Western Canada Business Litigation Blog

BC Court of Appeal Reaffirms Finality of Arbitration Decisions

Posted in Civil Litigation, Civil Procedure

The recent decision of the British Columbia Court of Appeal in Chriscan Enterprises Ltd. v. St. Pierre, 2016 BCCA 442, reminds those who elect to resolve their business disputes through arbitration that decisions of the arbitrator, even those touching on the fairness of procedures, will generally be final and not subject to review by the courts. As the Court noted, the “scope to appeal arbitral awards is narrow because arbitration is intended to be an alternate dispute resolution mechanism, rather than one more layer of litigation.”

The Court of Appeal’s Decision

The appellants, the St. Pierres, contracted with the respondent, Chriscan Enterprises Ltd., in 2004 for the construction of a house. The project was completed in 2006, but some issues arose concerning Chriscan’s failure to obtain competitive bids for some of the work (the “Overcharge Issue”) and certain alleged deficiencies relating to the driveway (the “Deficiency Issue”). The contract contained an arbitration clause which required the parties to submit their disagreements to arbitration.

The St. Pierres attempted to have the Overcharge Issue heard by the courts, arguing breach of fiduciary duty, but were directed back to the arbitration process. The arbitrator rejected the St. Pierres’ breach of fiduciary claim, ruling that the issue was one of breach of contract. The St. Pierres did not seek to amend their Statement of Claim at that time, and the arbitrator continued to hear and decide the Deficiency Issue. The St. Pierres later made an application to amend their Statement of Claim to allege the Overcharge Issue through breach of contract. The arbitrator allowed the amendment, finding that the delay in bringing the application to amend was explained by other steps taken in the litigation and that Chriscan would suffer no substantial prejudice. By this time, the parties had made no fewer than four court applications in the dispute.

The Chambers Judge granted leave to appeal the amendment decision. He was of the view that the proposed appeal was on a point of law, and that the importance of the decision to the parties justified the court’s intervention. Citing reasonableness as the standard of review, the Chambers Judge allowed the appeal.

The Court of Appeal disagreed with this characterization. Writing for a unanimous Court, Savage J.A. held that the issue of whether to allow the amendment was a question of mixed fact and law and that leave to appeal should not have been granted. Rule 22 of the Domestic Commercial Arbitration Rules of Procedure provides a permissive power to arbitrators to allow amendments to pleadings. It sets out two situations where the arbitrator may not allow the amendment: (i) where the delay is prejudicial; or (ii) where the amendment is beyond the terms of the agreement. Any finding as to delay is therefore a finding of fact. The Chambers Judge improperly rejected this factual finding when he substituted his own finding that to allow the amendment would be a manipulation of the adversarial process.

The Court addressed Chriscan’s several other arguments including res judicata, estoppel, waiver, and abuse of process. On the res judicata issue, the Court held that it was clear that the Overcharge Issue was never dealt with on the merits and that the initial jurisdiction decision served only to eliminate the St. Pierres’ claim in breach of fiduciary duty. The breach of contract issue remained extant, although not pleaded. The Court commented that it was inappropriate to treat the parties’ arbitral process as being the same as an action in the courts, where a final entered order ends the jurisdiction of a trial judge. The parties chose to “litigate in slices” and discrete issues were dealt with at different times. As a result, no finding was made in respect of the breach of contract issue. With respect to waiver and estoppel, the Court accepted the arbitrator’s conclusion that the St. Pierres had not, either by their words or conduct, abandoned their contractual claim. As for abuse of process, the Court rejected this claim summarily, repeating that the amendment decision was a question of mixed fact and law.

The Bottom Line

The Court of Appeal reminds us that parties submitting to arbitration subscribe to “the whole package that comes with it.” The Arbitration Act limits the Courts’ role in reviewing arbitral decisions to true questions of law, and the courts will apply the deferential standard of reasonableness, even on important matters of procedure. Choosing arbitration means choosing to be bound by the Arbitration Act, the Domestic Commercial Arbitration Rules of Procedure, and the discretion of the arbitrator chosen.

