Stewart v. Enterprise Universal Inc. et al., 2010 ABQB 259

• Judge: Martin, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: October 13, 2009
• Citations: 2010 ABQB 259;(2010), 489 A.R. 153 (QB)

Stewart v. Ent. Universal Inc. (2010), 489 A.R. 153 (QB)

MLB headnote and full text

Temp. Cite: [2010] A.R. TBEd. AP.090

Jim Stewart (plaintiff) v. Enterprise Universal Inc., Peter Huang, John Huang, and Ian Huang (defendants)

(0701 12497; 2010 ABQB 259)

Indexed As: Stewart v. Enterprise Universal Inc. et al.

Alberta Court of Queen's Bench

Judicial District of Calgary

Martin, J.

April 16, 2010.

Summary:

Stewart, a registered nurse, brought an action under the Class Proceedings Act, against his employer, a medical care facility, and its directors (three doctors) (the defendants), seeking damages for alleged exposure to asbestos while at work. The defendants applied under rule 159 for summary judgment to dismiss the claim and under rule 129(1) to strike certain portions of the amended statement of claim. Stewart asserted that the pretrial applications were premature as he had not yet applied for certification.

The Alberta Court of Queen's Bench held that it could determine the summary judgment application prior to the certification hearing. The court allowed the application for summary judgment to dismiss the claim. The court also indicated that it would have dismissed the application to strike under rule 129(1).

Company Law - Topic 312

Nature of corporations - Lifting the corporate veil - Principals - "Directing mind and will" of company - Stewart, a registered nurse, brought an action under the Class Proceedings Act, against his employer, a medical care facility, and its directors (three doctors) (the defendants), seeking damages for alleged exposure to asbestos while at work - The defendants applied, inter alia, under rule 159 for summary judgment to dismiss the claim - At issue was whether the corporate veil shielded the directors from liability - The Alberta Court of Queen's Bench dismissed the claim against the directors - The directing minds of corporations could not be held civilly liable for the actions of the corporations they controlled and directed unless there was some conduct on the part of those directing minds that was either tortious in itself or exhibited a separate identity or interest from that of the corporations such as to make the acts or conduct complained of those of the directing minds - Stewart's evidence and pleadings did not show that there was a triable issue regarding whether the directors participated in the asbestos removal in a manner that was itself tortious or in such a capacity as to make any tort their own - See paragraphs 56 to 81.

Company Law - Topic 4183

Directors - Liability of directors - For torts - [See Company Law - Topic 312 and Workers' Compensation - Topic 106 ].

Practice - Topic 209.4

Persons who can sue and be sued - Individuals and corporations - Status or standing - Class actions - Certification - Appointment or replacement of representative plaintiff - Stewart, a registered nurse, brought an action under the Class Proceedings Act (CPA), against his employer, a medical care facility, and its directors (three doctors) (the defendants), seeking damages for alleged exposure to asbestos while at work - The defendants applied under rule 159 for summary judgment to dismiss the claim - The court found that due to the operation of the Workers' Compensation Act and the corporate veil, Stewart, as a worker, had no cause of action against the employer or the directors - At issue was the appropriate remedy - Stewart asserted that, as the proposed class included persons who "worked or resided at [the medical facility]", dismissing the action would leave the non-worker residents without a claim - The Alberta Court of Queen's Bench dismissed the action - Under s. 2(4) of the CPA, a representative plaintiff need not necessarily be a member of the class if certifying a non-class member would avoid substantial injustice to the class - However, here, allowing Stewart to represent residents against the employer, which was the only remaining part of the claim, did not avoid any demonstrated substantial injustice to the class - The risk of dismissal had been known from the time that the defendants filed their motion - Stewart had indicated at one point that he was in a position to find a representative plaintiff who was not a worker at the facility - Despite an adjournment and a second hearing, no such person had come forward - See paragraphs 82 to 91.

