Western Canada Business Litigation Blog - Vancouver | Calgary | Yellowknife

Earlier this year, I blogged about the civil forfeiture case of B.C. (Director of Civil Forfeiture) v. Wolff.  That appellate decision set guidelines for the trial courts on what and how to consider the “interest of justice” when faced with a forfeiture claim.   It confirmed the “dominant principles” of proportionality and fairness in weighing whether to order forfeiture or not.

The Court of Appeal recently weighed in again on the subject of civil forfeiture, though on slightly different grounds.  As in Wolff, the Court constrained the strident position of the Director of Civil Forfeiture.  In this case, the Director sought forfeiture of both real property and money belonging to Mr. Crowley.  Mr. Crowley had plead guilty to various offences after being found in possession of drugs, a prohibited firearm and nearly $100,000 in cash.  Two years later, the Director commenced a forfeiture claim against Mr. Crowley’s home and the cash, asserting they were both the proceeds of crime.  For justifiable reasons based on Mr. Crowley’s conduct in this civil claim, the court struck out his defence, meaning he was no longer technically a party to the proceeding.  As a result, the Director moved for a forfeiture order on the grounds that the claim was undefended.  Mr. Crowley was given notice of the application, but only as a “person who may be affected by a forfeiture order” as it was for the house he was living in at the time.

The appeal turned on the wording of section 6(1) of the Civil Forfeiture Act which provides the courts with authority to order forfeiture unless it “is clearly not in the interests of justice”.  The trial judge had ordered forfeiture without allowing Mr. Crowley to address the appropriateness of that step (as he was no longer a party) or considering whether the forfeiture was “in the interests of justice”.  The Court of Appeal disagreed with both these points. 

The Court of Appeal ruled that section 6(1) imposes a positive obligation on courts to consider the interests of justice in each forfeiture case, even where the case is undefended.  Further, there is no legal onus on a defendant to adduce any evidence before a court must consider the interests of justice.  The Court of Appeal also held that Mr. Crowley had a right to be heard on all aspects of the forfeiture application, with the caveat that, as his defence had been struck, he could not controvert the facts alleged in the Notice of Civil Claim.  However, he could adduce other evidence relevant to the interests of justice and make submissions.  By extension, this right of audience is available to any person claiming an interest in property subject to the forfeiture claim. 

In other words, it was a mistake not to let Mr. Crowley argue against the forfeiture of his house (and money).  It was also a mistake not to let Mr. Crowley introduce evidence relevant to the interests of justice consideration.  While Mr. Crowley was not obliged to do so, the Court of Appeal noted that there may be an:

“evidentiary or practical burden on the defendant to present evidence with respect to the interests of justice.  . . .  Much of the relevant evidence that the court might be asked to consider on the question of the interests of justice is likely to be solely in the knowledge or control of the defendant.  Failure to adduce such evidence may be at his or her peril.”

If you are facing a forfeiture claim, this decision confirms your ability to oppose, regardless of the underlying facts.  It also establishes your right, whatever your interest in the subject property, to address the court on the fairness of the Director’s claim and to introduce evidence that may assist in demonstrating that forfeiture “is clearly not in the interests of justice”.  In other words, don’t give up in the face of the Director’s claim; forfeiture is by no means a certainty.

Canada has two official languages – English and French - arising from our unique heritage as a country.  Given this status, one may have assumed both official languages were freely used in the courts across the country.  Not so says the British Columbia Court of Appeal which recently ruled that documents, not in the English language, without a certified translation cannot be admitted into evidence in a civil trial in British Columbia.  This was so even though the documents in question were in French.

In Conseil Scolaire Francophone de la Colombie-Britannique v. British Columbia,  2012 BCCA 282,  the British Columbia Court of Appeal sat as a panel of 5 (normal panels are of 3) and considered an appeal from a decision dismissing an application for a declaration that un-translated exhibits in the French language, attached to an affidavit, be considered by the court without a certified translation.  The Court of Appeal dismissed the appeal.

The Court relied on an English enactment entitled Proceedings in the Courts of Justice Act, 1731 (U.K.), 4 Geo. II, c. 26, which was received in British Columbia by virtue of s. 2 of the Law and Equity Act, R.S.B.C. 1996, c. 253.  The Court concluded that the requirement for civil proceedings in British Columbia to be conducted in English is prescribed by statute and that there is no discretion for a judge of the Supreme Court of British Columbia presiding over civil proceedings to admit documentary evidence in any other language for the truth of its contents without an accompanying certified English translation.  This requirement goes beyond documentary exhibits and requires that “civil proceedings in British Columbia” be conducted in English.