Supreme Court Of Canada Dismisses Appeal Alleging Freedom of Expression Breach

Posted in Constitutional

In its first decision of 2017, the Supreme Court of Canada addressed the likelihood of successful damages claims against quasi-judicial boards pursuant to s. 24 of the Charter. In a 4-4-1 split decision, the Court ultimately dismissed the appeal and struck the appellant’s claim for damages. Given the nature of the split decision, and the fact-specific basis for the result, a closer look is warranted both to understand the decision in question and evaluate its potential reach.

Factual Background

The Energy Resources Conservation Board (the “Board”) is an independent quasi-judicial body responsible for regulating Alberta’s energy resource and utility sectors. It is responsible for overseeing energy related activities and enforces legislation intended to protect the groundwater supply. The Board was created by the Energy Resources Conservation Act (the “ERCA”), R.S.A. 2000, c. E-10. That statute includes an immunity clause at s. 43 which insulates the Board from actions or proceedings against it “in respect of any act or thing done purportedly in pursuance of this Act, or any Act that the Board administers, the regulations under any of those Acts or a decision, order or direction of the Board.”

Ms. Ernst owns land in Alberta. Throughout 2004 and 2005, she frequently voiced her concerns to the Board about the negative impacts caused by hydraulic fracturing and drilling near her home. She also voiced her concerns publicly.

In December 2007, Ms. Ernst brought claims against the project proponent, the Board, and the government of Alberta. Only one of those claims was still alive before the Supreme Court of Canada, i.e.: whether or not the Board had breached Ms. Ernst’s s. 2(b) right to freedom of expression by “arbitrarily, and without legal authority” restricting her communications with the Board for a period of 16 months. She asserted that the Board had punished her for her earlier public criticisms.

The Board brought an application to strike Ms. Ernst’s claims. The onus was therefore on the Board to demonstrate that it was “plain and obvious” that Ms. Ernst’s claims could not succeed as pleaded. Both the Alberta Court of Queen’s Bench and the Court of Appeal found that the immunity clause on its face barred Ms. Ernst’s claim for Charter damages and concluded that her claim should be struck out, 2013 ABQB 537; 2014 ABCA 285.

The Issues

While there were three key issues on appeal, the three decisions written by the court addressed these issues in substantially different fashions. Three judges sided with Cromwell J.; one judge sided with Justice McLachlin C.J., Moldaver J. and Brown J.; and Abella J. wrote for herself.

(a)            Does s. 43 of the ERCA bar a claim for Charter damages?

Justice Cromwell, writing for himself, and Justices Karakatsanis, Wagner and Gascon, and Justice Abella (writing for herself) held that it is “plain and obvious” that the immunity clause bars a claim for Charter damages, but for slightly different reasons. Justice Cromwell concluded it would be unfair to the Board to rule otherwise, since the case has been argued in the lower courts on this basis. However, Abella J. was of the view that s. 43 is an absolute and unqualified immunity clause and that, absent a successful challenge to the constitutionality of the provision, it bars all claims against the Board.

The Chief Justice, Moldaver J. and Brown J. disagreed. Although this issue was not properly before the lower courts, the circumstances of this case, involving a novel legal problem of significant public importance, compelled the Court to consider the issue. In their view, it was not plain and obvious that Ms. Ernst’s claim was barred by the immunity clause. Focusing on the language of “any act or thing done purportedly in pursuant of the [ERCA],” it is arguable that punitive acts or non-adjudicative functions could fall outside the scope of the immunity that s. 43 confers.

(b)               Is s. 43 of the ERCA constitutional?

At both the Queen’s Bench and the Court of Appeal, Ms. Ernst maintained that she was not challenging the constitutionality of the immunity clause, but rather was challenging the applicability of the clause to her Charter damages claim. It was not until she reached the Supreme Court that this issue was raised. As a result, neither the Attorney General of Alberta nor the Attorney General of Canada received notice of a constitutional question and no evidence was lead as to the constitutionality of the provision.

Justice Abella was critical of this procedural failure, and emphatically declined to rule on the constitutionality of s. 43. Notice to the Attorneys General serves the vital purpose of ensuring courts have a full evidentiary record before invalidating legislation and affords governments the fullest opportunity to support duly enacted statutes. She stated that new constitutional questions ought not to be answered “unless the state of the record, the fairness to all parties, the importance of having the issue resolved by this Court, the question’s suitability for decision, and the broader interests of the administration of justice demand it.”

