Cherubini Metal Works Ltd. v. Nova Scotia (Attorney General) et al., (2011) 302 N.S.R.(2d) 367 (CA)

• Judge: MacDonald, C.J.N.S., Saunders and Farrar, JJ.A.
• Court: Court of Appeal of Nova Scotia (Canada)
• Case Date: May 12, 2011
• Jurisdiction: Nova Scotia
• Citations: (2011), 302 N.S.R.(2d) 367 (CA);2011 NSCA 43

Cherubini Metal v. N.S. (A.G.) (2011), 302 N.S.R.(2d) 367 (CA);

    955 A.P.R. 367

MLB headnote and full text

Temp. Cite: [2011] N.S.R.(2d) TBEd. MY.024

Cherubini Metal Works Limited, a body corporate (appellant/respondent on cross-appeal) v. The Attorney General of Nova Scotia representing Her Majesty the Queen in Right of the Province of Nova Scotia (respondent/appellant on cross-appeal)

(CA 325779; 2011 NSCA 43)

Indexed As: Cherubini Metal Works Ltd. v. Nova Scotia (Attorney General) et al.

Nova Scotia Court of Appeal

MacDonald, C.J.N.S., Saunders and Farrar, JJ.A.

May 12, 2011.

Summary:

A union local filed numerous grievances against Amherst Fabricators (now Cherubini), which operated a steel fabrication plant. The Attorney General (Department of Labour (DOL) inspectors) issued compliance orders under the Occupational Health and Safety Act. The plant subsequently closed. Cherubini sued the Attorney General, the union, and the union local for its losses, alleging negligence, conspiracy, discrimination, and intentional interference with Cherubini's economic interests. The union and local applied under rule 13.01 for summary judgment dismissing the claim, submitting that the issues in dispute arose out of the collective agreement and were within the exclusive jurisdiction of an arbitrator under the grievance and arbitration process, that the issues raised in Cherubini's claim were settled by binding mediation or arbitration, that the union and local did not owe a duty of care, and the civil conspiracy action should be dismissed because it should not be extended to the fact situation in this case.

The Nova Scotia Supreme Court, in a judgment reported (2006), 246 N.S.R.(2d) 283; 789 A.P.R. 283, dismissed the application, denying summary judgment. The dispute did not arise out of the collective agreement and, in any event, the collective agreement arbitration process did not provide an effective remedy. The issues raised were not dealt with by mediation or arbitration. A prima facie duty of care arose. It was not for the court, on a summary judgment application, to determine the extent of the application of the law of civil conspiracy. The union and local appealed.

The Nova Scotia Court of Appeal, in a judgment reported (2007), 253 N.S.R.(2d) 144; 807 A.P.R. 144, allowed the appeal and granted summary judgment dismissing the actions as against the union and local. The trial judge erred in failing to find that the claims against the union and local, in their essential character, arose out of the collective agreement and fell within the exclusive jurisdiction of the grievance and arbitration process under the Trade Union Act and the collective agreement. The action proceeded against the Attorney General.

The Nova Scotia Supreme Court, in a judgment reported (2009), 285 N.S.R.(2d) 255; 905 A.P.R. 255, dismissed the action. Although the Attorney General owed Cherubini a duty of care, it had not breached that duty. Cherubini appealed the dismissal of its regulatory negligence claim. The Attorney General cross-appealed the finding that it owed a duty of care and the failure to award it costs.

The Nova Scotia Court of Appeal dismissed the appeal and allowed the cross-appeal.

Practice - Topic 7020

Costs - Party and party costs - Entitlement to party and party costs - Successful party - General principles - The Attorney General successfully defended the plaintiff's action for damages for, inter alia, regulatory negligence - Since the proceedings were bifurcated, no submissions on costs were invited or made before the trial judge denied the Attorney General costs - No reasons were provided - The Nova Scotia Court of Appeal agreed that "the trial judge erred by failing to invite counsel to make submissions on costs; by failing to decide costs on a principled approach; and by depriving the Attorney General of its costs when its conduct, as disclosed by the decision of the trial judge, did not warrant a departure from the usual approach that costs follow the event. ... While a trial judge has the discretion to depart from the general rule, it is an error in principle not to award a successful party costs unless there are sound reasons for doing so." - There were no sound reasons to deny the successful party its costs - The court remitted the matter to the trial judge to determine the appropriate amount of trial costs - See paragraphs 111 to 117.

Practice - Topic 7034

Costs - Party and party costs - Entitlement to party and party costs - The attorney general - [See Practice - Topic 7020 ].

Torts - Topic 61

Negligence - Causation - Causal connection - [See Torts - Topic 9158 ].

Torts - Topic 77

Negligence - Duty of care - Relationship required to raise duty of care - [See Torts - Topic 9158 ].

Torts - Topic 5910

Negligent investigation - Regulatory authorities - [See Torts - Topic 9158 ].

