Top Court Rules Union's Right to Picket Trumps Individuals' Right to Privacy

During a lawful strike that lasted 305 days, both the United Food and Commercial Workers, Local 401 ("Union") and a security company hired by the Palace Casino at West Edmonton Mall in Alberta. videotaped and photographed the picket line near the entrance to  the casino.  The Union posted signs in the area of the picketing stating that images of persons crossing the picket line might be placed on a website called www.casinoscabs.ca. 

 

Several individuals who were recorded crossing the picket line filed complaints with the Alberta Information and Privacy Commissioner under the Personal Information Protection Act of Alberta ("PIPA").  PIPA restricts the collection, use and disclosure of personal information by a range of organizations. 

 

The Vice-President of the casino complained he was photographed or videotaped and that two pictures of him were used on a poster displayed at the picket line with the text, "This is (X's) police mug shot."   Images of his head were also used in Union newsletters and strike leaflets with captions intended to be humorous.  Another complainant, a member of the public, testified that cameras were trained on the entrance to the casino where he would regularly meet friends.  A third complainant testified that she had been photographed and videotaped while working near the casino entrance.  No recordings of the complainants were placed on the website.

 

The privacy commissioner appointed an adjudicator to decide whether the Union had contravened PIPA.  The adjudicator concluded that the Union's collection, use and disclosure of the information was not authorized by PIPA.  On judicial review, PIPA was found to violate the Union's rights under section 2(b) of the Charter of Rights and Freedoms ("Charter") which provides that, "Everyone has the following fundamental freedoms:...(b)  freedom of thought, belief, opinion and expression, including of freedom of the press and other media of communication".  The Alberta Court of Appeal agreed and granted the Union a constitutional exemption from the application of PIPA.  The employer appealed this finding to the Supreme Court of Canada. 

 

The Supreme Court substantially dismissed the appeal.  [Alberta (Information and Privacy Commission) v. United Food and Commercial Workers, Local 401 2013 SCC 62]

 

The Court held that PIPA establishes a general rule that organizations cannot collect, use or disclose personal information without consent.  None of PIPA's exemptions permitted the Union to collect, use and disclose personal information for the purpose of advancing its interests in a labour dispute.  The court held that the central issue in this case was whether PIPA achieved a constitutionally acceptable balance between the interests of individuals and controlling the collection, use and disclosure of their personal information and a union's freedom of expression.  To the extent that PIPA restricted collection for legitimate labour relations purposes, it breached section 2(b) of the Charter and could not be justified under section 1.  Section 1 provides that, "The Canadian Charter of Rights and Freedoms guarantees the rights and freedoms set out in it subject only to such reasonable limits prescribed by law as can be demonstrably justified in a free and democratic society."

 

The court found that the purpose of PIPA is to enhance an individual's control over his or her personal information by restricting the collection, use and disclosure of personal information without that individual's consent.  The objective is to ensure individual autonomy, dignity and privacy, which are significant social values. 

 

However, the court also found that PIPA did not include any mechanisms by which a union's constitutional right to freedom of expression could be balanced with the interests protected by the legislation.  There is a long recognized fundamental importance of freedom of expression in the context of labour disputes.  The court found that PIPA prohibited the collection, use or disclosure of personal information for many legitimate, expressive purposes related to labour relations.  Picketing represents a particularly crucial form of expression with strong historical roots.  The court found that PIPA imposed restrictions on a union's ability to communicate and persuade the public of its cause, impairing its ability to use one of its most effective bargaining strategies in the course of a lawful strike.  This infringement of the right to freedom of expression was disproportionate to the government's objective of providing individuals with control over the personal information that they exposed by crossing a picket line.  It was therefore not justified under section 1 of the Charter. 

 

Given the comprehensive and integrated structure of the statute, the government of Alberta and the Information and Privacy Commissioner requested that the court not select specific amendments, requesting instead that the entire statute be declared invalid so that the Alberta legislature could consider the Act as a whole.  The declaration of invalidity was granted by the court but was suspended for a period of 12 months to give the legislature the opportunity to decide how best to make the legislation constitutionally compliant.  

