Small v. New Brunswick Liquor Corporation, 2012 NBCA 53

The New Brunswick Court of Appeal considered the distinction between the reasonableness standard and the correctness standard of review as applied to questions of pure statutory or contractual interpretation. The court identified an overlap between the two standards: while an administrative adjudicator’s interpretation may attract deference, an adjudicator is never entitled to deviate from accepted interpretive methodology. Consequently, the Court of Appeal upheld the lower court’s finding that an adjudicator’s interpretation of the By-laws of the New Brunswick Liquor Corporation (the Corporation) was unreasonable.

The respondent employer had dismissed the appellant employee, Anne Small, without cause, which the appellant grieved under the Public Service Labour Relations Act, RSNB 1973, c P-25. The adjudicator awarded her the retirement allowance sought, basing his decision on his interpretation of the Corporation’s bylaws under Article 22.04. Article 22.04 deems “dismissed” employees ineligible for any retirement allowance; the adjudicator found ambiguity in the term “dismissed” and read it down to mean only “dismissed with cause.” Article 22.01 deems “laid off” employees eligible for the retirement allowance; the adjudicator relied on his interpretation of the former provision to interpret “laid off” as including “dismissed without cause.” On appeal, the applications judge found the adjudicator’s interpretation of the By-law unreasonable and vacated the award.

The Court of Appeal held that it is unreasonable, and a fortiori incorrect, for an adjudicator to interpret statutory or contractual provisions except according to the textual, contextual, and purposive methodology which the law imposes. Where a provision is ambiguous, the adjudicator’s choice between two reasonable interpretations will generally prevail under the deferential standard of review; but the adjudicator must first have employed the correct interpretive methodology to determine whether the provision was truly ambiguous. The adjudicator erred  by interpreting Article 22.04 as a stand-alone provision, then relying on that interpretation to interpret Article 22.01(l). Moreover, the adjudicator interpreted “laid off” in Article 22.01(l) without reference to the definition of “layoff” in Article 2.01(k). Robertson JA found that under the requisite textual, contextual, and purposive interpretive methodology, the provisions admitted of no ambiguity; rather, they unambiguously excluded the appellant from eligibility for the retirement allowance under any reasonable interpretation.

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Aaron SanFilippo

*

R v. W.C.K., 2012 ABCA 185

In this case, the Alberta Court of Appeal considers whether a young  accused, who is not aware of the charge being laid against him, can give a fully informed waiver of the right to consult with counsel and a parent, adult relative or other appropriate adult chosen by the accused. In addition, the court clarifies the relationship between section 146 of the Youth Criminal Justice Act (“YCJA”) and the Charter. The court unanimously held that a waiver under section 146 of the YCJA is not valid unless an accused understands the charges against him.

The accused had been arrested for a break and enter and breach of probation. The police obtained further information implicating the accused in the dangerous driving of stolen vehicles. A detective took the young accused through a form designed to explain his rights under section 146 of the YCJA; the accused signed the form thereby waiving his right to consult. After the form was signed, he was told that he was being charged with possession of stolen property and dangerous driving.

With respect to the relationship between section 146 of the YCJA and the Charter, the court held that the two analyses have much in common, but they are not the same. The trial judge must first determine whether the requirements of section 146 of the YCJA have been satisfied; the onus of establishing a valid waiver beyond a reasonable doubt rests with the Crown. If the requirements are satisfied, the trial judge must go on to consider whether there has been a section 10 Charter breach that should attract a section 24 remedy. The accused bears the burden of establishing a section 10 Charter violation.

In this case, the court was of the view that the accused “was taken through a very important part of the process without knowing the charges against him, and this… taints the entire process.” The court held that a young accused could not give a fully informed waiver under section 146 of the YCJA without knowing the charges against him. It also stated that the standard for a valid waiver of the right to counsel is very high. In the result, the Crown’s appeal was dismissed.

Link to Decision

Brandon Walker

*

Centre for Addiction and Mental Health v. Ontario, 2012 ONCA 342

In Centre for Addiction and Mental Health v. Ontario, the ONCA considered the interpretation of ‘consent’ in the context of s. 672.62 of the Criminal Code, which provides that – where an accused has been found unfit to stand trial and has been ordered to undergo treatment according to s. 672.58 – the consent of the person in charge of the hospital in question is required. Justice Blair overturned the hearing judge on the question of whether the consent requirement had been met in the circumstances – it had not – and further considered the constitutionality of s. 672.62, an issue before the court for the first time on appeal. Blair J.A. held that the s. 672.62 requirement complies with society’s notions of procedural fairness and is not unconstitutionally vague or arbitrary.

Mr. Brian Conception, accused of sexual assault, was found mentally unfit to stand trial. Justice Mary Hogan of the Toronto Mental Disorder Court issued a treatment order requiring Mr. Conception to submit “forthwith” to 60-days’ anti-psychotic treatment at Oak Ridge, a facility affiliated with the Centre for Addiction and Mental Health (CAMH), notwithstanding the hospital’s declared inability to accommodate him until six days later. CAMH appealed the decision, arguing it had not given the requisite consent.  

