Canadian Appeals Monitor

Information and Commentary on Upcoming and Recent Appeal Court Decisions

Canadian Appeals Monitor – SCC Monitor post for July 2016

A Commentary on Recent Legal Developments by the Canadian Appeals Monitor

Posted in Charter of Rights, Civil Procedure/Evidence, Constitutional, Contracts, Insurance, Labour and Employment, The SCC Monitor
Katherine BoothRyan MacIsaac

We may be into the lazy days of midsummer, but the Supreme Court of Canada (“SCC”) has been busy, releasing a number of important decisions in the areas of insurance, contract, labour & employment, constitutional, property, evidence and administrative law.

 

Judgment

Since our last SCC Monitor post, the SCC has released the following judgments of interest:

  • Jurisdiction Over Radiocommunications: Rogers Communications Inc. v. Châteauguay (City), 2016 SCC 23 (36027) – One of McCarthys’ Top 10 Appeals to Watch in 2016, in this decision the SCC confirmed the Federal government’s jurisdiction over the location of radiocommunication infrastructure and held that the municipality’s notice of reserve, which prevented Rogers from constructing an antenna system on a certain property, was ultra vires. The majority provided important guidance on the scope of the doctrines of cooperative federalism and interjurisdictional immunity. Read our blog post on this decision here.
  • Right to a Speedy Trial: R. v. Jordan, 2016 SCC 27 (36068) – The SCC overhauled the Charter s. 11(b) right to a trial in a reasonable time. Effectively, the accused in a criminal case is entitled to a trial within 30 months (in a superior court action), or within 18 months (in a provincial court action), from the date of the charge. Any delay longer than that presumptively breaches s. 11(b). This recent blog post contains an excellent summary and discussion of the decision, including of the potential impact to corporate defendants facing criminal or quasi-criminal prosecutions.
  • Terminal Discord on Standard of Review: Wilson v. Atomic Energy of Canada Ltd., 2016 SCC 29 (36354) – The SCC held that non-unionized federal employees can only be terminated for cause, if those employees choose to challenge their termination under the Canada Labour Code (unless the employee was laid off because of lack of work or discontinuance of a function). If the non-unionized employee opts to challenge the termination in court, the normal common law remedies continue to apply (notice or pay in lieu). The case is significant because the SCC justices displayed sharply divergent views on the administrative law standard of review analysis; see this previous blog post for a discussion of the decisions below.
  • Presumptive Jurisdiction Over Dispute: Lapointe Rosenstein Marchand Melançon LLP v. Cassels Brock & Blackwell LLP, 2016 SCC 30 (36087) – Another one of McCarthy’s Top 10 Appeals to Watch in 2016, in this decision the SCC provided clarity on the fourth Van Breda connecting factor, which provides a court with presumptive jurisdiction when a contract connected with the dispute was made in the province. The majority adopted a broad approach to this fourth factor, finding that it did not require the alleged tortfeasor to be a party to the contract or that the tortfeasor’s liability flows directly from its contractual obligations. Justice Côté, dissenting, was critical of the majority’s broad approach.
  • Legal Causation ≠ Scientific Causation: British Columbia (Workers’ Compensation Appeal Tribunal) v. Fraser Health Authority, 2016 SCC 25 (36300) – This case (previously discussed here) involved claims that breast cancer was caused by the workplace environment. At the tribunal hearing of the appeal of the workers’ compensation claims, medical experts opined that there was not sufficient scientific evidence to causally link the cancer to the employment. The tribunal applied a different standard of causation than the experts, holding that the cancers were caused by the employment. The SCC upheld the tribunal’s decision, ruling that the tribunal could apply a lower threshold of causation under the Workers Compensation Act than the scientific threshold applied by the experts.
  • Circumstantial Evidence Clarified: R. v. Villaroman, 2016 SCC 33 (36435) – This decision clarifies the difference between direct and circumstantial evidence, and how circumstantial evidence may be used in criminal cases. A jury must be cautioned about “jumping to conclusions” or “filling in the blanks” with circumstantial evidence. Circumstantial evidence (reasonable inferences based on facts or evidentiary gaps, “assessed logically, and in light of human experience and common sense”) is different than reasonable doubt (a degree of persuasion, or lack thereof, based on reason and common sense). The Crown may need to negative reasonable alternative theories or possibilities—but not merely speculative possibilities—where the evidence is circumstantial. “[T]o justify a conviction, the circumstantial evidence, assessed in light of human experience, should be such that it excludes any other reasonable alternative”. This decision will likely be cited in many future civil lawsuits as the clearest articulation of the law governing circumstantial evidence. It will also be applicable where corporate defendants are facing criminal or quasi-criminal charges.

Leaves to Appeal Granted

The SCC granted leave to appeal the following decision:

  • Adverse Possession: Mowatt v. British Columbia (Attorney General), 2016 BCCA 113 (36999) – In a rare modern case considering adverse possession, the petitioners claimed ownership of land on Kootenay Lake relying on the doctrine of adverse possession. The judge found that the petitioners had not proved continuous possession of the land for the years 1916 to 1920, and that this gap broke the continuity required to make out a claim. The BCCA allowed the appeal, holding that the requirement to prove “inconsistent use” with the true owner’s intended use of the land does not apply in British Columbia, and that the gap in possession between 1916 and 1920 was actually shorter than found by the judge and, having regard to evidence available, it was more likely than not that the squatters had continuous possession during these years. The appeal to the SCC raises the issues of whether a distinct approach to fact-finding should be applied for claims that involve facts occurring beyond living memory, and whether the doctrine of inconsistent use is part of the law of adverse possession in Canada.

