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
Wednesday, May 2, 2012
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.
Friday, January 20, 2012
Invasion of Privacy now a tort
The Ontario Court of Appeal recognized a tort of invasion of privacy called "intrusion on seclusion".
The Facts
Jones and Tsige worked at different branches of the Bank of Montreal (“BMO”). Jones maintained her primary bank account there. Jones and Tsige did not know or work with each other. However, Tsige became involved in a relationship with Jones’ former husband. For four years, Tsige used her workplace computer to access Jones’ personal BMO bank accounts at least 174 times. The information displayed included transactions details, as well as personal information such as date of birth, marital status and address. Tsige did not publish, distribute or record the information in any way.Jones became suspicious that Tsige was accessing her account and complained to BMO. When confronted by BMO, Tsige admitted that she had looked at the account.
Tsige alleged that she was involved in a financial dispute with Jone’s former husband and accessed the accounts to confirm whether he was paying child support to the appellant. Jones said this explanation was inconsistent with the timing and frequency of Tsige’s snooping. BMO disciplined Tsige by suspending her for one week without pay and denying her a bonus.
Jones commenced an action asserting that her privacy interest in her confidential banking information was “irreversibly destroyed” and claimed damages of $70,000 for invasion of privacy and breach of fiduciary duty, and punitive and exemplary damages of $20,000. The Superior Court denied her claim on the basis that Ontario has not recognized a tort of invasion of privacy. The Ontario Court of Appeal held that a right of action for "intrusion upon seclusion" exists in Ontario and awarded Jones $10,000 in damages.
The New Tort
The court adopted the definition of the tort of “intrusion upon seclusion”, from the American Restatement:
One who intentionally intrudes, physically or otherwise, upon the seclusion of another or his private affairs or concerns, is subject to liability to the other for invasion of his privacy, if the invasion would be highly offensive to a reasonable person.
Key Features of the Cause of Action
The key features of this cause of action are, first, that the defendant’s conduct must be intentional, which includes recklessness; second that the defendant must have invaded, without lawful justification, the plaintiff’s private affairs or concerns; and third, that a reasonable person would regard the invasion as highly offensive causing distress, humiliation or anguish. However, proof of harm to a recognized economic interest is not an element of the cause of action.
Limitations on the Cause of Action
A claim for intrusion upon seclusion will arise only for deliberate and significant invasions of personal privacy. Claims from individuals who are sensitive or unusually concerned about their privacy are excluded: it is only intrusions into matters such as one’s financial or health records, sexual practices and orientation, employment, diary or private correspondence that, viewed objectively on the reasonable person standard, can be described as highly offensive.
Claims for the protection of privacy may give rise to competing claims like claims for the protection of freedom of expression and freedom of the press.
Damages will be Modest
Damages for intrusion upon seclusion will ordinarily be measured by a modest conventional sum. The Court held that "damages for intrusion upon seclusion in cases where the plaintiff has suffered no pecuniary loss should be modest but sufficient to mark the wrong that has been done." The Court fixed the range at up to $20,000 but did not preclude the availability of aggravated or punitive damages.
Regards,
Blair
The Facts
Jones and Tsige worked at different branches of the Bank of Montreal (“BMO”). Jones maintained her primary bank account there. Jones and Tsige did not know or work with each other. However, Tsige became involved in a relationship with Jones’ former husband. For four years, Tsige used her workplace computer to access Jones’ personal BMO bank accounts at least 174 times. The information displayed included transactions details, as well as personal information such as date of birth, marital status and address. Tsige did not publish, distribute or record the information in any way.Jones became suspicious that Tsige was accessing her account and complained to BMO. When confronted by BMO, Tsige admitted that she had looked at the account.
Tsige alleged that she was involved in a financial dispute with Jone’s former husband and accessed the accounts to confirm whether he was paying child support to the appellant. Jones said this explanation was inconsistent with the timing and frequency of Tsige’s snooping. BMO disciplined Tsige by suspending her for one week without pay and denying her a bonus.
