Cherubini Metal Works Ltd. v. Nova Scotia (Attorney General) et al., (2009) 285 N.S.R.(2d) 255 (SC)

• Judge: Duncan, J.
• Court: Supreme Court of Nova Scotia (Canada)
• Case Date: November 07, 2008
• Jurisdiction: Nova Scotia
• Citations: (2009), 285 N.S.R.(2d) 255 (SC);2009 NSSC 386

Cherubini Metal v. N.S. (A.G.) (2009), 285 N.S.R.(2d) 255 (SC);

    905 A.P.R. 255

MLB headnote and full text

Temp. Cite: [2009] N.S.R.(2d) TBEd. DE.059

Cherubini Metal Works Limited (plaintiff) v. The Attorney General of Nova Scotia (defendant)

(Hfx 184701; 2009 NSSC 386)

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

Nova Scotia Supreme Court

Duncan, J.

December 21, 2009.

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 dismissed the action.

Torts - Topic 61

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

Torts - Topic 5023

Interference with economic relations - Elements of liability - Use of unlawful means - [See Torts - Topic 5024 ].

Torts - Topic 5024

Interference with economic relations - Elements of liability - Malice or intent to injure - The plaintiff purchased a steel fabrication plant in receivership (AFL) 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, and filed spurious grievances - The union also 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 - Subsequently, the plaintiff shut down the plant - Claims against the union and union local were summarily dismissed as falling under the exclusive jurisdiction of an arbitrator under the collective agreement - The damages claim against the DOL (i.e., Attorney General) based on, inter alia, intentional interference with economic relations continued - The plaintiff alleged incompetence, harassment, breach of DOL policies, issuing compliance orders rather than less onerous options, commencing investigations where they knew or should of known that the union's complaints were false, etc. - The Nova Scotia Supreme Court dismissed the claim - The DOL aggressively pursued its statutory options respecting what it perceived to be a troubled workplace with safety concerns - There was no malice, bad faith or ulterior motive - Assuming that the plaintiff suffered an economic loss (not quantified), it failed to prove the required elements of an intent to injure the plaintiff by unlawful or illegal means - No actual intent was proved and wilful blindness, even if established, would not be sufficient to prove intent - The "means" used by DOL were not unlawful, as all actions, even if some were misguided, were taken in good faith to enforce the public safety legislation it was charged with enforcing - See paragraphs 298 to 339.

Torts - Topic 5086

Interference with economic relations - Conspiracy - Conspiracy to injure - The plaintiff purchased a steel fabrication plant in receivership (AFL) 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, and filed spurious grievances - The union also 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 - Subsequently, the plaintiff shut down the plant - Claims against the union and union local were summarily dismissed as falling under the exclusive jurisdiction of an arbitrator under the collective agreement - The damages claim against the DOL (i.e., Attorney General) based on, inter alia, conspiracy to injure, continued - The Nova Scotia Supreme Court dismissed the claim - The plaintiff had to prove (1) an agreement between DOL and the union having the predominant purpose of injuring the plaintiff, whether by lawful or unlawful means, or (2) an agreement between DOL and the union respecting unlawful conduct towards the plaintiff where DOL ought to have known that injury would be the likely result - The plaintiff proved neither - Assuming that the union's activities intended to injure the plaintiff, there was no proof that DOL agreed to assist the union in effecting its purpose - DOL's predominant purpose was to ensure compliance with safety regulations, which it carried out using lawful means - See paragraphs 374 to 405.

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 steel fabrication plant in receivership (AFL) 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, and filed spurious grievances - The union also 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 - Subsequently, the plaintiff shut down the plant - Claims against the union and union local were summarily dismissed as falling under the exclusive jurisdiction of an arbitrator under the collective agreement - The damages claim against DOL (i.e., Attorney General) based on, inter alia, negligence continued - The plaintiff claimed that DOL was negligent in conducting its regulatory activities and that such negligence contributed to the plaintiff's loss and plant shutdown - The Nova Scotia Supreme Court dismissed the claim - 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 - There was no basis to exempt the duty of care - There was no breach of the duty of care, 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 - Nothing done by DOL caused or materially contributed to any loss or the plant shutdown - See paragraphs 406 to 457.

