Unofficial English Translation
Syndicat des communications, de l'énergie et du papier, section
locale 121 c. Produits Shell Canada
2010 QCCS 3988
SUPERIOR COURT
CANADA
PROVINCE OF QUEBEC
DISTRICT OF MONTREAL
No.:
500-17-059448-103
DATE: JULY 27, 2010
______________________________________________________________________
THE HONOURABLE JEAN-YVES LALONDE, J.S.C., PRESIDING
______________________________________________________________________
COMMUNICATIONS, ENERGY
AND PAPERWORKERS UNION,
LOCAL 121
Applicant – Plaintiff
v.
SHELL CANADA PRODUCTS
and
SHELL CANADA LTD.
Respondents – Defendants
and
THE MINISTER OF NATURAL
RESOURCES AND WILDLIFE
Impleaded third party
______________________________________________________________________
JUDGMENT
______________________________________________________________________
JL3280
500-17-059448-103
PAGE: 2
[1]
On July 23, 2010, the Communications, Energy and Paperworkers Union,
Local 121 (hereinafter the “Union”) submitted an application to the Superior Court to
amend the safeguard order in effect since July 15, 2010, for the waiting period until the
hearing on the merits of the Union's application for a permanent injunction, set by
Associate Chief Justice André Wery for September 13, 2010.
[2]
Essentially, the Union seeks to compel Shell Canada Products and Shell Canada
Ltd. (hereinafter “Shell”) to restore and maintain in good working order all the equipment
at the Sherbrooke Street refinery site in Montreal East.
[3]
Through its application to amend safeguard measures, the Union seeks to
compel Shell to apply the technical means of preservation provided in the maintenance
guide entitled “Preservation of old and new equipment and piping standing idle” (PS-5),
dated July 1999.
[4]
The Union makes the unusual request for Shell to comply with the requirements
in points 7.1 to 7.7.7 (pages 22 to 40 incl.) of the guide, in the section providing for a
preservation method applicable to petroleum equipment involved in disputes.
[5]
What the Union is actually seeking is to force Shell to keep the refinery
equipment in good working order until the hearing on the merits, and thus rekindle the
interest of a prospective purchaser. In the Union's eyes, if the refinery is left to
deteriorate, the final judgment risks being practically unenforceable, and the refinery will
consequently be of no interest to a potential purchaser.
[6]
Shell bitterly disputes the allegation that it is letting the equipment deteriorate. In
an affidavit, Marc Legault, engineer (hereinafter “engineer Legault”1), manager of Shell's
engineering and technical assurance department in Montreal East, assured the Court
that apart from Boiler #13, which will be inspected shortly, no additional measures to
preserve the equipment are necessary until the hearing on the merits scheduled for
September 13, 2010.
[7]
According to engineer Legault, the maintenance guide to which the Union refers
does not constitute a standard or rule but a practical guide that leaves a considerable
amount of discretion to operators and supervisors. Its use and application may vary
depending on the specific circumstances of each facility, and the objectives and
inherent costs of its application.
[8]
Shell maintains that if any of the potential damages alleged by the Union were to
occur, they would not be irreparable.
1
Surnames are used in the judgment to simplify the text, with no disrespect intended to the persons
concerned.
500-17-059448-103
PAGE: 3
PROCEDURAL BACKGROUND
[9]
On January 7, 2010, Shell announced its intention to shut down the Montreal
East refinery and convert it into an oil terminal.
[10] On April 14, 2010, Shell submitted its plan to the Quebec Minister of Natural
Resources and Wildlife (hereinafter the “Minister”) to cease operations at the refinery
and to convert it into an oil terminal, which would include dismantling certain equipment.
More than 30,000 pieces of equipment and technical components of the crude oil
refining process are involved.
[11] On July 7, 2010, the Union applied to the Superior Court to obtain a provisional
injunction barring Shell from proceeding with any demolition work, even partial, on the
Montreal East refinery site without the Minister's prior authorization.
