Continental Precious Minerals Inc. ("Continental" or the "Company") is a junior natural resource and mining company whose shares are traded on the Toronto Stock Exchange. The Company owns a number of mineral exploration licenses in Sweden. Continental has filed several technical reports containing estimates of the resources in its main project. However, to date, Continental's mineral exploration licenses have not earned any revenues and are still in the development stage.
Continental was founded in 1987 by Edward Godin, a retired commercial airline pilot. Mr. Godin has been President, CEO and a member of Continental's board of directors ("Board") since that date. Mr. Godin is the only executive of the Company who is employed on a full-time basis. He is 69 years old and has no plans to retire.
When the Company was formed, Mr. Godin and his friends and family held the majority of its shares. At that time, the Company's by-laws provided that two shareholders, personally present or represented by proxy would constitute a quorum for any meeting of any class of shareholders.
However, as the Company issued more shares to other investors, and Mr. Godin's position became diluted, he became increasingly concerned about his ability to maintain control of the Company. In 1996, at Mr. Godin's request, the Board initiated an amendment to the ordinary quorum ("Ordinary Quorum") for the purposes of considering any matter that related to removing directors from office, electing or appointing directors, changing the number of directors, or later amending or appealing this provision of the by-laws from two or more persons, personally present or represented by proxy, to two or more persons representing not less than 50 per cent of the outstanding voting shares of the Company ("Special Quorum"). As a result, the bylaws provided for two separate quorums: the Special Quorum for electing directors and the Ordinary Quorum for all other business.
According to the circular for the 1996 AGM, the Board's rational for adopting the Special Quorum was that "only a significant number of shareholders ought to be able to change the board, since change in the board will effect the overall direction of the Company". The amendments were ratified at the 1996 AGM, apparently by no more than 5 per cent of the total shares of the Company.
The Board enacted the Special Quorum with the knowledge that it was unlikely that the Special Quorum would be achieved, given the historically low attendance at meetings of shareholders. In fact, the Special Quorum has never been achieved for 15 years – since the 1996 amendment. The effect of the amendment has been to entrench Mr. Godin and his friends on the Board: Patricia Sheahan was appointed to the Board in 1998, Gerard Osika in 2005 and Herb Dhaliwal in 2008. Neither Mr. Osika's or Mr. Dhaliwal's appointment was ratified by shareholders as a result of the Company's failure to achieve the Special Quorum.
The applicants are a group of shareholders who challenged the Special Quorum on the basis that it was not only impractical because its effect was to prevent the election of directors, but taken together with Mr. Godin's conduct at the Company's last AGM (held October 24, 2011), the Special Quorum was "oppressive" to their interests as shareholders of Continental.
The applicants (the Ebrahim family, Jatinder Dhillon and Rita Hoff) are the beneficial owners of approximately 22.5 per cent of the outstanding shares of Continental.
On August 19, 2011, the Company announced that the 2011 AGM would be held on October 24, 2011. The management information circular indicated that the four nominees for election to the Board were all the incumbent directors, Godin, Sheahan, Osika and Dhaliwal.
At the October 2011 AGM there were approximately 51,750,000 issued and outstanding common shares of which the Board owned approximately 3.25 per cent.
The applicants had been dissatisfied with the performance of the Company for some time. Prior to the 2011 AGM, arrangements were made through Gary Singh, their investment advisor at Canaccord Genuity Corporation ("Canaccord"), for a meeting between Mr. Godin, Sajjad Ebrahim and Jatinder Dhillon. Godin failed to show up for the meeting and shortly thereafter, certain of the shareholders including the applicants retained Grant Sawiak of Fogler, Rubinoff to advise the Company that he was acting for a number of concerned shareholders and to request changes to the composition of the Board.
The applicants and other shareholders authorized Canaccord to deliver proxies to Mr. Sawiak to vote their shares at the 2011 AGM. They gave 12,755,630 proxies (approximately 24.5 per cent of the Company's shares) to Mr. Sawiak in the form of omnibus proxies signed by Canaccord. The Company received from Canaccord another omnibus proxy permitting Mr. Singh to vote a total of 993,600 shares owned by his family and his business partner (about 2 per cent).
At the AGM a representative of the Company's transfer agent, Equity Financial Trust ("Equity"), advised Mr. Sawiak that 83 per cent of his proxies had been disallowed on the instructions of Mr. Godin who took on the role of chairman of the meeting. The majority of Mr. Singh's proxies were also disallowed. Mr. Godin refused to give a reason for disallowing the proxies.
Mr. Godin refused Mr. Sawiak's request to adjourn the meeting for 30 days in order to challenge the disallowance of the proxies.
As a result of that disallowance, only about 21.6 per cent of the issued shares were represented at the meeting. Of these, only 4 million shares voted for the incumbent board, the remaining votes were withheld. In any event, no election of directors occurred because the 50 per cent Special Quorum had not been met.
Upon subsequent investigation it was determined that in the 15 years since the Company's by-laws had been amended, the average attendance at shareholders meeting was only 27 per cent.
The applicants brought an application claiming that the acts of the Company and the Board constituted oppression within the scope of subsection 248(2) of the OBCA. The applicants asked the court to make an order pursuant to section 106 of the OBCA for a new meeting of shareholders to be called for the purpose of electing directors and dispensing the with Special Quorum for the purposes of the meeting. S. 106 of the OBCA provides that: "if for any reason it is impracticable to call a meeting of shareholders or to conduct the meeting in the manner prescribed by the by-laws, or if for any other reason the court thinks fit, the court may order that a meeting be held and conducted in such manner as the court directs or otherwise as the court deems fit".
In response, the Company brought a counter-application alleging that the respondents, as well as the family company operated by the Ebrahims – Par-Pak Companies Inc. ("Par-Pak") had been acting jointly or in concert and had acquired shares of the Company contrary to part XX of the Securities Act (takeover bid provisions). Prior to the return of the application, the Ebrahims sold their shareholdings in excess of the 20 per cent ownership threshold and the Company abandoned its argument that Singh was a joint actor with the Ebrahims.
The application was heard before Mr. Justice D. Brown of the Superior Court of Justice – Commercial List on March 28 and 29, 2012. Justice Brown released his decision on May 22, 2012.
Justice Brown dismissed the application for the following reasons.
Justice Brown, first reviewed what he called the " governing legal principles" in the case. He held that the oppression remedy contained in section 248 of the OBCA is an equitable remedy which seeks to ensure fairness and "which gives courts a broad jurisdiction to enforce not just what is legal but what is fair".
The applicants argued that the Board's conduct of:
1. relying on the Special Quorum at the 2011 AGM;
2. failing to actively solicit proxies for the meeting; and
3. excluding non-management proxies from voting at the meeting effected a result that was oppressive to them.
With respect to the Board's failure to actively solicit proxies, Justice Brown held that the evidence disclosed that the Board had complied with its obligations under corporate and securities law. He found that a shareholder of an offering corporation had a reasonable expectation only that management will:
(a) give proper notice of a shareholders meeting;
(b) solicit proxies as required by section 111 of the OBCA; and
(c) send out a management information circular. Continental met those obligations imposed by law. Impliedly he found that shareholders would have no expectation that management would do any more than meet the minimum under the legislation.