The decision clarifies the law on what Blair J.A. called “a recurring theme” in Ontario courts: the tension between judges’ desire to avoid interim jail time for mentally unfit accused on their way treatment, and the hospitals’ refusal to give consent due to bed shortages. Recognizing the hearing judge’s legitimate exasperation with a system suffering a scarcity of resources, Blair J.A. allowed the appeal. He accepted the hospital authorities’ power to determine priority of treatment in an environment where, among those patients waiting for a bed, there might well be others like Mr. Conception. Noting that “[s. 672.58] orders are… not intended to be… for the medical benefit of the unfit accused in the broad sense”, Blair J.A. held that the s. 672.62 consent requirement does not offend principles of fundamental justice. The decision makes the point that policy decisions concerning the allocation of psychiatric hospital resources are beyond the competence of the courts.

Link to Decision

Radostina Pavlova

Tony Drake

*

R v Pham, 2012 ABCA 203

In this case, the Alberta Court of Appeal considered whether minor variations in a sentence should be granted for convicted persons with a prior criminal record where the accused may be subject to proceedings under the Immigration and Refugee Protection Act  (“IRPA”).  The Court held that where persons have a prior criminal record, minor variations of a sentence due to considerations under the IRPA do not apply.

In this case, the appellant had been earlier convicted of two drug offences. He was found guilty of unlawfully producing and possessing marijuana for the purposes of trafficking and was sentenced to a prison term lasting two years. He appealed on the basis that a sentence of two years had the unintended consequence of losing his right to appeal a deportation order under the IRPA and asked for a sentence variation to two years less a day. The prevailing practice has been to reduce the sentence of an appellant in cases where (1) the requested reduction is minimal and therefore will not render the sentence unfit, and (2) maintaining the original sentence carries with it unintended or collateral consequences. This approach has been fairly consistent across the country.

The Alberta Court of Appeal held that even minor variations should not be granted in cases where the appellant has a previous criminal record. The majority states, “[I]t would be a strange and unfortunate legal system wherein a non-citizen could expect to receive a lesser sentence than a citizen for the same crime. No such distinction should be countenanced.” In dissent, Justice Martin would have allowed the appeal based on the Crown's willingness to concede to a sentence of two years less a day (based on the prevailing practice).

Link to Decision

Brandon Walker

Mary Phan

*

Association of Justice Counsel v. Attorney General of Canada, 2012 ONCA 530

The Ontario Court of Appeal considered whether the Expenditure Restraint Act ("ERA") infringed on the Association of Justice Counsel’s (“AJC”) s.2(d) Charter rights. This is the first case under the ERA to reach a Court of Appeal.  The Court of Appeal held that AJC had failed to show that the ERA infringed on their s. 2(d) right to engage in a meaningful process of collective bargaining.

The AJC alleged that the ERA rendered their right to collectively bargain on salary under s. 2(d) of the Charter with the Treasury Board Secretariat ("TBS") useless between the years of 2006 - 2011. The application judge found infringement of the AJC’s s.2(d) rights but upheld the ERA under s.1 of the Charter. The Attorney General appealed the application judge’s holding that the ERA infringed s.2(d), and the AJC cross-appealed that the provisions were justified under s.1. The court applied the "effectively impossible" test outlined in Fraser, which states that legislation violates s. 2(d) if it renders the pursuit of collective bargaining goals "effectively impossible." The court found that AJC's claim did not satisfy the "effectively impossible" test. Relying on Fraser, the court held that s. 2(d) guarantees a process of collective bargaining but not necessarily a result. Further, as stated in Fraser, s. 2(d) only protects the right to collective bargaining in the minimal sense of good faith. Applying the Fraser test, the court found that the AJC had engaged in a meaningful process of collective bargaining over a two-year period with TBS prior to the enactment of the ERA. During that process, the Court found that TBS had considered the demands of AJC in good faith. Therefore, the court held that AJC had failed to show that the ERA infringed on their s. 2(d) right to engage in a meaningful process of collective bargaining.

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Haran Viswanathan

*

Kwicksutaineuk/Ah-Kwa-Mish First Nation v. Canada (Attorney General), 2012 BCCA 193

This case deals with an action brought by the Chief of the Kwicksutaineuk/Ah-Kwa-Mish First Nation and his attempt to have the action certified as a class action with the class defined as “all aboriginal collectives who have or assert constitutionally protected aboriginal and/or treaty rights to fish wild salmon for food, social, and ceremonial purposes within the Broughton Archipelago and the rivers that drain into the Broughton Archipelago on behalf of himself and other Aboriginal collectives who have rights to fish in the Broughton Archipelago.” The issue in this appeal is whether the certified description for the plaintiff class is statutorily permissible. The British Columbia Court of Appeal holds that not only is the class not properly defined, but that there is no acceptable definition which the Court could substitute for the one used by the chambers judge.

