Sable Offshore Energy Inc. v. Labourers' International Union of North America, Local 1115

Sable Offshore Energy Inc. v. Labourers' International Union of North America, Local 1115 Court Supreme Court Date 2001-05-24 Citation 2001 NSSC 81 Docket SN 114539 Judge/Registrar/Adjudicator Davison, John M. (Honourable Justice) (SC) Document Type Decision Relations Library Sheet - Sable Offshore Energy Inc. v. Labourers' International Union of North America, Local 1115 - 2001 NSSC 81 - 2001-05-24 - Library Sheet Decision Content Date: 20010524 Docket: S.N. 114539 IN THE SUPREME COURT OF NOVA SCOTIA [Cite as Sable Offshore Energy Inc. v. Labourers’ International Union of North America, Local 1115 , 2001 NSSC 81] Between: SABLE OFFSHORE ENERGY INC. Applicant - and - LABOURERS’ INTERNATIONAL UNION OF NORTH AMERICA, LOCAL 1115, UNITED BROTHERHOOD OF CARPENTERS AND JOINERS OF AMERICA, LOCAL 1588 and UNNAMED PERSONS Respondents - and - FLEETWAY INC. Intervenor D E C I S I O N HEARD BEFORE: The Honourable Justice John M. Davison PLACE HEARD: Sydney, Nova Scotia DATE HEARD: May 24, 2001 DECISION: May 24, 2001 (Orally) WRITTEN RELEASE: June 6, 2001 COUNSEL: Ross Langley and Glenn F. Gouthro Solicitor for the Applicant N. Blaise MacDonald Solicitor for the Respondent John H. Graham Solicitor for the Intervenor. DAVISON, J.: (Orally) [1] I am going to render a decision and give certain reasons. The decision will not change. The reasons will probably have to be edited or added to or subtracted from because I am referring to compiled notes and that which I will say will probably be quite disjointed. [2] This is an application for an interim injunction which was advanced before commencement of the action. On May 4, 2001 the parties appeared before Justice Edwards who did not make a final determination but considered submissions and viewed video tapes taken by the R.C.M.P. He granted an order and set the matter for a full hearing for May 18, 2001, which was continued by an amended order to May 24, 2001. [3] At the opening of the adjourned hearing I sought clarification on a couple of procedural points. It is now clear that Sable Offshore Energy Inc., the applicant, will commence its action forthwith, and further that the proceeding before me is an interim application for injunction. [4] The applicant introduced two affidavits of Kenneth Balmer an employee of the applicant who was described as being the Gas Plant Head for the Fractionation Plant at the Point Tupper facility and who had overall responsibility for operations at the plant. From one of Mr. Balmer’s affidavits it would seem that the pipeline that was from Goldboro, Nova Scotia supplies a natural gas mixture of propane, butane and condensate. The applicant is currently adding processing equipment to the Plant. The subcontractor hired to perform the civil concrete and structural materials for supply and installation for the project is Harbour Hill Contracting Limited, and Harbour Hill has in turn subcontracted with Northstar Construction Limited to perform the digging and construction work for the concrete work necessary for the installation of the processing equipment and the relocation of a portion of the Plant’s underground firewater piping. Northstar is non-unionized. [5] There are two entrances to the Plant: a loading facility entrance and a main entrance. Both are located off the Port Malcolm Road. The main entrance is through Statia Terminal Canada Incorporated, and Sable offshore employees drive across this property to enter the Plant. [6] Mr. Balmer, in his affidavit, swore that at 6:45 on Thursday May 3, 2001 he was driving to work along the Port Malcolm Road when he encountered approximately nine cars and fourteen people near the loading facility entrance. He continued to drive along the Port Malcolm Road and encountered another group of approximately nine protestors and fourteen cars at the main entrance. They stopped his car and asked for whom he worked and when he reported that he was a Sable Offshore Energy employee, the protestors expressed their objection to the hiring of Northstar. They commented that it was improper to hire non-union labour and employees from Halifax. After approximately five minutes the protestors allowed his car to pass through the picket line. [7] At 8:00 on the same day a large flatbed truck carrying a skid arrived at the Port Malcolm Road to deliver the skid to the plant. It was denied access by the protestors. The protestors stood in front of the truck to prevent its passage. At 9:00 a.m. Hudson MacLeod, a safety advisor, employed by the applicant and Mr. Balmer met with the protestors who reported they were unemployed construction workers and they were not representing any union. [8] At approximately 9:10 a.m. on that same day, May 3, the primary contractor for the Plant, A.B. Mechanical Ltd. arrived at the main entrance, but its employees refused to cross the protestor’s picket line. The representative from A.B. Mechanical later