Justice Brown found that if the applicants thought that something more was required to secure a "large turnout at the AGM" it was open to the applicants to make suggestions to management about what to do. They made none. Brown also found that it was also open to the applicants to solicit proxies and issue a dissident information circular but they did not do so.
With respect to the exclusion of proxies, Justice Brown held that the applicable section of the OBCA provides that a proxy must be signed, in writing or by electronic signature, by the shareholder or an attorney who is authorized by a document that is signed in writing or by electronic signature. Those requirements were reproduced by Continental in its management information circular. The applicants did not deposit with Continental signed copies of the form of proxy the Company had distributed. Instead, they signed a short form of letter addressed to Mr. Singh at Canaccord. The letter included the words, "I have lost my original proxy, therefore needing you to take my instructions above and have Mr. Sawiak vote on my behalf". The letters signed by the applicants were not deposited with Continental. Instead, Continental received a form of proxy signed by Canaccord (not by the beneficial shareholders) designating Mr. Sawiak as the proxy holder.
Justice Brown noted that at the AGM Mr. Godin gave no reason for his disallowance of the applicants’ proxies notwithstanding that prior to the meeting Equity had advised him that it could only accept the proxies if they were executed by the beneficial holders.
He held that the duty under which the Chairman of such meetings operates is one of honesty and fairness to all individual interests and directed generally towards the best interests of the company. Courts are reluctant to find a chair to be in dereliction of his responsibility barring proof of bad faith. He found that it would have been "sensible, or the better practice", for Mr. Godin to have disclosed the reason for disallowing the proxies but he saw nothing in the evidence to support a suggestion that Mr. Godin acted in bad faith by disallowing the proxies.
Justice Brown held that, in any event, the disallowance of the proxies was not oppressive because even if the proxies had been counted the Special Quorum would not have been met. Causation remains a necessary element of any oppression claim and in the present case no cause and link existed between the disallowance of the proxies and a lack of a vote for the election of directors at the 2011 AGM.
Justice Brown also found that there was reason to doubt the correctness of Mr. Godin's ruling not to allow an adjournment of the meeting for 30 days. He should have sought the views of those present to ascertain whether the "consent of the meeting" existed for an adjournment. But he saw nothing oppressive or unfair in that ruling. He found that management had (a) given proper notice of the meeting, and (b) had sent out required information circular. It was open to any shareholder to attempt to seek proxies opposing management through a dissident information circular. In light of the Company having taken all necessary steps before the meeting, the judge did not regard as unfair Mr. Godin's ruling to refuse an adjournment.
With respect to the Special Quorum the judge held as follows.
In forming their reasonable expectations, shareholders must take into account the public pronouncements and documents issued by the Company. The Special Quorum had been disclosed in materials posted on SEDAR. The by-law had been publicly available since May of 2006. The Special Quorum had been described in management information circulars since 1996, all of which were available on SEDAR. Accordingly, it was not reasonable for the applicants to expect some other Special Quorum because at the time a simple search of SEDAR would have disclosed the existence of the Special Quorum.
Secondly, Justice Brown found that there was no evidence that the Board had acted in any way to frustrate the attendance at meetings to meet the Special Quorum. To the contrary, management had complied with its proxy solicitation and MIC obligations. If shareholders were dissatisfied with the Special Quorum, they were free to submit a change to management for inclusion in the management information circular or to requisition a special meeting of shareholders. The applicants did neither.
Thirdly, it was true that historically turnouts at the AGM were low. However, the applicants did not avail themselves of the tools contained in the OBCA by which displeased shareholders can attempt to effect change in the management of a corporation. Specifically, the applicants did not conduct a solicitation of proxies or distribute a dissident information circular. Brown held that, "Common sense suggests that the more one acts as a squeaky wheel, the more likely that one's message will attract some attention". Accordingly, he could not accept that the Special Quorum acted as an "insurmountable barrier to effecting management change when the applicants haven't really tried that hard to bring about such change".
He then dismissed the application for oppression. Note that he used the work insurmountable rather than impractical which is the language of the OBCA.
With respect to the section 106 of the OBCA argument, he found that the majority of the cases dealt with varying the Ordinary Quorum only in "exceptional circumstances" and that judicial discretion should be exercised cautiously. Where there is a corporate remedy still open to a shareholder under the legislative scheme, the court should be reluctant to step into the fray and impose its own solution. The courts role is to decide issues of a procedural or substantive nature which need to be determined to enable the process to proceed in a proper and timely fashion, but otherwise to remain apart from the battle.
He reiterated that the reluctance of a court to call a meeting where the shareholder has not availed itself of the procedure to requisition a meeting was well mentioned in the precedents.
He found that the evidence did not reveal any matter which would make it impracticable to call a shareholder meeting. The Special Quorum mirrors the default quorum provision in the OBCA and management had not impeded the solicitation of proxies by dissident shareholders.
Instead the dissidence did not make use of the proxy fight devices available under the corporate legislation to effect change in Continental's management nor have they attempted to requisition a special meeting notwithstanding that they hold over 5 per cent of the issued and outstanding shares. Accordingly, he declined to exercise his discretion in the circumstances.
Regards,
Blair
Tuesday, July 31, 2012
Friday, June 1, 2012
Retroactive Pension Legislation
Here is a reprint of a Pension Alert from my colleague Priscilla Healy:
Buried deep within the federal Omnibus Budget Implementation Bill is a provision
amending the Pension Benefit Standards Act, 1985 (PBSA). Section 483 of the
Bill gives retroactive effect to July 27, 2004 to two sections of the PBSA. Those
provisions have the effect of legitimizing regulations made under those sections
almost eight years ago.
Presumably there is some specific situation or situations that section 483 seeks
to address. What it/they might be, I have no idea. It was eight years ago. Section
483 may be, and probably is, totally innocuous.
Why does this apparently minor matter merit our attention? Because we should
all be concerned with legislation that has retroactive effect that is introduced without
clear or obvious explanations or justification given, and should be particularly
concerned when regulations are given retroactive effect in this indirect manner.
First, retroactive legislation can obviously be simply unfair to those who relied on
the former legislation. Secondly, the reasons for retroactive legislation should be
transparent. Thirdly, legitimizing existing regulations by way of amendments to
empowering statutes having retroactive effect leads to confusion. If regulations
have retroactive effect, they are expected to state so clearly within the regulation
itself.
Section 483 is a bad legislative precedent. Law should not be made in this way.
PENSION ALERT
Priscilla H. Healy
phealy@foglers.com
416.941.8828
Priscilla
Buried deep within the federal Omnibus Budget Implementation Bill is a provision
amending the Pension Benefit Standards Act, 1985 (PBSA). Section 483 of the
Bill gives retroactive effect to July 27, 2004 to two sections of the PBSA. Those
provisions have the effect of legitimizing regulations made under those sections
almost eight years ago.
