| Date: 20001012 CITATION: United Brotherhood of Carpenters and Joiners of America et al v. British Columbia Provincial Council of Carpenters et al 2000 BCSC 1494 Docket S003443 Registry: Vancouver IN THE SUPREME COURT OF BRITISH COLUMBIA BETWEEN: UNITED BROTHERHOOD OF CARPENTERS AND JOINERS OF AMERICA, DOUGLAS J. McCARRON, JAMES E. SMITH, WAYNE COX, MICHAEL AUTZEN AND DAVID WRIGHT on their own behalf as members of United Brotherhood of Carpenters and Joiners of America and on behalf of and representing all Members of United Brotherhood of Carpenters and Joiners of America PLAINTIFFS AND: BRITISH COLUMBIA PROVINCIAL COUNCIL OF CARPENTERS, LENNOX EMBREE, DAVID FLYNN, G. R. & S. HOLDINGS LTD. and ON THE LEVEL PUBLISHERS LTD. DEFENDANTS REASONS FOR JUDGMENT OF THE HONOURABLE MR. JUSTICE CLANCY Counsel for the Plaintiffs: C. Ross D. Fetterly Counsel for the Defendants: B. Laughton Date and Place of Hearing: August 11, 2000 and September 6, 2000 Vancouver, BC [1] The United Brotherhood of Carpenters and Joiners of America is an international organization of workers with members in Canada and the United States (“the United Brotherhood”). The personal plaintiffs are officers of the United Brotherhood who joined the action in a representative capacity. Under the Constitution of the United Brotherhood, it has the power to establish and charter subordinate local unions and district, provincial and state councils. In British Columbia, there are 27 local unions, six district councils and the defendant British Columbia Provincial Council of Carpenters (“ Provincial Council”). The personally named defendants are officers of the Provincial Council. G.R.& S. Holdings Ltd. is an investment body incorporated by the Provincial Council. On The Level Publishers Ltd. publishes a newspaper on behalf of the Provincial Council. [2] David (sic) McCarron, the general president of the United Brotherhood, has purported to exercise a power under s. 10B of the Constitution of the United Brotherhood. He has required the Provincial Council to provide its financial records for review by his deputies, the accounting firm KPMG. Lennox Embree, the president of the Provincial Council, has refused to comply and has written to the British Columbia local and district councils advising them to reject compliance as well. [3] The United Brotherhood brought this action and now seeks judgment pursuant to Rule 18 of the Rules of Court on some, but not all, of the claims advanced in the statement of claim. Specifically, the United Brotherhood seeks: (a) a declaration that KPMG may take possession of financial records and related documents of the Provincial Council for the years 1998, 1999 and 2000; (b) a mandatory injunction requiring the defendants to deliver those financial records to KPMG; (c) a mandatory injunction requiring the defendants to show the deputies of the General President including KPMG how to access information stored on computer; and (d) a mandatory injunction requiring the defendants to make arrangements to provide whatever equipment is necessary to allow the deputies to read or listen to records maintained on tape or disk. [4 ] In the alternative, the United Brotherhood claims for: (a) an injunction requiring the preservation of books and documents in the possession and control of the defendants pending the trial of the action; and (b) an interlocutory or interim injunction restraining the Provincial Council and the other defendants from acting in a manner contrary to the Constitution of the United Brotherhood and the lawful directives of the General President. [5] The relief claimed in the statement of claim for which judgment is not sought on this motion includes claims for damages for breach of contract, breach of fiduciary duty and interference with contractual relations. Rule 18 [ 61 Rule 18 (1) provides, in part, as follows: In an action in which an appearance has been entered, ... the plaintiff, on the ground that there is no defence to the whole or part of a claim, or no defence except as to amount, may apply to the court for judgment on an affidavit setting out the facts verifying the claim or part of the claim and stating that the deponent knows of no fact which would constitute a defence to the claim or part of the claim except as to amount. [7) The authorities provide that the function of the Chambers judge on an application under the Rule is to determine whether there is a bona fide triable issue. If so, the application must be dismissed. The question to be resolved has been stated in a number of ways: whether there is a real and substantial question to be tried; whether there is a dispute as to facts or law which raises a reasonable doubt; and whether it is manifestly clear that there is no defence which deserves to be tried; Memphis Rogues Ltd. v. Skalbania and N.M. Skalbania Ltd. (1982), 38 B.C.L.R, 193 (C.A.); Golden Gate Seafood (Vancouver) Co. Ltd. v. Osborn & Lange Inc. (19 8 6) , 1 B. C. L. R. (2 d) 14 5 (C. A.) ; Douglas Lake Cattle Co. v. Smith (1991), 54 B.C.L.R. (2d) 52 (C.A.). [8] The Chambers judge is not to try disputed issues of fact or law. In Esteban Mgmt. Corp, v. Edelweiss Int. Hldg. Corp. (1990), 43 B.C.L.R. (2d) 335 (S.C.), after referring