



COURT OF APPEAL FOR ONTARIO

CITATION: Berry v. Pulley, 2015 ONCA 449

DATE: 20150619

DOCKET: C55933

Hoy A.C.J.O., Watt and Brown JJ.A.


BETWEEN

Patrick Berry, James Deluce, Jeffrey Karelsen,
Robert James Simerson and Ernest Zurkan

Plaintiffs (Appellants)

and

Chris Pulley, Tom Fraser, James Griffith, Peter
Wallace, George Cockburn, Denis Belhumeur, Greg Mutchler, Gary Dean, Yves
Filion, Howard Malone, Kevin Vaillant and Gordon Grieg

Defendants (Respondents)

and

Kent Hardisty

Third Party (Respondent)



Benjamin Zarnett, Graham D. Smith and Peter R. Merchant,
for the appellants

Steve Waller and Leanne Storms, for the respondents

Brian Shell and Steven Sagle, for the third party
respondent

Heard: April 14, 2015

On appeal from the judgment of Justice Sarah E. Pepall of
the Superior Court of Justice dated July 25, 2012, with reasons reported at
2012 ONSC 1790.



Hoy A.C.J.O.:

I  overview

[1]

This appeal arises out of turf wars waged nearly twenty years ago
between Air Canada pilots and pilots of Air Ontario and other regional carriers
in which Air Canada held an interest.

[2]

In the late 1980s, Air Canadas pilots became concerned that Air Canada
would transfer domestic routes to the cheaper regional carriers, which had
lower pilot costs. Some thought that merging the pilot seniority lists of Air
Canada and the regional carriers would protect Air Canada pilots. They would
get access to the routes that the regional pilots flew. Merger could also
benefit the regional pilots. They would be able to bid on Air Canada planes,
advance their careers, and make more money.

[3]

On March 1, 1991, with the support of union executives from Air Canada,
Air Ontario and four other regional airlines, the Canadian Airline Pilots
Association (CALPA)  a trade union that, at its peak, represented 4,000
pilots in Canada  initiated a process to merge pilot seniority lists at Air
Canada and five regional airlines. However, the Air Canada pilots and the regional
pilots had different perspectives on how a merged seniority list should look.
The Air Canada pilots pushed for an end-tail merger, in which the most senior
regional pilot would follow the most junior Air Canada pilot. The regional
pilots argued for a dove-tail merger, in which pilots would be assigned
seniority numbers by start date, regardless of the airline for which they flew.
Ultimately, an arbitrator  Michel Picher  crafted first a framework for a
merged seniority list and then, a number of months later, drafted an actual
merged seniority list.

[4]

Neither the framework nor the list was binding on Air Canada and neither
could be implemented without its agreement. CALPA contemplated that Air
Canadas agreement would be secured through collective bargaining.

[5]

A couple of days after the arbitrator finalized the merged seniority
list, the Air Canada pilots voted to leave CALPA and join a new union known as
the Air Canada Pilots Association (ACPA). The merged seniority list was not
implemented.

[6]

In a class proceeding, the representative plaintiffs of a class
comprised of 171 pilots employed by Air Ontario on March 28, 1995 claimed,
among other things, that the defendant Air Canada pilots had committed the tort
of unlawful act conspiracy. In particular, they alleged that from March 28,
1995 until November 14, 1995, Air Canada First Officer Chris Pulley  who was
the Chairman of Air Canadas Master Executive Council during that period  and
defined sub-classes of Air Canada pilots conspired with each other by expressly
or impliedly entering into an agreement or agreements to prevent implementation
of the merged seniority list. The plaintiffs sued for expenses incurred in
connection with creating the merged list and for the loss of the chance to implement
the merged seniority list.

[7]

Following a lengthy common issues trial, the trial judge dismissed the
plaintiffs claims. She found that the plaintiffs claim for unlawful act
conspiracy failed against the defendants in sub-classes two, four and six
because those defendants had committed no unlawful acts, the second of the five
elements in unlawful act conspiracy.

[8]

After finding that the plaintiffs had established the first four
elements of unlawful act conspiracy with respect to the defendants in
sub-classes one, three and five, the trial judge dismissed the claims against
those defendants because she found their unlawful conduct did not cause damage
to the plaintiffs. Due to a number of barriers to implementation of a merged
seniority list, the plaintiffs did not lose more than a
de minimis
chance to have a merged seniority list implemented.

[9]

The plaintiffs advance four principal arguments on this appeal, all
relating to their claim of unlawful act conspiracy:

1.

The trial judge erred in concluding that a union members right to
dissent permitted the defendants in sub-class six (Air Canada rank-and-file
who somehow acted to prevent implementation of a merged seniority list) to resist
implementation of the merged list. As a result, the trial judge wrongly concluded
that the defendants in sub-class six acted lawfully in resisting implementation
of the merged list.

2.

The trial judge erred in concluding that sub-classes two and four
(described below) did not commit unlawful acts related to the merged list.

3.

The trial judge erred in her causation analysis. She should have
concluded that the defendants unlawful conduct had caused the plaintiffs to
lose more than a
de minimis
chance of having a merged seniority list
implemented. She should then have gone on to value that lost chance.

4.

The trial judge erred by failing to award damages equal to the $150,280
incurred by the plaintiffs in retaining lawyers and preparing for the
arbitration with respect to the merged seniority list.

[10]

As
I explain below, I reject each of these arguments and would dismiss this
appeal.