The reasons the court gives for holding that the class definition does not meet the legislative criteria are to do with lack of legal capacity of the group as defined and lack of known objective criteria by which a collective could identify its membership in the class. In terms of legal capacity, the Court points out that an unincorporated association does not have to capacity to sue or be sued, unless legislation specifies otherwise. The Class Proceedings Act (“CPA”) does not create a substantive right to litigate and so a collective that cannot act as an independent plaintiff cannot be made a capable plaintiff through identification and inclusion in a class proceeding. The court confirms that a Band registered under the Indian Act does have legal capacity, but is not necessarily the proper entity to assert an Aboriginal right. The Court declines to decide in general whether an Aboriginal collective has legal capacity, but does hold that in this case, the “aboriginal collectives” designated as class members do not have legal capacity.

With respect to the objectivity criteria, the Court points out that in an Aboriginal rights claim the identity of the rights holder is integral to the analysis. In this case, this identity is also integral to part of the class definition. The chambers judge identified several Bands to be included in the class based on ethnographic material and the Court points out that performing this sort of in-depth analysis to identify class members conflicts with the CPA goals of judicial economy and access to justice. This Court cites the chambers judge's analysis and reasons as proof that the class definition does not provide clear and objective criteria. Furthermore, the circularity in defining members of the class as those who have the right to fish in an action which will partly determine the question of their right to fish would further complicate the matter.

Link to Decision

Kiran Arora

*

Temoin v Martin, 2012 BCCA 250

In this case, the British Columbia Court of Appeal considered the issue of whether the Supreme Court of British Columbia has the power to order a psychiatric examination of a person who appears to be incapable of managing his or her own affairs when the person in question will not voluntarily undergo examination. The Court of Appeal agreed with the Supreme Court judgment that the court does in fact have the power to order an assessment under its “parens patriae jurisdiction”, which gives the court control over vulnerable persons incapable of protecting themselves. However, the court stressed that the presumption of mental fitness under the Patients Property Act remains intact and the court must only order medical assessments in exceptional circumstances. 

The plaintiff, Lynne Temoin, had concerns that her father, Llewellyn Martin, was unfit to manage his finances or create a will due to dementia and sought an order declaring that he was incapable of managing his own affairs. A psychiatric examination of Mr. Martin confirmed that he did not have the capacity to make a will but did not assess his ability to manage his own affairs. As Mr. Martin refused to undergo such an assessment, the court was unable to make a declaration of incapacity under the Patients Property Act, which presumes a patient fit to manage his affairs unless two medical examinations provide evidence to the contrary. Justice Neilsen held that the Act contains a legislative gap regarding the court’s ability to order a patient to undergo psychiatric examination and thus looked to the legislature’s intent to determine the proper course of action. He reasoned that the purpose of the Act is to protect the autonomy of capable individuals by ensuring a rigorous protocol for declaring a patient unfit to manage his or her own affairs. However, he maintained that the Act does not adequately protect those mentally incapable individuals who refuse to undergo examination or do not have access to a physician. In these circumstances, the Act fails to protect the autonomy and wellbeing of these patients and thus falls out of line with its legislative objectives. The court held that in these exceptional circumstances, a party may request a court-ordered psychiatric examination of the individual in question. However, the moving party must meet a high evidentiary threshold to rebut the Patients Property Act presumption of fitness. Furthermore, the court stressed that its parens patriae power must be exercised very cautiously in order to maintain the Act’s objective of protecting free choice. Ultimately, the court concluded that Ms. Temoin had not discharged this burden of proof and declined to order Mr. Martin to undergo a medical examination.

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Maeve Clougherty

*

R v Nickel, 2012 ABCA 158

This was a successful Crown appeal of the sentence given to an offender convicted of 
aggravated assault and failure to provide necessaries of life.  The charges stemmed 
from an incident where the defendant placed the feet of his nine-month-old 
daughter in recently boiled water and caused third degree burns. The sentencing 
judge, following R v Evans (1996 182 AR 21), categorized the defendant as an
unskilled parent who failed to appreciate the potential consequences and sentenced
 him accordingly. The ABCA finds that the sentencing judge erred and substitutes its own assessment of a fit sentence. Rejecting the Evans framework, the court outlines a process of analysis of moral culpability as relevant to sentencing.

In rejecting the framework provided in Evans, the court refrains from articulating another fixed framework for
sentencing in “child abuse” cases. Instead, they outline a process of analysis
 beginning with an assessment of the risk and materialization of harm to the child,
 and the level of the offender’s culpability. Evans suggested differentiation between 
intended and foreseeable harm and this judgment echoes that, but as a starting 
place for consideration rather than a rigid divide. Other considerations including 
the offender’s personal circumstances should be relevant, but this analysis removes
 Evans’ heavy emphasis on the offender.



Justices Martin and O’Brien dissented on the sentence imposed in this particular
case, but not on the rejection of Evans and the proposed new set of principles.