Given the nature of this decision, it would not be unexpected if leave was sought to have a further appeal heard by the Supreme Court of Canada.  As of now, however, civil proceedings in British Columbia have only one official language.

As a lifelong Canucks fan, I will never forget the video footage of Todd Bertuzzi tackling Steve Moore and the subsequent North American wide television coverage.  This incident was back in the news recently because Master Dash of the Ontario Superior Court of Justice ordered production of the Minutes of Settlement among Todd Bertuzzi, Marc Crawford (the former coach of the Vancouver Canucks) and Orca Bay, the company that owns the Vancouver Canucks, arising from their claims against each other relating to the Steve Moore incident.

During a NHL game on March 8, 2004, Todd Bertuzzi, then of the Vancouver Canucks, struck Steve Moore, then of the Colorado Avalanche, from behind.  It is alleged in Moore et al v. Bertuzzi et al that the force of the blow caused Moore a significant injury and ended his NHL career.  The lawsuit was commenced on February 14, 2006 against Bertuzzi, and Orca Bay.  Bertuzzi subsequently issued a Third Party Claim against Marc Crawford.  Orca Bay filed a cross claim against Bertuzzi.

In July of 2011, Orca Bay, Bertuzzi and Crawford settled the claims amongst themselves.  The Plaintiff sought production of the Minutes of Settlement.  The Defendants resisted on the basis of settlement privilege.  Master Dash ordered the Minutes of Settlement be produced.

He found that the settlement had changed the landscape of the litigation because it has altered the relationship among the parties as set out in the pleadings.  The main ground for this finding was that the settlement apportioned liability among Orca Bay, Bertuzzi and Crawford in a way that could influence their testimony at trial.  Master Dash was particularly troubled that the trial judge could be left with the impression that Orca Bay, Bertuzzi and Crawford were adverse to each other when in fact they were not.  Master Dash found that the interests of fairness and justice overrode the public policy interest of fostering settlements by keeping them confidential. 

In the end, Master Dash limited the applicability of his decision to settlement agreements that “change the landscape of the litigation” and affect both pre-trial and trial procedures as being worthy of disclosure.  He also issued further reasons in which he stated the conduct of counsel was above reproach and he did not intend to suggest that any of them mislead the court.

Where does this leave Defendants who wish to settle among themselves and fight only with the Plaintiff?  “At risk” is the answer.  Given the case by case analysis utilized, in part, by Master Dash, Defendants will need to show in each case that the settlement does not fundamentally alter the case in order to ensure their settlement agreement will be protected from disclosure.

The press is riddled with stories concerning perceived problems with the court system.  Various commentators say it is too slow, too expensive and procedurally unwieldy.  These concerns have led some to conclude that arbitration is a better alternative. Arbitration agreements do have risks which parties should understand before agreeing to an alternate form of dispute resolution.

The long running saga of Creston Moly Corp. v. Sattva Capital Corp.provides an example of the potential pitfalls of arbitration.   These parties are engaged in an ongoing dispute concerning an arbitration decision handed down on December 23, 2008, in which the arbitrator ruled that Creston was required to pay $4,140,000 plus costs as a finder’s fee in connection with the acquisition of Creston's molybdenum property in Mexico. The dispute is over the valuation of the finder’s fee and the arbitrator ruled in favour of the finder.

Parties often enter into Arbitration agreements because they view arbitrator’s decisions as “final”.  However, the Commercial Arbitration Act (British Columbia) does provide limited rights of appeal with respect to arbitration awards. Section 30 allows arbitration decisions to be overturned if they were improperly procured and section 31 allow appeals on errors of law if permission, or leave, is granted by the British Columbia Supreme Court.  Similar, but arguably broader, appeal provisions are found in sections 44 and 45 of the Arbitration Act (Alberta).

In Creston Moly, these appeal rights have delayed the ultimate resolution of this case.  Creston Moly first applied to the British Columbia Supreme Court for leave to appeal the arbitrator's decision and was denied.  Creston Moly then appealed to the British Columbia Court of Appeal which overturned the decision and granted leave to Creston Moly to appeal the arbitrator’s decision.  Creston Moly announced on May 6, 2011 that the substance of the appeal was heard and dismissed.  However, Creston Moly also stated its intention to appeal that decision to the British Columbia Court of Appeal.  Nearly three years after a supposedly “final” decision, the arbitrator’s decision is still subject to review.