 

Regards,

 

Blair

Guatemalan Plaintiffs sue HudBay and Subsidiaries in "Novel" Negligence Actions

Justice C.J. Brown of the Ontario Superior Court of Justice dismissed a motion brought by HudBay Minerals Inc. ("HudBay") and two of its subsidiary corporations, including one Guatemalan corporation) to dismiss novel actions for negligence.  In the this case, the plaintiffs sued HudBay for its failure to prevent the harm allegedly caused by its security personnel at mining projects owned by HudBay's subsidiary corporations in Guatemala. (Choc v. Hudbay Minerals Inc. 2013 ONSC 1414)

 

The plaintiffs are indigenous Mayan Q'Eqchi' from the El Estor region of Guatemala.  They started three separate actions: Margarita Caal Caal v. HudBay;  Angelica Choc v. HudBay; and German Chub Choc v. HudBay.

In the Caal action, the plaintiffs were 11 women, who alleged that they were gang raped by mining company security personnel, police and military during their forced removal from their village as requested by a HudBay subsidiary.     

 

In the Choc action, the plaintiff alleged that her husband, a respected indigenous leader and outspoken critic of mining practices, was beaten and shot in the head by security personnel of a HudBay subsidiary in the context of a land dispute.

 

In the Chub action, the plaintiff alleged that a gunshot wound left him paralyzed from the chest down and that he was shot in an unprovoked attack by security personnel employed at HudBay's subsidiary's mining project in the context of a land dispute.  

 

The actions arose out of a dispute as to ownership of land in Guatemala.  At all material times, the HudBay defendants maintained that they had a valid legal right to the land while the Mayan communities claimed that the Mayan Q'Eqchi' were the rightful owners of the lands which they considered to by their ancestral homeland.  The plaintiffs alleged that the defendants' claim to ownership was illegitimate because the rights of the defendants were derived from a dictatorial, military government which granted those rights during the Guatemalan civil war at a time when the Mayan Q'Eqchi' were being massacred and driven off their lands. 

 

In 2011, the Constitutional Court of Guatemala, the highest court in the country, ruled that the Mayan Q'Eqchi' communities had valid legal rights to the contested land and ordered the Guatemalan government to formally recognize those rights.  When the Mayan Q'Eqchi' had originally attempted to reclaim their ancestral homelands, there were allegedly numerous forced evictions, burning of hundreds of homes, murders and alleged human rights atrocities, including those giving rise to the three actions. 

 

The defendants brought three motions:  (i)  a motion to strike the statements of claim on the basis that they disclosed no reasonable cause of action against HudBay; (ii)  a motion to dismiss the Caal action as being statute-barred pursuant to the provisions of the Limitations Act, 2002; and, (iii)  a motion disputing the court's jurisdiction over the Guatemalan subsidiary.  

 

The court ordered that the three actions be consolidated and the motions were heard together before Justice Brown.  She dismissed all three motions.   

 

The Rule 21 Motion To Strike

 

On this motion the defendants argued that there was no recognized duty of care owed by a parent company to ensure that the commercial activities carried on by its subsidiaries were conducted in a manner designed to protect people in foreign countries.  In addition, they pleaded that HudBay was not responsible at law for the actions of its subsidiaries. 

 

Amnesty International Canada intervened in the motions to support the position of the plaintiffs. 

 

With respect to the vicarious liability claim, Justice Brown held that the plaintiffs pleaded in the Choc action that the Guatemalan subsidiary was an agent of HudBay.  In doing so, the plaintiffs had pleaded an exception to the rule of separate legal personality, i.e. where the corporation has acted as the authorized agent of its controllers, corporate or human, the allegation is not patently ridiculous or incapable of proof and must be taken to be true for the purposes of the pleadings motion.  Accordingly, the claim against HudBay on the basis of actions by its foreign subsidiary was allowed to proceed.  