[12] On that same day, Mr. Justice Claude Auclair of the Superior Court issued a
provisional injunction valid until 8 p.m., July 16, 2010, whereby the Court, inter alia:
[TRANSLATION]
…
[10] ORDERS Shell Canada Ltd. and Shell Canada Products, their officers,
directors, employees, agents and subcontractors to refrain from proceeding
with any demolition work, even partial, in the petroleum products
manufacturing facility located at 10501 Sherbrooke Street East, in the city of
Montreal East, district of Montreal, H1B 1B3 and, in particular but without
limitation, any work that would render any equipment in this facility unusable,
and more specifically work consisting of drilling holes in the piping of Furnace
F-2601 of the Refinery, which could contain any remaining petroleum
products in order to drain the remainder without first obtaining the
authorization of the Minister of Natural Resources and Wildlife on the
conditions set by the Minister under section 15 of the Petroleum Products
Act, R.S.Q. c. P-30.01;
…
(Emphasis added.)
[13] On July 15, 2010, with the consent of the parties, Mr. Justice André Wery,
Associate Chief Justice, set the hearing on the merits for September 13, 2010, and
changed the terms of the provisional injunction issued on July 7, 2010, into a safeguard
order valid until September 10, 2010.
[14] Therefore, on July 23, 2010, the Union applied to the Superior Court to amend
the existing safeguard order by adding mandatory conclusions to ensure that Shell
would maintain its equipment in good, safe working order.
500-17-059448-103
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[15] As a basis for its claim, the Union engaged section 131 of the Safety Code2
under the Building Act.3 This provision is found under Division V of the Safety Code,4
“General provisions applicable to all petroleum equipment”. The crucial section on which
the applicant relies states the following:
…
131. Petroleum equipment must be used for the purposes for which it is
designed and must be maintained in proper and safe working order.
…
(Emphasis added.)
[16] The Union, well aware that it shouldered the burden of demonstrating new facts,
claims that three recent developments justify its application to amend the safeguard
order currently in effect, namely:
16.1
The recent discovery of the maintenance guide (PS-5) dated July 1999;
16.2
The recent federal Parliamentary Committee hearing confirming that
Delek Holdings US (hereinafter “Delek”) would still be an interested
purchaser even though negotiations between it and Shell had recently
failed;
16.3
Its recent familiarization with section 131 of the Security Code,5 applicable
to petroleum equipment, combined with the risk of unionized employees
committing an offence within the meaning of the penal provisions of the
Building Act6 (sections 194 et seq., including sections 200 to 201.1).
APPLICABLE LEGAL PRINCIPLES
[17] In a number of rulings, the Quebec Court of Appeal has set out the following
principles:
17.1
In Association québécoise de lutte contre la pollution atmosphérique
(AQLPA) v. Compagnie américaine de fer et de métaux,7 the safeguard
order is characterized as follows:
[TRANSLATION]
2
3
4
5
6
7
c. B-1.1, r 0.01.01.1
R.S.Q., c. B-1.1.
Supra note 2.
Supra note 2.
Supra note 3.
[2006] R.J.Q. 2597 (C.A.).
500-17-059448-103
PAGE: 5
…
[23] In summary, a safeguard order is a discretionary measure that is
temporary, that is, it lasts until the hearing of the motion for an
interlocutory injunction and is for a fixed term, reviewable and
renewable, issued for conservatory purposes and in the event of
urgency, and may be subject to conditions.
…
17.2 In Turmel v. 3092-4484 Québec inc.,8 Gendreau J.A. made the following
comments:
[TRANSLATION]
… In my opinion, the safeguard order in article 754.2 C.C.P., despite
its name, has the nature of a provisional injunction: it is a judicial,
discretionary measure, issued for conservatory purposes, in an
emergency situation, for a limited period of time and with regard to a
file where the respondent has still been unable to introduce all its
defences.
…
Furthermore, if the safeguard order is of the same nature as a
provisional injunction, it stands to reason that for it to be issued, the
applicant must meet the same test for a prima facie case, urgency
and a balance of convenience.
Lastly, the order must be formulated in such a way as to minimize the
inconvenience of the party against which it is issued because, at the
risk of repeating myself, it is part of an incomplete record and is
intended to necessarily correct a situation that will need to be
reassessed later but still within a short space of time.