Leaves to Appeal Refused

Finally, the SCC refused leave to appeal the following decisions:

  • Regulator can Ban Loyalty Points for Pharmacies: Sobeys West Inc. v. College of Pharmacists of British Columbia, 2016 BCCA 41 (36917) – The College council passed bylaws prohibiting pharmacies from making incentive programs available to customers. The applicant pharmacies challenged the bylaws on the grounds that there was no risk of harm from the loyalty programs. The pharmacies sought to introduce new evidence in the judicial review, in addition to the documents that the College council considered when making its policy decision. The BCCA held that (i) the chambers judge erred by admitting evidence that was not before the College council when it passed the bylaws; and (ii) although the evidence supporting the need for the bylaws was “thin”, the bylaws were still “within the range of reasonable outcomes” available to the College council. The College council was not obligated to pass the “narrowest” bylaw to achieve the outcome, as this was not a Charter challenge but rather a judicial review.
  • Unconscionability in Contract: Bank of Montreal v. Javed, 2016 ONCA 49 (36902) – Shah was a director of a corporation and he (along with Mr. Jahved) provided a personal guarantee to BMO to secure a small business loan. Mr. Shah subsequently resigned as director from the company and his subsequent requests for access to the company’s account information with BMO were refused. The corporation then defaulted on the loan and BMO sought to enforce the guarantee against Mr. Shah. The ONCA rejected Mr. Shah’s argument that the duty of honest performance recognized in Bhasin extended the doctrine of unconscionability beyond the equities of the contract itself, to apply to performance of a contract. It also found that, while the bank had breached its obligation to Mr. Shah in not providing him information regarding his liability under guarantee, this breach did not discharge the guarantee. See our post on the ONCA’s decision here.
  • Sexist Blog Post Not Workplace Harassment: Taylor-Baptiste v. Ontario Public Service Employees Union, 2015 ONCA 495 (36647) – During a period of labour unrest, a unionized employee wrote a blog post and permitted the posting of a comment, both of which targeted his female manager by alleging nepotism and incompetence. The manager complained to the Human Rights Tribunal that the blog post and comment were discrimination or harassment in the workplace, contrary to the Human Rights Code. The Tribunal weighed the Charter values of freedom of expression and association and noted that, while the blog post and comment were sexist and offensive, there was no evidence that the postings were made from the workplace. The Tribunal concluded that the blog post and comment were not made “with respect to employment” under the Code. The Tribunal’s decision was upheld by the Divisional Court and ONCA. Both courts held that the Tribunal did not err by considering Charter values in reaching its decision.
  • Obligations Regarding Exculpatory Clauses: Suhaag Jewellers Ltd. v. Alarm Factory Inc. (AFC Advance Integration), 2016 ONCA 33 (36887) – The plaintiff jewelry business claimed that the security and alarm system supplied by the defendant failed when it was robbed. The defendant was granted summary judgment on the basis that the contract included an exculpatory clause which noted that the system might fail and provided that the defendant would not be liable in any way for any loss arising from the provision of the products and services. The ONCA dismissed the plaintiff’s appeal. In an ordinary commercial contract between two corporations, there is no obligation on the defendant to draw an exculpatory clause to the specific attention of the plaintiff. One of the issues raised in the application for leave to appeal to the SCC was whether the duty of good faith in contract created a duty of disclosure for any party proffering an exculpatory clause.
  • Insurance Contracts and Disclosing Material Facts: Swiss Reinsurance Company v. Camarin Limited, 2015 BCCA 466, 2016 BCCA 92 (36967) – At issue was the availability of a reinsurance policy following losses from settling a class action for defective tile. The reinsurer argued that the insured had failed to provide material information, rendering the insurance policy voidable. The BCCA held that the trial judge erred by failing to consider the information available to the reinsurer during each policy year and then analyzing the materiality of that information. A new trial was ordered.

The SCC Monitor (02/08/2016)

A Commentary on Recent Legal Developments by the Canadian Appeals Monitor

Posted in Intellectual Property, Oil and Gas, Professions, The SCC Monitor
Kosta KalogirosKelli McAllisterSam Rogers

Since our last post, the Supreme Court has granted and denied leave in a few significant cases that will be of interest to our readers.

Leave to Appeal Granted

Auditor Liability: Livent Inc v Deloitte & Touche

The SCC granted leave to appeal from the judgment of the Ontario Court of Appeal in Livent Inc v Deloitte & Touche, 2016 ONCA 11, which is an important decision concerning the liability of auditors for negligence.

The case is extremely complex (indeed, the Court of Appeal’s judgment is more than 150 pages). It arose out of the collapse of Livent, a well-known theatre production company headquartered in Toronto. The principles of the company engaged in an elaborate accounting fraud, which was uncovered in the late 1990s. Deloitte was Livent’s auditor. Livent, through a special receiver appointed in insolvency proceedings, brought an action against Deloitte for negligence in failing to discover the financial fraud being perpetrated by Livent’s principles.

Following the decisions by the Ontario Superior Court and Court of Appeal, the SCC has now agreed to hear this matter. This will be the Court’s first chance to address auditor negligence since Hercules Managements Ltd v Ernst & Young, [1997] 2 SCR 165. That decision, which has been cited over 770 times since it was released, effectively blocked nearly all negligence claims against auditors based on public policy concerns of indeterminate liability. Depending on how the SCC rules, it may open the door to other claims against auditors or it may shut that door for good.

Leaves to Appeal Dismissed

Patent Legislative Regime is a Complete Code: Low v Pfizer Canada Inc

The SCC denied leave to appeal from the judgment of the British Columbia Court of Appeal (“BCCA”) in Low v Pfizer Canada Inc, 2015 BCCA 506 (“Low”), an appeal of a class action certification based on “unlawful abuse of the patent system”. The BCCA reversed the trial decision and held that the patent legislative regime was a complete code that foreclosed private-law consumer remedies based on breaches of the Patent Act.

