure and failed to commence their proceedings under the Class Proceedings Act, 1992, S.O. 1992, c. 6 before the expiry of the relevant limitation period. Given these facts, they will argue that the Abreu action may not proceed except on behalf of the plaintiffs named (i.e. Debbie Abeu and Alex Abreu). Should the Caetano action not be stayed as a result of the Weber motion, they intend to advance the same argument in relation to this action as well.
[16] It is proposed that both the Weber motion and the two limitations motions be heard together (and in that sequence) on or after February 20, 2016 and the parties have worked out a case timetable backwards from that date. The plaintiffs agree on the condition that they don’t have to argue the “limitations issue” twice. A determination on that issue ought to be binding for all purposes – whether it be a representation order or an eventual motion to certify a class under the Class Proceedings Act.
[17] I concur with the parties that the Weber motion ought to go first and this should be prepared for a hearing forthwith. I shall discuss the timetable for the hearing of that motion below. However, it clearly represents a gating issue on a very significant piece of the entire litigation puzzle. It will have to be decided in any event and is not the sort of decision that seems reasonably able to be held down pending trial. That train should start down the tracks without delay.
[18] My concern is with respect to the Limitation motion and the interplay between that and the intended amendments to proceed under the Class Proceedings Act.
[19] Pursuant to Rule 26.02(a) of the Rules of Civil Procedure, amendments may be made to the pleadings (including the statement of claim) before the close of pleadings without leave “if the amendment does not include or necessitate the addition, deletion or substitution of a party to the action”. Under the s. 28 of the Class Proceedings Act, limitation periods are suspended “on the commencement of the class proceeding”. Pursuant to s. 21(1) of the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B, “if a limitation period in respect of a claim against a person has expired, the claim shall not be pursued by adding the person as a party to any existing proceeding”.
[20] Given the position the defendants have taken with respect to the Limitation motion in their written submissions, I understand them to be intending to submit that amending either statement of claim at this point to become a class proceeding would effectively amount to adding plaintiffs to the action for which leave is required under Rule 26.02(a) of the Rules of Civil Procedure and that leave ought not be granted by reason of s. 21(1) of the Limitations Act. There are differences between the Caetano action (that names each proposed plaintiff by name) and the Abreu action (that describes them by number and status, but not by name) that may also be relevant.
[21] It therefore appears to me that the question of whether the plaintiffs can make the amendments that they propose to make without leave (and bearing in mind my ruling that the plaintiffs would not be prejudiced for not having taken the unilateral step of making such amendments without leave prior to the hearing of the motion) is going to be raised as will the question of whether an action that does not plead the Class Proceedings Act by name can nevertheless be considered one for purposes of s. 28 of that Act, among other issues. As well, it will be necessary in the context of either or both actions to consider what the effect of claiming representative status has prior to an order being granted under Rule 10.01 of the Rules of Civil Procedure or the failure to reference the Class Proceedings Act in the title of proceedings pursuant to Rule 12.02(1). Finally, there is the matter of the practice direction in relation to Class Proceedings pursuant to which the Class Proceedings Judge (Perell J. in the case of Toronto region) is required to hear or assign certification motions.
[22] While I have been assigned as Case Management Judge to this matter, that designation was before any question of the Class Proceedings Act was brought into play. As Case Management Judge, it is usually desirable but not necessary that I should hear motions in the case. My own assignment to the Criminal Team for the Winter and Spring Terms in January 2017 will make it difficult for me to accommodate the parties’ hearing timetable in a reasonable time frame.
[23] In my view, the most efficient means of dealing with these concerns is to direct that the Weber and Limitation motions be heard together on or as soon after February 20, 2017 as these can be scheduled before Belobaba J. Depending upon his ruling, this matter and my case management of it may be transferred to Class Proceedings to be dealt with thereafter or may remain Case Managed by me. Rather than attempt to anticipate every possible outcome, it seems to me that the most sensible course is to take matters one step at a time.
[24] There appears to be consensus at this point that the Limitations motion should be heard in advance of a certification motion. That being said, it must be heard in the context of the intended amendments that would invoke the Class Proceedings Act. I shall leave it to the parties to frame the question for the Limitations motion. Regardless of who is taking the initiative of bringing the motion, however, it would be advisable to have the actual proposed amendments before the Court to review.
[25] The parties are invited to arrange the scheduling of the motions with Belobaba J.’s office as soon as possible. He has been alerted and has kindly agreed to assist. I am directing the parties adhere to the timetable on p. 2 of Mr. Hatnay’s written submissions to me dated November 24, 2016. If minor adjustments to the Limitations Motion portion of that timetable need to be introduced given the timing of receipt of my ruling and changes that may be needed, I may be spoken to if and only if the parties are not able to sort them out consensually. I do not need to approve alterations to the timetable that are on common consent of all.
[26] The Certification Motion will be scheduled, if necessary, depending upon the outcome of the first two. I shall await the ruling of Belobaba J. in order to determine whether case management carriage should be transferred or not.
S. F. Dunphy, J.
Date: December 5, 2016