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Introduction

Certain class action lawsuits require settlement agreements to ensure the fair distribution of settlement funds through an adjudicative process. An Independent Assessment Process (“IAP”) provides for an independent adjudicator to determine the validity of disputed claims. In JW v Canada (Attorney General), 2019 SCC 20 [JW], the Supreme Court of Canada (“SCC” or “the Court”) ruled that the courts should supervise and potentially intervene in disputed class action settlement agreements when the terms of such agreements are modified by these adjudicators. In JW, the Court overturned the decision of the Manitoba Court of Appeal and restored an award for a residential school survivor that was initially dismissed by an adjudicator because it failed to demonstrate that the abusive actions were accompanied by a “sexual purpose.” The SCC’s ruling has broad implications for class action lawsuits and settlement agreements that create an adjudicative process to determine the validity of potential claims.

Background

Over the span of almost 130 years, from the 1860s to the 1990s, more than 150,000 First Nations, Inuit, and Métis children were removed from their homes and forced to attend residential schools run by religious organizations and funded by the Canadian government (JW, para 56). After many years of neglect, the truth of the living conditions endured by Indigenous children in residential schools has slowly emerged. It is now acknowledged that these children were removed from their homes in order to sever their ties with their Indigenous roots. It is also accepted that thousands of these children suffered physical, emotional, and sexual abuse while attending residential schools (JW, para 56).

On May 8, 2006, the Government of Canada signed an agreement to settle a class action lawsuit with over 80,000 plaintiffs who had suffered harm due to the residential schools regime. The Indian Residential Schools Settlement Agreement (“IRSSA”) sought to achieve a “fair, comprehensive and lasting resolution of the legacy of Indian Residential Schools” (JW, para 57). Among other things, the agreement created two pathways for class members to receive compensation. The first was a “common experience” payment that was available to all eligible former students. The second was through the creation of an Independent Assessment Process (“IAP”), which awards individual claimants for specific compensable harms (JW, para 9). The IRSSA outlines the policies and procedures that the IAP must follow and sets out the internal review mechanisms of any decision. The agreement was approved in nine provinces and territories, and each was assigned a supervising judge to oversee the implementation of the agreement.

Facts

In 2014, J.W. (the “Appellant”) brought forward an individual claim to be processed in accordance with the IAP. The Appellant asserted that while he was a young boy at a Manitoba residential school, he was the victim of an incident in which a nun touched his genitals over his clothing. The Appellant claimed that this form of abuse was covered a defined category of harm under the IRSSA. Specifically, category SL1.4 of the IRSSA allows individuals to seek claims for

[a]ny touching of a student, including touching with an object, by an adult employee or other adult lawfully on the premises which exceeds recognized parental contact and violates the sexual integrity of the student. (JW, para 36)

The facts of incident were not in dispute, and as such, the Hearing Adjudicator accepted that the incident occurred. Despite this, the Adjudicator denied the Appellant’s claim on the grounds that he was not able to prove an element of “sexual” intent in the nun’s behaviour (JW, para 37).

The IRSSA permitted J.W. to seek two levels of review for the negative decision. The Appellant was unsuccessful at both stages, with the Review Adjudicators finding that the Hearing Adjudicator was correct in requiring J.W. to establish not only the act of touching, but also the accompanying sexual intent. Pursuant to the agreement, the Appellant then brought a Request for Directions (“RFD”) application to the provincial supervising judge. The judge fundamentally disagreed with the earlier decisions and remitted the Appellant’s claim for re-adjudication. The new adjudicator allowed the claim, finding that J.W. had proven on a balance of probabilities that the requirements of category SL1.4 had been met, and awarded J.W. $12,720 in compensatory damages.  

Before this decision could be implemented, the Attorney General of Canada (“AG”) appealed the supervising judge’s intervention to the Manitoba Court of Appeal, which unanimously concluded that the supervising judge exceeded his jurisdiction under the IRSSA. The Court of Appeal agreed with the submissions of the AG, emphasizing that there is no right to appeal or seek judicial review of IAP decisions (JW, para 95).

J.W. appealed the decision of the Manitoba Court of Appeal to the SCC.

Issues

The SCC was confronted with two essential issues in this case:

  1. Is judicial review of the decisions of IAP adjudicators available?
  2. If judicial review is not available, what is the scope of the judicial recourse available to parties seeking intervention by the supervising courts in decisions rendered under the IAP? (JW, para 98)

Decision

The Court released three separate judgements on these important issues. Justice Abella wrote the majority position that allowed the appeal, on behalf of herself, Chief Justice Wagner, and Justice Karakatsanis. Justices Cotê and Moldaver wrote a concurring opinion, while Justices Brown and Rowe dissented and would have dismissed the case.

Majority (Justices Abella, Wagner, and Karakatsanis)

The majority of the Court found that the Manitoba Court of Appeal erred in limiting the role of the supervising judge.

According to Justice Abella, it is not enough for the adjudicator to simply refer to the relevant sections of the IAP. Any meaningful judicial supervision of an IAP decision must imply a review of how an adjudicator interprets or applies the relevant sections. According to Justice Abella, this expansive approach to the role of the supervising judges is more aligned with the purposes of the Agreement, which is to ensure “a fair, comprehensive and lasting resolution of the legacy of Indian Residential Schools” (JW, para 33).

Justice Abella concluded that the supervising judge correctly found that the Hearing Adjudicator’s decision constituted “an unauthorized modification of SL1.4 by substituting the phrase ‘any touching’ with ‘sexual touching’” (JW, para 44). Reading in this additional requirement was an unauthorized modification of the agreement, and such a modification “amounted to a failure to apply or implement the terms of the Agreement, warranting judicial supervisory intervention to ensure that the benefits promised in the Agreement were delivered” (JW, para 44).

By allowing the appeal, the Reconsideration Adjudicator’s decision was upheld and J.W.’s award was reinstated.

Concurring Decision (Justices Cotê and Moldaver)

Although coming to the same conclusion on allowing the appeal, Justice Cotê made a point to clarify the material nature of the IRSSA. She explained how the IRSSA is essentially a contract, and as such it is like any other contractual agreement between the parties: If the parties are not satisfied with the terms of the agreement, the courts do not have the authority to substitute or rewrite the contract in a manner that favours one party over the other. The adjudicative body is created out of an agreement and not out of a statutory provision. As such, IAP adjudicators do not have statutory backing, and so there is no executive decision to be judicially reviewed.

According to Justice Cotê, the supervisory judge only has a hand in the administration of the agreement – not in the correctness of the adjudication. In this case, the Hearing Adjudicator interpreted SL1.4 of the IRSSA as requiring the Appellant to prove the sexual intent of the nun. For Justices Cotê and Moldaver, it is outside the jurisdiction of the courts to review this determination.

In spite of this, Justice Cotê still concluded that the appeal should be allowed because the case created a unique circumstance for which the IRSSA provided no guidance. The IAP scheme includes a Chief Adjudicator who represents the final level of review. This Chief Adjudicator had already conceded that the claim was wrongly decided by the initial adjudicators and that those initial decisions were “aberrant” (JW, para 61). The IRSSA contained no mechanism through which the Chief Adjudicator could re-open the file, and as such Justice Cotê deemed it appropriate for the Court to step in and fill this “procedural gap” (JW, para 61).

Dissent (Justices Rowe and Brown)

Justices Brown and Rowe dissented with their colleagues on the outcome of the appeal, but agreed with Justices Cotê and Moldaver on the narrower role of supervising judges in such agreements. They found that there was no procedural gap to fill and as such, there were no grounds to interfere with the initial decisions. The IRSSA only allows for judicial recourse when the value of the harm suffered by a claimant exceeds compensation limits, or when the evidence is too complex for the hearing adjudicator (JW, para 182). According to Justice Brown, this clarity in the IRSSA precludes any judicial body from re-opening a claim to reconsider its outcome.

Analysis

Class proceedings are governed by three guiding principles: judicial economy, access to justice, and behaviour modification. It is interesting to understand the varied positions of the Court through the lens of these principles. Justice Abella’s decision, which seeks gives a broader role to supervising judges, can be understood as promoting access to justice and ensuring deterrence against the type of abuse that occurred at residential schools. By ensuring that all meritorious claims are judicially reviewable, the majority’s decision creates an equitable remedy in such situations where the internal review process of the IRSSA has failed the claimant.

The concurring and dissenting positions, which create a more limited scope for supervising judges, can be understood as promoting the principle of judicial economy. The IRSSA was a methodically detailed agreement, and one that did not explicitly create a mechanism for judicial review. In the view of the concurrence and dissent, it is less economical for the courts to review individual decisions where an internal review mechanism has already been established.

Conclusion

Although Justice Abella wrote the main decision that would allow the appeal, Justice Cotê’s decision on the more limited standard of access to the courts in such settlement agreements garnered support from a total of four Justices, or the majority of the Bench.

This is a complicated ruling that clarifies the role of judicial intervention in certain settlement agreements. The decision will likely force parties to create well defined rules of how to resolve disputes in settlement agreements that create an adjudication process. By eliminating procedural gaps, and clearly stipulating the role that supervising judges can have, parties can create a more airtight system that would prevent this type of case from arising.

The post <em>JW v Canada (AG)</em> : The Judiciary’s Role in Supervising Residential School Settlement Agreements appeared first on TheCourt.ca.

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In today’s guest post, Danielle Mallozzi examines the Supreme Court of Canada’s 2018 decision on whether life insurance beneficiaries should be enriched at the expense of unknowning premium payers. 

In Moore v Sweet, 2018 SCC 25 (“Moore”), the Supreme Court of Canada (“SCC”) considered whether the appellant, Michelle Moore or the respondent, Risa Sweet was entitled to the $250,000 proceeds of a life insurance policy whose premiums were paid for by Moore. The lesson? Do not pay your ex-spouse’s life insurance premiums based on their word alone. You may end up in timely and costly litigation.

Two Women, One Life Insurance Policy

Michelle Moore and the owner of the policy, Lawrence Moore, were former spouses. They came to an oral agreement that Michelle would continue to pay the policy’s premiums despite their divorce and Lawrence would keep her as the policy’s only beneficiary, and she would be entitled to the proceeds upon his death. Shortly after, Lawrence made his new common law spouse, Risa Sweet, the irrevocable beneficiary of the policy despite Michelle being unaware and continuing to pay the monthly premiums. Upon Lawrence’s death, the proceeds were payable to Sweet and not Michelle. Michelle applied to the court claiming unjust enrichment and requesting that the life insurance proceeds be awarded to her in the form of a constructive trust.

For a claim in unjust enrichment to succeed the plaintiff must prove that:

  1. The defendant was enriched
  2. They suffered corresponding deprivation, and
  3. The defendant’s enrichment and the plaintiff’s corresponding deprivation occurred in the absence of a juristic reason. (Moore, para 30)

If the plaintiff satisfies these criteria the defendant can still overcome the claim by proving there are residual reasons to deny the plaintiff’s recovery based on the parties’ reasonable expectations or public policy reasons.

Procedural History

Ontario Superior Court of Justice

At trial, Justice Wilton-Siegelruled that the life insurance proceeds should go to Michelle. He held that Michelle and Lawrence both had equitable interests in the proceeds of the policy from when it was taken out. Their oral agreement had resulted in an equitable assignment to Michelle of Lawrence’s equitable interest in the proceeds of the policy in return for her paying the premiums. He found that all elements of unjust enrichment were met and Sweet’s designation as an irrevocable beneficiary did not constitute a juristic reason that entitled her to retain the proceeds. Michelle had a constructive trust interest and would be unjustly deprived if the money went to Sweet.

Ontario Court of Appeal

The majority at the Court of Appeal overturned the lower court decision. They awarded the policy proceeds to Sweet but found Michelle Moore was entitled to be refunded the money she paid in premiums after she divorced Lawrence. Justice Blair wrote for the majority and held that the application judge erred in finding that Michelle and Lawrence’s oral agreement took the form of an equitable assignment to Michelle of Lawrence’s equitable interest in either the proceeds of the policy or the entire interest in the policy in exchange for the payment of future premiums. Justice Blair also stated it was procedurally unfair for Justice Wilton-Siegel to base his finding on the principle of equitable interest because Moore had not relied on that claim.