The class action in Low sprung in part from a prior SCC decision, Pfizer Canada Inc v Novopharm, 2012 SCC 60, which held that Pfizer’s patent for Viagra was invalid for insufficient disclosure contrary to the Patent Act. Consequently, generic drug manufacturers were able to enter the market at a lower price. The proposed class in Low was defined by the time period in which the generic version of Viagra – sildenafil – was prohibited from market entry as a result of Pfizer’s invalid patent. This tenacious class action sought to hold Pfizer accountable to consumers for the difference between the revenue Pfizer collected by charging the actual price of Viagra and the revenue it would have collected had there been generic competition, in the absence of any statutory remedy for consumers under the patent legislative regime. The chambers judge certified the class action based on intentional interference with economic relations and unjust enrichment, finding it was not plain and obvious that the claims could not succeed.

The unanimous BCCA reversed the trial decision and held that the class action should not have been certified. The BCCA held that claims advanced by the proposed class were grounded in the breach of the Patent Act. Patent rights are statutory. The patent legislative regime is comprehensive and precludes common law rights. With respect to the tort of unlawful interference with economic relations, the BCCA held that a breach of a statute will only satisfy the “unlawful means” element if it is actionable outside the context of the statute.

Had the SCC granted leave in this case, it could have conclusively addressed the comprehensiveness of the patent legislative regime and, more generally, consumer class actions seeking a common law remedy based on statutory claims.

Standard Form Contracts Standard of Review & Trespass for Removal of Resources: Stewart Estate v TAQA North Ltd

Stewart Estate v TAQA North Ltd, 2015 ABCA 357 (“Stewart Estate) is a complicated and lengthy decision of the ABCA, with each of the justices on the panel writing separate reasons. Almost all permutations in which the panel could agree, concur, and disagree are on display in Stewart Estate, arguably showing the lack of clarity in the law relating to trespass by way of removal of a resource in the context of largely standard oil and gas leases.

Standard of Review

With respect to the standard of review for the interpretation of oil and gas leases, the majority (McDonald JA and O’Ferrall JA) held that the appropriate standard was correctness – to search for the intention of the parties when dealing with contracts of adhesion was “merely a legal fiction” (at para 273 per McDonald JA). In this case, the majority noted there were only two blank spaces within the leases that represented points of negotiation between the parties and the precedential value and importance beyond the dispute required correctness to be the standard of review. In contrast, Justice Rowbotham concluded that, given the reliance in Sattva on cases that appeared to have interpreted standard form contracts, the trial judge’s interpretation of the leases was reviewable on the more deferential palpable and overriding error standard.

As previously discussed, the SCC’s blockbuster decision in contractual interpretation – Sattva[1] changed the standard of review for appellate courts from correctness to one requiring deference to the trial judge (unless an extricable error of law is shown) and emphasized the importance of the factual matrix when interpreting a contract. Since that decision, a number of appellate courts have considered whether interpretation of standard form contracts or contracts of adhesion remains a question of law alone or attracts a deferential standard of review.[2]  The SCC’s decision to deny leave in Stewart Estate leaves the standard of review with respect to standard form contracts or contracts of adhesion unclear.

Remedy for Trespass for Removal of Resources

The ABCA unanimously held that the oil and gas leases had terminated, although the members of the panel differed with respect to when the lessors were entitled to a remedy for trespass for removal of resources. The ABCA was unanimous that the so-called “royalty method” provisionally applied by the trial judge was inappropriate. However, as Justice Rowbotham acknowledged at paragraph 196, “the remedies for trespass in the context of removal of a resource range along a continuum based on courts’ perceptions of what is just and equitable in the face of the trespassers’ conduct” and include:

  1. The so-called “harsh rule”: the trespasser is required to disgorge the entirety of the benefit gains from the trespass with little or no allowance for costs incurred in earning that benefit of improvements made to the property. The harsh rule is designed to deter willful trespass, including trespass tainted by fraud or bad faith.
  2. The so-called “royalty method”: neither party knew of the trespass and the property owner would have been unable to realize the benefit of the trespasser obtained from the trespass, the trespasser may retain the benefit of the trespass and pay the property owner a reasonable fee for use of the property (e.g., contractually agreed royalties, any bonus associated with negotiating a new lease).
  3. The so-called “mild rule”: the trespass is not tainted by fraud or bad faith, and the trespasser is required to disgorge the revenues less certain expenses but with no allowance for profit to the trespasser.

The majority of the ABCA (this time, Rowbotham JA and O’Ferrall JA) held that “mild rule” was appropriate in this case, with Justice McDonald finding the “harsh rule” was appropriate due to the egregious behaviour of the lessees by continuing to produce when they knew that the leases were, at best, questionable, if not dead altogether. Regardless of the ultimate remedy, each approach requires an inquiry into the conduct of the parties.

Overall, what Stewart Estate makes clear is that even with the same findings of fact, the law lacks sufficient clarity for members of the bench to reach the same conclusion with respect to remedy—each of the three approaches was endorsed by different judges in this case. The SCC’s decision to deny leave in this case leaves untouched this muddle of remedies.

Alberta Securities Commission’s Powers to Compel and Share Evidence are Constitutional: Beaudette v ASC, 2016 ABCA 9

The SCC denied leave to appeal the decision of the Alberta Court of Appeal in Beaudette v Alberta Securities Commission, which determined that sections 7 and 8 of the Charter of Rights and Freedoms were not infringed by those sections of the Alberta Securities Act empowering the Alberta Securities Commission (“ASC”) to compel witnesses to provide sworn evidence during investigations and to share information with law enforcement agencies and other authorities in Canada and abroad. (See our previous comment on this case here).

