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