Jones commenced an action asserting that her privacy interest in her confidential banking information was “irreversibly destroyed” and claimed damages of $70,000 for invasion of privacy and breach of fiduciary duty, and punitive and exemplary damages of $20,000. The Superior Court denied her claim on the basis that Ontario has not recognized a tort of invasion of privacy. The Ontario Court of Appeal held that a right of action for "intrusion upon seclusion" exists in Ontario and awarded Jones $10,000 in damages.
The New Tort
The court adopted the definition of the tort of “intrusion upon seclusion”, from the American Restatement:
One who intentionally intrudes, physically or otherwise, upon the seclusion of another or his private affairs or concerns, is subject to liability to the other for invasion of his privacy, if the invasion would be highly offensive to a reasonable person.
Key Features of the Cause of Action
The key features of this cause of action are, first, that the defendant’s conduct must be intentional, which includes recklessness; second that the defendant must have invaded, without lawful justification, the plaintiff’s private affairs or concerns; and third, that a reasonable person would regard the invasion as highly offensive causing distress, humiliation or anguish. However, proof of harm to a recognized economic interest is not an element of the cause of action.
Limitations on the Cause of Action
A claim for intrusion upon seclusion will arise only for deliberate and significant invasions of personal privacy. Claims from individuals who are sensitive or unusually concerned about their privacy are excluded: it is only intrusions into matters such as one’s financial or health records, sexual practices and orientation, employment, diary or private correspondence that, viewed objectively on the reasonable person standard, can be described as highly offensive.
Claims for the protection of privacy may give rise to competing claims like claims for the protection of freedom of expression and freedom of the press.
Damages will be Modest
Damages for intrusion upon seclusion will ordinarily be measured by a modest conventional sum. The Court held that "damages for intrusion upon seclusion in cases where the plaintiff has suffered no pecuniary loss should be modest but sufficient to mark the wrong that has been done." The Court fixed the range at up to $20,000 but did not preclude the availability of aggravated or punitive damages.
Regards,
Blair
Monday, October 3, 2011
Lessons learned about the Hague Service Convention
LESSONS I LEARNED ABOUT THE HAGUE SERVICE CONVENTION
On November 15, 1965, members of the Conference on Private International Law met in The Hague, Netherlands, and signed a multi-lateral treaty called The Convention On The Service Abroad Of Judicial And Extra-Judicial Documents In Civil Or Commercial Matters (commonly referred to as the "Hague Service Convention" or the "Convention"). Among the stated purposes of the Convention were: (a) the need to create appropriate means to ensure that one contracting state's judicial and extra-judicial documents being served abroad would be brought to the attention of the addressee of such documents located in another contracting state "in sufficient time"; and (b) to improve "mutual judicial assistance" by simplifying and expediting the procedures around the service of documents .
To many observers in 1965, these goals had to be achieved if divergent legal systems were to follow the path that international commerce had begun to pave. Prior to the enactment of the Hague Service Convention, service abroad of Ontario's judicial documents in civil cases was generally effected by means of letters rogatory. These letters are a formal request from an Ontario court to a foreign court asking that court to give formal effect to serve Ontario's judicial documents on a party located in the receiving state.
Historically, foreign states had accepted such requests from Ontario courts on the basis of the doctrine of comity. Comity is often defined as reciprocity of treatment, in other words courts in one state will recognize and give effect to the laws of a foreign state only if the same recognition is given to the home state's laws by the courts of the foreign state.
As the Supreme Court of the United States said in the 19th century case of Hilton v. Guyot:
"Comity in the legal sense, is neither a matter of absolute obligation, on the one hand, nor of mere courtesy and goodwill, upon the other. But it is the recognition which one nation allows within its territory to the legislative, executive or judicial acts of another nation, having due regard both to international duty and convenience, and to the rights of its own citizens or of other persons who are under the protection of its laws."
However, comity has often been criticized for relying too heavily on judicial discretion instead of a desire to show courtesy to other states . Instead, the critics sought to propound a theory of "vested rights" where the home state did not recognize or enforce foreign law as a matter of comity, but as a matter of justice which gave effect to private rights which, in the home state's judgment, a person had duly acquired under a foreign system of law.