Practice - Topic 210.5

Persons who can sue and be sued - Individuals and corporations - Status or standing - Class or representative actions - Procedure - Pre-certification matters (incl. particulars, production, pleadings, etc.) - Defendants in a proposed class action sought summary judgment to dismiss the claim - At issue was whether the application was to be heard prior to the certification hearing - The Alberta Court of Queen's Bench held that the case management judge retained the discretion to determine the appropriate sequence and timing of applications to ensure the just and timely determination of procedures, to meet the goals of the Class Proceedings Act (CPA) and the Rules of Court, and to ensure fairness between the parties - Some pretrial motions might simply address what would be canvassed at a certification hearing - The best example was the overlap between a defendant's application to strike pleadings for disclosing no cause of action and the requirement under the CPA for the plaintiff to show the existence of a cause of action - The issue of whether a cause of action existed should only be addressed once - Slightly different considerations applied to the timing of an application for summary judgment - The purpose of a certification motion was to determine how the litigation would proceed and not to assess the merits - In a defendant's summary judgment application, the general issue was whether it was plain and obvious that the plaintiff's claim could not succeed - The primary criticism of allowing extensive pretrial motions was that it resulted in a bifurcated process - While it might be preferable to deal with most applications at the certification hearing, there were sometimes good and compelling reasons for them to be addressed earlier - Efficiency and judicial economy were important, but they were not the only values - Motions taken before the certification hearing might contribute to efficiency and judicial economy by narrowing and streamlining the issues and reducing the number of parties - Finally, it was essential that the process be fair to all parties - See paragraphs 16 to 40.

Practice - Topic 210.5

Persons who can sue and be sued - Individuals and corporations - Status or standing - Class or representative actions - Procedure - Pre-certification matters (incl. particulars, production, pleadings, etc.) - Stewart, a registered nurse, brought an action under the Class Proceedings Act, against his employer, a medical care facility, and its directors (three doctors) (the defendants), seeking damages for alleged exposure to asbestos while at work - The defendants applied under rule 159 for summary judgment to dismiss the claim and under rule 129(1) to strike certain portions of the amended statement of claim - Stewart asserted that the pretrial applications were premature as he had not yet applied for certification - The Alberta Court of Queen's Bench held that it could determine the summary judgment application prior to the certification hearing - Forcing the defendants to wait until Stewart brought his motion to certify the claim was neither fair nor efficient - The defendants had been in limbo for over two years - They deserved to have some control over the litigation - Further, the allegations in the statement of claim were stigmatizing - Forcing the defendants to participate in a costly certification hearing was not fair if they were able to establish at this time that they had been improperly named - See paragraphs 41 and 42.

Practice - Topic 210.5

Persons who can sue and be sued - Individuals and corporations - Status or standing - Class or representative actions - Procedure - Pre-certification matters (incl. particulars, production, pleadings, etc.) - Stewart, a registered nurse, brought an action under the Class Proceedings Act, against his employer, a medical care facility, and its directors (three doctors) (the defendants), seeking damages for alleged exposure to asbestos while at work - The defendants applied under rule 159 for summary judgment to dismiss the claim and under rule 129(1) to strike paragraphs 6, 12, 13 and 14 of the amended statement of claim - The Alberta Court of Queen's Bench, having allowed the application for summary judgment to dismiss the claim, also indicated that it would not have allowed the application to strike under rule 129(1) - Rule 129(1) gave courts discretion to strike pleadings that were scandalous, prejudicial or otherwise an abuse of the court process - The line between material facts and abusive facts was often narrow, as was the line between material facts and evidence - The impugned paragraphs were part of a summary of the facts and did not infringe rule 129 - Specifically, paragraph 6 spoke to the potential size of the class - Given that the claim included a claim for punitive damages, the extent of the financial gain enjoyed by the defendants might be a relevant consideration - Paragraph 12 pled that the employer had been charged with seven counts of violating the Occupational Health and Safety Act (OHSA) - Although these charges were mere allegations, they were material facts - Paragraph 13 pled that the employer had pled guilty to one count of violating the OHSA - This was a purely factual matter - Paragraph 14 discussed the effects that asbestos exposure caused generally, which was material to foreseeability, duty of care and alleged knowledge - See paragraphs 92 to 94.

Practice - Topic 2231

Pleadings - Striking out pleadings - Grounds - False, frivolous, vexatious or scandalous - [See third Practice - Topic 210.5 ].

