Happy New Year!

Dear Readers,


All the best for a healthy, happy and prosperous 2016.  See you again soon.


Regards,


Blair

Supreme Court Set to Rule Upon Dismissal Provisions of Canada Labour Code

On January 19, 2016 the Supreme Court of Canada will hear arguments in the case of Joseph Wilson v. Atomic Energy of Canada Limited (“AECL”) (2015 FCA 17).  The case involves the proper interpretation of certain provisions of the Canada Labour Code (“Code”) and whether an employee whose employment is subject to the Code, if dismissed without cause, has automatically been unjustly dismissed. 

 

In this case, AECL had employed Mr. Wilson for four and a half years.  Starting out as a Senior Buyer/Order Administrator, Mr. Wilson had received many promotions.  His last position was Procurement Supervisor, Tooling.  That position was not managerial.  On November 16, 2009, AECL terminated Mr. Wilson’s employment without cause.  AECL offered Mr. Wilson a severance package equal to roughly six months’ pay in exchange for a full and final release.  Had his severance package been determined in accordance with the minimum statutory notice and severance requirements under the Code, he would have been entitled to only 18 days’ pay.

 

Mr. Wilson did not sign the release.  Instead he filed a complaint under Part III of the Code alleging that he had been unjustly dismissed.  At the request of his counsel, Mr. Wilson remained on AECL’s payroll for roughly six months, continuing his access to AECL’s employee benefit programs.  In the end he received the full amount of the severance package AECL had originally offered to him. 

 

An adjudicator was appointed to hear Mr. Wilson’s complaint under the Code.  In the agreed statement of facts placed before the adjudicator, the parties identified two “preliminary questions”:  1.  Whether as a matter of statutory interpretation AECL could lawfully terminate Mr. Wilson’s employment on a without cause basis; and 2.  If so, whether the severance package gave rise to a "just dismissal".

 

The adjudicator accepted Mr. Wilson's submission that dismissal without cause is, by that reason alone, unjust dismissal within the meaning of the Code and that he was therefore entitled to a remedy.

 

Having made that decision, the adjudicator adjourned the hearing, directing the parties to discuss the appropriate remedy in the hopes that it might settle.   Absent settlement, he intended to conduct a hearing to determine whether a remedy was warranted and if so what it should be. 

 

AECL applied to the Federal Court for judicial review of the adjudicator’s decision.  The Federal Court dismissed the appellant’s objection that the judicial review was preliminary and found that the adjudicator’s statutory interpretation decision was unreasonable.  The Federal Court quashed the adjudicator’s decision and remitted the matter back to the adjudicator for decision. 

 

On further appeal to the Federal Court of Appeal, the court dismissed Mr. Wilson’s appeal. 

 

The Federal Court of Appeal found that the proper interpretation  of the Code had created two schools of thought which have persisted for decades.  The key consideration by the court was whether Part III of the Code ousted the common law of dismissal or whether it accepts the common law as given, supplementing and building upon it.  At common law, an employer could dismiss a non-unionized employee without cause, but is liable to provide reasonable notice or compensation in lieu of notice.  If the employee is given such notice, he or she is not wrongfully dismissed.

 

The Federal Court found that the provisions found in Part III of the Code do not represent a sea-change in the law of dismissal but rather enhance the remedies that may be available in appropriate cases of dismissal.   It will always be for the adjudicator to assess the circumstances and determine whether the dismissal, whether or not for cause, was unjust.  The dismissal of an employee without cause is not automatically unjust.

 

Part III of the Code sets out a complaints mechanism and remedies for “unjust” dismissal.  Specifically, a subsection of the Code empowers an adjudicator to “consider whether the dismissal of the person who made the complaint was unjust”.   The Code does not define unjust.  The Federal Court of Appeal examined whether Part III ousted the common law of employment or supplemented and built upon it as set out in that subsection.  

 

In reaching its decision, the Federal Court of Appeal held that the legislator is presumed not to depart from prevailing common law.   Such prevailing common law can be ousted only by way of explicit language or necessary implication.  An example of necessary implication is where the legislator has provided for something that conflicts with the common law so that the two can no longer live together.  The common law is not ousted unless Parliament has expressed its intentions to do so with “irresistible clearness”.  The Code does not contain text or necessary implication that can be taken to oust the aspects of the common law of employment.  The Code was enacted against the backdrop of the common law and does not explicitly oust it in this respect.   

Wilson has obtained leave to appeal from this decision to the Supreme Court of Canada.

AECL's case at the FCA was argued by my partner Ron Snyder.  I will keep you posted.

Regards,

Blair

Court Appointed Receiver Liable to pay Substantial Indemnity Costs

Earlier this year ( June 9th ), I wrote about a case in which the Court of Appeal for Ontario set aside "breathtakingly broad" receivership orders that put in place an "investigative receivership".  This month, the court released its ruling on costs arising from its decision. See Akagi v. Synergy Group (2000) Inc. 2015 ONCA 771. 

 

On the appeal, the court  had set aside ex parte orders issued by Justice Colin Campbell of the Superior Court of Justice (Commercial List).  The court concluded that the orders appointing the receiver stood “on a fundamentally flawed premise” and were “unjustifiably overreaching in the powers they granted”. 

 

In the court’s view, both the judgment creditor, Mr. Akagi - who commenced the receivership proceedings without taking any initial steps to recover on his judgment - and the receiver, J.P. Graci and Associates Ltd., who took the investigative receivership too far, should bear the cost consequences of the orders having been set aside.

 

Mr. Akagi applied for the initial ex parte order appointing the receiver after obtaining a default judgment in the amount of approximately $147,000 based on allegations of fraud arising out of the loss of funds he had contributed to a tax program marketed and sold by the Synergy Group.  The program was supposed to generate tax loss allocations for him, but did not.  His judgment was against the Synergy Group and certain individuals associated with it.  The initial order made by Justice Campbell granted a receivership over all the assets and undertakings of the Synergy Group and an additional company, Integrated Business Concepts Inc. (“IBC”).   

 

It soon became clear however that the principal purpose of the receivership order was not to recover on Mr. Akagi’s judgment debt but to institute a broad ranging inquiry – a roving “investigative receivership” – into what was alleged to be a much larger tax fraud scheme, and to do so, purportedly on behalf of approximately 3,800 other investors who may have been caught in the tax scheme as well.  None of these investors were a party to the Akagi action or the receivership application, none purported to seek to have their interests protected, and Mr. Akagi and the receiver maintained throughout that they did not purport to represent the interests of those investors. 

 

Subsequently, through a series of further ex parte applications, the receivership order morphed into a wide ranging investigative receivership, freezing and otherwise reaching the assets of 43 additional individuals and entities including authorizing the registration of certificates of pending litigation against their properties.  Only three of these entities and individuals had any connection to the underlying Akagi action and only two were actually judgment debtors.

 

The Court of Appeal set aside the receivership orders on the basis that the receivership had proceeded on an entirely misguided course, the orders were impermissibly over-reaching, and the ex parte proceedings themselves had been tainted by certain procedural errors including the receiver's failure to disclose to Justice Campbell that the Canada Revenue Agency had discontinued its investigation into the tax allocation scheme several months before the receivership was sought when evidence of that inquiry had formed the basis for obtaining the orders.