Justice Lauwers strongly dissented. He argued that the SCC in Soulos v Korkontzilas, 1997 2 SCR 217 did not confine the availability of remedial constructive trusts to instances of unjust enrichment and wrongful gains and that Soulos did not abolish the doctrine of good conscience.Though he stated that an irrevocable beneficiary designation may constitute a juristic reason for enrichment, the oral agreement between Michelle and Lawrence made it so this designation was no longer his to make. Consequently, Justice Lauwers concluded, it should not constitute a juristic reasoning in favor of enrichment in this case.

The Supreme Court of Canada

The Majority

The SCC did not uphold the ONCA’s ruling. Justice Côté, subsequently writing for the majority, held that

“Risa was enriched, Michelle was correspondingly deprived, and both the enrichment and the deprivation occurred in the absence of a juristic reason.”(Moore, para 3)

The majority ultimately concluded that an irrevocable beneficiary designation under the Insurance Act did not constitute a juristic reason. However, the majority arrived at this conclusion through a different chain of reasoning than Justice Lauwers of the Court of Appeal. The Majority stressed the presumption that legislation does not depart from prevailing law without expressing this intention with “irresistible clearness”, as previously held in Rawluk v Rawluk, 1990 SCR 70 (Moore, para 70). Therefore, because “no part of the Insurance Act operates with the necessary ‘irresistible clearness’ to preclude the existence of contractual or equitable rights in those insurance proceeds once they have been paid to the named beneficiary” (Moore, para 70), the statute requires payment to Risa, but not the right to keep the proceeds against Michelle.

The majority also held that Risa did not meet the burden of rebutting Michelle’s unjust enrichment case because Risa’s expectation came after the oral agreement between Michelle and Lawrence and thus cannot take precedence over Michelle’s prior rights. It would be bad policy to ignore that Michelle was tricked by her ex-husband to pay the premiums for Risa’s benefit when her payments kept the policy alive and made Risa’s entitlement to receive the proceeds possible. The appeal was thus dismissed, and Michelle was awarded the $250,000 policy proceeds in the form of a constructive trust.

The Dissent

In their joint dissent, Justices Gascon and Rowe echoed the Ontario Court of Appeal’s majority decision. They held that Risa’s enrichment did not result from the corresponding deprivation of Michelle and that this failure to establish unjust enrichment meant there was no basis to impose a constructive trust. They acknowledged Michelle’s contractual rights to the proceeds but held that the correlative deprivation between Michelle’s failed contractual expectations and Risa’s enrichment did not establish a proprietary or equitable interest in the proceeds. Michelle was a revocable beneficiary under the policy and therefore had no right to contest her ex-husband’s change of beneficiary, except by suing his estate for breach of contract.

The dissent found Michelle’s deprivation (being unable to enforce her contractual rights) did not correspond with Risa’s entitlement to the insurance proceeds (the enrichment). They acknowledged that both parties were innocent, but also that the Insurance Act provides a juristic reason for any enrichment that Risa could have received by being an irrevocable beneficiary. Consequently, they held that Michelle had a breach of contract claim and did not have any right to the proceeds since life insurance proceeds are an entitlement of the policy’s designated beneficiary, regardless of who pays the premiums.

The dissent further concluded that “the policy considerations at the second stage of the juristic reason analysis would nevertheless favor the denial of restitution to Michelle” (Moore, para 139). The Insurance Act, RSO 1990 is drafted in such a way to facilitate the quick payment of life insurance proceeds and immunize beneficiaries from any claims from the insured’s creditors. However, this does not mean that the act provides a juristic reason negating an unjust enrichment claim. The Act provides for a beneficiary’s entitlement to the payment of proceeds but it does not preclude the existence of rights outside its provisions (Shannon v Shannon,  50 OR (2d) 456, p 461)

Although some may find the dissent’s policy considerations convincing, the majority’s decision has left the option open for the Legislature to provide the “irresistible clearness” in the Insurance Act to dismiss a clam in unjust enrichment and contract- a favorable compromise between policy and equity. Furthermore, the purpose of equity is to fill the gaps left by the common law that results in an injustice. Michelle was misled to pay the premiums when the insurance proceeds would go to Risa. Allowing Lisa to retain these premiums would be unfair. It was accepted that Michelle would have stopped paying the premiums had she known she was no longer the beneficiary, and the policy would have expired without her payments. The dissent favored form and policy at the expense of fairness. Though their reasoning is convincing, they fail to remember equity’s purpose within the law and that an unjust enrichment claim will not succeed where a statute dismisses these claims or the connection between enrichment and deprivation is merely casual.

Concluding Thoughts

The uncertainty within the law over when a constructive trust is an appropriate remedy for a successful unjust enrichment claim has now been clarified by the SCC. The default remedy for this claim is the personal remedy of a debt or monetary obligation, not a constructive trust. However, where a plaintiff establishes that the default remedy is inadequate and that there is a link between their contributions and the disputed property, then a remedial constructive trust will be granted.

Insurers may now find themselves in a difficult position when a non-beneficiary challenges a beneficiary’s entitlement through litigation. However, a non-beneficiary will still have the onus of proving that the beneficiary was enriched at their corresponding deprivation, which may prove difficult. The connection between enrichment and deprivation must identify the plaintiff as the proper person to seek restitution; a mere belief that an insured should have named a plaintiff as beneficiary is not enough. Insurers may want to pay the proceeds into the court to protect itself from potential delay claims by the designated beneficiary.

It has been debated whether the SCC’s decision in this case has made it more difficult to plan transfers of property. Nevertheless, the legislature has the option to dismiss unjust enrichment claims with the clearness required by explicitly precluding recovery in the statute. It will be interesting to see if the legislature responds to this ruling by providing the ‘irresistible clearness’ in the Insurance Act necessary to dismiss future unjust enrichment claims against policy beneficiaries.

The post <em>Moore v Sweet</em>: SCC Ruling May Place Insurers in Difficult Position appeared first on TheCourt.ca.

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Introduction

On January 31, 2019, the Supreme Court of Canada (“SCC”) reached a decision pertaining to bankruptcy and insolvency law and the obligations owed by oil and gas companies that have filed for bankruptcy. The ruling raises policy implications for secured lenders, insolvency professionals and the question of who should be burdened with the cost of abandoning spent oil wells.

The decision of Orphan Well Association v Grant Thornton Ltd, 2019 SCC 5 [Orphan Well] is one that overturns the decisions of the Alberta Court of Queen’s Bench (“ACQB”) and the Alberta Court of Appeal (“ABCA”) on this matter. In its ruling, the SCC clarified the interpretation of certain provisions in the Bankruptcy and Insolvency Act, RSC 1985, c B-3 [BIA], the Oil and Gas Conservation Act, RSA 2000, c O-6, and the Pipeline Act, RSA 2000, c P-15.

An important legal issue was how to reconcile the various statutes implicated. The doctrine of paramountcy establishes that federal legislation supersedes any provincial counterpart when each respective law is valid, but inconsistent or conflicting.

While the lower courts interpreted and reconciled provisions from the aforementioned statutes by applying the doctrine of paramountcy, the SCC held that the doctrine of paramountcy does not apply, and no conflict exists between the statutes.

Background

According to Alberta law, a company that exploits oil and gas resources in Alberta must hold a property interest in the oil or gas, surface rights and a license issued by the Alberta Energy Regulator (“Regulator”) (Orphan Well, para 9). Under these provincial rules, the Regulator can only grant a license if the licensee assumes certain end-of-life responsibilities for its oil and gas assets. Such responsibilities include the plugging and capping of oil wells to prevent leaks, dismantling surface structure and restoring surfaces to their previous conditions. These are environmental obligations are known as “abandonment” and “reclamation” (Orphan Well, para 9).

Redwater Energy Corporation (“Redwater”) was a publicly traded oil and gas company in Alberta, which had principal assets of 127 oil and gas assets. These assets included wells, pipelines and facilities in addition to their corresponding licenses. Redwater suffered financial difficulty in 2014 and went into receivership in May 2015, appointing Grant Thornton Limited (“Grant Thornton” or “the Respondent”) as its receiver. In addition to undertaking the role of receiver, Grant Thornton was also deemed as the licensee of Redwater’s oil and gas assets when notified by the Regulator that it was legally required to fulfill the abandonment obligations for Redwater’s licensed oil and gas assets prior to distributing anything owed to creditors.

Critically, Grant Thornton informed the Regulator that it was unable to meet the end-of-life obligations for the spent wells as the cost of doing so was likely to exceed the proceeds of sale for the wells. To avoid such costs, Grant Thornton decided to renounce the unproductive wells, stating that the BIA allowed for this. Nevertheless, it did take possession and control of 17 of Redwater’s most productive wells, 3 associated facilities and 12 associated pipelines.

Contrary to Grant Thornton’s interpretation of the BIA, the Regulator took the position that neither the BIA nor provincial law allowed Grant Thornton to disown the licensed assets. Grant Thornton argued that even if it had to abide by the abandonment orders issued by the Regulator, that such orders were considered to be “provable claims” under the BIA. This meant that Grant Thornton would first have to pay off any creditors, before fulfilling obligations under the abandonment orders (Orphan Well, para 50)

Judicial History

The ACQB agreed with Grant Thornton in holding that a trustee could renounce its oil and gas assets and that any end-of-life obligations would be considered as “provable claims” under the BIA. The Court of Appeal upheld this decision (Orphan Well, paras 54-62).

SCC Decision

In a 5-2 majority decision, the SCC held that the doctrine of paramountcy does not apply on these facts and that both the BIA and Alberta’s provincial regime can co-exist without any conflict. By overturning the lower court decisions, it was held that the BIA provisions aimed to protect trustees only from being personally responsible to pay for an estate’s environmental obligations.

Majority

Chief Justice Wagner wrote the decision for the majority. He found that the provincial Regulator’s enforcement of the end-of-life obligations against Redwater did not violate the doctrine of federal paramountcy. In doing so, he undertook an analysis of the doctrine.

The doctrine of paramountcy focuses on the manner in which the power is exercised by looking at whether dual-compliance with both the federal and provincial legislation is impossible, or whether provincial legislation is incompatible with the very purpose of the impugned federal legislation. Chief Justice Wagner mentions the fact that under both branches of the paramountcy test, the party alleging the conflict bears the burden of proof to demonstrate that the test is met. He emphasizes however, that

[t]his burden is not an easy one to satisfy, as the doctrine of paramountcy is to be applied with restraint. Conflict must be defined narrowly so that each level of government may act as freely as possible within its respective sphere of constitutional authority…the application of the doctrine of paramountcy should also give due weight to the principle of co-operative federalism…While co-operative federalism does not impose limits on the otherwise valid exercise of legislative power, it does mean that courts should avoid an expansive interpretation of the purpose of federal legislation which will bring it into conflict with provincial legislation (Orphan Well, para 66).

The specific provision in question was section 14.06 of the BIA which Grant Thornton interpreted to imply that “since it [had] disclaimed Redwater’s unproductive oil and gas assets, [the section] empower[ed] it to walk away from those assets and the environmental liabilities associated with them…” (Orphan Well, para 4). Grant Thornton also asserted that the provincial legislation reorders the priorities of bankruptcy established by the BIA which prefer repayments to secured creditors over ordinary creditors.

After a lengthy exercise of statutory interpretation and a thorough investigation of the parliamentary transcripts and debates, the majority concluded that the impugned section is only concerned with personal liability of the trustee and not liability of the bankrupt estate (Orphan Well, para 75). Grant Thornton was therefore still accountable for the environmental liability by ensuring compliance with the end-of-life regulations.

As for Grant Thorton’s second assertion regarding the priorities established by the BIA, the Court dissected the collective proceeding model which governs the equitable distribution of the bankrupt’s assets as proposed by the BIA (Orphan Well, para 115). The Court referred to the test provided in Abitibi to determine if a particular regulatory obligation amounts to a claim provable in bankruptcy. The test states,

First, there must be a debt, a liability or an obligation to a creditor. Second, the debt, liability or obligation must be incurred before the debtor becomes bankrupt. Third, it must be possible to attach a monetary value to the debt, liability or obligation (Orphan Well, para 119).

Chief Justice Wagner concluded that the first branch of the test was not met as the Regulator should not be considered a creditor. It had a statutory mandate to regulate the oil and gas industry. Furthermore, the Regulator did not stand to financially gain from recovering the debt. The Regulator’s end-game was to have the environmental work performed for the public and not for an intrinsic benefit. For these reasons, the provincial legislation in question does not conflict with the priorities established by the BIA in ranking which creditors to should paid off first.

