Air Ontario Fact Sheet and Highlights from June 19, 2015 Decision:
Background to the Litigation
In the fall of 1997, the Air Ontario pilots launched a $300,000,000 lawsuit against all Air Canada pilots who, as of March 28, 1995, were CALPA members on the Air Canada seniority list. The lawsuit claimed financial harm arising from the Air Canada pilots' resistance to implementing the merged mainline/feeder seniority list envisioned by the Picher Award. The lawsuit was originally intended to pressure ACPA into capitulating during regional merger settlement talks and striking a deal favourable to the regional pilots. In addition to the lawsuit, the feeder pilots through CALPA also filed a single employer application with the Canada Industrial Relations Board (CIRB). The hoped-for pressure never materialized. The single employer application was dismissed by CIRB Vice-Chair Michele Pineau on December 23, 1999.
Initially, the lawsuit sought damages for breach of contract. The Air Ontario pilots alleged that the CALPA constitution was a contract between the Air Canada pilots and the Air Canada regional pilots, obliging the Air Canada pilots to pursue a merger of pilot seniority lists, in accordance with the Picher Award. ACPA moved for summary judgment, i.e., asked to have the lawsuit dismissed, based on legal precedent concerning the special contractual character of union constitutions. When it became apparent that the lawsuit was going to be dismissed, the Air Ontario pilots amended their allegations, adding several tort claims including: civil conspiracy, interference with contractual relations and interference with economic interests. The plaintiffs were successful in having the claims consolidated as a class action proceeding in the courts.
As expected, Judge Winkler granted our motion for summary judgment and dismissed the contract claims, in accordance with clear and established law. Judge Winkler did not see as clear a basis in law to dismiss the tort claims, so the lawsuit, based only on those tort claims, proceeded.
The lawsuit was dismissed by the Superior Court of Justice of Ontario on July 25, 2012 but the Air Ontario Pilots appealed that decision to the Court of Appeal for Ontario.
The Lower Court - Air Ontario Pilot Class Action Dismissed by the Superior Court of Justice
On July 25, 2012 Justice Pepall issued a 153-page decision dismissing the class action.
In the class proceeding, more than 170 pilots employed by Air Ontario on March 28, 1995 claimed, among other things, that the defendant Air Canada pilots had committed several torts including but not limited to the tort of unlawful act conspiracy, negligent misstatement and that they breached their fiduciary duty. Specifically, they alleged that specific 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 also sued for expenses incurred in connection with creating the merged list and for the loss of the chance to implement the merged seniority list.
After a lengthy trial, the judge dismissed all claims. The decision provides a lengthy analysis of each cause of action, the applicable law and the court's finding on that issue. Equally important, the trial judge provided a detailed analysis as to why the Plaintiffs actions did not cause the Air Ontario Pilots "damage", a legal requirement for several of the causes of action.
Our legal counsel, Steve Waller of Nelligan O'Brien Payne LLP, wrote an excellent summary of lengthy decision. It was released to you in MEC newsletter # 48, dated August 14, 2012. For additional detail, you can reread that MEC newsletter on the ACPA website.
The Decision at the Court of Appeal of Ontario dated June 19, 2015
The Plaintiffs appealed Justice Papal's decision to the Court of Appeal of Ontario on the following grounds:
1. The trial judge erred in concluding that a union member's "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 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 list.
The three judges of the Court of Appeal of Ontario unanimously rejected each of these grounds, and dismissed the claims, for the following reasons:
On the first ground of appeal the Court clearly and unequivocally ruled that the rank and file Air Canada members were entitled to select a union of their choice, had the right to dissent, and accordingly acted lawfully in resisting the implementation of the merged list. Specifically, the Court reasoned in part as follows:
[57] . 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 and the labour law principle affording a right to dissent to union members.
[58] The trial judge concluded, and I agree, 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 member to choose their union and the labour law principle affording a right to dissent to union members, I would not imply such a term.
On the second ground of appeal, the Court of Appeal confirmed the trial court's decision that the Air Canada pilots who were the Air Canada Pilots Merger Representatives and Negotiating Committee representatives did not engage in unlawful conduct. The court's reasons for this conclusion were in part as follows:
[66].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 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 judge's conclusion that sub-classes two and four did not breach the Merger Policy.
On the third ground of appeal, the Court of Appeal confirmed the trial judge's determination that the test for causation was not met and the plaintiffs failed to prove damages. In reaching this conclusion the court reasoned as follows:
[81] In my view, all of the plaintiffs' arguments fail in the face of the trial judge's acceptance of Mr. Harris' evidence, her detailed analysis of the circumstances leading to decertification, and her assessment of the lawfulness of the defendants' actions.
On the last ground of appeal, the Court concluded in short order that based on the other conclusions of the trial decision, and particularly the conclusion regarding causation, the Plaintiffs' had no argument to recoup the costs incurred in the merger.
As a result, the Court of Appeal dismissed the appeal and awarded costs in the amount of $175,000 against the Plaintiffs.
The decision of the Court of Appeal for Ontario, dismissing the appeal, is available on our website. It can also be found at: CanLII - 2015 ONCA 449 (CanLII)