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