 

All of the appellants, including IBC and Student Housing Canada Inc., sought their costs on a full or substantial indemnity basis against both Mr. Akagi and the receiver, jointly and severally. 

 

The receiver argued that no costs should be awarded against it because it was proceeding in good faith and simply carrying out what it understood to be its court-ordered mandate.  It’s conduct and activities pursuant to the receivership orders were approved by the court in two orders and the general rule is that a receiver is not exposed to costs against it personally in receivership proceedings.

 

Mr. Akagi argued that his involvement with the receivership had been limited solely to obtaining the initial receivership order and to defend that order throughout the receivership.  He argued against responsibility for costs incurred by the appellants subsequent to the initial order. 

 

The Court of Appeal did not accept that Mr. Akagi’s involvement in the receivership proceedings was minimal or limited to obtaining the initial order.  Mr. Akagi had tenaciously defended the subsequent ex parte orders.  Mr. Akagi’s counsel had attended and participated in various motions, scheduling appointments and examinations.  Mr. Akagi was a central participant on the appeal itself.  He instituted and supported the proceedings throughout.

 

As a result, the Court of Appeal found him responsible for costs. 

 

As for the receiver, the court held that it was also liable to pay costs.   The principle that costs are rarely awarded against the receiver applies only when the receiver is acting in his capacity as receiver in the course of the receivership.  It does not apply where the receiver turns itself into a real litigant, drawing others into the fray and forcing them to defend themselves in what amounted to a process that was extraneous to the creditor-driven receivership.

 

The court did not make a finding that the receiver acted in bad faith.  In its view however, the receiver had misconceived its role, and in the process had lost its objectivity in the notion that it was an investigative receiver.  Mr. Akagi’s claim was a relatively small one that did not justify or require the intrusive and far-reaching mareva like orders that were obtained.  In taking these steps, the receiver undermined its neutral position as an officer of the court and turned itself into a litigant for the cause.  As a litigant, it was subject to the loser pays costs regime that applies. 

 

The court awarded costs against the receiver on a substantial indemnity scale as a measure of its disapproval of its conduct. 

 

It awarded costs against Mr. Akagi on a partial indemnity basis.  It appeared to the court that the receiver was the more active litigant pushing for potential action on behalf of all 3,800 alleged victims and calling the shots on the over-reaching orders that were obtained.  In addition, the court reasoned that Mr. Akagi, as an unpaid creditor at least had some interest in pursuing the receivership.

Regards,

Blair

Ontario Courts Refuse to Stay Action Against Nigerian Defendants

The Court of Appeal for Ontario released its decision in James Bay Resources Limited v. Mak Mera Nigeria Limited, 2015 ONCA 781  this week.  This is an appeal by Nigerian appellants who had lost a motion to stay an action brought by James Bay Resources Limited (“James Bay Resources”) on the ground that the Ontario courts lacked “jurisdiction simpliciter” and Ontario was not the convenient forum for the determination of the dispute between the parties. 

 

James Bay Resources entered into a Memorandum of Understanding (“MOU”) with the appellant, Adewale Olorunsola (“Sola”) on March 3, 2011.  The MOU was negotiated and signed in Ontario.  It set out an arrangement between the parties with respect to the acquisition of Nigerian oil and gas assets. 

 

On February 12, 2012, James Bay Resources and the appellant, Mak Mera Limited (“Mak Mera”) entered into a letter agreement which replaced the MOU (“Agreement”).  The Agreement was far more detailed than the MOU.  Sola signed both the MOU and the Agreement.

 

A dispute arose between the parties in respect of the contractual arrangements.  The dispute was fueled by a letter sent by Mak Mera to Royal Dutch Shell PLL on July 2, 2014.  The letter was copied to James Bay Resources, as well as to many others, including the Nigerian Ambassador to Canada and a number of officials of the Nigerian government.  Madam Justice MacFarland of the Court of Appeal found that absence truth, the statements made in the letter were "quite clearly defamatory" of James Bay Resources.

 

On September 4, 2014, James Bay Resources commenced proceedings against Mak Mera and Sola in Ontario.  On September 16, 2014, Mak Mera, Sola and Sola’s father-in-law (a Nigerian resident and Chairman of Mak Mera), commenced an action in Nigeria against numerous parties including James Bay Resources and its CEO, Stephen Shafsky.  Some of the claims in the Nigerian action were similar to those in the Ontario action. 

 

James Bay Resources moved in The Federal High Court of Nigeria to strike the Nigerian action on the grounds that the Nigerian court lacked jurisdiction.  It was unsuccessful.  James Bay Resources is appealing that order.

 

On March 2, 2015, Mak Mera and Sola moved to strike or permanently stay the Ontario action.  Justice Paul Perell of the Ontario Superior Court of Justice concluded that Ontario had jurisdiction simpliciter and identified several presumptive factors that would apply, including that Sola is an Ontario resident and both the MOU and the Agreement were negotiated and signed in Ontario.  Justice Perell also found that the Agreement provides that it is governed by Ontario law and contains a choice of forum clause that names Ontario as the jurisdiction where any disputes would be resolved.  He noted, “Neither Mak Mera nor Mr. Sola has advanced any cogent argument that there is a rebuttal of the contractual connection as a presumptive factor.  Their arguments may be relevant to the issue forum conveniens, but jurisdiction is not rebutted.”.  Mak Mera and Sola appealed to the Court of Appeal. 

 

The appellants made no oral submissions rebutting the contractual connection as a presumptive factor.  Justice MacFarland held that the arguments raised on appeal went to the merits of the claims, not to jurisdiction of the Ontario courts.  Those issues did not displace or challenge the fact that both agreements (the MOU and the Agreements) were negotiated and signed in Ontario and that Sola is an Ontario resident – both are strong, presumptive factors.   

 

The appellants also argued that Justice Perell had erred in law by failing to specifically consider comity in his analysis.  Justice MacFarland embarked on a detailed analysis of the goal of comity in jurisdictional motions.  She referred to the decision of the Supreme Court of Canada in Van Breda v. Village Resorts, [2012] 1 SCR572:

 

The goal of the modern conflicts system is to facilitate exchanges and communications between people in different jurisdictions that have different legal systems.  In this sense it rests on the principle of comity.  But comity itself is a very flexible concept.  It cannot be understood as a set of well-defined rules, but rather as an attitude of respect for and deference to other states and, in the Canadian context, respect for and deference to other provinces and their courts.  Comity cannot subsist in private, international law without order, which requires a degree of stability and predictability in the development and application of the rules governing international or inter-provincial relationships.  Fairness and justice are necessary characteristics of a legal system, but they cannot be divorced from the requirements of predictability and stability which assure order in the conflicts system.   In the words of LaForest J., in Morguard, “what must underlie a modern system of private, international law and principles or order and fairness, principles that ensure security of transactions with justice”.

 

Accordingly, Justice MacFarland found that comity is not a stand-alone factor.  She held that it was part and parcel of the forum non conveniens assessment in a given case.  In dismissing the appeal, Justice MacFarland held that Justice Perell had considered the issue of comity in his analysis.  He had done so implicitly when he outlined and considered all of the relevant factors in coming to his conclusion that Nigeria was not the more convenient forum. 

