Cited as:
Pinot Holdings Ltd. (Re)

Pinot Holdings Ltd. ("Pinot"), and
Prospero Canadian Land Investment Fund Ltd.
("PCLIF"), and
Capri Centre Management Ltd. ("Capri Centre"), and
RG Properties Ltd. ("RG Properties"), and
ICR Projects Inc. ("ICR"), and
R398 Enterprises Ltd. ("R398"), and
Local 213 of The International Brotherhood of
Electrical Workers ("IBEW"), and
United Brotherhood of Carpenters and Joiners of
America, 21 Locals (the "Carpenters"), and
British Columbia and Yukon Building and Construction
Trades Council ("BCYBTC") (collectively, the

[2003] B.C.L.R.B.D. No. 252
BCLRB Letter Decision No. B252/2003

Case Nos. 44882, 44565 and 47290

British Columbia Labour Relations Board
L. Parkinson, Vice-Chair

Heard: December 16 - 17, 2002; January 8 - 10 and
27 - 29, and February 17, 2003.
Decision: August 5, 2003.
(279 paras.)

Leave for Reconsideration denied: RG Properties Ltd. (Re)


Bruce Greyell, for RG Properties, PCLIF, ICR and R398.
Sarbjit Deepak, for Carpenters, IBEW and BCYBTC.



 1      This case involves a number of different applications relating to bargaining rights at the Capri Hotel and shopping mall.  The Unions apply for a ruling under Section 35 of the Labour Relations Code (the "Code") that RG Properties and PCLIF are successors to Pinot Holdings.

 2      The Unions seek a further ruling under Section 139(e) of the Code that RG Properties and PCLIF are parties to a 1973 working agreement which binds them to the Unions' standard collective agreements.  The Unions also take the position that RG Properties and PCLIF are bound to agreements with ICR and R398 as enabling agreements to their standard collective agreements.

 3      The Unions also apply under Section 38 for a finding that a number of different entities are common employers.  However, during the case management process, the parties agreed to defer the common employer issues until after a ruling was given on the successorship application.  The parties further agreed that Section 139 issues which involve consequential declaratory relief flowing from any decision of the Board on successorship would be dealt with at the first stage of the proceedings should the Unions succeed.

 4      As an alternative remedy in the event that the successorship application is granted, RG Properties, PCLIF and ICR also seek a declaration under Section 139(g) that the 1973 working agreement is not a collective agreement currently in force between RG Properties and BCYBTC.


 5      This case involves a number of very complex issues arising from a lengthy, convoluted fact pattern.  Stated broadly, some of the key issues are as follows:


Is RG Properties/PCLIF a successor to Pinot Holdings?


Did IBEW and the Carpenters enforce their collective agreements against the Capri or are they barred from asserting successorship on the basis of laches or abandonment?


If laches or abandonment is not a bar, are IBEW and the Carpenters barred on the basis of estoppel from asserting bargaining rights against RG Properties/PCLIF because of agreements entered into with ICR and R398 in 1999 or the failure to pursue grievances?


Did ICR and R398 have actual or ostensible authority to enter into the agreements with IBEW and the Carpenters as agents for RG Properties/PCLIF?


Does a 1987 Board decision bar any challenges to the validity of the 1973 working agreement on the grounds of res judicata?


If the question is not res judicata, is the 1973 working agreement void for vagueness or because it purports to be binding in perpetuity?


If the 1973 working agreement is not void on those grounds, is it nevertheless unenforceable because RG Properties/PCLIF is not "an employer"?


If the 1973 working agreement is otherwise valid, was the notice given by RG Properties in March 2002 effective to terminate the working agreement?


 6      The parties prepared an agreed statement of facts summarizing many of the documents relied upon and reviewing the chronology of this dispute.  The parties led further evidence to supplement this agreed statement of facts and to speak to those areas of controversy between them.


Agreed Statement of Facts



The Capri Shopping Centre and Hotel which currently consists of a hotel, convention centre, restaurant and shopping mall has been in continuous existence for many years at the same location, 1171 Harvey Street, Kelowna (the "Capri Centre").


The Hotel, Restaurant and Culinary Employees and Bartenders Union ["Local 40"] was certified to Mannai Properties Inc. and Capozzi Enterprises Ltd. on January 25, 1961.


The United Brotherhood of Carpenters and Joiners of America (the "Carpenters") were certified to Capozzi Enterprises Ltd. on May 3, 1966.


The International Brotherhood of Electrical Workers, Local 213 (the "IBEW") was certified to Capozzi Enterprises Ltd. as the bargaining agent for the standard electrical construction craft unit on August 7, 1973.


On September 1, 1973 the British Columbia and Yukon Territory Building and Construction Trades Council (the "BCYT") signed an agreement entitled "Working Agreement" with Capozzi Enterprises Ltd.


At all relevant and material times Local 213 and the Carpenters have been an affiliate of the BCYT.


In Capozzi Enterprises Limited, BCLRB Decision No. 31/87, the Board found that the "Working Agreement" was a binding collective agreement between Capozzi Enterprises Ltd. and the BCYT.  The parties agree to the facts and findings as they are stated in the Board's decision, up to the date of that decision.


In 1987 Capozzi Enterprises Ltd. changed its name to Pinot Holdings Ltd. ("Pinot").  [See Note 1 below]


On January 30, 1987 Pinot entered into a partnership (the "1987 Partnership") with Mannai Holdings Ltd. ("Mannai") and 312894 Ltd. to own and operate the Capri Centre under the name "Capri Centre Partnership".


Registered ownership interest in the Capri Centre Partnership was 50% Mannai, 45% 312894 and 5% Pinot.


Mannai was controlled by property investors with no prior interest in either Pinot or 312894 Ltd. 312894 Ltd. was owned and controlled by the Capozzi family, who had interests in Pinot.


On April 28, 1987, the certification held by [Local 40] was amended to show the employer as Mannai Properties Inc. and Capozzi Enterprises Ltd. operating under the firm name of Capri Centre.


On February 8, 1989, Pinot transferred its interest in the 1987 Partnership to 357726 B.C. Ltd., another Capozzi family company, in trust.  As a result Pinot went off the title of the Capri Centre Partnership and 357726 B.C. Ltd. went on title.


On November 8, 1989, on the Industrial Relations Council's own motion, the certifications for the IBEW and the Carpenters were amended to reflect the employer as "Pinot Holdings Ltd.".


By a revised partnership agreement made on December 8, 1989, (the "1989 Partnership") the parties restated the provisions of the 1987 Partnership agreement.  Mannai changed its name to Tri-Centre Holdings Ltd. ("TCH"), shares in which were sold to the Canadian Maple Leaf Fund ("CMLF") with 875 shares, Golden Properties Ltd. ("Golden") with 175 shares and Prospero Canadian Land Investments Fund Ltd. ("PCLIF") with 1000 shares.


The members of the 1989 Partnership were now TCH with 50% interest, 312894 B.C. Ltd. with 45% interest and 357726 B.C. Ltd. with 5% interest.


After executing the 1989 Partnership, the Capri Centre Partnership entered into a management agreement with Capri Centre Management Ltd. for the management of the Capri Centre Partnership property.


The ownership of Capri Centre Management Ltd. was 50% TCH, 45% 312894 B.C. Ltd., and 5% 357726 B.C. Ltd.


The management agreement between the Capri Centre Partnership and Capri Centre Management Ltd. was terminated in October 1996, following the sale of the Capri Centre Partnership to RG Properties Ltd. ("RG").


On October 31, 1996 all the assets of the Capri Centre Partnership were sold to RG.  RG purchased the Capri Centre and the names "Capri Centre", "Capri Shopping Centre", and "Coast Capri Hotel" from the Capri Centre Partnership by the issuance of shares in RG and the assumption of debt of the Capri Centre Partnership.


The October 31, 1996 transaction was structured such that the registered interests in the Capri Centre Partnership of 312894 B.C. Ltd. and 357726 B.C. Ltd. were assigned to TCH.  On the same date, PCLIF bought-out the Golden and CMLF interests in TCH, such that TCH became a wholly-owned subsidiary of PCLIF.  RG purchased all of the shares in TCH and PVLIF for cash, shares in RG and the assumption of debt.  As a result of these transactions, RG became the beneficial owner of the Capri Centre with TCH holding registered title as a trustee for RG.


By an agreement dated October 31, 1996, PCLIF purchased beneficial ownership of the Capri Centre from RG for cash, the assumption of debt and shares in PCLIF.  TCH executed a new declaration of trust to PCLIF.  By virtue of the 1996 deal, the shares in Capri Centre Management Ltd. not previously held by TCH were transferred to TCH.


In 1997, the companies affiliated with RG underwent an amalgamation whereby TCH was amalgamated with PCLIF.  As such, the legal and beneficial interests in the Capri Centre were united.  As a result, PCLIF is the sole owner of the Capri Centre.  PCLIF is a wholly-owned subsidiary of RG and currently manages the Capri Centre.  Coast Hotels operates and manages the Capri Hotel under a management agreement with RG.


In 1998, RG retained I.C.R. Projects Inc. ("ICR") as a consultant and to manage major renovations to the Capri Centre.  Similarly, R398 Enterprises Ltd. was retained.  [Whether R398 Enterprises Ltd. is "affiliated with ICR" remains in dispute.]


From the date of the decision in Capozzi Enterprises Limited, No. 31/87 up to at least June of 2001, members of unions affiliated with the BCYT have been dispatched to work, or have worked, at the Capri Centre.


Prior to 1996, Capozzi Enterprises Ltd./Pinot was engaged in the ownership, development and management of commercial properties.  It owned or was involved in various projects including condominiums at Apex Mountain, the development of the Apex Mountain ski village, a Mohawk fuelling station, and bingo halls. By 1987, Capozzi Enterprises Ltd./Pinot had largely ceased its involvement in all projects apart from the Capri Centre.


RG is engaged in the ownership, development and management of commercial properties.  It has long term holdings in shopping centres, a hotel, a sports arena and major industrial buildings.  RG also develops and manages recreational facilities in British Columbia.


On March 12, 2002, counsel for RG wrote to the BCYT in regard to the September 1, 1973 Working Agreement.  The letter was copied to the IBEW and the Carpenters.  The letter stated, in part:  "RG Properties hereby puts you on notice that the Working Agreement is terminated effective forthwith."  The IBEW and the Carpenters responded on the 13th and 15th of March, respectively, stating that the letter of March 12, 2002 is not effective in terminating the Working Agreement.

   Note 1:  In argument, the Union noted that the date of 1987 for the change of name was in error.  The parties agreed that the effective date specified of March 1989 in the corporate searches was the correct date.

 7      In addition to the agreed statement of facts there were other stipulations of fact that were made in the course of the hearing.  One of those was a stipulation that RG Properties and PCLIF are effectively one and the same.  It was also stipulated that there is no written contractual agreement between ICR, R398, RG Properties and/or PCLIF.

       (b)  Changes in Certifications

 8      As part of the disclosure of documents, the parties were given an opportunity to review the various Board records relating to the Capri Centre.  Those records indicate a number of variance and successorship applications made over the years.  As set out in paras. 12 and 14 of the Agreed Statement of Facts, Local 40 applied in 1987 to the Industrial Relations Council for a successorship declaration due to a "change in composition of ownership".  The letter confirming the declaration of a successorship from Capozzi Enterprises to Mannai Properties and Capozzi Enterprises to Local 40 was not copied to other unions.  Neither the IBEW nor the Carpenters had notice of that change.

 9      However, two years later, in 1989 those unions were notified of a variance application initiated by the Labourers to reflect the employer's correct name by changing it from Capozzi Enterprises to Pinot Holdings Ltd.

 10      The IRO report on the Labourers' application indicates that Thomas Capozzi, Secretary-Treasurer of the company, advised the Council that Capozzi Enterprises Ltd. had gone through changes the last two years having sold or transferred some business assets and property.  The report records him advising the IRO "with the various changes in the company and registered name changes, they agree that the information supplied is correct".  That report was not disclosed to the unions at the time.  As stated in paragraph 14 of the Agreed Statement of Facts, the Council, on its own motion, varied the certificates of IBEW and the Carpenters at the same time as it varied the Labourers' certification.

       (c)  Nature of RG Properties' business

 11      Graham Lee, President and CEO of RG Properties, testified about the origins of RG Properties as a developer of properties.  It now builds industrial and commercial properties and recreational facilities.  It owns a number of commercial buildings that are leased out under long-term leases.  Its holdings include a number of shopping centres. As Lee described it, his company builds buildings and generates revenue by renting them out.

 12      RG Properties' 2001 Annual report describes its primary business activity as the ownership, development and operation of real estate projects, including hotel and ice rink facilities.  Its business involves the leasing and management of its portfolio of commercial and industrial properties.  Apart from the Capri, it owns another mall as well as a number of other buildings that have long-term rental contracts.  The report describes the 3 segments of its business as:  sports and entertainment, industrial and commercial properties and property development.

 13      PCLIF is a wholly owned subsidiary of RG Properties and its business is the same as RG Properties.

 14      RG Properties employs 6 staff in its office in accounting, commercial leasing and construction administration.  It has other staff members who work in the recreational facilities.  It does not employ the staff in the Capri Hotel; those who work at the hotel are hired by Coast Hotels.  RG Properties does not employ building trade workers; it never has in the past and has no intention of hiring contract labourers.  Lee testified that should RG Properties build another building on the Capri Centre complex, it would not employ building trade workers.

       (d)  Relationship with ICR and R398

 15      Mariotto is President of ICR.  Mariotto is also the owner and director of R398, a company that was incorporated for the specific purpose of entering into agreements with the Carpenters and Labourers for the Capri project.  ICR employs architects, engineers and project managers and whatever other labour is required, such as first aid attendants.  Mariotto is not an employee of RG Properties/PCLIF.

 16      The relationship between Mariotto's company, ICR, and RG Properties was in some dispute.  Any issues relating to common employer status have been deferred until after this phase is completed; only the issues of agency and authority to contract are relevant at this stage.  Lee described ICR as a third party company that has had a relationship with RG Properties for a number of years.  It is a company that provides assistance with design, project management and construction management.  It is paid a percentage of the total cost of construction.  RG Properties and its principals have no direct or indirect interest in ICR.

 17      RG Properties does the accounting and issues the cheques for any construction project; however, all contract negotiations and approval of invoices are done by ICR.  Lee also refers labour issues arising out of construction to ICR. Whenever the Carpenters forwarded correspondence to Lee's attention during these disputes, Lee passed those grievance letters onto Mariotto.  He relies on his consultant to handle those types of issues.  Mariotto dealt with all construction related matters.

       (e)  IBEW presence at Capri

 18      The evidence relating to IBEW's involvement with the Capri was led through two witnesses, Richard Scrafton and Al Oliver.  Scrafton worked as an electrician at Capri in the early 1970s when the working agreement was signed.  He started working at the Capri as an electrical contractor in late 1991 and has continued to do work at the site since then as the Capri complex does not have a licensed electrician on staff. Since 1996 Scrafton has taken out an annual permit to do electrical work at the Capri mall and hotel.  The annual permit covers most of the small renovation work done during the year.

 19      Scrafton operates through his company Scrafton Electrical Ltd.  He incorporated that company after operating for some time as an unincorporated business known as Richard Scrafton Electrical & Services.  He works on the tools himself and employs electricians on an as-needed basis.  If he cannot handle a project himself, he hires through IBEW's hiring hall.