The Chief Justice, Moldaver J. and Brown J. also declined to rule on the constitutionality of the provision. In their view, the appeal should have been allowed on the basis of their answers to the other two questions. However, they expressed some support for Abella J.’s approach, commenting in obiter that the record did not provide an adequate basis on which to decide the issue.

Justice Cromwell ruled the provision was constitutional, for two reasons. First, the appellant had simply failed failed to discharge her burden of showing that the law is unconstitutional. Second, however, Cromwell J., found that as Charter damages would never be an appropriate and just remedy for Charter breaches by the Board, and s. 43 did not actually limit the availability of Charter remedies, it could not then be unconstitutional.

(c)              Are Charter damages an appropriate remedy as against the Board?

Charter damages may be an “appropriate and just” remedy for a breach of a claimant’s Charter rights if the claimant demonstrates that damages would fulfill one or more of the functions of compensation, vindication, or deterrence. However, Charter damages will not be available where countervailing factors, such as alternative remedies or good governance concerns, render s. 24(1) damages inappropriate or unjust, 2010 SCC 27.

Justice Cromwell concluded that it was plain and obvious that Charter damages would never be an appropriate remedy against the Board. Judicial review is available to vindicate any misconduct by the Board and good governance concerns support the Board’s immunity – immunity protects the Board’s independence and impartiality and ensures the Board is able fulfill its functions without the distraction of time-consuming litigation. His decision reminds litigants and lower courts that courts must be careful not to extend the availability of Charter damages too far.

Those siding with the Chief Justice again, disagreed. In their view, the limited evidentiary record did not support the high threshold mandated by an application to strike. It was not plain and obvious that Charter damages could not, in any circumstances, be an appropriate and just remedy against the Board. It was not obvious that judicial review would fulfill the same the same objectives as an award of Charter damages, namely, vindicating Ms. Ernst’s Charter right and deterring future breaches. It was also not plain and obvious, on the record at this junction, that good governance concerns, either alone or together, would be enough to oust a claim for Charter damages.

Justice Abella declined to decide this issue as well, finding that the question of whether Charter damages are appropriate requires a prior determination of the constitutionality of the immunity clause. Though her comments in obiter suggest that, absent the procedural error, she would have otherwise agreed with Cromwell J.

What does all of it mean?

Although the justices reached their conclusions in different ways, the collective result is that s. 43 remains in effect and bars claims against the Board. However, a constitutional challenge of s. 43 and other similar immunity clauses appears to remain open, as there was a limited evidentiary record before the Court to support its ruling. It is unclear whether an argument is still open to litigants to argue that s. 43 does not apply to a claim for Charter damages, as only Abella J. conclusively ruled on the matter.

It is also unclear whether Charter damages are available to litigants as against a quasi-judicial board other than Energy Resources Conservation Board. Although Abella J.’s comments suggest that such a claim would fail, the Court’s decisions do not offer a clear majority on this issue.

With thanks to articling student Rochelle Collette for her assistance.

The Perils of Trespass

Posted in Civil Litigation

Few property disputes engender more anger and unreasonable behaviour than trespass and nuisance claims between residential neighbours.  Municipal and other authorities, such as regional districts or stratas, are either loath to get involved or simply refuse to exercise their authority, though that would often resolve matters sooner.  As a result, such disputes between neighbours often lead to acrimonious, lengthy and costly litigation.

A recent case provides a example and a cautionary tale for property owners seeking to build or renovate their property.  The lesson to be learned is: if you are going to engage in construction activities on your land, do it properly, makes sure you know where your property line is, obtain all the requisite approvals and permits, and get professional help if at all in doubt.  Your failure to do so will not only peeve the neighbours but, in the long run, be a lot more expensive.

Mr. Jensen and Mr. Lojstrup learned this the hard way recently when the court found them liable for trespass, granted injunctive relief requiring them to tear down much of their construction as well as awarding both special and punitive damages against them.

They had purchased a lot in the Shuswap Lake Estates development with a plan to build a home.  The result was described by the neighbour as a “monstrosity” and an “abomination”.  The project started poorly when the two men built a retaining wall on their neighbour’s property without permission.  While this was quickly removed when the neighbour complained, that temporary trespass resulted in an award of both general and special damages to compensate the neighbour for both the cost of a survey and the neighbour’s actual legal costs in hiring a lawyer to protest the encroachment.