The appellant’s objections to the combined effect of section 42 and 46 of the Securities Act were generally that his privilege to avoid self-incrimination was undermined as the ASC might share information obtained through its investigative powers to U.S. authorities to assist in a potential criminal prosecution against him in the U.S. Given his objections, the appellant was refusing to comply with a Summons to Witness issued to him by the ASC.

The ABCA unanimously rejected the appellant’s objections for a number of reasons including, among others, that:

  1. The suggestion that information might somehow be unlawfully shared with the U.S. authorities was too speculative to give rise to an infringement;
  2. The investigations conducted by the ASC are not in service of the criminal law but are directed at compliance and regulating conduct with the goal of protecting investors, facilitating capital market efficiency, and ensuring public confidence in the capital markets;
  3. The fact that evidence that might be useful in the U.S. or may become easier for U.S. authorities to locate or acquire because of the operation of a Canadian law does not make the Canadian law per se the author or sponsor of an infringement of s 7 of the Charter; and
  4. The requirement that the ASC comply with the Charter does not entitle Canadian courts to arrogate the jurisdiction to evaluate, let alone to control, the investigative or judicial processes of other friendly foreign rule of law democracies, such as the U.S.

As for the suggestion that the powers of the ASC infringed section 8 of the Charter, the ABCA was quick to reject this argument noting, among other things, that the appellant had a low expectation of privacy, if any, in any knowledge or records he had related to his public trading in the capital markets and that the Securities Act provided reasonable lawful authority for requiring him to product information and documents.

The SCC’s decision to deny leave to appeal in this case acknowledges that the mere presence of investigative and informational sharing powers in regulatory legislation is insufficient to give rise to Charter infringements that would entitle individuals to refuse to comply with summonses to provide evidence. Notwithstanding, the Charter implications that might arise in the event information is actually shared in the manner speculated by the appellant in Beaudette remains open for future consideration.

_______________________________

[1]      Sattva Capital Corp v Creston Moly Corp, 2014 SCC 53

[2]      See e.g., Vallieres v Vozniak, 2014 ABCA 290; MacDonald v Chicago Title Insurance Company of Canada, 2015 ONCA 842; Ledcor Construction Limited v Northbridge Indemnity Insurance Company, 2015 ABCA 121; Precision Plating Ltd v Axa Pacific Insurance Company, 2015 BCCA 277

Where the Charter Ends: Supreme Court Will Not Hear Appeal on International Cooperation by Securities Regulators

Posted in Case Comments, Charter of Rights, Criminal, International rights, Securities
Adam Goldenberg

If there’s one thing that most non-lawyers know about being questioned by the authorities, it’s that “anything said can and will be used against [you] in court”.[1] And, if you’re already in court, then you can “take the Fifth” and refuse to answer a question whose answer may incriminate you.

Right? Not quite.

The privilege against self-incrimination operates differently in Canada than it does in the United States. Here, there is no “Fifth” for a witness to “take”. Unlike the Fifth Amendment to the U.S. Constitution, the Canadian Charter of Rights and Freedoms does not permit a witness to answer some questions but not others. Instead, it protects the accused from being compelled to testify in a criminal proceeding and prevents a witness’ evidence in one proceeding from being used to incriminate him in another.[2]

But what about when compelled testimony in a Canadian proceeding could potentially be used against the witness in a criminal prosecution in another country? Must the witness testify?

The Supreme Court of Canada might have addressed that question in Beaudette v. Alberta (Securities Commission).[3] Instead, it denied leave to appeal. The result is that, in Alberta at least, securities regulators may compel a witness to give evidence in a Canadian investigation without providing assurances that the compelled testimony will not be handed over to the authorities in the United States without notice or an opportunity to object.

Because of the distinctions between the Fifth Amendment and the Charter, the Alberta Court of Appeal decision leaves an inter-jurisdictional grey area between our countries’ respective constitutions. As the Court of Appeal for Ontario has stated:

[I]n Canada, a witness cannot refuse to answer a question on the grounds of self- incrimination, but receives full evidentiary immunity in return. In the United States, a witness can claim the protection of the Fifth Amendment and refuse to answer an incriminating question. Once the answer is given, however, there is no protection.[4]

In the context of cross-border securities regulation, these two variations on the privilege against self-incrimination do not fit neatly together. Between them lies the possibility that American investigators will attempt to do an end-run around the Fifth Amendment by relying on their Canadian colleagues to compel answers to questions that, if asked in the United States, would be greeted with constitutionally protected silence.

With leave to appeal denied, it will now be for U.S. courts, in U.S. proceedings, applying U.S. law, to decide whether and how the privilege against self-incrimination applies in that scenario. For the time being, that determination is beyond the reach of the Charter. Continue Reading

Whose Courtroom Is It Anyway – The Latest Instalment of Groia v The Law Society of Upper Canada

Posted in Administrative, Case Comments, Charter of Rights, Constitutional, Professions
Ryan MacIsaac

In a decision of interest to barristers, the Ontario Court of Appeal held that the Law Society of Upper Canada is entitled to deference when regulating a lawyer’s in-court conduct in Groia v The Law Society of Upper Canada, 2016 ONCA 471 (“Groia”). The Court of Appeal affirmed the Law Society’s holding that it is professional misconduct to make allegations of prosecutorial misconduct or that impugn the integrity of opposing counsel, unless the allegations are made in good faith and with a reasonable basis.

Facts

Joseph Groia defended John Felderhof against securities charges brought by the Ontario Securities Commission (“OSC”). Felderhof had been a senior officer and director of Bre-X, a mining company that fraudulently claimed to have discovered a large gold deposit in the 1990s. At the end of his trial, Felderhof was acquitted of all charges (R v Felderhof, 2007 ONCJ 345).