 20      His company is currently the only unionized contractor out of 120 electrical contractors working in the Kelowna area.  At other recent times, there have been up to two other IBEW affiliated electrical contractors.  On some occasions, he does work in the non-union sector.

 21      Over the years Scrafton has done electrical work at the Capri, both as a contractor and as a sub-contractor. For some of the time, the work Scrafton did at the Capri was through another firm.  In the early part of 1996 Scrafton's company did work as a subcontractor on Revenue Canada's GST office for a union general contractor, Sawchuk Developments Ltd. ("Sawchuck").  Scrafton's bills were sent to Sawchuk and it paid Scrafton.  Scrafton also did work at the Capri through Sawchuk in September 1999.

 22      Scrafton was engaged directly by Capri to do some of the work.  Examples of recent invoices introduced in evidence include work done by Scrafton in October 2002 on the lighting in the Happy Fryer area of the mall.  Scrafton was asked to do some troubleshooting by Jim McMillan, maintenance manager for the mall and hotel.  Scrafton also did work in the hotel again at the request of McMillan in September 2002.

 23      When Scrafton did work directly for the Capri, the method of payment varied somewhat over time.  Up to a point, Scrafton was paid by the hotel and mall.  Some of the invoices in 1996 show that Scrafton was paid by the Capri Centre for work done at the hotel.  When Coast Hotels took over the hotel management contract, Scrafton was paid by Coast (although sometimes PCLIF paid for work done in both the hotel and the mall).  From August 1999 onwards, Scrafton was paid by PCLIF for work done at the hotel and mall.  Before then, he was paid by Capri Centre in trust.  Invoices were at different times addressed to Coast Capri Hotel or to Capri Centre Mall; later invoices are addressed directly to RG Properties. Current invoices are submitted to the mall or hotel and are paid by PCLIF.

 24      Some of the other invoices Scrafton has for work done at the Capri are addressed directly to the tenants in the mall when the work done was tenant improvements.  The bill for that work goes directly to them and Scrafton is paid by those individuals.

 25      Scrafton recalls some issues arising between Local 40 and IBEW about the performance of electrical work when a new management person, John Petvic, had been hired. Petvic came in with some "new ideas" on how to do things. Some of the electrical work was being done by maintenance staff when it should have been done by IBEW members.  An IBEW representative came down and talked to Capri management and told them the maintenance workers should not be doing this work.  Scrafton's recollection as to when this occurred was vague.  At first, he recalled these issues as arising in the 1988 or 1989 and then later stated that it may have been sometime in the 1990s.

 26      Scrafton is aware of three instances where it was brought to IBEW's attention that non-union electrical work was being done at the Capri.  As he described it, when non-union work was discovered, IBEW came down and talked to Capri management.  Once the non-union work was brought to the attention of maintenance staff at the hotel, it was stopped. Until the most recent event leading to these applications before the Board, nothing ever went as far as a grievance being filed.

 27      On one occasion Scrafton was asked to come in and bid on work that had already been given to non-union companies.  Scrafton gave the Capri Centre mall a proposal and they accepted.  He described one incident relating to parking lot lighting in or about 1994 or 1995 when materials were brought on the job site and objection was taken to the non-union status of the workers.  Scrafton denied the suggestion that the IBEW representative threatened to shut the worksite down.  The job was not shut down as work had only proceeded to the point of delivery of materials to the jobsite.  Scrafton does not know if a grievance was filed over that incident.

 28      There was a further instance when the Capri Centre engaged a non-union company, Osram Sylvania, to re-lamp the Capri as part of a PowerSmart program with West Kootenay Power.  This happened in or about 1996 or 1997.  Osram Sylvania had already bought and supplied material, but had not yet actually started to do the work when its non-union status was discovered.  Scrafton does not know whether a grievance was filed, but apparently there was some resolution reached with the IBEW.  He received a phone call from IBEW asking him to put in a bid.  Scrafton ended up taking over the labour side of the contract.  The invoices and supporting documents relating to this project were not put into evidence, but the parties agreed to stipulate that Scrafton's invoices were sent to Osram Sylvania and paid by West Kootenay Power.

 29      The third and more recent dispute that Scrafton was aware of was in 2000.  It arose over the assignment by ICR of some electrical work to a non-union firm, Keldon Electric. A grievance was filed, and that issue led to these applications being filed with the Board.

 30      Al Oliver, a former Assistant Business Manager and dispatcher for IBEW, was also called as a witness.  He worked out of the Kelowna office for a period of 12 years.  He was not aware of any non-union electrical work being done at Capri.  As far as he was aware, the electrical work was always done union, whether by IBEW contractors or by in house employees of Capozzi.

 31      As Oliver recalls it, the hotel stopped using IBEW employees at one point, but continued on using IBEW outside contractors.  (Some of the documents before the Board refer to the practice of direct hire ending in 1979 and resuming in 1983 when the Capri again hired employee electricians).

       (f)  IBEW Variance Application

 32      Shortly after the Board's decision in January 1987, IBEW attempted to organize other trades to bring the rest of the maintenance workers at the Capri into the unit. In May 1987 IBEW applied for a variance of its certification with Capozzi Enterprises.  It sought to amend its certificate so that it read employees "employed by Capri Centre or by Capozzi Enterprises" as well as adding an express exclusion of those represented by other unions.  In its application it stated that it was asking to vary the description of the bargaining unit to include five additional employees in the existing bargaining unit.  It also sought to have the Council vary the description of the employer to reflect that Mannai Properties Inc. and Capozzi Enterprises Ltd had formed a partnership in respect of the Capri Centre.

 33      A vote was conducted on its variance application, but it was never counted.  In the meantime, Local 40 had also applied for certification.  Sometime later in 1988, IBEW withdrew its application for variance.  As Oliver recalled it, the reason for withdrawal was that IBEW had received assurances from Local 40 that it would represent the workers and there would not be any non-union trades working in the hotel.  The then ongoing boycott by unions of the Council was another reason given for not pursuing the application.

       (g)  IBEW Negotiations

 34      Limited evidence was led about the course of negotiations involving IBEW and the Capri.  According to IBEW's initial 1987 variance application, the parties were at that time in negotiations for a renewal agreement. Subsequently, IBEW signed a collective agreement sometime in the spring of 1988 with Hospitality Industrial Relations ("HIR") acting on behalf of Capri Hotel and Centre.

 35      As far as Oliver is aware, there were no prior or subsequent agreements with HIR.  This collective agreement has an express term of April 22, 1987 to October 31, 1990, with a continuation clause providing for it to continue from year to year thereafter unless notice was given.  That collective agreement negotiated with HIR covered both the Capri Hotel and mall.  Article 3.01(a), the recognition clause, describes IBEW as representing "employees who perform electrical and communication maintenance and repair in the Capri Hotel and Capri Centre, but does not extend to the adjustment of sound and audio-visual systems nor does it extend to construction". An appendix to the agreement gives different rates for general maintenance and electrical maintenance.

 36      There is no evidence before the Board that either the IBEW or the Capri gave notice to bargain after this agreement.

 37      A copy of the 1972 - 1974 Inside Wiremen's Agreement was also entered as an exhibit.  Its continuation clause allows for the agreement to extend beyond its express term of April 30, 1974 thereafter from year to year until notice in writing is given by either party.  (Those terms are identical to the current 2000 - 2004 Inside Wiremen's Agreement).

       (h)  Carpenters enforcement of bargaining rights

 38      The evidence relating to the Carpenters' enforcement of the 1973 working agreement was led primarily through Malcolm Broxham.  He was employed by the Carpenters as a business agent from 1975 up until his retirement in March 1998.  He had worked at one time at the Capri early on at about the time the Carpenters were certified and had been a witness in the 1987 Board hearing.  As a business agent, he had dealings with the Capri from time to time over the course of his 23 years of service.  He continued to have some involvement in matters relating to the Capri after his retirement given his past history in some of the issues.

 39      As Broxham described it over the years, the various owners of the Capri had abided by the 1973 working agreement and the Carpenters standard agreement, although a few times he had to take them to task.  Usually any violations were quickly fixed although there were a few grievances.

 40      One of the examples given of the Carpenters' enforcement of the agreement was the use of Trec Construction. As Broxham recalled it, after Trec Construction, a non-union contractor, was engaged by the Capri, the Carpenters wrote letters of grievance.  A settlement was reached with the Capri under which the foreman and workers from Trec Construction ended up on the Capri's payroll under direct hire.  The last time Trec Construction was used was March 1999.

 41      Gina O'Rourke who currently works as the Local 1307 dispatcher for the Carpenters, but who was employed in a different capacity in the office at the time, also recalls the dispute when Trec Construction got the contract for the Extra Foods expansion.  When the Carpenters took exception to the work being given to a non-union firm, a compromise was reached in which Trec Construction was allowed to remain as project manager.  However, its foreman and all other workers had to be hired through the different unions.  O'Rourke dealt with the hotel payroll personnel who handled all the remittances.  The dispatch records show that from 1987 through to March 1989 dispatches were made in the name of Capri Centre/Trec Construction.

 42      There was other contact between the Carpenters and the Capri and some steps taken by the Carpenters in 1989 to investigate the status of the Capri.  In July 1989 Broxham wrote the then controller of the Capri Hotel inviting him to contact him on the method of construction for renovations for a beer and wine store within the Angie's Pub and some other renovations to other premises within the complex.  He offered two methods of construction, either direct hire through Capri Centre or by contract with a union contractor.

 43      Shortly after the Council amended the Carpenter's certification on its own motion in November 1989 to name Pinot Holdings as the employer, Broxham contacted the Council to express his concern.  Ultimately, Broxham was assured that any change would not alter the enforceability of the working agreement.  He testified that, at that point, the transfer of shares had less importance for him than ensuring that the work was being done under the collective agreement.

 44      The Carpenters' records also disclose that later in November 1989 staff at the Provincial Carpenters' office made an inquiry of Broxham about the variance of the Carpenters' certification for Capozzi Enterprises.  There was discussion between them about sending a registered letter advising that the successor company, Pinot Holdings, was then bound to the 1973 working agreement.  There is no other evidence, or any other form of documentary record, relating to what followed that inquiry, although notice to bargain was later given to Pinot Holdings in the next round of bargaining in 1991.

 45      The Carpenters' dispatch records show dispatches to the Capri Centre for what is named as the Wosk's renovation in July and August 1990.  The arrangement was for direct hire by the Capri.  The dispatch records also show a variety of dispatches in the fall of 1990 for work at the GST office. Dispatches were made to various union contractors as well as some apparent direct hires by the Capri.

 46      In 1991 there are a number of entries on the Carpenters' dispatch records for the Capri for various purposes - room renovation and work at Angie's.  In 1991 Broxham also corresponded with Donna Redl who worked in the payroll department of Capri Centre to confirm a discussion between them about estimating work that had been done by Frank Bothe.  He advised that estimating and project planning work does not fall under the Carpenter's jurisdiction, but should any work be done on the renovation as the result of any estimating, the terms of the standard agreement would apply. He indicated that should Bothe do any work or act as a foreman, a dispatch slip would be required and payment would have to be made under the terms of the agreement.

 47      In September 1992 Broxham initiated inquiries about a self-storage project located elsewhere that appeared to be owned by Capozzi Enterprises.  A Southam Information sheet led the Carpenters to believe that Capozzi was involved. Broxham had a discussion with Joe Capozzi about this issue and later sent a letter confirming his advise that Capozzi had sold the property earlier.  The letter also states:  "I am pleased to know that you do not have any dispute that your company is committed to the union.  We look forward to working with you on the realignment of Princess Avenue and related work.  Please feel free to call if there are any questions on hiring or who are Union sub-contractors".

 48      At about the same time as the inquiries were made about that self-storage project, a Carpenters representative had done a corporate search on Pinot Holdings.  The records obtained at the time show the change of name from Capozzi Enterprises to Pinot Holdings effective March 13, 1989.

 49      The records of the Carpenters also reveal that in September 1992 the Carpenters did corporate searches for Foxrun Ventures Ltd. and Capozzi Enterprises.  The reasons for the searches being done at that point were not entirely clear, but it appears as if a search was done of Foxrun because it was named as the developer of the self-storage project in the Southam report.

 50      As indicated above, Broxham also had contact with Capozzi Enterprises over some work done in September 1992 relating to the realignment of Princess Avenue to allow for expansion of hotel's parking lot.  Although the road-building portion of the work was not within the Carpenters' jurisdiction, some of the layout work caused by relocation of roads and entrances other than those done by machine was within the Carpenter's jurisdiction.  As an elected officer of the Kamloops, Revelstoke, Okanagan Building and Construction Trades Council ("KIRO") at the time, Broxham made sure the agreement applied for all the trades.

 51      The Carpenters' dispatch records reveal many instances of dispatch throughout 1992 for some general renovation work, work done in the gift shop and the lobby. Some instances are examples of direct hire by the Capri; other dispatches are in the name of the unionized contractor doing work at the Capri.  The records further show that unionized companies did work at the Bank of Montreal in the mall in May 1993.

 52      The dispatch records for 1994 indicate that in June 1994 the Capri hired carpenters from the union directly in June and in November.  In October 1994 employees working for unionized contractors were also dispatched to the Capri.

 53      In 1994 Broxham took steps to ensure that work done on the GST office at the Capri centre was done under the collective agreement.  As he recalled it, the original work was done under the terms of the collective agreement, but the Capri tried to engage Lutz Construction, a non-union firm, for some additional work.  Broxham wrote Joe Capozzi challenging the use of a non-union contractor and advising of the union's intent to file a grievance.  To remedy the situation, Broxham gave the Capri a choice between using union contractors and hiring directly from the union hiring hall.  That dispute was resolved by hiring those workers through the Capri payroll under the terms of the collective agreement.

 54      In October 1994 Broxham dealt with Dennis Nadeau, a member working at the Capri Hotel without a dispatch to C & T Construction.  He wrote him a letter reminding him of a previous discussion at the time of the dispute over Lutz Construction over the obligation not to go to work on the Capri without a dispatch.  He also assisted that member in dealing with an overtime claim against Capri.

 55      There are no dispatch records showing any referral of carpenters to the Capri in 1995.  However, in May 1995 Broxham wrote a grievance letter addressed to Dumont, Operations Manager for the Capri Centre, over work at Angies' Pub in the hotel complex under a lease between the Capri and Lutz Construction.  Broxham claimed that the work on this project must be done union and referred to past discussions with various representatives of the Capri confirming its intent to use union forces only.  He again sent another copy of the 1987 Board decision.

 56      Broxham testified that at various times copies of the collective agreement were also dropped off to the Capri office to update the Capri.  A copy was provided when Capri was doing the payroll as part of the direct hire.  He remembers taking down a copy of the standard agreement and providing it to them at that time.  On a number of occasions he provided Capri with copies of the 1987 Board decision. Broxham also testified that there would be correspondence showing that the collective agreements were provided, but the Carpenters were unable to produce that correspondence from its records.

 57      In October 1995, in response to concerns expressed by Capri about the need to receive competitive bids, Broxham wrote to various unionized contractors in the province advising them of some upcoming major renovations in the shopping centre and the requirement for the work to be done union.  He advised them of the usual practice of soliciting bids from general contractors and told them that he had provided the names of their companies to the Capri.