In practice, the recognition and enforcement of Ontario's letters rogatory by foreign states proved to be cumbersome and time-consuming. Not all foreign states gave prompt effect to requests to serve judicial documents upon parties located within their borders.
The Hague Service Convention strove for more efficient and reliable procedures to serve judicial and extra-judicial documents on foreign parties.
The members of the Hague Conference recognized that by 1965, the world was a much different place than the world in which the judges who decided Hilton v. Guyot lived. There was an increasing need to "facilitate the flow of commerce, skills and people across international borders". The world economy was becoming increasingly more integrated and it was necessary for private international law to respond.
How The Convention Is Supposed To Work
Pursuant to the provisions of the Convention, each contracting state is required to designate a Central Authority to receive requests for service coming from other contracting states.
Article 5 of the Convention provides that the Central Authority of the receiving state can either serve the document itself, arrange to have it served by an appropriate agency in accordance with the receiving state's own internal laws for the service of documents or serve the documents by the method requested by the applicant (unless that method is incompatible with its laws).
Article 5 also provides that, if the document is to be served in accordance with the receiving state's own internal laws, the Central Authority may require the document to be written in, or translated into, the official language, or one of the official languages of the receiving state.
Article 10 of the Convention provides:
Provided the state of destination does not object, the present Convention shall not interfere with:
(a) the freedom to send judicial documents, by postal channels, directly to persons abroad;
(b) the freedom of judicial officers, officials or other competent persons of the State of origin to effect service of judicial documents directly through the judicial officers, officials or other competent persons of the State of destination; and
(c) the freedom of any person interested in a judicial proceeding to effect service of judicial documents directly through the judicial officers, officials or other competent officials of the State of destination.
How The Convention Does Work
In a recent case, we represented an Ontario corporation which that became involved in a contractual dispute with a Mexican non-profit entity as well as that entity's two principals. The client's headquarters were located in Toronto. All of the opposing parties resided in Mexico City.
Unable to resolve the dispute through negotiation, the client commenced legal proceedings against the Mexican nationals in the Ontario Superior Court of Justice.
Service Outside Ontario
Under Ontario's Rules of Civil Procedure ("Rules"), defendants to an action commenced in Ontario may be served outside Ontario with the originating process (in the case, the originating process was a statement of claim) without leave of the court if the case falls within the types of cases enumerated in the Rules: i.e. where the proceeding against that party consisted of a claim or claims in respect of, among other things, a tort committed in Ontario; damages sustained in Ontario arising from tort, breach of contract, breach of fiduciary duty or breach of confidence wherever committed; or where the defendants are ordinarily resident or carrying on business in Ontario.
This Rule codifies, in part, the common law principle of "jurisdiction simpliciter" which allows an Ontario court to assume jurisdiction over non-resident defendants where there is a "real and substantial connection" between Ontario and such non-resident defendants.
In this case, damages had been sustained by our client in Ontario. In addition, the contract in question provided that the courts of Ontario were to have jurisdiction over legal proceedings "in respect of the contract". On that basis we believed that Ontario courts could assume jurisdiction over the Mexican defendants.
The Rules also incorporate the Hague Service Convention by reference and provide that "an originating process or other document to be served outside of Ontario in a contracting state shall be served, (a) through the Central Authority in the contracting state; or (b) in a manner that is permitted by Article 10 of the Convention and that would be permitted by the Rules if the document were to be served in Ontario.
Canada signed the convention in September of 1988 and Mexico ratified it in November of 1999.
Mexico is one of Canada's largest trading partners, a partner in NAFTA, it's third largest trading partner by share of total imports and fifth largest by share of total exports. There is a vast amount of business conducted between Canadian and Mexican entities on a daily basis. One would think that forty-five years after the Convention was enacted, it would not be difficult to effect service of an Ontario statement of claim on Mexican defendants.