to Hughes v. Sharp (1969), 68 W.W.R. 706, Allan J. held: ... that neither a judge in chambers nor a master is to determine any issue of fact or law on an application for summary judgment; his or her function is limited to a determination as to whether a bona fide triable issue arises on the material before him in the context of the applicable law. That statement of the law has been supported in many subsequent authorities. See, for example, Hutton v. Provident Life and Accident: Assurance Co. (1992), 11 C.C.L.J. (2d) 3; (19923 B.C.J. No. 2187 (Q.L.) (B.C. Master). Declaratory Relief [9] The claim of the plaintiffs for a declaration that KPMG may take possession of financial records and related documents of the Provincial Council rests on the authority granted to the General President under s. 10B of the Constitution of the United Brotherhood. That section provides as follows: The General President may personally, or by deputy, take possession for examinations of all books, papers and other records, including all financial records, of any Local Union, District Council, State Council or Provincial Council, summarily when necessary, and the same shall remain in possession of the General President within the jurisdiction of the Local Union, District Council, State Council or Provincial Council until a complete report has been made and filed. During said examination a representative of the Local Union, District Council, State Council or Provincial Council may be present. [10] it is conceded that KPMG is a deputy appointed by the General President. [11] Under Section 10G of the Constitution, the General President has the duty to “supervise the entire interest of the United Brotherhood, and perform such other duties as the Constitution and Laws of the United Brotherhood may require...”. [12] In his affidavit, President McCarron alleges that his action was prompted by the passage of certain resolutions at the annual convention of the Provincial Council in May 2000, which suggested to him that the Provincial Council was moving towards an attempt to withdraw, or disaffiliate, from the United Brotherhood. [13] In its June 2000 issue, On The Level, the newspaper of the Provincial Council described the events of the convention as follows: The convention directed the Provincial Council to start a process of rewriting and revamping the provincial constitution to reflect the often stated desire of the membership for Canadian autonomy. They also demanded that all references to the UBCJA be removed from the constitution and, as a reaction to some Local Unions not conducting a ballot during the last referendum, that all members be guaranteed the right to vote in any future Provincial Council referendum. [14] The actual resolution passed at the convention contained a number of inflammatory passages. It referred to the United Brotherhood as an anti-democratic organization, to nonsensical inquiries of the United Brotherhood and to possible litigation. The resolution also provided that anyone on the payroll of the United Brotherhood be barred from attending the convention. A representative has deposed that employees of the International organization were denied access. [15] In his affidavit, Mr. McCarron states that when he became aware of the events of the provincial convention, he concluded that it was necessary in the interests of the United Brotherhood to conduct a review of the financial records of the subordinate British Columbia bodies. He felt that the circumstances were such that he might be called upon to exercise his discretion under Section 30A of the Constitution. Section 30A provides that in the event a subordinate body should withdraw, or otherwise cease to function as a chartered subordinate body of the United Brotherhood, all Property, Books, Charters and Funds held in the name of the subordinate body must be forwarded to the United Brotherhood for use or disposition in the interests of the membership of the United Brotherhood as the General President may direct. Mr. McCarron deposed that he needed a complete and up-to-date picture of the assets in question in order to discharge his duties. [16] He put forward other reasons for taking action. He deposed that contrary to Section 27D of the Constitution, the Provincial Council had not kept its property in the name of its trustees, but instead held substantial assets in the hands of the defendant G.R.& S. Holdings Ltd. He expressed concern as well over the transfer of funds from the Strike Fund of the Provincial Council to the Legal and Defence Fund which he believed violated the terms of the Provincial Council’s Constitution. [17] The United Brotherhood contends that its Constitution constitutes a contract of membership that regulates the relationship between members and that compliance with the contract will be enforced by the courts: Orchard v. Tunney, [1957) S.C.R. 436 (S.C.C.); Astgen v. Smith (1970), 7 D.L.R. (3d) 657; [1970] 1 O.R. 129 (Q.L.) (Ont. C.A.); Boe v. Hamilton, Vancouver Registry, C864925 (B.C.S.C.). [18] In the plaintiff’s view, there can be no dispute as to the relief sought since the General President is simply asking the court to enforce the contractual provisions of the