 58      In December 1995 Broxham had further correspondence with Dumont about some work on store improvements.  Broxham noted that some of the work had been done by a union company, but sought confirmation on other renovations.  He advised that the Union would pursue a claim for compensation if the Capri did not comply with the agreement.  He also invited her to call him to discuss the need for any accommodation of hours of work with the GST project.

 59      As Broxham described the events after 1995 generally, every time the Capri went to do something, Broxham had to remind it of its obligations under the working agreement.

 60      The dispatch records show that carpenters were dispatched to unionized contractors working at the GST Centre at the Capri mall in February 1996.  One of those contractors was Sawchuk.

 61      The next renovation project was for a new tenant for the mall.  After seeing an item in the local newspaper about the new Winners store, Broxham contacted Capri to ensure that it was aware of its obligations to the Carpenters.  By Broxham's description, the matter was "sorted out" and the project was done union.  Broxham initially identified the time of this event as being sometime in the early to mid 1990s. Other evidence, including the dispatch records, suggests that it was 1997. The dispatch records show dispatches to Sawchuk and to Sid's Drywall beginning from August through to October 1997.

 62      By Mariotto's description, there was a four-month project for renovations to accommodate the renovations for the new tenant.  ICR handled those renovations on direction of RG Properties.  ICR contracted to finish the space off to fit the specifications of Winners.

 63      There is some dispute over whether all of the work done on the Winners store was done with union labour. One of the grievance letters written later by the Carpenters in October 1998 refers to recent work on Winners having been done under the Building Trades agreement.  That assertion was not contradicted in any of the written responses from Mariotto at the time, but at the hearing Mariotto testified that some of the work was done by non-union firms (an assertion that was not put to the other witnesses at the time - an issue I deal with in the course of my analysis).

 64      Mariotto acknowledged that Sawchuck was working together with ICR as a construction manager on the Winners project.  He stated that there was no general contractor on this project.  ICR contracted with Sawchuck for assistance in obtaining trade prices and coordinating trades.  The actual physical work was done by Sawchuck.  He testified that the reason he chose Sawchuk was that it had done work before at the Capri.  He never asked the question as to whether that company was union, but he later found out it was unionized. (At the time of the Winners project, Sawchuck was a unionized company; its voluntary recognition agreement was later cancelled under Section 34 of the Code in February 2001).

 65      Mariotto testified that the decision to give the work on the Winners project to Sawchuk was based on the fact that it was familiar with the layout of the Capri complex as it had done work on it previously.  Although Mariotto stated that he did not know the union status of Sawchuk when the contract was given to it, there was other evidence that Mariotto knew at least as of July 1998 that Sawchuk was unionized.  ICR sought a "comfort letter" from Sawchuk as a condition of acceptance of a contract for other work on RG Properties' arena project.  He sought assurances at the time that there would be no strikes that would affect that project.

 66      Mariotto testified that two non-union companies were used on the Winners' project, United Carpet and another sheet metal company whose name he could not recall.  He did not know whether United Carpet was working for Sawchuk or RG Properties.  When asked to produce the invoices, Mariotto indicated they were not in the possession of ICR.  He was unable to provide any further details.  (For completeness, I also note that Lee testified that he understood from what had been told by others that there had been some non-union work done at the Capri, presumably a reference to the Winners project.  No further details were provided beyond this hearsay evidence).

 67      In the summer of 1998 there were disputes over some of the work being done in tenants' premises in the mall. Controversy also arose when the plans for major upgrades and renovations to the Capri complex became known.

 68      In August 1998 a dispute arose over the use of non-union contractors to do work in a travel agency and another store in the mall.  According to Broxham, the Capri was attempting to make the renovation work appear to be a tenant improvement by giving the tenant an allowance for renovations.  The Carpenters took the position that this was not tenant improvements.  Don Thomas, Business Representative for the Carpenters, wrote Mariotto about these matters asserting that RG Properties was the successor and advising that the Carpenters would pursue a claim to the Board.  Thomas also disputed the assignment of work on the premises occupied by Intra Travel and the Hallmark store.  In relation to the Intra Travel grievance, the Carpenters took the position that as the Capri Centre gave the tenant an allowance for the work, the work remained the responsibility of the Capri.  As for the Hallmark store, the Carpenters asserted that the Capri must comply with the agreement as it required that tenant to move premises.

 69      ICR took the position in response that the tenants had contracted directly with the contractor they chose and referred the Union to the tenants.  Thomas responded on September 1, 1998 by advising Mariotto of the union's choice of nominee for arbitration of this dispute.  Work done at Intra Travel did not stop although the Carpenters made the request for the work to stop as a "good faith" gesture.

 70      As is described more fully below, there were some intervening discussions in September 1998 between Mariotto and the trades about the use of union labour for the planned renovation and expansion of the Capri Centre.  After those discussions, in mid October 1998, a Carpenters' business representative wrote RG Properties responding to Mariotto's intention to tender that renovation project "open shop".  The Carpenters also sought a response on the two outstanding grievances mentioned above.

       (i)  September 4, 1998 meeting

 71      The controversy came to a head in a meeting held on September 4, 1998 between all the trades and Mariotto, although there were some preliminary discussions before that meeting.  Broxham believes he had a total of three meetings with Mariotto, including the one on September 4.  He had two preliminary meetings with him about the anticipated work at the Capri.  Lee had told him Mariotto looked after construction matters and that he should be in touch with him. Broxham made the initial contact and set up the meetings with the first meeting in May followed by the September 4, 1998 meeting to discuss the anticipated renovation work at the Capri Centre.

 72      Broxham recalls Mariotto introducing himself in the first meeting as representing RG Properties and advised that he had his own company called ICR.  He explained the scope of the renovation project and the project's estimated cost of 7 million dollars.  They had a discussion whether workers could be engaged on his payroll, or another company formed for payroll purposes or on RG Properties payroll.  As Broxham put it in his testimony, Mariotto showed some "reluctance" to make any firm commitments on whether workers would be hired through a union general contractor or hired through a subcontractor.

 73      Three witnesses provided their recollection of the September 4, 1998 meeting between Mariotto and the trades: Broxham, Mariotto and Lionel Railton, Operating Engineers Local 115 business representative and President of KIRO. Railton was asked to be involved to facilitate discussions between the trades and Mariotto.  He assisted in the meetings leading up to the agreements and in resolving some issues following the signing.

 74      As Railton recalls it, Mariotto introduced himself as with ICR representing the Lee family.  He indicated that he had acted as a manager on behalf of the family on a number of projects.  In that meeting, Mariotto put forward the position that the owners had only bought the assets and were not bound by the working agreement; all the unions took the position that the current owners were indeed bound.

 75      Broxham provided Mariotto with a copy of the Carpenters' standard agreement and the 1973 working agreement. He also described the history of the relationship between the building trade unions and the Capri.

 76      All the unions represented at that meeting took the position that RG Properties was bound to the 1973 Working Agreement.  Mariotto's position was that the current owners had only purchased the assets of Capozzi Enterprises and were not the successor employer.  Mariotto told the Unions that if project costs included the labour rates that had been used for the Winners' store, the Capri renovations would not go ahead. He said that if those terms applied, they cannot afford to build the project and his recommendation to the owners would be not to proceed.

 77      Broxham acknowledged that Mariotto told him that he did not believe the agreements were binding; Broxham disputed the suggestion that they were not binding and said he should "go test the waters".  Mariotto suggested instead that the Unions go to the Board.  Broxham told him that if he tried to bring in people on site, he would throw up a picket line and they would end up at the Board in a hurry.  Mariotto said he had no control over what the unions do, but would respond accordingly.  Broxham told him that RG Properties was the successor, and if he wanted to go ahead non-union, the unions would go after it for lost wages and if the Board found it to be a successor, it would be paying twice.

 78      Mariotto initially testified that he said in the meeting both parties have the option to go to the Board - the unions could seek successorship or the owners could apply to the Board.  He stated to the unions that they were prepared to do that.  He later stated in his evidence that he could not recall whether he had said that.

 79      There was also some discussion about decertification and whether that could be accomplished given the Carpenters' views as to the obligation for direct hire from the union hall.

 80      Mariotto's notes made after the fact (and disputed by Broxham) indicate that in response to Railton's suggestion that a reduced rate could be considered if RG Properties recognized it was a successor, Mariotto stated "not a chance".  Broxham initially denied any specific recollection of those words, but later acknowledged those words may have come into some part of the discussion.

 81      There was discussion about Mariotto's recommendation to the owners that it proceed to tender on an open shop basis.  Broxham also testified that they had a discussion about select tender and the Union's provincial list.

 82      As Railton described it, the parties were at "loggerheads" and at the end of the meeting the parties went away to review their positions.  Mariotto's concerns were with legal fees and a tight time scale for construction; the Unions' concerns were with ensuring that the work went ahead under the terms of the collective agreements.

       (j)  Without prejudice issue

 83      There was a further disagreement between the witnesses as to whether there was an express understanding that the discussions at the September 4 meeting were without prejudice.  Broxham asserted that at no time in that meeting did the Carpenters ever agree to compromise its rights.  A "without prejudice" agreement may have been Mariotto's desire, but it was not what the unions agreed to.  Broxham described the understanding as a "gentleman's discussion" in which they agreed they "would not fight each other with words said". Mariotto may well have used the words "without prejudice", but the unions did not agree with everything that Mariotto said.

 84      Railton did not recall any comment by Mariotto about "off the record" discussions.  He testified that the discussions were "on the record".  Railton believed that had the parties not entered into the agreements, they would have ended up at the Board for a ruling.

 85      Mariotto's evidence was that there was an agreement that the discussions were off the record and without prejudice.  It was a condition of him agreeing to the request for the meeting.  Mariotto testified that he had made that very clear.

 86      Although Lee was not present at the September 4 meeting, he testified that he had given direction to Mariotto to proceed to meet with the unions provided there was no acknowledgement of successorship issues.  Lee told him in no way would they acknowledge that they were bound by the agreement.  He made the ultimate decision to go ahead with the renovation project on the understanding that it would be without prejudice to future dealings between the parties.

       (k)  Events after September 4 meeting

 87      Following the September 4 meeting with Mariotto, the trades met October 1, 1998.  Shortly thereafter, a draft ICR agreement was drawn up, but it was not signed as things soon became "unravelled".

 88      In the beginning of October 1998 a draft Memorandum of Understanding was sent to Mariotto by Don McGill, President of BCYBTC.  It contained no reference to any term recognizing that the draft agreement was "without prejudice".  It merely stated the parties' desire to enter into a project agreement and proposed enabling at 80% of the standard rates.  Mariotto testified that he was prepared at the time to sign that agreement as he was ready to enter into a deal.  He does not know why that draft did not have "without prejudice" language, but he would have asked for some changes before he signed it.

 89      That draft agreement was not signed, as other events intervened.  In October 1998 the Carpenters advised that its members had voted not to endorse any enabling for the proposed work at the Capri Centre.  After this announcement, there was an extensive exchange of correspondence between the then business manager for the Carpenters and RG Properties each casting blame on the other for the falling apart of the negotiations.  For various reasons, including the position taken by the Carpenters, the project was put on hold until the summer of 1999.

 90      The next event after discussions broke off in the fall of 1998 was an inquiry from the Capri about the process for direct hire.  That inquiry appears to have arisen over controversy over work done at the Dollar Store and Grandma Lees in the mall.  In June 1999 Bruce O'Rourke, a Carpenter's business representative, corresponded with the Manager of Capri Centre Mall to respond to her request for information on direct hire.  He reviewed the history of the use of direct hire of carpenters on the Capri payroll over the years, including the past use of Trec Construction by Capri.

 91      In July 1999, it appears as if work was being done on one project with unionized workers.  The Carpenters' dispatch records show that Sawchuk was doing work in July 1999 at Grandma Lees.  Gina O'Rourke testified that this work was required when the tenant was relocated.

 92      Within the same month, the Carpenters challenged the assignment of other work to a non-union firm.  On July 12, 1999 Bruce O'Rourke wrote Mariotto to advise that the Carpenters took the position that the work then going on at the Dollar Store in the mall was "landlord improvements" within the Carpenter's jurisdiction as it involved structural or demolition work.  In his letter, he stated that tenant improvements include only cosmetic work.  He advised Mariotto that the Carpenters would proceed to a grievance.

 93      It appears that nothing further was done with this grievance immediately following that letter because of an intervening meeting on July 14, 1999 with Mariotto and the trades to discuss the entering into of project agreements. O'Rourke wrote Mariotto again on July 15, 1999 referring to a meeting the day earlier indicating the willingness of the trades to enter into a project agreement and setting out the enabling terms it was prepared to accept.

 94      In or about August or September 1999, Gina O'Rourke received a phone call from a Local 40 member complaining about the presence of non-union floorlayers in the hotel.  O'Rourke went out to the site on two occasions.  On the second occasion she spoke with the banquet manager and the hotel manager telling them that the work had to stop.  There was some threat of a work stoppage on the part of Local 40 members at the time.  The managers told her that Mariotto would get in contact with her and that it was important that the work continue because of a wedding.  As O'Rourke understands it, Mariotto spoke with a Carpenters' representative and the uproar over this use of non-union labour was what led later to the series of meetings to discuss enabling.  As she recalls it, the arrangement worked out was that the non-union workers had to come into the union hall to get a permit to allow them to complete the job.  (A May 2000 letter from Mariotto to Railton reviewing the history of past disputes refers to the permits issued to the non-union floorlayers and the payment of $3000.00 to the Carpenters as a gesture of good faith before the signing of the project agreements).

 95      The dispatch records then show dispatches to Sawchuk and Sid's Drywall for renovations to the meeting rooms in the beginning of August 1999.

       (l)  ICR Agreement

 96      The ICR agreement with KIRO was finally signed August 24, 1999.  Its term extends to September 30, 2000 or the completion of the project, whichever occurs first.  In its preamble it refers to the parties' desire to enter into a project agreement.  One of the terms of that agreement states that affiliates agree to enable their current standard agreements to 85% of total package.  Railton describes the ICR agreement, and the one entered into with R398, as "enabled standard agreements to come up with a project agreement". Both the Carpenters and IBEW collective agreements have enabling clauses so that enabling can occur to provide relief in different areas for a project.

 97      The parties disputed the significance of the opening words of the ICR agreement referring to ICR as the Project Manager "on behalf of Capri Centre Mall and Hotel". Railton drafted that portion.  He put in that language to identify the project and owner so as to indicate whom the unions were entering into the project agreement with.  He testified that the opening words were standard in all project agreements.

 98      The ICR agreement has an express term saying: "This Agreement shall be without prejudice or precedent to any party signatory hereto".  Railton testified that from the perspective of the unions, the reason for the wording "without prejudice" and "without precedent" in the final version of the agreement was to avoid having this agreement impact the terms and conditions of the standard agreement.  The agreement was intended as a "one off" for a specific project for a specific period of time.  The unions did not want its terms thrown back in their face at the bargaining table to become, in effect, the new standard agreements.

 99      Railton stated that the agreement was short because the trades already had bargaining rights.  Had there not been an existing relationship, the agreement would have been many pages long.  In Railton's experience, it is common for parties to have "pick-up" agreements to adopt standard agreements.

 100      Mariotto's explanation of the terms of the ICR agreement follows.  He insisted on an expiry date and the without prejudice language in the ICR agreement.  When Mariotto reviewed the final draft with Railton, there was no discussion between them about who the parties to the agreement were.  Mariotto testified that it was clear that it was an agreement with ICR.  There was never any discussion that RG Properties or PCLIF would be bound by this agreement.  He thought the "on behalf of" language in the preamble refers to the building project, not the owner.

