IN THE SUPREME COURT OF NOVA SCOTIA
Citation: MacNutt v. Nova Scotia (Attorney General); Merriam v. Nova Scotia
(Attorney General) 2005 NSSC 337
Date: 050621
Docket: SH 179245
Registry: Halifax
Between:
Cathy MacNutt
Applicant
v.
Attorney General of Nova Scotia
Respondent
And:
Docket: SH 174025
Thomas G. Merriam
Applicant
v.
Attorney General of Nova Scotia
Respondent
D E C I S I O N
Judge: The Honourable Justice Suzanne M. Hood
Heard: Heard in Special Chambers on June 15, 2005 in Halifax, Nova Scotia
Written Decision: December 8, 2005 (Oral decision June 21, 2005)
Counsel: Ann E. Smith for the Applicants
Louise Walsh Poirier, Q.C. for the Respondent
By the Court:
[1] The application is dismissed.
[2] Catherine MacNutt and Tom Merriam commenced separate actions against the Attorney General of Nova Scotia in May 2002. They seek to have these actions consolidated for trial. Most of the pre-trial procedures have been completed, including discovery of witnesses, some of which were done jointly by consent. The plaintiffs are ready to file notices of trial.
[3] The province argues against the consolidation and it proposes that the matters be tried one immediately after the other instead.
[4] Civil Procedure Rule 39.02 provides:
Consolidation, etc., proceeding
39.02. Where two or more proceedings are pending in the court and it appears to the court that,
(a) some common question of law or fact arises in both or all of them;
(b) the rights to relief claimed therein are in respect of or arise out of the same transaction or series of transactions;
(c) for some other reason it is desirable to make an order under this rule;
the court may order the proceedings to be consolidated on such terms as it thinks just, or may order them to be tried at the same time, or one immediately after another, or may order any of them to be stayed until after the determination of any other of them.
[5] Section 41(g) of the Judicature Act, R.S.N.S., 1989, c. 240 provides:
Rules of law
41 In every proceeding commenced in the Court, law and equity shall be administered therein according to the following provisions: ...
(g) the Court, in the exercise of the jurisdiction vested in it in every proceeding pending before it, shall have power to grant, and shall grant, either absolutely or on such reasonable terms and conditions as to the Court seems just, all such remedies whatsoever as any of the parties thereto appear to be entitled to in respect of any and every legal or equitable claim properly brought forward by them respectively in the proceeding so that as far as possible all matters so in controversy between the parties may be completely and finally determined and all multiplicity of legal proceedings concerning any of such matters avoided;
[6] The province admits, in my view, that some common questions of law or facts arise in both actions. Its disagreement with consolidation focuses on whether the actions arise out of the same transaction or series of transactions.
[7] The claims involve statutory interpretation of the same statute: The Public Service Act, R.S.N.S., 1989, c. 376 and an Order-in-Council pursuant to it. The claims are also for breach of contract and negligent misrepresentation with respect to the deputy minister’s pension. The defences are the same to both actions but the province has an additional defence of estoppel with respect to Mr. Merriam.
[8] The leading case in Nova Scotia on the subject is Seafreez Foods Inc. v. Rothmar Manufacturing Corporation, [1993] N.S.J. No. 461. In that case, Justice Davison ordered consolidation of two actions. He said in para. 2:
2 The incident which is at the root of both actions is a fire which occurred on the 8th day of June, 1991 to premises owned by Seafreez at Canso, Nova Scotia.
[9] In that case, the defendant welding company, Budd Walker Welding Limited, was a defendant in two actions arising from the fire. One was brought by the owner of the fish processing plant and the other by the owner of fish product in the building lost in the fire. The claims were respectively $3 million and $70,000.00. The claims against the welding company were both negligence claims alleging the fire started because of sparks from a welder’s torch.