…
(Emphasis added)
17.3 Next, in 2957-2518 Québec inc. v. Dunkin' Donuts Canada,9 Otis
J.A. stated the following:
[TRANSLATION]
…
[22] An application for an interlocutory injunction must meet the
following test: a prima facie case or a serious issue to be judged,
serious or irreparable injury, and a balance of convenience (article
8
9
[1994] R.D.J. 530 (C.A.).
J.E. 2002-1108 (C.A.).
500-17-059448-103
PAGE: 6
752 C.C.P.). Its adjunct, the provisional injunction, was designed to
provide answers in litigious situations presenting exceptional features
and great urgency while considering, albeit summarily, the test for
issuing an interlocutory injunction order (article 753 C.C.P.). That is
why the time limit of ten days reduces the rigour of the effects of the
provisional injunction and tempers any interference with the right to be
heard in compliance with the usual rules of accusatory and
adversarial procedure. As for the safeguard order, it is set out in
article 754.2 C.C.P. ….
[23] The safeguard order operates on two axes: first, proceeding and
case management measures which result in administrative and
conservatory interventions; and secondly, measures determining the
rights of the parties, which aim to provisionally re-establish the
balance of opposed interests and minimize the alleged violations in
urgent and exceptional cases.
…
(Emphasis added)
17.4 In Aubut v. Marois,10 Delisle J.A. states:
[TRANSLATION]
…
The sole purpose of the safeguard order set out in
article 754.2 C.C.P. is to find, upon presentation of a motion for an
injunction, in the interests of seeking justice and for a limited time, a
modus vivendi that can be reasonably expected to cause the least
possible injury to either of the parties, by weighing their apparent or
disputed rights. This approach goes beyond a simple, facile search for
the status quo. However, it is not because the same criteria must be
used in this process as for granting an interlocutory injunction that the
safeguard order should engender a debate on the merits of the case.
…
(Emphasis added)
17.5 More recently, in English Montreal School Board v. Boyle,11 the Court of
Appeal recalled that the judge of first instance must definitely take into
consideration the inconvenience that the safeguard order could cause to
the party against whom it is issued. If the safeguard order creates such
prejudice to the persons involved in the situation and if the party must
completely readjust in view of their initial decision, being thereby
10
11
J.E. 2000-1090 (C.A.).
J.E. 2006-1330 (C.A.).
500-17-059448-103
PAGE: 7
confronted with unrealistic and unfair obligations, the safeguard order
should not be granted.
[18] As set out in article 754.2 of the Code of Civil Procedure (C.C.P.), a party may
present a motion for a safeguard order only upon presentation of an application for an
interlocutory injunction (provisional in this case).
[19] Article 46 C.C.P., however, mitigates the rigidity that article 754.2 C.C.P. seems
to impose, since article 46 C.C.P. confers on ordinary courts the ability to issue
safeguard orders at any time and in all matters, and for such time and on such
conditions as may be appropriate for the facts of the case.
[20] The Court is of the opinion that the applicant Union is entitled to a new look at
developments in the situation of the parties since the safeguard order was issued on
July 15, 2010, bearing in mind, where applicable, facts that have occurred since that
date or that were recently discovered.
[21] In the present case, this consists of verifying whether the conditions prevailing
today would permit the possible execution of a judgment assuming that the Union would
succeed on the merits. In other words, in leaving the equipment to deteriorate without
basic maintenance, such equipment must not become inoperative and slated to be
demolished before the date of the hearing on September 13, 2010. The safeguard order
issued on July 15, 2010, would be of no effect if the definitive cessation of refinery
operations were irremediable, final or considered a fait accompli solely because of the
passage of time.
[22]
Let us consider the evidence submitted in light of the applicable principles.
ANALYSIS AND DISCUSSION
 A SERIOUS COLOUR OF RIGHT OR A PRIMA FACIE CASE
[23] The issue of a safeguard order is highly discretionary and aims to mitigate the
effects of an emergency situation. The applicant must first establish that it appears to be
entitled to the order. Here, this judicial consideration must be based on the new facts
that occurred or were discovered since the order dated July 15, 2010.