Despite this early trouble, the men went on to rebuild the retaining wall on their property but within the building scheme set back.  They also built their “dream home” partially within the set back and at a height that exceeded the building scheme requirements.  The reconstructed retaining wall was also quite different than the description given to the neighbour in a “gentlemen’s agreement.”  Despite the neighbour’s vociferous protests, the regional district refused to take any action, in spite of the clear violations of the local zoning bylaws and building code.  As a result, the neighbour sued in both nuisance and trespass.

The nuisance claim was dismissed on the grounds that the “mere proximity of an otherwise safe structure on a neighbouring property” is not enough to trigger liability in nuisance.  However, the trespass claim was allowed on the grounds that the neighbour was entitled to enforce, in a private dispute, the development’s governing building scheme.  The argument that the retaining wall was a “fence” for the purposes of the governing building scheme was quickly dismissed.  The court found that in building the second retaining wall and the house, the owners had breached the building scheme in several respects.  They had failed to prepare formal drawings and specifications.  They did not seek prior approval of their construction.  They failed to comply with setback and height restrictions.  They did not comply with the building code.  As a result, court concluded that “there has been a clear, ongoing breach of the statutory building scheme by the defendants.”

The question then became what remedy to grant.  In deciding what order to make, the court noted that the defendants had made no effort to determine the location of their property line.  They had not submitted plans to anyone for approval or comment.  They “deliberately and knowingly breached the gentlemen’s agreement . . . concerning the height of the retaining wall.”  The neighbour’s complaints were “treated with disdain and contempt”.  As result, the court granted an injunction requiring the defendants to remove the retaining wall and offending portions of the house so that they were in compliance with the building scheme.  Interestingly, the court suspended the injunction for a period of thirty days so that the defendants could calculate how much this would cost them and the neighbour could decide whether he wanted to be paid this sum instead or to have the defendants’ property fixed.

Because of the “highhanded” nature of the defendants’ conduct, the court went on to award punitive damages of $15,000 against each of them ($30,000 in total).

If you run into allegations of trespass, nuisance and contravention of zoning bylaws or building schemes, it would be prudent to address those concerns immediately and transparently.  If you are in the wrong, rectify the situation.  If you are in doubt, obtain professional assistance to confirm your position.  Do not do as Mr. Jensen and Mr. Lojstrup did and charge ahead without professional assistance and in the face of the complaints of others.  If you do, it may turn out to be a very expensive exercise.

BCCA Affirms Solicitor-Client Privilege as “nearly absolute”

Posted in Civil Litigation, Civil Procedure

In the recent decision in Soprema Inc. v. Wolrige Mahon LLP, 2016 BCCA 471, the British Columbia Court of Appeal confirmed the status of solicitor-client privilege as “nearly absolute” and clarified the test for determining whether a party has impliedly waived of solicitor-client privilege by making its state of mind a material issue in an action.

Soprema commenced an action against Wolrige Mahon LLP (“Wolrige”) claiming that Wolrige had made false representations about the accuracy of financial statements Soprema had relied on in deciding whether to exercise an option to purchase shares. Wolrige brought an interlocutory application seeking production of some of Soprema’s privileged documents, claiming Soprema had waived privilege over these by putting its state of mind at issue in the action. The chambers judge found that a waiver of privilege will be implied where a party has put its state of mind in issue in a manner that makes the privileged communications highly relevant to that state of mind, and where fairness and consistency require disclosure. He concluded that Soprema’s pleadings put its state of mind in issue because to succeed in its negligent representation claim it must have relied reasonably on the alleged misrepresentations and therefore Soprema’s understanding of its legal position was relevant to the issue of whether its reliance was reasonable. The chambers judge also found that Soprema would have an unfair litigation advantage if Wolrige had to defend the reliance claim without access to the privileged communications. As a result, the chambers judge ordered production of several categories of privileged communications between Soprema and its in-house and external counsel.

Soprema successfully appealed this decision.  The Court of Appeal found that the test the chambers judge relied on did “not adequately give effect to the near absolute protection of solicitor-client privilege mandated by the Supreme Court” of Canada.  The Court of Appeal held that waiver does not occur simply because a party’s state of mind as to its understanding of its legal position or advice it received was relevant to a material issue; if this were sufficient for waiver, the protection of solicitor-client privilege would be at risk any time a case involved reasonable reliance. The Court of Appeal found that before waiver can be implied, a party must voluntarily put into issue legal advice or its understanding of the law.  In the circumstances, Soprema had not voluntarily put its understanding of its legal position in issue based on its pleadings.