 

In respect of the claim for direct negligence against HudBay, the judge held that the plaintiffs had pleaded all material facts required to establish the constitute elements of their claim.  However, the duty of care that the plaintiffs pleaded was not an "established" duty of care.  Accordingly, it was necessary for Justice Brown to apply the test for establishing a novel duty of care (the Anns test), i.e. that the harm complained of was reasonably foreseeable; that there was sufficient proximity between the parties that it would not be unjust or unfair to impose a duty of care; and, that there was no policy reasons to negate or otherwise restrict that duty.  Justice Brown held that the plaintiffs had met all three parts of the test.  With respect to policy considerations, she held that they were competing policy considerations and that it was not plain and obvious that they should be fatal to the case at the pleadings stage. 

 

The Limitations Act Motion

 

The defendants sought to have the Caal action dismissed on the basis that it was statute-barred because it was commenced after the basic limitation period of two years after the day on which the claim was discovered. 

 

However, section 10 of the Limitations Act provides an exception to the two year limitation period for claims based on an assault or sexual assault.  The provision reads as follows:

 

10 (1)    The limitation period established by section 4 does not run in respect of a claim based on assault or sexual assault during any time in which the person with the claim is incapable of commencing the proceeding because of his or her physical, mental or psychological condition.  

 

10 (3)   Unless the contrary is proven, a person with a claim based on a sexual assault shall be presumed to have been incapable of commencing the proceeding earlier than it was commenced.  

 

The plaintiffs argued, and Justice Brown accepted, that the language used in the Limitations Act of "claims based on sexual assault" is not intended to be limited to claims against the actual perpetrator, but is broad enough to include claims of vicarious liability and negligence against all persons whose acts or omissions contributed to the damage suffered as a result of the misconduct.  The Limitations Act specifically defines "claim" to mean "a claim to remedy an injury, loss or damage that occurred as a result of an act or omission".  Therefore, a "claim based on sexual assault" must include a claim to remedy injuries from a sexual assault caused by negligent acts or omissions.  In addition, the plaintiffs relied on the principle of interpretation that legislative provisions were to be given a large and liberal interpretation and are to be interpreted in line with their objectives.  They submitted that the purpose of section 10 of the Act was to make it easier for victims of sexual assault to bring their claims.  

 

Justice Brown accepted the submission and dismissed the Limitations Act motion.

 

As a result, there was no need to hear the jurisdiction motion because HudBay's foreign subsidiary conceded that if the first two motions were dismissed it would be a necessary and proper party to the Choc action.  

 

Regards,

 

Blair

 

Supreme Court Certifies "Indirect Purchaser" Class Action Against Microsoft

The Supreme Court of Canada has ruled that a class action commenced against Microsoft Corporation and Microsoft Canada (Microsoft) for allegedly overcharging for their operating systems may proceed in British Columbia ( Pro-Sys Consultants Ltd. v. Microsoft Corporation, 2013 SCC 57 )

The representative plaintiff in the class action alleged that, beginning in 1988, Microsoft engaged in unlawful conduct by overcharging for its Intel-compatible PC operating systems and Intel-compatible PC applications software.  The plaintiff sought certification of the class action under the British Columbia Class Proceedings Act ("Act").   The proposed class is made up of ultimate consumers, known as "Indirect Purchasers" who acquired Microsoft products from re-sellers. 

The British Columbia Supreme Court certified the proceeding as a class action.  Microsoft appealed from that decision.  The British Columbia Court of Appeal allowed Microsoft's appeal and dismissed the action, ruling that indirect purchaser actions were not available as a matter of law in Canada and therefore the class members had no cause of action. 

The plaintiff appealed that decision to the Supreme Court of Canada (SCC) which allowed the appeal.  