 101      Mariotto believed he was signing a project agreement with rates at 85%.  To him, "enabling" means a reduced rate.  He had never done enabling before and had no experience with collective agreements.

       (m)  R398 agreement

 102      The Carpenters signed a separate agreement with R398 in October 1999.  The original agreement continued until the earlier of the completion of the project or September 30, 2000.  The parties stipulated that there was an agreement later to continue this agreement to June 30, 2001 or substantial completion of the project, whichever is earlier.

 103      The reason for a separate agreement was that the Carpenters were not affiliated with BCYBTC at the time. Railton did not have a hand in drafting the R398 agreement with the Carpenters; it was drafted by the Carpenters.  It has similar wording in the preamble referring to a project agreement and to R398 as the "Project Manager, on behalf of the Capri Centre Mall and Hotel".  It has an identical term to the effect that the agreement is "without prejudice or precedent" and has the same expiry terms.  One of its terms refers to the agreement being "made under Clause 15.05 of the B.C. Provincial Council of Carpenters Standard Agreement 1994-98".  (Article 15.05 refers to the Joint Recovery Program under which special dispensation may be given for amendments to the agreement for the duration of a job to allow it to be competitive.)  It also states:  "All provisions contained in the [standard agreement] are in full force and effect with enabling of the monetary package to 85% of total package".

 104      Gina O'Rourke had some involvement in drafting and revising the R398 agreement.  She had a conversation with Mariotto about changes to the first draft.  He wanted the "without prejudice" language added and the name changed from ICR to R398.  As he explained it to her, ICR was not in the business of being a contractor and he did not want to end up with a collective agreement that would cover work outside of the work performed at the Capri.  He told her that he wanted that language in there to ensure the ability to remain non-union and so that he was not vulnerable to an organizing attempt.

 105      Broxham understood R398 was incorporated as a "convenience company" for payroll purposes.  As he explained it, it was originally intended to use ICR for direct hire from the Carpenters, but eventually R398 became the vehicle used as payroll agent.  As Broxham understood it, when carpenters were required from time to time, Mariotto or the carpenter foreman would call the Carpenters' hall directly to place the order.

 106      Broxham testified that by entering into that agreement at no time were the Carpenters saying that ended the relationship with RG Properties or the Capri Centre.  As Broxham described it, they were enabling agreements to allow Mariotto to work with the unions without the necessity to put it out for tender for a union contractor.  The agreement was also time-specific.  O'Rourke also testified that the only time a project agreement is entered into is if a collective agreement is in force.

 107      Mariotto's evidence is that he entered into that agreement so as to be able to do direct hire with the Carpenters.  There had been some discussion back and forth with the Carpenters about setting up a new company for this project with a memorandum of agreement allowing for direct hire.  Mariotto asked the Carpenters to prepare a similar agreement to the ICR agreement.  Terry Sawiuk, a Carpenters' Business representative, later came over to the Skyreach project with copies of the Carpenters' standard agreement for him to sign.  Mariotto refused to sign saying that he had agreed only to a project agreement, not a standard agreement. When the revised agreement was given to him for signature, he did not look at Article 15.05 or any other provision of the Carpenters' standard agreement before signing.  He did not believe that a copy of Article 15.05 was attached.

       (n)  Subsequent events after signing of agreements

 108      After the ICR and R398 agreements were concluded, ICR continued its role as construction manager and project manager.  It tendered the rest of the jobs that it did not do through its own forces and awarded the contracts.  The invoices for the subtrades were reviewed by Mariotto as project manager and ICR Projects approved and paid those invoices.  (Mariotto did acknowledge that Scrafton's invoices were paid by PCLIF.  The parties also stipulated that the invoices from Sid's Drywall for the period 1999 to 2002 for the work done at the Capri were paid by PCLIF).

 109      As the project proceeded, Railton had a number of discussions with Mariotto.  In the start-up of the project, Mariotto expressed concern over difficulties in obtaining unionized workers in certain trades.  Work halted in September 1999 and Mariotto requested a meeting.  Railton suggested to him the possibility of bringing in contractors from elsewhere and hiring locally.  Mariotto wrote Railton again in May 2000 to raise other concerns about the unavailability of union contractors in the area.  Work slowed down at that point and Mariotto reduced the crew and made other changes.  Mariotto had another meeting with the trades in August 2000 about some difficulties and an agreement was reached allowing tender of some limited work to non-union companies where there were no unionized contractors in Kelowna.

 110      Several disputes also arose over payment and remittances.  The Carpenters brought several grievances against R398 as the payroll cheques and remittances were issued by R398.  Two of those grievances were referred to expedited arbitration.  The successorship issue arose in the course of the referral to arbitration with the result that the Unions made the applications to the Board in February and March 2001.

 111      After the applications were filed with the Board, a number of other grievances were filed as the expansion project continued until July 2001.  On July 4, 2001 Sawiuk wrote Mariotto to advise of the suspension of John Hendricks from the union for non-payment of dues.  The letter refers to the previous arrangement under which Hendricks was admitted as a member on the basis that another member would be dispatched to work equal hours with him.  That arrangement was apparently reached to resolve the dispute over the use of his non-union employer.

 112      Mariotto responded to the grievance on September 4, 2001 to advise that Hendricks was not employed by R398 and the work was performed by a contractor under contract with the project owner.  He also stated that the agreement had expired as of June 30, 2001.

 113      After expiry of the R398 agreement, the Carpenters took the position that any work had to be done under the full terms of the standard agreement.

 114      In September 2001 the Carpenters advised RG Properties as project owner that the Carpenters may need to address a grievance on the subcontracting to a non-union carpentry company with RG Properties.  The Carpenters asserted in its letter that RG Properties as holder of the certification is responsible for its subcontractor and that R398 was allowed to operate under a project agreement on the basis of its certification.

 115      A settlement of this sub-contracting grievance was reached between R398 and Carpenters on September 20, 2001. The settlement terms included the payment of money by R398 and a statement that it had "no precedent setting value".

 116      The Carpenters sent another grievance letter to RG Properties in April 2002 complaining of non-union workers performing carpentry work as part of the relocation of a Capri Centre tenant, Happy Fryer.  O'Rourke testified that this grievance has been held in abeyance while these proceedings continue.

       (o)  Evidence relating to Sub-Contracting and Direct Hire

 117      Clause 2 of the 1973 working agreement allows the Capri to hire individuals through the respective union halls or engage contractors who are signatories to the agreement.  There is a similar clause in the Carpenter's standard agreement, Article 3.02, requiring an employer to contract only to a subcontractor or contractor who is signatory to the Carpenters' agreement.  Article 101 of the current IBEW Inside Wiremen's Agreement also provides that any sub-contractor or third party undertaking electrical work or supplying labour to an employer who is party to this Agreement will be bound by terms applicable to the employer who was initially awarded the work.

 118      Broxham testified that the 1973 working agreement allowed Capozzi Enterprises to operate as an independent contractor.  It was "enabled" to work under various building trades collective agreements that were in place from time to time.  If the Capri required work to be done, it could hire the appropriate building trades personnel under the terms of the collective agreement.  On some occasions, workers were hired directly on the Capri Centre payroll.  On other occasions, they were hired via a sub-contractor or project manager working under the control and direction of the owners of the Capri.  When a subcontractor was used, workers would be hired directly on its payroll and work under the control and direction of Capri.  On the occasions when Capri employed a project manager, such as Trec Construction, the workers were hired by them through the Union hiring halls but placed on payroll.  Sawchuk, on some occasions, was tendered specifically to do a project; on other occasions, it acted as a project manager.  Broxham stated that it was no different than RG Properties using the services of Mariotto to engage the trades in the renovation work around the Capri.  Broxham testified that there was no real difference between how Trec Construction and R398/ICR operated as both were project managers acting under direction of the owner.

       (p)  Duration clause in Carpenters' collective agreement

 119      The duration clause in the Carpenters' current standard agreement has a special provision to deal with employers who are not members of the Construction Labour Relations Association ("CLRA").  Article 2.03 of the collective agreement provides, in effect, that with an employer who is not a member of an accredited employer's organization, notice of lockout only operates as terminating the agreement if notice is followed by an actual refusal to employ union members on a project.  If no such notice is given within the time limits, and no actual lockout occurs, the employer is bound by the new standard agreement as negotiated from time to time in the industry.

 120      The 1972 standard agreement did not contain that provision on serving notice and imposing an actual lockout. The 1972 - 1974 standard agreement provided in its duration clause for its continuation unless either party gave notice of a strike or lockout or the parties conclude a renewal or revision of the agreement.  Article 2.03 was added later.  It appears in the 1986-1988 agreement and in all the subsequent agreements up to the current agreement.

       (q)  Carpenters' negotiations

 121      The Carpenters gave notice to bargain to Pinot Holdings in March 1991 and May 1994.  There is no record of notice to bargain given after that date.

 122      In 1997 through to 1998 there were negotiations for renewal of the Carpenters' standard agreement.  The 1994 - 1996 agreement became the 1994 - 1998 agreement.  At the time of the hearing, the 2002 collective agreement had just been finalized.  In the meantime, the terms and conditions of work continued under the old agreement.  For the most part, the new agreement is the same except for a few different wage rates.

       (r)  Knowledge of change of ownership

 123      The issue of the extent of knowledge of the various union representatives was pursued to deal with the objections based on laches, abandonment and estoppel.

 124      Oliver was not questioned about his knowledge, or that of any other IBEW representative, about the change in ownership.  Railton was questioned about this issue.  He testified that he was never made aware of any corporate change in the ownership of the Capri.  The Operating Engineers always knew the owner as Capozzi; it was not aware of Pinot Holdings. Its dealings with the Capri were rather limited since there was no direct hire by the Capri.  Its involvement was with the hiring of contractors who were signatory to an agreement with the Operating Engineers.

 125      Gina O'Rourke was aware in 1998 that RG Properties was the owner of the complex.  She was told about the name changes by Thomas after he had a meeting with Mariotto.  She did not know who Mannai was.  She had had some discussions with Kevin Capozzi earlier, but he did not tell her that the Capozzi interest in the hotel had been sold.

 126      Broxham knew about the change of ownership of the Capri at least by 1996 or 1997 when he spoke to Lee (an event described below).  Before that, Broxham became aware through his ongoing discussions with Capri personnel that RG Properties had an interest in Capri.  He believes someone told him when he made inquiries through the Capri Centre's office. It also appears that by the fall of 1997 that Broxham would have knowledge of the change of ownership through other sources.  A letter sent from a mortgage fund adviser to Broxham in October 1997 about the potential use of union pension funds for financing of another RG Properties' project refers to Broxham's existing knowledge that RG Properties also owns the Capri complex.

 127      Broxham had been aware earlier of some of the Capozzi's financial difficulties through their efforts to seek refinancing through other sources.  With one of the earlier renovations in or about 1995 or 1996, he helped bring in additional financing for the Capri from the Operating Engineers' pension fund.  Broxham also acknowledged that he was aware Mannai was taking ownership of some of the shares; however, Mannai had no direct dealings with him.  Broxham continued to deal with the same people at the Capri office, except for a change in the manager of the hotel once Coast Hotels took over operation of the hotel.  At no time was Broxham or the Carpenters ever told what percentage of shares were held by Mannai.  At the time that Capozzi was seeking refinancing, Broxham was told that Mannai or Pinot Holdings had bought an interest in the Capri and Capozzi's shares were being reduced as time went on.

 128      Broxham was not aware of Tri Centre Holdings Ltd.; nor was he aware that RG Properties had completely taken over all the shares in Capri.  He had seen a newspaper article that talked about how the Capri Centre had been taken over by new interests, but there was no mention that Capozzi Enterprises no longer had any involvement.  The article did refer to RG Properties as having a controlling interest, but it did not say that Capozzi Enterprises was no longer involved.  All Broxham did was make sure that he contacted Lee so that RG Properties was aware of the contractual obligations.  Broxham believes this occurred in 1996 or 1997 after the news article about the Capri and another one about an arena to be built in Kelowna by RG Properties, Sky Reach Place.  Broxham asked one of the union pension fund mortgage advisers to contact Lee about the possibility of financing the Skyreach project through the union pension fund.

 129      The Carpenters did not get official notification of any change in ownership of the Capri.  Broxham did not take an interest in the corporate changes; he took an interest in the Capri Centre, not its corporate side.  From his perspective, whether it was Pinot Holdings or Mannai as the owner, it was still called the Capri Centre and the Capri Hotel and he continued to deal with the same people at the office.

 130      The only time he made enquiries was in November 1989 after he objected to the Council varying the certification on its own motion.  He received assurances then that led him to believe there was no need to act as the agreement would still be enforceable.

 131      Broxham testified that he had a telephone conversation with Lee in the late part of 1996 and a meeting with him sometime after October 1997.  He places the meeting and telephone call then as he recalls a letter written by a union mortgage fund advisor to Lee written in October 1997. In October 1997 there was correspondence between Gordon Allan, a mortgage fund advisor with ACM Advisors Ltd, and Broxham about the potential use of funds from Mortgage Fund One for the financing of renovations to be done by RG Properties to the Capri complex and Skyreach Sports Centre.

 132      Broxham recalls meeting Lee at a coffee shop at the Capri Centre.  Broxham testified that he was told by Lee to speak to Mariotto.  As a result of his discussions with Lee, Broxham had Sawchuk get in touch with Capri about some of the upcoming work.

 133      Lee stated that it was possible that he spoke to Broxham on the telephone, but he does not recall it.  Lee does not believe that he ever met with Broxham, although he did meet with the representative of the mortgage fund.  When they first met to talk about financing, they talked about the sports centre.  Lee thinks he probably told that representative that his company was also looking at renovating the Capri Hotel and mall.  Ultimately, Lee's company did not use the mortgage fund for financing; it obtained financing for both projects from other sources.

 134      Lee testified that he was not told by any of the Capozzis about the unions or the working agreement.  He first became aware of the working agreement after the purchase when they were contemplating renovating the hall and shopping mall sometime in 1998.  Mariotto told him at that time about the working agreement.

       (s)  Evidence relating to successorship application

 135      As set out more fully in the Agreed Statement of Facts, in 1989 RG Properties purchased 25% interest in the shares of the Capri.  Lee described his company's role after that purchase as that of a "passive investor".  It had no role in the day-to-day operations of the complex; the comptroller of the other 25% investor, Maple Leaf Fund, was involved in that role.  Tri Centre Holdings was the holding company that the Lee family's held shares in.  Although Lee is named in both the 1989 and 1996 partnership agreements as one of the members of the management committee, that never happened in practice.

 136      After it acquired its shareholdings in 1989 and before its purchase in 1996 of all of the shares, RG Properties agreed in or about 1995 to provide additional financing in the approximate amount of 1.5 million dollars to avoid foreclosure of the complex.  Lee described the facility as badly in need of revitalization at the time it made this further investment.  RG Properties then purchased the Capri complex in 1996 for roughly 24 million dollars (as Lee described it, that figure was a tax number, and not actually a purchase number as it was all done through the transfer of shares).  The initial thought was that part of a large space in the mall that was vacated by a former tenant could be converted into an ice rink.  Lee saw this possibility as a way of improving the Centre, although that possibility later fell through.  At the same time, there was a possibility for Winners to come into the mall as one of the larger anchor tenants.  For those reasons, RG Properties decided to purchase the Centre and finish off the development.