reported that the company would not cross a picket line. [9] At 10:45 a.m. Mr. Balmer met with Doug Serroul, business agent for Local 1115 of the Labourers International Union, at the main entrance to the Plant. Mr. Serroul reported that he was not there on behalf of Local 1115 of the Labourers International Union, but that he would become involved if Northstar was permitted on site. He used explicatives and said words to the effect that if Northstar was permitted on site he would “bring forces” and “no one will get in or out.” Mr. Serroul also said words to the effect that if Northstar was permitted on site, the applicant should be prepared because there were 30 today but there would be 300 tomorrow and 3000 the day after that. [10] At 12:45 p.m. Mr. Balmer witnessed the truck containing Northstar employees attempt to enter the Plant at the main entrance. The protestors prevented the truck from entering the Plant by standing in front of it to prevent its passage. The truck backed up and left. Northstar, at the time of the affidavit, which was only a day later, has not returned. [11] Mr. Balmer executed and swore to another affidavit which is dated the 21st day of May, wherein he says “at approximately 6:30 a.m. on Friday, May 4th, 2001 I was driving to work along Port Malcolm Road when I encountered approximately three people near the loading facility entrance of the Plant”, and he “continued to drive along the Port Malcolm Road and encountered another group of approximately 15 protestors at the main entrance.” These protestors yelled “scab” and were handing out pamphlets. [12] At approximately 8:15 a.m. on Friday, May 4, 2001, Mr. Balmer said he watched the truck containing Northstar employees attempt to enter the Plant through the main entrance and that the protestors physically obstructed the truck from entering the gate. [13] The affiant was not cross examined, and counsel for the respondents did not request cross examination of any of the affiants. [14] There is also an affidavit filed by a David L. North, who is a Nova Scotia Professional Engineer and Operations Manager for the applicant. It states in part that Northstar’s work at the Plant is absolutely vital to the completion of the construction activity and to the applicant’s ability to deliver product in accordance with specification requirements of various contracts entered into with its customers. If the construction schedule is delayed, the applicant will not be able to deliver the propane product at its full commercial value as it has contractually committed to deliver to customers. Moreover, if the departure of railroad cars loaded with propane from the Plant is delayed or stopped, this would shutdown the entire offshore and onshore production facilities within a day because of the limited size of the storage facilities at the Plant causing irreparable harm to the applicant’s reputation. [15] The affidavit states that the applicant is critically and directly affected by the picketing and other activity which is occurring at the entrance driveway to the Plant and at the entrance used by railcars at the Plant. Any delay in one aspect of the construction activity scheduled to be carried out by Northstar or delay in shipping propane from the Plant, will have profound implications on others, will impact the overall production at the facility and impact the applicant’s ability to meet its contractual commitments. If Northstar is unable to complete or is delayed in the completion of its work, or propane delivery out of the Plant is delayed, the delays caused at the Plant, if not rectified immediately, will result in irreparable harm, loss of reputation of the applicant and its partners and incalculable damage to the applicant. [16] Mr. Langley, on behalf of the applicants, submitted that his client has causes of action in nuisance, inducing breach of contract and what he described as the common-law version of civil assault. There is also reference in his written submissions to intimidation. [17] In an action based on private nuisance the court determines whether the defendants have interfered with the use and enjoyment of the plaintiff’s land and whether the interference is unreasonable. The forms of activity constituting nuisance are varied and often difficult to define. As stated by Lord Wright in Sedleigh-Renfield v. O’Callagan (1943), 3 ALL E.R. 349, it is what is reasonable according to the ordinary usages of mankind living in this society. That is the test. [18] The applicant says that traffic has been obstructed and that is a nuisance. At this point I would note that originally the applicant sought an order in the terms set out in the order of Justice Edwards with the number of persons who picket being reduced to four. But I am advised today that the applicant endorses the submission of Fleetway Inc., the intervener, and seeks an injunction eliminating all picketing from the site. [19] The second cause of action that was advanced is that the respondents