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Court of Queen’s Bench Strikes Prohibition on Pharmacy Inducements in Alberta

7 hours 54 min ago

By: Shaun Fluker

PDF Version: Court of Queen’s Bench Strikes Prohibition on Pharmacy Inducements in Alberta

Case Commented On: Sobeys West Inc v Alberta College of Pharmacists, 2016 ABQB 232

In late March I wrote a post commenting on the difficult application of a standard of review analysis to a vires determination of subordinate legislation – see Does the Standard of Review Analysis Apply to a Vires Determination of Subordinate Legislation? The decision before me then was Sobeys West Inc v Alberta College of Pharmacists, 2016 ABQB 138, wherein Mr. Justice V.O. Ouellette selected the standard of correctness to assess the vires of a prohibition enacted as subordinate legislation by the Alberta College of Pharmacists (“College”). This comment now looks at the substantive decision issued April 22 by Justice Ouellette ruling that the prohibition is ultra vires the College. I think there are some doctrinal problems with the reasoning in this judgment which I explain below, and I conclude this comment by shining some light on the fact that the successful party – Sobeys – is a large and powerful national grocery retailer in Canada who appears to convince the Court that this matter is more about consumers than patients. 

The Inducement Prohibition

In April 2014 the College voted to amend its Code of Ethics and Standards of Practice for Pharmacists and Pharmacy Technicians to prohibit pharmacists from providing inducements – such as loyalty program points or other forms of consumer purchase rewards like Air Miles – to a patient for the acquisition of a prescription drug or a service from them. The College provides a description of the inducement issue and its rationale for the prohibition here. My previous comment did not explore the details of this issue because the decision under review was simply on standard of review, but given we are now into the substance of the dispute between the parties I am going to dig into this a bit more.

The College regulates pharmacists in Alberta through a registration requirement set out in Part 2 of the Health Professions Act, RSA 2000, c H-7. Like many other regulated professions, the registration requirement facilitates the ability of the College to oversee and monitor the provision of pharmacy services as well as establish and enforce competency and conduct requirements on pharmacists. These requirements include having post-secondary education in pharmacy, passing the national qualifying exams and a provincial jurisprudence exam, continued professional development, and adhering to conduct rules, patient care and confidentiality laws, standards of practice, and a code of ethics. While at one time the role of the pharmacist was primarily the dispensing of prescription drugs, in recent years that role has expanded to include patient care services such as the development of medication plans and providing information on how to take prescribed drugs.

The matter of inducements at pharmacies in Alberta has been an issue for the College for some time now, and the expanding role of pharmacists in patient care led the College to enact the prohibition into the Code of Ethics and Standards of Practice. The College published its rationale for the prohibition in a document entitled Inducements for Drugs and Professional Services: A Basis for a Prohibition (see here). My reading of this document suggests the primary reason for the prohibition is the ability of inducements to influence decisions made by patients on prescription drugs. The economic benefits provided by inducements – the desire to accumulate points or air miles for example – is thought to be improperly influencing decisions made by patients on their drug therapy and systemically interfering with and/or disrupting the pharmacist-patient relationship. The College provides more detail and many examples of these problems in the published rationale, but perhaps the summary statement is sufficient:

The patient-pharmacist relationship needs to be rooted in integrity and trust. Patients should select their pharmacist based on the pharmacist’s knowledge and quality of care, not based on inducements. Patients and pharmacists should be able to make health decisions free from competing economic and psychological influences. (Inducements for Drugs and Professional Services: A Basis for a Prohibition at 13)

The College thus added the following provisions to the Code of Ethics and the Standards of Practice to implement the inducement prohibition:

Code of Ethics

13 Do not enter into any arrangement with a patient where I provide an inducement to the patient that is conditional on the patient obtaining a drug or professional service from me.

Standards of Practice

1.18 A regulated member must not offer or provide or be party to the offering or provision of an inducement to a patient where the inducement is offered or provided on the condition that the patient obtains: (a) a drug product, or (b) a professional service from the regulated member or licensed pharmacy.

Are the Inducement Prohibitions lawful?

The authority of the College to enact the Code of Ethics and Standards of Practice governing pharmacists is provided by section 133(1) of the Health Professions Act, RSA 2000, c H-7. The text in this section suggests the Legislature contemplated these enactments would constitute subordinate legislation – in other words that these provisions constitute enforceable rules with penal consequences if not followed, as opposed to merely internal guidance to pharmacists. Hallmarks of this intention include the requirement on the College to allow pharmacists and the Minister to review and comment on proposed provisions, as well as to publish the Code and Standards of Practice. These process provisions largely replicate the substance of the Regulations Act, RSA 2000, c R-14. The text of section 133 is as follows:

133(1)  A council may, in accordance with procedures set out in the bylaws, develop and propose the adoption of a code of ethics and standards of practice for a regulated profession and may develop and propose amendments to an adopted code of ethics or standards of practice.

(2)  The college must provide, for review and comment, a copy of a proposed code of ethics and proposed standards of practice and proposed amendments to

(a)    its regulated members,
(b)    the Minister, and
(c)    any other persons the council considers necessary.

(3)  A council may adopt a code of ethics and standards of practice and may adopt amendments to a code of ethics or standards of practice after it has reviewed and considered the comments received from a review described in subsection (2).

(4)  The Regulations Act does not apply to a code of ethics or to standards of practice adopted or amended under this section.

(5)  The college must ensure that copies of the code of ethics and standards of practice adopted under subsection (3) are readily available to the public and regulated members, and the copies may be distributed in the manner directed by the council.

The test for determining the vires or lawfulness of subordinate legislation was recently consolidated and set out by the Supreme Court of Canada in Katz Group Canada Inc. v Ontario (Health and Long?Term Care), 2013 SCC 64 at paras 24-28. The test is largely about assessing whether the subordinate legislation is consistent with the objective or purpose of its enabling statute. Consistency is important because the entity that enacts subordinate legislation is doing so with delegated legal authority provided by the Legislature. The guiding principle is that a delegate – such as the College in this case – only has the legal authority granted to it by the Legislature, and so the test for vires examines whether the delegate stayed within the grant of authority in its enabling statute. If not, the enactment must be struck as unlawful.