Presumably there is some specific situation or situations that section 483 seeks
to address. What it/they might be, I have no idea. It was eight years ago. Section
483 may be, and probably is, totally innocuous.
Why does this apparently minor matter merit our attention? Because we should
all be concerned with legislation that has retroactive effect that is introduced without
clear or obvious explanations or justification given, and should be particularly
concerned when regulations are given retroactive effect in this indirect manner.
First, retroactive legislation can obviously be simply unfair to those who relied on
the former legislation. Secondly, the reasons for retroactive legislation should be
transparent. Thirdly, legitimizing existing regulations by way of amendments to
empowering statutes having retroactive effect leads to confusion. If regulations
have retroactive effect, they are expected to state so clearly within the regulation
itself.
Section 483 is a bad legislative precedent. Law should not be made in this way.
PENSION ALERT
Priscilla H. Healy
phealy@foglers.com
416.941.8828
Priscilla
Wednesday, May 2, 2012
Supreme Court of Canada - Conrad Black can sue for defamation in Ontario
Breeden v. Black, 2012 SCC 19
Conrad Black ("B") is a well‑known business figure who established a reputation as a newspaper owner and publisher in Canada and internationally. While B served as the chairman of a publicly traded U.S. company, the legitimacy of certain payments that had been made to B were questioned. A special committee formed to conduct an investigation concluded that the company had made unauthorized payments to B. The committee’s report was posted on the company’s website, which was accessible worldwide, along with press releases containing contact information directed at Canadian media. Statements were also published in the company’s annual report summarizing the committee’s findings.
B commenced six libel actions in the Ontario Superior Court against the ten appellants, who are directors, advisors and a vice‑president of the company. B alleges that the press releases and reports issued by the appellants and posted on the company’s website contained defamatory statements that were downloaded, read and republished in Ontario by three newspapers. He claims damages for injury to his reputation in Ontario.
The appellants brought a motion to have the actions stayed on the grounds that there was no real and substantial connection between the actions and Ontario, or, alternatively, that a New York or Illinois court was the more appropriate forum. The motion judge dismissed the motion, finding that a real and substantial connection to Ontario had been established and that Ontario was a convenient forum to hear the actions. The Court of Appeal unanimously dismissed the appeal. It found that a real and substantial connection was presumed to exist on the basis that a tort was committed in Ontario, and that the appellants had failed to rebut this presumption. It also found that there was no basis on which to interfere with the motion judge’s exercise of discretion with regard to forum non conveniens.
Applying the Van Breeda analysis, the SCC dismissed the appeal. The issue of assumption of jurisdiction was determined based on a presumptive connecting factor ― the alleged commission of the tort of defamation in Ontario. It is well established in Canadian law that the tort of defamation occurs upon publication of a defamatory statement to a third party, which, in this case, occurred when the impugned statements were read, downloaded and republished in Ontario by three newspapers. It is also well established that every repetition or republication of a defamatory statement constitutes a new publication, and that the original author of the statement may be held liable for the republication where it was authorized by the author or where the republication is the natural and probable result of the original publication. The republication in the three newspapers of statements contained in press releases issued by the appellants clearly falls within the scope of this rule. In the circumstances, the appellants have not displaced the presumption of jurisdiction that results from this connecting factor.
Having found that a real and substantial connection exists between the action and Ontario, the court considered whether the Ontario court should decline to exercise its jurisdiction on the ground that the court of another jurisdiction was clearly a more appropriate forum for the hearing of the actions. Under the forum non conveniens analysis, the burden is on the party raising the issue to demonstrate that the court of the alternative jurisdiction is a clearly more appropriate forum. The factors to be considered by a court in determining whether an alternative forum is clearly more appropriate are numerous and will vary depending on the context of each case. The forum non conveniens analysis does not require that all the factors point to a single forum, but it does require that one forum ultimately emerge as clearly more appropriate. The decision not to exercise jurisdiction and to stay an action based on forum non conveniens is a discretionary one, and the discretion exercised by a motion judge will be entitled to deference from higher courts, absent an error of legal principle or an apparent and serious error on the determination of relevant facts.
The Court found that both the courts of Illinois and Ontario are appropriate forums for the trial of the libel actions. The factors of comparative convenience and expense for the parties and witnesses, location of the parties, avoidance of a multiplicity of proceedings and conflicting decisions and enforcement of judgment favour the Illinois court as a more appropriate forum, whereas the factors of applicable law and fairness to the parties favour the Ontario court. In the end, however, considering the combined effect of the relevant facts, and in particular the weight of the alleged harm to B’s reputation in Ontario, and giving due deference to the motion judge’s decision, the Illinois court did not emerge as a clearly more appropriate forum than an Ontario court for the trial of the libel actions.
Here is a link to the decision http://scc.lexum.org/en/2012/2012scc19/2012scc19.html
Regards,
Blair
Conrad Black ("B") is a well‑known business figure who established a reputation as a newspaper owner and publisher in Canada and internationally. While B served as the chairman of a publicly traded U.S. company, the legitimacy of certain payments that had been made to B were questioned. A special committee formed to conduct an investigation concluded that the company had made unauthorized payments to B. The committee’s report was posted on the company’s website, which was accessible worldwide, along with press releases containing contact information directed at Canadian media. Statements were also published in the company’s annual report summarizing the committee’s findings.
B commenced six libel actions in the Ontario Superior Court against the ten appellants, who are directors, advisors and a vice‑president of the company. B alleges that the press releases and reports issued by the appellants and posted on the company’s website contained defamatory statements that were downloaded, read and republished in Ontario by three newspapers. He claims damages for injury to his reputation in Ontario.
The appellants brought a motion to have the actions stayed on the grounds that there was no real and substantial connection between the actions and Ontario, or, alternatively, that a New York or Illinois court was the more appropriate forum. The motion judge dismissed the motion, finding that a real and substantial connection to Ontario had been established and that Ontario was a convenient forum to hear the actions. The Court of Appeal unanimously dismissed the appeal. It found that a real and substantial connection was presumed to exist on the basis that a tort was committed in Ontario, and that the appellants had failed to rebut this presumption. It also found that there was no basis on which to interfere with the motion judge’s exercise of discretion with regard to forum non conveniens.
Applying the Van Breeda analysis, the SCC dismissed the appeal. The issue of assumption of jurisdiction was determined based on a presumptive connecting factor ― the alleged commission of the tort of defamation in Ontario. It is well established in Canadian law that the tort of defamation occurs upon publication of a defamatory statement to a third party, which, in this case, occurred when the impugned statements were read, downloaded and republished in Ontario by three newspapers. It is also well established that every repetition or republication of a defamatory statement constitutes a new publication, and that the original author of the statement may be held liable for the republication where it was authorized by the author or where the republication is the natural and probable result of the original publication. The republication in the three newspapers of statements contained in press releases issued by the appellants clearly falls within the scope of this rule. In the circumstances, the appellants have not displaced the presumption of jurisdiction that results from this connecting factor.
