C.A. No. 106122
NOVA SCOTIA COURT OF APPEAL
Cite as Arnoldin Construction & Forms Ltd. v. Alta Surety Co. 1994 NSCA 3
BETWEEN:
ARNOLDIN CONSTRUCTION & FORMS
LIMITED, a body corporate ) Thomas M. MacDonald
) for the Appellant
Appellant )
)
)
- and - )
)
) Geoffrey A. Saunders
) for the Respondent
ALTA SURETY COMPANY, )
a body corporate )
)
Respondent )
)
)
IDEAL ALUMINUM SALES LIMITED, )
a body corporate ) David Farrar
) for the Proposed Intervenor
)
Proposed Intervenor ) Application Heard:
) October 20, 1994
)
) Judgment Delivered:
) October 31, 1994
)
)
)
BEFORE THE HONOURABLE JUSTICE RONALD N. PUGSLEY,
IN CHAMBERS
PUGSLEY, J.A.: (In Chambers)
Ideal Aluminum Sales Limited, ("Ideal"), has applied for leave to intervene and to be joined as a party, pursuant to Civil Procedure Rule 8.01, in an appeal by Arnoldin Construction & Forms Limited ("Arnoldin") from the dismissal of Arnoldin's action against Alta Surety Company ("Alta").
Arnoldin consents to the intervention, but the application is opposed by Alta.
Arnoldin's appeal is set down for hearing on January 16, 1995.
BACKGROUND:
Ideal and Arnoldin independently entered into subcontracts with Gem Construction Specialists Limited ("Gem") the main subcontractor engaged by Keddy Motor Inns Limited ("Keddy") to construct the Airport Hotel at the Halifax International Airport.
Alta issued a labour and materials payment bond under which it guaranteed Gem's obligations, if any, to pay its subcontractors and material suppliers.
As a result of financial problems experienced by Keddy, the hotel project was not completed and Gem failed to pay, among others, Arnoldin approximately $550,000 and Ideal approximately $225,000.
Arnoldin and Ideal claimed on the bond against Alta on the bond, who refused payment.
Arnoldin's action commenced August 1991 against Alta was dismissed by decision rendered April, 1994. The central issue in the trial concerned the wording of a "pay when paid" clause in the contract between Arnoldin and Gem. A similar clause appeared in the Ideal contract with Gem.
Arnoldin has appealed from the dismissal of the action, alleging the trial judge erred in interpreting the payment clause, and further erred in refusing to allow parol evidence to assist in interpreting a clause which Arnoldin alleged was ambiguous.
Ideal had commenced action in December, 1991, against both Alta and Gem, but delayed in prosecuting its action while it awaited the outcome of another action brought against Alta (i.e., Dartmouth Ready Mix) which was only resolved in October of 1993, when an application for leave to appeal to the Supreme Court of Canada was dismissed.
In December, 1993, Alta changed solicitors, the new counsel took steps to move the action along by delivering relevant documents and preparing for oral discovery examinations. While these matters were progressing, the April, 1994 decision dismissing Arnoldin's action was handed down.
Arnoldin is insolvent. It has not satisfied an execution order for trial costs in favour of Alta in the amount of $23,000. Arnoldin's principals have started another business under another corporate umbrella.
On October 7, 1994, on the application of Alta, Arnoldin was ordered to post, on or before November 4, 1994, security for costs pending its appeal in the amount of $5,000.
DISPOSITION:
It is clear that I have jurisdiction as a judge of this court, sitting in Chambers to entertain the application brought by Ideal for intervenor status (R. v. K.A.M. (1992), 116 N.S.R. (2d).
Civil Procedure Rule 8.01 provides:
8.01 (1) Any person may, with leave of the court, intervene in a proceeding and become a party thereto where,
(a) he claims an interest in the subject matter of the proceeding, including any property seized or attached in the proceeding, whether as an incident to the relief claimed, enforcement of the judgment therein, or otherwise;
(b) his claim or defence and the proceeding have a question of law or fact in common;
(c) he has a right to intervene under an enactment or rule.
(2) The application for leave to intervene shall be supported by an affidavit containing the grounds thereof and shall have attached thereto, when practical, a pleading setting forth the claim or defence for which intervention is sought.