 

Justice Perell was aware of the Nigerian litigation which was started after the Ontario action.  He was aware that James Bay Resources had filed a statement of defence in that action, and brought an unsuccessful motion to strike and was appealing the dismissal of its motion.  The appellants had cited no law for their argument that by filing a statement of defence in the Nigerian action, James Bay Resources had attorned to the jurisdiction of the Nigerian courts. 

 

Justice MacFarland agreed with Justice Perell’s conclusion that “balancing all factors, Nigeria is not clearly the appropriate forum for the dispute and Ontario is not forum non conveniens.”.

Regards,

Blair

 

 

Court of Appeal Finds Judicial Bias in Bizarre Child Custody Case

In a recent decision (Clayson-Martin v. Martin, 20015 ONCA 596), the Court of Appeal for Ontario overturned a family trial judge’s decision on the basis of a reasonable apprehension of bias.

 

The case involved a custody and access dispute over children aged 10 and 7.  At trial, the judge granted the wife sole custody of the children.  The wife appealed that decision because it provided for the children to have generous access to the husband.  The wife submitted that access should have been terminated because the husband tried to kill her.  The case garnered some notoriety in the news because of the alleged attempted murder.  The couple separated as a result of an incident which occurred while they were on vacation in Jamaica.  Each party alleged that at the end of the vacation, while they were on a deserted road from which the husband had wanted to photograph their hotel, the other attacked with a knife. 

 

The marriage was in trouble in 2010.  The wife wanted to separate from the husband.  He persuaded her to go on one last trip with him to Jamaica for a week in December to try to save the marriage.

 

After leaving the hotel on December 23, 2010, the husband drove the wife to a secluded road where on the wife’s evidence, he slit her throat, forced her into the vehicle after she attempted to flee, strangled her and then drove 17 kilometres before she was able to jump from the moving vehicle and escape.  She was taken to a hospital by a passerby.   

 

On the husband’s evidence, he testified that the wife attacked him with a knife.  He assumed, although he did not see, that she sustained a wound on her neck by her own hand when he, in self-defence, pushed her hand bearing the knife away from him.  This story differs from the one he told Jamaican police at the time of the incident.  At that time he said that his wife was injured by a Jamaican man who had attempted to rob the couple. 

 

Surprisingly, the trial judge concluded that he could not find on a balance of probabilities that the husband had attacked the wife and that if anything, the evidence “tilts in the opposite direction”.  He was not prepared to make a finding either way. 

 

Before the Court of Appeal, the wife’s counsel began her argument by outlining the facts that were not in dispute:  

 

1. the wife suffered a knife wound to her throat, 10 cm in length extending from ear to ear, and which caused profuse bleeding;
2. there were only two people present at the time, the wife and the husband;
3. the wife suffered a deep cut to her thumb;
4. the husband suffered no knife injuries;
5. the husband forcibly carried the wife back to the car, shoved her in the driver’s side and held her as he drove from the scene;
6. the husband drove for 10 kilometres with the wife bleeding profusely and did not stop once to get help;
7. the husband also drove into a dirt road during this time;
8. the wife was observed to have her feet dangling out of the car and screaming for help;
9. the wife either jumped, was pushed, or slipped out of the moving car;
10. the husband, after the wife exited the car, continued to drive, leaving the wife with her throat slit by the side of the road;
11. the husband did not stop or use his cell phone to get help;
12. the husband repeatedly told police that a big Jamaican man had attached them, slit the wife’s throat and fought with them;
13. the husband admitted that the story he told police involving a Jamaican man was a complete fabrication;
14. his stated reason for telling this lie was to protect his wife from being charged with his attempted murder;
15. the husband maintained this lie even after he was arrested and charged with attempted murder of his wife;
16. the wife’s version of what occurred has been consistent throughout:  “my husband slit my throat”.    

 

There were several grounds of dispute including that the trial judge’s conduct during the trial raised a reasonable apprehension of bias. 

On that issue, the Court of Appeal found as follows: 

“The test for bias is well settled – would a reasonable and informed person viewing the matter realistically and practically and having thought it through, conclude that the judge, consciously or unconsciously would not decide fairly.”

 

The objective of the test is to ensure not only the reality, but also the appearance of a fair and adjudicated process.  The court found that the trial judge did not analyse the evidence that came from an independent witness that collaborated the wife’s version of the event.  Instead he rejected the entirety of this evidence because of a minor inconsistency – an inconsistency by which he was also mistaken in the detail.  The trial judge was dismissive of expert evidence which supported the wife’s version of the events.  Again, he focused on a minor inconsistency. 

 

The trial judge was extremely critical of the wife’s evidence, which was troubling in contrast to the generosity with which he treated inconsistency in the husband’s evidence.  While the wife’s inconsistencies were all emphasised, the significant and material inconsistencies in the husband’s evidence were ignored.  This suggested an uneven treatment of the evidence and amounts to an error of law.

 

When questioning witnesses himself, the trial judge appeared to be filling holes in the husband’s testimony. 

 

The trial judge was extremely rude and disruptive of the wife’s counsel. 

In the end, the court found that the trial judge committed several reversible errors.  The trial judge relied on inadmissible hearsay evidence that permeated his entire credibility analysis.  He treated the evidence of the parties unevenly in a way that gave rise to a reasonable apprehension of bias and amounted to an error in law.   Lastly, he failed to consider the full range of factors effecting the best interest of the children which also constituted a reversible error.  As a result of these and other errors, the court set the decision aside and ordered a new trial. 

Regards,

Blair

 

Avon Settles Bribery Related Class Action

 

Avon Products Inc. (“Avon”) recently settled a class action lawsuit brought against the beauty products company and two former executives concerning Avon’s compliance with the US Foreign Corrupt Practices Act (“FCPA”).  Avon settled the lawsuit despite the fact that the US District Court for the Southern District of New York (“Court”) had granted a motion to dismiss the lawsuit.  In the action, certain of the company's shareholders had alleged that Avon and its former executives had issued materially false and misleading statements concerning Avon’s compliance with the FCPA by concealing that the company had given bribes to Chinese government officials by various means, including providing lavish gifts and paying travel expenses improperly.

 

In 2008, Avon publicly announced that it had received allegations of potential FCPA violations in connection with its business in China and that it had disclosed such information to the US Department of Justice (“DOJ”) and the US Securities and Exchange Commission (“SEC”).  That initial press release was the first in a series of public statements by Avon relating to the potential FCPA violations and after each announcement, Avon’s stock price fell.  The class action claimed that Avon had artificially inflated its stock price by intentionally misleading shareholders about the company’s compliance with the FCPA.  The shareholders alleged that the defendants knew that Chinese officials were being bribed years before the company publicly disclosed it in 2008.  The action also alleged that Avon embraced a corporate culture that was “actively hostile” to effective oversight and hid its dependence on corrupt activities to boost their sales revenue. 

 

In December of 2014, the DOJ and SEC levied fines of $135 million to Avon for violating the FCPA - $68 million was paid to settle the DOJ’s criminal investigation and $67 million was paid to settle the SEC’s civil investigation.  As part of the settlement, Avon was also required to retain an independent monitor to review its FCPA compliance program for a period of 18 months, followed by an additional 18 months of self-reporting on its ongoing compliance efforts

 

Shareholder litigation is a common occurrence following or during FCPA investigations of public companies – both securities class actions and shareholder derivative actions.  In a derivative action shareholders file suit against members of the board of directors or corporate officers on behalf of the corporation itself for a wrong the corporation has suffered. 

