) ) Total Mechanical Systems Limited v. Total, 2013 ONSC 1922

CITATION : Total Mechanical Systems v. Sheet Metal Workers’ International Association Local 30, 2013 ONSC 1922 DIVISIONAL COURT FILE NO.: 17/12 DATE: 2013/04/10 ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT Molloy, Herman, Edwards J.J. BETWEEN: ) ) Total Mechanical Systems Limited and Total Mechanical Systems

(2003) Ltd. Applicants – and – Sheet Metal Workers’ International Association Local 30 and Ontario Labour Relations Board Respondents )) )) )) )) )))))))) David J. Rose , for the Applicants Ronald Lebi , for the Respondent, Sheet Metal Worker’s International Association Local 30 Leonard Marvy, for the Respondent, Ontario Labour Relations Board HEARD: March 15, 2013 HERMAN J. reasons for decision [ 1 ] This application for judicial review was heard on March 15, 2013. The Court dismissed the application, with reasons to follow.

These are the reasons. [ 2 ] The applicants sought judicial review of three decisions of the Ontario Labour Relations Board in a related employer/successor employer case. [ 3 ] In the first decision, dated September 15, 2011, the Board refused the applicants’ request for an adjournment sine die , pending a determination of their civil action against the respondent union but, instead, granted an adjournment of one month. In the second decision, dated October 17, 2011, the Board found that the applicants were one employer for the purposes of s. 1(4) of the Labour Relations Act, 1995 , S.O. 1995, c. 1, Sched. A.

In the third decision, dated November 24, 2011, the Board refused to exercise its discretion to reconsider its two earlier decisions.

[4] The applicants raised four issues in their application: (

i) the Board improperly refused the applicants’ request for an adjournment; (ii) the Board erred when it relied on the July 25, 2008 agreement between the parties; (iii) the Board disregarded evidence that the applicants were not one employer; and (iv) the Board acted ultra vires when it gave legal advice to the applicants. Adjournment request [5] Total Mechanical Systems

(2003) Ltd. (“Total 2003”) requested an adjournment sine die pending the determination of thecivil action it had initiated against the union. The company said it could afford a lawyer for the civil action, but it could not afford alawyer for the Board hearing as well. [6] The Board refused the request, but granted an adjournment of one month. [7] If the Board’s refusal of the applicants’ request for an adjournment constitutes a denial of natural justice or proceduralfairness, there is no standard of review applicable.

If it is not a denial of natural justice or procedural fairness, the standard of review isreasonableness. [8] There is no right to an adjournment. As noted by the Divisional Court in Khan v. Ontario Labour Relations Board andRoyal Alliance, [2009] O.J. No. 393 (Div. Ct.) at para. 14: “The Board has the authority to control its own process and has discretion togrant or refuse an adjournment.” [9] In reaching its decision, the Board took into consideration the fact that there was no possibility of the civil case reaching trialin the foreseeable future.

The Board stated that it was up to Total 2003 to make its own decisions regarding the retention of lawyers. [10] The Board also noted that the application involved an issue that was directly related to the core of the Board’s jurisdiction,that is, a declaration under s. 1(4) of the Labour Relations Act. [11] The applicants submit that the Board failed to take into account Rule 48.14(0.1)(1) of the Rules of Civil Procedure, R.R.O.1990, Reg. 194, which provides that a matter be set down for trial within two years after the defence is filed.

However, that Rule doesnot mean that a matter will reach trial “in the foreseeable future.” [12] The Board did not act arbitrarily. It considered relevant factors in deciding not to grant an indefinite adjournment. In thecircumstances, the Board’s decision did not constitute a denial of natural justice or procedural fairness and was not unreasonable.

Reliance on the parties’ agreement [13] During the course of the September 2011 hearing, Total 2003 conceded that the July 25, 2008 agreement between TotalMechanical Systems Limited (“Total”) and the union was sufficient to cause the Board to issue a declaration that Total and Total 2003constituted one employer. The issue to be determined, therefore, was whether the health of Mr. Riccardo Lettieri, one of the signatoriesto the agreement, was sufficient reason to cause the Board not to rely on that agreement. [14] The respondents submit that the standard of review applicable to this issue is reasonableness.

The applicants did not makeany submissions on the standard of review. [15] We agree that a related employer decision under s. 1(4) would usually be subject to the reasonableness standard. Theinterpretation by a tribunal of its home statute is generally afforded deference (Alberta (Information and Privacy Commissioner) vAlberta Teachers’ Association, 2011 SCC 61). However, we have some question as to whether that standard would apply to thedetermination of mental capacity.

That determination is not core to the function and expertise of the Board and involves the applicationof general law. [16] We are, however, reluctant to rule on this issue in the absence of full argument. In the circumstances it is unnecessary to doso because, in our view the decision of the Board was both reasonable and correct. [17] At the time that he signed the agreement, Mr. Lettieri was encephalopathic. The applicants have provided a letter from adoctor, dated April 29, 2011, which indicates that when Mr.