Having found that a real and substantial connection exists between the action and Ontario, the court considered whether the Ontario court should decline to exercise its jurisdiction on the ground that the court of another jurisdiction was clearly a more appropriate forum for the hearing of the actions. Under the forum non conveniens analysis, the burden is on the party raising the issue to demonstrate that the court of the alternative jurisdiction is a clearly more appropriate forum. The factors to be considered by a court in determining whether an alternative forum is clearly more appropriate are numerous and will vary depending on the context of each case. The forum non conveniens analysis does not require that all the factors point to a single forum, but it does require that one forum ultimately emerge as clearly more appropriate. The decision not to exercise jurisdiction and to stay an action based on forum non conveniens is a discretionary one, and the discretion exercised by a motion judge will be entitled to deference from higher courts, absent an error of legal principle or an apparent and serious error on the determination of relevant facts.
The Court found that both the courts of Illinois and Ontario are appropriate forums for the trial of the libel actions. The factors of comparative convenience and expense for the parties and witnesses, location of the parties, avoidance of a multiplicity of proceedings and conflicting decisions and enforcement of judgment favour the Illinois court as a more appropriate forum, whereas the factors of applicable law and fairness to the parties favour the Ontario court. In the end, however, considering the combined effect of the relevant facts, and in particular the weight of the alleged harm to B’s reputation in Ontario, and giving due deference to the motion judge’s decision, the Illinois court did not emerge as a clearly more appropriate forum than an Ontario court for the trial of the libel actions.
Here is a link to the decision http://scc.lexum.org/en/2012/2012scc19/2012scc19.html
Regards,
Blair
Monday, April 30, 2012
Supreme Court of Canada Enforces Choice of Forum Clause
Momentous.ca Corp. v. Canadian American Association of Professional Baseball Ltd., 2012 SCC 9
Shortly after filing a statement of defence, the respondents Canadian American Association of Professional Baseball Ltd., and others moved under Rule 21.01(3)(a) of the Ontario Rules of Civil Procedure, R.R.O. 1990, to dismiss a claim against them on the ground that Ontario Courts had no jurisdiction because the appellants had signed agreements providing that disputes would be arbitrated or litigated in North Carolina. The motion judge dismissed the action against all the respondents on the basis of these arbitration and forum selection clauses and the Ontario Court of Appeal for Ontario upheld the decision.
The issue before the Supreme Court of Canada was whether the defendants could move under Rule 21.01(3)(a) to seek dismissal of the action based on the arbitration and forum selection clauses in the agreements, notwithstanding the delivery of a statement of defence. The appellants argued that a party that delivers a statement of defence on the merits is precluded from relying upon a forum selection clause, even where the statement of defence explicitly seeks to enforce the clause.
The Supreme Court dismissed the appeal and held that the defendants were entitled to bring a motion to dismiss the action because the parties had agreed to arbitrate and litigate disputes in another forum. Although the motion must be brought promptly, there is nothing in Rule 21.01(3)(a) that requires it to be brought before delivery of a statement of defence. Within the framework provided by the Ontario Rules of Civil Procedure, a statement of defence that specifically pleads a foreign forum selection clause does not amount to consent that Ontario assume jurisdiction so as to preclude consideration on the merits of whether to enforce the clause.
The appellants did not argue that there was any reason, apart from the delivery of a statement of defence, for the court to determine that there was “strong cause” for Ontario to displace the forum that the parties have agreed should resolve their disputes.
Regards,
Blair
Shortly after filing a statement of defence, the respondents Canadian American Association of Professional Baseball Ltd., and others moved under Rule 21.01(3)(a) of the Ontario Rules of Civil Procedure, R.R.O. 1990, to dismiss a claim against them on the ground that Ontario Courts had no jurisdiction because the appellants had signed agreements providing that disputes would be arbitrated or litigated in North Carolina. The motion judge dismissed the action against all the respondents on the basis of these arbitration and forum selection clauses and the Ontario Court of Appeal for Ontario upheld the decision.
The issue before the Supreme Court of Canada was whether the defendants could move under Rule 21.01(3)(a) to seek dismissal of the action based on the arbitration and forum selection clauses in the agreements, notwithstanding the delivery of a statement of defence. The appellants argued that a party that delivers a statement of defence on the merits is precluded from relying upon a forum selection clause, even where the statement of defence explicitly seeks to enforce the clause.
The Supreme Court dismissed the appeal and held that the defendants were entitled to bring a motion to dismiss the action because the parties had agreed to arbitrate and litigate disputes in another forum. Although the motion must be brought promptly, there is nothing in Rule 21.01(3)(a) that requires it to be brought before delivery of a statement of defence. Within the framework provided by the Ontario Rules of Civil Procedure, a statement of defence that specifically pleads a foreign forum selection clause does not amount to consent that Ontario assume jurisdiction so as to preclude consideration on the merits of whether to enforce the clause.
The appellants did not argue that there was any reason, apart from the delivery of a statement of defence, for the court to determine that there was “strong cause” for Ontario to displace the forum that the parties have agreed should resolve their disputes.
Regards,
Blair
Friday, April 20, 2012
Supreme Court Rules on Ontario's Jurisdiction to hear Foreign Proceedings
Jurisdiction of Canadian Courts to hear Actions against Foreign Travel Companies
In this decision released this morning the Supreme court of Canada held that Ontario had jurisdiction to hear two cases against tour companies offering vacations in Cuba in circumstances where the tourists were injured in Cuba.
Here is an extract from the decision.
Club Resorts Ltd. v. Van Breda, 2012 SCC 17
In separate cases, two individuals were injured while on vacation outside of Canada. Morgan Van Breda suffered catastrophic injuries on a beach in Cuba. Claude Charron died while scuba diving, also in Cuba. Actions were brought in Ontario against a number of parties, including the appellant, Club Resorts Ltd., a company incorporated in the Cayman Islands that managed the two hotels where the accidents occurred. Club Resorts sought to block those proceedings, arguing that the Ontario courts lacked jurisdiction and, in the alternative, that a Cuban court would be a more appropriate forum on the basis of the doctrine of forum non conveniens. In both cases, the motion judges found that the Ontario courts had jurisdiction with respect to the actions against Club Resorts. In considering forum non conveniens, it was also held that the Ontario court was clearly a more appropriate forum. The two cases were heard together in the Court of Appeal. The appeals were both dismissed.
Held: The appeals should be dismissed.
This case concerns the elaboration of the “real and substantial connection” test as an appropriate common law conflicts rule for the assumption of jurisdiction. In determining whether a court can assume jurisdiction over a certain claim, the preferred approach in Canada has been to rely on a set of specific factors which are given presumptive effect, as opposed to a regime based on an exercise of almost pure and individualized judicial discretion. Given the nature of the relationships governed by private international law, the framework for the assumption of jurisdiction cannot be an unstable, ad hoc system made up on the fly on a case‑by‑case basis – however laudable the objective of individual fairness may be. There must be order in the system, and it must permit the development of a just and fair approach to resolving conflicts.