were inducing breach of contract. To succeed the applicant must show that the respondent knew of the contract, its terms and that they intended to procure a breach. There normally is conduct where a respondent directly persuades or induces a third party to breach a contract and the applicant must suffer damages. There must have been a breach of the contract. [20] Before considering these causes, I want to deal briefly with the test for interlocutory injunctions which has been set out by the Supreme Court of Canada in R.J.R. MacDonald Incorporated v. Canada Attorney General (1994), 111 D.L.R. (4) 385 which, subject to certain exceptions, accepted the decision of the House of Lord in American Cyanamid v. Ethicon Ltd. (1975), A.C. 396. [21] The first question in normal circumstances is whether the plaintiff has presented a case which is not frivolous or vexatious but which presents a serious case to be tried. One of the exceptions to this rule enunciated in the R.J.R. MacDonald case is where, as a practical matter, the interlocutory injunction will effectively end the litigation, and the court said this often happens in cases involving picketing. With respect to cases involving picketing, there should be advanced a strong prima facie case by the applicant. [22] The second step is whether damages will provide an adequate remedy or will there be irreparable harm. Irreparable harm means harm which cannot be quantified or cannot be cured because one party cannot collect damages from the other. I refer to an article of Mr. Justice Robert J. Sharpe of the Ontario Court (General Division) dated May 1996 entitled “Injunctions” and which was the subject of a lecture given to the National Judicial Institute: “Irreparable” refers to the nature of the harm suffered rather than its magnitude. It is harm which either cannot be quantified in monetary terms or which cannot be cured, usually because one party cannot collect damages from the other. Examples of the former include instances where one party will be out of business by the court’s decision; where one party will suffer permanent market loss or irrevocable damage to its business reputation; or where a permanent loss of natural resources will be the result when a challenged activity is not enjoined. [23] A further question advanced by the R.J.R. MacDonald case is a balance of convenience and the final question brings the court back to the success of the action where the extent of incompensable disadvantage to each party would not differ significantly. [24] Mr. MacDonald, counsel for the union respondents emphasized the exception set out by the Supreme Court as it relates to picketing and states that the applicant has to have a strong case. He also says there was no reasonable attempt to obstruct, and refers to the video taken by the R.C.M.P. I have looked at the video. There were 15 to 20 people at the entrance to the Plant. There was information given to some of the motorists who approached the entrance and discussions had with them. Some vehicles did not enter. There was no violence but the R.C.M.P. were present at the time of the video. Mr. MacDonald also emphasized last Thursday that there must be an unreasonable aspect to a finding of nuisance. [25] There was also an argument advanced by Mr. MacDonald that there was no evidence in the affidavits of any misconduct after May 4, 2001, and credit should be given to the respondents. The respondents should be recognized as having complied with the order of Justice Edwards. [26] It was represented that there should not be an injunction where a breach could bring on an application for contempt and rather there should be a promise by the respondents to the court that there will be compliance with the concerns of the plaintiff. [27] I will deal with some of these submissions advanced by the respondents. I am not prepared to substitute a promise in the place of the court order. If an order is to be issued, it should be enforceable within a short period of time and all rights of law should be available to the parties. [28] I will adopt the position that is advanced by the applicant. An order will issue incorporating the provisions determined by Justice Edwards for the reasons advanced by him except for the matter of picketing. In his decision of May 16, 2001 Justice Edwards stated: Both counsel have stated their respective positions. Mr. Langley has stated that no one has the lawful authority to prevent access to the facility. Mr. MacDonald agrees with that, but says they nevertheless do have the right to conduct a peaceful protest and lawfully disseminate information. This is not an employer/employee relationship. It is not a lawful strike situation. But citizens, including members of the respondent unions, do have the right to peacefully protest and lawfully disseminate information. They do not have the right to block access to the facility to the applicant or persons doing work on behalf of the applicant. They do not have