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Sarah Rankin
*

Bank of Montreal v. Peri Formwork Systems Inc., 2012 BCCA 252

In Bank of Montreal v. Peri Formwork Systems Inc., the British Columbia Court of Appeal was required to rule on two issues raised in an application brought by the appellants, Peri Formwork Systems Inc.: 1) settling the terms of a court order and 2) special costs in cases of a complicated appeal. The BCCA ordered that the appellant builder’s lien claim be restored to priority over the Bank of Montreal Receiver’s Borrowing Charge and over all security to which the Receiver’s Borrowing Charge has priority. Secondly, the Court ruled that it has the authority to award increased costs in accordance with Rule 60 of the Court of Appeal Rules when there is a significant discrepancy between the legal fees incurred as a result of a long and complicated legal process and the amount recoverable through an award of ordinary costs. Although the normal rule for awarding increased costs requires proof of not merely a significant discrepancy between costs incurred and ordinary costs but also an additional factor such as party conduct, the Court ruled that departure from the normal rule was merited in the interests of justice. 

Peri Formwork Systems Inc., a builder company, obtained a lien against title to Coastal Village’s property and was granted priority on this lien over all others, including a Bank of Montreal Receiver’s Borrowing Charge. As a result of an error in statutory interpretation by Rice, J. (Supreme Court of British Columbia), the parties were required to seek further appeals to determine who was entitled to lien priority. The lengthy and complicated appeals process resulted in Peri Formwork Systems incurring substantial costs to settle the terms of the court order. The BCCA determined that Rule 60 of the Court of Appeal Rules, a rule allowing the Court to order increased costs to avoid creating an “unjust result”, applies in the case of Peri Form. The Court ruled that Peri Form faced many challenges in bringing its case and application, including the application to settle the terms of the order, and that a failure to order increased costs would not be in the interests of justice. A refusal to order additional costs in complicated cases would act to prevent the hearing of important legal issues. The Court ordered increased costs for the appeal process and costs at Scale C in the court below payable by the Bank of Montreal to the appellants; the Court also ruled that the appellants were only entitled to one set of costs and therefore could not collect costs from the Receiver (Brown Group Inc.). 

Link to Decision

Elizabeth Severinovskaya 

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Stanway v. Wyeth Canada Inc., 2012 BCCA 260

The British Columbia Court of Appeal considered whether an omission can constitute a deceptive act or practice under the Business Practices and Consumer Protection Act (BPCPA). Justice Kirkpatrick established that a failure to disclose could qualify as a deceptive act or practice even in the absence of any particular communicated misrepresentation. The appeal was dismissed.

The issue arose in an appeal from a class action certification order. The appellant, Wyeth, manufactured hormone therapy products containing hormones which were associated with an increased risk of breast cancer according to a 2002 Women's Health Institute study. The respondent class consisted of women who were diagnosed with breast cancer after having taken one of the hormone therapy drugs prescribed in Canada during the 27 year class period. The respondent alleged that Wyeth had conducted "deceptive acts or practices" under s.4(1) and s.4(3)(b)(vi) of the BPCPA by failing to "accurately disclose the risks of the hormone therapy" on their product monographs and labels. In doing so, they were alleged to have engaged in a "systemic course of deceptive conduct." The defendant interpreted Chalmers (Litigation Guardian of) v. AMO Canada LTD., [2010] BCCA 560 as allowing for a failure to disclose tied to specific representations. However, the defendant contended that "any claim under the BPCPA must rest on a representation" and that an omission in itself failed to meet this requirement.

The British Columbia Court of Appeal rejected this interpretation as well as the emphasis in Blackman v. Fedex Trade Networks Transport & Brokerage, [2009] BCSC 2001 on the BPCPA's lack of terms such as "failure to disclose" which had been included in its precursor, the Trade Practice Act. Justice Kirkpatrick highlighted the overall purpose of the Act and noted that since the BPCPA was "all about consumer protection...its terms should be interpreted generously in favour of consumers." This view was also held to be consistent with s.8 of the Interpretation Act. Finally, the court interpreted the wording of a "representation...that fails to state a material fact" in s.4(3)(b)(vi) in conjunction with the expansive language of s.4(1) which allows for "an oral, written, visual, descriptive or other representation" as "anticipat[ing] that an omission can constitute a deceptive practice."

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Sara Elcombe

*

Darcis et al. v. Manitoba et al., 2012 MBCA 49

In this case, the Manitoba Court of Appeal clarified a stated question of law from a Northern Flood Agreement (NFA) arbitrator regarding what constitutes a South Indian Lake claim (or “SIL claim”). The central issue in the appeal was a claim by an individual who had left the community, where the damage or loss had not occurred within "the SIL Trapline Zone". Having ruled against the claimant, the arbitrator raised the case to the Court of Appeal. Hamilton J.A. determined that, because the NFA is essentially the arbitrator’s home statute, the standard of review would be reasonableness, and that the geographic restriction on SIL claims created by the decision was unreasonable. The appeal was allowed.

