Counsel:

I.   NATURE OF APPLICATION

¶ 1      The Companies apply seeking leave and reconsideration of those portions of BCLRB No. B291/2001 in which the original panel refused to deal with the matter as a successorship and awarded costs to the Union.

¶ 2      We sought submissions only on the Companies' second ground for reconsideration as it related to the issue of costs.  We did not seek submissions on the first ground relating to successorship.  As the Companies conceded in their application, resolution of this issue would have no practical impact on the consolidation of the bargaining units in light of the original panel's decision on the common employer issues.  We did not see any practical utility in pursuing reconsideration on the issues relating to successorship as the matter is academic: Brinco Coal Mining Corporation, BCLRB No. B74/93 (Leave for Reconsideration of BCLRB No. B6/93), (1994), 20 CLRBR (2d) 44, 93 CLLC [paragraph] 16,043, at p. 53.

¶ 3      However, we grant leave on the issues relating to the award of costs.  We find the Companies have raised a "good arguable case" on the costs issue where a jurisdictional question has been raised and there are apparently conflicting authorities: Brinco, CLRBR at p. 53.

II.  BACKGROUND

¶ 4      This matter has a lengthy history, all the details of which need not be set out in this decision.  As that history is extensively reviewed in the original decision, we do not repeat the background to this dispute other than highlighting those matters relevant to this reconsideration application.

¶ 5      After a series of proceedings before the Board relating to the restructuring of the Companies and their request for consolidation of bargaining units, it became evident after-the-fact that a representative of the Companies had given erroneous testimony about the name of the corporate entity operating the harbour cruise business at the time of a transfer in 1998.

¶ 6      One of the issues before the original panel was whether the Companies' representative had deliberately misled the Board throughout the past proceedings about the name of the entity operating the harbour cruise business.  A hearing was held to address, among other matters, the issue of whether there was a misrepresentation and if so, the impact of that error on the outcome of the successorship and common employer proceedings.

¶ 7      The Union argued that the original panel should refuse to consolidate the bargaining units due to the Companies' misrepresentation.  The Union also argued "it should be made whole for all expenses incurred in exposing the true state of facts" (at para. 38).  The Companies defended that claim for costs by arguing that their representative had not deliberately misled the Board or misrepresented facts. They maintained that no harm was done at the end of the day as the outcome that resulted was the very outcome that was appropriate once the facts were clarified.

¶ 8      In BCLRB No. 291/2001, the original panel found that there had been "careless disregard" for the accuracy of the information offered in testimony.  The original panel stated that the representative of the Companies who testified had not deliberately set out to mislead the Board, but had been careless to the point of reckless disregard for the consequences in not informing himself and in taking the witness stand purporting to testify to the truth of matters of which he knew nothing.

¶ 9      The original panel found no basis for compensation for the Union within the framework of Section 133(1)(d) where the Companies had committed no breach of the Code.  However, the original panel found that the Code "both expressly and implicitly gives the Board sufficient authority to compensate a party in the proper circumstances where an opposing party has misled the Board or abused the Board's processes in a way that has caused damage to the other party" (at para. 71). After reviewing the objects of the Code under Section 2 and the Board's power under Section 126 to establish its own practice and procedure, the original panel concluded that "implicit in the Code must be the power for the Board to make a party whole in appropriate circumstances if it has fallen victim to another party's conduct which undermines the purposes of the Code even though there has not been a breach of the express provision of the Code" (at para. 75).

¶ 10      In the alternative, the original panel found that Section 134 of the Code expressly provides the Board with sufficient flexibility to address the rare and exceptional circumstances where an abuse of the Board's processes has led to damages being suffered by another party.

¶ 11      In the result, the original panel granted part of the relief sought by the Companies of a common employer declaration.  It declined to grant a successorship for a number of reasons, including the fact that the parties had agreed to deal with the matter as a common employer application.  As consequential relief, the original panel ordered the certification and collective agreement of the Union to be cancelled. However, the original panel imposed as a condition for granting that relief that the Companies reimburse the Union for its reasonable legal costs, disbursements and related expenses incurred in various hearings.

III. POSITIONS OF PARTIES

¶ 12      The Companies argue that the original panel lacked jurisdiction to award the Union costs.  They say that the Board has no power to award costs absent proof of a statutory violation and that the Board cannot rely on its general powers to override the need for proof of a statutory violation under Section 133(1).