In its decision, the Court of Appeal confirmed the importance of solicitor-client privilege and that it “must be as close as absolute as possible to ensure public confidence and retain relevance”. The Court recognized that it is inevitable that upholding privilege where legal advice may have influenced a party’s state of mind will give a litigation advantage to the party claiming privilege because the other side will not have access to potentially relevant information about that party’s state of mind.  However, it found this advantage is not unfair because it arises from the protection of a fundamental principle of the legal system.

With thanks to articling student Rochelle Collette for her assistance.

How to Convert Your Canadian Judgment into Other Currencies: The Foreign Money Claims Act

Posted in Civil Litigation

Given that Canada, and BC in particular, has an economy driven largely by international trade, it will come as no surprise that many of those transactions are conducted in currencies other than the Canadian dollar.  What happens when you need to sue in Canada over a contract that deals in, for example, US dollars or Japanese Yen?  How and when do the courts address the conversion of foreign currencies?

In BC, this issue is addressed by the Foreign Money Claims Act (FMCA).  It provides the courts with authority to order that a judgment be stated in the amount of Canadian currency necessary to purchase the appropriate amount of “the other currency” based on the exchange rate of “a chartered bank located in British Columbia at the close of business on the conversion date.”  The test applied by the courts to invoke the FMCA is whether a judgment creditor will be “most truly and exactly compensated if all or part of the money payable” ought to be in a “currency other than the currency of Canada.” Measuring damages by using a foreign currency can apply in both contract and tort claims.

Section 1(2) of the FMCA provides that the conversion date is to be the last day before the judgment debtor makes a payment on the judgment.  However, where currencies have or may fluctuate wildly, this may result in a windfall to a judgment debtor. A recent case, Naturex Inc. v. United Naturals provides an example. United Naturals contracted to have Naturex deliver “plant extract products.” The shipments were payable in US dollars but, for reasons the court ultimately rejected, United Naturals stopped paying Naturex. Naturex sued to recover $248,000 US. Between the date the claim was commenced and the date of judgment, the value of the Canadian dollar fell against the US dollar. Unless adjusted, on the date of judgment, United Naturals would have received a “windfall” as it would require far fewer US dollars to pay the judgment in Canadian dollars. As a result, the court held that the most appropriate date upon which to order the conversion calculation was the date the claim was originally commenced, not the future date on which it may be paid.

As one appellate court reasoned:

The Court’s task is to select the most fair and equitable of the two possible conversion dates. It cannot be expected that either of these will allow perfect justice to be rendered. Given this, if any equities must fall unequally on the parties, they should fall more heavily on the wrongdoer than on the victim.

If your claim involves a foreign currency element or your damages may be better measured in a currency other than Canadian dollars, be mindful of the FMCA and be prepared to address the court on whether it ought to apply or not.

SCC Underscores the Importance and Protection of Privileged Communications before Administrative Bodies

Posted in Privacy

On November 25, 2016, the Supreme Court of Canada (the “SCC”) released two decisions that examine the protection of privileged communications before administrative bodies. The cases, which involve the Information and Privacy Commission of Alberta and Quebec’s Chamber de l’assurance de dommages, consider the ability of legislation to infringe on the established classes of solicitor-client and litigation privilege. Despite different administrative bodies, context, and types of privilege, in both cases the SCC emphasized the fundamental importance of such forms of privilege for the operation of our legal system and held that neither could be set aside absent clear and explicit legislative intent.

In Alberta (Information and Privacy Commissioner) v University of Calgary, 2016 SCC 53, the Information and Privacy Commission of Alberta ordered production of records from the University of Calgary which the University claimed were covered by solicitor-client privilege. The request was made pursuant to an application made under the Freedom of Information and Protection of Privacy Act (“FOIPP“) by a former employee of the University during the course of litigation with the University. The Commission sought to verify whether solicitor-client privilege was properly asserted by the University against the employee and issued a Notice to Produce Records to the University under section 56(3) of the Act. That section provides that a public body must produce records requested by the Commissioner “[d]espite…any privilege of the law of evidence.” The University refused to disclose the documents and applied for judicial review. Even though the litigation between the University and the employee concluded during the course of the proceedings, the case proceeded on a point of principle.