Constitution. President McCarron contends that he has a constitutional or contractual right to take possession of the records and that he has met his contractual obligations by appointing KPMG to obtain the records and conduct a review. [19] The defendants accept that the relationship between the United Brotherhood and its provincial members is contractual. They submit, however, that the contractual rights are not absolute and that a triable issue does exist. They argue that to suggest that the General President has an absolute right to invoke Section 10B fails to recognize fundamental aspects of the relationship between the United Brotherhood and the Provincial Council. In their submission, a number of implied terms arising from the reasonable expectation of the parties and from the equitable principles which have been applied to trade union constitutions must be read into the International Constitution. [20] The implied terms upon which they rely are: (a) the International Constitution is subordinate to the laws of British Columbia and, in particular, the Labour Relations Code; (b) the Provincial Council of Carpenters is entitled to operate as a trade union in the Province of British Columbia exercising the rights, privileges and duties of trade unions under the Labour Relations Code; (c) the Provincial Council is entitled to protect the democratic rights of its members and to uphold the majoritarian principles given to those members under the Labour Relations Code; (d) the Provincial Council and its members have a right to engage in genuine debate over its future, its structure, its affiliation with the International and to adopt resolutions that are consistent with that right; (e) the Plaintiff McCarron in his capacity as General President of the International will exercise his powers in good faith and for no ulterior purposes. [21] They submit that if those terms are implied, it becomes clear that the relief sought by the United Brotherhood would be contrary to rights and obligations created by the Constitution. Consequently there is a defence to the action which must be tried. [22] In Berry v. Pulley (1999), 45 O.R. (3d) 449 (Ont. S.C.J.), the Court dealt with an action brought in contract by Air Ontario pilots against Air Canada pilots. Both groups of pilots had been members of the Canadian Airline Pilots Association. The dispute involved the integration of seniority lists. Winkler J. found that union members are parties to the union contract but went on to hold that: ... it is not an incident of a contract of union membership that individual members of the union may be held personally liable to other union members as a result of the collective action of the bargaining unit. The remedy of damages as against individual members is not available for the breach of contract of the nature asserted to exist between the union members. (para. 97) [23] In reaching that conclusion, Winkler J. found that the contract was one of “adhesion”, where the union member has no choice in negotiating terms nor in declining participation where a collective agreement is in place. Citing the decision of the Alberta Court of Appeal in Westfair Foods Ltd. v. Watt (1991), 79 D.L.R. (4th) 48, he accepted that voluntary relationships are regulated “... by regard to the expectations raised in the mind of a party by the word or deed of the other ... This is what we call reasonable expectations...” (Westfair Foods p. 54). Winkler J. found that the remedy of damages was not within the reasonable expectations of the parties to the dispute. [24] As stated, the contention of the defendants before me is that the implied terms put forward were within the reasonable expectations of the parties. That being so, the defendants say there is a defence to be tried. [25] Berry v. Pulley, supra, was appealed (28 April 2000), Toronto Registry, C32366 (Ont. C.A.) In dismissing the appeal, the Ontario Court of Appeal referred to Orchard v. Tunney, supra, an authority relied on by the plaintiffs, and held: While the case stands for the proposition that an individual union member has certain contractual rights with respect to the collectivity, I see nothing in the case to support the proposition that the individual member may assert contractual rights against other individual members. [26] On the authorities presented to me, I conclude that the relationship between the United Brotherhood and the local bodies is contractual. Collectively, the contract may be enforced. Since the association is a voluntary one, it is arguable that the reasonable expectations of the parties must be taken into account. Those reasonable expectations could include the implied terms suggested by the defendants. [27] Counsel for the United Brotherhood contended that the implication of terms suggested by the defendants cannot be supported on the authorities. She referred to Pottelberg v. British Columbia Telephone Co. (1995), 11 C.C.E.L. (2d) 87 (B.C.S.C.) where Robinson J. held at p. 92: In London Drugs Ltd. v. Kuehne (1990), 45 B.C.L.R. (2d) 1 (C.A.) at 364, Lambert J.A. quoted from the reasons of Lord Simon of Glaisdale, for the Privy Council, in B.P. Refinery (Westernport) Pty, Ltd. v. Shire of Hastings (1977), 16 