The Court dismissed the action on the grounds that the plaintiffs had failed to demonstrate that Avon made any false statements regarding the use of bribes.  The Court held that in order to survive the motion to dismiss, the shareholders were subject to “heightened pleading requirements” but had failed to plead facts that were sufficient to demonstrate that Avon’s officers had met the intent to deceive Avon’s shareholders or the intent to report misleading statements regarding Avon’s business successes in China before or after 2008 when the company reported that it had become aware of the allegations. 

 

Under the heightened pleading requirements for securities fraud complaints, shareholders must plead sufficient facts with enough particularity to constitute fraud and plead with particularity facts that demonstrate a strong inference that Avon and its officers and directors intended to deceive their shareholders or were severely reckless. 

 

The Court found that Avon’s statements in its ethics policies regarding its high standards for ethics did not constitute fraud.  It found that these general statements of the company’s commitments to high standards of business ethics were not materially misleading to shareholders finding that the statements were mere “puffery” or generalizations regarding Avon’s integrity upon which reasonable investors would not rely.

  

The Court held that bare assertions about executives of Avon having information adverse to the disclosed filings were not sufficient to demonstrate that they were actually aware of alleged bribes paid to Chinese officials.  The shareholders merely alleged that executives “should have been aware” of the bribes.  The Court held that such facts were too conclusory and lacked sufficient detail to demonstrate intent to mislead. 

 

After 2008, the mere fact that Avon received a whistle-blower report regarding potential violations did not demonstrate that the company and its directors knew the allegations to be true.  They were permitted to conduct an internal investigation before announcing that the company received a report of a potential FCPA violations.

 

The Court also held that the plaintiffs failed to allege particularized facts showing that the company misled investors with regard to its internal investigation or compliance procedures.

 

When Avon first learned about potential FCPA problems in China through an internal audit report, it consulted an outside law firm but did not carry out a thorough investigation.  Instead, it simply directed that internal control measures be instituted at its subsidiary.  However, no such measures were taken and there was no follow up on the compliance initiatives.  The full-blown internal investigation only took place a few years later after a new CEO received a whistle-blower letter.  By this time, much of the damage had been done. 

Settlement of the class action came at a time when Avon had moved to dismiss an amended complaint filed by the shareholders' lawyers

Regards,

Blair   

Supreme Court Permits Enforcement Proceedings Against Chevron

In closing another chapter in what has been a very long story, the Supreme Court of Canada ruled unanimously that forty-seven Ecuadorian villagers can proceed with their Ontario lawsuit against Chevron Corporation (“Chevron”) and Chevron Canada Limited (“Chevron Canada”) to recognize and enforce a U.S. $9.51 million judgment that they obtained against Chevron in the courts of Ecuador.

 

This writer has written about this case before. After the plaintiffs commenced an action in the Ontario Superior Court, Chevron moved to permanently stay the action on the basis that the Ontario Court had no jurisdiction to hear the matter. The motion judge ruled in the villagers’ favour with respect to the issue of jurisdiction. However, the judge exercised the court’s power to stay the proceedings on its own motion on the basis that pursuing a recognition and enforcement proceeding against Chevron in Ontario, where Chevron claimed it had no assets, would be futile and a waste of time and resources.

 

The Ontario Court of Appeal reversed that decision, holding that the Ontario courts need not erect additional obstacles  to the villagers' 27 year fight against Chevron and its predecessor Texaco Oil.  The action had been brought in Ecuador as a result of extensive environmental pollution that had disrupted the lives and jeopardized the futures of approximately 30,000 Ecuadorian indigenous villagers.  The plaintiffs' attempts to obtain compensation had been met with obstacles and roadblocks by Chevron the entire way.

 

The Supreme Court of Canada agreed. Justice Gascon, writing for the unanimous court, held that in order to recognize and enforce a foreign judgment, the only prerequisite is that the foreign court have a real and substantial connection with the litigants or with the subject matter of the dispute or that the traditional bases of jurisdiction were satisfied.

 

Canadian courts have never required that there be a real and substantial connection between the defendant or the action and the enforcing court for jurisdiction to exist in recognition and enforcement proceedings. The Supreme Court held that an unambiguous statement  that a real and substantial connection was not necessary would have the benefit of providing a fixed, clear and predictable rule, and would help to avoid needless and wasteful jurisdictional inquiries.

 

The Court held that there were two considerations of principle that support the view that a real and substantial connection test should not be extended to an enforcing court. Firstly, in an action for recognition and enforcement, the only purpose of the action is to allow a pre-existing obligation to be fulfilled. As the enforcing court is not creating a new substantive obligation, there can be no concern that the parties are situated elsewhere or that the facts underlying the dispute are properly addressed in another court. Each jurisdiction has an equal interest in the obligation resulting from the foreign judgement and no concern about territorial overreach could emerge.

 

The Court held that it must be remembered that the notion of comity has consistently been found to underlie Canadian recognition and enforcement law. The need to acknowledge and show respect for the legal action of other states has remained one of comity’s core components and militates in favour of recognition and enforcement. No unfairness results to judgment debtors from having to defend against recognition and enforcement proceedings – through their own behaviour and illegal non-compliance, they have made themselves a subject of outstanding obligations, so they may be called upon to answer for their debts in various jurisdictions.

 

The court held that requiring any defendant to be present or to have assets in the enforcing jurisdiction would only undermine order and fairness. In today’s globalized world and electronic age, to require that a judgment creditor wait until the foreign debtor is present or has assets in the province before a court can find that it has jurisdiction in recognition and enforcement proceedings would be to turn a blind eye to current economic reality.

 

Secondly, the court held that finding that there is no requirement of a real and substantial connection between the defendant or the action and the enforcing court is also supported by the choices made by the Ontario legislature, all other common-law provinces and territories, Quebec, other international common-law jurisdictions and most Canadian conflict of laws scholars.

 

In this case, the motion judge had correctly found jurisdiction with respect to both Chevron and Chevron Canada. The establishment of jurisdiction did not mean that the plaintiffs would necessarily succeed in having the Ecuadorian judgment recognized and enforced. It did nothing more than afford the Plaintiffs the opportunity to seek recognition and enforcement in Ontario. Chevron and Chevron Canada could use the available procedural tools to defend against the plaintiffs’ allegations.

The case will continue and will continue to be hard fought.

Regards,

Blair

 

Supreme Court Rejects Racial Profiling Claim Against Bombardier

Bombardier Inc. (“Bombardier”), the Montreal based aerospace company, operates two aerospace training centers – one in Montreal and the other in Dallas, Texas - at which pilots are trained on the types of aircraft produced by Bombardier.  Bombardier holds a training certificate from the US Federal Aviation Administration under which it is authorized to provide the necessary training to pilots holding US licenses. 