[11]

Because
I conclude that the trial judge did not err in her causation analysis, and that
there is therefore no need to value the lost chance, I need not address the
plaintiffs further argument that this court should value the lost chance in
the aggregate on the evidence of the plaintiffs expert rather than refer the
chance for individual assessment (as the trial judge would have ordered had she
found causation).

[12]

Before
addressing the plaintiffs four principal arguments, I will first set out some
portions of the background in more detail and then outline the elements of the
tort of unlawful act conspiracy.

II  THE BACKGROUND

The CALPA Constitution, the Merger Policy and the declaration
of merger

[13]

While
the Air Canada pilots and the pilots of the various regional airlines formed
separate bargaining units, they were all members of CALPA. CALPA had a
Constitution and an Administrative Policy to which all members were bound.
Under a section of CALPAs Administrative Policy, the President of CALPA could
declare a merger of pilot seniority lists, even if the pilots airlines had
not actually merged operations. This section  referred to by the trial judge
as the Merger Policy  set out a process for integrating the seniority lists of
affected airlines once the President declared a merger.

[14]

The
CALPA Constitution provided for Local Councils. Each Local Council decided
local matters and consisted of members who were employed by the same airline or
division of an airline and who were based at the same location. In the relevant
period, Air Canada had Local Councils in Montreal, Toronto, Winnipeg and Vancouver.
Each Local Council elected a Local Executive Council (LEC).

[15]

The
CALPA Constitution also provided that each bargaining unit would have a Master
Executive Council (MEC). The MEC was the highest governing body in all
matters that only affected the active CALPA membership of a particular airline.
The MEC was comprised of the Chairman and Vice-Chairman of each Local Executive
Council. The members of the MEC elected a Chairman. First Officer Chris Pulley
was the Chairman of Air Canadas MEC from September 1994 until the Air Canada
pilots decertified CALPA on November 14, 1995.

[16]

At
the request of the MEC Chairmen for Air Canada, Air Ontario and four other regional
airlines, the President of CALPA declared a merger of pilot seniority lists in
March 1991.

Unsuccessful negotiation of a merged seniority list

[17]

As
provided in the Merger Policy, the MEC of each merging bargaining unit
appointed two Merger Representatives to negotiate a merged seniority list. One
of Air Canadas Merger Representatives is the defendant in sub-class two in
this action.

[18]

CALPA
did not pay all expenses associated with the merger process. The MEC for each
airline had to raise funds from its pilots. After an authorizing vote, the MECs
deducted monies from pilots wages to pay merger-related expenses. Air Ontarios
merger-related expenses amounted to $238,000 up to November 15, 1995. Of that
amount, $150,280 relates to their claim in this action and is the subject of
the fourth issue that the plaintiffs raise on appeal.

[19]

The
various Merger Representatives were unable to agree on a merged seniority list.
Mediations conducted in 1992 and 1993 failed. By late 1993, Air Canadas MEC
Chairman was receiving weekly if not daily communications on merger from Air
Canada pilots, about 90% of whom were against merger. In response to pilot
dissatisfaction, the Air Canada MEC in March 1994 passed a resolution to try
and postpone, delay or cancel the merger of the seniority lists. The Air Canada
MEC also tried to convince CALPAs President to dissolve the merger.

[20]

CALPA
was not deterred. In accordance with the Merger Policy, Michel Picher had been
appointed as arbitrator in January 1994 to put together the merged seniority
list. Arbitration commenced in September 1994. Air Canadas MEC participated fully
in the arbitration.

The March Picher Award and events triggered by it

[21]

On
March 28, 1995, Mr. Picher released his first award (the March Picher Award).
He contemplated two lists: one for seniority and a second for bidding on home base,
flying equipment and status as captain or first officer (the latter two of
which influenced a pilots income). He directed that an integrated seniority
list be based on date of hire but left the dates of hire to be determined by
the MECs. He selected an Air Canada pilot  P.J. OHara  to act as top
blocker for bidding on base, equipment and status. Regional pilots senior to
him would be treated as immediately junior to him for bidding purposes. In his
reasons, Mr. Picher indicated that only the 15% most junior Air Canada pilots would
compete with regional pilots in bidding on base, equipment and status. Mr.
Picher invited the parties to fashion the two actual lists, but reserved
jurisdiction in the event of a dispute.

[22]

The
Air Canada rank-and-file overwhelmingly opposed the March Picher Award. In
April 1995, Air Canadas MEC Chairman, First Officer Pulley, issued a
newsletter questioning the legitimacy of the merger process. Air Canada Local
Councils in Toronto, Winnipeg and Montreal passed motions directing the Air
Canada MEC to reject the March Picher Award. In addition, the Montreal Local
Council unanimously resolved that, among other things, the Air Canada MEC
refuse to negotiate any agreement with Air Canada that would place any Air
Canada pilot on the current seniority list junior to any regional pilot. The
Montreal Local Council also resolved that Seniority Protection Committees be
appointed at the Montreal level and at the MEC level to explore means to
nullify the arbitration award.

[23]

A
Montreal-based Seniority Protection Committee was established and circulated a
petition, entitled the Declaration of Solidarity. The Declaration of
Solidarity was presented to Air Canada. It was also presented to CALPAs Board
of Directors with the hope that it would prompt them to stop the merger
process.

[24]

Air
Canada pilots also sent letters to Hollis Harris, the Chief Executive Officer
of Air Canada, complaining about the March Picher Award.