the right to prevent them from carrying out their lawful activities. It is in everyone’s interest that the matter be aired as soon as possible. I have already dealt with the only reasonably available dates. Justice Edwards expressed concern that nothing take place beyond “a peaceful protest and dissemination of information” and he signed an order to reflect that concern concluding with these words: ... I want to make it abundantly clear that nothing that I am saying should be taken in any way to condone any threats, (which may or may not have been made, and I am not making a finding one way or the other on that today,) as giving anyone carte blanche to interfere with anyone going in and out of that facility. That is not the case. As suggested by Mr. MacDonald, I direct that a passage be added to the order: subject only to the limit of six persons at the main entrance, nothing in the order should be construed as limiting the right of persons to peacefully protest and lawfully disseminate information. With respect to Clause 1(c), I am going to allow that to remain because leaving that in does not, on the face of it at least in any way interfere with the right of the protestors to protest and to disseminate information. Without prejudging that aspect, just to err on the side of caution, I am going to allow that to stay in as some insurance that there will be no interference with the transportation of the natural gas product, via the rail line or any other means. [29] I will deal with the issue of picketing when I give consideration to the submission of counsel for Fleetway Inc. (the intervenor). I determined this company had an interest in the subject matter of this proceeding to permit intervention pursuant to Civil Procedure Rule 8. [30] The claim of the intervenors is supported by the affidavit of Mark Healy who is said to be the Logistics Coordinator of the intervenor and who was present in court during the hearing. No request was made to cross examine him on the affidavit. [31] This gathering of workers in front of the plaintiff’s Plant was not a legal proceeding and there is no collective agreement between the parties. In Canada Games Society Prince Edward Island Incorporated v. International Brotherhood of Electrical Workers Local 1432 (1989), P.E.I. J. 131. The court described the same type of gathering as not a “legal picket” and the whole crux of the decision to grant the injunction was the fact that the picket line was not legal. I cannot, with respect, completely agree with that conclusion even in circumstances in this proceeding. There has to be considered the right to a freedom of expression which was not considered in the Canada Games case. [32] The Canadian Charter of Rights and Freedoms does not apply to this litigation which is between private parties and where there is no governmental involvement. But even before the passage of the Charter, courts were reluctant to enjoin in interlocutory proceedings where persons were exercising civil rights such as freedom of speech and freedom of expression. I refer to the extensive reasons of Justice Adams of the Ontario Court (General Division) in Ontario (Attorney-General) v. Dieleman (1995), 117 D.L.R. (4th) 449 at 652 and 659. Furthermore after the Charter was passed the courts attempt to give respect to the basic principles in the Charter even though the Charter itself does not pertain to the proceeding. [33] We do not have a labour dispute. There is no legal relationship between the applicant and the respondent or between the intervener and the respondents. We have protesters who are unemployed persons who belong to unions and from the pamphlet introduced in evidence object to non-union Halifax workers being engaged to work in the Plant. Mr. Graham, counsel for the intervenor, states the position of the protestors is that persons cannot work in Cape Breton if you are not unionized. [34] From that which I saw on the video tapes and from the information in the uncontested affidavits I find the purpose of the line was not to disseminate information to the public but to stop work at the plant with a view to having unionized workers from Cape Breton instead of non-union workers. It is to be noted there would be little, if any, traffic of the public at the entrances to the plant except persons who worked at the plant or suppliers of material to the plant. [35] It is a well known principle that union workers will not cross picket lines and the evidence renders it clear they will not cross the line even in the face of threats of substantial financial loss. Attached to Mark Healey’s affidavit is five items of correspondence between the intervenor who has management contracts with the applicant and A.B. Mechanical Limited , a unionized company doing pipework at the plant and which retained the non-union company North Star. [36] The first letter from the intervenor to A.B. Mechanical Limited dated May 9, 2001 stated: ... If A.B. fails to resume onsite work, Fleetway