Cherubini Metal Works Ltd. v. Nova Scotia (Attorney General), 2011 NSSC 429

• Judge: Duncan, J.
• Court: Supreme Court of Nova Scotia (Canada)
• Case Date: September 22, 2011
• Jurisdiction: Nova Scotia
• Citations: 2011 NSSC 429;(2011), 309 N.S.R.(2d) 236 (SC)

Cherubini Metal v. N.S. (A.G.) (2011), 309 N.S.R.(2d) 236 (SC);

    979 A.P.R. 236

MLB headnote and full text

Temp. Cite: [2011] N.S.R.(2d) TBEd. NO.070

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

(Hfx 184701; 2011 NSSC 429)

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

Nova Scotia Supreme Court

Duncan, J.

November 21, 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, in a judgment reported (2011), 302 N.S.R.(2d) 367; 955 A.P.R. 367, dismissed the appeal and allowed the cross-appeal respecting costs. The matter was remitted to the trial judge for the determination of costs.

The Nova Scotia Supreme Court held that costs were to be assessed under the 1972 Civil Procedure Rules rather than the new Rules that came into force January 1, 2009. The court determined that an appropriate award of party and party costs to the Attorney General would be $140,000. However, concerns respecting the defendant's pre-litigation conduct warranted a 25% reduction to $105,000. The Attorney General was entitled to reasonable disbursements, but since those disbursements were not quantified or supported by evidence, the court could not make an order. Disbursements were to be determined between the parties and, failing agreement, the court would rule on the issue.

Practice - Topic 6923.1

Costs - General principles - What rules applicable - The plaintiff's action was commenced in 2002 - The trial ended in November 2008 - The new Civil Procedure Rules came into force on January 1, 2009 - Transitional provisions provided that the current Rules (1972) continued to apply to proceedings commenced before January 1, 2009 unless the judge ordered otherwise - The Nova Scotia Supreme Court held that costs were to be assessed under the 1972 Rules, as "cost consequences contemplated by the parties as they planned the litigation would have been ascertained by reference to the Rules then in effect. It would be capricious to impose a different regime that was created after the litigation was effectively complete" - See paragraphs 7 to 9.

Practice - Topic 7021

Costs - Party and party costs - Entitlement to party and party costs - Successful party - Exceptions - Conduct (incl. counsel) - 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 for ordering that each party bear their own costs - On appeal, the court held that the trial judge erred by depriving the Attorney General of its costs when its conduct, as disclosed by the trial judge's decision, did not warrant a departure from the usual approach that costs follow the event - There were no sound reasons to deny the successful party its costs - The appeal court remitted the matter to the trial judge to determine the appropriate amount of trial costs - The Nova Scotia Supreme Court, after considering, inter alia, the complexity of the proceedings, the importance of the issues to the parties, and the principle of substantial indemnity, determined that an appropriate award of party and party costs to the Attorney General would be $140,000 - However, pre-litigation conduct by department officials did warrant a 25% reduction to $105,000 - See paragraphs 1 to 75.

Practice - Topic 7034

Costs - Party and party costs - Entitlement to party and party costs - The Attorney General - [See Practice - Topic 7021 ].

Cases Noticed:

Landymore et al. v. Hardy et al. (1992), 112 N.S.R.(2d) 410; 307 A.P.R. 410 (S.C.), refd to. [para. 20].

Williamson v. Williams et al. (1998), 223 N.S.R.(2d) 78; 705 A.P.R. 78 (C.A.), refd to. [para. 21].

Bevis et al. v. CTV Inc. et al. (2004), 228 N.S.R.(2d) 34; 723 A.P.R. 34; 2004 NSSC 209, refd to. [para. 22].

Founders Square Ltd. v. Nova Scotia (Attorney General) (2000), 186 N.S.R.(2d) 189; 581 A.P.R. 189 (S.C.), refd to. [para. 54].

HMC Group Inc. v. Nova Scotia (Attorney General) et al. (2000), 188 N.S.R.(2d) 268; 587 A.P.R. 268 (S.C.), refd to. [para. 65].

Rhyno Demolition Inc. v. Nova Scotia (Attorney General) et al. (2005), 233 N.S.R.(2d) 311; 739 A.P.R. 311; 2005 NSSC 147, refd to. [para. 65].

Donald et al. v. Friesen et al. (1990), 72 O.R.(2d) 205 (Dist. Ct.), refd to. [para. 65].

Counsel:

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

Michael Pugsley and Duane Eddy, for the defendant.

This matter was heard on September 22, 2011, at Halifax, N.S., before Duncan, J., of the Nova Scotia Supreme Court, who delivered the following judgment on November 21, 2011.