 

Almost immediately after the terrorist attacks of September 11, 2001, the United States implemented enhanced security measures.  Such measures included enacting, in November of 2001, the Aviation and Transportation Security Act (the “Act”).  The Act required that any organization (including Bombardier) wishing to provide pilot training to an individual who was not a US citizen, submit the individual’s name to US authorities for security screening:  Screening of Aliens and Other Designated Individuals Seeking Flight Training.  The security training was carried out by the US Department of Justice (“DOJ”) until the end of September 2004.  At that time, the United States passed even stricter security screening requirements and transferred control over screening to the Department of Homeland Security.

 

Canada did not adopt similar measures with respect to the training of pilots holding Canadian licenses.

 

The plaintiff in this case, Javed Latif (“Latif”), was a Canadian citizen but was born in Pakistan.  Latif had been flying airplanes since 1964.  He had held a US pilot’s license since 1991 and a Canadian pilot’s license since 2004.  He had an unblemished career record and had taken many training courses from Bombardier. 

 

In 2003, Latif was offered employment flying a Boeing 737 under his US license.  He registered for training and in October of 2003 the DOJ issued him a security clearance.  He took his training in the US and was certified in December of 2003.  Unfortunately, the job opportunity fell through.

 

In January of 2004, at a time when he was unemployed, Latif accepted a friend’s offer to go to Pakistan to participate in a real estate project.  In March of 2004, while he was still in Pakistan, he received an offer from a Canadian company to pilot a Bombardier aircraft. 

 

Latif initially registered for training on this new aircraft under his US license at Bombardier’s Dallas training center.  Because he was in Pakistan there was a delay so that Latif, then asked the Canadian company to register him for training under his Canadian license.

 

In April of 2004, the Canadian company informed Latif that Bombardier had received an unfavourable reply to his security screening request from the US.  No explanation for the refusal was provided at that time.  Latif then checked with Bombardier who also refused to provide him with training under his Canadian license based solely on the fact that DOJ had not issued Latif a security clearance. 

 

When Latif wrote to the US authorities, he was advised that:  “The denial decision was made after extensive analysis of the data received.  This process is in place to protect the national security of the US.  There is no appeals process for non-US citizens.”   

 

Latif filed a discrimination complaint against Bombardier with Quebec’s Commission des droits de la personne et des droits de la jeunesse (“Commission”).  After investigating, the Commission initiated proceedings in the Quebec Human Rights Tribunal (“Tribunal”).  At the Tribunal, the Commission alleged, among other things, that Bombardier “had impaired Latif’s right to avail himself of services ordinarily offered to the public and his right to the safeguard of his dignity and reputation without discrimination based on ethnic or national origin, contrary to sections 4, 10 and 12 of the Quebec Charter of human right and freedoms” (“Charter”). 

 

The Tribunal ordered Bombardier to pay damages to Latif.  It also ordered Bombardier to cease applying or considering the standards and decisions of the US authorities in national security matters when dealing with applications for the training of pilots under Canadian pilot licenses. 

 

The Quebec government appealed to the Quebec Court of Appeal which set aside the Tribunal’s decision on the basis that the Tribunal could not find that Bombardier had discriminated against Latif without proof that the US authorities’ decision was itself based on a ground that was prohibited under the Charter. 

 

Latif’s appeal to the Supreme Court of Canada was dismissed.

 

In dismissing the appeal, the Supreme Court agreed with the Court of Appeal that Latif could not prove on the balance of probabilities that the US authorities’ refusal to issue him a security clearance was based on a prohibited ground of discrimination under the Charter.  The SCC held that the Commission had not adduced sufficient evidence – either direct or circumstantial – to show that Latif’s ethnic or national origin had played any role in the US authorities’ unfavourable reply to his security screening request.  The Supreme Court held that it could not be presumed solely on the basis of a social context of discrimination against a group that a specific decision against a member of that group was necessarily based on a prohibited ground under the Charter.  It held that this, in practice, would amount to reversing the burden of proof in discrimination cases.  The Supreme Court held that evidence of discrimination, even if it is circumstantial, must be tangibly related to the impugned decision or conduct. 

 

As for the process, the SCC held that an application with respect to a complaint under the Charter involves a two-step process that successively imposes separate burdens of proof on the plaintiff and the defendant.  At the first step, the Charter requires that the plaintiff prove a distinction or exclusion based on one of the grounds listed in the first paragraph of the Charter which has the effect of nullifying or impairing the right to full and equal recognition in exercise of a human right or freedom.  If the elements comprising the first step are established, then there is “prima facie discrimination”.  At the second step, the defendant (Bombardier) can seek to justify his or her decision or conduct on the basis of the exemptions that are provided for in the applicable human rights legislation or developed by the courts.    

 

The Court emphasized however, that the evidence of discrimination must be adduced on the standard of proof that normally applies in civil law cases, namely proof on a balance of probabilities.

 

This case is indexed as Quebec (Commission des droits de la personne et des droits de la jeunesse) v. Bombardier Inc. 2015 SCC 39

Regards,

Blair

Court of Appeal Upholds Substantial Indemnity Costs Award

In the dog days of summer, cases that one might otherwise ignore, suddenly cry out for attention.  One such case is Matthew Brady Self Storage Corporation v. InStorage Limited Partnership 2014 ONCA858 which deals with the exciting issue of the cost consequences of offers to settle.

 

The principals of Matthew Brady Self Storage Corporation (“Matthew Brady”) jointly purchased with the principal of InStorage Limited Partnership (“InStorage”) a vacant factory in Windsor, Ontario and converted it into a self-storage facility.  InStorage was part of a group of corporations in the business of operating self-storage facilities and had approximately 50 sites in operation at the time.  Matthew Brady was incorporated for the purpose of acquiring and converting the property for the joint venture. 

 

The plans of the joint venture partners were altered when InStorage ran into financial difficulties.  This circumstance led to further negotiations and a new arrangement whereby the principals of Matthew Brady agreed to put up the entire purchase price so that Matthew Brady would become the sole owner of the Windsor property pending completion of the project.  The parties entered into a put/call agreement under which Matthew Brady could force InStorage to purchase the property through a “put” and InStorage could force Matthew Brady to sell the property to it through a “call” beginning one year following substantial completion of the retrofit and for three years after that.  

 

The put/call agreement provided that if the parties could not agree on a purchase price, an appraiser would determine the purchase price and in the absence of a manifest error, the appraiser’s determination of “fair market value” as defined, would bind the parties.  The fair market value definition provided that the primary consideration was to be the net cash flow generated from the property.  Matthew Brady exercised the put.  It obtained an appraisal.  However, InStorage refused to accept the appraiser’s determination of the fair market value of the property, taking the position that he had made a manifest error in failing to base his conclusion about fair market value on the income approach. 

 

Matthew Brady sued.  The trial judge granted a motion by Matthew Brady to exclude the report and evidence of a second appraiser.  In the course of that ruling, the trial judge found that the original appraiser had made no manifest error in arriving at his fair market value conclusion.  The trial judge allowed Matthew Brady’s action.  InStorage appealed to the Ontario Court of Appeal.