[24] It is worth pointing out that the purpose of the conclusions sought by the Union
regarding the permanent injunction is to have the Court declare that the work
undertaken by Shell before the provisional injunction was issued, in particular the holes
drilled in the piping of Furnace F. 2601 of the refinery, constitutes partial demolition
work of the facility owned by Shell.
[25] Shell undertook such work, which it qualifies as preliminary, without the
ministerial authorization required under the applicable legislation. The most important
500-17-059448-103
PAGE: 8
task of the judge hearing the merits of the case will be to characterize the work initiated
by Shell.
[26] It is blindingly obvious that the Union wants to prevent the dismantling and
promote the sale of the refinery to a third party. This would keep several hundred jobs in
Quebec. It is undisputed, however, that legally the Union cannot force a private sale,
given the principle of freedom of contract. Only a specific federal law could in a way
expropriate the refinery from Shell and save it. The Union does not have this power, nor
does the Court.
[27] If the Minister authorizes the dismantling, the refinery can be converted into a
terminal by Shell.
[28] In sum, the Court does not see any real connection between the conclusions
sought on the merits by the permanent injunction and the application to amend the
safeguard order. Regardless of the equipment's current condition, without a sale in the
short term, it is destined to be dismantled. The Minister cannot indefinitely refuse to
issue her authorization. The solution, if there is one, barring any specific statute, is
strictly of a business nature.
[29] There is, therefore, no actual connection between the application for an
amendment and the conclusions of the application for a permanent injunction. Rather, it
is a separate application whose objective is clearly to maintain the assets at their
highest value to promote a possible sale.
[30]
No matter how much empathy the Court may have, the Union does not have a
prima facie case to compel Shell to maintain its assets at their highest value. Section
131 of the Building Act12 is of no help to the Union. With all due respect for the contrary
opinion, the Court is of the view that this provision does not force equipment to be used.
If it is being used, however, the petroleum equipment contemplated by the Act must be
used for the purposes for which it was designed and be maintained in proper and safe
working order. The Shell equipment is currently not in use and is even intended to be
dismantled. The law does not force Shell to continue its business operations at the
Montreal East refinery.
[31] And there is more. The new facts alleged by the Union are actually not new facts.
The Court understands that the conditions described in the detailed affidavit signed by
Jean-Claude Rocheleau (hereinafter “Rocheleau”), dated July 22, 2010, existed well
before July 15, 2010. His examination on July 19, 2010 demonstrates this.13
[32] The maintenance guide (PS-5) dates from 1999. According to the witness
Rocheleau, the guide contains equipment maintenance recommendations, and is the
12
13
Supra note 3.
Examination before defence on affidavit of Jean-Claude Rocheleau, conducted on July 19, 2010,
at 31, 32, 40, 48, 49, 64 and 65.
500-17-059448-103
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guide actually used by Shell. There is no indication in Rocheleau's affidavit that it is an
established fact that the Union just learned of this guide. On the contrary, Shell's
counsel maintains that this practical guide is loaded onto the computers of some
unionized workers who have had to apply it for a number of years. Who is right? The
Court can only find that there is a lack of evidence on this question.
[33] The same applies to section 131 of the Building Act,14 which is not new
legislation. It is quite possible that counsel for the Union just learned about it now.
Nothing in the affidavits supports the conclusion that the discovery of this legislative
provision constitutes a new fact.
[34] The Union submitted to the Court that it had just learned that the potential
purchaser was still interested. It allegedly learned that Delek still wished to purchase the
Montreal East refinery through the recent public undertakings of the federal
Parliamentary Committee. This fact is irrelevant to the conclusions sought on the merits
at the stage of the application for a permanent injunction. In addition, when questioned
outside court, Rocheleau disclosed that according to his sources, he had learned
through his trade union leader that Delek was still interested in the purchase and that
the offer was still on the table. All this was known before the application to amend the
safeguard order.
[35] Finally, no technical evidence was submitted by the Union concerning the
damage to the equipment because of a lack of maintenance. Since the Court is forced
to choose, it prefers to rely on the affidavit evidence of engineer Legault.
[36] The hearing on the merits will be held in less than two months, and Shell has
demonstrated its concern about maintaining the equipment in appropriate working order
considering its projected final use.
