Representation Orders in Small Claims

In Ontario, Small Claims Court’s monetary jurisdiction increased from $25,000 to $35,000 on Jan. 1, 2020. This has allows far more claims to be heard in this venue, with its streamlined processes and less procedural delays. Even prior to the pandemic, the Small Claims Court handled more than half of all of Ontario’s civil disputes.

Wrongful dismissal claims in particular have been effectively advanced in this venue, especially during the pandemic, and for those looking to avoid the cost consequences of improperly advancing a claim in Superior Court. However, in order for these proceedings to be heard effectively, the courts must still treat the rules of Small Claims Court in a flexible and prudent manner.

This was recently illustrated in an Ontario Court of Appeal decision in Kelava v. Spadacini, dealing with the appeal of a decision by the Divisional Court, reviewing a wrongful dismissal claim in Small Claims Court. What made the action somewhat unusual is that the self-represented plaintiff, himself a lawyer, was suing an unincorporated trade union.

The Rights of Labour Act, which was first past in 1944, states,

Trade union, party to action

(2)A trade union shall not be made a party to any action in any court unless it may be so made a party irrespective of this Act or of the Labour Relations Act.

This provision would appear to provide a procedural obstacle for any action against the unincorporated party, except the courts have interpreted this provision repeatedly over the years to allow otherwise.

In Public Service Alliance of Canada v. Canada (Attorney General), Justice Gouge reviewed an application in 2002. Several unincorporated unions were suing, and he referred to this section as “an archaic legislative provision” while explaining some of the history behind it,

[16] …given the historical context which gave rise to the RLA, its provisions are understandable. Trade unions had only begun to emerge as important institutions in Ontario society. Provincial legislation providing them with rights to compulsory collective bargaining was relatively new…

[17] In this context, the RLA offered some protection to trade unions and the fledgling system of labour relations of which they were a part…

[21] Implicit in the language of s. 3(2), and explicit in the jurisprudence surrounding it, is the idea that trade unions, once accorded statutory rights by labour legislation, acquire corresponding legal obligations and, at least to that extent, have a legal status or capacity.

He concluded that courts must treat unincorporated unions as legal entities in order for them to properly fulfill their obligations. Their legal status (to be distinguished from standing) is implied not through legislation, but through their function and recognition by the legislature or through certification.

More recently, the Ontario Court of Appeal also reviewed this provision in Lawrence v. International Brotherhood of Electrical Workers, also dealing with a wrongful dismissal action against an unincorporated trade union. The union explicitly cited the Act as a basis for not being able to be sued. The court stated,

[15] It is well established that the Rights of Labour Act precludes a trade union from being named as a party and that an action brought in violation of the Act will be struck or dismissed: Nippissing Hotel Ltd. et al. v. Hotel & Restaurant Employees & Bartenders International Union et al., 1963 CanLII 149 (ON SC), [1963] 2 O.R. 169 (H.C.J.); Dover Corp. (Canada) Ltd. v. CAW-Canada, Local 27, [1996] O.J. No. 2319 (Gen. Div.); Active Canada Inc. v. Formosa, [2002] O.J. No. 2551 (S.C.J.); Burley v. O.P.S.E.U., [2004] O.J. No. 4431 (S.C.J.)

[16] The proper way to sue a trade union is to obtain a representation order pursuant to r. 12.07, authorizing one or more members of the union to defend a proceeding on behalf of all the other members. Rule 12.08 facilitates a similar procedure by providing that a representative order may be made for members of an unincorporated association or trade union to bring a proceeding on behalf of all the members where a class action would be unduly expensive or inconvenient.

The majority allowed the matter to proceed, despite the representation order being provided past limitations, because the union defended and treated the action as valid, and the matter was ready for trial.

The challenge in Kelava was that there are no explicit rules dealing with representation orders in Small Claims Court. The Divisional Court did not find this to be an insurmountable barrier, stating,

[10] In our view, the Small Claims Court Rules (sic) contain a “gap”, a gap that the Small Claims Court has jurisdiction to fill under Rule 1.03(2) by reference to the Rules of Civil Procedure.

Rule 1.03(2) of the Rules of Small Claims Court state,

Matters Not Covered in Rules

1.03(2) If these rules do not cover a matter adequately, the court may give directions and make any order that is just, and the practice shall be decided by analogy to these rules, by reference to the Courts of Justice Act and the Act governing the action and, if the court considers it appropriate, by reference to the Rules of Civil Procedure.

The Deputy Judge’s decision to amend the style of cause to include an executive member of the union as a representative of the union as a whole was therefore upheld.

The Court of Appeal rejected the argument that the omission of representation orders from these rules was an omission, and not a gap. This was not a case like Van de Vrande v. Butkowsky or Riddell v. Apple Canada Inc., where summary judgment and pre-trial inspection of property were respectively found not to be available in small claims.

In addition to the rule above, the Court of Appeal also cited the other general provision in the Rules of Small Claims Court, which are intended to facilitate access to justice,

These rules shall be liberally construed to secure the just, most expeditious and least expensive determination of every proceeding on its merits in accordance with section 25 of the Courts of Justice Act.
[emphasis by the court]

There is therefore broad discretion to provide for the achievement of the objectives of these rules and of the court. Reference to the Rules of Civil Procedure were not even required in order to make this order, to make orders that are just, and ensure control over its own proceedings.

The Court of Appeal emphasized that unincorporated trade unions are indeed legal entities with legal personalities, with long-standing recognition that they can be sued in their own name, and in this case, through a representation order.

What this case illustrates is that for all of the typical benefits expounded of the Small Claims Court, its flexibility and ability to also handle more complex procedural issues is also understated.

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