 137      There was no hiatus in the operation of the hotel or mall at the time of the purchase.  Although Lee described that purchase as only the acquisition of a "asset", the documents show that RG Properties not only bought the property and equipment but took assignment of the leases, inventory, cash deposits, accounts receivables, agreement with Coast Hotels, service contracts, name and good will as well as other general assignment of matters such as insurance rights. It also assumed the mortgages.

 138      At the time of the purchase in October 1996, the previous management agreement was terminated.  After the sale, the hotel continued to be managed by Coast Hotels and the previous mall manager continued to handle the mall's affairs.

 139      After the 1996 sale, the Capozzis did not have any interest in the complex or any role in managing it, although they were allowed the use of an office in the complex as part of the terms of the sale.

 140      In Lee's view, the mall has changed considerably since 1989.  The facilities have been improved and changes made in the interior layout and the outside facades.  He described there being a "stigma" attached to the Capri Centre Mall that made it difficult to lease.  The renovation and expansion project done in 1999 and onwards was undertaken to revitalize the complex because it had become rundown.

 141      Other witnesses saw little change in the mall and hotel over the years.  From Scrafton's perspective, there has been no change in operations at the Capri.  He submits his billings in the same way to McMillan who, in turn, either redirects them to Dumont or to hotel management for approval. He receives payment in the same way.

 142      Scrafton has dealt with the same individuals at the Capri Centre and mall since 1995.  For the most part, there have been the same faces, except for a few people who have left due to retirement or to take other jobs.  He has dealt with McMillan as the maintenance manager since 1991. McMillan is the one who calls in all the construction companies to do repairs, replacements or additions.  Scrafton has also dealt with Dumont, the Operations Manager who handles all the issues relating to the tenants in the mall.  She has been there acting as the Operations Manager for as along as Scrafton has done work for the Capri.  Scrafton has also dealt with Ron, last name unknown, an individual on maintenance staff who has been there for about 15 years.  Since 1995 he has continued to deal with an individual known to him as Ken who handles maintenance and repairs for the mall and is responsible for outside clean-up.  Scrafton does not know who employs these individuals, but he does know that McMillan is affiliated with Local 40.

 143      Scrafton recalls a number of businesses that have continued to be in the centre since 1995:  a card shop, clothing shops, bowling alley, restaurant, GST office, insurance agency, dry cleaner and Extra Foods.  Broxham also testified that there are still three businesses in the mall that use Capri as part of the business' name.  Since 1997 many of the tenants have remained the same.  Some tenants, such as the liquor store, have moved out and others have shifted locations within the mall.

 144      O'Rourke has been on site on many occasions over the years to deliver papers and dispatch slips.  Her observation was that many of the businesses are the same.  She identified the travel agency, a number of clothing shops, flower shop, bowling alley, Extra Foods, battery shop and shoe store as examples of shops that had been there for a long time.  O'Rourke has seen the Capri name on signs outside the mall and on the mall directory.  She has dealt with the same people over the years such as Dumont, her assistant as well as McMillan.  She has also dealt with the payroll department of the hotel over the years when they needed clarification on the dispatch system.  As far as she understands it, they are now employees of Coast Hotels.


 145      Given the length of this decision, I do not set out the parties' arguments separately, but deal with them in the analysis that follows.



       (a)  Successorship

 146      The Unions say that in deciding successorship issues the Board looks to discernible continuity rather than the technical, legal form of the transaction:  Pacific Northern Power Limited, BCLRB No. B237/98 (Leave for reconsideration dismissed BCLRB No. B367/98).

 147      The Unions argue that viewing the series of corporate transfers broadly over the period of 1987 to 1996 what has resulted is the transfer of ownership and control of the Capri from 100% Capozzi owned to 100% owned by RG Properties/PCLIF.  Ignoring some of the intermediate changes within the partnership, and looking at the substance of these very complicated transactions, it is clear that there was the transfer of some of the interests in the Capri complex in the initial restructuring in 1987.  Eventually, the entire business was transferred.  The subsequent changes from 1987 to 1996 within the partnership structure still resulted in the partnership as a whole remaining the owner of the Capri Centre.  While the interest of Pinot Holdings may have diminished in 1987, there was a transfer of its interests to another wholly owned Capozzi entity.  Effectively, RG Properties/PCLIF held one-quarter interest in the business for nine years between 1987 and 1996 before they acquired the remaining portion of the business.

 148      RG Properties/PCLIF counter the Union's argument focussing on the substance of the transaction by saying that there was no transfer of a business, but only a transfer of an asset.  They argue that successorship applies to the transfer of a business as a "dynamic entity" and "going concern" rather than an idle collection of assets:  Metropolitan Parking Inc., [1980] 1 Can LRBR 197.  They maintain that the Capri was not a functional economic vehicle at the time they acquired those assets.  When they acquired the complex, foreclosure was imminent and the mall was not viable.  It required a major injection of capital to make it a viable enterprise.  It was that capital investment and business expertise that revitalized the Capri centre and made it into a viable business.

 149      RG Properties/PCLIF submit that even the transfer of a significant asset is not in itself determinative:  Leeds Enterprises Ltd., BCLRB No. B271/96, para. 56; Blackdome Mining Corporation, BCLRB No. B419/99. They say that the renovations were so extensive that they went beyond mere enhancement; they also rely on the expense incurred and the extent of the renovations relative to the purchase price.  They invested seven million dollars in renovations, almost one-third of the purchase price of twenty-four million dollars.

 150      The Unions answer that argument by pointing to other cases where the Board found a successorship despite major renovations:  Village Gate Inns Ltd., BCLRB No. 210/87. They say that the renovations did not alter the essential character of the business and the changes to the facade and the like were merely "window dressing".  The Unions also question the accuracy of the proportion of the renovations to original purchase price noting that the figure of twenty-four million dollars was only a "tax figure".

 151      I do not accept the Unions' submission that the improvements were no more than "window dressing".  The magnitude of the renovation budget belies that claim.  The extent of the renovations was more significant than the Unions acknowledge.  However, I do not necessarily accept Lee's characterization of the nature of changes as transforming the business.

 152      After the sale, there was the continuation of an ongoing business.  At the time of the 1996 purchase, the business may not have been thriving to its full potential as Lee sees it, but it was not just an idle collection of useless assets.  There was a business in existence at the time of the transfer.

 153      On this point, the timing of the renovations relative to the purchase is significant.  The renovations were not done immediately following the transfer in 1996; they did not start until the fall of 1999 and were not completed until 2001.  Even those changes made well after the date of the transfer have not transformed the business so dramatically that continuity is lost.  On these facts where the business continued in a recognizable form, although improvements were later made, I do not accept that characterization of the transaction as simply an asset transfer.

 154      There was not just a conveyance of title to land and property that passed hands; much more was transferred. The hotel and shopping mall business was carried on at the same location, with all the same assets, under the same name with no hiatus in operations.  On the operations side, the people the Unions' representatives dealt with representing the mall or the hotel remained the same.  Some of those may have at various times been employed by others, such as Coast, but the management agreement with Coast was another item passing hands.

 155      There is also the fact that the Capri name has been retained and transfer of the name was one of the terms of the sale.  RG Properties/PCLIF argue that although they took the name and goodwill that connection was a detriment to leasing as the Capri name bears a stigma.  However, there has been no effort to alter the name of the complex over the last six years since the transfer occurred.  It continues to trade on the goodwill associated with the name.

 156      There is also continuity in the type of business carried on.  Capozzi Enterprises and Pinot Holdings carried on a very similar business to that now engaged in by RG Properties/PCLIF.  They both lease space to generate revenue. On the mall side, retail space is offered for lease.  On the hotel side, rooms are rented out.  I see no difference in substance.  The business is not so qualitatively changed that continuity is lost.  In essence, the same business remains. Before and after the 1996 transaction, the business involved the ownership and operation of a hotel and shopping mall with lease retail space to generate revenue.

 157      RG Properties/PCLIF assert that there were significant tenant changes in the mall as some larger tenants moved out.  The Unions answer that claim by saying that many of the same tenants remain.  RG Properties/PCLIF may now attempt to target a different market on the mall side, but any changes in the tenants or in the mall improvements do not amount to such a qualitative transformation that discernible continuity would be lost:  Village Gate Inns Ltd., supra.

 158      I find the nature of the business remains essentially the same.  Before the purchase of the Capri, RG Properties/PCLIF was in a similar business in the form of ownership, development and management of commercial properties.  The Unions notes that the 1987 decision records the fact that Capozzi initially developed the Capri complex. Although it was previously engaged in those types of development activities, that aspect of its business of running a hotel and shopping centre has been transferred.

 159      I turn to consider the significance of the fact that not all of the business of the predecessor was transferred.  RG Properties/PCLIF acknowledge that the Capri was one of the main assets of Capozzi Enterprises and Pinot Holdings, but they point out that the Capozzis had ongoing business interests after disposing of Capri.

 160      The Unions emphasize that they are only seeking successorship as it relates to the Capri; they do not seek to attach bargaining rights to other portions of RG Properties/PCLIFs' business.  They also argue that what was transferred was part of a business.  Both Capozzi and RG Properties/PCLIF may operate other businesses, but that ground alone does not defeat a successorship where there is a transfer of a separate identifiable business.

 161      I conclude that there was a transfer of the entire business as it relates to the Capri Centre.  Whether or not Capozzi had other business interests elsewhere which were not the subject of the transfer is irrelevant.  To make out successorship, the entire business does not have to be transferred.  It is enough if one discrete aspect is transferred:  Expert Floors Ltd. and Cromwell Flooring Ltd., BCLRB No. B279/93.

 162      Before leaving this point, I acknowledge Lee's evidence that at the time of the purchase of the remaining interest in the Capri in 1996 he had no knowledge of the 1973 working agreement.  The Unions argue that lack of knowledge on the part of an existing partner is not credible.  The Unions say that RG Properties/PCLIF was not a complete outsider at the time of the 1996 purchase; the Lee family, through its various holdings, was already part owner when they moved to take full ownership.

 163      I do not need to decide whether the claim of lack of knowledge is credible since the extent of knowledge on the part of a purchaser is not relevant.  Even if I accept Lee's evidence that he was not informed of the 1973 working agreement by the Capozzis, that lack of knowledge does not provide a defence to successorship.  It is up to the prospective purchaser through the exercise of due diligence to investigate the terms of a bargain:  Kelly Douglas and Company Limited, BCLRB No. 8/74, [1974] 1 Can LRBR 77.

 164      I find that a successorship is made out based on the evidence before me.  As a successor RG Properties/PCLIF would inherit "proceedings" under the Code, including any existing certifications, and would be bound by any collective agreements in force, unless any of the laches, abandonment or estoppel claims succeed.

 165      Before considering the merits of those claims, I note that the parties' arguments relating to abandonment, estoppel and laches at times seemed to blend together to some extent.  The same conduct was relied upon for different legal defences without distinguishing between them.  To avoid repetition given the overlap with laches, abandonment and estoppel issues, I deal with some of the same evidence together.  Although these defences have different legal pigeon-holes, and at times have a different analytical focus, they are but different manifestations of the same underlying concerns of equity and fairness.

       (b)  Laches

 166      To begin with laches, RG Properties/PCLIF say that the delay in applying for successorship was unreasonable and has prejudiced them.

 167      The Unions point to the line of authority questioning whether the doctrine of laches can apply to Section 35 given that successorship operates automatically by law rather than depending on application by a party:  Expert Floors, supra; Maverick Coach Lines, BCLRB No. B435/97, para. 56.  Given my ultimate conclusion on the merits of the laches argument, it is unnecessary for me to resolve that debate and I decide this case on the assumption that laches can apply to successorship.

 168      The doctrine of laches applies where one party's conduct has been equivalent to waiver or through the combination of conduct and neglect puts the other party in a situation where it would be prejudiced by a remedy later sought.  Laches depends both on the length of delay and the nature of the conduct of the parties during that interval: 3269 Enterprises Ltd. doing business as the Duncan Inn, IRC No. C151/92.  The assessment of the period of delay begins from the point at which the party has knowledge:  Maverick Coach Lines, supra, para. 55.  In assessing the length of time to see if any delay is excessive, the Board excludes those portions of time where there are periods of inactivity when no construction work was being done.

 169      In written submissions, RG Properties/Prospero suggested that the time for assessment of delay should begin in 1989 when the last change to the certifications was made. I do not accept that in assessing delay the Board should consider matters as far back as that date.  I consider the relevant period for assessment of any delay and any balancing of the relative positions of each party on equitable grounds to flow from 1996 onwards.  As I set out more fully below in considering the defence of abandonment, I do not think the clock should run from 1989 since the previous owners abided by the collective agreements until the time of the transfer in 1996.  I will consider the period of 1996 to August 1998, beginning with the significance of events in 1997.

 170      In this case the Unions did not apply for successorship relief until February and March 2001 for a transfer that was accomplished on paper in or about November 1996.  Although formal application was not made until the beginning of 2001, the Carpenters sent correspondence in August 1998 referring to a successorship claim.  There is also the evidentiary dispute over whether there was a meeting in or about 1997 between Broxham and Lee (which I resolve below).

 171      For reasons stated more fully in the course of considering the abandonment defence, I am not persuaded that the Board should reject these applications on the basis of laches.  The conduct during this interval from 1996 to 1999 when the agreements were entered into does not lead to a conclusion of longstanding waiver or acquiescence that could lead to prejudice.  As I reason more fully below, the ICR and R398 agreements entered into in 1999 had the effect of "stopping the clock" and suspending the time for purposes of assessing the prejudicial impact of delay for purposes of laches.

       (c)  Abandonment

 172      The next argument advanced is if RG Properties/PCLIF is a successor, and if the 1973 working agreement is a collective agreement binding them to the Unions' standard agreements, the Unions have abandoned those collective agreements.

 173      I adopt the test for abandonment set out in Wayne Watson Construction Ltd., BCLRB No. B306/94.  The employer raising abandonment bears the onus of proving that it used employees that fall within the jurisdiction of the union. After establishing that fact, the employer must show that the union was aware of it, or should have been aware, through the exercise of reasonable diligence and did nothing to assert its rights.  Abandonment depends both on work being done within jurisdiction of union and knowledge on its part.

 174      The test is essentially a factual one:  were the Unions aware, or should they have been aware, of the work done and did nothing to assert a claim to the work?  Did they have any reason to suspect work was being done and acquiesced by turning a blind eye?

 175      Given the Board's ruling on the validity and enforceability of the working agreement in 1987, any claim for abandonment can only start after 1987.  I turn to consider the conduct of IBEW and the Carpenters after 1987.

 176      Before doing so, as an aside, I note that the 1987 Board decision refers to an earlier consent order issued by the Board in 1982 as part of a settlement of a claim by another union which is party to the 1973 working agreement. That settlement required the Capri to give notice to the Unions before beginning any renovations or alterations.  That order was not relied upon in these proceedings, but I merely note it as some recognition of the difficulties in policing enforcement issues where a union may not have direct knowledge that a project is being done and the work is not highly visible.