The specific issue considered by the SCC was whether the University could be compelled to disclose documents protected by solicitor-client privilege to the Commissioner or her delegate for review in order to determine the validity of the University’s claim of privilege.  Justice Côté, writing for the majority of seven sitting justices, held that section 56(3) of FOIPP does not require production of a document to the Commissioner when solicitor-client privilege is claimed.  That section failed to meet the “clear, explicit and unequivocal” language required to set aside solicitor-client privilege.

The majority reviewed and applied the well-established jurisprudence to the effect that solicitor-client privilege is “no longer merely a privilege of the law of evidence, having evolved into a substantive protection” and, according to some, having acquired “constitutional dimensions” and that it was to “remain as close to absolute as possible and should not be interfered with unless absolutely necessary.”  In analyzing the specific statutory provision and legislation in issue, the majority also emphasized that it was utilizing the “modern approach” to statutory interpretation and was thus “in no way. . .returning to the plain meaning rule” even though the Alberta Court of Appeal had concluded that an earlier SCC decision ousted the modern approach in favour of one of strict construction where solicitor-client privilege was in issue.

In Lizotte v Aviva Insurance Company of Canada, 2016 SCC 52, the SCC, with nine sitting justices, affirmed the findings of the courts below and concluded that litigation privilege cannot be rescinded absent an express statutory provision. In that case, the Quebec Chamber de l’assurance de dommages (the “Chamber”), an administrative body designed to ensure protection of the public in matters relating to damage insurance and claims adjustment, requested the disclosure of documents from an insurer involved in an investigation. The insurer refused on the basis that certain documents were protected by litigation privilege. The Chamber claimed that litigation privilege was lifted by operation of the statutory obligation for a party related to an investigation to produce “any… document.”

Justice Gascon, writing for the unanimous court, held that a party cannot be denied the right to claim litigation privilege “without clear and explicit legislative language to that effect.” Legislation with a blanket provision requiring production of “any… document” was not deemed sufficiently explicit to abrogate litigation privilege. The SCC rejected arguments that litigation privilege be limited due to an overriding public interest and that it no longer reflects the more co-operative nature of the courts.

With thanks to articling student James Scott for his assistance in writing this blog post.

SCC Rules Debtors Impliedly Consented to Disclosure of Mortgage Discharge Statement

Posted in Privacy

On November 17, 2016, the Supreme Court of Canada (the “SCC”) released its decision in Royal Bank of Canada v. Trang, 2016 SCC 50. This case involved the proper interpretation of certain disclosure exceptions in the Personal Information Protection and Electronic Documents Act, S.C. 2000, c.5 (“PIPEDA”).

Writing for a unanimous court, Justice Côté overturned the Ontario Court of Appeal’s decision and ordered the Bank of Nova Scotia (“Scotiabank”) to disclose the debtors’ mortgage discharge statement to the Royal Bank of Canada (“RBC”) for two reasons: (1) such disclosure was required to comply with a court order pursuant to s. 7(3) of PIPEDA; and, (2) the debtors had impliedly consented to such disclosure. The SCC held that each of these two reasons would have been enough on their own to allow the appeal.

A Mortgage Discharge Statement is Personal Information under PIPEDA

PIPEDA is a federal privacy statute that generally prohibits organizations from disclosing personal information, such as that within a mortgage discharge statement, without the knowledge and consent of the affected individual. Section 7(3) of PIPEDA provides a list of legislative exclusions to the requirement of knowledge of consent, including where disclosure is required to comply with an order made by a court to compel the production of information.

Exception to Requirement of Knowledge and Consent of the Affected Individual

Phat Trang and Phuong Trang (the “Debtors”) had defaulted on a loan from RBC. The Debtors owned property in Toronto (the “Property”), for which Scotiabank held a first mortgage. After obtaining judgement against the Debtors in the amount of $26,122.76, RBC filed a writ of seizure and sale of the Property with the sheriff in Toronto, Ontario. The sheriff was permitted to sell the Property pursuant to subsection 9(1) of the Execution Act, R.S.O. 1990, c. E. 24.  However, it refused to do so until receiving the Debtors’ mortgage discharge statement from Scotiabank. The mortgage discharge statement was necessary for the sheriff to know Scotiabank’s interest in the Property, and to determine the rights as between Scotiabank and RBC.