The SCC held that indirect purchasers do have a cause of action against the party who has caused the overcharge to occur at the top of the distribution chain and who has injured the indirect purchasers as a result of the overcharge being passed on to them".  The Court acknowledged that it had rejected the "passing-on"  defence in the context of the imposition of ultra vires taxes.  However, the fact that the passing-on defence had been rejected did not lead to a corresponding rejection of the offensive use of passing on.  Accordingly, indirect purchasers should not be foreclosed from claiming "losses" passed on to them.  The risk of double or multiple recovery where actions by both direct and indirect purchasers are pursued at the same time or where parallel suits are pending in other jurisdictions can be managed by the court. 

The SCC further held that In bringing the action, indirect purchasers willingly assumed the burden of establishing that they have suffered a loss.  Whether they meet their burden is a factual question to be decided on a case by case basis.  Indirect purchaser action may, in some circumstances, be the only means by which overcharges are claimed and deterrence is promoted.  Allowing such an action is consistent with the remediation objectives of restitution law because it allows for compensating the parties who have actually suffered the harm rather than reserving those actions for direct purchasers who may have in fact passed on the overcharge.

As to meeting the test for certification under the Act, the SCC held that the pleadings disclosed causes of action that should not be struck out at the certification stage.  No such remedy should be given by the courts unless it was "plain and obvious" that the plaintiff's claim could not succeed.  The class representative must show some basis in fact for each of the certification requirements set out in the Act, other than the requirement that the pleadings disclose a cause of action.  However, the certification stage is not meant to be a test of the merits of the action, rather it is concerned with forum and with whether the action can properly proceed as a class action.  

Regards,

Blair

Ontario sues Big Tobacco for $50 Billion for "Tobacco Related Wrongs"

The Ontario Court of Appeal has held that the government of Ontario can proceed with a $50 billion lawsuit against several foreign tobacco companies to recover the cost of health care services arising from "tobacco related disease " and "tobacco related wrongs". See Ontario v. Rothmans Inc. 2013 ONCA 353

 

Ontario's case is based on legislation - The Tobacco Damages and Health Care Costs Recovery Act - enacted by the province in 2009.  The Act gave Ontario a stand-alone statutory right to sue tobacco manufacturers to recover the cost of health care services provided to the public as a result of "tobacco related disease arising out of tobacco related wrongs". 

 

In substance, Ontario is claiming that since the 1950s, several of the defendants committed tobacco related wrongs  by manufacturing and distributing cigarettes in Ontario when they knew or ought to have known that smoking cigarettes and being exposed to second-hand smoke could cause or contribute to disease.  In addition, Ontario claims that all of the defendants have engaged in various conspiracies to mislead the government and the public about the dangers of smoking and to suppress information about those dangers.

 

Many of the defendants are foreign - British American Tobacco (Investment) Limited, BAT Industries p.l.c., British American Tobacco p.l.c., Carreras Rothmans Limited, RJ Reynolds Tobacco Company and RJ Reynolds Tobacco International Inc.  Several of these foreign defendants asserted that the Ontario courts do not have jurisdiction to determine the claims against them and brought a motion to set aside the service ex juris of the statement of claim and to stay or dismiss the action on the basis of lack of jurisdiction.  Justice Conway of the Ontario Superior Court of Justice dismissed the defendants' motion.  They appealed to the Ontario Court of Appeal. 

 

The Ontario Court of Appeal dismissed the appeal for the following reasons:

 

Under rule 17.02(g) of Ontario's Rules of Civil Procedure, a defendant may be served out of Ontario with a statement of claim where there is an allegation that the damages sought  are based on a tort committed in Ontario.  The Supreme Court of Canada has confirmed that a claim in respect of a tort committed within the jurisdiction gives rise to a "presumptive connective factor" sufficient to establish a real and substantial connection with the jurisdiction. Unless rebutted, this factor is sufficient to provide the domestic court with "jurisdiction simpliciter" to determine the dispute before it.  In this case, the foreign defendants claimed that the offence created by the Act was not a tort for the purposes of rule 17.02(g).   However, the Court of Appeal held that, "If something looks like a duck, walks like a duck and quacks like a duck, it probably is a duck."   In the court's view, Ontario's claim against the defendants under the Act created a statutory tort and fell within the section of the rule.