[25]

The
Air Canada MEC sought legal advice. Their lawyer told them the CALPA Constitution
did not require the Air Canada MEC to put the March Picher Award into the
collective agreement. The MEC unanimously passed a motion that recognized Air
Canada pilots direction to cease any efforts to implement the March Picher
Award. It also established the Special MEC Merger Advisory Committee (the
SMMAC) to, among other things, provide options on the merged seniority list.

[26]

The
SMMAC recommended that the Air Canada MEC withdraw its grievance with Air Canada
over Letter of Understanding 17 (LOU 17). LOU 17, concluded in 1988, provided
that Air Canada could not transfer flying to regional airlines and then lay off
Air Canada pilots due to loss of that flying. CALPA argued that Air Canada laid
off pilots in 1993 because it transferred flying to the regional airlines. The
SMMAC thought that pursuing the grievance risked demonstrating that Air Canada
was playing its bargaining units off against one another. And that demonstration
could provide fodder for an application under s. 35 of the
Canada Labour
Code
, R.S.C. 1985, c. L-2
.
Under a s. 35 single employer application, the Canada Labour Relations Board
(the Board) could declare Air Canada and its regional airlines a single
employer and consolidate the pilot bargaining units into a single bargaining
unit.

[27]

Several
meetings were held between late April and early August 1995 to construct
seniority and bidding lists, as required by the March Picher Award. The Air
Canada MEC did not agree to the proposed lists.

[28]

The
Air Canada collective bargaining agreement expired on April 1, 1995. First
Officer Pulley and the Air Canada MEC directed the committee appointed to
negotiate the new collective agreement not to raise the March Picher Award or
the topic of a merged seniority list. Sub-class four of the defendants in this
action consists of members of that negotiating committee.

[29]

In
April or May 1995, some Air Canada pilots began discussing formation of a new
union. The Air Canada Pilots Association was subsequently formed and, in May
1995, it began soliciting support from Air Canada pilots. Because ACPA was
seeking the right to represent Air Canada pilots, CALPA and the Air Canada
MECs negotiating committee suspended collective bargaining with Air Canada on
June 22, 1995. On July 7, ACPA applied for certification as bargaining agent
for the Air Canada bargaining unit. In September, the Board ordered a
representation vote to determine whether CALPA or ACPA would represent Air
Canada pilots.

The Final Picher Award and de-certification of CALPA

[30]

On
October 9, Mr. Picher unsuccessfully attempted to mediate a resolution. He then
proceeded to prepare finalized, merged seniority lists  the Final Picher
Award. He released the Final Picher Award on November 7, 1995.

[31]

On
November 9, 1995, a substantial majority of Air Canada pilots voted to certify
ACPA as the new bargaining agent for Air Canada pilots. On November 14, 1995,
ACPA was certified and CALPA was subsequently decertified as the bargaining
agent for Air Canada pilots. ACPA and Air Canada then negotiated a collective
agreement.

[32]

On
March 20, 1996, CALPA filed an application before the Board, seeking a
declaration that Air Canada and its five regional airlines constituted a single
employer. On December 22, 1999, the Board declined to grant the relief
requested. It had denied an Air Canada single employer application in 1989 and
concluded that no change in the airline industry since warranted modifying its
position.

[33]

On
February 1, 1997, CALPA merged with the Air Line Pilots Association (ALPA), a
U.S.-based union. ALPA became the successor bargaining agent for the Air
Ontario bargaining unit formerly represented by CALPA. ALPA, represented by Kent
Hardisty, defended the main action as a Third Party and is the Third Party
Respondent on this appeal. In a separate action, currently on hold, the Air
Canada defendants seek indemnification from ALPA for any damages arising out of
tort awarded to the plaintiffs. ALPA denies that the actions of the defendants
were tortious.

III  THE TORT OF UNLAWFUL ACT CONSPIRACY

[34]

Before
considering the issues raised on this appeal, it is useful to review the
elements of unlawful act conspiracy.

[35]

Canadian
courts recognize two types of actionable conspiracy:
Pro-Sys Consultants
Ltd. v. Microsoft Corp.
, 2013 SCC 57, [2013] 3 S.C.R. 477, at para. 73.
The first is predominant purpose conspiracy, also known as conspiracy to
injure. This appeal involves the second type, which is known as unlawful means
or unlawful act conspiracy.

[36]

As
outlined in
Agribrands Purina Canada Inc. v. Kasamekas
, 2011 ONCA 460,
106 O.R. (3d) 427, at para. 26, a plaintiff must establish the following five
elements to succeed on a claim of unlawful act conspiracy:

1)

The defendants acted in combination, that is, in concert, by agreement
or with a common design;

2)

The defendants conduct was unlawful;

3)

The defendants conduct was directed towards the plaintiff;

4)

The defendants should have known that, in the circumstances, injury to
the plaintiff was likely to result; and

5)

The defendants conduct caused injury to the plaintiff.

[37]

Only
the trial judges conclusions on the second and fifth elements are at issue on
appeal.

[38]

With
this framework, I turn to the first issue the plaintiffs raise on the second
element: whether the members of sub-class six acted unlawfully in resisting
implementation of a merged seniority list.

IV  ISSUE One: DID THE RIGHT TO
DISSENT permit THE DEFENDANTS IN SUB-CLASS SIX TO FRUSTRATE IMPLEMENTATION OF
THE AWARD?