 

The Ontario Court of Appeal (consisting of Justices Doherty, Blair and Tulloch) dismissed the appeal holding that the language of the put/call agreement did not require the appraiser to use the income approach.  Instead, he was required to give that approach “primary consideration”.  Ultimately, it was open to the appraiser to determine that the income approach was not helpful.  For the purposes of the appeal, the court assumed that the trial judge should not have made a finding that there was no manifest error in the appraisal in the course of his admissibility ruling, and that he should have given InStorage a full opportunity to address that issue.  However, that error did not result in any prejudice to InStorage, as InStorage would have been unable to establish manifest error in any event. 

 

The Court of Appeal held that the trial judge did not err in granting specific performance of the put/call agreement.  Damages are always an adequate remedy where the vendor is the plaintiff.  However, in this case the vendor was intended to be the defendant.  The parties clearly intended InStorage to be the sole owner of the property.   Matthew Brady had renovated the property to InStorage’s specifications and design criteria.  But for InStorage’s commitment to owning the property, Matthew Brady would not have acquired it and done the retrofit.  InStorage occupied, managed and operated the building since the completion of the retrofit.  The Court of Appeal found that it had done a poor job of managing the property – something that would affect its value and impede a steady sale.   The court held that in such circumstances, damages would not adequately compensate Matthew Brady for InStorage’s refusal to abide by the put/call agreement.

 

Get ready for the kicker.  At the end of the trial, the trial judge made a cost award of $415,000 plus HST in favour of Matthew Brady.  The award was made on a partial indemnity basis to a point that an offer to settle was made by Matthew Brady (and not accepted by InStorage) and on a substantial indemnity basis thereafter.  InStorage submitted that the offer to settle did not qualify as a Rule 49 offer for costs purposes because, although it had been exchanged directly between the parties, it had not been served on InStorage’s lawyers as required by the rules.  The Court of Appeal disagreed. 

 

The Court of Appeal agreed that Matthew Brady’s offer to settle had not been served on InStorage’s lawyers but that fact did not preclude an award of costs on a substantial indemnity basis.  Service of the offer on InStorage did not create any confusion or difficulty and there was no evidence that InStorage’s lawyers were unaware of the offer.  The court held that the trial judge did not err in awarding substantial indemnity costs that exceeded the multiplier in rule 1.03(1) of the Rules of Civil Procedure on the basis that InStorage’s conduct had unnecessarily prolonged the trial. 

Regards,

Blair

 

New Trial Ordered after Judge Signs up for Dating Site

In a recent (and very odd) decision - R. v. H. (C.D) 2015 ONCA102 - the Ontario Court of Appeal set aside a trial judge’s acquittals of an accused on a number of charges including sexual assault, possession of a weapon and unlawful confinement and ordered a new trial on the grounds that the trial judge’s conduct gave rise to a reasonable apprehension of bias. 

 

The trial judge had acquitted the accused of sexual assault of his wife, but had found him guilty of the included offence of simple assault.  However, before sentencing the accused, the trial judge declared a mistrial based on a reasonable apprehension of bias that arose out of a meeting that he had in his chambers with the police officer in charge of the case immediately after he delivered the reason for his verdicts.

 

During the break between the verdict and the decision on sentencing, the trial judge asked to see the officer in charge of the case in his chambers.  When she arrived the judge told her she had missed valuable evidence.  The evidence at trial had been that the complainant and the accused had met on a website called Match.com and during the alleged sexual assault encounter, the accused had become angry and searched the website to see the complainant’s other contacts on the site.   The judge told the officer that he had gone on to the website the night before and created a fake profile of himself.  The judge said that had defence counsel done the same thing, she would have been able to "hang the victim with all of the available information" because a large amount of information was entered on the site including how many drinks a desired partner should consume.

 

In setting aside the acquittals and ordering a new trial, the Court of Appeal (Justices Laskin, Feldman and Simmons) held that two considerations supported their conclusions:  (1) in declaring a mistrial, the trial judge himself recognized that the verdicts were tainted by reasonable apprehension of bias; and (2) the conduct of the trial judge in conducting his own evidentiary research while the decision was under reserve – whether or not he had already written his reasons or had accessed any actual details about the complainant – and his comment to the officer about using website information to “hang” the complainant, created the appearance of bias.

 

The long-accepted test for reasonable apprehension of bias was set out by de Grandpré J., in a Supreme Court of Canada case - Committee for Justice and Liberty v. Canada (National Energy Board), as follows:  “The apprehension of bias must be a reasonable one, held by reasonable and right-minded persons, applying themselves to the question obtaining thereon the required information…the test is “what would an informed person, viewing the matter realistically and practically – and having thought the matter through – conclude.  Would he think that it is more likely than not that the decision-maker, whether consciously or unconsciously, would not decide fairly.” 

 

Further, the Court of Appeal held that in order to maintain public confidence in the administration of justice, the appearance of judicial impartiality is as important as the reality. 

 

The trial judge’s conversation with the officer about the evidence tainted the perceived fairness of the process.  Conducting his own research was contrary to the basic principle that judges and jurors must make their judicial decisions based only on the evidence presented in court on the record. 

 

His comment to the officer about “hanging” the complainant may have had an innocent explanation, but viewed objectively, from the standpoint of a reasonable person, it created the impression that consciously or unconsciously the trial judge would not decide fairly and in particular would not fairly decide the credibility of the complainant.  The Court of Appeal cited instances in the trial record where the judge had commented negatively about the complainant and her credibility.

Regards,

Blair

County Held Liable To Farmer For Excessive Use of Road Salt

In the case indexed as Steadman v. Lambton (County) 2015 ONSC 101, the plaintiff, (“Steadman”) and his wife, lived on a farm bordering Nauvoo Road in Lambton County, Ontario (“County”).  Mr. Steadman had been a full-time farmer for all of his adult life.  His wife was a retired nurse.  

 

Mr. Steadman farmed wheat and soybeans on his land and had been doing so for more than 40 years.  In the mid to late 1990s he observed crop damage due to the County spraying salt on Nauvoo Road.  He sued the County for nuisance, claiming crop losses, diminution of the value of his farm.  Mr. Steadman also claimed that the farm was now burdened with a "stigma' of having been damaged by the salt.   

 

The County defended the action claiming that the real culprit was the poor drainage on Mr. Steadman’s property; he had taken no steps to fence the property and restrict the wind's distribution of salt or use gypsum to mediate the effects of salt on his land.

 

The matter proceeded to trial before Justice Carey of the Ontario Superior Court of Justice.

 

Justice Carey reviewed extensive factual and expert evidence with respect to both liability and damages.  He concluded on all of the evidence, that the pattern of salt dispersal on Mr. Steadman’s farm was consistent with his engineering expert's opinion that higher levels of salt contamination were found closest to the road.  The only reasonable logical inference was that the salt was coming from road spray and off the road itself.  Justice Carey found on the balance of probabilities that the dispersion of the road salt along the portion of the land that bordered the road was the cause of the damage to Mr. Steadman's wheat and soya crops from about 1999 to the date of trial.

 

Justice Carey relied on the leading case in Ontario in considering whether road salt constitutes a nuisance – Schenck v. The Queen; Rokeby v. The Queen.  In that 1981 case, (which was upheld on appeal to the Ontario Court of Appeal and Supreme Court of Canada), Justice Robins balanced the interests between the plaintiffs' private property rights with the importance of proper highway maintenance to the public at large.  He found that on a balancing of the conflicting interests it would be unreasonable to compel the plaintiffs to continue to suffer interference for an indeterminate time without compensation from the government.  The injury was a cost of highway maintenance and the harm suffered by the plaintiffs was greater than they should be required to bear in the circumstances, at least without compensation.   Fairness between the citizen and the state demands that the burden imposed be borne by the public generally and not by the plaintiff farmers alone. 