Torts - Topic 9158

Duty of care - Particular relationships - Claims against public officials, authorities or boards - Safety inspection authorities - The plaintiff purchased a business (AFL) in receivership and employed its unionized workers - The union resisted change, engaged in an illegal strike and work slowdowns, deliberately failed to comply with company policy, violated the collective agreement, sabotaged property to disrupt production, filed spurious grievances and filed complaints with the Department of Labour (DOL), often based on false information and bypassing the regulatory requirement of first going to the plaintiff's workplace safety committee - The result was DOL inspections investigating AFL and the issuance of compliance orders by inspectors - The plaintiff shut down the plant - The plaintiff claimed damages against DOL (i.e., Attorney General) for, inter alia, negligence in conducting its regulatory activities - The plaintiff alleged that DOL's negligence contributed to the plaintiff's loss and plant shutdown - The trial judge dismissed the claim - Notwithstanding a statutory immunity clause, DOL, as a regulator carrying out a statutory duty to inspect for workplace safety, owed the plaintiff a prima facie duty of care because if DOL negligently performed its functions, harm was reasonably foreseeable - However, there was no breach of that duty as the plaintiff failed to show that DOL officials "did not act in a reasonably competent way having regard to the nature and severity of the risk, the industry custom and practices and relevant guidelines available" - Since all orders issued were lawful, they could not give rise to a breach of the duty of care - Further, nothing done by DOL caused or materially contributed to the plant shutdown - The Nova Scotia Court of Appeal affirmed the result - DOL did not owe the plaintiff a duty of care - Finding a duty would conflict with the Attorney General's statutory or public duty to carry out its statutory mandate - There was insufficient proximity to give rise to a prima facie duty of care - The statutory immunity clause indicated the Legislature's intent to preclude or limit private law duties - Alternatively, if a duty of care existed, the court agreed that it was not breached where the DOL performed its duties reasonably in good faith - Further, causation was not established where nothing DOL did materially contributed to the plant closure - See paragraphs 1 to 110.

Cases Noticed:

McPhee v. Gwynne-Timothy (2005), 232 N.S.R.(2d) 175; 737 A.P.R. 175; 2005 NSCA 80, refd to. [para. 21].

McPhee et al. v. Canadian Union of Public Employees et al. (2008), 270 N.S.R.(2d) 265; 865 A.P.R. 265; 2008 NSCA 104, refd to. [para. 22].

Cooper v. Registrar of Mortgage Brokers (B.C.) et al. (2001), 277 N.R. 113; 160 B.C.A.C. 268; 261 W.A.C. 268; 2001 SCC 79, refd to. [para. 27].

Cooper v. Hobart - see Cooper v. Registrar of Mortgage Brokers (B.C.) et al.

Edwards et al. v. Law Society of Upper Canada et al. (2001), 277 N.R. 145; 153 O.A.C. 388; 2001 SCC 80, refd to. [para. 27].

Fullowka et al. v. Pinkerton's of Canada et al. (2010), 398 N.R. 20; 474 A.R. 1; 479 W.A.C. 1; 2010 SCC 5, dist. [para. 28].

B.D. et al. v. Children's Aid Society of Halton Region et al. (2007), 365 N.R. 302; 227 O.A.C. 161; 2007 SCC 38, refd to. [para. 33].

Syl Apps Secure Treatment Centre v. B.D. - see B.D. et al. v. Children's Aid Society of Halton Region et al.

Lewis v. Prince Edward Island (1998), 160 Nfld. & P.E.I.R. 183; 494 A.P.R. 183 (P.E.I.C.A.), refd to. [para. 38].

Dorman Timber Ltd. v. British Columbia (1997), 97 B.C.A.C. 178; 157 W.A.C. 178 (C.A.), dist. [para. 49].

Ryan v. Victoria (City) et al. (1999), 234 N.R. 201; 117 B.C.A.C. 103; 191 W.A.C. 103 (S.C.C.), refd to. [para. 54].

Nova Mink Ltd. v. Trans-Canada Airlines, [1951] 2 D.L.R. 241 (N.S.C.A.), refd to. [para. 54].

Swanson and Peever v. Canada (1992), 124 N.R. 218 (F.C.A.), refd to. [para. 56].

Hill et al. v. Hamilton-Wentworth Regional Police Services Board et al. (2007), 368 N.R. 1; 230 O.A.C. 260; 2007 SCC 41, refd to. [para. 64].

Ontario (Minister of Labour) v. Hamilton (City) (2002), 155 O.A.C. 225; 58 O.R.(3d) 37 (C.A.), refd to. [para. 73].

Blackwater et al. v. Plint et al. (2005), 339 N.R. 355; 216 B.C.A.C. 24; 356 W.A.C. 24; 2005 SCC 58, refd to. [para. 91].

B.M.G. v. Nova Scotia (Attorney General) (2007), 260 N.S.R.(2d) 257; 831 A.P.R. 257; 2007 NSCA 120, refd to. [para. 92].

Mustapha v. Culligan of Canada Ltd. (2008), 375 N.R. 81; 238 O.A.C. 130; 2008 SCC 27, refd to. [para. 99].

Landymore et al. v. Hardy et al. (1992), 112 N.S.R.(2d) 410; 307 A.P.R. 410 (T.D.), refd to. [para. 115].

Statutes Noticed:

Occupational Health and Safety Act, S.N.S. 1996, c. 7, sect. 5(1)(a) [para. 25]; sect. 5(2) [para. 26]; sect. 78 [para. 24].

Authors and Works Noticed:

Fleming, John G., The Law of Torts (9th Ed. 1998), p. 218 [para. 88].

Linden, Allen M., and Feldthusen, Bruce, Canadian Tort Law (9th Ed. 2011), p. 362 [para. 90].

Counsel:

George W. MacDonald, Q.C., Michelle C. Awad, Q.C., and Ryan M. Conrod, for the appellant/respondent on cross-appeal;

Michael T. Pugsley and Duane A. Eddy, for the respondent/appellant on cross-appeal.

This appeal and cross-appeal were heard on February 14, 2011, at Halifax, N.S., before MacDonald, C.J.N.S., Saunders and Farrar, JJ.A., of the Nova Scotia Court of Appeal.

On May 12, 2011, Farrar, J.A., delivered the following judgment for the Court of Appeal.