Inc. will be forced to take whatever measures necessary to ensure timely completion of this job. A.B. Mechanical will be responsible for the cost of such measures. Fleetway holds A.B. Mechanical liable for all losses, costs, damages and expenses incurred by Fleetway or its customer due to A.B. Mechanical’s failure to progress and complete the work in accordance with the terms of the contract. A.B. Mechanical replied by letter dated May 10, 2001 which contained the following paragraph: Last week, I applied for a ‘Cease and Desist’ against my employees. This was issued by the Labour Relations Board last Friday. After serious consideration, I am reluctant to enforce this order because of safety concerns for my employees and/or their families. [37] On May 18, 2001 the intervenor wrote again stating: As you are aware, A.B. Mechanical Limited continues to be in breach of contract for its refusal to progress the work at the Point Tupper Fractionation Plant. This work is now approximately ten days behind schedule. In accordance with paragraph 14(c) of the Fleetway Standard Terms and Conditions (Appendix C), A.B.Mechanical has ten (10) days from receipt of our May 9th, 2001 notice to rectify this breach of contract. If this breach is not rectified to Fleetway’s reasonable satisfaction during the 10 day cure period, Fleetway has the right to immediately terminate the Purchase order or suspend all or any part of the work. Should A.B. Mechanical continue to be in breach of contract at the expiry of the cure period, Fleetway will consider all options available to it, including immediate termination of the contract for default. On the same day A.B. Mechanical replied: In response to your letter this date, it is A.B. Machanical’s [sic] position that we are very reluctant to jeperodize [sic] the safety of our employees by forcing them to cross picket lines. Fleetway and Sable have now had approximately two weeks to have this line removed and have not in my estimation given us free and safe access to site. We are concerned with our employee’s and families well being. On May 23, 2001 A.B. Mechanical again wrote to the intervenor stating: A.B. Mechanical Limited is unwilling to force our employees to cross picket lines for the following reasons: A) We feel it could very well put us out of business on future jobs B) It would not be in Fleetway’s best interest from a productivity perspective C) It would put our employees in a “no win” situation - fines or wrath of Union brothers D) We can not settle issues between Fleetway and the building trades I remind you of the pre-award meeting, in which we told you we had no control over unions. At no time did we anticipate picket lines. The problem was not with maintenance people on site, but with pickets. [38] The effect of the line of protestors has put the job at least two weeks in arrears and has prevented suppliers from crossing the line. It is clear from the letters of A.B. Mechanical which is attached to Mr. Healy’s affidavit that the contract is being breached and the copies of the letters were sent to union officers of the two respondent unions. I would find that they knew it was being breached. All of the circumstances before me indicate the work will not be done if that protest line remains. In my view, under these circumstances, the protestors cannot assemble if a cause of action arises such as intimidation or inducing a breach of contract. [39] Intimidation is a criminal offence as set out in s.423(1) of the Criminal Code. It has also been described by the Alberta Court of Appeal as tortuous and I refer to International Union United Automobile Airspace and Agricultural Implementation Workers of America v. Pacific Western Airlines Limited, [1986] 3 W.W. R. 531 at 537, wherein that Appeal Court says: A strike is a blunt instrument in labour relations. By the very nature of the process, the purpose of each side is to subject the other to such economic harm and hardship that it will be forced to submit. To inflict this economic damage employees are entitled to picket in order to induce other persons not to work for or do business with the employer so long as they use no unlawful means. Coercion or intimidation is tortuous and wrongful; persuasion even in dramatic terms is not. It is often a difficult problem where a few unlawful incidents have occurred during the course of picketing, which is otherwise peaceful, to determine what portion of the economic harm has been done by the lawful picketing and which portion may be attributed to the unlawful acts. (emphasis added) The Court went on to say: Counsel for the unions posed for the court a “dilemma” which, he said, exists in labour cases when unlawful acts have been part of the picketing process in a lawful strike, but the employer does not prove irreparable damage arising out of them. In my view the courts have never had difficulty in resolving that “dilemma”. A great mass of precedent establishes that unlawful acts by picketers