 

As for damages, Justice Carey assessed damages at approximately $107,000 for crop losses, the cost of soil and plant tissue analysis, and diminution in the value of Mr. Steadman’s property.   

He concluded that on the evidence, Mr. Steadman had not satisfied him that there should be separate damage award for stigma (the seminal case in Ontario on stigma is Tridan Developments Limited v. Shell Canada Products Limited).  In that case, the Ontario Court of Appeal considered whether there would be a residual reduction in the value of land, even after it had been restored to a pristine condition caused by the knowledge that it had once been polluted.

Justice Carey reviewed the cases following Tridan as well as the evidence presented by Mr. Steadman.  He concluded that the salt contamination posed no human safety concern.  Additionally, he did not accept that the highest and best use of the land was cash crop farming.  Portions of the farm were unaffected by the salt and there was the ability to sever and/or consolidate the farm and its buildings for other uses.

Regards,

Blair

Supreme Court to Pot Users: No Need To Smoke Your Medicine

The Supreme Court of Canada has ruled that users of medical marihuana need not “smoke their medicine” but rather can get access to the drug in other forms.  In the case of R. v. Smith, 2015 SCC 34, the court ruled that under the Controlled Drugs and Substances Act (“Act”), a medical access regime that permits access to only dried marihuana unjustifiably violates the guarantee of life, liberty and security of a person contrary to section 7 of the Canadian Charter of Rights and Freedoms (“Charter”). 

 

The Act prohibits the possession, production and distribution of cannabis, its active compounds and its derivatives.  However, in recognition of the fact that controlled substances may have beneficial uses, the Act empowers the government to create exemptions by regulation for medical, scientific or industrial purposes.  The Marihuana Medical Access Regulations created such an exemption for people who can demonstrate a medical need for cannabis.  Applicants are required to provide a declaration from a medical practitioner certifying that conventional treatments were ineffective or medically inappropriate for treatment of their medical condition.  Once they had met all regulatory requirements patients were legally authorized to possess dried marihuana, defined as “harvested marihuana that has been subjected to any drying process”.

 

The regulations were replaced in 2013 with new regulations, but the situation remained unchanged – for medical marihuana patients the exemptions from the offence was still confined to dried marihuana. 

 

In this case, the accused, Owen Smith worked for an entity called the Cannabis Buyers Club of Canada located on Vancouver Island.  The club sold marihuana and cannabis derivative products to its members.  It sold dried marihuana for smoking but also edible and topical cannabis products – cookies, gel capsules, rubbing oil, topical patches, butters and lip balms.  It also provided members with recipe books for how to make products by extracting the active compounds from dried marihuana.

 

Responding to a complaint about the smell of pot, police raided Mr. Smith’s apartment and charged him with possession of THC for the purpose of trafficking contrary to the Act and with possession of cannabis contrary to the Act.  

 

At trial, the judge held that the prohibition on non-dried forms of medical marihuana unjustifiably infringed section 7 of the Charter.  A majority of the British Columbia Court of Appeal dismissed the Crown’s appeal.  The matter was further appealed to the Supreme Court of Canada.

 

The judgment of the seven member court was delivered by “the court”.  The court dismissed the appeal.  It held that the prohibition on possession of non-dried forms of medical marihuana limited the section 7 Charter right to liberty of the person in two ways:  (1)  the prohibition deprived Smith as well as medical marihuana users of their liberty by imposing a threat of imprisonment or conviction under the Act;  and (2)  it limited the liberty of medical users by foreclosing reasonable medical choices through the threat of criminal prosecution.  The court ruled that by forcing a person to choose between a legal but inadequate treatment (smoking) and an illegal but more effective one, the law also infringed security of the person. 

 

The court held that the limits in the regulations were contrary to the principles of fundamental justice because they were arbitrary.  The effects of the prohibition contradicted the objective of protecting health and safety. 

 

The evidence presented at trial amply supported the trial judge’s conclusions that inhaling marihuana can present health risks and that it is less effective for some conditions than administration of cannabis derivatives.   In other words, there was no connection between the prohibition of non-dried forms of medical marihuana and the health and safety of the patients who qualified for legal access to it.   

 

The expert evidence, along with the anecdotal evidence from the medical marihuana patients who testified did more than establish a subjective preference for oral or topical treatment forms.  The evidence demonstrated that the decision to use non-dried forms of marihuana for treatment of some serious health conditions was medically reasonable.  To put it another way, there were cases where alternative forms of cannabis will be “reasonably required” for the treatment of serious illnesses.  In those circumstances, the criminalization of access to the treatment infringed the liberty and the security of the person.

 

In this case, the objective of the prohibition frustrated the requirement under section 1 of the Charter that the limit on the right be rationally connected to a pressing objective.  The court found that it was not and therefore the infringement of section 7 was not justified under section 1 of the Charter.

 

Regards,

 

Blair

Supreme Court Denies Aboriginal Accused's Right to Representative Jury

The Supreme Court of Canada has recently tackled ( and in my view, wrongly decided) the issue of representativeness of Aboriginal people on Canadian juries.  In the case of R. v. Kokopenace, 2015 SCC 28, the appellant, Clifford Kokopenace, was an Aboriginal Canadian from the Grassy Narrows First Nations Reserve in the District of Kenora, Ontario.  He was charged with second degree murder for stabbing his friend to death in a fight.  He was tried by a judge and jury in 2008, acquitted of murder but convicted of manslaughter.  Prior to his sentencing, Kokopenace’s lawyer learned that there may have been problems with including Aboriginal on-reserve residents on the jury roll for the District of Kenora which raised questions about the representativeness of the jury in his case.  The issue was raised for the first time on appeal to the Ontario Court of Appeal.

 

Mr. Kokopenace argued at the Court of Appeal that because his jury was chosen from a jury roll that did not adequately ensure that Aboriginal on-reserve residents were included, his rights under sections 11(d), 11(f) and 15 of the Charter of Rights and Freedoms (the “Charter”) were violated. 

 

Section 11(d) of the Charter provides that any person charged with an offence has the right... to be presumed innocent until proven guilty according to law in a fair and public hearing by an independent and impartial tribunal. 

 

Section 11(f) of the Charter provides any person charged with an offence has the right…except in the case of  an offence under military law tried before a military tribunal, to the benefit of trial by jury where the maximum punishment for the offence is imprisonment for 5 years or a more severe punishment. 

 

Section 15 of the Charter is the “equality rights” sections that provides that at 15(1) every individual is equal before and under the law and has the right to the equal protection and equal benefit of the law without discrimination and, in particular, without discrimination based on race, national or ethnic origin, colour, religion, sex, age or mental or physical disability. 