The steps or considerations set out by Katz which guide the review on the vires of subordinate legislation are as follows: (1) is the impugned regulation consistent with the objective of its parent statute – in order to demonstrate invalidity a person must establish that the regulation is not consistent with such objective or that it addresses a matter which is not set out in the regulation-making provision of the parent statute; (2) if there are conditions to be met in the enactment of subordinate legislation – for example a notice and comment process – have these conditions been met; (3) there is a presumption of validity such that the onus or burden is on the challenger to demonstrate that the regulation is ultra vires – so where possible a regulation will be read in a ‘broad and purposive’ manner to be consistent with its parent statute; (4) the inquiry into the vires of a regulation does not involve assessing the policy merits of the regulation, nor does the reviewing court assess whether the regulation will successfully meet its objective (Katz at paras 24-27).

Justice Ouellette sets out the Katz test at paragraphs 9-14 of this decision. The reason for this lengthy dissertation of the test is that Justice Ouellette distinguishes Katz somewhat from this case. In particular, Justice Ouellette observes that in Katz the Supreme Court assessed the vires of regulations enacted by the Ontario Legislature itself under a statute with a targeted policy direction. For Justice Ouellette, this case is distinct from Katz in that the delegate here is the College and it is purporting to exercise delegated authority under a statute – the Health Professions Act – with a general or broader purpose.

This distinguishing of Katz is the first doctrinal problem with this judgment. While it is true that the form of subordinate legislation and the enacting body in Katz is different, I don’t see how this difference necessarily means that the Katz principles don’t apply just the same. As I see it, Justice Ouellette goes down this distinguishing path in order to depart somewhat from the deference called for in Katz. But I think what he really wants to say is that the principles governing a vires review of subordinate legislation should be different depending on what entity purports to enact the legislation. Where it is a legislature – such as in Katz – the review is very deferential, but where it is a statutory entity such as a tribunal or the College, the review is less deferential. The problem for Justice Ouellette is that Katz does not expressly support this. As I noted in my previous post on this case, it would have been nice had the Supreme Court of Canada more carefully situated its reasoning in Katz within the broader context of administrative law and confirmed whether the Katz principles applied likewise to subordinate legislation enacted by delegates of the Legislature.

The second doctrinal problem with this judgment is the manner in which Justice Ouellette goes about deciphering the purpose or objective of the Health Professions Act. Justice Ouellette remarks that it is unfortunate there is no preamble or recital to the legislation that provides its objective (at para 17), however my understanding is that the legislative drafting policy of the Alberta Legislature is to avoid using such preambles in order to ensure the objective or purpose of a statute is gleaned from the enactment as a whole. So in the absence of a provision that expressly states an objective, Justice Ouellette cites extensively from the Hansard record of the debate in the Legislature when the Health Professions Act was in the legislative process in 1998 and 1999 (at paras 18-25).

It wasn’t too long ago when Canadian courts balked at admitting evidence of legislative debates and speeches as an aid to interpreting the purpose of legislation. In its 1993 R v Morgentaler, [1993] 3 SCR 463 decision the Supreme Court of Canada acknowledged that this exclusionary rule had been relaxed, and in its leading authority on statutory interpretation – Rizzo v Rizzo Shoes, [1998] 1 SCR 27 – the Supreme Court confirmed that such debates have a limited role in the interpretation of legislation: “Although the frailties of Hansard evidence are many, this Court has recognized that it can play a limited role in the interpretation of legislation.” (Rizzo Shoes at para 35).

The concern with using legislative debate as an aide to interpreting legislation is that individual members of the legislature do not speak for the legislature as a whole and often their speech is heavily laden with a partisan slant. The demise of the exclusionary rule does not mean these concerns are no longer present, but rather such concerns are still given effect by limiting the weight attached to these debates in the interpretation process. As Ruth Sullivan summarizes in Sullivan on the Construction of Statutes, 6th ed (Lexis Nexis, 2014) at 681:

It appears to be now well-established that legislative history materials are admissible if they are relevant and reliable and these materials may be relied on for any purpose. However, they must not be given inappropriate weight. The current focus has thus shifted from admissibility to identifying the factors that make these materials more or less reliable and determine the weight they should receive. Although the exclusionary rule is no longer relevant, the concerns which led the courts initially to exclude legislative history and later to admit it first as external context, then as direct evidence of purpose and finally as direct evidence of legislative intent remain relevant in determining reliability and weight.

Justice Ouellette’s review of the legislative discussion in Hansard culminates with the following articulation of the purpose of the Health Professions Act:

Therefore, the legislature clearly intended the HPA to provide the framework necessary to ensure that all health professionals be competent and accountable to the public. Further, the legislature clearly intended that the HPA would require the role of the regulatory colleges to be separate from economic functions. Section 3(2) of the HPA, which deals with the issue of professional fees, is clearly indicative of the fact that economic related issues are not one of the contemplated roles of the colleges under the HPA. This is in the sense that HPA, s 3(2) specifically excluded professional fees (an economic function) from their roles. This is further supported by the parallel, stated purpose of the Pharmacy and Drug Act, which is directed at the economic control of costs. (at para 26, emphasis added)

I find it curious that Justice Ouellette comes to this conclusion that the statute so clearly separates economic issues from all others, without even mentioning section 3(1) of the Act, which expressly provides for the role of the College to govern and regulate the conduct of pharmacists.

The essence of Justice Ouellette’s ruling is that the College enacted economic regulation with its inducement prohibitions because such prohibitions are directed, solely it seems, at the issue of pricing and the commercial operation of business. Given the aforementioned conclusion on the purpose of the Health Professions Act and the exclusion of economic regulation, Justice Ouellette seems to have little if any trouble ruling that the inducement prohibitions are ultra vires the College based on a Katz analysis (at paras 27-42).

Justice Ouellette uses the word ‘clearly’ in 10 instances when describing either the purpose of the Health Professions Act or the inducement prohibitions (at paras 18, 22, 24, 26, 27, 28, 30, 56), as if there could hardly be any doubt as to the vires question here. But how clear is this case really? Granted there is no doubt the inducement prohibition would have some economic impact on certain pharmacies (more on that below), but is the prohibition really targeted at price competition? The one document which significantly differs with Justice Ouellette’s economic reading is the College’s own rationale for the prohibition, entitled Inducements for Drugs and Professional Services: A Basis for a Prohibition, summarized above. It is very noteworthy to me that there is just a single reference to this document in Justice Ouellette’s ruling (at para 6), and no substantive discussion of its content. I find it hard to understand how the purpose of the inducement prohibitions can be deciphered without any reference to the College’s own articulation of its rationale.