[39]

To
establish that the defendants in sub-class six (Air Canada rank-and-file who
somehow acted to prevent implementation of a merged seniority list) were liable
for unlawful act conspiracy, the plaintiffs had to establish that the
defendants in sub-class six acted unlawfully in resisting implementation of the
merged list. The trial judge acknowledged that the CALPA Constitution and
Merger Policy constituted a contract between each union member and CALPA. The
plaintiffs alleged that the members of sub-class six breached that contract and
thereby acted unlawfully. At issue is how a union members right to dissent from
the manner in which union affairs are conducted fits into this
breach-of-contract analysis.

[40]

Below,
I first outline the trial judges reasons on this point, then summarize the
plaintiffs arguments, and finally explain my conclusion that the defendants in
sub-class six did not breach their contracts with CALPA. In interpreting the
CALPA-member contract, I describe the relevance of sub-class sixs right to
dissent.

The trial judges reasons

[41]

Before
considering whether the members of sub-class six breached their contract with
CALPA, the trial judge considered the impact of a union members right of
dissent on the contract analysis. She quoted the following passage from
Tippett
v. International Typographical Union, Local 226
(1975), 63 D.L.R. (3d) 522 (B.C. S.C.), at p. 546
:

All members of trade unions have the unqualified right to speak
out against the manner in which union affairs are conducted. There is a right
of dissent. There is a right of decertification, subject to the condition that
no member of a union shall conspire with his employer to injure the union No
person can be expelled or penalized by a trade union for insisting on his
rights.

[42]

She
also cited
Berry v. Pulley
, 2002 SCC 40, [2002] 2 S.C.R. 493, the
Supreme Court decision from an earlier point in this action. In 1998, the
defendants brought a summary judgment motion that made its way to the Supreme
Court. The court held that the plaintiffs breach of contract claims against
the defendants could not prevail. The CALPA Constitution and Merger Policy
constituted a contract between each union member and CALPA, not a contract between
union members. At para. 60, Iacobucci J., for the court, endorsed the passage
from
Tippett
and the unqualified right of union members to speak out
against the agenda of their bargaining agent.

[43]

The
trial judge also cited the more recent decision of
Fullowka v. Pinkertons
of Canada Ltd.
, 2010 SCC 5, [2010] 1 S.C.R. 132, which, at para. 149,
stated:

The relationship between a union member and his or her union is
contractual in nature, with both the union and the member agreeing to be bound
by the terms of the union constitution. However, the analogy to contract has
its limits given that the relationship is greatly determined by the relevant
statutory regime and the general principles of labour law which have been
fashioned over the years. Significantly, the members have the unqualified
right to speak out against the agenda of their bargaining agent.

[44]

The
trial judge then considered, at para. 417, whether a union members right to
dissent permitted him or her to depart from the terms of the CALPA Constitution
and Merger Policy. She concluded that the right to dissent did not permit
members of sub-classes one through five, who were either officers of the union
or members acting on behalf of officers, to so depart. However, members of
sub-class six could seek to avoid implementation of a merged seniority list.

[45]

At
para. 419, she explained that the CALPA Constitution and Merger Policy did not
require the members of sub-class six to act to implement the merged seniority
list:

A review of the Merger Policy places the primary responsibility
for implementation on CALPA, not the MECs, much less the individual members.
Furthermore, while the Constitution bound union members, the Merger Policy
provides that the President shall notify the MECs that it is their
responsibility, as representatives of the affected pilots, to activate the
described procedure for the integration of the pilot lists. The remainder of
the Merger Policy describes the role of the MEC, the Merger Representatives and
CALPA. With the exception of a passing reference to pilot groups in section
5(a) of the Merger Policy, there is no reference to the individual union
members.

[46]

She
concluded, at paras. 420 and 421:

It seems to me that the unqualified right to dissent should
operate to permit members of Class 6 to speak out against the agenda of CALPA
and its union officers in these circumstances.

Many members of Class 6 communicated with Air Canada, urged the
MEC and LECs to oppose the implementation of an integrated seniority list,
supported the formation of SMMAC or the Local Seniority Protection Committee,
signed the Declaration of Solidarity, and took other steps and positions to
advocate against the imposition of the Picher Award. I decline to find that any
of these actions or the conduct advanced by the Plaintiffs constituted unlawful
conduct for the purposes of liability for conspiracy. Rather, they were
permissible given the Class members right to dissent.

The plaintiffs argument

[47]

The
plaintiffs argument has two prongs. The second prong depends on the success of
the first.

[48]

First,
the plaintiffs argue that the trial judge erred in concluding that the conduct
of the rank-and-file members did not breach their contract with the union.

[49]

The
plaintiffs argue that the provisions of the Merger Policy bound all union
members, including the rank-and-file members of sub-class six, to implement the
merged seniority list. Section 1(c) of the Merger Policy provides that the
Merger Representatives will have authority to act for and on behalf of the
pilots of their respective airlines for the purpose of compiling a single
integrated seniority list. The Merger Policy also mandates arbitration if the
Merger Representatives cannot agree on an integrated pilot seniority list
through negotiation or mediation. The Merger Representatives of each airline
participate in the selection of the arbitrator. The arbitrators decision binds
all parties to the arbitration.