After RBC’s attempts to obtain the mortgage discharge statement from the Debtors were unsuccessful, RBC brought a motion to compel the Bank of Nova Scotia (“Scotiabank”) to produce the mortgage discharge statement.

Both the trial court and the Court of Appeal held that the order sought by RBC did not constitute an “order made by a court” under s. 7(3)(c) of PIPEDA because it would be circular reasoning to hold that 7(3)(c), which permitted disclosure to comply with a court order, also provided the authority to seek such an order in the first place. In rejecting this reasoning, the SCC overruled Citi Cards Canada Inc. v. Pleasance, 2011 ONCA 3, a case where the Ontario Court of Appeal held that a mortgage disclosure statement was “personal information” under PIPEDA but that none of the exceptions in s. 7(3) of PIPEDA applied.

Procedural Rule Impedes Access to Justice

A point of contention was whether RBC should be required to make another application relying on rule 60.18(6) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, the effect of which would be to require the mortgagee (in this case, Scotiabank) to produce the mortgage discharge statement.

Justice Côté agreed with the reasoning of dissenting Justice Hoy at the Court of Appeal, writing that it would have been “overly formalistic and detrimental to access to justice” to conclude that RBC must make another application specifying that it would be relying on rule 60.18(6)(a) to obtain the order to compel disclosure (at para. 30). RBC had already made multiple trips to court to determine the amount outstanding on the Debtors’ mortgage to enforce a valid judgement. While RBC has many legal and financial resources, Justice Côté wrote that ensuring access to justice requires paying attention to the plight of all litigants.

Reasonable Expectations Constitute Implied Consent

Schedule 1, cl. 4.3.6 of PIPEDA acknowledges that consent for the purposes of the statute can be implied consent when the information is “less sensitive”. Clause 4.3.5 of PIPEDA further states that in obtaining consent, the reasonable expectations of the individuals are relevant. The SCC held that while financial information is generally extremely sensitive, it is a reasonable expectation of a mortgagor that his or her mortgagee would be entitled to provide a mortgage discharge statement in this context.

Justice Côté wrote that the sensitivity of the current balance of the mortgage must be assessed in the context of the related financial information already in the public domain, the purpose served by making the related information public, and the nature of the relationship between the mortgagor, mortgagee, and directly affected third parties. Certain information is already made publicly available when mortgages are registered electronically on title in part to allow creditors with a current or future interest in the land to make informed decisions. As such, the SCC concluded that the Debtors impliedly consented to the disclosure of the mortgage discharge statement by Scotiabank to RBC.

With thanks to articling student Jada Tellier for her assistance.

Alberta court ruling signals companies can’t block shareholder vote

Posted in Commercial

On September 27, 2016, I blogged about the decision of the Alberta Court of Queen’s Bench blocking approval of an arrangement in Re Marquee Energy Ltd,. and the Alberta Oilsands Inc. In that decision, the Court held that Alberta Oilsands shareholders must be allowed a shareholders vote even though the only company being “arranged” was Marquee Energy Ltd. The appeal of this order was heard on November 9 and on November 14, the Alberta Court of Appeal allowed the appeal, with reasons to follow. I will blog further once the reasons for judgment are released.

Out-of–Province Class Actions Hearings – the Supreme Court of Canada has its say

Posted in Class Actions

On November 13, 2015, I blogged about the Supreme Court of Canada granting leave to appeal in two related cases: Endean v. British Columbia, 2014 BCCA 61 and Parsons v. Ontario, 2015 ONCA 158.  These cases raised the issue of the scope of inter-jurisdictional coordination for national class actions in Canada by determining whether or not judges of provincial superior courts were able to sit outside their home jurisdiction when supervising a settlement of a national class action.

On October 20, 2016, the Supreme Court answered this question. In Endean v. British Columbia, 2016 SCC 42, the Court ruled unanimously as to result. Mr. Justice Cromwell, writing the majority reasons, ruled that that judges in Ontario and British Columbia

“…have the discretionary statutory power … to sit outside their home provinces, and a video link to an open courtroom in the judge’s home jurisdiction is not required” (see paragraph 4).