Patient or Consumer?

There is a dualism at work in this case, specifically whether the person who approaches the pharmacy counter is a patient or a consumer. The College views the inducement prohibitions as a measure that governs the conduct of a pharmacist to help ensure the decisions made at the counter by the patient are based on healthcare alone. Justice Ouellette’s reasoning views the inducement prohibitions as a measure that restricts the liberty of a pharmacist to compete for the consumer’s purchases at the counter. As Justice Ouellette states at para 40: “The College’s legislative action amounts to controlling the way commercial entities operate and compete amongst themselves in terms of prices offered to consumers and costs.” The consumer trumps the patient in this case.

I can’t help but conclude by noting that the successful party here is Sobeys – a large and powerful national grocery retailer in Canada who is quoted as being delighted with Justice Ouellette’s ruling. That same media release quotes a Sobeys spokesperson as stating: “Encouraging competition and making prescriptions and pharmacy services more affordable has been at the core of our challenge of the Alberta College of Pharmacists.” One can read this as an assertion of consumer interests over the regulatory functions of the College. The law sides with the powerful in this case. And while the ruling is based on some statutory interpretation, with respect it seems to me that that interpretation is only a partial job. In any case, it has long been a knock against statutory interpretation that it can be a results-orientated exercise. This decision seems very susceptible to the critical legal studies adage that law is politics, and doctrinal analysis simply serves to mask the politics in legal reasoning.

My ultimate point is that this case could just as easily have been decided in favour of the College had the dualism been flipped and the patient trumped the consumer. Indeed on very similar law and facts, the British Columbia Court of Appeal recently upheld as lawful inducement prohibitions enacted by the College of Pharmacists in British Columbia, deciding against Sobeys in Sobeys West v College of Pharmacists of British Columbia, 2016 BCCA 41.

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Excluding Mere Intimate Relationships: The Alberta Court of Appeal Interprets the Protection Against Family Violence Act

Tue, 05/03/2016 - 10:00am

By: Jennifer Koshan

PDF Version: Excluding Mere Intimate Relationships: The Alberta Court of Appeal Interprets the Protection Against Family Violence Act

Case Commented On: Lenz v Sculptoreanu, 2016 ABCA 111 (CanLII)

The Protection Against Family Violence Act, RSA 2000, c P-27 (PAFVA) allows “family members” to obtain emergency protection orders (EPOs) on an ex parte basis, in circumstances where “family violence” has occurred, the claimant “has reason to believe that the respondent will continue or resume carrying out family violence”, and “by reason of seriousness or urgency, the order should be granted to provide for the immediate protection of the claimant and other family members who reside with the claimant” (section 2). In the context of intimate relationships, “family member” is defined to mean “persons who are or have been married to one another, who are or have been adult interdependent partners of one another or who are residing or have resided together in an intimate relationship.” Family member also includes those who are “parents of one or more children, regardless of their marital status or whether they have lived together at any time” (section 1(1)(d)).

In Lenz v Sculptoreanu, 2016 ABCA 111 (CanLII), the Alberta Court of Appeal (Justices Rowbotham, Wakeling and Schutz) made a “comprehensive consideration of the language used in the legislation, the scheme of the legislation, and its objects”, and concluded that this definition does not include persons who have been involved in an intimate relationship without residing together and do not fall within the definition of “adult interdependent partner” in the Adult Interdependent Relationships Act, SA 2002, c A-4.5(at para 4).

Facts and Issue on Appeal

Tia Maria Lenz was the recipient of an EPO, but she did not appear at the Court of Queen’s Bench hearing to consider confirmation of the EPO under section 3 of the PAFVA nor at the appeal. The Court of Appeal therefore based its decision on the evidence of the appellant, Amon Sculptoreanu. According to his evidence, he and Lenz were in a non-exclusive dating relationship for about 3 years, from 2012 to 2015. They have no children together, maintained separate residences during their relationship, and did not live together apart from some overnight stays. When the relationship first began, Lenz was married to another man, with whom she resided for the first 6 to 8 months of her relationship with Sculptoreanu. She eventually moved in with her sister. Lenz and Sculptoreanu each worked and individually supported themselves and they did not share expenses or bank accounts. Their relationship broke down in June 2015 because of Sculptoreanu’s relationships with other women. Lenz contacted the RCMP alleging that Sculptoreanu made threats against her and her property. A Justice of the Peace granted an ex parte EPO against Sculptoreanu under the PAFVA, which was confirmed by Mr. Justice G.A. Verville of the Court of Queen’s Bench on July 15, 2015, for one year. Sculptoreanu’s appeal to the Alberta Court of Appeal raised the issue of whether the EPO was improperly granted and confirmed because he was not a “family member” to Lenz.

The Court of Appeal’s Decision

After noting that the interpretation of a statute is reviewable on the standard of correctness (at para 13), the Court of Appeal set out the definition of “family member” from the PAFVA (noted above), and the definition of “relationship of interdependence” from the Adult Interdependent Relationships Act:

1(1) In this Act, . . .

(f)  “relationship of interdependence” means a relationship outside marriage in which any 2 persons

(i)   share one another’s lives,

(ii)   are emotionally committed to one another, and

(iii)  function as an economic and domestic unit.

Under the section 3 of the Adult Interdependent Relationships Act, a person is the “adult interdependent partner” of another person if, inter alia, “the person has lived with the other person in a relationship of interdependence for a continuous period of not less than 3 years.” Moreover, under section 5(2), “A married person cannot become an adult interdependent partner while living with his or her spouse.”

Turning to the interpretation of these provisions, the Court noted that “Words of a statute must be read “in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act and the intention of [the Legislature]”” (at para 16, citing Re Rizzo & Rizzo Shoes Ltd, 1998 CanLII 837 (SCC), [1998] 1 SCR 27 at para 21). Finding that the term “adult interdependent partner” was intended to have the same meaning under the PAFVA as it has under the Adult Interdependent Relationships Act, the Court held that the evidence did not establish that the parties met the definition – they did not “function as an economic and domestic unit” for a continuous period of more than 3 years (see the factors in section 1(2) of the Adult Interdependent Relationships Act), and Lenz was simultaneously living with her spouse for part of that period, contrary to section 5(2) (at paras 18-19).