(3) On the application, the court shall consider whether the intervention will unduly delay or prejudice the adjudication of the rights of the parties to the proceeding and it may grant such order as it thinks just.
The interpretation of the "pay when paid" in the Arnoldin - Gem appeal, gives rise to a question of law that is common to the Ideal - Gem dispute. It is clear that the intervention will not delay the hearing of the appeal on January 16, 1995.
Hence, the applicant has established a prima facie right to be joined under Civil Procedure Rule 8.01(1)(b);
It is not necessary to decide whether Ideal as well has a "interest in the subject matter" of the Arnoldin - Gem appeal but I do note that Hallett, J.A. in considering this phrase, concluded:
there is no reason to give a restrictive interpretation to the words as contained in Rule 8.10 (Anderson & Anderson v. Cooperative Fire &Casualty Co.) (1983), 58 N.S.R. (2d) 163.
While acknowledging that the words of Rule 8.01 are broad enough to permit the order sought, counsel for Alta submits that the Court should favour a narrow interpretation of the Rule to limit intervention in private disputes.
He argues that the 1972 revision of the Civil Procedure Rules in Nova Scotia (which introduced C.P.R. 8.01) was strongly influenced by the practice then current in the state of New Jersey. Those rules of intervention, he submits, were primarily directed towards public sector intervenors in cases where the remedy sought affected the public generally. The present case, however is a private dispute, having no public sector involvement. Alta's counsel distinguishes those cases in which permission is granted to insurers to be joined as third parties, because the interest of the insurer in the "lis" is more direct. The determination of the action between plaintiff and defendant may result, in those situations, in a direct monetary obligation on the insurer. See for example the factual situation in Halifax Flying Club v. Maritime Builders Limited (1973), 5 N.S.R. (2d) 364.
The Canadian experience has favoured a broad discretion in adding parties grounded "in the authority of a court to control its own process for the purposes of furthering the efficient adminstration of the judicial system, in particular, the avoidance of a multiplicity of actions "(Muldoon Law of Intervention, (1989), Canada Law Book at p. 31).
Public interest intervention is only one type of intervention available under Civil Procedure Rule 8.01. While not possessing a legal or commercial interest in the subject matter of the proceeding, public interest intervenors are usually required to establish a "vital and legitimate interest in some issue of public policy pertinent to the case which may have consequences for segments of the population beyond that of the immediate litigants to the proceeding (See Muldoon, supra at p. 63.)
The growth of intervention by public interest groups has not, in any way, limited the development of intervenor applications in private sector cases. Indeed the cases seem to indicate a broadening of the definition of "interest" as it appears in C.P.R. 8.01(1)(a) and comparable rules in other jurisdictions (Batten and Newfoundland Association of Public Employees v. Bay St. George Community College (1986), 59 Nfld and PEI reports as an example).
Subject to appropriate conditions, depending upon the nature of the intervention, Civil Procedure Rule 8.01 can be an effective tool in expediting the speedy and inexpensive determination of law suits. Among private litigants, I favour a broad interpretation of the rule to further the efficient adminstration of justice.
Application for intervention by Ideal is granted, subject to the following conditions.
1. Ideal will consent to a stay of its action against Gem and Alta until the final disposition of this appeal;
2. Ideal will not seek costs in the appeal against any party, but may be subject to them, depending on the result;
3. If Arnoldin does not post security for costs on or before November 4, 1994, and if Arnoldin's appeal is dismissed as a consequence of that failure, Ideal will withdraw from this matter as intervenor;
4. With respect to its dispute against Alta, Ideal will agree to be bound by the determination of any question of law concerning the interpretation of the Arnoldin - Gem subcontract. Any factual issues unique to Ideal - Gem would not of course be affected.
5. Counsel for Ideal has acknowledged that he has been retained by the Royal Bank of Canada to advance the Ideal position. Counsel for the Royal Bank will agree that any award for costs made against Ideal, in these proceedings, will be paid by the Royal Bank in the event of default by Ideal.
Alta has raised valid issues respecting the proposed intervention. It shall be entitled to costs in the amount of $400.00 to be paid by Ideal forthwith.
I would ask counsel to submit an order incorporating the foregoing.
J.A.