In 1977, the NFA was entered into between several parties, including the Manitoba Hydro Electric Board and the Nisichawayasihk Cree Nation (NCN), allowing the SIL community to bring claims for damage caused by hydro-electric development. A newer agreement was created in 1996, including an exception governing SIL claims. The NFA claims at issue in Darcis v Manitoba were first made in 1992 by people who had been displaced as a result of adverse effects of the project. When their collective claim was denied, the appellants made the claims in issue individually. However, the NFA arbitrator determined that when an ordinary resident defined under subsection (b) of the 1996 agreement leaves the SIL community, he or she cannot make a claim because damages did not arise in the SIL trapline zone under subsection (a).  The appellants' position is that the decision in this case has the effect of punishing them for having left South Indian Lake to mitigate their damages.
 

After reviewing the arbitrator’s decision and the NFA, Hamilton J.A. determined that, because the words “regardless of where the damage or loss arose” are included in the introductory paragraph of the 1996 agreement governing SIL claims, the arbitrator’s conclusion unreasonably limited what constitutes an SIL claim. As long as a member of the NCN was ordinarily resident at or near the community of SIL at one of the dates specified in subsection (b) (at the date of the 1996 agreement or at the date the damage arose) the fact that they then left and the damage caused by hydro development did not occur in the trapline zone does not limit their claim. As a result, the appeal was allowed.

Link to Decision

Rebecca Vasluianu

Tony Drake

*

Fairhurst v. De Beers Canada Inc., 2012 BCCA 257

The British Columbia Court of Appeal considered whether harm caused by conspiracy fits under the mandatory presumption categories under s. 10 of the Court Jurisdiction and Proceedings Transfer Act (CJPTA) that determine a real and substantial connection to the jurisdiction of British Columbia. Justice Newbury held that a conspiracy causing harm in British Columbia is sufficient to establish the real and substantial connection necessary to prove jurisdiction under these provisions. Jurisdiction had been established and the appeal dismissed. 

The significant issue arose in the context of a cluster of inter-connected companies alleged to be conspiring to fix diamond prices worldwide. The plaintiff represented a class of consumers in British Columbia who bought the diamonds in the province at an increased price due to conspiracy. The defendants argued that they were not involved in selling gem-grade diamonds and, with the exception of De Beers Canada, did not perform any operations in Canada throughout the relevant period. Sections 10(g) and 10(f) of the CJPTA state that a real and substantial connection is presumed to exist where the facts allege restitutionary obligations that arose in British Columbia or where the facts allege a tort committed in British Columbia. Justice Newbury held that a conspiracy causing harm in British Columbia is sufficient to establish the real and substantial connection necessary to prove jurisdiction under these provisions. She noted a similar approach was taken in both Ontario (Vitapharm Canada Ltd. v. F. Hoffmann-La Roche Ltd. [2002] O.J. No. 298) and in Quebec (Option Consommateurs v. Infineon Technologies AG, 2011 QCCA 2116), where purely economic harm caused in the jurisdiction by conspiracies originating abroad is regarded as appropriate proof of a real and substantial connection to the jurisdiction. The Court of Appeal dismissed the defendants’ appeal and maintained that jurisdiction had been established.  

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Rebecca Vasluianu

*

Morrison v Van Den Tillaart, 2012 BCCA 185

In this case, the British Columbia Court of Appeal holds that time for appealing the allowance of a no-evidence motion pursuant to the Court of Appeal Act, R.S.B.C. 1996, c. 77, begins to run once the motion is ruled on and not once the trial has concluded. In other words, the allowance of a defendant’s no evidence motion at trial triggers a right of appeal for the plaintiff.

Section 14(1)(a) of the Court of Appeal Act imposes a 30-day time limit for filing an appeal. The plaintiff at trial appealed the allowance of the defendant’s no evidence motion after the trial against the other defendants had concluded – more than 30 days after the motion was allowed. The Court departs from the “order” approach taken in Glover v Magark ([1997] B.C.J. No. 766, 31 B.C.L.R. (3d) 9). In that case, a decision on a non-suit motion was deemed not appealable because it was not an interlocutory order or an order authorized by the rules of civil procedure. Rather, it was a ruling on evidence which formed part of the trial process. To support its conclusion, the Court cites the reasoning in Ceapro Inc. v Saskatchewan (2008 SKCA 64, [2008] S.J. No. 316):  A non-suit judgment is a final judgement which disposes of the issues between the parties; it is not subsumed in the final judgment to be delivered against the other defendants at the end of the trial; the appeal would not interrupt or delay the trial. The Court also cites Stanley v Godwin (2002 BCCA 166, [2002] B.C.J. No. 451) for its proposition that a non-interlocutory order may still trigger a right of appeal.

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Dane Richard

*

General Electric Canada Company v. Aviva Canada, Inc. and The Dominion of Canada General Insurance Company, 2012 ONCA 525

At issue in this case was whether an insurer who agrees to defend suits, under a general liability insurance policy, must pay the insured’s costs of voluntary compliance with a regulator’s requirements. The Court of Appeal for Ontario ruled in the negative, approving the lower court’s distinction between defence costs and compliance costs while rejecting the reasoning of some US courts.