As for the definition of “family member” in the PAFVA, the Court indicated that in its view, “A plain reading of … the definition suggests that being in an intimate adult relationship with someone without also “residing” together during that relationship, is insufficient for qualification as “family members”” (at para 21). “Residing” is not defined in the PAFVA, but dictionary definitions establish that “reside” means “To dwell permanently or continuously: have a settled abode for a time: have one’s residence or domicile” (Webster’s Third New International Dictionary of the English Language, Unabridged) or to “have one’s home, dwell permanently” (Canadian Oxford Dictionary, 2d ed) (at para 23). Neither does the PAFVA define “intimate relationship”, but the Court indicated that for the purposes of the Act it could be taken to mean a sexual relationship (at para 24, citing ND v WS, 2000 ABQB 313 (CanLII) at para 20). The Court also cited Siwiec v Hlewka, 2005 ABQB 684 (CanLII) for the point that “The Legislature intended EPOs to be an extraordinary remedy reserved for situations of imminent familial domestic violence” (at para 28), noting that persons in dating relationships had access to common law restraining orders in appropriate circumstances (at para 26).

In conclusion, the Court of Appeal stated that the PAFVA:

was designed and intended to address one subset of abusive relationships – violence among prescribed family members – whereas common law restraining orders are available for broader forms of abusive relationships. The Act is a specially designed instrument that seriously abridges the liberty of persons, and its application should be restricted to its intended familial context (at para 30).

The appeal was therefore allowed and the EPO was revoked. The Court emphasized that in doing so, “we make no findings as to whether the facts of this case merited some form of protection order”, and “expressly do not find that Ms. Lenz acted in a frivolous or vexatious manner” contrary to section 13 of the PAFVA (at para 39). It declined to make an order for costs, noting its agreement with the decision of Justice C.M. Jones in Denis v Palmer, 2016 ABQB 54 (CanLII), that “it is not reasonable for this Court to use its discretion to order costs to effect such a penalty where the Legislature has not, to date, seen fit to do so.” (at para 42). Furthermore:

The objectives of the Act are set out in its preamble and are to prevent family violence and protect vulnerable victims by providing an immediate period of safety in their own home. These objectives are pressing in our society and outweigh other considerations relating to costs, including the appellant’s success on appeal.

We do not consider it appropriate to create any impediment which would cause vulnerable victims to avoid seeking an EPO when they are at immediate risk of family violence, merely for fear that they may later have to pay adverse costs (at paras 45-46).

Commentary

To begin with the Court’s decision on costs, it is a welcome affirmation of Justice Jones’ ruling in Denis v Palmer, which I blogged on here. If the Legislature does see fit to review this matter, I trust that it will keep in mind the objectives of the PAFVA and the importance of not creating barriers to its use.

As for the Court’s interpretation of “family member”, this is not an unreasonable reading of the PAFVA. In fact, in a report I wrote with colleagues reviewing the PAFVA in 2005, we recommended that the Act be amended to explicitly include “intimate and family relationships where the parties have not resided together” (see Leslie Tutty, Jennifer Koshan, Deborah Jesso, & Kendra Nixon, Alberta’s Protection Against Family Violence Act: A summative evaluation (Calgary: RESOLVE Alberta, 2005) at 31). This recommendation was based on a comparison of the PAFVA with similar legislation in other jurisdictions, feedback we received from stakeholder interviews, and statistics on the high rate of violence in these relationships. Although a number of our other recommendations were adopted and resulted in amendments to the PAFVA (e.g. on the definition of “family violence”), the definition of “family member” was not broadened as we recommended. More recently, a similar recommendation to extend the PAFVA to include dating relationships was made in Lana Wells et al, How Public Policy and Legislation Can Support the Prevention of Domestic Violence in Alberta (Calgary: Shift: The Project to End Domestic Violence, 2012) at 39 (disclosure: I was part of the peer review panel for this report).

The PAFVA’s narrow focus on “family members” differs from civil protection legislation in some other provinces and territories. Manitoba’s Domestic Violence and Stalking Act, CCSM c D93, defines “domestic violence” to include acts or omissions committed by persons in dating relationships, whether or not they have ever lived together (section 2(1))(d)). Nunavut’s Family Abuse Intervention Act, SNu 2006, c 18, covers violence in “intimate relationships”, which are defined to include relationships “between two persons, whether or not they have ever lived together, who are or were dating each other, and whose lives are or were enmeshed to the extent that the actions of one affect or affected the actions or life of the other” (section 2(3)). In other provinces, civil protection legislation continues to be restricted to intimate relationships where the parties have resided together (see e.g. British Columbia’s Family Law Act, SBC 2011, c 25, Part 9 — Protection from Family Violence, which applies to “family members” (section 1); Saskatchewan’s Victims of Domestic Violence Act, SS 1994, c V-6.02 and Nova Scotia’s Domestic Violence Intervention Act, SNS 2001, c 29, which apply to “cohabitants”).

The Court of Appeal noted that persons who are in intimate relationships but do not reside together can apply for common law restraining orders where they are not covered by the protection order legislation in their jurisdiction; they also may apply for peace bonds under the Criminal Code, RSC 1985, c C-46, section 810. These remedies are often much more challenging to obtain, however. It was the barriers to seeking other remedies that led to Alberta and some other provinces and territories to enact civil protection order legislation allowing for ex parte EPO applications, which can be brought by persons other than the victims in some circumstances (see e.g. Alberta Law Reform Institute, Domestic Abuse: Toward An Effective Legal Response (ALRI, 1995)). Although the Court of Appeal opined that this kind of legislation “seriously abridges the liberty of persons” subject to civil protection orders, it should also be noted that these orders must be reviewed by a higher court within a certain period of time, and can be revoked where inappropriately made in the first instance (see e.g. PAFVA section 3). This type of scheme was upheld as a reasonable limit on respondents’ liberty under the Charter in Baril v Obelnicki, 2007 MBCA 40 (CanLII)).

Alberta’s ruling New Democrats have shown a willingness to extend protections for victims of intimate violence, for example in the recent Residential Tenancies (Safer Spaces for Victims of Domestic Violence) Amendment Act, 2015 (and see ABlawg commentary on that Bill here). In light of the Court of Appeal’s decision in Lenz v Sculptoreanu, it is time for the government to re-consider whether it should amend the PAFVA to include intimate relationships where the parties have not resided together.