[10] Justice Davison referred in para. 6 to the factors considered in Stone v. Raniere, [1992] N.S.J. No. 458 where Justice Saunders referred to Re Hillcrest Housing Limited, [1985] P.E.I.J. No. 5. Davison, J. said in para. 6 that the factors to be considered are as follows:
(1) the general convenience and expense;
(2) whether a jury notice is involved;
(3) how far the actions have progressed;
(4) whether the plaintiffs have separate solicitors;
(5) actions should not be consolidated where matters relevant in one action have arisen subsequent to the commencement of the other, and the actions have proceeded to a considerable extent; and
(6) where consolidation is otherwise proper, the fact that on discovery questions would be unobjectionable in one action which might be privileged in the other action is not a sufficient reason for refusing an order consolidating the actions.
[11] He also referred to the section of the Judicature Act, supra, which I have quoted above. In para. 12 he said:
12 In the two actions in the matter before me the substantial issues of the fire and the cause of the fire raise facts common to both actions and to a certain extent raise questions of law common to both actions.
[12] He granted the consolidation on this basis and on the basis that:
15 Two separate trials would result in substantial duplication and considerable and unnecessary expense to Walker. (para. 15)
[13] This was in spite of the inconvenience and delay caused to National Sea Products because of the time that would be involved in proving Seafreez’s damages. Davison, J. also referred to the possibility of different results. He then concluded in para. 17:
17 In attempting to balance the convenience and embarrassment, I find that the factors are substantially in favour of consolidation.
[14] I note that Justice Davison did not refer to the need for one action to dispose of the other. In my view, the result was obvious, since both negligence actions against Walker arose from the fire and the alleged negligence which caused it.
[15] In Stone v. Raniere, cited by Justice Davison, consolidation was not ordered. In that case, Stone commenced two actions. One was against the driver of the motor vehicle which injured him. That insurer had advised Stone that he had to put forward a subrogated claim on their behalf against the motor vehicle driver. After that insurer stopped his disability payments, Stone then commenced a second action against the insurer.
[16] Justice Saunders said (at the bottom of p. 2 of the Quicklaw version):
While on its face, there may be some attraction to the argument that judicial economy would invite a combination of cases where some of the medical experts may be the same persons, there is much more to an application for consolidation than that. I must consider all of the circumstances, all of the issues that have been raised by the parties in their respective litigation and determine whether or not it would be just and appropriate to combine those two cases. Having done so, I am convinced there are cogent reasons for refusing consolidation.
He then referred to what I will call the Hillcrest factors that were quoted by Justice Davison and he added at p. 3:
In addition, the court recognized the principle formulated in a number of cases and stated at p. 247:
The common element in these decision (sic) is that in order for consolidation to be ordered a decision in one case would dispose of the essential cause of action in the other case.
[17] He then continued on page 3:
A decision in one of these cases will not dispose of the essential cause of action in the other case. This is reason enough to refuse consolidation.
[18] On page 4 he said:
I add to the factors proposed by Chief Justice Carruthers a consideration which, in this case, is of paramount importance. Here there is a very real prospect of conflict of interest as between the long term disability insurer and its insured.
[19] In Hillcrest, there were two applications for winding up of two inter-related companies. Chief Justice Carruthers concluded that consolidation should not be ordered. The rule in Prince Edward Island is identical to that in Nova Scotia and the effect of the Judicature Act in P.E.I. is the same. Chief Justice Carruthers quoted, from Williston and Rolls, The Law of Civil Procedure, the six factors that I have already quoted. He then said at p. 12:
The common element in these decisions is that in order for consolidation to be ordered a decision in one case would dispose of the essential cause of action in the other case.
[20] He referred to the two proceedings at p. 12 and said:
... I am not satisfied, however, that a decision in one proceeding would necessarily dispose of the essential cause of action in the other proceeding. I, therefore, will not order that the two proceedings be consolidated into one proceeding. I do order, however, that when these two matters are ready for trial they be placed on the docket list for trial one immediately after the other, subject to such terms and conditions as to procedures as the trial judge assigned may think fit or convenient in the circumstances.