Lesson No. 1: Retain The Assistance Of Lawyers In The Foreign State
Shortly after the contractual dispute arose, the client retained Mexican lawyers to negotiate with the Mexican defendants. The client's Mexican lawyers proved to be invaluable in guiding us through what was supposed to be a simple procedure. We encountered a series of rules and barriers, not imposed by the Convention but which had been established by the Mexican authorities in applying the Convention.
After the settlement negotiations between the parties had broken down, I wrote a letter to the Mexican defendants setting out the substance of our client's claim against them. I enlisted the assistance of our client's Mexican lawyers to deliver the letter on our behalf. This simple process of making a demand for payment was our first indication that suing Mexican defendants might be more formal and rule-oriented than we had anticipated.
The Mexican lawyers recommended that the client provide them with a power of attorney so that they could deliver the letter by means of a notary public. This, they explained would make the demand more formal and "serious". Accordingly, the client executed the appropriate form of power of attorney and we couriered five original copies of the demand letter to the Mexican lawyers.
No satisfactory response to the letter was received and we issued a statement of claim in Ontario against all three defendants. Accordingly, it was necessary to effect service of the statement of claim pursuant to the provisions of the Hague Service Convention.
The Mexican lawyers advised that, although Mexico was a signatory to the Convention, when that country ratified the Convention, it objected to serving judicial documents pursuant to the procedures set out in Articles 8 (Article 8 allows a contracting state to serve documents upon persons outside of its borders directly through diplomatic or consular agents. However, any state may declare that it is opposed to such service within its territory (which Mexico clearly did) unless the document is to be served upon a citizen of the originating state) and 10 of the Convention. That posed a problem for us as Article 10 had been specially incorporated into Ontario's Rules.
Article 10 of the Convention states that, provided the state of designation does not object (again which Mexico clearly did) the Convention would not interfere with such things as the freedom to send judicial documents by mail, through judicial officers or other competent persons in the state of designation.
This objection was a further indication of the "formal" approach that Mexico takes in these matters. The Mexican lawyers advised us that Mexico had designated a branch of its Ministry of Foreign Relations as its Central Authority to receive documents for service from other countries. The Ministry upon satisfying itself as to the content of the documents, would then transmit the documents to the Federal Court of Mexico in order to have them served.
The Mexican lawyers advised us that to comply with Mexican law, we would need to take the following steps to properly serve the statement of claim on the Mexican defendants:
1. complete, in duplicate, a "Request for Service Abroad of Judicial or Extra-Judicial Documents" form ("Request Form");
2. translate the Request Form and the statement of claim into Spanish using an official translator in Mexico;
3. submit the Request Form, statement of claim and translations thereof in duplicate to the Mexican Central Authority;
4. retain Mexican lawyers to pursue the client's request for service with the Mexican Central Authority and the Mexican Federal Court and grant the Mexican lawyers a second power of attorney to enable them to represent the client before the Mexican Central Authority and Federal Court. We were advised that the power of attorney would have to be notarized and "legalized" at the Mexican Consulate in Mexico City.
Lesson No. 2: If Possible, Obtain An Advance Ruling From The Receiving State's Central Authority
The client's Mexican lawyers sent the required form of power of attorney for the client's execution. The client signed and returned it. Some weeks later, the Mexican lawyers advised that the power of attorney was "invalid" because it didn't bear a "legalization" stamp from the Mexican Consulate in Toronto (something they had not advised us of before). Accordingly, the Mexican lawyers returned the power of attorney to us so that we could get it stamped by the Mexican Consulate.
The next day, the Mexican lawyers advised us that before being stamped by the Mexican Consulate, the power of attorney must first be approved by Canada's Ministry of Foreign Relations. They advised that alternatively, the client could attend at the Mexican Consulate to sign a new power of attorney in accordance with Mexican law. We took the second route and returned the power of attorney to Mexico.
A few days later, the Mexican lawyers advised us that the Request Form should not only refer to the statement of claim but also to all of the documents that were required to be served on the defendants. They indicated that these documents should include the client's certificate of status as a corporation and the power of attorney. We made all such amendments suggested by the Mexican lawyers, in triplicate (also at their suggestion). The Mexican lawyers advised that we should return the documents either through the Central Authority in Ontario or have them stamped by the Ontario Court. We opted for the first route.