It is interesting to note that Justice Sheila Martin, who was excused from this hearing, wrote the dissenting opinion in the ABCA decision and would have allowed the Regulator’s appeal. Chief Justice Wagner refers to her dissenting opinion on more than one occasion.

Dissent

Justice Cotȇ, along with Justice Moldaver, came to the opposite conclusion in their dissenting opinion. They found that the appeal should be dismissed and that there was an operational conflict that creates an inconsistency between the federal and provincial law.

Of particular note are the concerns raised by the dissenting judges regarding the potential for a chilling effect on financing within Alberta’s oil and gas sector. Justice Cotȇ summarizes the concern as follows,

if the estate’s entire realizable value must go toward its environmental liabilities, leaving nothing behind to cover administrative costs, insolvency professionals will have nothing to gain — and much to lose — by stepping in to serve as receivers and trustees, irrespective of whether they are protected from personal liability. Debtors and creditors alike, knowing that this is the case, will have no reason to even petition for bankruptcy. The result is that none of a bankrupt estate’s assets will be sold — not even an oil company’s valuable wells — and the number of orphaned properties will increase (Orphan Well, para 221).

According to the dissent, this flies in the face of the original purpose of the BIA, which was to encourage insolvency professionals to accept mandates and to reduce the number of abandoned sites (Orphan Well, para 221).

Implications of SCC’s Ruling:

This decision is a blow to secured creditors and lenders. In effect, the court’s decision forces receivers and trustees to ensure that they have fulfilled their environmental obligations under the provincial rules before repaying debts to lendors. Prioritizing environmental security over prior debt obligations sends a strong message by the Court that provincially enacted environmental legislation cannot be ignored even in bankruptcy claims. The necessary consequence of this ruling will be fewer options to secure credit on such projects, or more expensive financing options to hedge against the increased risk of defaulting on payments.

As the dissent emphasized, there will also be impact on insolvency professionals. The decision may potentially discourage insolvency professionals from accepting mandates if an estate’s entire realizable value must go towards its environmental liabilities. Such a situation will leave nothing left over as an incentive for the insolvency professionals to get involved in the first place.

Conclusion

The Orphan Well decision is another great example of the application of constitutional doctrines and the role of statutory interpretation in understanding the law. The court grappled with sensitive political considerations concerning environmental legislation vis-à-vis the oil and gas industry in Alberta, but did so within the confines of established doctrines. The issue of abandoned wells is a real one and this decision affirms that environmental obligations can no longer simply take a back seat and remain ignored by the industry.

The post <em>Orphan Well Association v GTL</em>: Constitutional Doctrines Applied to Cleaning Up Old Oil Wells appeared first on TheCourt.ca.

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Introduction

It is by the goodness of God that in our country we have those three unspeakably precious things: freedom of speech, freedom of conscience, and the prudence never to practice either of them.

– Mark Twain, Following the Equator

What does harm to the reputation of a polarizing public figure entail? What is the evidentiary standard for proof of such harm? If determined to be significant, is this harm enough to render one person’s freedom of expression illegal under defamation law? The questions surrounding reputational harm reveal a particular tension present in defamation law. On the one hand, there is a sense that an individual’s reputation ought to be protected from false allegations. On the other, freedom of expression is fundamental to the flourishing of ideas, and comments that are offensive and off-colour should not compromise this central tenet of Canadian society.

Anti-SLAPP (Strategic Litigation Against Public Participation) provisions were created to prevent defamation litigation from silencing discourse on matters of public interest. In Levant v Day, 2019 ONCA 244 [Levant ONCA], however, demonstrates how anti-SLAPP provisions are subject to a balancing analysis that makes them a less than ideal tool for upholding freedom of expression as it relates to defamation law.

Facts

Between May and early June 2016, Robert Day, the appellant, issued a series of tweets aimed at Ezra Levant. A self-described left-wing liberal, Mr. Day’s social media commentary is no stranger to profanity or provocation (Levant v Day, 2017 ONSC 5956 at para 7) [Levant ONSC]. Mr. Levant is a right-wing media commentator, founder of Rebel Media, and no stranger to defamation actions. The subject of the tweets was a fundraising campaign by Rebel News for victims of the Fort McMurray fires.

Specifically, the tweets alleged that Mr. Levant was himself profiting from the donations. Some of the tweets were critical in tone: “I think I see the scam… Ezra will take a tax write-off based on giving out things of ‘value’. What a con” (Levant ONSC at para 11). Others were profane: “By the way, here’s two ways Ezra completely fucked all those Indigogo donors up the ass” (Levant ONSC at para 17). In other tweets, Mr. Day characterized Mr. Levant as “a sleazy opportunist, hack, con artist and grifter” (Levant ONSC at para 20). At the time, Mr. Day had over 11,000 followers on Twitter. In response to the tweets, Mr. Levant brought a defamation action against Mr. Day under the Libel and Slander Act, RSO 1990, c. L. 12 [the “Act”].

Procedural History

Late in the proceedings, Mr. Day moved to dismiss the action under section 137.1(3) of the Courts of Justice Act, RSO 1990, C.43 [CJA]. Under this anti-SLAPP provision, the court may make a preliminary assessment of the merits of the defamation claim. The purpose of this provision is to protect individuals engaging in important public debate, as well as to discourage the use of defamation litigation to limit public discourse. Under a section 137.1(3) motion, a defendant (Mr. Day) may move to dismiss a defamation suit when it can be established that the expression in question deals with a matter of public interest [CJA s. 137.1(3)]. Once the public interest is established, the plaintiff (Mr. Levant) must prove that the action has substantial merit, that the defendant has no valid defence, and that the harm that the plaintiff has suffered or is likely to suffer is “sufficiently serious” to outweigh the public’s interest in protecting the impugned expression (Levant ONSC at para 2).

The Ontario Superior Court of Justice held that the impugned expression did not relate to a matter of public interest and that the tweets were instead “thinly veiled attacks on Mr. Levant” (Levant ONSC at para 24).  In the event that this finding was incorrect, the motion judge proceeded to the next stage of the test.

First, Justice Brown held that the claim has substantial merit since the tweets were directed at Mr. Levant, were published to be publicly read, and were intended to harm Mr. Levant’s reputation (Levant ONSC at paras 27-33).

Second, the motion judge found that the Mr. Day had no valid defences. The defence of fair comment was not available since Mr. Day had portrayed his tweets as facts rather than comments, and he continued even after he was informed of their inaccuracy (Levant ONSC at para 40). The defence of no notice under section 5(1) of the Act was also unavailable since the motion judge held that the tweets are not necessarily subject to the Act.

Third, the motion judge held that the real or potential harm to Mr. Levant was sufficiently serious to outweigh the public interest underlying section 137.1(3) motions under the CJA. Mr. Levant argued that there was in fact a greater public interest in protecting the reputation of those raising funds for causes from a “relentless and baseless attack […] which [would] also have the effect of chilling charitable fundraising campaigns” (Levant ONSC at para 52). The motion judge accepted that the reputational harm outweighed the public interest since Mr. Day’s tweets were directed at Mr. Levant and were presented as facts rather than comments.

Having found that Mr. Day’s tweets did not engage a matter of public interest, and in the alternative, did not meet test under section 137.1(3) of the CJA if they did deal with a public interest, the motion judge refused the motion and ordered that the defamation claim proceed to trial.

The Court of Appeal

Mr. Day appealed the motion judge’s decision not to dismiss the action in accordance with the anti-SLAPP provisions of the CJA on the basis that the judge erred in three conclusions:

  1. The appellant’s tweets did not relate to a matter of public interest.
  2. The defence of fair comment was not available to the appellant and that the notice provisions of the [Act] are inapplicable to Internet publications.
  3. The public interest in allowing the proceeding to continue outweighed the public interest in protecting the appellant’s expression. (Levant ONCA at para 1)

In addition to appealing the costs order issued against him, Mr. Day contended that since the expression did indeed relate to a matter of public interest, and since Mr. Levant had failed to provide evidence of any harm to his reputation, the action should have been dismissed. The Court of Appeal dismissed the appeal.

Writing for the court, Justice Pardu first revisited the purpose of the anti-SLAPP provisions in the CJA. The concern underlying these provisions is that defamation actions will discourage individuals from engaging in discourse on matters of public interest. The provisions, therefore, serve to “promote broad participation in debates” and “discourage the use of litigation as a means of unduly limiting expression on matters of public interest” (Levant ONCA at para 8). Additionally, the provisions attempt to counteract or reduce any chilling effect on expression created by the threat of a defamation suit.

Justice Pardu noted that the ONCA’s ruling in 1704604 Ontario Ltd. v Pointes Protection Association, 2018 ONCA 685 [Pointes] had not been released when Levant ONSC was decided. While the motion judge determined that Mr. Day’s tweets were best characterized as personal attacks as opposed to comments on a matter of public interest, Pointes adopts a broad definition of the anti-SLAPP’s public interest requirement. In Levant ONCA, the Court provides further clarification on the concept of public interest: “An expression may relate to more than one matter. If one of those matters is a ‘matter of public interest’, the defendant will have met its onus” (Levant ONCA at para 10, quoting Pointes at para 65).

Given this clarification, the motion judge’s focus on the merits of the allegation, the nature of the expression itself, and Mr. Day’s motives were an error of law. Mr. Day’s motive is distinct from the subject matter of the tweets, and should have been considered separately. When the tweets are examined for their subject alone, the Court held that they do indeed relate to a matter of public interest. Whether or not the fundraising campaign run by Rebel Media and Mr. Levant was legitimate, and whether the funds raised were making their way to the citizens affected by the Fort McMurray fires was a matter of public interest. While the analysis would normally stop with this finding, the Court continued to cover all the grounds of appeal.

The Court proceeded to consider whether Mr. Day could produce any valid defences, which the motion judge was satisfied he could not. Drawing again from the Court’s recent ruling in Pointes, Justice Pardu noted at this stage a motion judge must decide “whether a conclusion that the defendant has no valid defence falls within ‘the range of conclusions reasonably available on the motion record’” (Levant ONCA at para 14). This means that there are a myriad of ways the trier of fact might conclude that there is no valid defence to the action. If such a conclusion is reasonable, the analysis proceeds to the next and final stage. Here the motion judge had several options: she could have held that s. 5(1) of the Act did not apply to Twitter, or that the impugned expression did not satisfy the defence of fair comment. No errors were made, therefore, at this stage.

In the final stage of analysis, the Court turned to the balancing that must be performed between the reputational harm suffered or likely to be suffered on one hand, and the public interest in protecting the impugned expression. As the Court noted in Pointes, insignificant reputational harm does not outweigh the importance of protecting freedom of expression as it relates to matters of public interest (Levant ONCA at para 17). Here the Court held that “the statements attribute serious criminality to the respondent” (Levant ONCA at para 19). This suggestion amounted to serious reputational harm. While Mr. Day argued that Mr. Levant’s reputation and work with Rebel Media has already resulted in a bad reputation, the Court held that a bad reputation (though it made no finding on this question) was distinct from “a reputation tainted with criminal conduct depriving innocent victims of charitable donations” (Levant ONCA at para 19). The Court is clear to note that the vulgar nature of the tweets themselves do not cause harm. Instead, deliberately peddling falsehoods over a sustained period of time tips the balance in favour of the harm to Mr. Levant outweighing the public’s interest in protecting Mr. Day’s tweets.

Concluding Thoughts

While proportionality has become a core component of most rights adjudication, this case demonstrates what we may lose when we resort to balancing: principled rights protection. Far from rigorous, the proportionality analysis here hinges on judicial discretion. Another panel may have found that Mr. Day’s tweets engaged in a matter of public interest and this expression outweighed the harm to Mr. Levant’s reputation. Yet another panel may have held that the harm to Mr. Levant’s reputation would have been insignificant but for the publicity the tweets gained through the defamation litigation itself. Throughout the ruling, the motion judge seemed particularly concerned with the fact that this motion to dismiss was brought late in the proceedings (Levant ONSC at paras 4–5). As a result, the motion judge appeared to have been receptive to Mr. Levant’s argument that Mr. Day was engaged in a stalling technique.

How Twitter fits into defamation law must be clarified further. What we see in Levant are two sides taking their Twitter battle offline and into the justice system where courts must sift between equally unappealing positions to strike a balance between freedom of expression and protection of reputation. The underlying question is how defamation law should evolve to better respond to an age of public discourse through ‘280-characters or less’ communication. The Law Commission of Ontario has embarked on a project entitled “Defamation Law in the Internet Age” which seeks to provide recommendations for updates to defamation law in light of internet communications. Like it or not, public discourse is now dominated by social media and an update to defamation law is long overdue.