[21] A later Prince Edward Island Trial Division decision in 2002 is Metro Credit Union Ltd. v. McInnis, [2002] P.E.I.J. No. 104. In that decision, Justice Campbell ordered consolidation. The two actions arose from the advance of mortgage funds on behalf of McInnis to his lawyer who misappropriated them. The Credit Union sued McInnis for the mortgage funds and other unpaid loans and McInnis in turn sued his law in a separate action. Justice Campbell said in para. 10:
There can be no question that these actions deal with common questions of fact and law and the most substantial portion of the relief sought in each arises out of the same transaction or occurrence.
[22] He referred to Hillcrest but said in para. 14:
14 With respect, while I adopt the factors for consideration set out in Williston and Rolls, I cannot agree with Carruthers C.J. when he concludes that consolidation can only be ordered if a decision in one case would dispose of the essential cause of action in the other case.
[23] In my view, his reason for saying so is stated in para. 15 as follows:
15 Here, we have two causes of action that are inextricably intertwined. It is true that the Metro action against McInnis includes some claims for debt which, on their face, have no connection to the suit by McInnis against Mullin Fortier and which would not be resolved directly by a complete resolution of the action against Mullin Fortier. However, it can not be denied that ‘some common questions of law or fact arise in both of the cases’, nor can it be denied that ‘the rights to relief claimed therein are in respect of or arise out of the same transaction or occurrence’.
[24] He then concluded in para. 17:
17 While there will undoubtedly be residual issues to deal with in each matter (which is to be expected when you have two separate causes of action) a review of the factors for consideration set out in Williston and Rolls leads one to conclusion that these two matters ought to be consolidated.
He added in para. 18 that “a multiplicity of legal proceedings shall be avoided.” (quoting from the Supreme Court Act RSPEI 1988, Cap. S-10)
[25] Two other cases were also cited to me where trials were ordered to be heard one immediately after the other. One is the Nova Scotia Supreme Court decision of Justice Grant in Elliott v. Reagh, [1994] N.S.J. No. 316 and the other is the Alberta Queen’s Bench decision in Jeerh v. Yorkton Securities Inc., [2004] A.J. No. 1547.
[26] In Elliott, Justice Grant said in paras. 1 and 2:
1 This case and a companion case, S.AR. 00759 were heard together by me at Annapolis Royal. This case was heard first.
2 There are separate decisions but they contain similar opening portions and the evidence of some witnesses was to be common to both cases. These are included in each decision. By agreement their evidence was common to both cases.
[27] He dealt with the issue of consolidation in para. 10:
10 Consolidation had been sought but I considered it more appropriate to hear the cases together rather than consolidate them. There appeared to be common questions of law, the roles were reversed in the second case. The plaintiffs in the first case became a defendant in the second case. There were the burdens of proof to consider and other potential problems. I ordered the two cases be tried at the same time, with the case to be immediately followed by the second case. Counsel agreed that certain of the evidence be in common in both cases. That is witnesses (not parties) who would ordinarily be called in both cases need give evidence only once and that evidence could be used in both cases.
[28] In Jeerh, Justice Erb heard an appeal by the defendants from a decision of a Master ordering ten actions to be tried consecutively. He said in para. 2:
2 The Plaintiffs allege misrepresentation and fraudulent misrepresentation against a common stockbroker to whom they were all introduced by the Plaintiff Sohan Jeerh who is either directly or indirectly related to them. The Plaintiffs all purchased shares in the same companies. The most contentious stocks being in Entertainment Boulevard Inc., and Uncommon Media Group Inc.
[29] All the plaintiffs had the same lawyer and Justice Erb said in para. 20:
20 While all of the claims are not identical, it is quite obvious that there is a commonality in certain witnesses such as Yorkton’s corporate officer, Mr. Pandelidis as broker on all of the claims and Mr. Jeerh as the introducing party or link between each of the Plaintiffs and Mr. Pandelidis.