 177      I begin my assessment with a review of IBEW's conduct.  Oliver's evidence that unionized electrical contractors were always used as far as he was aware was not challenged.  There is also a clear pattern of a constant use of an IBEW contractor, Scrafton Electric.  It is not mere coincidence that the only (at times) unionized electrical contractor in Kelowna was used.  Where there were attempts to assign the work non-union, IBEW was vigilant in asserting its representational rights.

 178      Although IBEW did not display the same vigilance in seeking to correct the entity named on the certification, a matter I comment on below, it did act quickly to complain about the actual use of non-union electricians.  Non-union electrical work was the exception.  In three instances, the IBEW asserted its rights and in two of those three disputed instances, the work ended up being completed by an IBEW contractor.  The third instance, involving Keldon Electric, was the one that led to these proceedings.  Given that conduct by the IBEW in enforcing its claims under the 1973 working agreement, I see no basis for a finding that IBEW has failed to enforce its contractual rights so as to give rise to any claim of abandonment.

 179      However, there was some lack of diligence on the part of the IBEW in giving notice to bargain.  From the complete lack of evidence on this point, I assume that no notice was given directly by either party (although deemed notice under the statute may have operated:  Advanced Glazing Systems Limited, BCLRB No. B99/94, p. 9).

 180      I also had no argument presented on the significance of the expired HIR agreement.  Its significance is unclear.  It appears to relate only to maintenance work given its express exclusion of construction.  It is unknown whether this agreement was entered into as part of the resolution of the past conflict with the use of Local 40 members doing electrical work.  It may coincide with the suggestion in the evidence that at one point the Capri hired electricians directly to do the work before disbanding that practice at a later point.

 181      Although the evidence on this point was not entirely satisfactory in resolving these uncertainties, any significance that would attach to this agreement is lessened by the fact that it was followed by a consistent pattern involving the use of an IBEW contractor, Scrafton.  On the few occasions when work was assigned to a non-union electrical contractor, action was taken and an IBEW contractor brought in to do the work (with the exception of the Keldon Electric grievance in 2000).  That conduct of the parties is consistent with the terms of Article 2 of the 1973 working agreement. That article provides that the company agrees it will give contracts or sub-contracts only to individuals or to companies that are parties to a collective agreement with affiliates of BCYBTC.

 182      As for the Carpenters, I am more than satisfied that up until the 1996 transfer there was vigilance on their part.  The evidence recounted above involving Trec Construction and other examples where the Capri undid the contracts to non-signatory companies when challenged by the Carpenters convinces me that there was no lack of diligence. Notice to bargain was also given to Pinot Holdings in the last round of negotiations in 1994 before the transfer in 1996.

 183      As for the events after 1996, there are two evidentiary disputes relevant to this issue.  The first dispute is whether Broxham contacted Lee in late 1996 or 1997 (the evidence Broxham gave was unclear on when he said this contact occurred).  Lee disputed Broxham's claim of a meeting between them.  He doubted whether there was an actual meeting between them, although he admitted it was possible that Broxham could have spoken to him on the telephone or accompanied the mortgage fund advisor to a meeting to talk about possible financing for the Skyreach project.  From the documents, it appears as if those discussions occurred in late 1987.

 184      I prefer Broxham's evidence on this point as I consider he had more reason to remember this event than Lee. It is also consistent with other surrounding events occurring at that time.  I conclude on the balance of probabilities that there likely was some contact between Broxham and Lee coincidental with the lead-up to the Skyreach project.  From the surrounding events, it makes sense that the Carpenters would be making overtures at that time to have the work done with union labour in return for some financing.  I also consider it probable that they were speaking about both Skyreach project and the Capri renovations when given the opportunity.  Although I find that there was some contact then, I also accept that neither Mariotto nor Lee may have seen the actual 1973 working agreement at that stage, but I believe they knew at that point about the past use by the Capri of unionized construction companies.

 185      The other significant event in dispute relates to the use of union labour for the 1997 Winners renovations. For the most part, the Capri used a unionized workforce for that project.  I do not think it was mere happenstance that a unionized contractor, Sawchuk, was used (especially when the timing of that work is juxtaposed against the other ongoing work in the hotel in either 1996 to 1997 when IBEW disputed the assignment of work to Osram Sylvania).

 186      There is some question over whether other non-union companies were used in the Winners project.  The Unions say that Mariotto's evidence that the work was done by United Carpet is only hearsay and notes that he was not able, when requested, to produce any invoices or cheques confirming his assertion.  The Unions point out further that the Carpenters' dispatch records show that the dispatch was done through Sawchuk during this time.  The Unions also say that Lee's evidence does not make out abandonment.  Although Lee had a recollection that some non-union labour was used, he had no specifics.  The Unions question Lee's recollection of this event as he had not other knowledge of any other construction-related matters and professed to say those matters were all handled by Mariotto.

 187      As this is a critical point, I do not rely on Lee's evidence as it is entirely hearsay.  As for Mariotto's evidence, he testified that there were two non-union contractors on the Winners site to do floorlaying and sheet metal.  Mariotto was able to name the floorlaying company, but was not able to identify the name of the sheet metal contractor.

 188      In the absence of the name of the sheet metal company to confirm whether it was union or not, I find it difficult to conclude that this example makes out abandonment. Apart from that lack of detail about the sheetmetal work, the use of non-union forces in another trade does not make out abandonment on the part either of the Carpenters or the IBEW. Aside from the apparent lack of knowledge on the part of the Unions, this does not show acquiescence when the work is not within the Unions' jurisdiction.  The onus is on the party asserting abandonment to prove that individuals were employed within the union's jurisdiction:  Rissling Contractors Ltd., BCLRB No. B224/96, para. 28.

 189      As for the floorlaying work, I will assume for purposes of argument that this work may be within the Carpenters' jurisdiction given the incident O'Rourke described when she received the complaint from Local 40 members about the use of non-union floorlayers in the hotel (which I understand from the timing to be a different incident). However, even if this floorlaying work is within the Carpenters' jurisdiction, I do not find that RG Properties/PCLIF has proven that the Carpenters knew of this assignment of work.

 190      I note that the use of non-union labour on the Winners project was not put to Broxham or Gina O'Rourke in cross-examination to offer them an opportunity to acknowledge or deny knowledge of this event.  Mariotto's testimony contradicts both Broxham's evidence in chief and in cross examination that the Winners project was done with union labour.  Broxham testified in direct examination that a union contractor, Sid's Drywall, also worked at Winners and no other work was done non-union except at Happy Fryer when a grievance was filed.  In cross-examination when he was questioned on this point, he further asserted that the Winners project was done with union labour with Sawchuk.

 191      O'Rourke testified in direct that the Carpenters dispatched workers to the Winners project.  It was only put to O'Rourke in cross-examination that while Sawchuk was working at Winners, it was required to work at 100% of the rates set out in the Carpenters' agreement.  O'Rourke agreed and stated that she informed Sawchuk that it could not get enabling for the Winners project.  I infer from the fact that the Carpenters insisted on full rates for this project that, had it known that some work was going non-union, it would have taken steps to enforce the 1973 working agreement.

 192      When Mariotto's evidence about the use of two non-union contractors at Winners was given, the Union noted with surprise that this was the first time it had heard this allegation.  It had earlier sought particulars on whether there was any allegation that non-union work had been done without protest and received no particulars.  In the face of the failure to disclose this claim earlier when particulars were sought and to cross-examine on this point to allow an opportunity to admit, deny or to explain a lack of knowledge, I give little weight to Mariotto's evidence.  Even if I were to accept his evidence in the absence of the invoices and the failure to put this to other witnesses, it has not been proven that the Carpenters either had knowledge or this event or that all of this work was within its jurisdiction.

 193      Although I do not have the benefit of cross-examination of the Carpenters' witnesses on this point, the other documentary evidence before me is consistent with a conclusion that the Carpenters were unaware that there was non-union labour at the Winners project.  The Carpenters' October 15, 1998 letter to Mariotto asserts that this project was done with union labour.  There was no response from Mariotto challenging that assertion.  That letter is consistent with the Carpenter's knowledge at the time that union labour was used.  The fact that the Winners project used union labour was also an issue discussed in the September 4, 1998 meeting.  Although Mariotto spoke about the other project mentioned, he did not dispute or qualify the Unions' assertion that the Winners project was done union.  The minutes he took show no such challenge.  Those references in the meeting to the work being done with union forces further suggest that the Carpenters were unaware that any of it was done non-union.

 194      To conclude to this point, I do not find the evidence of what happened with Winners in 1997 makes out the onus on a party arguing abandonment to show knowledge on the part of the Carpenters or IBEW.  I find that RG Properties/PCLIF has not met the onus to prove abandonment by what occurred in 1997 with the Winners project.  It has not been established that non-union labour was used either within the jurisdiction or with the knowledge of the Unions.

       (d)  Estoppel

 195      I now turn to consider the events happening over the period of 1998 to 1999 before the ICR and R398 agreements were entered into, the events leading to those agreements and the period following those agreements.  The estoppel argument as framed by RG Properties/PCLIF has a number of facets relating to those events.  They argue that the Unions should be estopped from making successorship claims because instead of proceeding to the Board with a successorship application, the Unions agreed to project agreements for the renovations. RG Properties/PCLIF say they relied to their detriment on the Unions' lack of action in the face of full knowledge of the position they took denying successorship.  They also argue that the failure of the Unions to prosecute grievances to arbitration or to be vigilant in updating their certifications should mean the Unions are estopped from the relief they seek.

 196      There is no dispute over the legal principles of estoppel that could apply.  The question is whether the facts make out an estoppel through an unequivocal representation. Other questions are whether the conduct led to any prejudice through any detrimental reliance.  There are further questions as to whether it was reasonable to rely on an agreement that was without prejudice to either side.

(i)  Estoppel based on failure to update certifications

 197      I start with the estoppel argument based on the status of the certifications.  RG Properties/PCLIF argue that since the Unions made no effort to amend their certificates to reflect changes in ownership when changes occurred in 1989 and 1996 that the Unions should be estopped from asserting successorship.  They submit that the Unions showed a negligent attitude towards maintaining their certifications despite knowledge of the change in ownership.  Broxham knew of the change in late 1996, and a period of 2 years goes by before the August 1998 letter is sent asserting successorship rights.

 198      Before considering the 1989 changes, I first consider one event specific to the IBEW, its failure to pursue its 1987 variance application for an expansion of the scope of the unit.  The evidence suggests that IBEW withdrew its variance application later in 1988 in the face of the competing claim by Local 40 to represent the maintenance people doing electrical work.  Given that background, I do not find this event to have much bearing.  The importance of any abandoned certification claim also diminishes given the apparent switch later from use of in house electricians to the use of IBEW contractors.

 199      The only significance of that variance application is that it reveals that IBEW knew at the time of the application in 1987 that Mannai had acquired an interest in the Capri.  A year later it seeks to withdraw.  The explanation advanced for not pursuing the expansion of the unit is understandable given the competing application by another union, but the failure to update the certification to include Mannai is not adequately explained.  That failing is offset in part by the fact that after IBEW withdrew its application for variance, the Capri continued to respect the 1973 working agreement by engaging IBEW contractors.  There was no need to seek Board intervention to obtain compliance.

 200      I agree that the Unions were not as vigilant in ensuring their certifications were accurate and up-to-date as they were in policing the application of the collective agreement obligations.  I do not endorse Broxham's cavalier attitude towards the identity of certificate holders.  The Unions were not diligent in updating certifications, but they did assert collective agreement rights against past and present owners.  There is also merit in the Unions' argument that as no Board intervention was required to obtain compliance, there was no immediate need to attend to certification changes until the disputes arose in 1998.

 201      In assessing the equities on this issue, I also make one observation on the changes to the certifications in 1989 naming Pinot Holdings as the employer.  Based on the more complete corporate information now before the Board relating to the changes in the ownership, it is questionable whether Pinot Holdings was the correct entity to be named as the employer at the time.  The information obtained by the Council from a Capozzi representative was not disclosed to the Unions at the time so the source of their knowledge would have been limited.

 202      As paragraph 13 and 14 of the agreed statement of facts show, at the time the Labourers' variance application was granted in November 1989, Pinot was already off title and had transferred its interests to another corporate body.  This change in the composition of the ownership was treated by the Council in 1989 as more akin to a simple name change.  It was processed as a variance, rather than a successorship.  It is possible that the Council may have been misled as to the nature of holdings.  I do not have to decide whether that misrepresentation was innocent or otherwise; I merely make the observation that in the result the wrong entity was apparently named as the employer given that Pinot's interest had already dropped to 5% in the 1987 transactions.

 203      Not only was the 1989 variance already superseded by other events, it was quickly overtaken by events immediately following that had an impact on the identity of the employer.  Almost immediately after the granting of the variance, there were other corporate changes implemented that were not disclosed to the Board or to the other parties:  see para. 15 of agreed statement of facts.

 204      Those observations on the actions of the predecessor employer are unnecessary to my conclusion, but reflect on the equities of this case.  In these unusual circumstances, I make those observations about the lack of care of the predecessor employer on certification issues to put in perspective the failure of the Unions to police the certifications.

 205      I also observe that had the Unions done a corporate search at the time of some of these transactions, little would have been gleaned of the true nature of the transactions without more disclosure.  Given their complexity, these commercial transactions would not have been readily comprehensible even when disclosure of the corporate records was made.  The series of financial transactions reflect a corporate shell game for taxation and other business purposes. I suspect very few people other than the corporate lawyers who drafted the documents understand all the intricacies of the maze of those complex transactions of corporate restructuring. Not even Lee purported to understand all of it.  In his evidence, he did not pretend to follow much of it other than understanding the end result.

(ii)  Estoppel based on failure to pursue grievances

 206      I turn to the estoppel arguments focussed on the failure to prosecute grievances to arbitration.  This claim is advanced only against the Carpenters, and not IBEW.  The one outstanding grievance involving the use of Keldon Electric was diligently pursued by IBEW and led directly to the application of the Board once a dispute arose in the grievance process over whether the collective agreement binds RG Properties/PCLIF as a successor.

 207      In relation to the Carpenters, RG Properties/PCLIF note that the work at Intra Travel was completed non-union and the grievance was not pursued notwithstanding the request by the Carpenters to hold off doing the work.  They argue the Carpenters should be estopped from pursuing its successorship claim for failing to pursue that grievance.

 208      The grievance on Intra Travel was set out in the same August 1998 letter as the Carpenters' assertion of successorship.  Mariotto responded saying the tenant had contracted directly with contractor.  A defence was thus raised that the work done was in the nature of tenant improvements, which if true, would apparently be work outside of the Carpenters' jurisdiction.  The Carpenters disputed that defence at the time on the basis that, since the landlord had given an allowance to the tenant, the work was still within its jurisdiction.  The Intra Travel grievance was left unresolved after those letters were sent.  The grievance was not pursued to arbitration, although a nominee was appointed.

 209      I do not find the inactivity on this particular grievance establishes an estoppel.  Its timing, the nature of the issues and the subsequent conduct all lead me to conclude that there was not an unequivocal representation of abandonment of any successorship claim.  Even if it could be said there were a somewhat equivocal representation, it would not have been reasonable to rely on it given the other events occurring at the time and afterwards.

 210      As for timing, the Intra Travel grievance was raised immediately before discussions leading to the project agreements.  It occurred just before the September 4, 1998 meeting where there was vigorous assertion of a successorship claim followed by attempted settlement discussions.

