International Association of Bridge, Structural & Ornamental Ironworkers Union, Local 97, et al. v. Canadian Ironworkers Union No. 1, [1972] SCR 295

Supreme Court of Canada

International Association of Bridge, Structural & Ornamental Ironworkers Union, Local 97, et al. v. Canadian Ironworkers Union No. 1, [1972] S.C.R. 295

Date: 1971-10-05

International Association of Bridge, Structural & Ornamental Ironworkers Union, Local 97, et al. (Defendants) Appellants;

and

Canadian Ironworkers Union No. 1 (Plaintiff) Respondent.

1971: May 27, 28; 1971: October 5.

Present: Judson, Ritchie, Hall, Spence and Pigeon JJ.

ON APPEAL FROM THE COURT OF APPEAL FOR BRITISH COLUMBIA

Labour—Building trades council—Struggle for exclusive access to construction jobs—Breakaway union—Members employed by subcontractor—Illegal strike by affiliated unions—Council obtaining subcontractors’ clause—Liability for illegal activity of affiliated unions.

The defendant, Local 97, was one of a number of craft labour unions constituting a building trades council, one of whose objectives was to secure for the benefit of the members of its affiliated unions exclusive access to all jobs in the construction industry in the area. As a result of a dispute within the ranks of Local 97, a group of its members broke away to form the plaintiff union, Union No. 1. The latter then obtained a number of certificates and secured collective agreements with some employers.

At the site where a new Hudson’s Bay Co. store was being erected, two union business agents, both of whom were known to be representatives of unions affiliated with the council, objected to the presence on the job of members of Union No. 1. These members were employed by a subcontractor who was under collective agreement with Union No. 1 and threats of a strike were made if they were not taken off the job. On the following day members of affiliated unions established a picket line and, as a result, the job was shut down. The picketing and work •stoppage were illegal under the statute law of the Province.

Subsequently, meetings were held by representatives of a contractors’ association, to which most of the contractors in the area belonged, with representatives of the council and, in the result, the

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manager of the association gave a commitment that the members of his organization had agreed not to let out contracts or entertain bids from firms who were under agreement to or certified by Union No. 1.

An action for damages, in which several incidents were mentioned, was dismissed by the trial judge, save with respect to what was called the “North-wood” incident, for which nominal damages only were given. Union No. 1 appealed that part of the trial judgment dismissing its claim in respect to the Hudson’s Bay incident. In respect of this incident, the Court of Appeal allowed the appeal and ordered a new trial limited to damages. An appeal by Local 97 was then brought to this Court.

Held: The appeal should be dismissed.

Although what had been agreed upon with respect to subcontractors who were under agreement to or certified by the plaintiff union was not illegal, the means employed to secure that end, namely a strike and the threat of its indefinite prolongation, were tortious because it was an actionable wrong to use illegal means to secure a lawful objective, when damage was caused thereby.

While it was true that those who seek to fasten on a defendant responsibility for a tort committed by others have to show the existence of relationship of agent and principal, this did not have to be demonstrated by producing a formal agreement. It was clear that although Local 97’s officers sat back and took no part in what was going on, what was being achieved was an objective that they were struggling for. It was equally clear that the others, who were resorting to illegal means for attaining it, felt that Local 97’s participation in the activities of the council meant that they had authority for acting as they did. In view of such evidence, it was of no importance that such authority could not be found in the rules and by-laws of the council or that the procedure followed may have been contrary to those rules and by-laws.

Belyea v. The King; Weinraub v. The King, [1932] S.C.R. 279, referred to.

APPEAL from a judgment of the Court of Appeal for British Columbia[1], allowing an appeal from a judgment of Ruttan J. Appeal dismissed.

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J.M. Giles and I.G. Nathanson, for the defendants, appellants.

J.N. Laxton, for the plaintiff, respondent.

The judgment of the Court was delivered by

PIGEON J.—This appeal is from a majority judgment of the Court of Appeal for British Columbia finding the appellant, “Local 97”, liable in damages to the respondent, “Union No. 1”, and ordering a new trial limited to damages. The finding of liability is with respect to one only of the several incidents mentioned in the action, namely what was referred to as the “Hudson’s Bay” incident. The trial judge had dismissed the action, save with respect to what was called the “Northwood” incident and awarded nominal damages only to Union No. 1 that is suing on behalf of itself and of its members.