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Expiration of Confidentiality also gives Boards the Liberty to Copy and Distribute

Wed, 04/27/2016 - 1:50pm

By: Nigel Bankes

PDF Version: Expiration of Confidentiality also gives Boards the Liberty to Copy and Distribute

Case Commented On: Geophysical Services Incorporated v Encana Corporation, 2016 ABQB 230

This decision involves rights to seismic data. Under Canadian law (and here specifically the rules established for federal lands in the north and the east coast offshore) seismic data filed with government is treated as privileged or confidential for a period of years. The principal issue in this case was the question of what rules apply once that protection comes to an end. Is it open season or do the creators of the seismic data retain some rights and in particular their copyright entitlements? In her decision Justice Kristine Eidsvik has decided that it is open season.

The decision is part of complex case-managed litigation commenced by Geophysical Services Inc (GSI) in 25 actions against the National Energy Board (NEB), the Canada-Newfoundland Offshore Petroleum Board (CNOPB) (the Boards) and numerous oil and gas companies, seismic companies and companies providing copying services. GSI claims that copyright subsists in seismic data and that its copyright protection survives the confidentiality period. Furthermore, it claims that access to the seismic information after the loss of confidentiality is governed by the Access to Information Act, RSC 1985, c A-1 (AIA) and that there is no open season on access or copying.

Chief Justice Wittman as the case management judge set down two preliminary issues for the parties to address: (1) does copyright subsist in seismic data, and (2) what is the effect of the regulatory regime (i.e. the term limited protection of confidentiality referred to above) on any rights that GSI might claim? This judgement addresses those two issues. GSI also maintains other claims based on contract, unjust enrichment and breach of confidence but those issues are not the subject of this judgement.

Justice Eidsvik concluded that seismic data is protected by copyright. This seems correct to me and I offer no further comment. On the second issue, Justice Eidsvik held that once the confidentiality period is over, not only does GSI as the owner of the data lose the quality of confidentiality but it also loses all of the rights that it has under the Copyright Act, RSC 1985, c C- 42 as owner of the copyright in that data. Thus, the Boards are free to allow others not only to have access to this data but to make copies of it. Furthermore, access is not governed by the AIA. Justice Eidsvik reaches these conclusions in two steps. The first step is to hold that the statutory regime allowed disclosure at the end of the confidentiality period and that there must also be a liberty to copy and a liberty to facilitate copying by others. The second step is to conclude that any resulting conflict between the protection offered by the Copyright Act and the implied liberty to copy must be resolved in favour of the more specific regime which in this case was the regulatory regime rather than the Copyright Act. Neither could the plaintiffs secure additional protection from the AIA regime. That regime could have no application during the legislated period of privilege because the AIA regime is fundamentally concerned with enhancing access to information (at para 275). While the AIA regime might have some application during any longer discretionary extension of the confidentiality period (again to enhance access), it could have no application to protect the release of information after the expiration of this longer discretionary period (see paras 275 – 281). I think that Justice Eidsvik is correct on the AIA regime point and thus will have no further comment on that here but I have serious misgivings about her conclusions in relation to two issues: (1) her conclusion that the liberty to disclose includes the liberty to copy and to facilitate copying by others, and (2) her decision to resolve the resulting conflict between the regulatory regime and the Copyright Act by treating the Copyright Act as inapplicable to the creators of seismic data. This post will focus on those two issues. I will begin by describing the applicable regulatory regime and then address these two issues.

The Regulatory Regime

As noted above, this case deals with the regulatory regime for protecting seismic data in relation to federal lands in the north and federal lands on the east coast subject to the so-called Accord regime. The two regimes are essentially the same and to keep this simple I, like Justice Eidsvik, will focus on the northern regime. The current northern regime is based on two statutes – the Canada Petroleum Resources Act, RSC 1985, c 36 (2nd supp) (CPRA) and the Canada Oil and Gas Operations Act, RSC 1985, c O-7 (COGOA). Justice Eidsvik’s judgement also deals with the historical evolution of these two statutes but not much seems to turn on that except for several references to a provision in the CPRA (s.111) which was designed to protect the Crown from any claims to compensation when old permit rights were rolled over into rights under the new regime, whether the Liberal’s National Energy Program regime represented by the infamous or (famous depending on one’s perspective) Bill C-48, the Canada Oil and Gas Act (COGA) with its Crown Share provisions, or the Conservative version – the current CPRA (which repealed and replaced COGA). More on that provision and its relevance below.

Of the two statutes (i.e. the CPRA and COGOA) it is the CPRA that it is crucial here. The principal significance of COGOA, the regulatory statute (or as Justice Eidsvik prefers, the “operations statute”) is that COGOA requires Board approval for seismic programs (see Hamlet of Clyde River et al. v. Petroleum Geo-Services Inc. (PGS) et al, 2015 FCA 179) and the regulations under COGOA (the Canada Oil and Gas Geophysical Regulations, SOR/96-117) require operators to submit seismic data to the Board as part of their reporting requirements. The confidentiality and disclosure provisions however are in the CPRA. Section 101 (headed “Disclosure of Information”) provides, so far as is relevant here, as follows:

Privileged information or documentation

(2) Subject to this section, information or documentation is privileged if it is provided for the purposes of this Act or the Canada Oil and Gas Operations Act, … or any regulation made under either Act … whether or not the information or documentation is required to be provided.

Information that may be disclosed

(7) Subsection (2) does not apply in respect of the following classes of information or documentation obtained as a result of carrying on a work or activity that is authorized under the Canada Oil and Gas Operations Act, namely, information or documentation in respect of …

(d) geological work or geophysical work performed on or in relation to any frontier lands,…

(ii) in any other case, after the expiration of five years following the date of completion of the work;…

While this provision creates a statutory privilege or confidentiality period of five years, it appears that as a matter of practice (at paras 192 – 195) the NEB (and its predecessor regulators under the CPRA) have consistently applied an administrative policy of not releasing non-exclusive seismic data (the speculative or “spec” seismic at issue here) for an additional ten years (i.e. 15 years in total). The Newfoundland Board has applied a policy (at paras 206 – 208) of an additional five years (i.e. 10 years in total). After this, other persons have been able to view, print (copy) or borrow the seismic information.

What are the implications of the expiration of the period of privilege?