[50]

The
plaintiffs submit that a party to a contract who renders it impossible to
perform the contract breaches the contract:
Culina v. Giuliani
, [1972]
S.C.R. 343, at pp. 357-58, citing
Southern Foundries (1926), Ltd. v.
Shirlaw
, [1940] A.C. 701 (H.L. Eng.). Therefore, they say, because the Constitution
and the Merger Policy bound the members of sub-class six, those members could
not take any steps  including forming a new union and decertifying CALPA as
their bargaining agent  to intentionally thwart implementation of the merged
list.

[51]

Second,
if a union member harms another member by the breach of the unions rules, the
injured member may (if the requisite elements are present) have an action in
tort against that member:
Berry
(SCC)
, at para. 64. The plaintiffs submit that a union members right
to dissent does not insulate him or her from tort claims from other union
members.

[52]

The
plaintiffs argue that Winkler J. (as he then was) got it right in his
obiter
comment in the summary judgment motion in this action:
Berry v. Pulley
(1999), 45 O.R. (3d) 449 (S.C.). There, Winkler J. wrote, at para. 78:

The assertion of a right of dissent in this case ignores the
process that led to the Picher award. The defendants participated, through
representatives, in the process with full opportunity to have their views heard
by an independent arbiter. Consequently, I find that the defendants submission
that their actions were justifiable based on a right to dissent to be
untenable.

[53]

This
paragraph, the plaintiffs say, supports their position that the right to
dissent does not insulate the members of sub-class six from the plaintiffs tort
claims.

Analysis

[54]

The
plaintiffs argue on appeal that the members of sub-class six breached their
contracts with CALPA. I agree with the trial judge that members of sub-class six
did not breach their contracts with CALPA in their attempts to avoid the
implementation of the March Picher Award and the Final Picher Award. The
plaintiffs argument accordingly fails.

[55]

In
considering the plaintiffs argument that the members of sub-class six breached
their contracts with CALPA, it is important to keep in mind the Supreme Courts
comments in
Berry
about the nature of the contract between the member
and the trade union. The union-member contract is a unique adhesion contract:
Berry
(SCC), at para. 49. While, by the act of membership, both the union and the
member agree to be bound by the terms of the union constitution, the terms of
the contractual relationship will be greatly determined by the statutory
regime affecting unions generally as well as the labour law principles that
courts have fashioned over the years:
Berry
(SCC), at para. 48. As
the court pointed out, at para. 49, the statutory context plays a very
important role:

For example, the statutory right of members to be represented
by the union of their choice implies that the contract only exists as long as
the members maintain that union as their bargaining agent, and no penalty could
be imposed by the contract against members for exercising this statutory right.

[56]

As
the Supreme Court also noted at para. 49, the unique character and context of
[a member-union] contract, as well as the nature of the questions in issue,
will necessarily inform its construction in any given situation.

[57]

Accordingly,
the terms of the contractual relationship between the rank-and-file members of
sub-class six and CALPA must be interpreted in light of both the statutory
right of union members to choose their union
[1]
and the labour law principle affording a right to dissent to union members.

[58]

The
trial judge concluded, and I agree, that that the Constitution and Merger
Policy did not expressly require the members of sub-class six to act to implement
a merged seniority list. Nor did the Merger Policy expressly require the
members of sub-class six to refrain from impeding or thwarting implementation
of a merged list. Having regard to the statutory right of union members to
choose their union and the labour law principle affording a right to dissent to
union members, I would not imply such a term. Interpreting the terms of the
contractual relationship between the rank-and-file members of sub-class six in
light of the applicable principles, the members of sub-class six did not breach
their contracts with CALPA in voting to form ACPA and in taking other steps to
avoid implementation of a merged seniority list.

[59]

This
case does not involve a situation where a union members right to dissent
conflicts with an express provision of the union-member contract. While I am
doubtful that a provision directly or indirectly prohibiting dissent would
survive in what the Supreme Court has characterized as a unique adhesion
contract, that issue is best left for another day.

[60]

Culina
does not help the plaintiffs.

The contract between the members of
sub-class six and CALPA did not require the members of sub-class six to act to
implement, or to refrain from sabotaging, the merged seniority list.


[61]

Nor
does Winkler J.s
obiter
comment assist the plaintiffs. First, as
discussed above, the trial judges conclusion was driven by her interpretation
of the union-member contract. Second, the defendants were not yet divided into
sub-classes when Winkler J. gave his reasons. The trial judge determined that
the right to dissent did not apply to sub-classes one through five (the sub-classes
made up of union officers or members who worked on behalf of those officers).
Winkler J. might well have taken a more nuanced position had the defendants
been divided into sub-classes when he wrote his reasons. In light of the
subsequent, clear direction from the Supreme Court, I would interpret his
statement in
obiter
as restricted to the members of sub-classes one
through five.

[62]

I
turn next to whether the members of sub-classes two and four acted unlawfully.

V  ISSUE Two: DID THE TRIAL JUDGE
ERR IN FINDING THAT THE MEMBERS OF SUB-CLASSES Two AND Four COMMITTED NO
UNLAWFUL ACTS?

[63]

The
plaintiffs factum devoted a single paragraph to the argument that the trial
judge erred in concluding that the defendants in sub-classes two and four
committed no unlawful acts. The plaintiffs did not allude to the argument in
their oral submissions. I will address the argument very briefly.