After we had delivered the documents back to Mexico, the Mexican lawyers advised us that the Mexican Central Authority had determined that the documents were acceptable "in principle", but were missing the "official stamp and signature" of the Canadian Central Authority. In response, we contacted the Central Authority in Haileybury, Ontario to obtain the Central Authority's signature. Once again we returned all of the documents to the Mexican lawyers.
Several weeks later, the Mexican lawyers advised us that the Mexican Central Authority had rejected the documents again because the Request Form had not been signed by an official of the Ontario Court (although it had been signed by the Central Authority as they had requested) and the "notice to the defendants" in the statement of claim (the pre-printed preamble) did not specify whether the time for responding to the claim was to be calculated in business or calendar days.
It took some brilliant advocacy by our law clerk to persuade the Registrar of the Ontario Superior Court of Justice at Toronto to sign the Request Form, particularly after she advised him that it was the court's policy not to do so. We then sent the full set of documents back to the Central Authority in Haileybury to obtain an updated Request Form.
Lesson No. 3: Make Additional Originals Of Everything
After we received the documents from the Central Authority in Haileybury, but before we returned them to Mexico, the Mexican lawyers advised us that the Mexican Central Authority was now asking for two sets of original documents (as opposed to copies) for each of the three defendants that we wished to serve. This was a completely new requirement. Accordingly, our clerk was required to re-attend before the Superior Court Registrar and ask her sign the Request Form once again.
The Mexican lawyers advised that the request for duplicate originals was indeed new and although such a request was not a requirement of the Convention or even Mexican law, it was a requirement of the clerk at the Mexican Central Authority who was seized with reviewing our request.
Once again, we returned the full set of documents to the Mexican lawyers. They advised us that the documents were complete and that they would send them to be translated into Spanish before they filed them with the Mexican Central Authority.
Several weeks later we were informed by the Mexican lawyers that the Mexican Central Authority had once again rejected the documents because they continued to be of the view that the preprinted preamble of the statement of claim did not clearly distinguish between business days or calendar days even though we had specifically made that distinction in the request summary.
Accordingly, we resigned ourselves to going through the process once again. However, to our surprise the Mexican Ministry of Foreign Relations, on its own initiative, informed us that they had decided to accept the documents and had transmitted them to the Superior Court in Mexico City to proceed with service.
Lesson No. 4: Start Early
The Mexican defendants were served with the statement of claim approximately 10 months after it was issued. As the Rules provide that a statement of claim must be served within six months after it is issued, it was necessary to obtain an order extending the time for service.
Accordingly, I recommend that you make contact with lawyers in the foreign jurisdiction even before an Ontario claim is issued to ensure that you have a good handle on the unique requirements of the jurisdiction for service of Ontario judicial process. Doing so will save you time and inconvenience, and save your client money. It would also achieve the main goal of the authors of the Convention – by simplifying and expediting the process.
Blair W.M. Bowen – Fogler, Rubinoff LLP, Toronto, Canada
On November 15, 1965, members of the Conference on Private International Law met in The Hague, Netherlands, and signed a multi-lateral treaty called The Convention On The Service Abroad Of Judicial And Extra-Judicial Documents In Civil Or Commercial Matters (commonly referred to as the "Hague Service Convention" or the "Convention"). Among the stated purposes of the Convention were: (a) the need to create appropriate means to ensure that one contracting state's judicial and extra-judicial documents being served abroad would be brought to the attention of the addressee of such documents located in another contracting state "in sufficient time"; and (b) to improve "mutual judicial assistance" by simplifying and expediting the procedures around the service of documents .
To many observers in 1965, these goals had to be achieved if divergent legal systems were to follow the path that international commerce had begun to pave. Prior to the enactment of the Hague Service Convention, service abroad of Ontario's judicial documents in civil cases was generally effected by means of letters rogatory. These letters are a formal request from an Ontario court to a foreign court asking that court to give formal effect to serve Ontario's judicial documents on a party located in the receiving state.