One would have thought that a party that wanted to copy or authorize the copying of seismic material deposited with the Board at the end of the privilege period (whether as established by statute or as extended by policy) would have to show two things. First, that the necessary implication of the loss of privilege is that the information may be disclosed, and second, that disclosure (or more precisely the loss of privilege) must also allow copying. The first proposition does seem to follow from the statutory juxtaposition of privilege and disclosure (in the heading of, and marginal notes for, the section) and Justice Eidsvik so held (at paras 214 – 215). The second hurdle is much more challenging but Justice Eidsvik has little difficulty in finding that it too can be met. Her reasons are as follows (at paras 252 – 253):

I agree that s 101(7) does not explicitly say that the information deposited with Board may be “copied”. I am also cognisant that s 100 of the CPRA grants the Governor-in-Council authority to make Regulations, including to prescribe fees for making copies or certified copies.

Nonetheless, I agree with the Defendants that s 101 read in its entirety does not make sense unless it is interpreted to mean that permission to disclose without consent after the expiry of the 5 year period, or under the conditions found in s 101(6) must include the ability to copy the information. In effect, permission to access and copy the information is part of the right to disclose.

I think that this is an unnecessarily broad interpretation of the section which confounds the different qualities of the rights (and liberties) associated with the data. The creator of the data has copyright in that data. Copyright is a form of property. It is true that as a creature of statute this particular form of property is hedged around with all sorts of limitations (e.g. duration and fair dealing) but it is still a form of property. Under s.3 of the Copyright Act, the rights of the creator of data in which copyright subsists are “… the sole right to produce or reproduce the work or any substantial part thereof in any material form whatever … or, if the work is unpublished, to publish the work or any substantial part thereof … and to authorize any such acts.”

Copyright does not protect confidentiality, but the creator of the data can, as a matter of common law, maintain the confidentiality of that data provided that it takes the necessary steps to do so (e.g. by not sharing it broadly and by imposing non-disclosure obligations upon those with whom the data is shared). This data when deposited with the Board is both confidential and protected by copyright. All that subsections 101(2) and (7) speak to is the quality of confidentiality. All that subsection (7) speaks to is the compulsory loss of confidentiality (subject to any contractual obligations pertaining thereto). In Hohfeldian terms there is now a liberty of access where there was formerly a duty not to provide access. Nobody commits a wrong after the expiration of the statutory period by allowing access. But there is no change in the duty not to copy or to the duty not to facilitate illegal copying by others after the expiration of the statutory period. It is a huge leap to suggest that the legislature has also dealt with the property issues en passant. Justice Eidsvik seems to deal with this argument (the vested rights argument) as part of her more general discussion (at paras 234 – 237) of the implications of loss of privilege (i.e. disclosure) and does not do so specifically in the context of concluding that disclosure allows copying. Furthermore, in her discussion of the vested rights argument she refers (at paras 236 – 237 and see also at para 243) to the no-compensation rule of s.111(2) of the CPRA and the predecessor provision in COGOA. Section 111 provides in full as follows:

Replacement of rights

111 (1) Subject to section 110 and subsections 112(2) and 114(4) and (5), the interests provided for under this Act replace all petroleum rights or prospects thereof acquired or vested in relation to frontier lands prior to the coming into force of this section.

No compensation

(2) No party shall have any right to claim or receive any compensation, damages, indemnity or other form of relief from Her Majesty in right of Canada or from any servant or agent thereof for any acquired, vested or future right or entitlement or any prospect thereof that is replaced or otherwise affected by this Act, or for any duty or liability imposed on that party by this Act.

Once one looks at this provision in its full context (rather than just subsection (2) in isolation), including its heading, it is, with respect, crystal clear that it is not concerned with the risk to government that might flow as a result of any interference with the rights of creators of seismic data through the operation of s.101(7). Rather, s. 111 was intended to deal with the risk that the government felt it faced insofar as it was requiring old permittees to roll over their rights into new forms of rights – exploration agreements (COGA) or licences (CPRA) under the new legislation. The title to s.111 makes this clear as does subsection 1.

Regime Conflict

Having decided that the liberty to disclose included the liberty to copy and the liberty to facilitate copying by others, Justice Eidsvik then had to deal with the conflict between the implied liberty to copy and the express duty not to copy a creator’s work without consent under the terms of the Copyright Act. Justice Eidsvik begins her discussion of this issue by referring to Justice Rothstein’s majority judgement in Reference re Broadcasting Regulatory Policy CRTC 2010-167 and Broadcasting Order CRTC 2010-168, [2012] 3 SCR 489, 2012 SCC 68. Justice Eidsvik then suggests that each of these two regimes is concerned to balance the same types of interests (at para 298). Parliament hit on one balance in the Copyright Act and another in the CPRA – the difference is (at para 296) “a few decades of protection”. It would lead to absurdity, concludes Justice Eidsvik, if the longer periods of protection under the Copyright Act could frustrate Parliament’s decision to establish a more limited regime under the CPRA. Accordingly, the conflict should be resolved by preferring the more specific regime (at para 304):

Accordingly with respect to the disclosure provisions, the specific legislated authority in the Regulatory Regime that allows disclosure and copying, as described above prevails over the general rights afforded to GSI in the Copyright Act. The CPRA creates a separate oil and gas regulatory regime wherein the creation and disclosure of exploration data on Canadian territory is strictly regulated and, in my view, not subject to the provisions of the Copyright Act to the extent that they conflict.

I think, with respect, that there are several weaknesses in this chain of reasoning. The test for conflict (and Justice Eidsvik acknowledges this) is narrowly defined and not readily assumed. Justice Rothstein in Re Broadcasting, drawing on earlier authority, puts it this way (at para 41): “For the purposes of statutory interpretation, conflict is defined narrowly … overlapping provisions will be given effect according to their terms, unless they ‘cannot stand together’ (Toronto Railway Co. v. Paget (1909), 42 S.C.R. 488, at p. 499 per Anglin J.” The presumption then is that both laws will be given effect to. Justice Rothstein puts the presumption as follows (at paras 37 and 61):

Parliament is presumed to intend “harmony, coherence, and consistency between statutes dealing with the same subject matter” (R. v. Ulybel Enterprises Ltd., 2001 SCC 56 (CanLII), [2001] 2 S.C.R. 867, at para. 52; Sullivan, at pp. 325-26)…

… the presumption of coherence between related Acts of Parliament requires avoiding an interpretation of a provision that would introduce conflict into the statutory scheme.