[64]

The
trial judge found that the members of the Air Canada MEC, who comprise
sub-class one, engaged in unlawful conduct by breaching duties of loyalty to
CALPA and breaching their contractual obligations under the Merger Policy. The
trial judge found that the members of sub-classes two (one of the Air Canada
pilots Merger Representatives) and four (members of the committee appointed by
the Air Canada MEC to negotiate the new Air Canada collective bargaining
agreement) did not owe duties of loyalty to CALPA. The trial judge also
concluded, at para. 429, that members of sub-class two and sub-class four did
not commit unlawful acts on the basis of breach of the Merger Policy. She found
that the members of sub-classes two and four had a limited contractual role.
In addition, they acted under the control and direction of the Air Canada MEC.
Furthermore, it is not clear to me that their conduct did amount to a breach of
contract.

[65]

The
plaintiffs argue that whether the members of sub-classes two and four acted
under others direction is irrelevant and does not change the fact that they
were bound, as union members, to abide by the Merger Policy.

[66]

However,
this argument does not address the trial judges key determination. The trial
judge had to decide whether the members of the sub-classes, in their capacities
as Merger Representatives or negotiating committee members, breached the Merger
Policy. In addition to finding that the members of these two sub-classes acted
under the control and direction of the Air Canada MEC, the trial judge found
that their conduct did not breach the Merger Policy. The plaintiffs do not
articulate how the trial judge erred in her interpretation of the Merger
Policy, if they in fact argue that she did err. I am not persuaded that there
is any basis to interfere with the trial judges conclusion that sub-classes
two and four did not breach the Merger Policy.

[67]

I
turn next to the two issues arising out the fifth element of unlawful act
conspiracy: causation.

VI  ISSUE Three: DID THE TRIAL
JUDGE ERR IN HER CAUSATION ANALYSIS?

[68]

The
fifth and final element of unlawful act conspiracy required the plaintiffs to
prove that the defendants wrongful conduct caused them injury. The plaintiffs
put forward as their main injury the loss of the chance to implement the merged
seniority list. They say that the trial judge erred in concluding that, even without
the defendants unlawful acts, the chance of implementing the merged seniority
list was not more than
de minimis
.
As a result of that error,
the trial judge failed to value the probability of implementing the merged
seniority list.

[69]

In
my view, the trial judge made no error. First, I outline the legal framework
applied when a plaintiff claims injury consisting of the loss of a chance to
achieve a benefit or avoid a loss. Then I review the relevant portion of the
trial judges reasons, outline the plaintiffs arguments on this issue, and
finally explain my conclusion.

The loss of chance doctrine

[70]

A two-step framework applies when a plaintiff alleges
injury consisting of the loss of the chance to achieve a benefit or avoid a
loss.
Folland v. Reardon

(2005), 74 O.R. (3d) 688 (C.A.), at para. 73, outlines
the four criteria the plaintiff must meet at the first step:

First, the plaintiff must establish on the balance of
probabilities that but for the defendants wrongful conduct, the plaintiff had
a chance to obtain a benefit or avoid a loss. Second, the plaintiff must show
that the chance lost was sufficiently real and significant to rise above mere
speculation. Third, the plaintiff must demonstrate that the outcome, that is,
whether the plaintiff would have avoided the loss or made the gain, depended on
someone or something other than the plaintiff himself or herself. Fourth, the
plaintiff must show that the lost chance had some practical value. [Citations
omitted.]

[71]

As Doherty J.A. noted in
Folland
, at para. 74,
the second criterion is somewhat nebulous. There is no bright line between a
real chance and a speculative chance. An empirical review of the case law
suggests that chances assessed at less than 15 percent are seldom viewed as
real chances. This
de minimis
threshold has also been described as requiring the plaintiff to prove
she had some reasonable probability of realizing an advantage of some real
substantial monetary value:
Kinkel v. Hyman
, [1939] S.C.R. 364, at p. 383; see also
Eastwalsh
Homes Ltd. v. Anatal Developments Ltd
.
(1993), 12 O.R. (3d) 675 (C.A.), at pp. 689-90, leave to appeal refused, [1993]
S.C.C.A. No. 225.

[72]

If these four criteria
are met, the court proceeds to the second step and will award damages equal to
the probability of securing the lost benefit (or avoiding the loss) multiplied
by the value of the lost benefit (or the loss sustained): see
Wong
v. 407527 Ontario Ltd.
(1999), 179
D.L.R. (4th) 38 (Ont. C.A.), at para. 27.

The trial judges reasons

[73]

After
outlining the loss of chance doctrine, the trial judge concluded that the
plaintiffs failed to establish that they had lost any chance above the
de
minimis
range for any one of a number of reasons, which she detailed. I
will enumerate only a few of them.

[74]

First,
the decertification of CALPA as the bargaining agent for the Air Canada pilots,
which she found was lawful, terminated the prospect of implementing the merged
seniority list through collective bargaining. Mr. Picher issued the Final
Picher Award only one week before CALPA ceased to represent the Air Canada
pilots. The chance of implementing the Final Picher Award in that very short
period was negligible.

[75]

Second
and critically, Air Canada needed to agree for the parties to implement the
merged seniority list. As she explained, in the absence of consent by Air
Canada, a merged list was no more than a bargaining position. She accepted
the evidence of Hollis Harris, the CEO of Air Canada at the relevant time. He
testified that only he had the authority to accept the Picher Award and would
not have done so. According to Mr. Harris, [i]t would have been a financial disaster
to agree to a merged list. Based on his evidence, which was credible,
forceful and unequivocal, she found, at para. 457, that:

[E]ven if the Defendants had fully complied with the Merger
Policy and taken all necessary steps to implement the integrated seniority
list, there was no possibility that Air Canada would have agreed to a merged
list.