To meet the common law real and substantial connection test, the party arguing that the court should assume jurisdiction has the burden of identifying a presumptive connecting factor that links the subject matter of the litigation to the forum. Jurisdiction must be established primarily on the basis of objective factors that connect the legal situation or the subject matter of the litigation with the forum. Abstract concerns for order, efficiency or fairness in the system are no substitute for connecting factors that give rise to a “real and substantial” connection for the purposes of the law of conflicts. In a case concerning a tort, the following factors are presumptive connecting factors that, prima facie, entitle a court to assume jurisdiction over a dispute:
(a) the defendant is domiciled or resident in the province;
(b) the defendant carries on business in the province;
(c) the tort was committed in the province; and
(d) a contract connected with the dispute was made in the province.
Although the factors set out in the list are considered presumptive, this does not mean that the list of recognized factors is complete, as it may be reviewed over time and updated by adding new presumptive connecting factors. When a court considers whether a new connecting factor should be given presumptive effect, the values of order, fairness and comity can serve as useful analytical tools for assessing the strength of the relationship with a forum to which the factor in question points. These values underlie all presumptive connecting factors, whether listed or new. In identifying new presumptive factors, a court should look to connections that give rise to a relationship with the forum that is similar in nature to the ones which result from the listed factors. Relevant considerations include:
(a) Similarity of the connecting factor with the recognized presumptive connecting factors;
(b) Treatment of the connecting factor in the case law:
(c) Treatment of the connecting factor in statute law; and
(d) Treatment of the connecting factor in the private international law of other legal systems with a shared commitment to order, fairness and comity.
The presumption of jurisdiction that arises where a recognized connecting factor — whether listed or new — applies is not irrebuttable. The burden of rebutting the presumption of jurisdiction rests, of course, on the party challenging the assumption of jurisdiction. That party must negate the presumptive effect of the listed or new factor and convince the court that the proposed assumption of jurisdiction would be inappropriate. This could be accomplished by establishing facts which demonstrate that the presumptive connecting factor does not point to any real relationship between the subject matter of the litigation and the forum or points only to a weak relationship between them.
If the court concludes that it lacks jurisdiction because none of the presumptive connecting factors — whether listed or new — apply or because the presumption of jurisdiction that flows from one of those factors has been rebutted, it must dismiss or stay the action, subject to the possible application of the forum of necessity doctrine. If jurisdiction is established, the claim may proceed, subject to the court’s discretion to stay the proceedings on the basis of the doctrine of forum non conveniens.
In Van Breda, a contract was entered into in Ontario. The existence of a contract made in Ontario that is connected with the litigation is a presumptive connecting factor that, on its face, entitles the courts of Ontario to assume jurisdiction in this case. Club Resorts has failed to rebut the presumption of jurisdiction that arises where this factor applies. Therefore, there was a sufficient connection between the Ontario court and the subject matter of the litigation. Club Resorts has not discharged its burden of showing that a Cuban court would clearly be a more appropriate forum. While a sufficient connection exists between Cuba and the subject matter of the litigation to support an action there, issues related to the fairness to the parties and to the efficient disposition of the claim must be considered. A trial held in Cuba would present serious challenges to the parties. All things considered, the burden on the plaintiffs clearly would be far heavier if they were required to bring their action in Cuba.
In Charron, the facts supported the conclusion that Club Resorts was carrying on a business in Ontario which is a presumptive connecting factor. Club Resorts’ commercial activities in Ontario went well beyond promoting a brand and advertising. Its representatives were in the province on a regular basis and it benefitted from the physical presence of an office in Ontario. It therefore follows that it has been established that a presumptive connecting factor applies and that the Ontario court is prima facie entitled to assume jurisdiction. Club Resorts has not rebutted the presumption of jurisdiction that arises from this connecting factor and therefore the Ontario court has jurisdiction on the basis of the real and substantial connection test. Furthermore, Club Resorts failed to discharge its burden of showing that a Cuban court would clearly be a more appropriate forum in the circumstances of this case. Considerations of fairness to the parties weigh heavily in favour of the plaintiffs.
Here is a link to the decision http://scc.lexum.org/en/2012/2012scc17/2012scc17.html
Regards,
Blair
In this decision released this morning the Supreme court of Canada held that Ontario had jurisdiction to hear two cases against tour companies offering vacations in Cuba in circumstances where the tourists were injured in Cuba.
Here is an extract from the decision.
Club Resorts Ltd. v. Van Breda, 2012 SCC 17
In separate cases, two individuals were injured while on vacation outside of Canada. Morgan Van Breda suffered catastrophic injuries on a beach in Cuba. Claude Charron died while scuba diving, also in Cuba. Actions were brought in Ontario against a number of parties, including the appellant, Club Resorts Ltd., a company incorporated in the Cayman Islands that managed the two hotels where the accidents occurred. Club Resorts sought to block those proceedings, arguing that the Ontario courts lacked jurisdiction and, in the alternative, that a Cuban court would be a more appropriate forum on the basis of the doctrine of forum non conveniens. In both cases, the motion judges found that the Ontario courts had jurisdiction with respect to the actions against Club Resorts. In considering forum non conveniens, it was also held that the Ontario court was clearly a more appropriate forum. The two cases were heard together in the Court of Appeal. The appeals were both dismissed.
Held: The appeals should be dismissed.
This case concerns the elaboration of the “real and substantial connection” test as an appropriate common law conflicts rule for the assumption of jurisdiction. In determining whether a court can assume jurisdiction over a certain claim, the preferred approach in Canada has been to rely on a set of specific factors which are given presumptive effect, as opposed to a regime based on an exercise of almost pure and individualized judicial discretion. Given the nature of the relationships governed by private international law, the framework for the assumption of jurisdiction cannot be an unstable, ad hoc system made up on the fly on a case‑by‑case basis – however laudable the objective of individual fairness may be. There must be order in the system, and it must permit the development of a just and fair approach to resolving conflicts.
To meet the common law real and substantial connection test, the party arguing that the court should assume jurisdiction has the burden of identifying a presumptive connecting factor that links the subject matter of the litigation to the forum. Jurisdiction must be established primarily on the basis of objective factors that connect the legal situation or the subject matter of the litigation with the forum. Abstract concerns for order, efficiency or fairness in the system are no substitute for connecting factors that give rise to a “real and substantial” connection for the purposes of the law of conflicts. In a case concerning a tort, the following factors are presumptive connecting factors that, prima facie, entitle a court to assume jurisdiction over a dispute:
(a) the defendant is domiciled or resident in the province;
(b) the defendant carries on business in the province;
(c) the tort was committed in the province; and
(d) a contract connected with the dispute was made in the province.