Historically, foreign states had accepted such requests from Ontario courts on the basis of the doctrine of comity. Comity is often defined as reciprocity of treatment, in other words courts in one state will recognize and give effect to the laws of a foreign state only if the same recognition is given to the home state's laws by the courts of the foreign state.
As the Supreme Court of the United States said in the 19th century case of Hilton v. Guyot:
"Comity in the legal sense, is neither a matter of absolute obligation, on the one hand, nor of mere courtesy and goodwill, upon the other. But it is the recognition which one nation allows within its territory to the legislative, executive or judicial acts of another nation, having due regard both to international duty and convenience, and to the rights of its own citizens or of other persons who are under the protection of its laws."
However, comity has often been criticized for relying too heavily on judicial discretion instead of a desire to show courtesy to other states . Instead, the critics sought to propound a theory of "vested rights" where the home state did not recognize or enforce foreign law as a matter of comity, but as a matter of justice which gave effect to private rights which, in the home state's judgment, a person had duly acquired under a foreign system of law.
In practice, the recognition and enforcement of Ontario's letters rogatory by foreign states proved to be cumbersome and time-consuming. Not all foreign states gave prompt effect to requests to serve judicial documents upon parties located within their borders.
The Hague Service Convention strove for more efficient and reliable procedures to serve judicial and extra-judicial documents on foreign parties.
The members of the Hague Conference recognized that by 1965, the world was a much different place than the world in which the judges who decided Hilton v. Guyot lived. There was an increasing need to "facilitate the flow of commerce, skills and people across international borders". The world economy was becoming increasingly more integrated and it was necessary for private international law to respond.
How The Convention Is Supposed To Work
Pursuant to the provisions of the Convention, each contracting state is required to designate a Central Authority to receive requests for service coming from other contracting states.
Article 5 of the Convention provides that the Central Authority of the receiving state can either serve the document itself, arrange to have it served by an appropriate agency in accordance with the receiving state's own internal laws for the service of documents or serve the documents by the method requested by the applicant (unless that method is incompatible with its laws).
Article 5 also provides that, if the document is to be served in accordance with the receiving state's own internal laws, the Central Authority may require the document to be written in, or translated into, the official language, or one of the official languages of the receiving state.
Article 10 of the Convention provides:
Provided the state of destination does not object, the present Convention shall not interfere with:
(a) the freedom to send judicial documents, by postal channels, directly to persons abroad;
(b) the freedom of judicial officers, officials or other competent persons of the State of origin to effect service of judicial documents directly through the judicial officers, officials or other competent persons of the State of destination; and
(c) the freedom of any person interested in a judicial proceeding to effect service of judicial documents directly through the judicial officers, officials or other competent officials of the State of destination.
How The Convention Does Work
In a recent case, we represented an Ontario corporation which that became involved in a contractual dispute with a Mexican non-profit entity as well as that entity's two principals. The client's headquarters were located in Toronto. All of the opposing parties resided in Mexico City.
Unable to resolve the dispute through negotiation, the client commenced legal proceedings against the Mexican nationals in the Ontario Superior Court of Justice.
Service Outside Ontario
Under Ontario's Rules of Civil Procedure ("Rules"), defendants to an action commenced in Ontario may be served outside Ontario with the originating process (in the case, the originating process was a statement of claim) without leave of the court if the case falls within the types of cases enumerated in the Rules: i.e. where the proceeding against that party consisted of a claim or claims in respect of, among other things, a tort committed in Ontario; damages sustained in Ontario arising from tort, breach of contract, breach of fiduciary duty or breach of confidence wherever committed; or where the defendants are ordinarily resident or carrying on business in Ontario.
This Rule codifies, in part, the common law principle of "jurisdiction simpliciter" which allows an Ontario court to assume jurisdiction over non-resident defendants where there is a "real and substantial connection" between Ontario and such non-resident defendants.
In this case, damages had been sustained by our client in Ontario. In addition, the contract in question provided that the courts of Ontario were to have jurisdiction over legal proceedings "in respect of the contract". On that basis we believed that Ontario courts could assume jurisdiction over the Mexican defendants.