The Felderhof trial and related interlocutory proceedings spanned 7 years and used 160 days of court time. It was characterized by intractable evidentiary disputes and acrimony from both sides.

Between days 52 and 70 of the trial, Groia made incessant allegations (the “Prosecutorial Misconduct Allegations”) that the OSC prosecutors were reneging on their earlier assertions that certain documents were relevant and authentic. The allegations were underlaid by Groia’s legally erroneous belief that any witness could be questioned on any document disclosed by the prosecution. Groia also kept referring to an OSC spokesperson’s statement that the OSC wished to secure a conviction. After a number of directions from the trial judge, and an admonishment from the Court of Appeal (R v Felderhof (2003), 68 OR (3d) 481 (CA)), Groia changed his course and the trial proceeded uneventfully after day 70.

In 2009, the Law Society, on its own initiative, commenced disciplinary proceedings against Groia. The Law Society alleged that the Prosecutorial Misconduct Allegations constituted professional misconduct. Specifically, the Law Society alleged that Groia failed to treat the court with courtesy and respect, undermined the integrity of the profession, and failed to act with courtesy and in good faith.

Proceedings Below

At first instance, the Law Society hearing panel held that the Prosecutorial Misconduct Allegations fell below the standards of civility and good faith (Law Society of Upper Canada v Joseph Peter Paul Groia, 2012 ONLSHP 0094; 2013 ONLSHP 0059). An Appeal Panel of the Law Society affirmed that decision as it related to Groia’s professionalism (the “Conduct Decision”). However, the Appeal Panel reduced the initial penalty against Groia to a one-month suspension plus $200,000 in costs (the “Penalty Decision”) (Law Society of Upper Canada v Joseph Peter Paul Groia, 2013 ONLSAP 0041; 2014 ONLSTA 11).

Groia applied for judicial review. The Divisional Court, applying a correctness standard of review, varied the Appeal Panel’s test for misconduct, focusing on whether the in-court conduct would undermine (or have a realistic prospect of undermining) the proper administration of justice. The Divisional Court held that the Appeal Panel’s application of the law to the facts, and the Penalty Decision, were reasonable (Joseph Groia v The Law Society of Upper Canada, 2015 ONSC 686; previously discussed on this blog here). Groia appealed.

Court of Appeal Majority Decision

In a split decision comprising 444 paragraphs, a majority of the Court of Appeal held that the Appeal Panel’s Conduct Decision and Penalty Decision were reasonable.

The Court of Appeal majority upheld the Appeal Panel’s test, namely that it is professional misconduct for a lawyer:

  • To make allegations:
    • of prosecutorial misconduct, or
    • that impugn the integrity of opposing counsel,
  • Unless the allegations are made:
    • in good faith, and
    • with a reasonable basis.

In reaching her conclusion, Cronk JA (MacPherson JA concurring) for the majority made the following points:

  1. Existing jurisprudence establishes that reasonableness is the proper standard of review for a court reviewing a law society’s discipline decision. The Divisional Court erred by substituting its own test for that of the Appeal Panel.
  2. Justice Cronk rejected Groia’s argument that trial judges should have primary responsibility for managing their courtrooms, to the exclusion of the Law Society’s rules except in narrow circumstances. Judges and the Law Society have differing but complementary roles, with different remedial powers available to each. The Law Society’s jurisdiction over in-court conduct clearly flows from its enabling act.
  3. The fact that a lawyer’s commitment to her or his client’s cause is a principle of fundamental justice under s. 7 of the Charter does not give a lawyer licence to breach her or his professional obligations of courtesy, civility and good faith. In short, a lawyer’s duty of zealous advocacy does not override his or her duties to the profession and the courts.
  4. The Charter s. 2(b) right to freedom of expression is not incompatible with professional conduct obligations, including the duty of civility. The Appeal Panel reasonably balanced Groia’s expressive rights with his professional obligations.
  5. Justice Cronk rejected Groia’s argument that the Appeal Panel’s formulation of the incivility test was vague. A test for incivility needs to be contextual and fact-specific, and the Appeal Panel’s formulation of the test was reasonable. The test is designed to address the serious and repetitive nature of the Prosecutorial Misconduct Allegations. The test should not be limited to conduct that results in trial unfairness.
  6. Fearless advocacy (passionate, brave and bold language) is permissible; unfounded, direct attacks on the integrity of opposing counsel are not. Similarly, isolated lapses in judgment or the occasional disparaging comment should generally not trigger disciplinary action.

In addressing the potential of Groia’s conduct to impact public confidence in the administration of justice, Cronk JA stated:

“[C]ourtrooms are not just places where advocates and judges come to work. They are the community’s chosen forum for public dispute resolution and the administration of the criminal law.” (para 212)

Court of Appeal Dissent

In a dissent echoing of Diceyan influences, Brown JA focused on the constitutional divide between the courts, which are empowered through s. 96 of the Constitution Act, 1867 or otherwise statutorily empowered, and regulators such as the Law Society, which are given delegated powers from provincial and federal legislatures. Justice Brown held that existing precedents did not establish a standard of review for law societies regulating in-court conduct. He would have scrutinized the Conduct Decision on a correctness standard of review, given the quotidian responsibility of the independent judiciary for maintaining control of their courtrooms. Justice Brown preferred a test for in-court professional misconduct that considers three factors: (i) what the barrister did; (ii) what the presiding judge did about the conduct and how the barrister responded; and (iii) whether the conduct undermined, or threatened to undermine, the fairness of the court proceeding. Applied to the Felderhof trial, the trial judge and Court of Appeal issued directions which Groia heeded. And the Prosecutorial Misconduct Allegations did not seriously affect the fairness of Felderhof’s trial. Justice Brown would have held that Groia did not commit professional misconduct.