The Supreme Court has, as a result, removed a shadow that was cast over national class actions which required management in multiple Canadian jurisdictions.

The decision is interesting from a number of perspectives. The Court found the authority to conduct hearings outside of a judge’s home jurisdiction in the class action legislation in Ontario and British Columbia. It did not find it necessary to rely upon the inherent jurisdiction of provincial superior courts to control their own processes.  However, this finding by itself would have left a void in provinces or territories whose class action legislation differed from Ontario and British Columbia (or where there is no class action legislation). In order to fill this gap and not create a patchwork across the country, the Court found that the statutory provisions reflected and confirmed the inherent jurisdiction of provincial superior court. So judges of other provinces or territories are able to rely on that jurisdiction, if necessary due to the absence of express statutory authorization, to hold hearings outside of their home jurisdiction.

The Court also discussed the “Open Court” principle and ultimately found it did not require a video link to a home jurisdiction open court in every case. Rather, whether a video link is necessary was left to the discretion of the judge.

Finally, the Court wrote that in exercising the discretion to determine whether to hold a hearing outside the home jurisdiction, a judge should (1) weigh the benefits and costs of an out-of-province proceeding, including the issue of fairness to the parties, availability of the media and the interests of justice; and (2) consider whether terms, such as a video link, should be imposed to serve the interests of justice.

In the end, the Supreme Court has provided a principled and practical solution to allow the effective management and administration of national class actions.

Setting the Rules for Televising Trials in BC

Posted in Civil Litigation, Civil Procedure

On September 9, 2016, the B.C. Supreme Court issued the first decision to consider the court’s new practice directive concerning the often contentious question of whether to permit a trial to be recorded for broadcasting.

In British Columbia, like other provinces in Canada, trials and other court proceedings are not typically recorded for the purpose of media broadcasts. In contrast to the American experience, the public cannot watch even high profile civil or criminal trials on television. An exception is the broadcasting of proceedings before the Supreme Court of Canada, which are typically available.

In 2015, the B.C. Supreme Court issued Practice Direction 48 (the “PD-48”), which describes the procedure for applications for authorization to video record or broadcast court proceedings. PD-48 states that video recordings or broadcasts are prohibited unless authorized by the court. It prescribes a form of notice of application to be used by media organizations and requires that such an application be filed not more than 90 days and not less than 14 days prior to the start of the hearing. PD-48 provides that the argument in support of the application must address (a) fair trial rights, (b) privacy rights, (c) witnesses who will testify, and (d) the court and the administration of justice. PD-48 also addresses other matters, such as the physical criteria for recording equipment personnel, specific restrictions on what may be recorded, and a mandatory delay in broadcasting.

In Cambie Surgeries Corporation v. British Columbia (Medical Services Commission), 2016 BCSC 1686, Justice Steeves considered the first application brought under PD-48. The applicant, Pacific Newspaper Group, sought to set up a daily feed to host recordings of all proceedings in the trial for the purpose of recording or broadcasting. The underlying case has attracted immense public interest because it involves a constitutional challenge to BC’s ban on private health care for medically necessary services covered by the public health system.

Justice Steeves dismissed the application, and his reasons for doing so give some helpful guidance for those bringing future applications on behalf of the media. His decision demonstrates the following:

  1. The application must be brought in a timely way. Steeves J. made clear at several points in his decision that the 14-day deadline imposed by PD-48 must be respected.
  2. The court will ensure that any order made under PD-48 presents a fair and objective portrayal of the proceedings. He rejected an earlier attempt to have the application heard because of concerns with “an issue of objectivity” in the initial materials. He dismissed the application to broadcast the opening statements because the plaintiff had already completed its opening, and it would not be balanced if the public saw only the opening statement of the defendants.
  3. The court will be sensitive to the privacy interests of parties and witnesses. Steeves J. dismissed the application to record testimony in the trial because individuals will be testifying about “very personal matters” regarding their health, their medical histories and issues of diagnosis and treatment. The application to record expert evidence on historical and policy matters was also dismissed because the cross-examination of those experts may involve putting individual cases to them.

Justice Steeves adjourned the application to record the closing submissions because the court would not hear those submissions for some time.