The post Defamation in the Twitterverse: <em>Levant v Day</em> appeared first on TheCourt.ca.

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Until late March 2019, when Justice Boswell struck down s.112(2)(b.1) of the Immigration and Refugee Protection Act, SC 2001, c 27 [IRPA], refugee claimants from certain “designated” countries were required to wait for two years longer compared to all other refugee claimants for a risk assessment of their removal from Canada. Justice Boswell ruled that s.112(2)(b.1) discriminated against applicants from such “designated” countries on the basis of national origin compared to applicants from non-designated countries. He found that s.112(2)(b.1) was discriminatory based on national origin contrary to s.15(1) of the Canadian Charter of Rights and Freedoms [Charter], not justified under s.1, and therefore, of no force and effect immediately.

Between 2010-2012, Canada introduced reforms to its immigration and refugee laws to speed up the way refugee claims are processed. Canada designated certain countries as “safe” and relatively unlikely to produce refugees and amended its laws to subject the refugee claimants from these countries to a different process. For example, applicants from “designated” countries were excluded from accessing medical care pending the resolution of their claim, could not obtain employment, and did not have many of the procedural protections guaranteed to all other refugee claimants. The legislation aimed to inhibit “bogus” refugee claims and reduce waiting times in the system. However, Justice Boswell’s decision in Feher v Canada (Minister of Public Safety and Emergency Preparedness), 2019 FC 335 [Feher] marks the third time that the Federal Court has struck down aspects of the DCO scheme enacted in 2012 as unjustifiably contrary to equality guarantees under the Charter.

This case comment analyzes the Feher decision in the context of the DCO regime. The DCO-designation process has been widely criticized for a lack of clear and precise criteria for designation and for being inconsistent with Canada’s international obligations for refugee protection which oblige Canada to assess refugee claims on an individual basis.

The Legislative Context of the Designated Country of Origin (DCO) Regime

Under the IRPA as it was first enacted, all refugee claimants who had enforceable removal orders pending against them were entitled to a pre-removal risk assessment (“PRRA”) if they alleged a risk of torture, or risk to life or cruel treatment following removal from Canada. The assessments were a last-stop measure to ensure that refugee claimants were not deported into dangerous and life-threatening conditions. The original provisions in s.112(2) of the IRPA contained no time limitation on when claimants could make a PRRA application (Feher, para 19). However, after the Canadian government concluded that the immigration and refugee system in Canada had become backlogged, inefficient, and in need of reform, the Canadian government introduced amendments to the IRPA in 2010.

Canada’s stated aim was to speed up the processing of refugee claims and to inhibit “bogus” claims from slowing it down. In 2010, it enacted a revised s.112(2)(b) of the IRPA, which prohibited any person who had previously applied for a PRRA which was rejected, abandoned or withdrawn from applying for a new risk assessment for at least 12 months (Feher, para 20). In 2012, in a further measure, Canada introduced a different process for countries deemed “safe” and unlikely to produce refugees: the DCO regime. Countries designated as safe under the DCO regime include, for example, the United States and all EU countries except Bulgaria and Romania. Claimants from these countries were to be subjected to a different process than claimants from non-DCOs.

Section 112(2)(b), which bars refugee claimants facing removal from Canada from seeking another risk assessment for 12 months following an unsuccessful or abandoned claim, was also amended in 2012. The amendment introduced a new exception. Under s.112(2)(b.1) of the IRPA, refugee claimants from DCOs were now to be prohibited from seeking a new PRRA for 36 months following an unsuccessful, withdrawn, or abandoned claim. In effect, while for the first 12 months, all unsuccessful refugee claimants were equally banned from submitting a new PRRA application, s.12(2)(b.1) subjected refugee claimants from DCOs to an additional waiting period of two years.

The amendments in the IRPA included other procedural differences between DCO and non-DCO claimants. For example, non-DCO nationals are entitled to a work permit while awaiting a PRRA decision, while DCO nationals are not. Equally, non-DCO nationals benefit from a stay of removal while they wait for a PRRA decision to be made; DCO-nationals may be removed from Canada before any decision is made regarding a new PRRA. Finally, a non-DCO national need only show more than a mere possibility that their removal would expose them to persecution or risk in order to be successful on a PRRA application; a DCO national needs to show on a balance of probabilities that removal would expose them to death, extreme sanction, or inhumane treatment in order to be successful on a deferral request (Feher, para 188).

As mentioned, courts have previously struck down aspects of the DCO regime as inconsistent with s.15(1) of the Charter. In Canadian Doctors for Refugee Care v Canada (AG), 2014 FC 651 [Canadian Doctors], Justice Mactavish found that the restrictions on access to health care for DCO claimants violated s.15 of the Charter. In Y.Z. v Canada (Citizenship and Immigration), 2015 FC 892 [Y.Z.], Justice Boswell found that the denial of access to appeals at the Refugee Appeal Division (“RAD”) for refugee claimants from DCOs, a restriction that non-DCO applicants were not subjected to, was also a violation of s.15 of the Charter.

Hungary has been designated under the DCO regime since the regime was enacted in 2012. In Feher, Justice Boswell considered whether a group of refugee claimants from Hungary, who were all of Romani descent, were discriminated against contrary to s.15 equality guarantees. All had been subject to enforceable removal orders from Canada and had applied for risk assessments, but were subjected to a 36-month waiting period, compared to the 12-year period for refugee claimants from non-DCO countries.

The Facts and Evidence in Feher

The applicants argued that the purpose and effect of s.112(2)(b.1) of the IRPA was to single out all DCO nationals, based solely on their nationality, from the pool of unsuccessful refugee claimants and to deny them access to a PRRA for a further 24 months. The Canadian government argued that s.112(2)(b.1) was a recognition of “the [different] conditions existing within a country” (Feher, para 211), and was not about nationality. The government put forward that DCOs were countries that respected human rights, offered state protection, and normally did not produce refugees (Feher, para 214), and that classifying countries based on distinctions in the social, political, and economic conditions existing within them did not “perpetuate prejudice or stereotyping on the grounds prohibited in section 15(1) of the Charter” (Feher, para 211).

Section 109.1 of the IRPA governs how a country is designated and establishes quantitative and qualitative “triggers” for designation (Feher, para 214). The quantitative triggers include a statistical evaluation of how many claims from a given country are abandoned, withdrawn, or found genuine in Canada. The qualitative triggers examine whether the country has an independent judicial system, affords democratic rights and freedoms guaranteed by mechanisms for redress, and ensures space for civil society organizations (Feher, para 214). While there is no express provision set out in the IRPA for removing a country’s designation, a process for doing so was established in 2014. The process involves monitoring all DCOs for significant deterioration in country conditions, but in practice no DCO has thus far been un-designated (Feher, para 25).

At trial, aside from evidence produced by the applicants themselves, who all claimed discrimination based on their Romani ethnicity, and their Hungarian nationality based on s.112(2)(b.1) of the IRPA, the applicants led expert evidence on stereotyping and discrimination in Canada’s immigration and refugee system. The evidence included research by professors from Osgoode Hall Law School, Sean Rehaag and Janet Mosher.

The expert evidence included academic research that presented evidence of prejudice against people of Romani descent within Canada’s immigration system, both current and historic, as well as a historic tendency of Canada’s immigration system to single out and exclude groups of people. Research also suggested that perceptions of a “safe” country drove perceptions that claimants from these countries presented “bogus” refugee claims; in turn, these perceptions created stereotypes against claimants and pushed them out of Canada’s immigration system (see Feher, para 103). Professor Mosher attached as exhibits to her affidavit the speaking notes of former Minister of Citizenship and Immigration, Jason Kenney, announcing amendments to Canada’s immigration and refugee legislation, in which he suggested that refugees from certain countries were “bogus claimants” (Feher, paras.104, 201-205). The applicants argued that the “blanket tarring of DCO nationals as being frauds and cheats had a punishing impact on the dignity of the individual Applicants” in the case (Feher, para 202). They argued that instead of “using a surgical tool to target non-meritorious claims” such as an extended PRRA bar for refugee claims found to be manifestly unfounded or having no credible basis, Parliament instead chose to use nationality as a substitute (Feher, para 207).

In response, the government presented expert evidence of EU-level programs from 2010 aimed at redressing historical marginalization of Roma people, the free movement of people within the EU as an alternative to seeking protection abroad, and conditions in Hungary meeting EU values and rule of law principles, including prohibitions on ethnic discrimination. One of the expert witnesses for the Canadian government noted, however, that “EU asylum applications will be declared inadmissible and will not be considered, unless there are exceptional circumstances” (Feher, paras.112).

Although the government sought an order to strike all or parts of eight affidavits filed by the Applicants on the grounds that they were irrelevant, unnecessary or contained improper opinion evidence (Feher para 46). Justice Boswell denied the application and found no prejudice.

Section 112(2)(b.1) of the IRPA: Charter Infringement or Recognition of Country Conditions?

The test for a s.15(1) infringement is set out in Centrale des syndicats du Quebec v Quebec (Attorney General), 2018 SCC 18 [Centrale des syndicats], where Justice Abella explains: “[w]hen assessing a claim under s.15(1), […] jurisprudence establishes a two-step approach: Does the challenged law, on its face or in its impact, draw a distinction based on an enumerated or analogous ground, and, if so, does it impose ‘burdens or [deny] a benefit in a manner that has the effect of reinforcing, perpetuating or exacerbating […] disadvantage’, including ‘historical’ disadvantage?” (Centrale des syndicats, para 22).

At the first step of the analysis, Justice Boswell had little difficulty answering in the affirmative (Feher, paras 240-246), concluding that “the differential treatment in paragraph 112(2)(b.1) is clearly a distinction based on the national origin of a refugee claimant [because] [i]f the claimant comes from one of the countries designated under subsection 109.1(1) of the IRPA, he or she will be without the potential benefit of a PRRA until 36 months have passed since their claim […] was last rejected or determined to be withdrawn or abandoned” whereas in contrast, claimants from non-DCO countries were only required to wait 12 months (Feher, para 246).

What played the major role in Justice Boswell’s conclusion were the submissions regarding how states are designated as DCOs. First, he found that “it is not persuasive that the DCO regime is a proxy for safety” (Feher, para 248): in 2014, 57.3% of Hungarian claims were accepted at the Refugee Protection Division, an acceptance rate that was higher than that of some of the non-DCO countries such as Angola (44.4%), Burundi (54.2%), China (52.7%), Democratic Republic of the Congo (46.7%) and others (Feher, para 248). Second, he found that the decision to designate a country as “safe” was made without regard to individual claimants: the “distinction is made without regard to a claimant’s personal characteristics or whether that country is safe for them” (Feher, para 249). Third and finally, Justice Boswell noted that there is no express provision for de-designating a country, and that, while a policy is in place that allows the Minister to remove a country’s designation, “[a]ll that means is that the Minister could stop drawing distinctions based on national origin in the future, and claimants have no control over when that might be” (Feher, para 250).

At the second step of the s.15 infringement test, Justice Boswell found that s.112(2)(b.1)’s discrimination based on national origin does create a disadvantage by perpetuating prejudice or stereotyping. He noted the evidence of the Canadian government that one of the aims of the DCO regime was to deter abuse of the system by “non-genuine claims” (Feher, para 253). The DCO regime creates a presumption that refugee claimants from some countries which are generally considered safe and “non-refugee producing” are likely to be “bogus claimants” (Feher, para 254). He concluded that “persons directed affected by paragraph 112(2)(b.1) undoubtedly include many claimants who are not abusing the system or making bogus claims” (Feher, para 254).

Conclusion

DCO claimants face inferior procedural safeguards compared to non-DCO refugee claimants. With Feher, the Federal Court has now struck down three aspects of the DCO regime: the provision against DCO claimants from accessing healthcare in Canadian Doctors, the provision against DCO claimants’ access to the Refugee Appeal Division (RAD) in Y.Z., and DCO claimants’ longer waiting period for a pre-removal risk assessment in Feher.