Justice Brown agreed with the majority that:

“Civility is… an essential pillar of the effective functioning of the administration of justice.” (paras 119, 254)

Although he acknowledged the inherent limits on civility:

“But courtrooms are not populated by saints; they are populated by flawed human beings who enter them each day to argue and adjudicate cases. … To hold either counsel or judges to a standard of perfection is unreasonable, because it is unattainable. Judges and counsel are human beings, not machines.” (para 417)

The dissent did not suggest that the courts’ inherent jurisdiction ousts the role of the Law Society as regulator. Rather, Brown JA preferred a test for in-court professional misconduct that gives great weight to how the trial judge handled the conduct.

Commentary

There are three key takeaway points from the Court of Appeal’s decision in Groia.

First, lawyers cannot assume that the standard for incivility is what they can “get away with” in the courtroom. Law societies have concurrent jurisdiction to punish incivility, even if the trial judge chooses not to. Lawyers must always be mindful of law society codes of conduct.

Second, lawyers should not make allegations against the integrity of fellow members of the bar, unless there is good reason to do so.

Third, the split judgment demonstrates the fraying of the standard of review framework in Canada. (See this recent blog post for a more fulsome discussion.) In particular, Groia demonstrates the difficulty in the first stage of the Dunsmuir two-step analysis, in which the court looks to existing jurisprudence to determine whether the standard of review has already been determined for that particular “issue” (the problem being—how narrowly do you define an “issue”?).

Joseph Groia has said that he intends to appeal the Court of Appeal’s ruling. If the Supreme Court decides to weigh in, the last word in this saga is yet to come.

Case Information

Groia v The Law Society of Upper Canada, 2016 ONCA 471

Docket: C60520

Date of Decision: June 14, 2016

The Supreme Court Protects Accounting Records of Lawyers from the CRA

Posted in Case Comments, Charter of Rights, Privacy, Quebec Court of Appeal, Solicitor-Client Privilege, Tax
Sam Rogers

Solicitor-client privilege is nearly sacrosanct in Canada. The circumstances in which it can be breached are limited and specific. Courts will not abide attempts by the Government to do away with privilege for expediency’s sake or overreach when limiting the application of the privilege. This was recently reinforced by the Supreme Court of Canada in two decisions that considered the CRA’s powers to compel information from lawyers and notaries: Canada (Attorney General) v. Chambre des notaires du Quebec and Canada (National Revenue) v. Thompson. Continue Reading

R. v. Jordan – The Supreme Court of Canada Dramatically Alters the Framework Applicable to the Right to a Criminal Trial Within a Reasonable Time

Posted in Case Comments, Criminal
Peter BradyMichael RosenbergTrevor Courtis

For decades members of the judiciary have publicly raised concerns about the swelling length and complexity of criminal cases. In October 2005, Justice Michael Moldaver, then of the Ontario Court of Appeal, stated:

Am I worried? You bet I am. Long criminal trials are a cancer on our criminal justice system and they pose a threat to its very existence. You see, ladies and gentlemen, if the criminal justice system does not enjoy the support and respect of those whom it is meant to serve; if criminal trials are seen by the public as little more than interminable games; if the public comes to view the system with distain and contempt, then the system will have lost its reason for being. And the consequences, I fear, will be serious.[1]

Continue Reading

Right Back Where You Came From: Does the law of your birthplace govern your estate without you even knowing it?

Posted in Case Comments, Conflict of Laws
Trevor CourtisBreanna Needham

If an individual is born in Alberta, lives and works in BC for more than a decade, then lives and works in Saskatchewan for more than a decade, then moves back to BC temporarily, while simultaneously searching for a residence in Costa Rica, where is this person domiciled?

If you answered Saskatchewan (where the individual had lived and worked for the past decade), British Columbia (where the individual was currently laying his head), or Costa Rica (where the person intended to live and work for the remainder of his days), your common sense has indeed betrayed you. The answer is actually Alberta (the place where the individual had not lived for several decades and had no intention of returning to). Welcome to the antiquated law of domicile. Continue Reading

Northern Superior Appeals Dismissal of Aboriginal Consultation Claim Against Ontario

Posted in Aboriginal, Case Previews, Mining
Bryn GrayAdam Goldenberg

A recent article, published on McCarthy Tétrault LLP’s Canadian ERA Perspectives blog may be of interest to readers of the Canadian Appeals Monitor blog.

Northern Superior Resources Inc. v. Ontario, now on its way to the Ontario Court of Appeal, raises the question of whether a resource company, rather than a First Nation, may bring a claim against the Crown arising out of an alleged breach of the Crown’s duty to consult Aboriginal peoples pursuant to s. 35 of the Constitution Act, 1982. Though the Court of Appeal is likely to limit its decision to the facts in this case, its reasoning could provide important guidance for both project proponents and governments as they work with each other and with First Nations to develop Canada’s natural resources.

When is a Settlement Agreement Reached? Federal Court of Appeal Provides Guidance in Apotex Inc v Allergan Inc, 2016 FCA 155

Posted in Case Comments, Intellectual Property
Kelli McAllister

In today’s litigation landscape 95% to 97% of all civil cases are settled without a trial.[1] Settlement negotiations increasingly happen informally, over email, through a back-and-forth dialogue between counsel. What happens when one party steadfastly believes a settlement was reached and moves to enforce that settlement and the other party disagrees? This was the situation before the Federal Court of Appeal in Apotex Inc v Allergan Inc, where a collection of “without prejudice” letters and emails formed the basis for Allergan Inc (“Allergan”) to argue that Apotex Inc (“Apotex”) had agreed to settle a patent infringement case. It was against this backdrop the Federal Court of Appeal clarified the objective test for when a settlement agreement is reached, cautioning:[2]

The requirement of an objective, mutual intention to create legal relations does not mean that there must be formality. Settlements need not be reached through counsel or in pre-planned, formal negotiations….Sometimes much to the surprise of clients and lawyers alike—seemingly idle conversations can have binding, legal consequences. Binding settlements can arise from impromptu, informal communications in relaxed, non-business settings.