¶ 13      As an alternative to their position on the jurisdictional issue, the Companies say there was no factual or legal basis for an award of costs in these circumstances. The Companies argue that an award of costs against them is inappropriate where they were found not to have made deliberate misrepresentations and where the information was irrelevant to the labour relations issue.

¶ 14      The Companies also submit that the original panel denied them a fair hearing as it granted costs on a basis never argued by the Union, and indeed awarded them on a basis contrary to the position of the Union.  Before the original panel, the Union based its claim for entitlement to costs on its assertion that there had been deliberate misrepresentation.  The Companies responded to that claim rather than the premise the original panel used of inducement of unnecessary proceedings.

¶ 15      In the interests of brevity, the arguments of the Union are not separately stated, as for the most part, they are considered in the course of the analysis that follows.

       (a) Jurisdiction to order payment of costs

¶ 16      The original panel framed its finding on the jurisdictional question in the alternative.  Its primary finding was that the Code implicitly granted the authority to award costs for an abuse of process.  Its alternative finding was based on the condition-granting power under Section 134. We do not agree with that separate formulation of the powers as we see them as intertwined rather than as alternatives. When the Board acts under its general powers to establish its practice and procedure under Section 126 and exercises its particular condition-making power under Section 134 it is mandated to promote the objects of the Code under Section 2. Section 2(2) of the Code directs the Board to exercise the powers conferred under the Code having regard to the purposes set out in Section 2(1).  One of those purposes in Section 2(1)(d) is to "promote conditions favourable to the orderly, constructive and expeditious settlement of disputes between employers and trade unions".

¶ 17      In Beacon Hill (1984) Ltd. v. Labour Relations Board et al, (1987) 12 B.C.L.R. (2d) 273, the B.C. Court of Appeal affirmed the reliance by the Board on its condition-making power in furtherance of the purposes and objects of the Code.  In that case, the Board attached a condition requiring an employer to refrain from hiring strike replacements in an essential services dispute.  The Board exercised that authority under Sections 28(2) and 29(1) of the then-Labour Code (now Sections 133(2) and 134 of the current Labour Relations Code).  The Court of Appeal reasoned that in making an order under the essential services provisions of the Code, the Board has by implication the power to attach any condition that is required to achieve the purpose of the section and has the express power to attach such a condition under Sections 28(2) and 29(1) of the former Code.

¶ 18      As the Companies argue, the Board's policy is that costs are only awarded as part of a remedial order designed to correct a violation of statute where the conduct is sufficiently egregious:  Roberta Scott, IRC No. C169/92, (1992) 15 CLRBR (2d) 65, at pp. 70 - 71.  However, the ability of the Board to grant costs as part of its remedial powers to counteract a statutory violation does not limit the authority of the Board to award costs as part of its powers to control litigation.  Depending on the circumstances, the Board may require a party to pay the costs of the other to ensure the fair conduct of litigation under the Board's practice and procedure power.

¶ 19      Section 126 grants the Board the authority to establish its own practice and procedure in the conduct of the litigation before it.  In the past, the Board has used that power to control its processes in tandem with the specific power to fix conditions under Section 134 to control proceedings where fault attributable to one party in unduly delaying proceedings has resulted in prejudice to the other party.  Most commonly, the exercise of the condition-making power for that purpose has been used where costs have been "thrown away" as a result of a late request for an adjournment.  A panel of the Board may solicit such an undertaking as part of a condition of an order granting an adjournment or it may impose that term as a mandatory condition where an undertaking is not forthcoming.

¶ 20      Where one party has put another party to some expense by belatedly seeking an adjournment, the Board has granted the relief sought of an adjournment on the condition that the party seeking the adjournment pay the expenses thrown away in preparations for the delayed hearing.  (see, for example: Imperial Parking Limited, IRC No. C220/89; Gulf Concrete Products, BCLRB Letter Decision L310/82; McMillan Bloedel Limited, BCLRB Letter Decision L339/82.  Other authorities recognize the authority to do so, but in the circumstances did not impose the condition:  Sie-Mac Heavy Haulers Ltd., IRC No. C27/87, Checkmate Cabs Ltd., BCLRB No. B58/97; Blu's Night Club, IRC No. C107/91).

¶ 21      That practice of requiring an undertaking or imposing an order to pay costs as a condition of adjournment is also followed by other labour relations tribunals, such as the Ontario Board: Ontario Paving Corporation, 1993 OLRB Rep July 630; R.T. Construction, [1971] OLRB Rep. June 342. Tribunals in other jurisdictions have attached other terms as a condition of an order granting an adjournment to deal with other forms of prejudice in the interval: James Johnson & International Brotherhood of Boilermakers, (1989) 4 CLRBR (2d) 139 (Alta. L.R.B.), at p. 150.

