SHERWOOD STEEL LTD v ODYSSEY CONSTRUCTION INC, 2014 ABCA 320
COSTIGAN, WATSON and BROWN JJA
3.72: Consolidation or separation of claims and actions
7.3: Summary Judgment (Application and decision)
The Defendant, Odyssey Construction Inc. (“Odyssey”) was the general contractor for a condominium project. Odyssey sub-contracted the excavation and concrete work to 706740 Alberta Ltd. (“Edmonton Concrete”). Edmonton Concrete contracted with the Plaintiff, Sherwood Steel Ltd. (“Sherwood Steel”) for the supply of rebar for the project. When Edmonton Concrete failed to pay Sherwood Steel and other subcontractors, Sherwood Steel obtained Summary Judgment against Edmonton Concrete for the outstanding debt. Having obtained judgment against Edmonton Concrete, Sherwood Steel then sued Odyssey in a separate Action for the same amount, alleging breach of an oral contract relating to Edmonton Concrete’s debt. The Chambers Judge granted Odyssey’s Application for Summary Dismissal of Sherwood Steel’s Action on the basis that it was barred by the doctrine of merger: when a Court gives Judgment on an Action, the cause of action on which it is based is exhausted. Sherwood Steel could not bring another lawsuit based on the same cause of action. Sherwood Steel appealed, arguing that the doctrine of merger did not apply.
The Court of Appeal agreed with Sherwood Steel and held that Sherwood Steel was not re-litigating the same cause of action against Odyssey as it did against Edmonton Concrete. The two Actions did not involve the same parties; and, though the relief sought and the subject matter were the same, the Actions were not the same with respect to the agreements between the parties and did not have the same factual underpinnings. The Court of Appeal also held that the Action against Odyssey did not constitute an abuse of process: while the obligations of Odyssey and Edmonton Concrete may be co-extensive, they are separate and distinct, and civil procedure permits multiple Actions for the same damage and separate Actions may be addressed by consolidation under Rule 3.72. The mere fact of multiple potential Judgments for the same loss is not an abuse of process or potential abuse of process. The Appeal was granted.View CanLII Details