Continue Reading

Suing the Provincial Crown in the Federal Court: The Federal Court of Appeal Upholds Attornment Clause in First Nations Settlement Agreement against Saskatchewan

Posted in Aboriginal, Case Comments
Mira Novek

In an important decision regarding the jurisdiction of the Federal Court in aboriginal claims, the Federal Court of Appeal has affirmed the right of the Pasqua First Nation to sue the Government of Saskatchewan in the Federal Court for breach of a settlement agreement on the basis of an attornment clause.  In Canada v Peigan, 2016 FCA 133,[1] Saskatchewan argued that notwithstanding the attornment clause, which directed that any disputes arising under the settlement agreement be determined by the Federal Court, it was immune from suit in the Federal Court and, alternatively, that the suit did not fall within the Court’s subject matter jurisdiction.  The Federal Court of Appeal rejected both arguments, finding that the Federal Court possesses exclusive jurisdiction over the portions of the claim alleging a breach of Saskatchewan’s obligations under the settlement agreement. Continue Reading

Hot Off the Press – Canadian Contractual Interpretation Law 3rd Edition

Posted in Class Actions, Contracts

Canadian_Contractual_Interpretation_Law_Book

Geoff Hall, senior litigator at McCarthy Tétrault, authors the newly published third edition of Canadian Contractual Interpretation Law. The book clearly sets out the principles governing the interpretation of contracts in Canada, particularly in light of the landmark decisions of the Supreme Court of Canada in Sattva and Bhasin.

These two cases – both of which cited the second edition of Mr. Hall’s book, and were successfully argued by litigators from the firm – transformed contractual interpretation in fundamental ways, firstly by recognizing contractual interpretation as a highly fact-driven exercise and secondly by recognizing an organizing principle of good faith in Canadian contract law.  The third edition can be purchased here.

 

Quebec Court of Appeal holds Aboriginal tax exemption not an exemption from remitting tax

Posted in Aboriginal, Case Comments, Tax
Kate Macdonald

In Rice v. Agence du revenu du Québec, 2016 QCCA 666, the Quebec Court of Appeal addressed arguments by status Indians that they should be exempt from the obligation to collect and remit gas taxes which are collected by the Agence du revenu du Quebec (“ARQ”) on behalf of both the province and the federal government.  In doing so, the Court made it clear that status Indians who sell goods to non-Indian consumers cannot avoid the administrative burden of collecting and remitting taxes from their customers who are not exempt from taxation.

Continue Reading

Do What You Say, Not Just What You Write: Subsequent Oral Amendments to Written Contracts

Posted in Case Comments, Civil Litigation, Contracts
Richard Lizius

Globe Motors, Inc. & Ors v. TRW Lucas Varity Electric Steering Ltd. & Anor, [2016] EWCA Civ. 396 is the latest statement of the England and Wales Court of Appeal with respect to whether parties can make an oral amendment to a contract, notwithstanding a clause requiring any amendment to be in writing (an “anti-oral amendment” clause).

Continue Reading

Québec Court of Appeal to hear its first case on the scope of lobbying legislation

Posted in Case Comments, Civil Litigation, Lobbying law
Gabriel Querry

The Québec Court of Appeal recently granted leave to appeal from Directeur des poursuites criminelles et pénales c. Cliche, 2016 QCCS 1288. To our knowledge, it is the first time the Court of Appeal agrees to rule on the scope of the Québec Lobbying Transparency and Ethics Act (“LTEA”).

Cliche, a windfarm business’ executive, was charged under the LTEA for failing to register as a lobbyist after he asked municipal officials to endorse his employer’s bid to a third party’s RFP and to champion the project before environmental regulators. The endorsement was meant to demonstrate the bid’s “social acceptability” and to prevent negative media coverage. Continue Reading

Is your Clearly Descriptive Place of Origin Mark Distinctive? Prove it!

Posted in Case Comments, Civil Litigation, Trade-mark
Dharshini Sinnadurai

The Federal Court of Appeal recently clarified the applicable test for challenging a trade-mark that is clearly descriptive of a good’s place of origin, pursuant to s. 12(1)(b) of the Trade-marks Act, RSC 1985, c. T-13 (the “Act”). The Court also articulated how such a trade-mark could still be ruled distinctive, and, accordingly valid: good old fashioned proof!

The context for the decision in MC Imports Inc. v. AFOD Ltd., 2016 FCA 60 [1] was a dispute between two importer-distributors of bagoong, a fish and shrimp based condiment from the Philippines. Continue Reading

Ontario Court of Appeal Recognizes Potential Liability of the Corporate Parent of a Franchisor Under the Duty of Good Faith

Posted in Case Comments, Civil Litigation, Franchise and Distribution
Adam ShipSarah Ahsan

On May 3rd, 2016, the Court of Appeal for Ontario (the “OCA”) overturned a decision of the Ontario Superior Court which had held that a franchisor’s parent company could never be liable to a franchisee of its subsidiary for breach of the duty of good faith under the Arthur Wishart Act (the “Act”). Continue Reading

Certification of an “Uncommon” Class Action based on a “Central Commonality”

Posted in Case Comments, Class Actions
Sara D.N. Babich

The Ontario Court of Appeal recently reiterated several key principles in the context of class action certification motions. In Good v Toronto Police Services Board, 2016 ONCA 250 [Good], the Court of Appeal upheld the Divisional Court decision to certify the claim of Ms. Sherry Good as representative plaintiff (the “Representative Plaintiff”) in the proposed G20 class action against the Toronto Police Services Board (the “TPS”). The decision in Good reminds us of two very important considerations in class action proceedings: Continue Reading

Standard of review of administrative action: coherence post-Dunsmuir?