[30] He also referred to other common evidence including that of expert witnesses. He said in para. 24:
24 The Appellant argues that there will be differences in the relationship that each of the Plaintiffs’ (sic) had with Yorkton and Mr. Pandelidis, as well as the levels of investment experience and investment expectations of the various Plaintiffs. Each of the Plaintiffs will have to prove the (sic) that he or she relied on the alleged misrepresentation to his or her detriment. This is not affected by the fact of consecutive trials.
[31] He then said in para. 27:
27 The Appellant also argues that the Defendants would be prejudiced because consecutive trials would set up something akin to similar fact evidence risking tainting the Defendants. In my opinion, because each Plaintiff must prove the alleged misrepresentation and that they relied on it to their respective detriment, the focus will be on the quality of that evidence and the requisite burden of proof. It is simply a matter of proof and credibility which trial judges are, needless to say, quite accustomed to assessing. I do not believe the Defendants would be prejudiced.
[32] In my view, consolidation is not appropriate in this case. The cases should be tried one immediately after the other by the same trial judge. That judge can make orders as necessary or the parties may be able to agree on how to handle the common evidence. It will, of course, be up to the trial judge, but reading in does not seem to me to be the best solution. As was stated in Williston and Rolls, The Law of Civil Procedure, and as Justice Grant did in Elliott, supra, the witnesses testified once and their evidence was used in both cases. That is, in my view, similar to the procedure often used in criminal cases where evidence given on a voir dire does not need to be repeated on the trial proper.
[33] Although there are obvious similarities between the two actions, these cases are more similar to Jeerh, supra, than to Seafreez, supra, or Metro Credit Union, supra, where consolidation was ordered. In Seafreez, the actions both arose from the alleged negligence of a welder which caused a fire. In Metro Credit Union, there was an advance of mortgage funds on behalf of one party, received and misappropriated by the other.
[34] In Jeerh, there were allegations of misrepresentations to a number of plaintiffs by one party, the defendant stock broker. In that case, Justice Erb said each plaintiff must prove the alleged misrepresentation and the focus would be on the quality of the evidence and the credibility of the witnesses. The same can be said in this case where each plaintiff must prove the negligent misrepresentation each relies on. They come from different communications. In Ms. MacNutt’s case, she alleges they were all written. In Mr. Merriam’s case, he says some were written and some were oral and they were with different people. In my view, the representations were not the same transaction or series of transactions for each. Some may have been related in time and arose from the dismissals but the dismissals are not the transactions which are the subjects of the two actions.
[35] The fact that there is a separate defence, estoppel, raised with respect to the claim of Mr. Merriam, it would not, in my view, be sufficient however to disallow consolidation if I were otherwise inclined to order it. However, the principal problem here with consolidation is the fact that the representations each relies upon are different. The result could well be different for each depending upon, as Justice Erb put it, “the quality of the evidence and the requisite burden of proof.”
[36] Many of the so called Williston and Rolls factors are inapplicable here because of the lateness of the consolidation application and, in particular, I refer to numbers 5 and 6. The fourth factor from Williston and Rolls deals with separate solicitors for the plaintiffs. It is phrased that way, in my view, because the applications are often brought by defendants such as Walker in Seafreez, seeking to avoid the expense of two trials. For that reason and also because there is only one defendant, that is, in my view, a neutral factor here.
[37] No jury notice has been issued and both actions have progressed to the point where notices of trial are imminent.
[38] In my view, the issue of convenience and expense can be sufficiently addressed by consecutive trials with the same trial judge. That will eliminate the risk of conflicting interpretations of the statutory provisions. Consecutive trials and the way in which they can be conducted also balances the prejudice in terms of cost and convenience to the plaintiffs against the ability of the defendant to defend itself separately against two separate actions.
[39] Because there could be different results depending upon the findings of fact and because the two actions did not arise from the same transaction or series of transactions, I cannot conclude, as just Campbell did in the Metro Credit Union case, that these actions are inextricably intertwined.
[40] The application is dismissed.
[41] Costs in any event of the cause are awarded in the amount of $1,000.00.
Hood, J.