A.L.R. 363 (P.C.): “Their Lordships do not think it necessary to review exhaustively the authorities on the implication of a term in a contract which the parties have not thought fit to express. In their view, for a term to be implied, the following conditions (which may overlap) must be satisfied: (1) it must be reasonable and equitable; (2) it must be necessary to give business efficacy to the contract so that no term will be implied if the contract is effective without it; (3) it must be so obvious that “it goes without saying”; (4) it must be capable of clear expression; (5) it must not contradict any express term of the contract.” [28] In her submission, the terms as suggested may be reasonable and equitable but they fail to meet the remaining requirements for implication of contractual terms. I conclude that whether the requirements are fulfilled is an open question to be decided by the trial judge on the facts as determined and after full argument on the issue. [29] I cannot say that the defence contention that terms must be implied is bound to fail. President McCarron’s powers under the Constitution have not been shown to be absolute beyond a reasonable doubt. There is an issue to be tried. [30] There is further support for concluding that there are issues to be tried. There are issues of fact to be resolved. The actions of President McCarron cannot be looked at in isolation. The history of the relationship between the parties, as established by the materials filed and as illustrated in previous decisions of the Labour Relations Board of British Columbia, shows that, prior to the invocation of Section 10B of the Constitution, the International Brotherhood had decided to dissolve local unions and the Provincial Council and to transfer members and appoint officers, all without allowing affected members to vote on the changes. That is part of the background which led up to the Provincial Council’s resolution. [31] The Provincial Council sees the invocation of Section 10B as a means of intimidating and coercing the Provincial Council and affiliated locals in the exercise of their democratic rights under the Labour Relations Code. They further see the use of Section 10B as a means of obtaining information that could be used to justify a basis upon which the Provincial Council could be placed under supervision. Counsel submits that whether Mr. McCarron is using Section 10B in an ulterior manner to advance his own ends and not in response to the threat of disaffiliation is a triable issue. [32] Mr. McCarron’s reference to the holding of assets in G.R.& S. Holdings Ltd. rather than in the name of trustees as a reason for his actions is also disputed by the defendants. They allege that all parties knew of and consented to that action. They refer to a history of some 30 years of following that course. G.R.& S. had been in existence since 1970. [33] As to Mr. McCarron’s concerns over the transfer of funds from the Strike Fund to the Legal and Defence Fund, the position of the defendants is that expenditures are regulated by the Provincial Council Constitution. There is nothing in the International Constitution that regulates the use of such funds. A province-wide referendum was conducted in September 1999 and an amendment to the Provincial Council Constitution was approved. The United Brotherhood has refused to approve the Constitutional amendment. [34] The defence put forward in respect of the use of Section 10B in an ulterior manner raises the question of whether the actions of Mr. McCarron were oppressive. In light of the history of the relationship between the parties, I am unable to say that defence is bound to fail. If good faith is an implied term of the contractual relationship, allegations of oppression deserve consideration. A triable issue exists. [35] On the materials provided to me, I cannot find beyond a reasonable doubt that the actions of the Provincial Council in handling funds through G.R.& S. Holdings Ltd. and in transferring funds from the Strike Fund constituted justifiable grounds for invoking Section 10B of the Constitution. Those matters are also issues to be considered at trial. [36) For all of the reasons given, I find that triable issues have been identified. The application of the plaintiff for judgment pursuant to Rule 18 of the Rules of Court is dismissed. Injunctive Relief [37] In the alternative, the plaintiffs claim for injunctive relief. They seek a mandatory injunction requiring the defendants to deliver up to the United Brotherhood all of the Provincial Council’s books, papers and other records for the years 1998, 1999 and 2000. In Williams v. International Association of Machinists (31 January 1992), Vancouver Registry, C918553 (B.C.S.C.), Saunders J. (now J.A.) held that a mandatory injunction will only be granted where there is a fair question to be tried, the case is unusually sharp and clear or right and the balance of convenience favours the granting of the injunction. [38] To grant a mandatory injunction would be to effectively give the plaintiffs the relief sought in their application for judgment for declaratory relief. For the reasons given in denying that application, I find it inappropriate to grant