¶ 22      We agree with the original panel's observation that imposing a condition under Section 134 in these circumstances is a "permissible extension of an already existing power" as part of the Board's exercise of its plenary power to control its processes under Section 126 of the Code. We see little difference in principle between the two scenarios.  In both instances a party may be put to considerable expense in pursuing litigation that may have been unnecessary or may require added preparation.  In one case the added expense is incurred because a misrepresentation has been made, but is not discovered until later.  In the other case a party may be compensated for costs because the other party delayed in seeking an adjournment at the last minute compounding the costs by incurring expenses that may have been wasted.  In both instances the Board uses its ability to impose a condition to deal with potential or proven prejudice resulting from the parties' conduct of litigation.  The only difference is that in this case the egregious conduct came to light after-the-fact when the litigant is before the Board continuing to seek relief.

¶ 23      We do not find the original panel's extension of that recognized practice in the adjournment context to use a condition in this case is an unwarranted departure from the principle that conditions may be imposed to further the Section 2(1)(d) objectives of promoting the Board's practices and procedures under Section 126.  The order to pay costs as a term of granting the relief the Companies sought is a true condition: if the Companies decline to pay the costs, the Companies lose the benefit of the conditional order.

¶ 24      We are not persuaded by the Companies' argument that the Board cannot rely on its general powers to control litigation and to impose conditions to override the specific power to award costs as a remedy if a violation of the statute has not been shown.  A remedial award of costs is granted for a different purpose.  Under Section 133 or Section 14 of the Code, remedies ordered to compensate for breaches of the Code must flow from a finding of a violation of the statute or a collective agreement.  However, a condition imposed to ensure the proper conduct of litigation under the Board's practice and procedure power serves a different purpose.  It is not a remedy for a breach of a substantive provision in the Code; rather it is the exercise of an adjudicative power to control the conduct of litigation before the Board.

¶ 25      In arguing that Section 134 does not confer the jurisdiction claimed by the original panel, the Companies assert further that Section 134 is designed to deal only with future conduct, not to remedy past conduct.  The language of the Section 134 does not support that claim.  Section 134 is broadly framed so as to permit flexibility in the crafting of a condition in response to the particular circumstances of the case.  It allows the Board to attach a condition "before, after or both before and after" the making of the decision or order.  By design, a panel is given leeway to craft the right response appropriate to the case before it.  We find that Section 134 is broad enough to confer an ability on a panel to impose a condition to deal with past prejudice resulting from the conduct of litigation.

¶ 26      Lastly, the Companies argue that the original panel's decision is entirely contrary to the conclusion reached by another panel in Trilec Installations Ltd., BCLRB No. B236/97.  In that case a panel of the Board held that the Board has no jurisdiction to award costs to cure an abuse of process in the absence of a breach of the statute.  The Union argues that Trilec is distinguishable on its facts as not involving misrepresentations in sworn testimony; nor is it a case where a party who has engaged in misconduct is seeking relief from the Board.  Apart from those facts, we consider the more significant distinguishing feature is that the panel in Trilec was not asked to consider whether the exercise of the conditon power under Section 134 in tandem with Sections 2 and 126 give the Board the authority to do so in exercise of its adjudicative powers.

¶ 27      In conclusion on this ground, we find that the Board does have the jurisdiction to impose the condition in these circumstances.

       (b) Appropriateness of order to pay costs

¶ 28      The next ground for reconsideration advanced by the Companies relates to the appropriateness of the award of costs.  Assuming the Code confers jurisdiction on the Board to order costs absent a proof of a statutory violation, the Companies argue that there is no factual or legal basis for such a claim.  They submit that the award of costs in this case was extraordinary relief that was not warranted as the misrepresentation was not deliberate and did not in any event affect the substantive outcome.

¶ 29      This aspect of the Companies' application amounts to a challenge to the fashioning of a discretionary order. Absent an inconsistency with the Code, a reconsideration panel is loath to interfere with an original panel's exercise of discretion, particularly with respect to the choice of remedial terms and conditions: Baptist Housing Society of B.C. (Central Care Home), BCLRB No. B199/2000 (Leave for Reconsideration of BCLRB No. B406/99), at para. 47.