Local 97 is one of nineteen craft labour unions constituting the Vancouver North-Westminster and District Building Trades Council (the “Council”). This organization was formed to deal as a united group with the employers of the construction industry in the area, most of whom are themselves bound together into the Amalgamated Construction Association (the “Association”). It was one of the objectives of the Council to secure for the benefit of the members of its affiliated unions exclusive access to all jobs in the construction industry in the area, as much as possible.

As a result of a dispute that arose in 1960 within the ranks of Local 97, a group of its members had formed a rival breakaway union, Union No. 1. The latter then obtained a number of certifications and secured collective agreements with some employers, including The Century Steel Company. Local 97 used all available means in a relentless struggle to put its rival out of business. Proceedings, including applications for injunctions, were instituted by Union No. 1 with respect to several incidents.

On the morning of July 14, 1966, two union business agents appeared at Prince George on the

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site where a new Hudson’s Bay Company store was being erected. Both were known to be representatives of unions affiliated with the Council. They raised objections with respect to some materials hauling allegedly being done by a non-affiliated union and also with respect to the presence on the job of members of Union No. 1 employed by a subcontractor, The Century Steel Company. Threats of a strike were made if Union No. 1 members were not off the job site by that night. The following morning, members of affiliated unions established a picket line and, as a result, the job was shut down.

Counsel for the appellant conceded before the Court of Appeal that the picketing and work stoppage were illegal under the statute law of the Province. The purpose was to compel the general contractor to cancel the contract of the subcontractor who was under collective agreement with Union No. 1.

A meeting of representatives of the contractors’ association with representatives of the Council was called for July 20, 1966, by one R.K. Gervin, the manager of the Association. As a result of the discussion, a second meeting was held on July 25, 1966, at which a settlement was effected. Minutes of those meetings were kept and are as follows:

Meeting held Vancouver Construction Association, Oak Street, Wednesday, July 20th, 1966—2 p.m.

Present:	Employers	R.K. Gervin
		Don Bennett
		C.J. Oliver
		Century Steel
	Union	J.R. St. Eloi
		J. Whiteford
		A. Learn
		A. McGee
		D.C. Fraser

Mr. Gervin opened the meeting by stating that to his knowledge the Hudson Bay Parkade at Prince George had been shut down due to the trades walking off the job. There were two reasons given as to why this walkout had taken place.

1. The materials that were being handled by the Elevator Constructors was being delivered to the

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job site by C.P. Merchandise whose drivers were not affiliated to the Building Trades Council.

2. That Century Steel, the sub contractor, was employing members of Canadian Local No. 1 Iron Workers on that project.

On reason No. 1 it was explained that Bennett and White, the General Contractor on the job, did not have the contract for the new escalator. This contract had been let by Hudson Bay direct to Otis Elevators. Further, that nobody at the meeting was sure that C.P. Merchandise were delivering materials to that project.

On problem No. 2 it was clearly stated by the Trades that as long as Canadian Iron Workers No. 1 were on that job the Building Trades could and would refuse to work along side people who were not affiliated to the Building Trades Council.

Mr. Gervin stated he would call a meeting of the B.C. Amalgamated Contractors Association as he was unable to give the trades an answer to this problem without consulting the Association.

It was agreed to by both parties that a further meeting would take place on Monday, July 25th at 2 p.m. at the Vancouver Construction Association, Oak Street.

Meeting, July 25th, 1966—

Present—representing the employers Association—

Unions	R.K. Gervin
	Don Bennett
	J. Whiteford
	B. Whitelock
	H. MacKichan
	R. Macintosh Peters
	D. Jorgenson
	A. McGee
	D.C. Fraser

Mr. Gervin stated that he was unable at this time to put anything in writing but he would give the Building Trades Council a firm commitment that as of today, July 25th, 1966, the members of the Association had agreed not to let out contracts or entertain bids from firms who are under agreement or certified by Canadian Iron Workers Local No. 1.

It was also decided that the Companies employing sub trades who are under agreement to Local No. 1 would be allowed to complete their projects providing the members of the Association lived up to their commitments.

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This means that the sub contractors employing members of Local No. 1 would have to go out of business and start up again under another name and employ members of Local 97.