 

In addition, the Court of Appeal held that t is a breach of a common law duty to engage in a civil conspiracy that causes harm to others.   A conspiracy occurs in the jurisdiction where the harm is suffered regardless of where the wrongful conduct occurred.  The Act addresses this sort of breach and provides for joint and several liability where two or more defendants jointly breach a duty or obligation described in the definition of tobacco related wrong.  The  Court of Appeal held that Ontario's claim in this action is founded on the common law tort of conspiracy, alleged to have been committed in Ontario because the damage flowing from the conspiracy was sustained in Ontario.  It is therefore an action in respect of a tort committed within Ontario was contemplated by the rule.  

 

Secondly, the Court of Appeal held that Ontario had established "a good arguable case" for the Ontario courts to assume jurisdiction. 

 

The Court of Appeal held that it is well established that an Ontario court will assume jurisdiction against a foreign defendant only where the plaintiff establishes a good arguable case for assuming jurisdiction either through the allegations in the statement of claim or a combination of the allegations in the statement of claim and evidence filed on the jurisdiction motion.  

 

The Court of Appeal found that Justice Conway did not err, when she concluded that, despite deficiencies in Ontario's statement of claim, Ontario had established a good arguable case for assuming jurisdiction.  

 

The case law on the issue did not go as far as the defendants had argued.  Even if Ontario's statement of claim was deficient, Justice Conway was of the view that it was capable of amendment.  In the Court of Appeals' opinion, on a jurisdiction motion, the motion judge is not required to subject the pleadings to the scrutiny applicable on a rule 21 motion (motion to strike pleadings).  So long as the statement of claim advances the core elements of a cause of action known to law and appears capable of being amended to cure any pleading deficiencies such that the claim will have at least some prospect of success, the issue for the motion judge is whether the claimant has established a good arguable case that the cause of action is sufficiently connected to Ontario to permit an Ontario court to assume jurisdiction.

 

The motion judge did that in the following way, by submitting the allegations on the motion to the following assessment:

 

(a)    the facts pleaded in the statement of claim are taken as true and if they are sufficient to establish a good arguable case, the pleadings alone can satisfy the court that it has jurisdiction;

 

(b)     the foreign defendants may put forth affidavit evidence for the purpose of challenging the factual allegations in the statement of claim, but any allegations in the statement of claim that remain unchallenged by the defendants may be challenged as true for the purpose of the jurisdiction motion; and

 

(c)    the plaintiff may respond to any evidence put forward by the foreign defendants in order to satisfy the court that there is a good arguable case.

 

The Court of Appeal held that the core allegations against the defendants were that they participated in three levels of conspiracy to breach duties to persons in Ontario:  an international conspiracy; a Canadian conspiracy, and intra-group conspiracies.  The court was satisfied that the pleadings, in combination with the affidavit evidence filed by the parties, adequately established a cause of action known to law with sufficient connection to Ontario.  It held that a jurisdiction motion is not the appropriate proceeding for scrutinizing in detail the adequacy of the pleadings, nor is it the proper place for engaging in a rigorous assessment of whether the plaintiff's claim would ultimately succeed.  

 

Ontario's case against the tobacco companies will proceed in the Ontario courts.

 

Regards,

 

Blair

Ontario Court Enforces New York Court's Judgment for Specific Performance

The Ontario Court of Appeal recently recognized and enforced an judgment of a New York court for specific performance (Van Damme v. Gelber, 2013 ONCA 388).

 

The defendant in the case, Nahum Gelber is a very successful businessman and philanthropist.  He is a Canadian citizen and lives in Monaco.  Late in 2006, Mr. Gelber was approached about the possibility of selling a very valuable painting that he owned.  The plaintiff, Alexandre Van Damme claimed to have entered into an agreement through his agent with Mr. Gelber's agent to purchase the painting.  Mr. Gelber however refused to deliver the painting, contending that the person who purported to sell the painting on his behalf had no authority to do so.  