The main problem with the DCO regime is that it is in tension with Canada’s obligations under international law to assess refugee claims on an individual basis. Although all refugee claimants in Canada have access to process, the DCO scheme prejudges claims according to set criteria in a process that does not focus on the individual by its nature. The regime streamlines DCO claimants into an inferior process. At the same time, a significant number of countries that have been designated as “safe” fail to protect the human rights of minority groups, including ethnic groups and members of the LGBTQ community, while refugee protection within the EU by nationals of EU countries are sometimes difficult to obtain. Although some provisions of the DCO regime have now been struck down, other aspects of the regime remain, such as the lack of the possibility to work in Canada until a DCO claimant has been in the country for 180 days (s 206(2) of the IRPA), and the lack of a statutory stay of removal pending a judicial review of a Refugee Appeal Division decision in Federal Court, among others.

The post <em>Feher v Canada</em>: Strike three against the “safe country” list in Canada’s refugee law appeared first on TheCourt.ca.

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Today (March 29) the Supreme Court of Canada (“SCC”) will hear the intellectual property case of Keatley Surveying Ltd v Teranet Inc, 37863 [Keatley] about the issue of copyright in land surveys. Keatley Surveying Ltd (“Keatley”) brought a proposed class action on behalf of all land surveyors in Ontario against Teranet Inc (“Teranet”), a private company operating Ontario’s electronic land registry system (“ELRS”). Keatley claims that Teranet infringed surveyors’ copyright in drawings, maps, and charts (collectively “plans of survey”) by digitizing, storing, and copying them to be accessed by the public for a fee. The question is whether the surveyors’ copyright transfers to the Province of Ontario after the plans of survey have been deposited into the ELRS. If so, Teranet would not be liable for any copyright infringement because they operate pursuant to a license granted by the provincial government.

Perhaps this is not self-evidently legal blockbuster material. Still, many in the legal community are watching this appeal closely. This is primarily so because the SCC will be asked to determine a question with potentially wide-reaching implications—the scope of Crown copyright under section 12 of the Copyright Act, RSC 1985, c C-42 [“CA”]. A holding on this section could dictate whether or not governments and their service providers can assert that copyright has been transferred to them when—through statutory schemes—they digitize and copy private works and make them available to the public. For this reason, Keatley has attracted intervenors such as the Canadian Legal Information Institute (“CanLII”), the Canadian Association of Law Libraries, and the Centre for Intellectual Property Policy. These intervenors believe the case has broad implications for the freedom to access and use public documents in Canada, including public legal documents. I will discuss the background and judicial history of Keatley before analyzing some of the public policy considerations before the SCC.

Background

Land surveyors are a self-governing association of professionals in Ontario who create plans of survey. These plans provide property owners with an accurate determination of the dimensions of their property. As the Ontario Court of Appeal (“ONCA”) notes in Keatley Surveying Ltd v Teranet Inc, 2017 ONCA 748 [Keatley 2017] a land registration system in which copies of plans of survey have been available on request for a fee has existed for some 200 years in Ontario (para 10). In 1991, Teranet and the Ontario government began the joint project of creating the ELRS. No portion of the fees that users are charged is paid to the surveyors (Keatley 2017, para 10).

Judicial History and s 12 of the Copyright Act

Much of the early litigation in this copyright dispute revolved around the issues of certification of class proceedings and costs (see Keatley Surveying Ltd v Teranet Inc, 2012 ONSC 7120 [Keatley 2012] and Keatley Surveing Ltd v Teranet Inc, 2014 ONSC 3690). The case finally came before the court for a decision on the merits in 2016 with Keatley Surveying Ltd v Teranet Inc, 2016 ONSC 1717 [Keatley 2016], presided over by motion judge Belobaba J.

Teranet’s Core Argument 

From the beginning, the parties agreed that plans of survey are copyrightable as “artistic works” (see Keatley 2012, para 4). The contentious issue was who holds the copyright in these works. Keatley plead that surveyors hold the rights and that since s 3(1) of the CA gives copyright owners exclusive right to reproduce and publish a work, Teranet infringed these rights (Keatley 2012, para 178). Defences like fair dealing apply if Teranet does not own the copyright or is not properly licensed, but Teranet’s key argument is that copyright in the plans of survey is transferred to the Province of Ontario. Writing for the judicial panel at the ONCA, Doherty JA agreed with Belobaba J and Teranet that the Province of Ontario is the copyright holder due to the operation of s 12 of the CA, the “Crown copyright” provision.

Section 12 of the Copyright Act 

Section 12 provides that copyright will be held by the Crown for 50 years if a work is “prepared or published by or under the direction or control” of the Crown. This section has two branches to it: 1) works that are prepared under the direction or control of the Crown and 2) works that are published under the direction or control of the Crown. While neither court held that the plans of survey were “prepared” by or under the Crown, they both found that the plans were “published” in this fashion. They had different reasons for arriving at the same conclusion.

Differing Approaches at the Motion and Appeal Level

Belobaba J’s approach relied more heavily on an analysis of provincial legislation such as the Registry Act, RSO 1990, c R 20 and the Land Titles Act, RSO 1990, c L 5 (Keatley 2016, paras 6-9). In the appeal Keatley issued a notice of constitutional question, contending that Belobaba J’s judgement generated a vires problem. Section 89 of the CA clearly provides that “[n]o person is entitled to copyright otherwise than under and in accordance with this Act or any other Act of Parliament.” Therefore, Keatley asked how the Province could decide when copyright subsists and when it may be taken away given its lack of constitutional authority over this federal area of law. Doherty JA for the ONCA wrote: “I would not describe the applicable provincial legislation as transferring ‘ownership’ of the copyright to the Province.” Rather, it is “s 12 of the Copyright Act that vests copyright in the Crown…” (ONCA, para 54). This more exclusive focus on s 12 appears to correct the vires problem. At the same time, there are some remaining public policy issues that Keatley and several intervenors are hoping the SCC will be alive to.

Will the Scope of Crown Copyright be Interpreted Differently by the SCC?

The ONCA determined that “any work” that is prepared or published by or under the direction and control of the Crown could be interpreted as one where copyright vests with the government (Keatley 2017, para 29). The ONCA’s interpretation of the word “published” is wide enough to raise some concerns. Due to the ambiguity within the text of s 12, the SCC arguably has some room to maneuver in choosing an interpretation that is faithful to Parliament’s intent and the purpose of the provision, that also has positive public policy consequences in the context of our ever-changing digital economy and society. An expansive interpretation could mean that the Crown can expropriate pre-existing copyright from authors of a work when this work is given to government authorities in abidance with regulatory requirements. Interpreting s 12 more narrowly could limit the scope of Crown copyright to works commissioned by the government and created by government employees and agents. This latter position would be in line with the argument that Crown copyright is needed to ensure the accuracy and integrity of government works. It would also reflect what the SCC has stated previously in Théberge v Galerie d’Art du Petit Champlain inc, 2002 SCC 34 (para 30), that copyright law should be applied to strike a balance between rewarding authors and disseminating creative works to the public.

Criticism of Crown Copyright

Crown copyright has been criticized by David Vaver, who notes it has the potential for “unfairness to certain authors.”  Others have more bluntly called s 12 a “legislative monstrosity” for its ambiguity despite it being only 85 words long.[1] Needless to say, comprehensive reform of s 12 would be the business of the legislature, not the SCC. However, the SCC has agreed to hear intervenors who will make a number of arguments about how interpreting s 12 too broadly may have negative reverberations, especially in an era when we’re trying to have greater access to justice, which includes access to law and legal documents.

Possible Application of Section 12 to Public Legal Documents

Canadian courts have not yet commented on whether s 12 of the CA includes public legal documents. Wagner CJ has said in remarks that judges need to “provide better access to justice for Canadians” including “access to information.” An overly broad scope for Crown copyright seems at odds with current notions of Open Government and “with democracy more generally,” as Luanne Freund and Elissa How have written.[2] It does so by placing restrictions on the reuse of “government” materials. Such a situation could enable the government to charge fees, institute overly restrictive terms of use, or otherwise limit access to public legal documents that could impede the public’s ability to review legal information, know their legal rights and responsibilities, advocate for themselves in court, and participate in legislative processes. There may be disproportionate effects on individuals and organizations that cannot afford to pay for access to primary legal materials, including academic researchers, innovative start-ups, and self-represented litigants. Intervenors in Keatley like CanLII no doubt want to set a precedent that could limit s 12 such that Crown copyright cannot be used as a device to withhold or limit the exchange of information. CanLII stands to benefit from a climate of more frictionless digital documentation, and arguably so does the public.

Concluding Thoughts

Were Wagner CJ and his fellow justices to agree that a wide scope for s 12 of the CA has negative public policy implications, they could turn to the SCC’s decision in Marzetti v Marzetti, [1994] 2 SCR 765 for the proposition that public policy considerations are relevant when applying a purposive approach to statutory interpretation (paras 85-87). The original purposes of Crown copyright, Elizabeth Judge argues:

either no longer apply or, where they do continue, can be better served by other legal or technological means than asserting ownership over the materials and controlling the means of reproduction. Copyright, in short, is not the best way to achieve the public purposes for which the Crown copyright system was designed.

If the original purposes of s 12 are no longer as relevant today, there may be other ways for Parliament to achieve its objectives that are more in keeping with its current commitments to openness and access to justice. Before the internet, Crown copyright was a way to recoup costs in the copying, printing, publishing and shipping of documents. In a post-internet world where dissemination is largely electronic and inexpensive, the underlying rationale for Crown copyright is weakened. Returning to the instant case, I believe there are genuine questions about Teranet’s business model insofar as it denies the copyright claims of Ontario land surveyors. The SCC has an opportunity to overturn the ONCA and set a precedent that many would keenly welcome, including copyright reformers and open government advocates, not to mention the land surveyors of Ontario.

[1] Barry Torno, “Crown Copyright in Canada: A Legacy of Confusion” (Department of Consumer and Corporate Affairs Canada, 1981) 49.

[2] Luanna Freund and Elissa How, “The Quagmire of Crown Copyright: Implications for Reuse of Government Information” (2015), 40 Can L Libr Rev 11.

The post <em>Keatley Surveying Ltd v Teranet Inc</em>: The SCC’s Crown Copyright Case appeared first on TheCourt.ca.

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Online communication platforms give people the tools to engage in meaningful and productive ways, but also have given predators the opportunity to connect with children without any supervision for the purposes of grooming them to be abused. Online communications give adults the opportunity to build rapport with children to facilitate sexual communications and potentially sexual offences against the children. Accordingly, Parliament has criminalized telecommunications with children for the purposes of facilitating sexualized discussions or the commission of offences against children.

In s. 172.1 of the Criminal Code, R.S.C. 1985, c. C-46, Parliament criminalizes communication with children for the purposes of facilitating the commission of other criminal offences, including sexual interference. In doing so, Parliament added additional sections that created presumptions that an accused person was aware that they were speaking with someone under the age of 16, though these presumptions were rebuttable with evidence that an accused person took “reasonable steps” to determine they were not speaking to a child. In R v Morrison, 2019 SCC 15, the Supreme Court of Canada (“the Court”) considered the constitutionality of the offence of child luring, the statutory presumptions created by Parliament, and the minimum penalties for the offence.

The provisions in the Criminal Code dealing with child luring read as follows:

172.1 (1) Every person commits an offence who, by a means of telecommunication, communicates with

(a) a person who is, or who the accused believes is, under the age of 18 years, for the purpose of facilitating the commission of an offence with respect to that person under subsection 153(1), section 155, 163.1, 170, 171 or 279.011 or subsection 279.02(2), 279.03(2), 286.1(2), 286.2(2) or 286.3(2);

(b) a person who is, or who the accused believes is, under the age of 16 years, for the purpose of facilitating the commission of an offence under section 151 or 152, subsection 160(3) or 173(2) or section 271, 272, 273 or 280 with respect to that person; or

(c) a person who is, or who the accused believes is, under the age of 14 years, for the purpose of facilitating the commission of an offence under section 281 with respect to that person.

(2) Every person who commits an offence under subsection (1)

(a) is guilty of an indictable offence and is liable to imprisonment for a term of not more than 14 years and to a minimum punishment of imprisonment for a term of one year; or

(b) is guilty of an offence punishable on summary conviction and is liable to imprisonment for a term of not more than two years less a day and to a minimum punishment of imprisonment for a term of six months.

 (3) Evidence that the person referred to in paragraph (1)(a), (b) or (c) was represented to the accused as being under the age of eighteen years, sixteen years or fourteen years, as the case may be, is, in the absence of evidence to the contrary, proof that the accused believed that the person was under that age.

(4) It is not a defence to a charge under paragraph (1)(a), (b) or (c) that the accused believed that the person referred to in that paragraph was at least eighteen years of age, sixteen years or fourteen years of age, as the case may be, unless the accused took reasonable steps to ascertain the age of the person.