Practice - Topic 2239

Pleadings - Striking out pleadings - Grounds - Abuse of process or delay - [See third Practice - Topic 210.5 ].

Practice - Topic 5719

Judgments and orders - Summary judgments - To dismiss action - [See first Practice - Topic 210.5 ].

Workers' Compensation - Topic 106

General principles - Effect of statute on other causes of action - Action by employer or employee against employer covered by Act - Stewart, a registered nurse, brought an action under the Class Proceedings Act, against his employer, a medical care facility, and its directors (the defendants), seeking damages for alleged exposure to asbestos while at work - The defendants applied under rule 159 for summary judgment to dismiss the claim - The Alberta Court of Queen's Bench allowed the application - Sections 21 and 23 of the Workers' Compensation Act (WCA) operated to stay Stewart's action as against the employer - There was no merit to that portion of the claim - The evidence established three critical points: (1) at all material times, the employer was an "employer" within s. 1(1)(j) of the WCA; (2) at all material times, Stewart was a "worker" within s. 1(1)(y) or 2 of the WCA; and (3) the exposure to asbestos was an "accident" within s. 1(1)(a) of the WCA as it arose in the course of employment in an industry to which the WCA applied - Stewart had no cause of action against his employer for alleged exposure to asbestos - However, the directors were not covered by the WCA because they had not maintained personal coverage accounts - Therefore, the WCA did not stay an action against the directors - Further, directors as a category were excepted out of the amended deemed worker provision in s. 16(1) of the WCA such that the directors were not protected by that provision - See paragraphs 49 to 55.

Cases Noticed:

Western Canadian Shopping Centres Inc. et al. v. Dutton et al., [2001] 2 S.C.R. 534; 272 N.R. 135; 286 A.R. 201; 253 W.A.C. 201; 2001 SCC 46, refd to. [para. 22].

MacKinnon v. National Money Mart Co. et al., [2005] 1 W.W.R. 233; 203 B.C.A.C. 85; 332 W.A.C. 85; 2004 BCCA 472, refd to. [para. 25].

Galarneau v. Canada (Attorney General) et al. (2004), 266 F.T.R. 52; 2004 FC 718 (Protho.), refd to. [para. 27].

Dahl et al. v. Royal Bank of Canada et al. (2006), 229 B.C.A.C. 263; 379 W.A.C. 263; 272 D.L.R.(4th) 344; 2006 BCCA 369, refd to. [para. 27].

Stone v. Board of Education of Wellington County (1999), 120 O.A.C. 296 (C.A.), refd to. [para. 27].

Kristal Inc. et al. v. Nicholl and Akers et al., [2007] A.R. Uned. 52; 2007 ABCA 162, refd to. [para. 28].

Chartrand v. General Motors Corp. et al., [2008] B.C.T.C. Uned. G02; 2008 BCSC 1781, refd to. [para. 28].

Direnfeld v. National Trust Co., [2002] O.A.C. Uned. 55; 17 C.P.C.(5th) 102; 2002 CarswellOnt 308 (C.A.), refd to. [para. 28].

Martin v. AstraZeneca Pharmaceuticals plc et al., [2009] O.T.C. Uned. M16; 2009 CarswellOnt 5499 (Sup. Ct.), refd to. [para. 29].

Tottrup v. Alberta (Minister of Environment) - see Tottrup v. Lund et al.

Tottrup v. Lund et al. (2000), 255 A.R. 204; 220 W.A.C. 204; 2000 ABCA 121, refd to. [para. 36].

Nette v. Stiles et al., [2009] A.R. Uned. 213; 2009 ABQB 153, refd to. [para. 38].

Attis et al. v. Canada (Minister of Health) et al., [2005] O.T.C. Uned. 334; 75 O.R.(3d) 302 (Sup. Ct.), refd to. [para. 40].

Murphy Oil Co. et al. v. Predator Corp. et al. (2006), 384 A.R. 251; 367 W.A.C. 251; 2006 ABCA 69, refd to. [para. 45].

Guarantee Co. of North America v. Gordon Capital Corp., [1999] 3 S.C.R. 423; 247 N.R. 97; 126 O.A.C. 1; 178 D.L.R.(4th) 1, refd to. [para. 45].