Although the factors set out in the list are considered presumptive, this does not mean that the list of recognized factors is complete, as it may be reviewed over time and updated by adding new presumptive connecting factors. When a court considers whether a new connecting factor should be given presumptive effect, the values of order, fairness and comity can serve as useful analytical tools for assessing the strength of the relationship with a forum to which the factor in question points. These values underlie all presumptive connecting factors, whether listed or new. In identifying new presumptive factors, a court should look to connections that give rise to a relationship with the forum that is similar in nature to the ones which result from the listed factors. Relevant considerations include:
(a) Similarity of the connecting factor with the recognized presumptive connecting factors;
(b) Treatment of the connecting factor in the case law:
(c) Treatment of the connecting factor in statute law; and
(d) Treatment of the connecting factor in the private international law of other legal systems with a shared commitment to order, fairness and comity.
The presumption of jurisdiction that arises where a recognized connecting factor — whether listed or new — applies is not irrebuttable. The burden of rebutting the presumption of jurisdiction rests, of course, on the party challenging the assumption of jurisdiction. That party must negate the presumptive effect of the listed or new factor and convince the court that the proposed assumption of jurisdiction would be inappropriate. This could be accomplished by establishing facts which demonstrate that the presumptive connecting factor does not point to any real relationship between the subject matter of the litigation and the forum or points only to a weak relationship between them.
If the court concludes that it lacks jurisdiction because none of the presumptive connecting factors — whether listed or new — apply or because the presumption of jurisdiction that flows from one of those factors has been rebutted, it must dismiss or stay the action, subject to the possible application of the forum of necessity doctrine. If jurisdiction is established, the claim may proceed, subject to the court’s discretion to stay the proceedings on the basis of the doctrine of forum non conveniens.
In Van Breda, a contract was entered into in Ontario. The existence of a contract made in Ontario that is connected with the litigation is a presumptive connecting factor that, on its face, entitles the courts of Ontario to assume jurisdiction in this case. Club Resorts has failed to rebut the presumption of jurisdiction that arises where this factor applies. Therefore, there was a sufficient connection between the Ontario court and the subject matter of the litigation. Club Resorts has not discharged its burden of showing that a Cuban court would clearly be a more appropriate forum. While a sufficient connection exists between Cuba and the subject matter of the litigation to support an action there, issues related to the fairness to the parties and to the efficient disposition of the claim must be considered. A trial held in Cuba would present serious challenges to the parties. All things considered, the burden on the plaintiffs clearly would be far heavier if they were required to bring their action in Cuba.
In Charron, the facts supported the conclusion that Club Resorts was carrying on a business in Ontario which is a presumptive connecting factor. Club Resorts’ commercial activities in Ontario went well beyond promoting a brand and advertising. Its representatives were in the province on a regular basis and it benefitted from the physical presence of an office in Ontario. It therefore follows that it has been established that a presumptive connecting factor applies and that the Ontario court is prima facie entitled to assume jurisdiction. Club Resorts has not rebutted the presumption of jurisdiction that arises from this connecting factor and therefore the Ontario court has jurisdiction on the basis of the real and substantial connection test. Furthermore, Club Resorts failed to discharge its burden of showing that a Cuban court would clearly be a more appropriate forum in the circumstances of this case. Considerations of fairness to the parties weigh heavily in favour of the plaintiffs.
Here is a link to the decision http://scc.lexum.org/en/2012/2012scc17/2012scc17.html
Regards,
Blair
Monday, April 16, 2012
Court overturns racial profiling decision
Peel Law Association v. Pieters, 2012 ONSC 1048 (Div Ct.)
The Divisional Court of Ontario (Justices Chapnik, Hockin and Hoy) released a decision on February 13, 2012 which overturned an award of Vice-Chair Eric Whist, of the Human Rights Tribunal of Ontario ("HRTO"). In its award, the Tribunal ("Tribunal") found that the Peel Law Association ("PLA") and its librarian, Melissa Firth, had discriminated against the respondents, Selwyn Pieters and Brian Noble in the provision of services, goods and facilities on the basis of their race and colour, contrary to section 1 of the Human Rights Code (the "Code"). Both Pieters and Noble are black, of ethnic African descent.
The Tribunal awarded Pieters and Noble compensatory damages of $2,000 each for the PLA's violation of their rights to be free from discrimination and for injury to their dignity, feelings and self-respect. PLA and Firth appealed that decision to the Divisional Court.
Facts
The background facts are summarized as follows:
On May 16, 2008, Pieters, Noble and a law student who worked for Pieters, were using the lawyers lounge of the PLA in the Brampton court house. PLA policy states that only lawyers and law students can use the lounge and the library. Paralegals and the public are not permitted to use these facilities.
Both respondents and the law student are black. All three individuals were dressed in business suits but none were gowned. Firth, as the PLA's librarian, has primary responsibility to ensure compliance with the policy. Firth approached the respondents in an aggressive manner asked them to confirm that they were lawyers. The vice-chair found that race factored into Firth's decision to approach the respondents. Firth did not approach anyone else in the lounge or ask anyone else the same question.
At the time, others were using the lounge, some of whom were "racialized" (South East Asian), none of whom were black. The South Asian lawyers volunteered to produce their identification to Firth, but she did not check their identification. The Tribunal concluded that these facts constituted a sufficient basis to require an explanation from Firth as to why her decision to question Pieters and Noble was not tainted by their race or colour. The Tribunal found that there was no credible and rational explanation for Firth's decision to abruptly interrupt a trip to the courthouse robing room to stop and question the respondents and found that the decision was "in some measure, because of their race and colour".
At the hearing, Firth testified that she had approached the respondents because she knew everyone else in the lounge at the time was a lawyer. However, that statement was proven false given that one individual in the lounge was not a lawyer and one lawyer in the lounge had never been there before.
Divisional Court Decision
Justice Chapnik, writing for the Court, held that that applicable standard of review of the Trigbunal's decision under the Code was one of "reasonableness". She also found that within the reasonableness standard, "the highest degree of deference should be awarded to the Tribunal in respect of determinations of fact and the interpretation of human rights law". Decisions of a tribunal of the HRTO are required to be rationally supported and to fall within a range of possible, acceptable outcomes that are defendable in fact and law.
Justice Chapnik found that with complaints under the Code the complainant bears the burden of proving a prima facia case of discrimination. A prima facia case of discrimination is one "which covers the allegations made and which, if they are believed, is complete and sufficient to justify a verdict in the complainant's favour, in the absence of an answer from the respondent.". In order to prove a prima facia case of discrimination there must be evidence to support the following findings:
(a) a distinction or differential treatment;
(b) arbitrariness based on a prohibited ground;
(c) a disadvantage; and
(d) a causal nexus between the arbitrary distinction based on a prohibited ground and the disadvantage suffered.
The key is the arbitrary nature of the treatment. The complainant need not prove an intention to discriminate.
In overturning the decision of the Tribunal, the Divisional Court inexplicably held that there had been no evidence adduced at the hearing that was capable of supporting the finding of a distinction or differential treatment or that any such treatment was motivated by race or colour. Accordingly, the court found that the Tribunal had erred in determining that there had been a prima facie case of discrimination.