It is not enough that the statutes deal with the same subject matter, it is only if there is an “unavoidable conflict” which arises “when two pieces of legislation are directly contradictory or where their concurrent application would lead to unreasonable or absurd results.” (Justice Rothstein (and it is his emphasis) relying on Lévis (City) v. Fraternité des policiers de Lévis Inc., 2007 SCC 14 (CanLII), [2007] 1 SCR 59 per Bastarache J., writing for the majority and in turn relying on (P.-A. Côté, The Interpretation of Legislation in Canada (3rd ed. 2000)).

If we apply these ideas to the supposed conflict between the CPRA regime and the Copyright Act it is far from obvious that there is an irremediable conflict. First, it is not clear that the statutes actually deal with the same subject matter. The Copyright Act is a property statute. The CPRA is an oil and gas statute and its s.101 is concerned with confidentiality and with disclosure. The Copyright Act is not a disclosure statute and has nothing whatsoever to say about confidentiality. Second, even were we to admit that the statutes are concerned with the same subject matter, there is no direct contradiction. Justice Eidsvik creates the contradiction by reading the liberty to copy into the CPRA’s disclosure regime whereas in my view she should have preferred a reading that avoided conflict and allowed each regime to cover its specialized interest. Third, “absurdity” is subjective. There is nothing inherently absurd in saying that we should have one rule for disclosure (confidentiality) and one rule for copying (property). This doesn’t make copying impossible; it simply means that until the expiration of the term of copyright the erstwhile copier will have to pay the creator for the privilege – but at least the copier will know, by virtue of disclosure, what it wants to copy!

In addition to ruling that the Copyright Act is inapplicable to the extent of any conflict (at para 304), Justice Eidsvik also endorses in the alternative (and perhaps logically this alternative argument should come first since it is another way of avoiding conflict) a way in which the two regimes may be reconciled and that is through the mechanism of a compulsory licensing scheme under the Copyright Act. There is perhaps even a suggestion of an implied licence (see at paras 311 – 317) which Justice Eidsvik disposes of by saying that GSI clearly never consented to release and certainly never consented to the copying of its data. As for a compulsory licensing scheme, Justice Eidsvik offers very little in the way of reasoning to support her conclusion other than to draw an analogy (at para 310) to the compulsory licensing regime for the music and broadcast business and then simply to assert, at the end of her judgement (at para 318), that “… in the alternative [to inapplicability based on a theory of conflict] the Regulatory Regime created a compulsory licensing scheme through which the Boards have the authority to copy, and as a result they are not infringing the Copyright Act when they do so.” The difficulties with this assertion and the comparisons with licensing regime for broadcasting music are two-fold. First, the scheme in the Copyright Act for the music and broadcast business (ss. 53 et seq) is a real licensing scheme. It is an exception within the Act itself. Second, the CPRA simply does not contain a compulsory licensing scheme. It does not expressly address data copying and it certainly does not create an express compulsory licensing scheme that makes lawful what would otherwise be unlawful (the definition of a license). The claim that the CPRA establishes a compulsory licensing scheme is nothing more than an unsupported assertion.

Conclusion

In conclusion, creators of seismic data and especially the creators of “spec” seismic data will typically wish to preserve the confidentiality of that data in order to recover their costs from persons who wish to acquire this data. They may do so to some extent by way of contract but they will be required to file that data with government regulators. At some point in time, the relevant statutes prescribe that the data must be made available to the public. At that point in time the creator loses its right to confidentiality but that is all that the creator loses. The creator has other entitlements including rights under the Copyright Act. These rights are property rights and as such are conceptually distinct from the right to confidentiality. It is not necessary to erase these property rights in order give sense to the CPRA’s disclosure regime. Or, if government takes the view that it is, then by all means let it do so explicitly rather than by sleight of hand. That is to say (and taking some liberties with para 297 of Justice Eidsvik’s reasons and Justice Pitney’s judgment in International News Service v Associated Press, 248 US 211 (1918)), if those who wish to get seismic data for free consider that it is a misguided policy to extend the protections of the Copyright Act to the creators of seismic data for the full duration of the copyright term, then they should make that political case – “it is not for this Court to change the intent of Parliament, unfair as it may be to” those who would wish to reap where they have not sown.

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Comparing the Views of Alberta Judges and Lawyers with Those in the Rest of Canada on Selected Family Law Issues

Tue, 04/26/2016 - 10:00am

By: Lorne Bertrand

PDF Version: Comparing the Views of Alberta Judges and Lawyers with Those in the Rest of Canada on Selected Family Law Issues

Report Commented On: Canadian Research Institute for Law and the Family, Comparing the Views of Judges and Lawyers Practicing in Alberta and in the Rest of Canada on Selected Issues in Family Law: Parenting, Self-represented Litigants and Mediation (2016)

The Canadian Research Institute for Law and the Family recently released a report that compares the views of Alberta judges and family law lawyers with legal professionals in the rest of Canada on parenting after separation, self-represented litigants, access to justice, and mediation. The report, written by John-Paul Boyd and myself, presents the findings of a survey conducted at the 2014 National Family Law Program in Whistler, B.C., and provides recommendations in several areas including:

  • the language used in the Divorce Act, RSC 1985, c 3 (2nd Supp), with respect to the care of children;
  • the provision of unbundled legal services to promote access to justice;
  • the use of mandatory mediation where at least one party is self-represented;
  • the provision of limited legal services in family law matters by paralegals; and
  • the use of standardized questionnaires by lawyers screening for family violence.

The report notes some striking differences between the views and experiences of Alberta practitioners and those from elsewhere in Canada.

Shared Custody and Shared Parenting

With respect to the resolution of parenting disputes after separation, fewer of the family law cases of respondents from Alberta resulted in a form of shared custody, defined as the equal or near-equal distribution of children’s time between separated parents, compared to the cases of respondents from the rest of Canada. Although almost the same proportion of Alberta respondents and respondents from the rest of Canada said that the number of their cases resulting in shared custody has increased substantially or increased somewhat in the last five years, respondents from Alberta were more likely than respondents from the rest of Canada to say that the number had increased somewhat or stayed the same, and the proportion of respondents from the rest of Canada who said that the number increased substantially was about a third greater than the proportion of Alberta respondents. These results may be a function of Alberta’s generally more conservative political and social values but are more likely a consequence of the geographic separation of parents owing to lengthy periods of site-based work in the oil patch or the interprovincial relocation of separated parents to take work in the province, making shared custody arrangements difficult if not impossible to implement.