[37] The Union is mainly concerned about the deterioration of Boiler #13. Shell
undertakes to inspect it within a short time in the presence of a Union representative
and to report thereon. Shell also undertakes to take the appropriate measures to
preserve the integrity of this equipment until the hearing on the merits.
[38]
The Court sees this as an expression of good faith on the part of Shell.
[39] In summary, the Court is of the opinion that, at best, the Union has established a
doubtful right to amend the safeguard order.
 IRREPARABLE HARM
[40] Once again, no expert evidence was established to support the Union’s
argument that the equipment would deteriorate to such an extent by
14
Supra note 3.
500-17-059448-103
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September 13, 2010, that without an amended safeguard order, the final judgment, if in
favour of the Union, would be ineffectual.
[41] The Court relies on the affidavit evidence of engineer Legault, whom it believes
to be sincere, especially because of the undertakings in the affidavit regarding the
equipment involved, in particular Boiler #13 and the lubricating oil units.
[42] According to the engineer, Mr. Legault: [TRANSLATION] “[20] None of the damage
alleged by the Union, if it were to occur, would be irreparable.” The Court defers to this
engineer's good knowledge of equipment and finds that the Union did not demonstrate
irreparable harm.
 BALANCE OF CONVENIENCE
[43] Without being overly specific, the amended conclusions of the motion for the
issue of an order amended as requested by the Union refer to temporary preservation
methods, as described in the practical maintenance guide (PS-5). The amendment
narrows the amendment application and limits it to points 7.1 to 7.7.7 of the guide
(pages 22 to 40, incl.). The Union has not been able to specify which ones are required
or not. The Court must render an order, if applicable, that is sufficiently specific and
enforceable. Such an order cannot be random or ambiguous due to the risk of triggering
a judicial saga around a potential contempt order.
[44] The Court takes the position that issuing the amended safeguard order sought
could create unrealistic, unfair, arbitrary and inappropriate obligations, especially since
the practical guide (PS-5) is not mandatory or regulatory. As the parties have concurred,
it contains only recommendations.
[45] The Court is of the opinion that the balance of convenience favours Shell, which
would suffer more inconvenience if the amended order were issued as requested, as
opposed to the inconvenience to be suffered by the Union without an amended order up
to the trial date. In this particular case, the status quo is appropriate, considering the
due diligence announced by the engineer, Mr. Legault.
 URGENCY
[46] If there have actually been no new facts since July 15, 2010, the date on which
the safeguard order was issued, there is therefore no urgency warranting court
intervention.
[47] Even though the Union has not established its right to amend the safeguard
order and has not persuaded the Court to exercise its discretion in its favour, Shell's
undertakings should nevertheless be recognized.
500-17-059448-103
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FOR THESE REASONS, THE COURT:
[48]
DISMISSES the motion to amend a safeguard order;
[49] FORMALLY RECOGNIZES the undertaking of Shell Canada Products and Shell
Canada Ltd. to inspect Boiler #13 no later than August 6, 2010, and to report thereon at
such date;
[50] DECLARES that a member designated by the Union may attend such inspection
and that the inspection report will be relayed to the Union on August 6, 2010;
[51] FORMALLY RECOGNIZES the undertaking of Shell Canada Products and Shell
Canada Ltd. to determine the need, during the aforesaid inspection, to adopt
appropriate conservatory measures, including sandblasting;
[52] FORMALLY RECOGNIZES the undertaking of Shell Canada Products and Shell
Canada Ltd. for nitrogen pressurization of the two lubricating oil units that are not
already pressurized, as soon as they have been emptied and decontaminated, or no
later than August 6, 2010;
[53]
COSTS TO FOLLOW.
__________________________________
JEAN-YVES LALONDE, J.S.C.
Mtre Roger Paiement
DAIGNEAULT, LAWYERS INC.
Counsel for the Applicant – Plaintiff
Mtre William Atkinson
Mtre Steeves Bujold
Mtre Dominic Amiot Bilodeau
MCCARTHY TÉTRAULT
Counsel for the Respondents – Defendants
500-17-059448-103
Date of hearing:
Date taken under advisement:
PAGE: 12
July 23, 2010
July 23, 2010