Creston Moly is instructive.  It does not suggest that arbitration is bad and the court process is good or vice versa.  Rather, it suggests that an arbitration agreement should be approached in the same manner as other commercial agreements with an understanding of each process and an effort to tailor an arbitration agreement to the specific circumstance.  For example, parties should consider:

• The cost of the Arbitrator?  In the court system you do not have to pay for the Judge and the cost of an arbitrator can be a disincentive to arbitration.
• The speed of the process?  Arbitration may be faster.  However, if you are looking for a fast process, you should consider a number of issues up front to speed the arbitration process. 
• What Rules do you want to govern the arbitration?  Do you want to prohibit discovery of documents or witnesses?  Do you want to specifically name an Arbitrator or only a process for naming one?

All of these questions can substantially impact on the arbitration process. The most common Rules governing arbitration in British Columbia and Alberta provide an arbitrator with a great deal of discretion in setting the process for an arbitration.  Accordingly, there is a good chance an arbitration may emulate a court process unless the parties intially agree that they intend a different more limited process.

The moral of the story is that one size arbitration agreements do not fit all and to “look” before you leap into one.

Class proceedings are a powerful tool for consumers and lawyers.  In practical terms, class proceedings allow otherwise uneconomic claims to be brought and often create large monetary exposure to Defendants.  This occurs through aggregation.  If a class proceeding is “certified”, it will “aggregate” all of the claims of a “class” of claimants into one claim.  Where one claimant may have chosen not to file a claim for $10 because it was uneconomic, a certified class proceeding aggregates potentially of thousands of people with $10 claims into one court action.  An uneconomic lawsuit has just become a lucrative lawsuit.

Potential defendants have attempted numerous strategies to minimize the risk of class proceedings.  One strategy has been to insert clauses in consumer contracts requiring the consumer to participate in mediation or arbitration and/or to waive his or her ability to bring or participate in a class proceeding.  These types of agreements have been tested in the United States with varying results.  In Canada, the Supreme Court of Canada had not spoken directly on this issue until now.

On March 18, 2011, a strongly divided Supreme Court of Canada released its decision in Michelle Seidel v. TELUS Communications Inc, 2011 SCC 15.  In a 5 to 4 decision, Mr. Justice Binnie, writing for the majority, found that a clause in a TELUS standard form agreement that required mandatory mediation and arbitration, and which barred class proceedings, was not effective to prohibit a claimant from pursuing a statutory remedy pursuant to the British Columbia Business Practice and Consumer Protection Act (the “BPCPA”).  It was also not effective to prohibit a Claimant from seeking certification of such a claim pursuant to the British Columbia Class Proceedings Act.

The majority decision found that the BPCPA was consumer protection legislation which allowed a claimant under section 172 to bring a claim to enforce consumer protection standards and, specifically, prohibited a consumer from waiving the rights granted under that legislation.  Accordingly, to the extent TELUS’ clause restricted the consumer’s right to file such a claim in court, the clause was invalid.  In addition, the class action waiver was not severable from the mandatory mediation/arbitration clause and, as a result, was also unenforceable.  This decision therefore allowed the Claimant to continue the application for certification of the claim as a class proceeding.

Is the future now one of more class proceedings and less alternative dispute resolution?  While this decision was consumer friendly, in that it interpreted the clause in question and the consumer protection legislation broadly in favour of the consumer, the decision was also very particular to the legislation in question.  The majority also wrote that it was ultimately the choice of the legislature to determine whether arbitration/mediation clauses are to be restricted and they also allowed a mandatory stay of the court proceedings in favour of arbitration for other claims that were not found to have the same statutory protection.  There are clearly more arguments of this type to come and it may be too early to tell how friendly the future will be for agreements requiring alternate dispute resolution and restricting class proceedings.

On October 28, 2010, a panel commissioned by the Ontario Attorney General delivered its report, recommending that the province enact legislation to address so-called strategic litigation against public participation or “SLAPP” suits.  The panel was chaired by Mayo Moran, the dean of the University of Toronto Faculty of Law.  According to the government’s press release, the government is now reviewing the report and its recommendations. 

The two American professors who coined the term in the late 1980s, George W. Pring and Penelope Canan, defined a SLAPP as a “a lawsuit involving communications made to influence a governmental action or outcome, which resulted in a civil complaint or counterclaim filed against nongovernment individuals or organizations on a substantive issue of some public interest or social significance.”

