



COURT OF APPEAL FOR ONTARIO

CITATION: 1670002 Ontario Limited (Canadian Professional
    Recruiters) v. Redtree Contract Carriers Ltd., 2014 ONCA 501

DATE: 20140627

DOCKET: C56390

Laskin, Rouleau and Epstein JJ.A.

BETWEEN

1670002 Ontario Limited operating as Canadian
    Professional Recruiters

Plaintiff (Appellant)

and

Redtree Contract Carriers Ltd., Wilson Logistics
    Inc., and Wilson Transportation and Leasing Group (Canada) Inc.

Defendants (Respondents)

Raymond Colautti and Anita Landry, for the appellant

Christine Kilby and Andrea Campbell, for the respondents

Heard: June 3, 2014

On appeal from the judgment of Justice Bruce G. Thomas of
    the Superior Court of Justice, dated December 10, 2012.

By the Court
:

A.

Background

[1]

The events that gave rise to this litigation took place between 2003 and
    2005.  At the time, the respondent Wilson Transportation was in the business of
    trucking and leasing trucks in Ontario.  Its subsidiary, the respondent Wilson
    Logistics
[1]
,
    had a contract with the City of Toronto to transport waste from Toronto to
    Michigan.  Redtree, another Wilson Transportation subsidiary, was to implement
    the waste contract.  To do so, Redtree needed qualified drivers.

[2]

In the spring of 2003, Redtree approached the appellant Canadian
    Professional Recruiters (CPR), a driver recruitment agency, to obtain drivers
    for the waste contract.  In May 2003, CPR and Redtree entered into an oral
    agreement under which CPR would recruit drivers for Redtree in return for a
    fee.

[3]

In late 2004, the City of Toronto put pressure on Redtree to reduce the
    costs of the waste contract.  In response, Redtree decided to phase out the
    services of CPR and hire its own drivers.  In February 2005, one of the
    vice-presidents of Wilson Transportation told CPR that its contract with
    Redtree was terminated.

[4]

CPR then sued Redtree, Wilson Transportation and Wilson Logistics for
    damages for breach of contract, interference with economic relations and inducing
    breach of CPRs employment agreements.

B.

The trial

[5]

The action was tried before Abbey J. over 11 days in 2009.  He prepared
    lengthy draft reasons, but before finalizing them, he died.  In his draft
    reasons, Abbey J. found that Redtree ought to have given CPR six months notice
    of termination.  He did not quantify the amount of damages, nor did he deal
    with interest and costs.  And he made no findings of liability against Wilson.

[6]

In November 2010, Redtree went bankrupt.

[7]

Following Abbey J.s death, Thomas J. reviewed the draft reasons and
    adopted them.  Thomas J. confirmed liability against Redtree only and, to
    account for the six-month notice period, awarded CPR damages of $73,093.00 plus
    interest.  He also awarded CPR its costs against Redtree, but then awarded
    Wilson its costs against CPR.  His reasons were released on November 13, 2012,
    but his formal judgment was not entered until December 10, 2012.  However, on
    January 10, 2013, Thomas J. made a Sanderson order requiring Wilson to seek
    its trial costs against Redtree.

C.

The appeal and the cross-appeal

[8]

CPR makes two submissions on its appeal:

(1)

The trial judge erred by failing
    to take account of Wilsons participation in the contract between CPR and
    Redtree.  In particular, CPR submits that Wilson is liable for inducing the breach
    of the contract between CPR and Redtree.

(2)

Under the common employer
    doctrine, Wilson is liable for breach of CPRs contract with Redtree.

[9]

Wilson cross-appeals against Thomas J.s Sanderson order.  It submits
    that Thomas J. had no jurisdiction to make the order because it was made after
    his formal judgment was issued and entered.  Alternatively, Wilson submits that
    the order is not supported by the evidence.

[10]

We
    called on Wilson only on CPRs first ground of appeal.  And we did not call on
    CPR to respond to Wilsons cross-appeal.

D.

Discussion

(1)

Is Wilson liable for inducing the breach of the contract between CPR and
    Redtree?

[11]

CPR
    submits that the trial judge erred by failing to find that Wilson induced the
    breach of the contract between CPR and Redtree.  In support of its submission,
    CPR points out that it was a Wilson executive, James Cockburn, who advised CPR in
    February 2005 that the contract had been terminated.  CPR relies on para. 52 of
    Abbey J.s reasons, in which he said:

While the contrary position was argued on behalf of the
    defendants, in my opinion, the purpose and effect of what was said by Cockburn
    in this telephone call amounted to a termination of the contract between the
    plaintiff and Redtree.

[12]

Wilsons
    position is that we should not even entertain CPRs argument because the issue was
    not raised either at trial or before Thomas J., and thus is being raised for
    the first time on appeal.  Alternatively, Wilson maintains that on the trial
    record the tort has not been made out.

[13]

Wilsons
    contention that this issue was not raised in the trial proceedings has merit.  Although
    CPR claimed that Wilson induced the breach of CPRs employment contracts, CPR
    never alleged that Wilson induced the breach of the contract between CPR and
    Redtree.  A claim for inducing the breach of the CPR/Redtree contract was not
    advanced in the pleadings, in counsels opening submissions at trial, or in the
    original notice of appeal.

[14]

Even
    if we were to accept that CPRs claim is not a new issue on appeal, the
    evidence at trial does not make out this claim.  To prove Wilson is liable for
    inducing a breach of contract, CPR had to meet the four-part test in
Correia
    v. Canac Kitchens
, 2008 ONCA 506, 91 O.R. (3d) 353, at para. 99:

(1)

Wilson had knowledge of the
    contract between CPR and Redtree;

(2)

Wilson intended to procure a
    breach of that contract;

(3)

Wilsons conduct caused Redtree to
    breach the contract; and

(4)

CPR suffered damages due to the
    breach.