 

Mr. Van Damme commenced an action for specific performance in New York requiring Mr. Gelber to complete the transaction and deliver the painting for the price agreed upon in the contract.  Mr. Van Damme relied on the forum selection clause in the contract that included, "this transaction shall be governed by and construed in accordance with the laws of the state of New York without giving effect to its choice of law rules.  In the event of a dispute, the parties consent to the exclusive jurisdiction of the state and federal courts sitting in the state of New York...The parties hereto consent and submit to the jurisdiction of the and state and federal courts sitting in the state of New York."  

 

The painting is hanging in the home of Mr. Gelber's son in Toronto.  At the same time he commenced the action in New York, Mr. Van Damme commenced an application in the Ontario Superior Court of Justice for an order preserving the painting and prohibiting its sale or movement outside of Ontario pending the outcome of the New York litigation.  In a cross-motion, Mr. Gelber took the position that Ontario was forum non conveniens and New York was the more appropriate forum in which to resolve the dispute between the parties.

 

The Ontario application did not proceed to a hearing.  The parties agreed to an order that prohibited the movement of the painting pending the outcome of the New York litigation.  The consent order also provided that the order was made without prejudice to any arguments the parties might make contesting the jurisdiction of "any court in the state of New York or elsewhere to hear this matter".

 

Mr. Gelber subsequently brought a motion in the New York action challenging the jurisdiction of that court.  He maintained that he was not a party to the relevant contract and therefore was not bound by it or by its forum selection clause. 

 

The New York court declined to decide jurisdiction as a preliminary matter but instead ordered Mr. Gelber to file his statement of defence and to proceed with relevant depositions and discoveries.  Mr. Gelber complied with the order and raised many and various standard defences.  After all depositions and discoveries were completed the parties both moved for summary judgment in the New York court.  The judge granted Mr. Van Damme's summary judgment motion and denied Mr. Gelber's summary judgment motion.

 

Mr. Gelber's summary judgment motion went well beyond the jurisdiction issue.  He advanced several arguments that went to the substantive merits of Mr. Van Damme's claim.

 

Mr. Gelber subsequently brought a variety of motions for a rehearing and appeals challenging the New York judgment.  All of the motions and appeals failed.  After the judgment was entered, Mr. Gelber instituted further proceedings challenging the judgment.  Those appeals were still outstanding when the Ontario motion was heard.  However, when the matter went before the Court of Appeal, the New York judgment was final. 

 

The Court of Appeal held that Mr. Gelber had attorned to the jurisdiction of the New York court by his conduct in the course of that litigation.  It cited another decision of the court (Wolfe v. Pickar, 2011 ONCA 347) where Justice Goudge said, "When a party to an action appears in court and goes beyond challenging the jurisdiction of the court based on jurisdiction simpliciter and forum non conveniens, the party will be regarded as appearing voluntarily, thus giving the court consent-based jurisdiction."  

 

The court held that Mr. Gelber's conduct in advancing his motion for summary judgment dismissing Mr. Van Damme's claims went far beyond his jurisdictional challenges.  Mr. Gelber chose to advance substantive defences on the merits.  In doing so he implicitly accepted that the New York court has jurisdiction to decide those issues.  He raised and argued the merits of several contract-based defences to the claim brought by Mr. Van Damme.

 

The Ontario Court of Appeal also held that the fact that the New York judgment was a judgment for specific performance, as opposed to a money judgment, was not a bar to enforcing it here.  The court held that had the matter been tried in Ontario and had an Ontario court made the same finding as the New York court, specific performance would have been an appropriate remedy having regard to the nature of the property, the nature of Mr. Gelber's obligation and the ready availability of the property.  

 

Regards,

 

Blair