Lettieri signed the agreement, he was not of sound mind as a result of hiscondition. [18] However, that evidence, on its own, does not determine the matter. Rather, in order for a contract to be voidable, the otherparty (in this case, the union) must also have either actual or constructive knowledge, of the incapacity (Racho v. United Steelworkers ofAmerica, Local 719, (O.L.R.B.) at para. 20, citing Chitty on Contracts (27th ed., 1994)). [19] The applicants submit that it should have been apparent to the union that Mr.

Lettieri did not have the mental capacity to enterinto the agreement because only his first name was on the “Please print” line. However, Mr. Lettieri signed his full name on thesignature line. [20] Furthermore, the evidence before the Board was that at the time that Mr. Lettieri signed the agreement, his brother wasunaware of his incapacity. If his own brother was unaware of the problem, it stands to reason that the union was not in a position to haveeither actual or constructive knowledge of Mr.

Lettieri’s incapacity. [21] The applicants further submit that the Board improperly disregarded the will-say statements provided by the union. However,

as a result of disregarding the union’s will-say statements, the Board based its decision on the applicants’ best case, that is, on the applicants’ own evidence. [ 22 ] In any case, the union’s two will-say statements do not assist the applicants. The deponents state that they were aware that Mr.

Lettieri was not physically well and needed a liver operation, but they had no reason to believe that his physical condition affected his decision-making capacity. [ 23 ] Finally, the applicants submit that Board’s decision was inherently contradictory: the Board indicated that the purpose of the hearing was to determine whether Mr. Lettier’s health was sufficient reason not to rely on the July 25 agreement, but the Board then went on to state that the case could be decided without any consideration of the alleged incapacity of Mr. Lettieri, because Mr.

Lettieri’s brother had also signed the agreement. [ 24 ] In our opinion, this is not inherently contradictory. Rather, the Board provided an additional reason for relying on the July 25 agreement. Failure to consider evidence [ 25 ] The applicants submit that the Board disregarded evidence that the two companies were not one employer.

In particular, they say that neither of the companies ever had employees and Total did not sell, lease or transfer anything to Total 2003. [ 26 ] We agree with the respondents that the standard of review applicable to this issue is reasonableness. [ 27 ] At the first hearing, Total 2003 conceded that the July 25, 2008 agreement was sufficient to cause the Board to issue a declaration that the two companies constituted one employer.

It follows from this concession that if the Board concluded that it could rely on that agreement, it was not necessary to consider any other evidence. [ 28 ] Total 2003 sought to resile from this concession at the application for reconsideration. [ 29 ] The Board has a broad discretion to reconsider any of its decisions, pursuant to s. 114(1) of the Labour Relations Act. In refusing to allow the applicants to resile from the concession, the Board stated: Absent compelling circumstances the Board does not permit parties to reject agreements which they have made. None exist here.

Any request to reopen this settled issue should also have been made before the October 14 hearing took place. [ 30 ] The applicants also did not put forward any compelling reasons as to why they should be able to resile from the concession at the application for judicial review. [ 31 ] In view of the concession, and the absence of a reason to allow the applicants to resile from that concession, the Board’s failure to consider other evidence was reasonable.

Legal advice [ 32 ] The applicants claim that the Board provided legal advice prior to the commencement of the hearing on September 15, 2011 and, in so doing, acted ultra vires . In particular, the applicants claim that Mr.

Joseph Lettieri asked the Board what, if any, implications the Board decision would have on the on-going civil litigation and the Board told him there would be no impact. [ 33 ] In its request for reconsideration, the applicants stated that the advice was incorrect and that had the advice not been given, they would have requested an adjournment in order to retain a lawyer to represent them at the Board hearing. [ 34 ] The Board considered this issue and stated: “The Board provided no legal advice to anyone that day”. [ 35 ] Leaving aside the question of whether the Board provided any legal advice, there is no evidence that the applicants relied on the advice to their detriment.

Indeed, notwithstanding the alleged advice, the applicants still requested an adjournment pending the determination of the civil claim. They were, at the time, represented by counsel in the civil action and could have sought his advice on the matter. Finally, although their counsel was not on the record in the Board proceeding, he attended the hearing on October 14, 2011, as their advisor. [ 36 ] We are in no position to make a finding as to what the Board said to Mr. Lettieri prior to the hearing and are therefore unable to determine that any legal advice was given.

However, even if any advice was given, there is no evidence to conclude that there was any unfairness or prejudice to the applicants as a result. Conclusion [ 37 ] For the reasons given above, the application for judicial review is dismissed. [ 38 ] The parties agreed that the successful party should receive costs of $7,500. Costs of $7,500, inclusive of disbursements and HST, are therefore awarded to the union. [ 39 ] The Ontario Labour Relations Board does not seek any costs.

Herman J. Molloy J. Edwards J. Released: April 10, 2013 CITATION : Total Mechanical Systems v. Sheet Metal Workers’ International Association Local 30, 2013 ONSC 1922 DIVISIONAL COURT FILE NO.: 17/12 DATE: 2013/04/10 ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT Total Mechanical Systems Limited and Total Mechanical Systems

(2003) Ltd. Applicants – and – Sheet Metal Workers’ International Association Local 30 and Ontario Labour Relations Board Respondents REASONS FOR DECISION Herman J. Released: April 10, 2013