The respondent insurers agreed, under a general liability policy, to defend suits on behalf of the insured General Electric (GE), and to investigate or pay the costs of investigating those claims. GE received a letter from the Ontario Minister of Environment (MOE) requiring that GE investigate and report on contamination of groundwater near land it had owned and occupied. GE voluntarily complied, and incurred significant costs in doing so. GE then sought a declaration that its insurers should bear those costs. The trial judge had held that by complying, GE did not defend; therefore, it could not claim the associated costs under the insurer’s duty to defend. The Court of Appeal for Ontario agreed. Armstrong JA declined to follow those US courts which had held that an adversarial process commenced upon receipt of a regulator’s letter, triggering an insurer’s duty to defend. Rather, he held that any potential liability which GE might face under the Environmental Protection Act, R.S.O. 1990 was at that stage only speculative, and therefore irrelevant to the characterization of the costs in question.

Link to Decision

Aaron SanFilippo

*

Steinberg v. Ellis Entertainment Corp., 2012 ONCA 362

In this case, the Ontario Court of Appeal considered a complicated pleadings issue. A corporation and an individual jointly defended an action; the corporation also counter-claimed. When the corporation became insolvent, it failed to pursue its defence. Its defence was struck out, and a creditor assigned the counterclaim to the individual, who obtained an order to continue the counterclaim. Is the individual permitted to amend his pleadings to make them consistent with the counterclaim? The court unanimously dismissed the appeal, stating that to allow the amendments would be an abuse of process.

Steinberg, a former employee of Ellis Entertainment Corporation, began a wrongful dismissal action against the corporation and against Ellis, its CEO, personally. The corporation and Ellis jointly defended the action, stating in their statement of defence that Steinberg voluntarily resigned from his employment with the corporation or, alternatively, that Steinberg had engaged in serious misconduct that justified termination of his employment for cause. When the corporation become insolvent, its first-ranking secured creditor acquired the counterclaim, and in turn, assigned it to Ellis. Steinberg obtained an order striking the corporation’s defence, and consequently, the corporation was deemed to have admitted the allegations in the statement of claim, including that Steinberg was wrongfully dismissed. The corporation's counterclaim did not contain any allegations specific to it, but rather recited a number of allegations of misconduct by Steinberg during his employment with the corporation. These allegations were inconsistent with and contrary to the corporation's deemed admissions.

Ellis argued that the deemed admissions of the corporation had no impact on the legal viability of the counterclaim because the corporation lost all of its rights and interests in the counterclaim when the secured creditor had acquired its assets; by the time the corporation's statement of defence was struck out, the corporation no longer had the right to advance that counterclaim since Ellis had acquired it personally by assignment. However, Gillese JA stated that the effect of the assignment was to give Ellis the right to pursue the counterclaim on behalf of the corporation, due to which Ellis could not have a better claim than the Corporation.

In response to Ellis's argument that Steinberg's appeal constituted a collateral attack on the order to continue, Gillese JA wrote that the striking out of its statement of defence meant that the Corporation could not succeed in establishing the claims in the counterclaim.  Because of this, the amendments that Ellis sought to make were not tenable at law, and as a result, the order of Hainey J had not allowed a collateral attack.

Link to Decision

Bhuvana Sankaranarayanan

*

Pridgen v. University of Calgary, 2012 ABCA 139

In Pridgen v University of Calgary, the Alberta Court of Appeal considered whether universities are Charter-free zones, and whether the University exercised reasonable discretion in its decision to impose disciplinary sanctions on students who had publicly criticized their instructors and educational institution on social networking sites. All three judges in the Court of Appeal ultimately upheld the decision of the Alberta Court of Queen’s Bench, which quashed the disciplinary measures taken against the students, but the three concurring judgments had nuanced differences in their opinions.

Paperny JA held that McKinney v University of Guelph, [1990] 3 SCR 229 did not rule out Charter applicability on university campuses for all purposes. In Greater Vancouver Transportation Authority v Canadian Federation of Students - British Columbia Component, 2009 SCC 31, the Supreme Court of Canada held that the Charter applies: (i) where the entity itself is a body of government; or (ii) to certain activities conducted by a non-governmental entity, where the activities are considered governmental in nature. Further, Eldridge v British Columbia (Attorney General), [1997] 3 SCR 624 affirmed that the actions of otherwise private entities may be subject to Charter review if they are classified as “governmental” activities. Paperny JA, in emphasizing that the university-student relationship is not a matter of purely contractual relations, held that the imposition of discipline by universities, an activity considered governmental in nature, should attract Charter scrutiny. She further emphasized that the application of the Charter in these circumstances does not undermine or interfere with academic freedom. Consequently, the university’s decision to discipline the students was quashed as it infringed on the students’ freedom of expression, and could not be saved by section 1 of the Charter.

McDonald JA, in a concurring judgment, affirmed the Chambers judge’s decision that the students’ conduct did not warrant disciplinary measures. However, the decision was based entirely on administrative law grounds, as he found it was unnecessary to perform a Charter analysis. In the third judgment, O’Ferrall JA found that the university ought to have considered whether its discipline violated the students’ rights to freedom of expression and freedom of association, and noted that they were concepts that long pre-dated the Charter.