[15]

CPR
    does not meet the second element of this four-part test.  It cannot show Wilson
    had the required intent.  The contract between CPR and Redtree was an oral
    contract.  The parties made no provision for notice if either side terminated
    the contract.  Abbey J. found that [t]he decision of Redtree to terminate the
    contractual arrangement was driven, not by greed or malice, but by economic
    necessity.  In the light of these considerations, it cannot be said that
    Wilson intended to procure a breach of the contract.

[16]

The
    most CPR can say is that Wilson participated in the termination of the
    contract, a termination that the trial judge later concluded required six
    months notice.  That conclusion, however, was far from obvious at the time the
    contract was terminated.  As Lord Hoffman said in
OBG Ltd. v. Allan
,
    2007 UKHL 21, [2008] 1 A.C. 1, at para. 39
[2]
:
    to be liable for inducing breach of contract, you must know that you are
    inducing a breach of contract.  The record does not show that Wilson knew it
    was inducing a breach of the contract between CPR and Redtree.

[17]

For
    these reasons, CPRs first ground of appeal fails.

(2)

Are the Wilson companies liable under the common employer doctrine?

[18]

CPR
    argued at trial that under the common employer doctrine, Redtree and both
    Wilson companies were liable for breach of contract: see
Downtown Eatery
    (1993) Ltd. v. Ontario
(1993), 54 O.R. (3d) 161 (C.A.), leave to appeal to
    S.C.C. refused, [2001] S.C.C.A. No. 397.

[19]

Abbey
    J. accepted that in some circumstances, an employee may have more than one
    employer.  But he rejected the doctrines application to CPRs contract with
    Redtree.  Instead he found, at paras. 43-45 of his reasons:

In short, none of the documents to which I was directed during
    the course of the trial contain any reference to any defendant other than the
    defendant Redtree.

.

This is not a case in which the plaintiff supplied services to
    the defendants generally without regard to the precise entity with whom it was
    bound in contract.  It is, I believe, rather clear that those individuals
    representing the interests of the plaintiff considered that the plaintiffs
    services were being provided to the defendant Redtree which, in turn, was
    supplying labor to meet the obligations of the Toronto contract held by Wilson
    Logistics.

[20]

We
    need not decide whether the common employer doctrine could ever apply to a
    contract such as the one entered into between CPR and Redtree.  Abbey J.s
    finding that CPR contracted only with Redtree is fully supported by the record
    at trial.  Although Wilson executives later dealt with aspects of the contract,
    the contract itself was entered into at a meeting in May 2003 at which only CPR
    representatives and three representatives of Redtree were present.  Moreover,
    Mr. Snobelen, the Operations Manager of CPR, admitted at trial that he
    understood he was contracting with Redtree.

[21]

Accordingly,
    we decline to give effect to this ground of appeal.

(3)

The cross-appeal: should the Sanderson order for costs be set aside?

[22]

Wilson
    submits that Thomas J.s Sanderson order should be set aside because he had no
    jurisdiction to make it and because it was not supported by the evidence.  We
    do not agree with either branch of this argument.

[23]

The
    Sanderson order was made after the formal judgment awarding Wilson costs
    against CPR had been issued and entered.  The final costs order was, however,
    an accidental slip, correctable under Rule 59.06(1) of the Rules of Civil
    Procedure.

[24]

As
    we have said, Thomas J.s judgment was entered on December 10, 2012.  A month
    earlier, on November 14, one day after Thomas J. had released his reasons,
    counsel for CPR asked if he could make submissions on the Sanderson order.  On
    November 20, 2012, Thomas J. advised the parties that he would entertain
    submissions on the appropriateness of the Sanderson order.  On November 26,
    Wilson filed its submissions on the Sanderson order.  All of this
    correspondence took place well before the formal judgment had been entered.

[25]

Wilson
    did not raise before Thomas J. his jurisdiction to make a Sanderson order.  And
    we have no doubt had it done so, Thomas J. would have concluded the costs order
    in his judgment as issued and entered was an accidental slip and that he would
    have corrected it.  Accordingly, Wilsons jurisdiction argument must fail.

[26]

The
    Sanderson order itself was supported by the evidence and was reasonable.  CPR
    acted sensibly in joining the two Wilson companies as defendants in the light
    of their involvement in the performance of the contract and the overlapping
    responsibilities of some of the key employees.  Additionally, all three
    defendants were represented at trial by the same counsel.

[27]

As
    Thomas J. pointed out, the real issue was who should bear the burden of
    Redtrees bankruptcy.  Thomas J. concluded it was fair and just that Wilson
    bear this burden.  He did not err in that conclusion.  Accordingly, we dismiss
    the cross-appeal.

E.

Conclusion

[28]

We
    dismiss both the appeal and the cross-appeal. Having regard to the results of
    the appeal and the cross-appeal, we award Wilson costs of the appeal
    proceedings in the amount of $15,000 inclusive of disbursements and applicable
    taxes.

Released: June 27, 2014 (J.L.)

John
    Laskin J.A.

Paul Rouleau J.A.

Gloria Epstein J.A.





[1]
In these reasons we refer to Wilson Transportation and Wilson Logistics
    collectively as Wilson.



[2]
Lord Hoffmans test was adopted in
Canac
    Kitchens