S. 172.1(3) creates a presumption that the accused knew they were speaking with a child if the person they were speaking to indicated in some way that they were a child, unless the accused is able to provide evidence to the contrary. In s. 172.1(4), an accused person cannot rely on the defence that they believed that the person they were communicating with was an adult, unless they took “reasonable steps to ascertain the age of the person” (Criminal Code, s. 172.1(4)). Therefore, if the accused person communicates with someone they believe to be a child for the purposes of facilitating one of the offences listed in s. 172.1, then the accused is guilty of an offence unless they can show that there was evidence that the accused did not believe they were talking to a child, or they were mistaken about the age of the other person despite taking reasonable steps to ascertain their age.

Case History

Mr. Morrison was charged with child luring under s. 172.1. Mr. Morrison posted an online ad on Craigslist seeking sexual conversations and that he was interested in younger girls. When police contacted Mr. Morrison posing as a 14 year old girl named “Mia”, Mr. Morrison facilitated sexual discussions, asked for photographs and eventually arranged to pick “Mia” up from school. After being charged with child luring, he argued that he believed that he was speaking to an adult online and was engaged in role play with someone playing the character of a 14 year old girl.

Mr. Morrison brought three Charter challenges before the court.  First, he argued that s. 172.1(3) violated his right to be presumed innocent under s. 11(d).  Second, he argued that the presumptions in s. 172.1(4) were not in accordance with the principles of fundamental justice, violating s. 7 of the Charter.  Finally, he argued that the mandatory minimum penalties under s. 172.1(2)(b) were in violation of s. 12.

At the Supreme Court, the Court examined the three issues of the s. 11(d) violations, the s. 7 violations and the s. 12 violations. The majority decision, written by Justice Moldaver , addresses the first two issues but leaves aside the s. 12 considerations. A concurring decision, written by Justice Karakatsanis addresses the s. 12 issues.  Justice Abella dissents in part, finding that s. 172.1(4) is also in violation of s. 7 and s.11(d) and therefore is unconstitutional.

The Presumption of Innocence and Presumptions in S. 172.1(3)

S. 11(d) of the Charter protects the right of an accused person to be presumed innocent. The presumption of innocence means that someone can only be convicted if the Crown proves its case beyond a reasonable doubt. The right to be presumed innocent will be violated by “any provision whose effect is to allow for a conviction despite the existence of reasonable doubt” (Morrison, para 51). In order for a statutory presumption that one has committed an offence to comply with section 11(d) of the Charter, the link between the conduct giving rise to the presumption and the conduct that actually constitutes the offence must be “inexorable” (Morrison, para 53).

Under s. 172.1(3), an accused person is presumed to believe they are speaking to a child online if the person they are communicating with is presented as a child unless they are able to bring evidence that they did not believe they were communicating with a child. Even though the accused has an opportunity to rebut the presumption, Justice Moldaver still finds that the presumption violates s. 11(d). The relationship between someone presenting themselves as a child online and that person actually being a child is not “inexorable”. Because online communications are inherently unreliable, a trier of fact may be left with reasonable doubt about whether the accused believed that they were communicating with a minor, but would still have to convict them of an offence unless the accused was able to rebut the presumption in s. 172.1(3). The presumption cannot be saved under s. 1 of the Charter because it is not minimally impairing—it would still be possible for the accused to be convicted if the trier of fact is satisfied beyond a reasonable doubt that the accused person believed they were contacting a child, a conclusion they can come to by drawing inferences about the circumstances of the case (Morrison, para 71).

The Principles of Fundamental Justice

Some criminal offences require a “purely subjective” mens rea, meaning that the accused subjectively knew that they were committing an offence, while other offences require subjective or objective mental elements. For offences that carry a high penalty and social stigma, a purely subjective mens rea will be required by the principles of fundamental justice. Although child luring does have a high level of social stigma and substantial penalties, Justice Moldaver is not satisfied that this rises to the level of requiring a purely subjective mens rea, though he does not come to a firm conclusion on this point  (Morrison para 79).

S. 172.1(4) prevents the accused from availing themselves of the defence of mistaken belief that they were talking to an adult unless the accused had taken all reasonable steps to ascertain the age of the other person. This section does not create a separate path to conviction, it simply limits a defence and therefore does not violate s. 7 of the Charter (Morrison, para 80). Instead, the Crown has to either prove that the accused believed they were speaking to a minor or that they were willfully blind as to whether the other person was underage.

In Mr. Morrison’s case, Justice Moldaver found that the trial judge convicted Mr. Morrison on the erroneous understanding that he could be convicted on the basis that he failed to take reasonable steps. Because the Crown’s case was substantial despite the errors the trial judge made, Mr. Morrison should be granted a new trial as opposed to an acquittal (Morrison, para 141).

The Mandatory Minimum Sentence

Under s. 172.1, if the Crown proceeds by way of indictment in a child luring case, there is a mandatory one year minimum sentence. Although Justice Moldaver does not address the issue of the constitutionality of the mandatory minimum, Justice Karakatsanis holds that the mandatory minimum violates s. 12 of the Charter because of the wide range of behaviours that constitute an offence under s. 172.1 of the Criminal Code.  The majority decision remits the issue of the mandatory minimum penalty back to the trial judge.

Justice Abella’s Decision on the Constitutionality of s. 172.1(4)

Although Justice Abella concurs in part with the result, she takes a very different approach to s. 172.1(4), and disagrees with Justice Moldaver that there is only one path to conviction for child luring. Instead, s. 172.1(4) provides a second path to conviction because it imports an objective element into the mens rea, separate from the subjective mens rea. For Justice Abella, this objective element is concerning because of the wide range of behaviours that are criminalized by the child luring provisions.

Child luring becomes an offence only when the accused is contacting a child for the purposes of facilitating one of the other offences listed in s. 172.1. However, online predators often begin communications with children through “ostensibly innocuous conversations” which could include discussions about the child’s interests and personal life. It is only the intent of the accused person that grounds the offence of child luring (Morrison, para 200). For Justice Abella, it is the accused’s belief that they are communicating with a child that constitutes the “sole difference between innocent online discourse and criminal child luring” (Morrison, para 203). Because the only mental element of this offence is subjective, then s. 172.1(3) is unconstitutional because it creates an objective component to the mens rea.

Under s. 172.1(4), an accused person can show that they took reasonable steps to ascertain the age of the person they were communicating with to show that they had a mistaken belief they were not communicating with a child. In the majority decision, Justice Moldaver includes some examples of how someone may take reasonable steps to ascertain someone else’s age online including asking for a photo of the other person (Morrison para 112).  However, the “reasonable steps” outlined by Justice Moldaver in the majority opinion are in many cases evidence of child luring in themselves. There are few reliable ways to ascertain one’s age online, especially when communicating with children who may not have access to government-issued identification, so many of the potential steps the majority says an accused person could have taken are, in and of itself, potential evidence of child luring. Asking for photographs or asking about one’s family or schooling is exactly what someone luring a child might do in order to groom and facilitate a relationship that could lead to offences committed against the child.

Analysis

Both Justice Moldaver and Justice Abella’s decisions highlight the inherent difficulty with prosecuting offences where the only difference between potentially innocuous conduct and criminal conduct is the subjective intent (or objective reasonableness of belief) of the accused person. S. 172.1 is incredibly broad, which is in keeping with the reality that child predators take a multitude of different approaches to grooming and luring children for the commission of offences against them. However, with this broad definition, there is a risk that innocuous online contact, whether it be with adults who are role playing or by those attempting to take reasonable steps to ascertain the age of a child online, be criminalized.

It could be that Parliament or the courts creates additional restrictions to the scope on the offence that the discussions should have a sexual element of them, but this raises the issue that online predators will spend less time online grooming children online and attempt to move the discussion offline, where children are far more vulnerable. It is clear that Parliament created the offence of child luring to ensure that predators are caught before any other offences are committed against children. Clearly, there are good public policy reasons why one would want to make it easier to catch potential predators, by casting the net so broadly, as Parliament did in s. 172.1. However, this raises concern about the type of innocent conduct that could be caught and the difficulty in establishing subjective intent given the context of online conversations, which can be hard for a court to understand. If Parliament or courts required that the discussions become sexual in nature before an offence is committed, this could expose children to harm via explicit conversations online with adults. There is a tension between having the offence defined broadly enough to protect children from any potentially harmful contact with adults online and having it so broad that innocent conduct is criminalized.

Conclusion    

In proving this offence, the context almost entirely defines whether behaviour is innocent or not. This creates evidentiary hurdles that are difficult to overcome for both the Crown and the accused, which makes the offence itself difficult to define and prove beyond a reasonable doubt. Where there is such a wide variety of conduct criminalized by s. 172.1, there is a risk that innocent people can be convicted, which is an unacceptable risk for the criminal justice system to accused. On the other hand, defining the offence too narrowly risks leaving children exposed to harm by adults they meet online, which is also an unacceptable outcome for the criminal justice system to assume. Either way, it certainly requires more clarification from either Parliament or courts to figure out just where the line should be drawn between protecting the innocent from criminalization and protecting children from predators.

The post <em>R v Morrison</em>: Child Luring Provisions are Tested by the Supreme Court of Canada appeared first on TheCourt.ca.

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The Supreme Court of Canada (“SCC”) Justices have the privilege and responsibility of representing Canada’s highest court and last court of appeal. Throughout their time on the bench, they remain apart from the legal bar to maintain objectivity and prevent bias. Yet once retired from the SCC, many justices resume the practice of law. The cases they take on and the work that they do often makes headlines. This is a closer look at the last ten justices to retire from the SCC, their contributions from the bench, and their lives now.

The Rt. Hon. Beverley McLachlin

Former position: Chief Justice (2000 – 2017), previously Justice (1989 – 2000)

Most-cited decision they delivered judgement on: R v Grant, [2009] 2 SCR 353 [Grant]. Chief Justice McLachlin delivered judgement jointly with Justice Charron and specified the three-part test under s. 24 of the Canadian Charter of Rights and Freedoms [Charter] for assessing and balancing the effect of admitting Charter-infringing evidence on society’s confidence in the justice system. The test mandates that the judiciary give regard to (1) the seriousness of the Charter-infringing state conduct; (2) the impact of the breach on the Charter-protected interests of the accused; and (3) society’s interest in the adjudication of the case on its merits.

Now practicing: Arbitrator and mediator in Canada and internationally at Arbitration Place. She also sits as a non-permanent judge at the Hong Kong Final Court of Appeal and as an International Judge to the Singapore International Commercial Court.

Recently in the news for: Announcing the publishing of her second book, a memoir titled Truth Be Told, due out on September 24, 2019. The publisher, Simon and Schuster, offers that this memoir will be “an intimate and revealing look at her life, sharing her insights into the most pressing legal and social questions we face today.”

The Hon. Thomas Albert Cromwell

Former position: Justice (2008 – 2016) 

Most-cited decision they delivered judgement on: R v Godin, 2009 SCC 26. Justice Cromwell held that the appellant’s s. 11 Charter right was infringed by the Crown’s exceptional delay of the case at the preliminary inquiry stage and this infringement warranted a stay of the proceedings. This case was foundational in the SCC’s decision in R v Jordan, 2016 SCC 27, a more recent case dealing with institutional delays in the justice system.

Now practicing: Senior Counsel at Borden Ladner Gervais LLP, specializing in appellate advocacy and complex mediations involving public sector entities. He also serves as Chair of the Chief Justice of Canada’s Action Committee on Access to Justice in Civil and Family Matters.

Recently in the news for: Advising the Hon. Jody Wilson-Raybould, former Minister of Justice and Attorney General of Canada, on solicitor-client privilege concerning the SNC Lavalin scandal.

 

The Hon. Marshall Rothstein

Former position: Justice (2006 – 2015)

Most-cited decision they delivered judgement on: F.H. v McDougall, [2008] 3 SCR 41. Justice Rothstein restored the trial judge’s decision to admit the appellant’s testimony—even though the evidence included inconsistencies—and in doing so confirmed that there is only one standard of proof in a civil case, that is, proof on a balance of probabilities. Previously, the SCC tended to apply the civil standard of proof with a higher degree of probability or require the evidence to be more clear, convincing, and cogent in civil cases involving allegations of criminal or morally blameworthy conduct.

Now practicing: Partner at Osler, Hoskin & Harcourt LLP, specializing in tax litigation.