 211      Any representation on the position of the Carpenters that could flow from the inactivity on this grievance is equivocal:  is it a representation by the Carpenters that they agree there was no successorship or that they would not challenge the assertion in this case that the work was tenant improvements beyond the jurisdiction of the Carpenters?  When juxtaposed against the other ongoing conduct at the same time where the successorship claim was vigorously pursued, I consider it would not be reasonable to rely on that inactivity as an acknowledgement that there was no successorship.

 212      Subsequent conduct calls into question the reasonableness of any reliance on that inactivity.  After the Intra Travel grievance, there were a number of other grievances in which the Carpenters pursued claims.  Some of the Carpenters' payroll grievances lodged against R398 were ultimately settled on a non-precedential basis.  Although some were resolved, others were not settled.  Those unresolved grievances were not formally withdrawn, but left outstanding.

 213      Events after the Intra Travel grievance also show that some of the work within the Carpenters' jurisdiction in 1999 was a "mixed bag".  Work at Grandma Lees was done by a union contractor, Sawchuk, in July 1999.  Yet, at almost the same time, the Carpenters were grieving the use of non-union labour at the Dollar store.  Shortly after that grievance, R398 and the Carpenters enter into the project agreement in October 1999.

 214      As subsequent events overtook this grievance, I do not consider it would be reasonable to rely on the failure to proceed to arbitration on that issue when other grievances were subsequently taken and vigorously pursued.  The terms under which the parties entered into the R398 agreement (a matter I deal with below) would also contradict any assumption that successorship was abandoned.

 215      I also do not consider that the grievances filed after February and March 2001 could establish any estoppel. Once the applications were filed with the Board, it would not be reasonable to rely on any inactivity on those grievances. Given the dispute over whether the collective agreement binds RG Properties/PCLIF or ICR or R398, it made sense to hold those in abeyance until the Board's ruling.  Any reliance placed on inactivity on those grievances would not be reasonable; the only reasonable assumption was that the dispute was in abeyance while the successorship issue was decided.

(iii)  Estoppel based on ICR and R398 agreements

 216      I move to consider the estoppel arguments based on the parties' conduct in entering into the ICR and R398 agreements.  Both sides invoke those agreements for their own purposes.

 217      The Unions rely on them to say that RG Properties/PCLIF is estopped from denying successorship. Notwithstanding the express without prejudice and without precedent language in the ICR and R398 agreements, the Unions argue that the agreements are not without prejudice.  They say RG Properties/PCLIF are bound through them to the standard collective agreements as it would be inequitable now to say they are not enforceable against them.  They argue that since the Unions agreed to a no strike/no lockout clause as part of the agreements to address Mariotto's concerns about a tight schedule and the cost of legal fees, it would now be unjust to allow them to argue that they are not bound.  They further say that the agreements reflect a recognition that RG Properties/PCLIF are the successor.

 218      I reject those arguments.  To begin with, I do not accept Broxham's evidence that the discussions in the September 4, 1998 meeting were not without prejudice.  The documents exchanged leading up to the meeting show an expectation on the part of Mariotto that the discussions would be off the record.  Mariotto's letter of August 26, 1998 indicating his willingness to meet was qualified by the express statement that it was on the understanding that it would be on an "informal basis".  That is entirely consistent with an understanding that the discussions leading up to the agreements were without prejudice.

 219      Whether there was an express or implicit agreement for without prejudice discussions on September 4, 1998, the agreements themselves are specifically made "without prejudice" and "without precedent" to either side.  From the Unions' perspective, the without prejudice/precedent clause was wanted so as not to impact on the terms and conditions of employment in the standard agreements.  While I accept that may be part of the rationale for the clause, I do not think it was the only rationale.  The sequence of events and exchanges leading up to those agreements convince me otherwise.

 220      The without prejudice language also had importance to Mariotto.  As the Unions point out, the first draft of the ICR agreement prepared by McGill did not have that language; however, that agreement was never signed.  The language was inserted into the agreement after the first draft upon his insistence.

 221      I read the language referring to the without prejudice/precedent nature of the agreements as a compromise on both sides.  At the time of the September 1998 meeting, there was a suggestion that the owners might take the issue to the Board if the Unions did not.  Although Mariotto was not consistent in his evidence as to whether he made that statement at the meeting, it is clear from the memo he wrote after the meeting that that possibility was contemplated. There was an exchange of threats at that time - if the Unions' position prevailed, full rates would apply - if Mariotto's position prevailed, the work would all go non-union.  There were risks to both sides.  The risk to the Unions was that if the project went ahead, it would go non-union or not go ahead at all.  There was a risk to Mariotto that if successorship were found and damages later awarded, the owners would, in effect, be required to make double payment.

 222      The parties stated their positions and were left with a stand-off on the successorship issue.  Yet they signed the agreements.  In effect, there was an agreement to disagree and to resolve the matter in a practical way short of deciding the legal question.  The Unions got the work in exchange for enabling; RG Properties/PCLIF could finish the project without the risk of paying twice if successorship were found.

 223      The without prejudice language served both sides.  The Unions protected themselves so that enabling was not established as a precedent to undercut the terms in the standard agreements.  The without prejudice language also assisted them as the agreements would be without prejudice to any delay argument mounted against them.  RG Properties/PCLIF got the protection against damages claims for that project should successorship later be made out.

 224      With that history in mind, I do not consider the R398 and ICR agreements amount to a recognition of successorship so as to create an estoppel against RG Properties/PCLIF.  On their face, they do not lead to that conclusion.  Apart from the obvious fact that there is no mention of successorship in them, that conclusion is contradicted by the sequence of events leading to their signing.  All in all, I find these project agreements neither make the Unions' case for successorship nor establish the estoppel against seeking successorship that RG Properties/PCLIF seek to make out against the Unions.

 225      I find that the two agreements are not an agreement on the part of either of the Unions or RG Properties/PCLIF on the issue of successorship - either as recognition of abandonment or acknowledgement of that status. Rather than any unequivocal representation, I accept them for what they purport to be on the face of the documents:  without prejudice to either side.  Those clauses recognize that the parties were sidestepping an issue in order to have the work done without the delay and expense of legal proceedings and to get the work done with union labour, albeit at reduced rates.

 226      They neither assist the Unions nor detract from their position.  Equally, they neither make out RG Properties/PCLIF's case for estoppel nor do they hurt their case by binding them directly or by amounting to a recognition of successorship.  It would not be reasonable for either side to rely on the conduct of the other in entering into either of the project agreements when the agreements stated that they were without prejudice to either party's position.

       (e)  Authority to bind RG Properties/PCLIF

 227      The Unions next argue that Mariotto had both actual and apparent authority to negotiate and sign the two agreements on behalf of RG Properties/PCLIF:  City of Vancouver, BCLRB No. B329/2001.  The Unions characterize the ICR and R398 agreements as the entering into of an enabled agreement to the standard agreements.  They say that in signing them ICR and R398 were acting as agents for the owners.

 228      On these facts, I do not accept the Union's argument that the ICR and R398 acted as agents on behalf of the owner, RG Properties/PCLIF.  In these circumstances, I find the agreements' use of the language "on behalf of" does not reflect any agency arrangements binding the owner independently to the agreements.  A deliberate choice was made to name entities other than the owner so as to avoid the successorship issue at the time.

 229      Leaving aside the question of whether, in other circumstances, a construction manager or project manager could be seen as having either actual or apparent authority given the language used of "on behalf of", I do not find that a convincing argument on the evidence before me.  As I have already found from reviewing the whole course of dealings between them, there was a deliberate choice to make the agreements with entities other than RG Properties/PCLIF to avoid confronting the successorship issue at the time.  Who was to be bound by the agreements was a critical question and was part of the compromise discussions.

 230      In other contexts, the Carpenters may have an understanding with other companies, or a practice in the industry in which they ascribe meaning to the enabling agreements relative to standard agreements.  However, such a conclusion in this case would be entirely contradicted by the sequence of events and the without precedent/prejudice character of this compromise.

 231      Whether those agreements are freestanding independent agreements or exist only as modifications to the standard agreement, I do not accept that either of those agreements binds RG Properties/PCLIF.  Not only is it clear on the face of the ICR document that the contracting entity is ICR, the discussions leading up to that agreement reflect a deliberate choice to name ICR to avoid the successorship issue.  With the R398 agreement, there is the added element of the substitution of R398 for ICR over the course of drafting. The history of the evolution of the R398 agreement makes it beyond doubt that the agreement was deliberately made with this corporate body created specifically for the purpose of allowing direct hire.

 232      I do not accept the Unions' arguments that the wording in the preamble "on behalf of", coupled with the references in the body of those documents to the standard agreements, leads to the conclusion that RG Properties/PCLIF is bound through those means to the standard agreements. Whether or not in other circumstances the Unions could advance a claim that project managers are acting as agents for owners, I do not take this event as proof of agency relationship, let alone proof that they entered into an agreement on behalf of RG properties as a agent in effect acknowledging successorship.  Even if I were to disregard the parties expressly named in the agreement, I would not be led to that conclusion given the course of conduct leading up to their signing.

 233      I add that by this decision, I do not decide the question of the nature of the role of a construction manager/project manager within the industry generally.  It is evident in the cases cited to me that, in other instances, the result may turn on the interpretation of documents or a finding on who has actual control over the awarding of contracts.  I offer no comment on the authorities advanced by the Unions on the role of contractors acting as construction managers as I have them to be distinguishable on that basis: PCL Constructors Canada Inc. v. UBCJA Local 1995, [2002] B.C.C.A.A.A. No. 49 (Glass), upheld on Section 99 review BCLRB No. B330/2002; Litwin Construction (1973) Ltd., BCLRB No. 23/82.  Whatever may be the accepted norm be in the industry, I do not find that practise elsewhere overcomes what I see as the evident deliberate choice to make these agreements to sidestep the disputed successorship issue.  My judgment about the nature of this arrangement is based on the history of these parties and their attempts for practical considerations to do a without prejudice compromise.  It turns on the significance of the exchanges in the September 1998 meeting, the subsequent conduct of the parties while negotiating the agreements, and the actual terms used.

 234      In summary, I do not find that the ICR and R398 agreements assist either party very much.  The without prejudice language cuts both ways.  Neither agreement assists RG Properties/PCLIF with any argument based on laches, abandonment or estoppel.  I consider that entering into those agreements "stopped the clock" so to speak for any argument based on delay.  By entering into those agreements, the Unions' positions were not prejudiced.  I do not construe them as an acknowledgement that by entering into those agreements they were foregoing rights to any claim in future.  Nor do those agreements assist the Unions in proving successorship or independently binding RG Properties/PCLIF to their standard agreements.

       (f)  Enforceability of Collective agreement

 235      RG Properties/PCLIF raise a number of other legal arguments on the invalidity of the 1973 working agreement on a number of grounds, including the perpetual character of the agreement and its ambiguous nature.  RG Properties/PCLIF also initially raised an issue in written submissions arguing for an implied term on cancellation, but that issue was not pursued in either the oral or written argument presented at the conclusion of the hearing.  I take it that issue is not being pursued.

       (g)  Res judicata

 236      Before considering the merits of those arguments on the validity of the agreement, I deal with a preliminary issue.  The Unions defend the validity of the collective agreement by reliance on the 1987 Board ruling and the doctrine of res judicata.

 237      In response to the res judicata defence, RG Properties/PCLIF say they are not asking the Board to revisit the 1987 decision.  They argue that notwithstanding that decision, the Board has the jurisdiction to look at the issue today as against the current respondents.  While certain findings of fact are binding on the parties, whether the working agreement is a collective agreement today is another issue.

 238      Under the doctrine of res judicata, a matter which is settled by a ruling cannot be re-opened.  A party is barred from initiating new proceedings for the purpose of re-litigating the same question.  A right once determined must be taken as between the same parties to be conclusively established:  B.C. Rail Ltd., BCLRB No. B67/2002.  To make out res judicata, the following elements must be met:  a final decision made with jurisdiction, and an identity of issues and parties in the two proceedings:  Crestbrook Forest Industries Ltd., IRC No. C47/90; North Shore Association for the Mentally Handicapped, BCLRB No. B423/97.  The requirement for the same parties includes what are known in law as the parties' "privies":  Sears Canada Inc., BCLRB No. B239/2001, at para. 17.

 239      I consider the element of identity of parties to be met.  A successor under the Code is a "privy" in the sense used in considering identity of parties.  RG Properties/PCLIF may not have been a party directly to the original action, but as a result of my conclusion that they are a successor, they are bound to all previous "proceedings" under Section 35 of the Code.  A decision of the Board arising out of a hearing is clearly such a "proceeding":  Uncle Ben's Industries Ltd., BCLRB No. 25/79, [1979] 2 Can LRBR 126.

 240      As for the identity of issue, many of the same legal questions are raised in this case as were decided in the 1987 decision.

 241      There has already been a ruling by the Board in 1987 that the 1973 working agreement is a collective agreement:  Capozzi Enterprises Ltd., BCLRB No. 31/87.  The general validity of the agreement under the Code was put in issue.  One of the questions before the panel was whether the working agreement met the definition of a collective agreement.

 242      The issue of ambiguity was argued in 1987 and rejected.  RG Properties/PCLIF now rely on many of the same authorities on ambiguity in the wording of the document and the conduct of the parties that were put before the Board in 1987 by Capozzi in support of its position that the working agreement was unenforceable.  The panel of the Board deciding the case in 1987 did not find the collective agreement to be ambiguous nor did it find that the subsequent actions of the parties supported that claim.  It found that the parties acted as if they were bound.

 243      There has been no material change in the law as the definition of collective agreement has remained unaltered in the Code.  The line of authority dealing with perpetual agreements beginning with Bradburn v. Wentworth Arms Hotel Ltd., [1979] 1 S.C.R. 846 was in existence at the time the issue of the validity of the 1973 working agreement was argued.  Although the Bradburn decision was issued in 1979, from the face of the 1987 decision it appears as if that authority was not cited to the panel.  However, res judicata can extend not only to issues which the parties raised in a proceeding, but also to issues which they had an opportunity of raising:  Morgan Power Apparatus Ltd. v. Flanders Installations Ltd., [1972] 27 D.L.R. (3d) 249 (B.C.C.A.).

 244      The Board's 1987 ruling considers both the wording of the agreements and the conduct of the parties. There is issue estoppel, at the very least, on the wording of the agreements and to the conduct to the extent it was considered up to 1987.  It is arguable whether conduct after 1987 could lead to a different conclusion if there is different conduct after that date.  Evidence of facts occurring after the 1987 decision would not be barred by res judicata:  Finlay Forest Industries Inc., BCLRB No. B355/95, pp. 25-26.

       (h)  Perpetual collective agreement objection

 245      Despite my conclusion that there may be good technical grounds for a finding of issue estoppel or res judicata on some matters, I will consider the legal arguments on the perpetual agreement issue and the evidence relating to activity after 1987 to present to see if it shows other conduct showing an intention not to be bound.

 246      I begin with the issue of whether the working agreement is a perpetual agreement that offends the Code.  RG Properties/PCLIF argue that the 1973 working agreement is invalid as it offends the law and policy of the Code by creating a perpetual collective agreement:  Bradburn, supra. They say they can never escape the working agreement unless an actual lockout is imposed.  They argue that the law does not sanction perpetual collective agreements:  Bradburn, supra; Armeco Construction Ltd., BCLRB No. 33/86 (Appeal of BCLRB No. 93/85).

