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OCA allows lawsuit against union to proceed

The Ontario Court of Appeal has allowed a plaintiff’s lawsuit against a union to go forward despite the fact she applied to correct a procedural error after the limitation period — a decision that a dissenting judge said will inject uncertainty into the law.

OCA allows lawsuit against union to proceed
Thomas Gorsky says a recent Court of Appeal decision is a message from the court that it will not allow technical tactics to thwart the underlying justice of a case.
In Lawrence v. International Brotherhood of Electrical Workers, the majority decision allowed a wrongful dismissal action by a former employee of the union to proceed, saying the procedural error was not enough to make the lawsuit a “nullity.”

The Court of Appeal found that the union — the International Brotherhood of Electrical Workers Local 773 — had brought its motion to dismiss the case based on the procedural issue only after a two-year limitation period had passed.

In the meantime, the union had retained counsel, submitted a statement of defence and participated in discovery, mediation and a pre-trial conference.

“I find it difficult to reconcile Local 773’s normal litigation activity on this matter over the course of more than two years with its argument that the action against it was so seriously flawed as to constitute nullity,” Justice Robert Sharpe wrote in the decision.

An Ontario Superior Court justice dismissed the union’s motion to dismiss the case, saying the union had failed to bring it in a timely manner and the Court of Appeal upheld that decision.

Lawyers say the decision is a message from the Court of Appeal that the courts are not going to allow technical tactics to thwart the underlying justice of a case.

“It used to be especially long ago that lawyers did a lot of that,” says Thomas Gorsky of Sherrard Kuzz LLP, who was not involved in the case.

“They often manoeuvred around and figured out ways to avoid the merits of a case by utilizing a technical defence.”

The appeal turned on whether a motion judge could grant a procedural mechanism called a representation order to the plaintiff, Pamela Lawrence, after a limitation period that would allow her to correct an error in her claim.

Lawrence had improperly named the union as a defendant on the lawsuit, which is contrary to the Rights of Labour Act.

So, in order for her lawsuit to proceed, Lawrence needed a representation order to name union members as defendants.

The union argued that the claim has no legal effect as it named Local 773 as a defendant and that this ultimately meant there was no effective claim when the representation order was made. They also contended the representation order was issued past the limitation period anyway.

The Court of Appeal found that the union, however, had not treated the claim as a “nullity” or as having no legal effect as it participated in the preliminary proceedings before the two-year limitation period applied.

Sharpe said that treating procedural flaws as “fatal nullities, incapable of amendments” was inconsistent with the modern principles of civil procedure.

Robert Reynolds, the lawyer representing Lawrence, says the decision shows that the courts are good at seeing through such tactics.

“It’s unfortunate that instead of addressing the plaintiff’s claims in a non-straightforward manner, they resorted to this type of gamesmanship,” he says.

The court also cited a previous decision that found a relevant section of the Rights of Labour Act was archaic.

The act was passed in 1944 to protect unions against employers, and it prohibits unions from being sued.

The court found that since the time the act was enacted, collective bargaining has greatly evolved and that unions should be treated as “juridical entities.”

Sharpe added that while the act should not be ignored, it “is a factor to be taken into account when the court is asked to use another archaic concept, that of ‘nullity,’ to characterize the effect of naming a trade union as a party.”

In his dissent, Justice William Hourigan slammed the majority’s analysis of the act, saying “it is not open to courts to ignore legislation on the basis that they feel it is outmoded or archaic” and that such an approach “is contrary to the basic rules of our parliamentary democracy because it usurps the legislative role of government.”

Hourigan maintained that the only way to bring a lawsuit against a union is to get a representation order and that, without one, the action is a nullity.

He added that Lawrence’s failure to obtain a representation order before the limitation period was “not just a mere procedural defect or flaw” and that the need for such an order is a “substantive statutory requirement.”

Jeffrey Murray, a partner with Stringer LLP, who was not involved in the case, says the decision preserves the plaintiff’s right of action while still upholding the significance of the provincial Rights of Labour Act.

“The purpose is not to prevent employees of unions from suing for wrongful dismissal,” Murray says of the act.

“I think Justice Sharpe recognized that and was also concerned by the conduct by the defendants in this case, who had not raised the Rights of Labour Act as a defence for two years and had simply lulled the plaintiff into I think a false sense that her action was viable.”

Through this decision and others like it, Reynolds says, the courts have invited the provincial government to revisit the language and intent of the legislation.

“This particular court found that rigid interpretation of this, what would be a 70-year-old statute, is not in the best interest of modern society,” he says.

Lawyers representing the union declined to comment as their client was still considering its options with respect to the decision, including whether to seek leave to appeal.

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