[76]

Third,
Air Canada pilots could not legally strike to force Air Canada to agree to a
merged seniority list.







The plaintiffs arguments on appeal

[77]

The
plaintiffs do not take issue with the parameters of the loss of chance doctrine
or the trial judges articulation of the doctrine. In essence, they make three
arguments.

[78]

First,
they argue that the trial judge should have assessed the second criterion in
the first step  whether the plaintiffs lost a chance above the
de minimis
range  beginning with the March Picher Award, and not the Final Picher Award.
They say that the chance to implement a merged seniority list arose with the
March Picher Award. They argue that chance was clearly real and significant, as
evidenced by the defendants strenuous efforts to frustrate implementation of
the Award. And, they continue, in March 1995, before the defendants engaged in
wrongful conduct, there was clearly a reasonable probability of implementing a
merged seniority list. The Air Canada MEC was about to begin collective
bargaining with Air Canada and could have bargained to include the merged
seniority list. In addition, CALPA was in a position to apply for a single
employer declaration, relying on the LOU 17 grievance as evidence that Air
Canada was undermining bargaining rights by playing bargaining units off
against one another. They argue that either alternative could have resulted in
implementation of a merged seniority list. Ignoring wrongdoing by the
defendants, the contingencies that had to work out in the plaintiffs favour to
implement the March Picher Award did not discount the value of the chance to a
de
minimis
level. Accordingly, the trial judge should have valued the lost
chance of implementing a merged seniority list.

[79]

Second,
the plaintiffs submit that figuring out what would have happened but for the
defendants wrongful conduct is particularly challenging in this case because the
defendants committed so many unlawful acts. In interpreting the impact of the
defendants unlawful acts, the plaintiffs argue the trial judge simply got it
wrong. They argue that Mr. Harris evidence did not foreclose the chance to
implement a merged list. They submit that if events had transpired differently,
Mr. Harris might have offered a more equivocal position.

[80]

Third,
they argue that although the trial judge properly directed herself to consider
not what did happen but what would have happened but for the defendants
wrongful conduct, she failed to follow that direction when she analyzed the
potential success of a single employer application. They say the trial judge
did not assess what would have happened had the Air Canada MEC not withdrawn
its grievance with Air Canada over LOU 17 and had instead supported CALPAs
single employer application. This, they submit, amounted to an error in
principle. The plaintiffs argue that had the trial judge conducted this portion
of her analysis correctly, she would (or should) have concluded that there was
a reasonable probability that, absent the defendants wrongful conduct, a
single employer application would have been successful. They argue that if a
single employer application had been successful, the chance of implementing the
merged seniority list would have been more than
de minimis.


Analysis

[81]

In
my view, all of the plaintiffs arguments fail in the face of the trial judges
acceptance of Mr. Harris evidence, her detailed analysis of the circumstances
leading to decertification, and her assessment of the lawfulness of the
defendants actions. I explain my reasoning below in relation to each of the
three arguments advanced.

[82]

The
plaintiffs first argument attempts to characterize what was inherently an
exercise in meticulous fact-finding as an error in principle. Ultimately,
nothing turns on whether the analysis focussed on the chance of implementing
the March Picher Award or the Final Picher Award. Whether the Air Canada MEC
had raised a merged seniority list in the collective bargaining process or
CALPA had sought and won a single employer declaration before negotiating, Air
Canada had to agree to a merged list. Air Canadas opposition to a merged
seniority list pre-dated the March Picher Award. The trial judge was entitled
to accept the evidence of Mr. Harris that he would not have accepted a merged
seniority list. She found that Air Canada would have inevitably rejected a
merged list and that, for this reason alone, the chance of implementing a
merged seniority list did not arise above the
de minimis
threshold.

[83]

In
substantial part, the plaintiffs second argument is rooted in sub-class sixs
efforts to form ACPA and decertify CALPA, efforts the plaintiffs argued were
unlawful. For example, they say that if ACPA had not been formed and CALPA
decertified, the chance of implementing the merged seniority list would have
exceeded the
de minimis
threshold. By way of illustration, they argue
that but for the unlawful conduct of the Air Canada MEC, the March Picher
Award, which set out a framework for a merged seniority list, would have been
mentioned in collective bargaining negotiations with Air Canada and, if ACPA
had not been formed, the negotiations would not have been suspended and the Air
Canada pilots might have been able to fulfill the statutory preconditions to a
legal strike. Moreover, if CALPA had not been decertified, the window within
which to implement the merged seniority list would not have prematurely shut.

[84]

Whether
the plaintiffs chance was more than
de minimis
is essentially a
determination of fact. I concluded, above, that the trial judge correctly found
that the sub-class six defendants conduct in forming ACPA and decertifying
CALPA was lawful. That conclusion reduces the plaintiffs second argument to
one that the trial judge committed palpable and overriding errors in finding
that the chance of implementing the merged seniority lists did not rise above a
de minimis
level even without the defendants unlawful conduct.

[85]

I
am not persuaded that the trial judge made any palpable and overriding errors.
Indeed, I agree with her conclusion. She heard months of evidence. She reviewed
the conduct of all the defendants in comprehensive and cogent reasons that
reached 567 paragraphs in length. She clearly understood the implications and
interplay of the conduct at issue, both lawful and unlawful. In the case of the
Air Canada pilots ability to strike that the plaintiffs allude to, the trial
judge explained both that the Merger Policy did not require the Air Canada
pilots to strike to obtain a merged seniority list and that the suspension of
collective bargaining was not the only reason why the Air Canada pilots could
not legally strike to obtain a merged seniority list. The plaintiffs do not
challenge those other reasons the Air Canada pilots could not legally strike to
force Air Canada acceptance of a merged list.