In so doing, rather than giving the Tribunal "the highest deference" in respect of findings of fact, the court appears to have given no deference whatsoever to the Tribunal. The court noted that the respondents had been closest to the door of the lounge when Firth abruptly interrupted her trip to the robing room to ask them for identification and that was a sufficient reason why she had "singled them out". It also found that it was within Firth's job responsibilities to ask people for identification. The court found that in the circumstances, there was insufficient evidence for the Tribunal to determine that Firth, by questioning the respondents alone, had treated them differently from others in the lounge.
Curiously, it also found that because Firth had had "run ins" in the past with others whom she had asked for identification (some of whom were not black) that there was no evidence of differential treatment of the respondents.
Finally, the court found that because Firth was not a police officer with the power and authority to arrest and detain the respondents, there was no nexus between the alleged arbitrary conduct and the disadvantage suffered by the respondents.
The respondents were ordered to pay an all inclusive sum of $20,000 in costs to the PLA and Firth.
The problem with the Divisional Court's decision is that in finding there was "no evidence" to support the award it appears to arbitrarily "pick and choose" only the evidence to support its findings rather than to consider the evidence as a whole. In addition, the court mischaracterizes the evidence it did consider as not being arbitrary. For example, the court ignored the evidence that at the time of the incident there were a number of persons in the lounge that were unknown to Firth. The respondents were the only black men in the lounge and the only persons who Firth chose to question. It also ignores Firth's own statement, which was later discredited, that she knew everyone else in the lounge at the relevant time was a lawyer.
The court places undue emphasis on the location of Pieters and Noble, i.e. that they were situated nearest to the door from which Firth entered the lounge which seems in and of itself to be arbitrary in determining who to question. There was no credible explanation given at the hearing as to why Firth's focus was on Pieters, as opposed to any other individual in the lounge, why she did not check the identification of other persons in the lounge, even after they offered to provide it and why Firth abruptly interrupted her trip to the robing room to confront the respondents.
Moreover, the court places undue emphasis on the fact that policing the use of the lounge to ensure that the PLA policy was complied with was within Firth's job description. Simply because it was her responsibility to check identification, does not give her a licence to perform such duties arbitrarily. The fact that she may have stopped and questioned non-black people in the past is completely irrelevant. It was in her job to do so and, in any event, such behaviour would have been unknown to the respondents.
The Divisional Court decision is poorly reasoned and bad law. Pieters and Noble have appealed to the Ontario Court of Appeal. Stay tuned.
Regards,
Blair
The Divisional Court of Ontario (Justices Chapnik, Hockin and Hoy) released a decision on February 13, 2012 which overturned an award of Vice-Chair Eric Whist, of the Human Rights Tribunal of Ontario ("HRTO"). In its award, the Tribunal ("Tribunal") found that the Peel Law Association ("PLA") and its librarian, Melissa Firth, had discriminated against the respondents, Selwyn Pieters and Brian Noble in the provision of services, goods and facilities on the basis of their race and colour, contrary to section 1 of the Human Rights Code (the "Code"). Both Pieters and Noble are black, of ethnic African descent.
The Tribunal awarded Pieters and Noble compensatory damages of $2,000 each for the PLA's violation of their rights to be free from discrimination and for injury to their dignity, feelings and self-respect. PLA and Firth appealed that decision to the Divisional Court.
Facts
The background facts are summarized as follows:
On May 16, 2008, Pieters, Noble and a law student who worked for Pieters, were using the lawyers lounge of the PLA in the Brampton court house. PLA policy states that only lawyers and law students can use the lounge and the library. Paralegals and the public are not permitted to use these facilities.
Both respondents and the law student are black. All three individuals were dressed in business suits but none were gowned. Firth, as the PLA's librarian, has primary responsibility to ensure compliance with the policy. Firth approached the respondents in an aggressive manner asked them to confirm that they were lawyers. The vice-chair found that race factored into Firth's decision to approach the respondents. Firth did not approach anyone else in the lounge or ask anyone else the same question.
At the time, others were using the lounge, some of whom were "racialized" (South East Asian), none of whom were black. The South Asian lawyers volunteered to produce their identification to Firth, but she did not check their identification. The Tribunal concluded that these facts constituted a sufficient basis to require an explanation from Firth as to why her decision to question Pieters and Noble was not tainted by their race or colour. The Tribunal found that there was no credible and rational explanation for Firth's decision to abruptly interrupt a trip to the courthouse robing room to stop and question the respondents and found that the decision was "in some measure, because of their race and colour".
At the hearing, Firth testified that she had approached the respondents because she knew everyone else in the lounge at the time was a lawyer. However, that statement was proven false given that one individual in the lounge was not a lawyer and one lawyer in the lounge had never been there before.
Divisional Court Decision
Justice Chapnik, writing for the Court, held that that applicable standard of review of the Trigbunal's decision under the Code was one of "reasonableness". She also found that within the reasonableness standard, "the highest degree of deference should be awarded to the Tribunal in respect of determinations of fact and the interpretation of human rights law". Decisions of a tribunal of the HRTO are required to be rationally supported and to fall within a range of possible, acceptable outcomes that are defendable in fact and law.
Justice Chapnik found that with complaints under the Code the complainant bears the burden of proving a prima facia case of discrimination. A prima facia case of discrimination is one "which covers the allegations made and which, if they are believed, is complete and sufficient to justify a verdict in the complainant's favour, in the absence of an answer from the respondent.". In order to prove a prima facia case of discrimination there must be evidence to support the following findings:
(a) a distinction or differential treatment;
(b) arbitrariness based on a prohibited ground;
(c) a disadvantage; and
(d) a causal nexus between the arbitrary distinction based on a prohibited ground and the disadvantage suffered.
The key is the arbitrary nature of the treatment. The complainant need not prove an intention to discriminate.
In overturning the decision of the Tribunal, the Divisional Court inexplicably held that there had been no evidence adduced at the hearing that was capable of supporting the finding of a distinction or differential treatment or that any such treatment was motivated by race or colour. Accordingly, the court found that the Tribunal had erred in determining that there had been a prima facie case of discrimination.
In so doing, rather than giving the Tribunal "the highest deference" in respect of findings of fact, the court appears to have given no deference whatsoever to the Tribunal. The court noted that the respondents had been closest to the door of the lounge when Firth abruptly interrupted her trip to the robing room to ask them for identification and that was a sufficient reason why she had "singled them out". It also found that it was within Firth's job responsibilities to ask people for identification. The court found that in the circumstances, there was insufficient evidence for the Tribunal to determine that Firth, by questioning the respondents alone, had treated them differently from others in the lounge.
Curiously, it also found that because Firth had had "run ins" in the past with others whom she had asked for identification (some of whom were not black) that there was no evidence of differential treatment of the respondents.
Finally, the court found that because Firth was not a police officer with the power and authority to arrest and detain the respondents, there was no nexus between the alleged arbitrary conduct and the disadvantage suffered by the respondents.
The respondents were ordered to pay an all inclusive sum of $20,000 in costs to the PLA and Firth.