Mr. Don Bennett stressed concern over members of Local No. 1 losing their jobs and that they should be given the chance to become members of Local 97.

It was pointed out that the Council had no control over any affiliate regarding whom they accepted for membership within their organization.

Meeting adjourned at 4 p.m.

D.C. Fraser,

Secretary

In the Courts below, the view was unanimous that what was agreed upon and is termed a “subcontractors’ clause” was not illegal. However, there was also unanimity in the view that the means employed to secure that end, namely a strike and the threat of its indefinite prolongation, were tortious because it is an actionable wrong to use illegal means to secure a lawful objective, when damage is caused thereby.

The only reason for which the trial judge dismissed the action—and the dissenting judge in the Court of Appeal would have sustained this decision—was that Local 97 took no part in the strike and in the further threats and was not represented at the meetings. The situation was said to call for the application of the rule that a member of a trade union is not responsible for torts committed by the union without his actual participation.

In the present case, it does not seem to me that there is any need to consider whether such a rule is applicable to an unincorporated organization of limited membership such as the Council. There is evidence that the union representatives present at the meetings of July 20 and 25 had authority to act for Local 97 in making to the employers’ representatives the threats that constituted the illegal means whereby the desired result, the subcontractors’ clause, was obtained. This evidence is to be found especially in the deposition of one Joseph Whiteford, the secretary-treasurer of one of the affiliated unions. He was present at both meetings. After stating that the

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minutes were correct and recounting the language used by him towards the employers, he gave the following answers:

Q. You were at that time speaking on behalf of all building trades unions affiliated to the Building Trades Council?

A. Oh, definitely. Definitely. I think that as a Building Trades representative, I have this right.

Q. Yes. And in that sense you were speaking on behalf of Local 97 as well as all the other affiliated unions?

A. If 97, which they are, is in the Building Trades, definitely I was speaking on behalf of all the trades in the Building Trades which I believe there is 19 of them, your honour.

Q. Including Local 97?

A. Including 97, yes.

It is quite true that, as counsel for the appellant pointed out, those who seek to fasten on a defendant responsibility for a tort committed by others have to show the existence of relationship of agent and principal. However, this does not have to be demonstrated by producing a formal agreement. The authority to act or the participation in a conspiracy may be established by any available means. Here, it is clearly shown that the situation was not one where third parties undertook the damaging course of conduct for Local 97’s benefit without any prearrangement. It is clear that although Local 97’s officers sat back and took no part in what was going on, what was being achieved was an objective that they were struggling for. It is equally clear that the others, who were resorting to illegal means for attaining it, felt that Local 97’s participation in the activities of the Council meant that they had authority for acting as they did.

In view of such evidence, it is of no importance that such authority cannot be found in the rules and by-laws of the Council or that the procedure followed may have been contrary to those rules and by-laws. In this respect, the situation is not different from that which obtained in Belyea v. The King; Weinraub v. The King[2], in which a

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conspiracy in restraint of trade was found to have been carried on by means, among others, of a builders’ council registered under the Trade Unions Act. All the stated objectives of that council were perfectly legitimate. However, in fact, its true purposes were illegal. The trial judge acquitted two persons who had been shown to have taken “an active part in the formation of the organization” but who had not been shown to have taken any part in any of the overt acts done in furtherance of the conspiracy. On appeal, their acquittal was quashed and a conviction directed. This was upheld in this Court. Anglin C.J.C. said (at p. 295):

If sitting as a jury, we should have no hesitation in finding that the illegal acts done at Windsor were a result intended by the defendants and their fellow conspirators when they formed the organizations found to have been a combine and a conspiracy.

In the present case, there is nothing tending to show that Whiteford did not speak the truth when he testified that he had authority from Local 97, as from the other members of the Council, in resorting to illegal means of obtaining for the benefit of Local 97 a “subcontractors’ clause”. This was intended to have the effect of putting Union No. 1 out of business for all practical purposes and it was fully appreciated that damage would thereby ensue to Union No. 1 and its members.

I would dismiss the appeal with costs.

Appeal dismissed with costs.

Solicitors for the defendants, appellants: Farris, Farris, Vaughan, Wills & Murphy, Vancouver.

Solicitors for the plaintiff, respondent: Shulman, Tupper & Co., Vancouver.