Anti-SLAPP legislation is not new.  Approximately half of U.S. states have anti-SLAPP statutes.

In Quebec anti-SLAPP measures were added to the Code of Civil Procedure in 2009 by An Act to amend the Code of Civil Procedure to prevent improper use of the courts and promote freedom of expression and citizen participation in public debate. The preamble refers to the need to “discourage judicial proceedings designed to thwart the right of citizens to participate in public debate” and “to strike a fairer balance between the financial strength of the parties to a legal action.”  The substantive provisions include many of the same provisions found in American statutes: the ability to strike out claims found to be brought for an improper purpose, the power of award special costs to defendants of SLAPP suits, etc.

British Columbia had anti-SLAPP legislation very briefly, for a few months in 2001.  The Protection of Public Participation Act came into force in April 2001, in the dying days of the last NDP administration, and was repealed in August of the same year, shortly after the B.C. Liberal Party took power.  The BC statute attempted to protect against what were seen by some as vexatious defamation suits by deeming acts of public participation to be occasions of qualified privilege, which required a plaintiff to prove actual malice in order to succeed it its claim. If a defendant was unable to strike out a claim at first instance, it could attempt to persuade the court that it was a “reasonable possibility” that the claim was a SLAPP, whereupon the onus shifted to the plaintiff to prove at trial the claim was not brought for an improper purpose. In those circumstances, the defendant could also obtain an order requiring the plaintiff to provide security for costs for the defendant’s legal expenses.

On April 30, 2010, the Uniform Law Conference of Canada adopted a Uniform Abuse of Process Act.

The question now is whether the Ontario government will follow the panel’s recommendations and enact anti-SLAPP legislation and, if it does, what that legislation will look like.  Some view anti-SLAPP legislation as a solution searching for a problem that doesn't exist, given the existing procedures that enable courts to deal with vexatious suits.  These include rules allowing for striking out a vexatious claim and claims that failed to disclose a reasonable cause of action, as well as provisions for summary judgment and summary trial. 

If the B.C. experience is any guide, any anti-SLAPP legislation will be hotly debated in Ontario, as businesses seek to ensure that any legislation doesn’t overly restrict their right to protect their reputations and interests, and environmental and citizen groups press for a statute that will shut down what they perceive to be abusive litigation.  And if Ontario does enact anti-SLAPP legislation, we may see other provinces follow suit.

No day goes by without some new internet peril being drawn to our attention.  The most recent evil is an internet based program called Firesheep.   Like others (i.e. Wireshark, Tshark, Snort, Nmap, etc.), this program, a free download on the internet, allows users to troll cyberspace for open WiFi networks and, by doing so, access personal data and communications.  The danger in this is self-evident.  A recent article by Gillian Shaw in the Vancouver Sun explains the program and its perils in good detail.  From a legal point of view, is there a problem with using these programs?  The short answer is yes, on many levels.

Among other things, intercepting electronic data is a criminal offence (i.e. section 184 of the Criminal Code).  It is essentially theft.  For the person from whom data is stolen while they are using a WiFi network, it could amount to a breach by them of the Freedom of Information and Protection of Privacy Act (“FIPPA”).  This would occur where that data was accessed by a hacker in circumstances that the rightful user knew or ought to have known created a risk of disclosure.  The use of an unsecure WiFi network in a public place creates just such a risk.  It would be a breach of section 30.4 of FIPPA which prohibits disclosure of personal data except as authorized. 

Electronic eavesdropping can also give rise to an actionable civil claim for breach of privacy.  The courts have long recognized a claim for breach of privacy at common law but the legislature has also codified such a claim in the Privacy Act, first enacted in B.C. on April 6, 1968.  This five section statute creates the statutory tort of “willfully and without claim of right” violating the privacy of another.  Whether someone’s privacy has been violated will depend on the context of each case.  But it is a fair argument that the use of a program such as Firesheep to access private networks and data over the internet, even in a public space, amounts to a breach of privacy.  The essential issue is whether the owner of the WiFi network being hacked has an expectation of privacy.    

The Privacy Act also protects from the unauthorized use of the name or portrait of another.  Specifically, it codifies the tort of using the “name or portrait of another for the purpose of advertising or promoting the sale of, or other trading in, property or services” without consent.

While it is always better to avoid the loss of personal electronic data, there are remedies available when it occurs.  As a practical matter, however, learning that you have been “hacked” and finding the person who did it are frequently insurmountable impediments to pursuing that civil remedy.