The problem with the Divisional Court's decision is that in finding there was "no evidence" to support the award it appears to arbitrarily "pick and choose" only the evidence to support its findings rather than to consider the evidence as a whole. In addition, the court mischaracterizes the evidence it did consider as not being arbitrary. For example, the court ignored the evidence that at the time of the incident there were a number of persons in the lounge that were unknown to Firth. The respondents were the only black men in the lounge and the only persons who Firth chose to question. It also ignores Firth's own statement, which was later discredited, that she knew everyone else in the lounge at the relevant time was a lawyer.
The court places undue emphasis on the location of Pieters and Noble, i.e. that they were situated nearest to the door from which Firth entered the lounge which seems in and of itself to be arbitrary in determining who to question. There was no credible explanation given at the hearing as to why Firth's focus was on Pieters, as opposed to any other individual in the lounge, why she did not check the identification of other persons in the lounge, even after they offered to provide it and why Firth abruptly interrupted her trip to the robing room to confront the respondents.
Moreover, the court places undue emphasis on the fact that policing the use of the lounge to ensure that the PLA policy was complied with was within Firth's job description. Simply because it was her responsibility to check identification, does not give her a licence to perform such duties arbitrarily. The fact that she may have stopped and questioned non-black people in the past is completely irrelevant. It was in her job to do so and, in any event, such behaviour would have been unknown to the respondents.
The Divisional Court decision is poorly reasoned and bad law. Pieters and Noble have appealed to the Ontario Court of Appeal. Stay tuned.
Regards,
Blair
Tuesday, February 7, 2012
Freedom 67
My colleague Priscilla Healy, pension law expert, offers the following observations about a universal concern - will I have enough money to retire when I want to retire?
We need to change our mind-set. We are going to have to work longer. Everyone who retires either voluntarily or involuntarily from the workforce and who still needs an income cannot set up in business for themselves. Jobs (paying) for those over age 60 or 65 need to be available.
Accordingly, our personal, social and workplace perspectives as to older workers are going to have to become much more positive.
Only a government with a majority and then only in the early years of its mandate could dare to
touch social benefits to seniors. That said, raising the age of eligibility for the Old Age Pension to
age 67 as proposed – or floated – may be inevitable. Clearly there will need to be a long phasing-in period, and a discussion as to the appropriate level for claw-backs. There also needs, of course, to be a discussion about Government spending priorities.
At $540.12 per month for two years, gently indexed for inflation, some or all of which may be clawedback, the loss may not seem like much to middle income earners. No problem, as long as we get enough notice. We will simply work longer, save more and/or make do with less income from our savings if we have to draw on them earlier.
We are indeed healthier and living longer. But is everyone, or at least almost everyone, really able to work longer than age 65? Forget about whether we want to. Could we even find a job? What about older, white collar workers who have lost their jobs through downsizing? Finding a comparable job in their field can be very difficult for older, white collar workers who are laid off. What about workers, both men and women, who are not physically able to work at their jobs much longer? What about people with physical and mental health issues that are not serious enough to receive disability benefits but which are impediments to employment?
There is currently a very long stretch already between involuntarily retirement, which could happen any time after age 55 or even 50, and age 65. Many Canadians do not have workplace pensions, and fewer have pensions that are not substantially reduced if they commence before age 65. The maximum CPP payment in 2012 is $986.67 per month, again gently indexed. CPP payments cannot be taken before age 60, and they are reduced by over 6% a year if taken before age 65. $540 a month can make a considerable difference if the only other income is a reduced CPP.
Financial planning? But how many people are able to save adequately for a retirement that
unexpectedly starts too early? What are older people who do still need an income and cannot get jobs to do? Set up a consulting business? Make a business out of a hobby or skill? Fine, if they have the energy and skills and can invest in start up costs. Work as a Walmart greeter or as a crossing guard? Perhaps. Drastically downsize lifestyle. Yes. Abandon recreational plans for retirement? Yes. Apply for income supplements through Gains or GIS? May or may not qualify. Apply for welfare? Probably won't qualify. Depend on adult children? An unfair generational cost shift.
The problems of the aging population were not created by the current government. Everyone needs to save for retirement. Everyone needs to recognize and provide for the possibility that they may not be able to work as long as they plan. Everyone needs to take care of their health. Depending on government programmes in the long run is risky.
There is however, good news. The boomers are beginning to retire. It will be interesting to see how society, and government programmes, adjust.
We need to change our mind-set. We are going to have to work longer. Everyone who retires either voluntarily or involuntarily from the workforce and who still needs an income cannot set up in business for themselves. Jobs (paying) for those over age 60 or 65 need to be available.
Accordingly, our personal, social and workplace perspectives as to older workers are going to have to become much more positive.
Only a government with a majority and then only in the early years of its mandate could dare to
touch social benefits to seniors. That said, raising the age of eligibility for the Old Age Pension to
age 67 as proposed – or floated – may be inevitable. Clearly there will need to be a long phasing-in period, and a discussion as to the appropriate level for claw-backs. There also needs, of course, to be a discussion about Government spending priorities.
At $540.12 per month for two years, gently indexed for inflation, some or all of which may be clawedback, the loss may not seem like much to middle income earners. No problem, as long as we get enough notice. We will simply work longer, save more and/or make do with less income from our savings if we have to draw on them earlier.
We are indeed healthier and living longer. But is everyone, or at least almost everyone, really able to work longer than age 65? Forget about whether we want to. Could we even find a job? What about older, white collar workers who have lost their jobs through downsizing? Finding a comparable job in their field can be very difficult for older, white collar workers who are laid off. What about workers, both men and women, who are not physically able to work at their jobs much longer? What about people with physical and mental health issues that are not serious enough to receive disability benefits but which are impediments to employment?
There is currently a very long stretch already between involuntarily retirement, which could happen any time after age 55 or even 50, and age 65. Many Canadians do not have workplace pensions, and fewer have pensions that are not substantially reduced if they commence before age 65. The maximum CPP payment in 2012 is $986.67 per month, again gently indexed. CPP payments cannot be taken before age 60, and they are reduced by over 6% a year if taken before age 65. $540 a month can make a considerable difference if the only other income is a reduced CPP.
Financial planning? But how many people are able to save adequately for a retirement that
unexpectedly starts too early? What are older people who do still need an income and cannot get jobs to do? Set up a consulting business? Make a business out of a hobby or skill? Fine, if they have the energy and skills and can invest in start up costs. Work as a Walmart greeter or as a crossing guard? Perhaps. Drastically downsize lifestyle. Yes. Abandon recreational plans for retirement? Yes. Apply for income supplements through Gains or GIS? May or may not qualify. Apply for welfare? Probably won't qualify. Depend on adult children? An unfair generational cost shift.
The problems of the aging population were not created by the current government. Everyone needs to save for retirement. Everyone needs to recognize and provide for the possibility that they may not be able to work as long as they plan. Everyone needs to take care of their health. Depending on government programmes in the long run is risky.
There is however, good news. The boomers are beginning to retire. It will be interesting to see how society, and government programmes, adjust.
Subscribe to:
Posts (Atom)