Torts - Topic 9162

Duty of care - Particular relationships - Claims against public officials, authorities or boards - Misfeasance in or abuse of public office - The plaintiff purchased a steel fabrication plant in receivership (AFL) 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, and filed spurious grievances - The union also 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 - Subsequently, the plaintiff shut down the plant - Claims against the union and union local were summarily dismissed as falling under the exclusive jurisdiction of an arbitrator under the collective agreement - The damages claim against the DOL (i.e., Attorney General) based on, inter alia, misfeasance in public office continued - The plaintiff alleged incompetence, harassment, breach of DOL policies, issuing compliance orders rather than less onerous options, commencing investigations where they knew or should of known that the union's complaints were false, etc. - The Nova Scotia Supreme Court dismissed the claim - The DOL aggressively pursued its statutory options respecting what it perceived to be a troubled workplace with safety concerns - There was no malice, bad faith or ulterior motive - All actions, even those that were ill-advised but not unlawful, were consistent with DOL's statutory obligations - See paragraphs 340 to 373.

Cases Noticed:

R. v. Amherst Fabricators Ltd., [2003] N.S.J. No. 280, refd to. [para. 264].

Reach M.D. Inc. v. Pharmaceutical Manufacturers Association of Canada et al. (2003), 172 O.A.C. 202 (C.A.), refd to. [para. 298].

Daishowa Inc. v. Friends of the Lubicon et al., [1996] O.J. No. 152 (Gen. Div.), refd to. [para. 301].

Cheticamp Fisheries Co-Operative Ltd. et al. v. Canada (1995), 139 N.S.R.(2d) 224; 397 A.P.R. 224 (C.A.), refd to. [para. 302].

Pembina County Water Resource District et al. v. Manitoba et al., [2008] F.T.R. Uned. A31; 2008 FC 1390, refd to. [para. 303].

Soost v. Merrill Lynch Canada Inc. (2009), 473 A.R. 254; 2009 ABQB 591, refd to. [para. 303].

Harbour Remediation & Transfer Inc. et al. v. Toronto (City), [2005] O.T.C. Uned. 994 (Sup. Ct.), refd to. [para. 303].

American Reserve Energy Corp. v. McDorman et al. (1999), 183 Nfld. & P.E.I.R. 40; 556 A.P.R. 40 (Nfld. T.D.), refd to. [para. 305].

R. v. Rashidi-Alavije (M.) (2007), 229 O.A.C. 365 (C.A.), refd to. [para. 306].

Correia v. Canac Kitchens et al. (2008), 240 O.A.C. 153; 2008 ONCA 506, refd to. [para. 310].

Spicer and Gaetz v. Volkswagen Canada Ltd. (1978), 28 N.S.R.(2d) 496; 43 A.P.R. 496; 91 D.L.R.(3d) 42 (C.A.), refd to. [para. 314].

Drouillard v. Cogeco Cable Inc. et al. (2007), 223 O.A.C. 350; 2007 ONCA 322, refd to. [para. 315].

Odhavji Estate et al. v. Woodhouse et al. (2003), 312 N.R. 305; 180 O.A.C. 201; 2003 SCC 69, refd to. [para. 342].

1515545 Ontario Ltd. et al. v. Niagara Falls (City) et al. (2006), 206 O.A.C. 219 (C.A.), refd to. [para. 345].

Canada Cement LaFarge Ltd. et al. v. British Columbia Lightweight Aggregate Ltd. et al., [1983] 1 S.C.R. 452; 47 N.R. 191, refd to. [para. 375].

Nicholls v. Richmond (Township), [1984] 3 W.W.R. 719 (B.C.S.C.), refd to. [para. 376].

Elliott v. Insurance Crime Prevention Bureau et al. (2005), 236 N.S.R.(2d) 104; 749 A.P.R. 104; 2005 NSCA 115, refd to. [para. 415].

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. 418].

Hercules Management Ltd. et al. v. Ernst & Young et al., [1997] 2 S.C.R. 165; 211 N.R. 352; 115 Man.R.(2d) 241; 139 W.A.C. 241, refd to. [para. 427].

Just v. British Columbia, [1989] 2 S.C.R. 1228; 103 N.R. 1, refd to. [para. 430].

Swanson and Peever v. Canada (1992), 124 N.R. 218 (F.C.A.), refd to. [para. 442].

Athey v. Leonati et al., [1996] 3 S.C.R. 458; 203 N.R. 36; 81 B.C.A.C. 243; 132 W.A.C. 243, refd to. [para. 454].

Counsel:

George MacDonald, Q.C., and Michelle Awad, for the plaintiff;

Michael Pugsley and Duane Eddy, for the defendant.

This action was heard between September 8 and November 7, 2008, at Halifax, N.S., before Duncan, J., of the Nova Scotia Supreme Court, who delivered the following judgment on December 21, 2009.