Posted in Administrative, Case Comments
Louis Fouquet

It was widely hoped that the Supreme Court of Canada decision in Dunsmuir v. New Brunswick, 2008 SCC 9 (“Dunsmuir”) would simplify the judicial review of administrative action by limiting the scope of review to two standards: reasonableness and correctness. The divided Supreme Court of Canada opinion in Commission scolaire de Laval v. Syndicat de l’enseignement de la région de Laval, 2016 SCC 8 shows that there is still a long way to go before coherence and uniformity is brought to this area of law. Continue Reading

The SCC Monitor (19/04/2016)

A Commentary on Recent Legal Developments by the Canadian Appeals Monitor

Posted in The SCC Monitor
Laurie BaptisteRyann AtkinsShanique Lake

Leaves to Appeal Granted

Since our last post, the Supreme Court of Canada (SCC) has granted leave in a couple significant cases that will be of interest to our readers:

Douez v. Facebook:  Like or Dislike?

The SCC recently granted leave to appeal from the judgment of the B.C. Court of Appeal in Douez v. Facebook (“Douez”), which likely garnered “dislikes” from online businesses and service providers who rely on choice of law and forum selection clauses in their Terms of Use agreements. Continue Reading

Missing the Mark – Federal Court of Appeal set aside dismissal in passing off and copyright case

Posted in Case Comments, Intellectual Property
Ryann AtkinsKaitlin Soye

In Sadhu Singh Hamdard Trust v. Navsun Holdings Ltd. (2016 FCA 69), the Court of Appeal set aside the Federal Court’s (2014 FC 1139) decision dismissing Hamdard Trust’s claim of copyright infringement and passing off against Navsun Holdings and remitted the matter to the Federal Court for redetermination, with some guidance. Continue Reading

Abuse of Process: Carbon Copy Class Actions Stayed by Courts Coast to Coast

Posted in Case Comments, Civil Litigation, Class Actions, Multijurisdictional
Kelli McAllister

A recent article, Abuse of Process: Carbon Copy Class Actions Stayed by Courts Coast to Coast, published on McCarthy Tétrault LLP’s Class Actions Monitor blog may be of interest to readers of the Canadian Appeals Monitor blog. Kelli McAllister recently published on update to her previous discussion about the ongoing systems access fee class action.

This unusual class action was launched in nine provinces in 2004 by the same counsel on behalf of the same plaintiffs. This class action has now been found to be an abuse of process by the Nova Scotia Court of Appeal in BCE Inc. v Gillis, 2015 NSCA 32, the Alberta Court of Appeal in Turner v Bell Mobility Inc, 2016 ABCA 21 and the Manitoba Court of Appeal in Hafichuk-Walkin et al v BCE Inc et al, 2016 MBCA 32. The Nova Scotia decision has been appealed to the Supreme Court of Canada and the decision on the leave application is pending. The Supreme Court of Canada is faced with a unique situation: not only is same issue being considered by courts across Canada, but, in fact, the exact same case. It remains to be seen whether bringing carbon copy class actions across Canada as part of a litigation strategy and without the intention to pursue the action (except in one province), will likewise be condemned by the Supreme Court of Canada. We will update you on that leave decision in our regular SCC Monitor blog posts.

Careful Putting Your Best Foot Forward: Alberta Court of Appeal Eases Access to Summary Dismissal

Posted in Case Comments, Civil Litigation, Contracts
Timothy Froese

The Alberta Court of Appeal strengthened the post-Hryniak judicial trend in favour of the summary disposition of litigation without trial by upholding the decision of a chambers judge to grant summary dismissal without strict adherence to the applicable Rules of Court.  In Pyrrha Design Inc v Plum and Posey Inc, 2016 ABCA 12, the plaintiff applied for summary judgment but failed to make its case. It saw not just its application, but its entire claim, dismissed, even though the defendant had not brought a cross-application for summary dismissal. Continue Reading

Dunkin’ Donuts: The Supreme Court of Canada puts an end to the saga

Posted in Case Comments, Civil Litigation, Franchise and Distribution
Adam ShipAnne-Marie NaudHelen Fotinos

A recent article published on McCarthy Tétrault LLP’s Consumer and Retail Advisor blog may be of interest to readers of the Canadian Appeals Monitor blog. Adam Ship, Anne-Marie Naud and Helen Fotinos recently published an update to their previous discussion about the Québec Court of Appeal’s decision in Dunkin’ Brands Canada Ltd. c. Bertico inc., 2015 QCCA 624, in particular its finding of implied obligations in franchise agreements. The Supreme Court of Canada (SCC) just announced their dismissal of Dunkin’ Brands Canada Ltd.’s application for leave to appeal from the judgment of the Quebec Court of Appeal. Notably, in a very rare move, Côté J. dissented on the decision to deny the application for leave.

Cook or Get Out of the Kitchen: Legitimate Interest Required to Enforce a Restrictive Covenant

Posted in Case Comments, Civil Litigation, Franchise and Distribution
Shanique Lake

MEDIchair LP v DME Medeqip Inc., 2016 ONCA 168 is a case with important implications for all franchisors and franchisees. In the decision released on February 29, 2016, the Ontario Court of Appeal struck down a non-competition covenant because the franchisor had no intention of operating a competing business within the geographical area covered by the covenant.  Overturning the lower court decision, the Court of Appeal held that a legitimate proprietary interest is necessary to enforce a restrictive covenant. Continue Reading