a mandatory injunction. [39] In the further alternative, the plaintiffs seek an injunction requiring the preservation of books and documents in the possession and control of the defendants pending the trial of the action and an interlocutory or interim injunction restraining the Provincial Council and other defendants from acting in a manner contrary to the Constitution of the United Brotherhood and the lawful directives of the General President. [40] The latter relief sought is overly broad. It is difficult to see how such an order could be enforced. Moreover, the evidence does not support the making of such a broad order. President McCarron may well have legitimate concerns arising from the actions of the Provincial Council at their convention but those concerns can be addressed in a more specific way. An injunction could be granted pending trial, requiring the preservation of documents in the control of the defendants if the facts warrant the making of such an order. [41] The authorities make clear that injunctive relief is available in circumstances such as these. In Lakeman v. Bruce, [1949] 3 D.L.R. 527 (B.C.C.A.), the court approved the granting of an injunction against representatives of a seceding group from interfering with the assets of a local union. The court held at p. 535; ... that a person who comes to the Court for an interim injunction pending trial, is not required to make out a case which will entitle him at all events to relief at the trial. It is enough if he can show that he has a fair question to raise as to the existence of the right which he alleges, and can satisfy the Court that the status quo ought to be preserved until the question can be determined judicially. The court will often grant an interim injunction as Lord Chancellor Cottenham said in Gt. Western R. Co. v, Birmingham & Oxford Jct. R. Co. (1848), 17 L.J. Ch. 243 at p. 245, without having the means of forming any opinion as to the ultimate rights of the parties. [42] The test enunciated in Lakeman is similar to the generally accepted test for the granting of an interim injunction set out in B.C. (A.G.) v. Wale (1986), 9 B.C.L.R. (2d) 333 (C.A.). What is required is a fair question to be tried as to the existence of a right, a breach of that right or a reasonable apprehension that a breach will occur, and the balance of convenience favouring the granting of an injunction. [43] As to the existence of a right, I have earlier held that there are fair questions to be tried. While I held that the other factual issues were issues to be tried and that I could not find that the provisions of the Constitution were absolute, it is equally true that I cannot find that the plaintiffs are bound to fail in their action. Their claim represents a fair question to be tried as well. [44] I do not agree that granting an injunction requiring the preservation of records effectively grants the plaintiffs the relief that they seek in the action. That may have been arguable in respect of a mandatory injunction but cannot be supported in considering an interim or interlocutory injunction. I am satisfied the plaintiffs have shown a fair question to be tried as to the existence of a right under the Constitution to obtain the records and the reasonable apprehension that a breach of that right may take place. It may be that the Provincial Council has done nothing improper by passing resolutions at its Convention but the resolutions clearly show an intention to disaffiliate. That raises the reasonable apprehension that control over documents and assets may be the next phase in the dispute between the parties. It is surely unnecessary for the plaintiffs to wait until some action depriving it of assets takes place. The balance of convenience favours the plaintiffs. [45] As to irreparable harm, the defendants submit that there is no evidence that the plaintiffs have suffered harm but there is a reasonable apprehension that the Provincial Council may suffer harm if information is obtained under Section 10B of the Constitution and then misused. That is not the effect of the injunction sought. It will only require the preservation of books and documents in the possession of the defendants. [46] I am satisfied that the basis for an injunction pending trial has been made out by the plaintiffs. The defendants are required to preserve all books, papers, documents and other records, including all financial records currently in their power, possession or control, or in the control of their servants, agents and officers pending the trial of this action or until further order of this Court. Conclusion [47] The application of the plaintiffs for judgment for declaratory relief pursuant to Rule 18 of the Rules of Court is dismissed. An injunction pending trial will issue in the terms set out herein. [48] Costs are reserved to the trial judge. The Honourable Mr. Justice Clancy Both the International’s suit and the Council’s statement of defence can be found on the internet at http://www.carpentersunionbc.com BC LRB rules against forced mergers by International International's appeal of LRB decision dismissed: Vancouver Sun, Saturday, October 14, 2000 |
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