[86]

Each
of the trial judges reasons for concluding that the plaintiffs chance of
implementing the merged seniority list did not exceed the
de minimis
threshold was fully supported by the evidence and is
logically sound
.

[87]

To
put the plaintiffs third argument in context, it is necessary to consider what
the trial judge said about the single employer application. She explained that
it was CALPA and not the Air Canada MEC that had to bring a single employer
application, that CALPA did not do so until March 1996, that six different
unions representing various bargaining units opposed the application, and that
the Board dismissed CALPAs application in December 1999, stating that it failed
utterly.

[88]

At
para. 471, she wrote the passage with which the plaintiffs take issue: It is
not possible or indeed appropriate to second guess [the Boards] decision based
on speculation that it would have been different if supported by the Air Canada
pilots and if the LOU 17 grievance had been pursued. She noted that the Board
had dismissed an Air Canada single employer application in 1989. She concluded
that there was no possibility or probability that a single employer
application would have had a different result but for the Defendants
conduct.

[89]

The
plaintiffs argue that while the trial judge declined to speculate whether the
outcome might have been different, the loss of chance doctrine required exactly
that hypothetical assessment. They say that had she engaged in that assessment,
she would (or should) have concluded that, absent the defendants wrongful
conduct, there was a reasonable probability CALPA would have won a single
employer declaration. They argue that the withdrawal of the LOU 17 grievance
played a crucial role in the failure of the application.

[90]

They
also argue that the trial judge erred in excluding the opinion of their expert,
Professor McLaren, on the basis that it pertained to domestic law. He opined
that had the Air Canada pilots supported a single employer application, it was
highly likely that the Board would have exercised its discretion to grant the
application. The plaintiffs argue that this was an opinion on a matter of fact
(what the Board might have decided under different circumstances) and not law.

[91]

The
plaintiffs argument is flawed. It assumes that the defendants were required to
support a single employer application. The trial judge found, at para. 426,
that [t]he Air Canada MEC was entitled to work to prevent a [single employer]
application and, at para. 467, that the Merger Policy did not call for a
single employer application. Those findings are not challenged on appeal. While
the trial judge was required to consider what would have happened but for the
defendants wrongful conduct, she was not required to speculate about what
would have happened but for lawful conduct. She was correct that it was not appropriate
to second guess [the Boards] decision based on speculation that it would have
been different if supported by the Air Canada pilots and if the LOU 17
grievance had been pursued.

[92]

Professor
McLarens opinion, which assumed the defendants supported a single employer
application, was therefore of no assistance to the plaintiffs.

[93]

I
turn now to the final issue.

VII  ISSUE Four: DID THE TRIAL
JUDGE ERR BY NOT AWARDING Merger Expenses DAMAGES OF $150,280?

[94]

The
fourth element of unlawful act conspiracy required the plaintiffs to establish
that the defendants should have known that injury to the plaintiffs was likely
to result from their unlawful conduct. At para. 442, the trial judge found the
plaintiffs had established the fourth element:

Clearly the Air Canada pilots knew or ought to have known that
the [regional] pilots might have been harmed. They certainly knew or ought to
have known that the Air Ontario pilots were subject to assessments for merger
expenses just as the Air Canada pilots were themselves.

[95]

Elsewhere
in her reasons, the trial judge determined that those merger expenses totalled
$150,280.

[96]

The
plaintiffs argue that once the trial judge found that the merger expenses
constituted an injury to the plaintiffs that the defendants knew or ought to
have known would result from their unlawful conduct, she erred by not, at a
minimum, awarding damages of $150,280.

[97]

I
disagree. I conclude that the plaintiffs are not entitled to the merger
expenses.

[98]

The
trial judges conclusion on loss of chance disposes of the plaintiffs argument.
The plaintiffs had to establish that, but for the defendants wrongful conduct,
the merger expenses they incurred would not have been for naught. The trial
judge concluded that regardless of the defendants wrongful conduct, the merged
seniority list would not have been implemented. Therefore, the defendants by
their wrongful conduct did not cause the merger expenses to come to no end. The
plaintiffs claim for merger expenses fails because they have not established
that the defendants wrongful conduct caused the loss of those expenses.

VIII  DISPOSITION

[99]

For
the foregoing reasons, I would dismiss this appeal. The parties agreed that the
successful party on this appeal would be entitled to costs in the amount of
$175,000, inclusive of disbursements and HST. I would accordingly order the
plaintiffs to pay such amount to the defendants.

[100]

The
Third Party Respondent, ALPA, did not seek costs and shall not be entitled to
them.





Released: AH  JUN 19
2015

Alexandra
Hoy A.C.J.O.

I
agree David Watt J.A.

I
agree David Brown J.A.





[1]
See s. 38(1) of the
Canada Labour Code
, which provides a statutory
right to decertify a bargaining agent:

Where a trade union has been
certified as the bargaining agent for a bargaining unit, any employee who
claims to represent a majority of the employees in the bargaining unit may,
subject to subsection (5), apply to the Board for an order revoking the
certification of that trade union.