The Rules also incorporate the Hague Service Convention by reference and provide that "an originating process or other document to be served outside of Ontario in a contracting state shall be served, (a) through the Central Authority in the contracting state; or (b) in a manner that is permitted by Article 10 of the Convention and that would be permitted by the Rules if the document were to be served in Ontario.
Canada signed the convention in September of 1988 and Mexico ratified it in November of 1999.
Mexico is one of Canada's largest trading partners, a partner in NAFTA, it's third largest trading partner by share of total imports and fifth largest by share of total exports. There is a vast amount of business conducted between Canadian and Mexican entities on a daily basis. One would think that forty-five years after the Convention was enacted, it would not be difficult to effect service of an Ontario statement of claim on Mexican defendants.
Lesson No. 1: Retain The Assistance Of Lawyers In The Foreign State
Shortly after the contractual dispute arose, the client retained Mexican lawyers to negotiate with the Mexican defendants. The client's Mexican lawyers proved to be invaluable in guiding us through what was supposed to be a simple procedure. We encountered a series of rules and barriers, not imposed by the Convention but which had been established by the Mexican authorities in applying the Convention.
After the settlement negotiations between the parties had broken down, I wrote a letter to the Mexican defendants setting out the substance of our client's claim against them. I enlisted the assistance of our client's Mexican lawyers to deliver the letter on our behalf. This simple process of making a demand for payment was our first indication that suing Mexican defendants might be more formal and rule-oriented than we had anticipated.
The Mexican lawyers recommended that the client provide them with a power of attorney so that they could deliver the letter by means of a notary public. This, they explained would make the demand more formal and "serious". Accordingly, the client executed the appropriate form of power of attorney and we couriered five original copies of the demand letter to the Mexican lawyers.
No satisfactory response to the letter was received and we issued a statement of claim in Ontario against all three defendants. Accordingly, it was necessary to effect service of the statement of claim pursuant to the provisions of the Hague Service Convention.
The Mexican lawyers advised that, although Mexico was a signatory to the Convention, when that country ratified the Convention, it objected to serving judicial documents pursuant to the procedures set out in Articles 8 (Article 8 allows a contracting state to serve documents upon persons outside of its borders directly through diplomatic or consular agents. However, any state may declare that it is opposed to such service within its territory (which Mexico clearly did) unless the document is to be served upon a citizen of the originating state) and 10 of the Convention. That posed a problem for us as Article 10 had been specially incorporated into Ontario's Rules.
Article 10 of the Convention states that, provided the state of designation does not object (again which Mexico clearly did) the Convention would not interfere with such things as the freedom to send judicial documents by mail, through judicial officers or other competent persons in the state of designation.
This objection was a further indication of the "formal" approach that Mexico takes in these matters. The Mexican lawyers advised us that Mexico had designated a branch of its Ministry of Foreign Relations as its Central Authority to receive documents for service from other countries. The Ministry upon satisfying itself as to the content of the documents, would then transmit the documents to the Federal Court of Mexico in order to have them served.
The Mexican lawyers advised us that to comply with Mexican law, we would need to take the following steps to properly serve the statement of claim on the Mexican defendants:
1. complete, in duplicate, a "Request for Service Abroad of Judicial or Extra-Judicial Documents" form ("Request Form");
2. translate the Request Form and the statement of claim into Spanish using an official translator in Mexico;
3. submit the Request Form, statement of claim and translations thereof in duplicate to the Mexican Central Authority;
4. retain Mexican lawyers to pursue the client's request for service with the Mexican Central Authority and the Mexican Federal Court and grant the Mexican lawyers a second power of attorney to enable them to represent the client before the Mexican Central Authority and Federal Court. We were advised that the power of attorney would have to be notarized and "legalized" at the Mexican Consulate in Mexico City.