 247      RG Properties/PCLIF say that a situation has been created which makes it impossible to comply with the Code without an actual lockout of employees.  They maintain that result is inconsistent with the Board's mandate under Section 2(1)(a) to encourage the practice and procedure of collective bargaining.

 248      RG Properties/PCLIF argue that the essential purpose of the statutory regime is to ensure renewed bargaining will lead to renewed collective agreements that are responsive to changes.  They say that the result of the change in the duration clause is that they are bound by a term that someone else bargained.  In arguing the unfairness of that result, they observe that the working agreement was the result of the exercise of economic power of a work stoppage. Furthermore, the Article 2.03 requirement in the Carpenters standard agreement for an actual lockout was not in the standard agreement at the time the working agreement was signed.  It was negotiated later with CLRA, not this party.

 249      The Unions say that it is not a perpetual agreement.  The working agreement ties the company to the standard agreements in place at the time and to the continuation clauses in those agreements.  There is a termination provision in the standard agreement and the Code deems a party to have given notice to bargain:  Diversicare Incorporated, BCLRB No. B343/96.

 250      I find the analysis in Rissling Contractors Ltd., BCLRB No. B101/96 (Leave for Reconsideration of BCLRB No. B45/96) provides the answer to this objection.  The reconsideration panel disposed of the argument that a perpetual collective agreement had been created in these terms:

       The Letter of Understanding between the parties creates a collective agreement with a continuation clause.  The parties have the right to serve notice to bargain under the terms of the collective agreement to which they agreed to be bound.  In addition, under Section 46(4) of the Code, the parties were deemed to have served notice to bargain.  ... Section 46(4) simply deems that notice to bargain has been served by the parties.  One must then look to the terms of the collective agreement for continuation or bridging language to determine whether the terms and conditions of the collective agreement continue to operate until some other event, such as a strike or lockout:  Armeco Construction Ltd. and S.G.M. Construction Ltd., BCLRB No. 33/86 (appeal of BCLRB No. 93/85); Creston Valley, supra. The Letter of Understanding in the case at hand contains continuation or bridging language which continues the collective agreement by agreeing to follow subsequent C.L.R.A. agreements.  However, the parties could enter negotiations to amend the Letter of Understanding, either by serving notice to bargain under the terms of the collective agreement or pursuant to Section 46(4) of the Code.  (para. 19)

 251      As other panels have observed, the bridging language that is found in continuation clauses does not necessarily create a perpetual collective agreement because the parties can end the operation of the collective agreement provision by engaging in the specified action, commonly strike or lockout notice or action:  Complete Environmental Services Inc., BCLRB No. B200/96, para. 18.

 252      Under that reasoning, I do not accept that the agreement is perpetual as it contains a provision allowing the parties the right to strike or lockout.  RG Properties/PCLIF could give notice to bargain and impose a lockout.  It may be difficult, and not the most desirable result from their perspective, but it is not impossible.  As there is no legal barrier to the agreement being brought to an end, it is not perpetual in the sense contemplated by the authorities.  It is a result not inconsistent with the Code since it allows for the exercise of the economic weapon of lockout after the conclusion of good faith bargaining.

 253      The Board has previously dealt with an objection that certain aspects of Article 2.03 of the Carpenters' standard agreement are contrary to the scheme of the Code.  In SW Cousins Construction Ltd., BCLRB No. 184/86, the Board found that the two-month window for non-CLRA members did not unfairly constrain an employer.  The Board recognized that a strike or lockout is the ultimate economic weapon that parties generally exercise as a last resort, but it remains a legitimate and necessary weapon that in a system of free collective bargaining the parties must be prepared to resort to if their bargaining ambitions are not met.

 254      RG Properties/PCLIF advance a further argument that the unfairness of those clauses is compounded by the fact that the standard agreements were negotiated with a third party and material changes were made in the termination clause without their knowledge or consent.

 255      While common in the construction industry, this form of "pick up" agreement may be considered by some as improvident as one's fate is tied to the actions of others, but that is the nature of the deal.  To the extent that the changes were made in the termination clause after the 1973 working agreement was signed, I note that the revised termination clause for the Carpenters was in place in 1986. That change would have been in place by the time of the 1987 Board decision presumably (unless the change had retroactive effect).  In any event, it would have been in place by the time notice to bargain was given later by the Carpenters in 1991 and again in 1994.  These events all pre-dated the date of the transfer in 1996.  I consider the effect of these changes to relate more to matters of due diligence in a successorship rather than to the validity of agreements.  The perceived unfairness of these clauses does not give reason to depart from the consequences of successorship.

       (i)  Objection based on ambiguity

 256      Although I have already observed that the 1987 Board decision rejected the argument that the 1973 working agreement was ambiguous, I will briefly deal with that issue. I join with the previous panel of the Board in concluding that the wording of the agreement is clear enough in expressing the intent to follow the standard collective agreements in each trade negotiated in the industry from time to time.

 257      The conduct of the parties since it was signed, including the conduct after the 1987 ruling, shows little ambiguity.  Up until the controversy arising in 1998 and 1999, construction work done at the Capri was done using union labour.  I do not need to repeat the evidence relating to the steps taken to enforce the collective agreement rights reviewed above in the context of laches, abandonment and estoppel.  These facts here are unlike those in cases where panels of the Board have been persuaded to exercise the discretion under Section 139(1)(g) to declare that no collective agreement is in effect:  Johnson Holdings Ltd., BCLRB No. 67/80 (where the conduct of the parties was not consistent with the continuation of the collective agreements).

       (j)  Administration of collective agreements

 258      As part of their argument on the invalidity of the agreements, RG Properties/PCLIF also argue that the quid pro quo for the generous treatment of continuation clauses in the collective agreement is that they are administered so as not to create serious problems:  Creston Valley Power Installations Ltd., BCLRB No. 289/85.  They say that there was thus a reciprocal obligation on the Unions to keep certificates up-to-date, and to provide notice to bargain and copies of collective agreements in a timely way.  RG Properties/PCLIF point, in particular, to the obligation in Article 3 of the working agreement for the Unions to make available copies of collective agreements currently in effect.

 259      In the course of considering the laches, abandonment and estoppel issues, I have already commented on the efforts of the Unions in relation to updating certifications and in giving notice to bargain.  As for the provision of collective agreements, there is some evidence from Broxham that he provided copies of the collective agreements from time to time, particularly at times when direct hire was done.  Although no correspondence was produced to confirm this assertion, I accept that it must have been done at least on those occasions in order for the payroll to be processed.

 260      There is also an explanation for the fact that standard agreements were not signed individually.  As the 1987 decision records, and as Broxham testified again, Capozzi advised the Unions that he only wanted to sign one document, not an agreement with each of the unions.

       (k)  RG Properties/PCLIF's status as employer

 261      The next question is the argument that the collective agreement should be unenforceable as RG Properties/PCLIF is not an "employer" since it does not engage any construction employees.  That argument is based on the fact that RG Properties/PCLIF does not directly employ any employees within the jurisdiction of IBEW or Carpenters since they do not maintain their own construction crew.  They contract out all work through tendering process.

 262      In support of their argument, RG Properties/PCLIF note that the last direct hire by the Capri was in November 1994.  All construction was done afterwards by contractors such as Sawchuk and Sid's Drywall.  Scrafton is another example of work done by a sub-contractor, not an employee.

 263      The Unions rely on a line of authority recognizing that despite a company's role as a developer using unionized general contractors, but not directly employing any construction workers, that company can nonetheless be considered an active participant in the construction industry and may be an employer:  B.C.E. Development Corporation, IRC No. C269/88.  They also rely on the comments in School Board No. 36 (Surrey), BCLRB No. 60/76 to the effect that a signatory to the Carpenters' standard agreement is not entitled to escape the language of the subcontracting clause through the argument that it is acting as owner rather than as an employer.

 264      This question of status as an employer is an issue that is not caught by the doctrine of res judicata as the factual basis may have changed since 1987.  As the 1987 decision reveals, under the Capozzi's ownership, the Capri sometimes did do direct hire.  As the Carpenters' dispatch records show, the Capri also did some direct hire after the decision in 1994.

 265      Although I do not consider this argument is necessarily barred by that doctrine, I do not find this argument persuasive.  First, it ignores the obvious fact that RG Properties/PCLIF is an employer of some employees.  Lee's evidence is that 6 people are employed in their office, although those individuals are not within the apparent scope of the bargaining unit represented by the Carpenters or IBEW. RG Properties/PCLIF thus is an employer as defined in the Code as a "person who employs one or more employees".

 266      Apart from the bare requirements of the statutory definition, there is another reason to reject RG Properties/PCLIF's argument on its lack of "employer" status. To accept that argument would be to allow ready circumvention of the Code's requirements for obtaining cancellation of bargaining rights.  If it were accepted, any employer wishing to divest itself of a "pick-up" agreement, such as the working agreement, could do so by the simple expedient of contracting out work to others.  The prohibition in the sub-contracting clause would thus be evaded and rendered effectively meaningless.  Subcontracting would provide an easier route than the express means provided in the statute for divesting bargaining rights through an application for decertification under Section 33(1) or (2), proving abandonment of bargaining rights under Section 33 (11), or making application to the Minister under Section 50.

 267      On this fact pattern arising out of a context of successorship, there is yet a further argument that prevails against acceptance of the argument that the effect of the absence of construction employees makes the agreements unenforceable because RG Properties/PCLIF is not an "employer".  Under Section 35 for a successorship to result, the purchaser does not need to be an "employer".  Under Section 35 a "purchaser" is bound to all proceedings and if collective agreement is in force is bound as if had signed it. Part of the obligation to which it is bound is the terms of any contract which may include a sub-contracting prohibition. While RG Properties/PCLIF may have chosen not to engage construction employees directly, and chose instead to sub-contract, they would remain bound by the subcontracting clause.

 268      Also, as the Board has observed on many occasions, the failure of a purchaser to hire the predecessor's employees is not a defence to a successorship. If the Board were to rule that the hiring of new employees was a factor that led to a finding of no successorship, employers seeking to avoid the effect of the successorship provisions would hire new workers and not offer employment to the employees of the predecessor:  Maverick Coach Lines, supra, at para. 77.  By analogy, there is the same potential mischief of the avoidance of the outcome of successorship through the means of subcontracting:  Kirkwest Construction Ltd., BCLRB No. 12/80.

 269      Although the comments are directed at a somewhat different point, I adopt the observations of the panel in Litwin Construction (1973) Ltd., BCLRB No. 23/82, on the implications of the Carpenters' sub-contracting clause and the mischief that could otherwise result were the form and not the substance of an arrangement to prevail:

       The language of Clause 3.02 ... commits the employer not to "contract or sub-contract any work within the jurisdiction of the ... Carpenters ... "unless the contractor is bound by the Carpenters' standard agreement.  The facts of this case constitute a compelling statement of the reasons why the scope of this language must not be confined to work contracted or subcontracted pursuant to a formal written contract.  If it were restricted in that manner, then obviously the obligation could be effectively ignored by not entering into a formal, written contract or by arranging for another party to make the formal contract.  Clearly, the collective agreement provision must be interpreted so as to prevent the employer signatory to the collective agreement from avoiding its obligation by means of a manipulation of the form of contract; the language must be interpreted to prohibit the employer from informally or indirectly granting or committing work within the Carpenters' jurisdiction to contractors not bound by the Carpenters' standard agreement" (p. 12).

 270      Given my conclusion on other grounds, I do not need to consider the further argument not identified in the submissions, but which arose in the course of the hearing, that was loosely based on a true employer analysis.  As I understood the argument, it turned on whether the true employer of the construction employees was indeed RG Properties/PCLIF or ICR or R398.  To the extent that argument was mounted to deal with the need for an "employer" for a collective agreement to be enforceable, my reasons above make it unnecessary for me to consider this argument further.

 271      The Unions advanced a further ground for rejection of this argument based on the status of an employer, but I place no reliance on it.  I do not intend to review extensively the line of authority the Unions invoke relating to the interpretation of the former Section 52(8) of the Code or Section 66.1 of the Industrial Relations Act, the provisions allowing for cancellation of a certification where no employees had been employed after two years of inactivity. I find the reliance on those authorities is misplaced because they were ultimately decided on the discretionary grounds allowing a refusal of a request where cancellation would be unfair or unreasonable.  To the extent that there was reasoning in some cases suggesting an expansive definition of "employed", the B.C. Court of Appeal appeared to disapprove of that extended meaning of causing employment.  Their persuasiveness may be undermined by those judicial review rulings:  Wall & Redekop Corp. v. CJA, 27 Locals, (1988) 30 B.C.L.R. (2d) 74 (C.A.); BCE Development Corp., supra.

       (l)  Notice of Termination

 272      The last issue is the effect of a notice of cancellation given in March 2002 by RG Properties to BCYBTC saying that if it is found to be a successor, it gives notice that the working agreement is terminated.  As is set out in paragraph 28 of the agreed statement of facts, that notice was promptly disputed by the Unions challenging the effectiveness of that means of termination by notice.

 273      I do not accept, and it was not seriously pressed in argument, that the notice given was an effective means of termination under the terms of the agreements. Neither the 1973 working agreement, nor any of the standard agreements with the Unions, provide for this means of termination by one side merely giving notice to terminate to the other.  To the extent to which the statute allows another means of termination beyond those provided for in the collective agreements, that method cannot be invoked merely by a party taking unilateral action.

 274      The Code does contain a provision that addresses the question of termination.  Section 50(2) allows an application to be made to the Minister for leave to notify the other party that the agreement will expire on its next anniversary date.  However, that section is qualified by the provision in Section 50(4) that the parties may oust the application of that clause.  It appears as if in the 1994-98 Carpenters' standard agreement the operation of Section 50(2) has been excluded; it is not apparent that the IBEW agreement has a similar provision.  It may be that the express terms of the Carpenters' agreement prevent its use.  I express no definitive opinion as this point was not squarely argued.  I only make the observation that to the extent termination may be possible upon giving of notice when the agreement does not expressly deal with this issue, the means of relief are specified in Section 50(2).


 275      I find RG Properties/PCLIF is the successor.  I do not find the Unions are barred on the grounds of laches or estoppel from asserting successorship rights.  I further conclude that the Unions have not abandoned collective agreement rights.  I also reject RG Properties/PCLIF's argument that either the ICR and R398 agreements or the failure to pursue some of the grievances or to update certifications prevent the Unions from advancing successorship claims.

 276      I do not accept the Unions' arguments that the ICR and R398 agreements bind RG Properties/PCLIF or that they are estopped by those agreements from denying a successorship. I do not find the Unions' argument based on actual or apparent authority persuasive where the sequence of events show a deliberate choice to name those entities as the contracting party as part of a compromise to avoid confronting the successorship issue.

 277      Although issue estoppel may apply to some questions decided by the 1987 Board decision and res judicata could apply to others, I nonetheless consider some of the remaining issues relating to the validity of the agreement.  I conclude that the 1973 working agreement does not create perpetual collective agreements.  I also do not accept RG Properties/PCLIF's argument that the working agreement is void for ambiguity.  I do not accept the claim that the agreement is unenforceable because RG Properties/PCLIF is not an "employer".

 278      I find the notice to terminate given in 2002 is ineffective.

 279      I retain jurisdiction to deal with issues arising out of this decision and the remaining matters raised in the submissions not dealt with in this phase of the proceedings.


QL Update:  20030820