Recently in the news for: Commenting on the new parliamentary hearing process implemented to interview SCC justice nominees prior to their appointment to the bench. He was the first SCC justice to go through the parliamentary hearing process and believes that it does not curtail judicial independence. In comparing Canada’s judicial vetting process to that of the United States, he stated that “[T]here’s never been a political aspect to the appointment [of SCC justices]. The opposition has asked questions . . . but there’s never any overt political posturing.”

  

The Hon. Louis LeBel

Former position: Justice (2000 – 2014)

Most-cited decision they delivered judgement on: Dunsmuir v New Brunswick, [2008] 1 SCR 190 [Dunsmuir]. Justice LeBel held jointly with Justice Bastarache that the adjudicator erred in his application of the duty of fairness and his decision was therefore correctly struck down by the Court of Queen’s Bench. Dunsmuir is currently the leading SCC decision on the standards of review: reasonableness and correctness.

Now practicing: Counsel at Langlois lawyers LLP, specializing in administrative law as well as employment and labour law. He also serves as resident judge at the Faculty of law at Laval University.

Recently in the news for: Objecting to the 50-year embargo on internal SCC communication documents between justices on cases. He opines that the justices will be “a part of history” before researchers can gain access to the files, and proposes that a period of 20 or 25 years may be a long enough period to preserve the files before making them public.

 

The Hon. Morris J. Fish

Former position: Justice (2003 – 2013)

Most-cited decision they delivered judgement on: HL v Canada (Attorney General),[2005] 1 SCR 401. Justice Fish restored the trial judge’s award of pecuniary damages for loss of past earnings but adjusted the amount to reflect the time the appellant spent in prison and the social assistance he received during the period covered by the award. Here, he reaffirmed Janiak v Ippolito, [1985] 1 SCR 146, and stated that the onus rests on the defendant to prove that the plaintiff failed to mitigate his loss. The plaintiff’s illness, addictions, and poor self-image do not point to a failure to mitigate.

Now practicing: Justice-in-Residence at Davies Ward Phillips & Vineberg LLP, specializing in dispute resolution. He was also appointed as Special Advisor on Wrongful Convictions to advise the Minister of Justice on applications under the criminal conviction review process.

Recently in the news for: Contributing pro bono assistance to Dutee Chand’s legal team, resulting in an international sports ruling suspending the screening of female athletes on the basis of their natural testosterone levels.

  

The Hon. Marie Deschamps

Former position: Justice (2002 – 2012)

Most-cited decision they delivered judgement on: ABB Inc v Domtar Inc, [2007] 3 SCR 461. In this civil law case, Justice Deschamps held that according to the Civil Code of Quebec, LRQ, c C-1991, products supplied with latent defects are not subject to the usual limitation period for liability. She established that for the buyer to prove that a product has a latent defect, they must prove four things: it must be latent; it must be sufficiently serious;it must have existed at the time of the sale; and it must have been unknown to the buyer.

Now practicing: External Review Authority on sexual misconduct and sexual harassment in the Canadian Armed Forces (“CAF”). Her report, following a nation-wide inquiry, provides the federal government with ten recommendations, such as the proposed creation of an independent agency to handle reports of sexual misconduct in the CAF and provide support to victims.

Recently in the news for: Recommending that the federal government create a sexual misconduct response centre fully independent from the CAF and able to track and evaluate CAF efforts to end inappropriate sexual conduct.

 

The Hon. William Ian Corneil Binnie

Former position: Justice (1998 – 2011)

Most-cited decision they delivered judgement on: Canada (Citizenship and Immigration) v Khosa, 2009 SCC 12. Here, Justice Binnie followed the reasonableness standard of review from Dunsmuir and advocated for deference of administrative decision-makers. Deference can be grounded in the privative clause of an enabling legislation, but Justice Binnie clarified that deference is appropriate whether or not the court has been given the advantage of statutory direction.

Now practicing: Counsel at Lenczner Slaght Royce Smith Griffin LLP, providing strategic and practical advice and dispute resolution expertise to clients. In addition, he is a resident arbitrator at Arbitration Place.

Recently in the news for: Suggesting that the Law Society of Ontario support access to justice in a meaningful way by introducing a levy on individual lawyers’ dues that would contribute to the funding of Pro Bono Ontario.

 

The Hon. Louise Charron

Former position: Justice (2004 – 2011)

Most-cited decision they delivered judgement on: Grant, above. Held jointly with Chief Justice McLachlin.

Now practicing: Independent Expert in investigations and inquiries, providing her legal opinion on controversial decisions with political implications.

Recently in the news for: She provided former Prime Minister Stephen Harper with her legal opinion on Justice Marc Nadon’s eligibility to sit on the SCC before his appointment. This opinion was not mirrored in the SCC’s decision in Reference re Supreme Court Act, ss. 5 and 6, 2014 SCC 21.

 

The Hon. Michel Bastarache

Former position: Justice (1997 – 2008)

Most-cited decision they delivered judgement on: Dunsmuir, above. Held jointly with Justice LeBel.

Now practicing: Counsel at CazaSaikaley LLP/srl, working in both English and French.

Recently in the news for: Testifying before the New Brunswick Senate Committee on Official Languages that the People’s Alliance Party was “created to oppose bilingualism” in the province. He has also extended his support for Franco-Ontarians’ rights to receive provincial government services in French.

 

The Hon. John C. Major

Former position: Justice (1992 – 2005)

Most-cited decision they delivered judgement on: Housen v Nikolaisen, [2002] 2 SCR 235. Held jointly with Justice Iacobucci and based on the “palpable and overriding error” standard of review at the time, Justice Major restored the decision of the trial judge. The very first statement of the judgement foreshadowed the SCC’s proposition that a court of appeal should not interfere with a trial judge’s reasons unless there is a palpable and overriding error.

Now practicing: Counsel at Bennet Jones LLP, specializing in appellate advocacy and judicial review. He is also a mediator and arbitrator with ADR Chambers.

Recently in the news for: Commenting on the SNC Lavalin scandal and whether the Hon. Jody Wilson-Raybould’s solicitor-client privilege can be waived, given the comments the federal government made publically.[1]

 

 

[1]This was published before the Rt. Hon. Prime Minister Justin Trudeau waived solicitor-client privilege and allowed the Hon. Jody Wilson-Raybould to testify before the House of Commons Justice Committee.

The post Where Are They Now? A Look at the Last 10 Justices to Retire from the SCC appeared first on TheCourt.ca.

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In 9147-0732 Québec Inc. c Directeur des poursuites criminelles et pénales, 2019 QCCA 373 [9147-0732 Québec Inc.], a case that has attracted some media attention, the Quebec Court of Appeal (“QCCA”) addressed the question of whether a corporation can benefit from the Canadian Charter of Rights and Freedoms s.12 protection against “cruel and unusual treatment or punishment” or whether the section protects human persons only. The QCCA majority found that corporations do, in fact, enjoy Charter s.12 protection and that the $30,843 fine imposed on a company that engaged in construction work without a license was cruel and unusual punishment within the meaning of the Charter. The dissent found that legal persons do not benefit from the protection provided by s.12 of the Charter.

The appeal poses questions over the nature of cruel and unusual punishment. It asks whether it is something that has to do with human dignity – human being the operative word – or whether cruel, grossly disproportionate punishment, regardless of who or what is captured by it, may equally be protected by s.12. In other words, the appeal asks whether a grossly disproportionate fine against a corporation may constitute cruel and unusual punishment under the meaning of s.12 of the Charter or whether s.12 protects human persons only.

This post outlines the QCCA decision in 9147-0732 Québec Inc., considers the history of the term “cruel and unusual,” and argues that s.12 may protect legal persons, rather than human ones, but only under extraordinary circumstances. Notably, 9147-0732 Québec Inc. was a ruling on a preliminary issue, and the case is now back before the magistrate for a consideration of the s.12 and other arguments. The Supreme Court of Canada (“SCC”) will likely need to consider the question in the years to come, but it may choose to wait for a more substantive case to do so.

9147-0732 Québec Inc.: The Majority Opinion

In 9147-0732 Québec Inc., the QCCA found a company to have carried out construction work without a license, contrary to sections 46 the Building Act, RLRQ c. B-1.1 [the Act]. The court was bound by s.197.1 of the Act to impose a fine, and it imposed the mandatory minimum of $30,843. In response, the appellant company challenged the constitutionality of the mandatory minimum fine requirement on the grounds that it was grossly disproportionate and violated the s.12 protections against “cruel and unusual” punishment. The appeal in 9147-0732 Québec Inc. focused exclusively on the issue of whether s.12 protects legal persons such as corporations.

In finding that s.12 protects corporations, the QCCA followed R v Boudreault, 2018 SCC 58 [Boudreault]. Boudreault was a December 2018 decision in which the SCC found that another fine – the mandatory victim surcharge – was cruel and unusual punishment contrary to s.12 of the Charter and struck down the mandatory surcharge as unconstitutional. For Justice Bélanger writing for the majority at the QCCA, just as Boudreault held that a mandatory victim surcharge may be grossly disproportionate for some criminal offenders, a “minimum fine may also in some cases constitute cruel and unusual punishment” when imposed on legal persons(9147-0732 Québec Inc., para 91). Justice Bélanger emphasized that s.12 may protect legal persons in “exceptional” circumstances only, such as when a grossly disproportionate fine against a corporation or an organization results in unacceptable consequences or when it completely ignores the principle of proportionality in sentencing (9147-0732 Québec Inc., para 92).

In finding that corporations may be subject to s.12 Charter protection, the QCCA majority noted that other Charter provisions have been found to apply to corporations, such as ss 7, 8, 11 and 24(1) (9147-0732 Québec Inc., paras 34-39). The majority noted that in order to determine the scope of a Charter provision, courts must first determine the provision’s purpose and identify the rights or freedoms it aims to protect. per Hunter v Southam, [1984] 2 SCR 145 [Southam], the interpretation must be broad and general.

In addition to focusing on the principles of sentencing, the majority applied the living tree principle of constitutional interpretation to find that corporations faced with grossly disproportionate fines may be protected by s.12 of the Charter. They found the appellants’ argument that s.12 is founded on the value of protecting human dignity– the strongest one that the court identified contrary to the respondents’ position – unconvincing. According to the majority, the living tree principle of constitutional interpretation, the law’s evolution regarding the rights and liabilities of legal persons, and a legislative context in which the criminal liability of corporations has been significantly expanded suggested support for the argument that s.12 could apply to corporations(9147-0732 Québec Inc., paras 101, 103).

The Dissent

Unlike the majority, Justice Chamberland in dissent wrote from the perspective that s.12 protects human dignity. He emphasized that “cruelty is directed toward living beings, in flesh and blood, whether they are human beings or animals” and “not to corporations,” because “suffering, physical or mental, is peculiar to living beings and not to […] inanimate objects without soul or emotional life” (9147-0732 Québec Inc., para 54-56). Justice Chamberland held that it would completely distort the common sense meaning of the words “cruel and unusual” to say that one can be cruel to a legal person such as a corporation (9147-0732 Québec Inc., para 53).

Like the majority, to reach his conclusion, Justice Chamberland cited Southam for the proposition that Charter rights and freedoms must be understood in a purposive way, in light of the interests they are meant to protect (9147-0732 Québec Inc., para 46). However, Justice Chamberland also emphasized that in Southam, the SCC noted that “[a]t the same time [as conducting the purposive analysis], it is important not to overshoot the actual purpose of the right of freedom in question, but to recall that the Charter was not enacted in a vacuum, and must therefore […] be placed in its proper linguistic, philosophic and historical contexts” (9147-0732 Québec Inc., para 46). Accordingly, the scope of s.12 must be properly restricted to humans and not corporations.

Justice Chamberland connected the Charter’s s.12 to the 1688 English Bill of Rights, in which provisions against “cruel and unusual punishments” were intended to prohibit barbarity and inhumanity, and noted the many definitions of “cruel” which refer to a lack of humanity (9147-0732 Québec Inc., paras 47-52). Although Justice Chamberland acknowledged that the scope of s.12 has broadened since 1688 to include all measures of state repression and control against individuals, rather than on physical suffering only, he emphasized that the term “cruel and unusual” nevertheless is concerned with human dignity only, and therefore the principle cannot be extended to legal persons (9147-0732 Québec Inc., paras 58-59).