Link to Decision

Bhuvana Sankaranarayanan

*

Valgardson v. Valgardson, 2012 ABCA 124

In Valgardson v. Valgardson, the Alberta Court of Appeal considered the appropriate standard of proof to establish a complainant’s good faith when seeking leave to bring a derivative action pursuant to s.240(2)(b) of the Alberta Business Corporations Act. The Court of Appeal allowed the appeal, and held that the chambers judge erred in holding the complainant to a higher standard of proof than the balance of probabilities to establish good faith. The Court of Appeal also held that on the balance of probabilities, the complainant had demonstrated good faith.

The issue of whether or not there should be a “high onus” on the complainant to demonstrate good faith in a derivative action arose in the context of one brother seeking leave to bring a derivative action against two other brothers and their jointly owned family businesses. The chambers judge held that there was a high onus on the complainant to demonstrate that the action was brought in good faith, and that the animosity between the brothers and the fact that there was other unresolved litigation between them demonstrated that the action did not meet this high standard of proof. The chambers judge had relied on holdings from courts in Alberta, Newfoundland and British Columbia stating that there is a high onus on the complainant to establish good faith when seeking leave to commence a derivative action. However, the Alberta Court of Appeal confirmed that absent any statutory language to the contrary, the standard of proof in civil suits is the balance of probabilities, without any elevated high onus for questions of good faith. 

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Penny Garnsworthy

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Karafiat v. Webb, 2012 ABCA 115

In this case, the Court of Appeal of Alberta considered whether the Appellant’s secured interest in land was defeated by operation of the Dower Act, RSA 2000, c. D-15. The majority held that s. 3(2)(a) of the Act, which provides that a homestead is terminated upon registration of a title transfer, is inapplicable to transfers between spouses. The Court also considered the boundaries of the spousal consent requirement as a precondition to a married person’s disposition of the homestead, under s. 2(1) of the Act. Berger JA, for the majority, maintained that the requisite consent must operate in connection with the specific transaction in question; a transaction invalid at its inception for lack of dower consent will be cured neither by consent in connection with another transaction, nor by the subsequent cessation of the dower interest.

Co-respondent Franklin Webb, as sole titleholder to his and Carmen Webb’s matrimonial home, had granted an interest in their home via a promissory note as security for his debt to the Appellant. Subsequently, Mr. Webb had registered a transfer of title to joint tenancy in common with Mrs. Webb. Berger JA found that the s. 3(2)(a) provisions for termination of a homestead upon registration of a title transfer, read alongside s. 11(1), must exclude transfers between spouses; transfers registered in the name of a third party would terminate the homestead and extinguish dower rights, but transfers between spouses, including transfers to joint tenancy, would not. Also, Berger JA rejected arguments that either a) Mrs. Webb’s implied dower consent, under s. 25(2), in favour of mortgagee Alberta Treasury Branches, or b) the ultimate cessation of her dower interest due to foreclosure, relieved the Appellant of the burden to prove Mrs. Webb’s consent – knowledge and intent – in connection with the promissory note. The majority declined to validate the transaction merely because the homestead was now defunct. It affirmed the lower court’s decision barring the Appellant’s claim.

Slatter JA dissented as to the consequence of the initial lack of dower consent. He viewed the Appellant’s interest as merely voidable, subject to Mrs. Webb’s dower interest, and fully enforceable upon termination of her dower rights. Moreover s. 3(2)(a) of the Act, in his view, should apply to all registered transfers including those between spouses. Accordingly, Slatter JA found that the transfer to joint tenancy had terminated the Respondent’s original homestead rights and immediately replaced them with new rights under a new title subject to the Appellant’s prior claim. Stressing that the purpose of the Dower Act was to protect a spouse’s interest in the homestead, and not to reorder the priority of creditors or to enable escape from agreements honestly made, Slatter JA would have allowed the appeal.

Link to Decision

Aaron SanFilippo
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United Food and Commercial Workers, Local 401 v. Alberta, 2012 ABCA 130

In this case, the Alberta Court of Appeal considered whether certain provisions of the Personal Information Protection Act (PIPA) were in violation of section 2(b) of the Canadian Charter of Rights and Freedoms. The issue arose in the context of a labour dispute, during which the union videotaped persons crossing the picket line. The persons who were videotaped then filed complaints with the privacy commissioner under the PIPA, arguing that the union's recording of the picket line was in violation of their privacy rights. While the Court acknowledged the importance of protecting individuals’ privacy rights and limiting the misuse of personal information, it held that the union’s freedom to record the picket line should be protected as an expressive right under the Charter, and should trump any statutory privacy rights provided under PIPA.

Based on the Supreme Court of Canada decision in Retail, Wholesale and Department Store Union, Local 558 v. Pepsi-Cola Canada Beverages (West) Ltd, 2002 SCC 8, Justice Slatter noted that picketing itself is an expressive activity and is limited by the Act. Further, according to R v. National Post, 2010 SCC 16, the freedom of expression in section 2 of the Charter encompasses an ability to collect information for the purpose of expressing a certain view. The Court found that recording the picket line has an expressive purpose, as persuading people to think or act in a certain way is a direct purpose of free expression. Consequently, the union was able to establish a prima facie breach of its section 2 Charter right.