Lesson No. 2: If Possible, Obtain An Advance Ruling From The Receiving State's Central Authority
The client's Mexican lawyers sent the required form of power of attorney for the client's execution. The client signed and returned it. Some weeks later, the Mexican lawyers advised that the power of attorney was "invalid" because it didn't bear a "legalization" stamp from the Mexican Consulate in Toronto (something they had not advised us of before). Accordingly, the Mexican lawyers returned the power of attorney to us so that we could get it stamped by the Mexican Consulate.
The next day, the Mexican lawyers advised us that before being stamped by the Mexican Consulate, the power of attorney must first be approved by Canada's Ministry of Foreign Relations. They advised that alternatively, the client could attend at the Mexican Consulate to sign a new power of attorney in accordance with Mexican law. We took the second route and returned the power of attorney to Mexico.
A few days later, the Mexican lawyers advised us that the Request Form should not only refer to the statement of claim but also to all of the documents that were required to be served on the defendants. They indicated that these documents should include the client's certificate of status as a corporation and the power of attorney. We made all such amendments suggested by the Mexican lawyers, in triplicate (also at their suggestion). The Mexican lawyers advised that we should return the documents either through the Central Authority in Ontario or have them stamped by the Ontario Court. We opted for the first route.
After we had delivered the documents back to Mexico, the Mexican lawyers advised us that the Mexican Central Authority had determined that the documents were acceptable "in principle", but were missing the "official stamp and signature" of the Canadian Central Authority. In response, we contacted the Central Authority in Haileybury, Ontario to obtain the Central Authority's signature. Once again we returned all of the documents to the Mexican lawyers.
Several weeks later, the Mexican lawyers advised us that the Mexican Central Authority had rejected the documents again because the Request Form had not been signed by an official of the Ontario Court (although it had been signed by the Central Authority as they had requested) and the "notice to the defendants" in the statement of claim (the pre-printed preamble) did not specify whether the time for responding to the claim was to be calculated in business or calendar days.
It took some brilliant advocacy by our law clerk to persuade the Registrar of the Ontario Superior Court of Justice at Toronto to sign the Request Form, particularly after she advised him that it was the court's policy not to do so. We then sent the full set of documents back to the Central Authority in Haileybury to obtain an updated Request Form.
Lesson No. 3: Make Additional Originals Of Everything
After we received the documents from the Central Authority in Haileybury, but before we returned them to Mexico, the Mexican lawyers advised us that the Mexican Central Authority was now asking for two sets of original documents (as opposed to copies) for each of the three defendants that we wished to serve. This was a completely new requirement. Accordingly, our clerk was required to re-attend before the Superior Court Registrar and ask her sign the Request Form once again.
The Mexican lawyers advised that the request for duplicate originals was indeed new and although such a request was not a requirement of the Convention or even Mexican law, it was a requirement of the clerk at the Mexican Central Authority who was seized with reviewing our request.
Once again, we returned the full set of documents to the Mexican lawyers. They advised us that the documents were complete and that they would send them to be translated into Spanish before they filed them with the Mexican Central Authority.
Several weeks later we were informed by the Mexican lawyers that the Mexican Central Authority had once again rejected the documents because they continued to be of the view that the preprinted preamble of the statement of claim did not clearly distinguish between business days or calendar days even though we had specifically made that distinction in the request summary.
Accordingly, we resigned ourselves to going through the process once again. However, to our surprise the Mexican Ministry of Foreign Relations, on its own initiative, informed us that they had decided to accept the documents and had transmitted them to the Superior Court in Mexico City to proceed with service.
Lesson No. 4: Start Early
The Mexican defendants were served with the statement of claim approximately 10 months after it was issued. As the Rules provide that a statement of claim must be served within six months after it is issued, it was necessary to obtain an order extending the time for service.
Accordingly, I recommend that you make contact with lawyers in the foreign jurisdiction even before an Ontario claim is issued to ensure that you have a good handle on the unique requirements of the jurisdiction for service of Ontario judicial process. Doing so will save you time and inconvenience, and save your client money. It would also achieve the main goal of the authors of the Convention – by simplifying and expediting the process.
Blair W.M. Bowen – Fogler, Rubinoff LLP, Toronto, Canada
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