Justice Chamberland emphasized that a sentence may be disproportionate or excessive without being cruel and unusual within the meaning of the Charter. In his view, the sentence would only be cruel and unusual if it was excessive to the point of not being compatible with human dignity, and disproportionate to the point where Canadians may consider it abhorrent and intolerable. He added that this would rarely be the case in circumstances when the contested sentence is a fine, and even more rare when the offender is a corporation (9147-0732 Québec Inc., para 27).

Analysis

Both the majority and dissent presented strong arguments in the QCCA decision. Once it is acknowledged that a mandatory minimum fine could have cruel and unusual consequences for an individual – as the SCC found in Boudreault – it seems plausible that a mandatory minimum fine, without leaving the door open to judicial discretion, could also have cruel and unusual consequences for a corporation in exceptional circumstances. On the other hand, it is difficult to compare the nature of human personhood with that of legal personality.

Although the QCCA majority in 9147-0732 Québec Inc. bases itself on Boudreault, it does not consider the practical similarities and differences between the appellants in both cases. The appellants in Boudreault included people who grew up without the benefit of adequate social supports. They included young and old indigent individuals with addiction and mental health problems, who had no realistic prospect of repaying a fine for the foreseeable future. By contrast, legal persons cannot be imprisoned or experience mental illness, as Justice Chamberland pointed out in dissent (9147-0732 Québec Inc., para 69). In fact, little is known about the appellant seeking s.12 protection in 9147-0732 Québec Inc., other than that the legal person was a corporation that had engaged in construction work without a license. While in Boudreault, the value of human dignity is clearly at stake, in 9147-0732 Québec Inc. it is possible that the only interests engaged are economic. Furthermore, it is possible that concerns with the majority’s analysis regarding broadening the scope of s.12 protections include concerns that their decision would strengthen the power of corporations vis-a-vis individuals.

Based on the logic of Boudreault, however, it is likely that the human dignity arguments are not fatal to the appellant’s case in 9147-0732 Québec Inc. It is possible that in extraordinary circumstances, a mandatory minimum fine could constitute cruel and unusual treatment or punishment under the meaning of s.12 of the Charter. At the very least, it seems unjustified to close the door to that possibility. Furthermore, according to Professor Bruce Ryder, a constitutional law professor at Osgoode Hall Law School, the dissent’s concerns about the potential impact of the majority ruling may be overstated, as the current state of the law allows corporations charged with offences to raise s.12 arguments most of the time already.

Because in practical terms legal persons are unlike natural persons in important ways, the circumstances where s.12 grants them protection may be different. It may be that s.12 protects corporations in extraordinary circumstances only. However, the circumstances in which s.12 protects legal persons is a different question than whether s.12 applies to legal persons at all. Overall, it seems likely that courts would not outright exclude the possibility.

Conclusion

The question of whether corporations have a right to s.12 protection is something the SCC will need to address eventually. However, according to Professor Ryder, it is doubtful they would grant leave at this stage of this proceeding: after all, 9147-0732 Québec Inc. was a ruling on a preliminary issue and the case is now back before the magistrate for a consideration of the s.12 and other arguments.

Nonetheless, this case has sparked interest, perhaps because legal entities being compared to human beings often sparks strong public reaction. At a time when courts in Canada and other jurisdictions are considering whether solitary confinement constitutes cruel and unusual punishment, the idea that economic interests may come under s.12 protection may certainly raise eyebrows. The sentiment would not likely be enough to discredit the argument that, in exceptional circumstances, corporations may indeed be protected by s.12 of the Charter and that there are high legal barriers against ruling out the possibility.

The post <em>9147-0732 Québec Inc</em>: Does Section 12 Protect Corporations From Cruel and Unusual Punishment? appeared first on TheCourt.ca.

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The legal profession revolves around the giving of advice. People seek legal counsel for a wide variety of issues, including (and perhaps most often) when they are vulnerable. Consequently, lawyers have a professional and legal duty to ensure that when they offer such advice, it is honest and informed. Where it is not, people often suffer harm.

In the case of Salomon v Matte-Thompson, 2019 SCC 14 [Salomon], the plaintiffs, Ms. Matte-Thompson and her company, “166,” suffered financial losses of $5 million as a result of negligent advice from legal counsel. More specifically, the plaintiffs lost their money as a result of investments in fraudulent ventures that had been recommended—and continually supported—by their lawyer, Mr. Salomon. The question for the Supreme Court of Canada (the “Supreme Court”) was whether to overturn the decision of the Court of Appeal of Quebec, which, contrary to the decision of the trial judge, found Mr. Salomon liable for breaching his duty to advise and duty of loyalty.

Writing for a majority of the Court, Justice Gascon held that Mr. Salomon was liable—this was “not a case about a mere referral,” but rather one in which a lawyer, “over the course of several years, recommended and endorsed a financial advisor and financial products” despite failing to “perform adequate due diligence, misrepresent[ing] investment information, committ[ing] breaches of confidentiality,” and maintaining a close relationship with the advisor that amounted to a “conflict of interest” (Salomon, para 96). According to Justice Gascon, the Court of Appeal was correct to intervene, as the trial judge had committed a series of reviewable errors in large part due to her adoption of a “distorting lens” which led to “her erroneously assess[ing] the evidence in isolated silos, without the insight provided by a global analysis” (para 5).

In dissent, however, Justice Côté disagreed, arguing that the trial judge’s thorough analysis was void of palpable and overriding errors and that, to the contrary, it was the Court of Appeal who had committed legal error by “substituting its own view of the case” on the basis of mere “divergence of opinion” with the trial judge (Salomon, para 102). Further animating Justice Côté’s position is a concern that too harsh an approach to civil liability “might inadvertently increase the exposure of numerous professionals who regularly recommend other advisors and then collaborate with them in their clients’ interests” (para 101).

A Disastrous Situation

In 2003, Mr. Salomon, Ms. Matte-Thompson’s longtime lawyer, introduced her and her company, 166, to Themis Papadopoulos, his close friend and investment advisor. The purpose of the introduction was to help Ms. Matte-Thompson manage her wealth in a manner that would provide financial security for her and her children. Between 2003 and 2007, Ms. Matte-Thompson and her company invested over $7.5 million with Papadopoulos and his firm. In 2007, it was discovered that the operation was a Ponzi scheme in which almost $100 million was lost ($5 million of the plaintiffs’). Mr. Salomon lost $20,000 in the scheme (he had invested $70,000) (Salomon, paras 2, 10-11, 16-19).

Was Mr. Salomon to blame?

At trial, the judge didn’t think so. Rather, according to her, while Mr. Salomon had overstepped his professional bounds in recommending specific investments to Ms. Matte-Thompson (in addition to his recommendation of Mr. Papadopoulos), the recommendations had not caused her losses; she had “developed her own relationship with Mr. Papadopoulos and therefore was not relying on Mr. Salomon’s advice in making her investment decisions” (para 22). Further, Mr. Salomon made no investment advice to Ms. Matte-Thompson’s company (as those investments had occurred well after the initial referral and specific investment advice to Ms. Matte-Thompson) and thus could not have had a duty to inquire or advise with respect to the company’s investments (para 23). Finally, the trial judge held that Mr. Salomon’s close relationship with Mr. Papadopoulos did not amount to a conflict of interest; while Mr. Salomon had received a series of payments from Mr. Papadopoulos totaling $38,000, these payments had been unrelated to any dealings with Ms. Matte-Thompson (they were said to be “gifts”) (paras 23, 77).

On appeal, however, the Court of Appeal of Quebec took a very different view. Intervening on the grounds of palpable and overriding errors, the court held that the trial judge had failed to consider the actions of Mr. Salomon as a whole, which had led to a series of erroneous conclusions. The court identified four errors:

  • First, Mr. Salomon had been acting for both Ms. Matte-Thompson and 166 (as opposed to just Ms. Matte-Thompson individually).
  • Second, Mr. Salomon’s faults were not limited to his initial action of recommending specific investments, but rather extended throughout the four year period as he “induced an air of confidence” regarding the investments.
  • Third, Mr. Salomon had breached his duty of loyalty because his relationship with Mr. Papadopoulos had caused him to breach confidentiality and neglect his clients’ interests.
  • Fourth and finally, Mr. Salomon’s faults were a direct cause of the plaintiffs’ losses and that the fraud committed by Mr. Papadopoulos did not serve to break the chain of causation (Salomon, paras 25-29).

Not Just a Referral

At the hearing before the Supreme Court, a major point of emphasis for both parties was on convincing the panel that this case was, or was not, about a simple referral. For the plaintiffs, it was clearly not a simple referral—Mr. Salomon had been Ms. Matte-Thompson’s lawyer for almost 15 years, had recommended she invest her money in specific investments with his personal financial advisor (and close friend), and had offered repeated reassurances over the course of four years that these investments were sound and secure (Salomon, paras 10-11, 60). In contrast, Mr. Salomon argued that he had simply made a referral and that, while he did overstep his professional bounds in recommending specific investments to Ms. Matte-Thompson, these recommendations did not cause any of the plaintiffs’ losses. Mr. Salomon’s continued reassurances of Ms. Matte-Thompson were nothing more than those of a friend; he had no continuing duty to advise or perform due diligence for Ms. Thompson, and she did not actually rely on his comments as legal advice (Salomon, webcast).

So, whose version of events rings true?

According to the entirety of the Supreme Court (including Justice Côté), this case is clearly not about a mere referral (Salomon, paras 96, 149). Rather, it is about determining whether all of Mr. Salomon’s actions, when considered in light of his professional duties, rise to a level of professional negligence (para 49). And, in the view of Justice Gascon and the majority, they did. The Court of Appeal was correct to intervene—the trial judge’s analysis was too narrow in its assessment. The events, taken as a whole, establish that not only did Mr. Salomon recommend Mr. Papadopoulos, but that he was integrally involved in ensuring that the investments continued. He should have known at numerous times in the four years that greater due diligence was required to ensure protection of Ms. Matte-Thompson’s assets (including in 2007 when an article in La Presse Affaires signalled “serious doubts about the investments”) (para 75). Further, Mr. Salomon should have been alive to the obvious conflict that arose in light of his ongoing personal and financial relationship with Mr. Papadopoulos. According to Justice Gascon, even if the payments made to Salomon were “gifts,” they raised “serious doubts regarding the independence of the lawyer who had received them” (para 77). Overall, then, when looking at the events as “part of a single continuum,” it is clear that Mr. Salomon breached his professional duties to advise and to maintain loyalty (para 86).

Implications for Professional Referrals

In her dissenting opinion, Justice Côté notes that, in taking too harsh an approach to the requirements of lawyers in referral situations, the Supreme Court risks imposing an “excessive burden” on lawyers and other professionals “who routinely recommend other trusted professionals” (Salomon, para 146). To expect lawyers to have to make “systematic inquiries” before a referral as well as to demand “monitoring and verifying the recommended professional’s advice” might result in a chilling effect whereby professionals “might become overcautious and avoid making recommendations altogether” (which would be a “clear disservice” to their clients) (para 146).

Justice Côté’s point here is well-taken. There is no doubt that to create a burdensome standard for pre- and post-referral practice would result in increased hesitancy and reluctance in an industry dependent on relationships and fluidity of services and expertise. Lawyers are already risk-averse, and any added potential of prospective liability may only serve to hinder the ability of clients to get the help they need.

This being said, however, I do not think Justice Côté’s fears will come to pass. The majority’s decision here has not extended the duty of lawyers or other professionals (“the instant case [does] not broaden the basis of liability for lawyers who refer clients to other professionals or advisors beyond the standard recently set in Harris: lawyers can refer their clients to other professionals or advisors so long as they discharge their professional obligations in so doing” (Salomon, para 50)). Thus, in many ways, this balance is reminiscent of the Supreme Court’s approach for determining liability for auditors for negligent misrepresentations in the performance of a service (see e.g. Deloitte & Touche v Livent Inc, 2017 SCC 63; Ankita Gupta, “Deloitte & Touche v Livent Inc.: A New Duty of Care for Auditors”). Just as the scope of liability for auditors is narrowly construed to instances where they negligently perform a service that they expressly undertake, so too is the scope of liability of lawyers narrowly construed to negligence in the fulfilment of their duties when undertaking to refer clients to other professionals. In effect, then, all Justice Gascon and the majority have established is that a lawyer cannot, where they have continually engaged with and supported a client post-referral, “avoid liability by hiding behind the high threshold for establishing liability that applies in a case in which a lawyer has merely referred a client” (Salomon, para 96).

The post <em>Salomon v Matte-Thompson</em>: Recommend with Care appeared first on TheCourt.ca.

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