Justice Slatter further held that PIPA’s effect on the union’s expressive rights was not justifiable under section 1 of the Charter. The Act failed the proportionality test, since it is overbroad and not adequately sensitive to the protection of Charter rights. He identified five problems with the Act:

(i)             The definition of “personal information” is defined too broadly;

(ii)            There is no general exception for information that is personal, but not at all private;

(iii)           The definition of “publicly available information” is artificially narrow;

(iv)          There is no general exemption for information collected and used for free expression; and

(v)           There is no exemption allowing organization to reasonably use personal information that is reasonably required in the legitimate operation of their business. 

Justice Slatter also found that it is not apparent that the salutary effects of the Act outweigh its deleterious effects.

Since it is possible that all of the impugned provisions of PIPA might have a constitutional application in some cases, the Court was reluctant to strike down the Act entirely. Instead, the Court issued a declaration that the application of PIPA to the activities of the union was unconstitutional, and deferred to the legislature to make the appropriate amendments to the Act. The Alberta Information and Privacy Commissioner has sought leave to appeal the Alberta Court of Appeal’s decision to the Supreme Court of Canada.

Link to Decision

Clara Morrissey

Kelly Ng

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Mihalyko (Re), 2012 SKCA 44

The Saskatchewan Court of Appeal considers s. 7(1) of the Seizure of Criminal Property Act (“the Act”), which states that “subject to section 8, and unless it clearly would not be in the interests of justice, the court shall make an order forfeiting property to the Crown if the court finds that the property is proceeds of unlawful activity or an instrument of unlawful activity.” The Court held that once the Director has established the criteria entitling an order for forfeiture, the burden shifts to the owner to prove, on a balance of probabilities, that an exemption should be applied.

The respondent’s (defendant’s) vehicle and cell phone were seized following an incident where the respondent sold two Oxycontin tablets to an undercover police officer in order to obtain $60 to put gas into the vehicle. The chambers judge found it would not be in the interests of justice to permit the forfeiture of the respondent’s property and so rejected a forfeiture order. The Director appealed. The Court of Appeal adopted the reasoning in Ontario (Attorney General) v. 1140 Aubin Road (Windsor), 2011 ONCA 363, in affirming that the onus lies with the owner to prove, on a balance of probabilities, that an exemption should be applied. The Court found the exemption was improperly applied in this case, as the motions judge failed to adequately consider the “clearly” in the wording of 7(1), and the importance to the larger interests of society of upholding the forfeiture of a vehicle used to traffic drugs. There was no strong evidence that demonstrated the forfeiture was manifestly harsh, unjust or inequitable.

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Sarah Rankin

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A.I. Enterprises and Schelew v. Bram Enterprises and Jamb Enterprises, 2012 NBCA 33

In this case, the New Brunswick Court of Appeal clarified the jurisprudence around the unlawful means tort. This appeal examines whether Canadian courts should adopt the narrow definition of “unlawful means” set out by the majority in OBG v. Allan [2007] UKHL 21 [“OGB”], a case which clarifies the tort in English law. Until this point, Canadian courts had adopted a broad and vague articulation which at times blurred the distinction between inducement torts and unlawful means torts. By building on the narrow definition of “unlawful means” set out by the majority in OGB, Robertson J.A. offers a general model that isolates the essential tenets of the unlawful means tort. In the proposed model, the claimant must establish the following:

1) the existence of a valid business relationship between the claimant and the third party;

2) the defendant knew or ought to have known of the relationship;

3) the defendant’s interference prevented the formation of a contract or its performance  in circumstances where there is no breach of the contract;

4) the defendant’s impugned conduct must qualify as unlawful means or as warranting exceptional treatment;

5) the unlawful means must not be directly actionable by the claimant;

6) the defendant must have intended to cause the plaintiff harm;  and

7) the defendant’s conduct must have been the proximate cause of the claimant’s loss.

This framework should also allow for the defendant to provide a defense of justification.

The issue in this case arose from a clause in a syndication agreement, which states that if the majority decides to sell the property, the minority has the right of first refusal for fifteen days, after which the majority will then have the right to seek out and sell the property to a third party. The minority shareholders did not want to sell the property and refused to exercise their right of first refusal. They proceeded to interfere with the sale of the property under the guise of the syndicate agreement. In reviewing the evidence, Robertson J.A. upheld the decision of the trial judge and found that the tort of unlawful means had been established.

The crux of the issue here was whether the independently actionable requirement should be flexible and allow for some categorical exceptions, bearing in mind that the tort is meant to fill in a gap in the law and be turned to when there is no other legal remedy for a wrong. Robertson J.A. found that the facts of the case at hand warranted exceptional treatment and, even if the requirement of not being independently actionable was not satisfied, the other independent causes of action were not sufficiently strong to support a finding of liability on their own.

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Megan Strachan

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