¶ 30      In this case, the condition ordered is not a "remedy" in the traditional sense, but involves the exercise of discretion by an original panel.  That is an area in which an original panel receives deference and in which a reconsideration panel would be reluctant to disturb unless there is some manifest error of law or policy.

¶ 31      Given our conclusion on the jurisdictional question, we see no error of law as the Board clearly has the legislative authority to attach conditions to an order or decision.  Nor do we see any error of policy in the award of costs given the original panel's findings as to the level of egregiousness.  The original panel is best suited to determine whether the condition was appropriate and necessary.  As a reconsideration panel, we would rarely second-guess the exercise of a discretionary power by an original panel as to whether the attachment of the condition promotes the fulfillment of objects of the statute, the statutory provision in dispute and the integrity of the Board's processes.

¶ 32      We do not need to define the outer limits of that authority for purposes of deciding this case.  The condition attached in this case was a novel and innovative use of the condition power, but the original panel recognized that, just as with an award of costs for violation of the Code, there must be a similarly high threshold met before a condition is imposed requiring payment of costs. In recognition of the exceptional nature of the relief, the original panel mirrored the narrow policy approach to ordering costs as a remedy for a statutory violation by stating that costs would not be ordered indiscriminately.  It found the Companies' conduct to have reached a "sufficient level of egregiousness to make this an exceptional and compelling case" for a condition requiring payment of costs.  The original panel is best placed to make that judgment call and to exercise the discretion as to how best to respond to that conduct through the fashioning of conditions.

¶ 33      The Companies argue that there was no basis for an order for costs where there was no effect on the labour relations consequences.  That argument ignores the other prejudice.  The misrepresentation may not have had a substantial impact on the eventual outcome, but the original panel found that the Union had been prejudiced by pursuing legal proceedings that it may otherwise not have undertaken. It made a finding that the Union pursued proceedings that it would not have pursued had it been aware sooner of the true facts.  We are not prepared to disturb that finding.

¶ 34      In sum on this ground, we are not persuaded that there is any basis for altering the original panel's exercise of discretion to attach a condition to its decision.  We do not see anything in the application that gives us reason to disturb that judgment.  We see the condition imposed as consistent with the purposes of the Code and with the need of the Board to control its practices and procedures in the course of litigation to ensure a fair hearing of disputed issues.

       (c) Allegation of denial of natural justice

¶ 35      As their last ground for reconsideration, the Companies argue that the original panel denied them a fair hearing.  The Companies responded to the Union's claim of an entitlement to costs due to a deliberate misrepresentation. They maintain that they had no notice of the premise upon which the original panel based its costs decision.  The original panel justified the award of costs on the basis that the Union was induced to undertake fruitless pursuits by the conduct of the Companies' representative.  They complain that they were deprived of an opportunity to address the appropriateness of reliance on any inducement as a basis for an award of costs.

¶ 36      We are not persuaded by the Companies' claim of prejudice.  The Companies cannot be taken by surprise by the award of costs; they clearly had notice that the Union was pursuing such an order.  Costs were sought and the issue was argued.  In the face of those submissions, it was up to the original panel to accept in whole or in part the submissions of the parties or to grant costs on a different basis.

¶ 37      A panel is not bound by the parties' formulation of the issues.  It is not a denial of a fair hearing for an adjudicator to recast the issues provided that the parties have an opportunity to be heard if there is a substantial alteration in the issues so that a new point is raised: Greater Vancouver Transit Authority, BCLRB No. B103/2001 (Leave for Reconsideration of BCLRB No. B8/2001), at para. 20. We do not see the original panel's decision to grant costs for a different rationale from that advanced by the Union is such a radical departure from the issues framed by the parties that a further opportunity to speak to the newly framed issue was required.

¶ 38      In the alternative, even if the Companies were denied natural justice before the original panel, a finding we do not make, we would find that the reconsideration submission process would have cured any procedural unfairness resulting. There has now been a full opportunity for the Companies to present the case on why costs should not be awarded.  We consider any denial of natural justice would be cured by that subsequent opportunity to argue the point: IUOE, Local 882 v. Burnaby Hospital Society, (1997), 42 CLRBR (2d) 142 (BCCA).

V.   CONCLUSION

¶ 39      We deny leave on the issue of the refusal to adjudicate the successorship issues on the grounds of mootness.  We grant leave on the issue of costs, but dismiss the application on its merits.

S. KELLEHER, Q.C., CHAIR
C.R. McCREARY, VICE-CHAIR
L. PARKINSON, VICE-CHAIR

QL Update:  20020128
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