 

After reviewing the fresh evidence that was introduced on the appeal regarding the efforts that Ontario had made in preparing the jury rolls for the District of Kenora, two out of the three judges of the Ontario Court of Appeal held that Mr. Kokopenace’s section 11(d) and 11(f) rights had been violated and ordered a new trial on that basis.  The dissenting judge held that Ontario had made reasonable efforts to include Aboriginal on-reserve residents on the jury roll and would have dismissed the appeal.  All three judges rejected Mr. Kokopenace’s section 15 claims.

 

On appeal to the Supreme Court of Canada before a seven member court, the Crown was successful in having the Supreme Court overturn the decision of the Ontario Court of Appeal.   Below are the somewhat lengthy and complex reasoning of the court.  The majority decision was written by Justice Moldaver.

 

Justice Moldaver reviewed in detail the jury selection process in the District of Kenora.  He referred to the Ontario Juries Act which used municipal assessment lists obtained from Municipal Property Assessment Corporation (“MPAC”).  However, MPAC data does not capture individuals who reside on First Nations Reserves.  For that reason, the Juries Act provides a separate process for including on-reserve residents (calling them Indian reserves).  The aim of both sections is that each municipality or reserve be sent the number of jury notices that is approximately proportionate to that municipality's or reserve’s percentage of the total population in the judicial district. 

 

Staff in the Court Services Division (“CSD”) are responsible for virtually the entire process of selecting on-reserve individuals for the jury roll.  Ontario’s Ministry of the Attorney General has provided CSD staff with guidance on the process to follow in doing so.  The guidelines provided encouraged staff to attempt to obtain the best lists of on-reserve residents available. 

 

The problem was that the District of Kenora contains a large number of reserves which are associated with approximately 46 different First Nations.  The on-reserve adult population makes up between 21 – 32 per cent of the adult population in the district, however, the response rate from on-reserve residents to jury questionnaires was below 10 per cent. 

 

There had been a significant decline in the rates of response to jury notices from on-reserve residents in the District of Kenora over the years.  In 1993, the return rate for completed jury questionnaires was approximately 33 per cent for on-reserve residents (compared to about 70 per cent for off-reserve communities). 

 

Many of the Aboriginal communities in the District of Kenora are remote and are accessible only by air.  Individuals typically do not have mailboxes at their place of residence.  Some have access to a community mailbox or have an individual box in the post office.  For others, mail is held at the post office until they retrieve it.  When jury notices are sent to on-reserve residents, they are sent by “general delivery”.  Mail delivered in this manner is sent to the community post office but not to individual or community postal boxes.  The CSD relies on postal clerks with local knowledge of the residents of the community in order to ensure that these notices are properly delivered. 

 

There was, not surprisingly, much confusion in the District of Kenora and in 2007 the rate of return for on-reserve residents was approximately 10 per cent compared to an off-reserve response rate of 56 per cent.  Many of the jury notices were returned by the post offices as undeliverable. 

 

Ultimately, only 10 per cent of the questionnaires sent to on-reserve residents were returned and only 5.7 per cent of on-reserve residents who returned the questionnaires were eligible to serve as jurors.  Mr. Kokopenace’s jury was selected from a jury panel of 175 jurors, 8 of who were on-reserve residents.  No on-reserve residents were selected for Mr. Kokopenace’s jury. 

 

The Ontario Court of Appeal delivered three sets of reasons.  Justices LaForme and Goudge held in Mr. Kokopenace’s favour.  Justice Rouleau held there was no Charter violation.

 

Since 2008, Ontario has expanded its efforts to include on-reserve residents in the jury selection process.  In 2011, for example, Ontario appointed former Supreme Court Justice Frank Iacobucci as an independent reviewer to study the issue of the under-representation of Aboriginal on-reserve residents on juries and to make recommendations for resolving the problem.  Justice Iacobucci's report was not released until 2013.  The report revealed that the problem is multi-faceted and extends well beyond the difficulty of obtaining accurate source lists.  It explains that the problem is linked to the long history of Aboriginal estrangement from the justice system and the mistrust of that system that has resulted.  Ontario has since begun implementing some of the report’s recommendations. 

 

The majority of the Court of Appeal emphasised that the analysis of Ontario’s efforts to increase Aboriginal on-reserve representativeness must be guided by both the honour of the Crown and the principles in the Supreme Court case of R. v. Gladue.  Justices LaForme and Goudge held that Ontario was required to consider the estrangement of Aboriginal peoples from the justice system and to work with First Nations governments to create a solution to the problem.  It was unreasonable for Ontario to delegate such responsibilities to a junior public servant in the CSD. 

 

The majority also concluded that Ontario had improperly focused its attention on obtaining updated lists and was required to investigate the causes of the problem and to actively encourage responses from on-reserve residents.  Its failure to do so meant that it had not made reasonable efforts to provide a fair opportunity for the inclusion of Aboriginal on-reserve residents. 

 

In dissent, Justice Rouleau found that Ontario’s efforts were reasonable in light of what was known at the time.  In other words, at the time relevant to the appeal (before the Iacobucci report) everyone was under the impression that the low response rates were caused by outdated lists. 

 

The Supreme Court of Canada - Justices Rothstein, Moldaver, Wagner and Gascon, with partially concurring reasons written by Justice Karakatsanis agreed with the dissenting judge of the Ontario Court of Appeal.  It held that representativeness is an important feature of our jury system but its meaning is circumscribed.  What is required is a representative cross-section of society, honestly and fairly chosen.  Representativeness focuses on the process used to compile a jury roll, not its ultimate composition.  

 

The court held that to determine if the state has met its obligation in that respect, the question was whether it had provided a fair opportunity for a broad cross-section of society to participate in the jury process.  To do so, the state must make reasonable efforts to:

 

1. compile the jury roll using random selection from lists that draw from a broad cross-section of society; and
2. deliver jury notices to those who have been randomly selected.   

 

When this process is followed, the jury roll with be representative and an accused’s Charter right to a representative jury will be respected.

 

As to the alleged Charter violations, the court held that the role of representativeness under section 11(d) is limited to its effect on independence and impartiality.  Section 11(d) will be violated if the process used to compile the jury roll raises an appearance of bias at the systemic level, i.e. deliberate exclusion of a particular group or efforts in compiling the jury roll that are so deficient as to create an appearance of impartiality.  The court held that that was not the case in respect of Mr. Kokopenace’s jury. 

 

The role of representativeness in section 11(f) is broader.  It not only promotes impartiality, it legitimizes the jury’s role as the “conscious of the community” and promotes public trust in the criminal justice system.  If there is a question of unintentional exclusion, it is the quality of the state’s efforts in compiling the jury roll that will determine whether an accused’s right to a representative jury has been respected.  If the state makes reasonable efforts, but part of the population is excluded because it declines to participate (for whatever reason), the court held that the state will nonetheless have met its constitutional obligation. 

 

The majority held that representativeness is not about targeting particular groups for inclusion on the jury roll.  The province was therefore not required to address systemic problems contributing to the reluctance of Aboriginal on-reserve residents to participate in the jury process.  In other words, the accused’s individual right is not the appropriate mechanism for repairing the broader relationship between societal groups and the criminal justice system. 

 

As written by Justice Moldaver, the Supreme Court held that there was no right to a jury roll of a particular composition nor to one that proportionately represents all the diverse groups in Canadian society. 

 

The majority held that the province had met its representativeness obligation in the case and dismissed the appeal. 

Regards,

Blair