will be enjoined whether or not irreparable harm is established. . . . [40] What is the evidence to indicate the workers or labour officials engaged in intimidation? There is uncontradicted evidence by an affidavit that there were threats from the business agents one day early in May that if Northstar was permitted on site they would bring forces and no one would get in or out of the Plant. There were individual and separate expressions of concern by A.B. Mechanical Limited, Woody’s Cranes and Atlantic Rentals that they will not permit their workers to cross the protest line and the reason advanced under oath was that they feared for the safety of their employees and their families. As stated, this position was taken by A.B. Mechanical Limited in the face of a clear indication from the plaintiffs that A.B. Mechanical Limited was in jeopardy of a substantial recovery action. [41] From all of the information before the court I infer that the applicant and the intervenor suffered as a result of the intimidation effected by the respondents. I find that there has been advanced a strong prima facie case of intimidation and also of inducing breach of contract. The protestors were aware of the contract with A.B. Mechanical and Northstar and strove to effect a breach of it by clearly indicating their objections of hiring non-unionized companies. There is no question the continued picketing will cause damage to the plaintiffs. The affidavit of Mr. North stated that Northstar’s work is absolutely vital to the completion of the construction activities and delays have a profound implication on others. I find that such delays will cause irreparable damages. [42] I also find irreparable harm flows from inducing breach of contract and intimidation. It would be difficult to recover damages and calculate damages caused by delays which affect contractors, subcontractors and suppliers together with those who expect delivery of the product. [43] In considering the balance of convenience, the applicant and the intervenor intend to carry on a job and employ persons and companies to effect this purpose, and the union is insisting that workers going to the job must be unionized. The balance of convenience favours the applicant and intervenor and the union cannot interfere with the contractual rights. [44] Mr. MacDonald raises an argument that the acts of the protestors are not tortuous and I have already found a prima facie case has been made out. Mr. MacDonald also strenuously argues that the affidavits are deficient and in particular the affidavit of Mr. Healy. He says that the evidence should not be advanced by affidavit. [45] This is an application for an interlocutory injunction and Civil Procedure Rule 37.09 applies and states: 37.09 (1) Evidence on a hearing may be given (a) by an affidavit or statutory declaration made pursuant to Rule 38; (b) . . . (c) with leave of the court, by any witness in person; . . . [46] In the alternative Mr. MacDonald says that the affidavit contains hearsay and that the names of the sources are not set out. In my view, affidavits can contain hearsay as long as the factors set out in the Waverley Village Commissioners et al. v. Nova Scotia Minister of Municipal Affairs (1993), 123 N.S.R. (2d) 46 are followed. The names of persons who are the sources of the information are perhaps not mentioned in some of the matters referred to in the Healy affidavit but the source is mentioned in the sense that there is reference to an “official” of a company. In the absence of cross examination of the affiant or conflicting evidence, I infer that the official is one with knowledge of that which is said. The applicant only has to put forth a prima facie case at this stage. [47] Mr. MacDonald also submitted that this should be a matter for the Labour Relations Board for a cease and desist order, and we can note that Mr. Wilkie of A.B. Mechanical fears to effect this procedure which he states would affect the safety of his employees. In these circumstances this court can grant an injunction. [48] In summary the line of protestors did not arise from any labour dispute between the parties but arose out of the concern of the protestors over work being given to nonunionized workers from Halifax. There was no nexus between the respondents and the applicant or the intervenor. [49] I found the purpose of the line was to exert pressure on the applicant and intervenor by stopping unionized workers from crossing the picket line and that intentional intimidation was effected by the respondents. [50] I found that all the elements of inducing breach of contract was shown and that the actions of the respondents were creating irreparable harm. I find there exists all of the appropriate elements for the granting of an interlocutory injunction prohibiting all matters prohibited in the decision of Justice Edward and prohibiting picketing or protesting. Such an injunction is just and convenient. [51] There will be no costs awarded. J.