Lameman et al. v. Canada (Attorney General) et al., [2008] 1 S.C.R. 372; 372 N.R. 239; 429 A.R. 26; 421 W.A.C. 26; 2008 SCC 14, refd to. [para. 46].

De Shazo v. Nations Energy Co. et al. (2005), 367 A.R. 267; 346 W.A.C. 267; 2005 ABCA 241, refd to. [para. 46].

Jager Industries Inc. v. Canadian Occidental Petroleum Ltd. et al. (2000), 273 A.R. 1; 2000 ABQB 592, refd to. [para. 47].

Hagen et al. v. Stromner et al. (1998), 212 A.R. 1; 168 W.A.C. 1; 157 D.L.R.(4th) 333 (C.A.), refd to. [para. 49].

Medicine Hat (City) et al. v. Wilson et al. (2000), 271 A.R. 96; 234 W.A.C. 96; 2000 ABCA 247, refd to. [para. 49].

Donnelly Estate et al. v. Ay-Jay Operations Ltd. et al. (2007), 401 A.R. 311; 391 W.A.C. 311; 2007 ABCA 62, refd to. [para. 49].

Chauvet et al. v. Workers' Compensation Board Appeals Commission (Alta.) et al. (2007), 409 A.R. 17; 402 W.A.C. 17; 2007 ABCA 155, refd to. [para. 55].

Salomon v. Salomon & Co., [1897] A.C. 22 (H.L.), refd to. [para. 59].

Montreal Trust Co. of Canada et al. v. ScotiaMcLeod Inc. et al. (1995), 87 O.A.C. 129; 26 O.R.(3d) 481; 129 D.L.R.(4th) 711 (C.A.), refd to. [para. 59].

ScotiaMcLeod Inc. v. Peoples Jewellers Ltd. - see Montreal Trust Co. of Canada et al. v. ScotiaMcLeod Inc. et al.

Kosmopoulos et al. v. Constitution Insurance Co. of Canada et al., [1987] 1 S.C.R. 2; 74 N.R. 360; 21 O.A.C. 4; 34 D.L.R.(4th) 208, refd to. [para. 60].

Nielsen Estate et al. v. Epton et al. (2006), 401 A.R. 63; 391 W.A.C. 63; 2006 ABCA 382, refd to. [para. 60].

Blacklaws et al. v. 470433 Alberta Ltd. (2000), 261 A.R. 28; 225 W.A.C. 28; 2000 ABCA 175, refd to. [para. 61].

Normart Management Ltd. v. West Hill Redevelopment Co. et al. (1998), 113 O.A.C. 375; 37 O.R.(3d) 97; 155 D.L.R.(4th) 627 (C.A.), refd to. [para. 63].

369413 Alberta Ltd. v. Pocklington Holdings Inc. - see Gainers Inc. v. Pocklington Holdings Inc.

Gainers Inc. v. Pocklington Holdings Inc. (2000), 271 A.R. 280; 234 W.A.C. 280; 2000 ABCA 307, refd to. [para. 64].

Tate v. Canada Mortgage and Housing Corp. et al. (2002), 310 A.R. 194; 2002 ABQB 465, refd to. [para. 65].

Elder Advocates of Alberta Society et al. v. Alberta et al. (2008), 453 A.R. 1; 2008 ABQB 490, refd to. [para. 88].

Owners-Condominium Plan No. 0020701 v. Investplan Properties Inc. et al., [2006] A.R. Uned. 192; 2006 ABQB 224, refd to. [para. 88].

Farquhar v. Liberty Mutual Insurance Co., [2004] O.T.C. 39; 43 C.P.C.(5th) 361; 2004 CarswellOnt 166 (Sup. Ct.), refd to. [para. 90].

Counsel:

Clint Docken, Q.C., and William S. Klym, for the plaintiff;

David J. Cichy, Q.C., for the defendants.

These applications were heard on October 13, 2009, by Martin, J., of the Alberta Court of Queen's Bench, Judicial District of Calgary, who delivered the following reasons for judgment on April 16, 2010.