However, Alberta respondents also reported a substantially higher rate of cases resulting in shared parenting, defined as the equal or near-equal distribution of decision-making between separated parents, than respondents from the rest of Canada. The difference in the views of Albertans may result from the child-centred nature of the province’s Family Law Act, SA 2003, c F-4.5, and its presumption that parents are the guardians of their children, during their relationship and after its dissolution. This presumption of guardianship and the general reluctance of the courts to remove guardianship or a right of access from a parent may explain the lower rate of cases resulting in limited contact or no contact between the child and a parent reported by Alberta respondents compared to those from the rest of Canada.

Amending the Divorce Act

Although a significant majority of all respondents were in favour of amending the Divorce Act to change the language used to describe the post-separation care of children from “custody” and “access” to alternative terminology such as “parental responsibilities” and “parenting time,” a slightly larger proportion of respondents from Alberta supported the proposed amendment than respondents from the rest of Canada. The higher rate of support may stem from the existing use of such alternative terminology by Alberta’s Family Law Act and either an established preference for such language or a preference toward eliminating the dissonance between federal and provincial terminology.

A significant majority of all respondents were opposed to amending the Divorce Act to create a presumption of shared custody, and the proportion of Alberta respondents opposed to such an amendment was only slightly lower than respondents from the rest of Canada. The views of Alberta respondents regarding a presumption of shared custody may reflect a positive view of the presumption of parental guardianship in Alberta’s Family Law Act or a reaction to the conflict suggested by Albertans’ comparatively higher rate of court involvement in family law matters and their higher divorce rate.

Interestingly, the comments provided by respondents from Alberta both in support of and opposed to such an amendment tended to concern conflict and power imbalances between parents or tended to be neither child- nor parent-centred, while the comments of respondents from the rest of Canada tended to concern the best interests of children.

Self-Represented Litigants and Dispute Resolution

Findings from the survey indicated that over three-quarters of all respondents thought that there are more self-represented litigants now than there were three years ago, with lawyers and judges from Alberta being even more likely to report this than legal professionals from the rest of Canada. Further, while a substantial majority of all respondents said that added challenges arise in cases involving a self-represented litigant, Albertans were more likely to say that these challenges always or usually arise than respondents from the rest of Canada. These challenges are frequently related to litigants’ lack of familiarity with the applicable legislation, the rules of court and court processes and the law of evidence. Alberta judges and lawyers also said that settlement is much less likely in cases involving at least one self-represented litigant than respondents from the rest of Canada.

More than one-half of all respondents thought that self-represented litigants obtain outcomes that are worse than litigants with legal representation with respect to child support, spousal support and the division of property. When asked what might improve self-represented litigants’ use of the court system and promote settlement of their cases, the most common measures supported by respondents was a requirement that self-represented litigants attend an information session on the law and court processes and providing these litigants with plain language guides to court and trial processes. Respondents from Alberta were more than twice as likely to support mandatory mediation when at least one party is self-represented than were respondents from the rest of Canada.

Lawyers from Alberta were slightly more likely to report that they provide services on an unbundled basis than were lawyers from the rest of Canada; they were also more likely to say that they were aware of other lawyers providing these services. The most common unbundled service that lawyers reported providing was legal advice. The availability of legal services on an unbundled basis could be a more affordable alternative for self-represented litigants than full representation, and could serve to promote case settlement by ensuring that these litigants have the benefit of some legal advice.

Another mechanism that might serve to provide self-represented litigants with some measure of legal assistance is the use of licensed paralegals to provide limited legal services in certain family law disputes. A slightly higher proportion of respondents from Alberta supported the provision of legal services by paralegals than did respondents from the rest of Canada.

Lawyers from Alberta were considerably less likely to say that they always screen for family violence when referring a case to mediation than were lawyers from the rest of Canada, and a higher proportion of lawyers in Alberta who do screen for family violence reported that they do not use a standardized screening device. The proportion of cases referred to mediation that do not result in a settlement was higher in the rest of Canada than in Alberta.

Conclusion

The views of Alberta legal professionals on important current issues in family law favour change and improving access to justice to a greater degree than those of their counterparts in the rest of Canada and are surprisingly at odds with Alberta’s generally conservative social values. Respondents from Alberta strongly support reforming the language of the federal Divorce Act on the care of children after separation, and are more likely to support the provision of limited scope legal services by lawyers, the use of paralegals to provide limited legal services, and the use of mandatory mediation when one or more parties to a family law dispute are not represented by lawyers. Finally, not only are lawyers in Alberta less likely to screen for family violence than lawyers in the rest of Canada, they are also less likely to use a standardized tool when they do screen for violence.

Based on these and other findings, we recommend that:

  • the federal government consider amending the language used by the Divorce Act to describe the post-separation care of children;
  • awareness of unbundled legal services be improved among the bar and general public;
  • a pilot program be implemented to evaluate the provision of legal services in family matters by paralegals;
  • the provincial government consider implementing legislation allowing a party to trigger a course of mandatory mediation when one or more parties to a family law dispute are self-represented; and,

educational efforts be made to raise the awareness among members of the Alberta bar of benefits of screening for family violence and the availability of standardized instruments for that purpose.

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Extractive Sector Transparency Measures Act: Reporting Without Context Will Subvert Reconciliation Efforts

Fri, 04/22/2016 - 10:00am

By: Emily Stanhope

PDF Version: Extractive Sector Transparency Measures Act: Reporting Without Context Will Subvert Reconciliation Efforts

Legislation Commented On: Extractive Sector Transparency Measures Act, SC 2014, c 39, s 376

Canada’s new Extractive Sector Transparency Measures Act (ESTMA), which came into force on June 1, 2015, requires companies engaged in the commercial development of oil, gas or minerals to publically report certain payments made to governments in Canada and abroad. Notably, in February of this year, Natural Resources Canada (NRCan) released an information sheet responding to long-standing concerns surrounding ESTMA and payments to Indigenous governments.

There has been significant dialogue around whether Indigenous governments should be included as “payees” under ESTMA (see Open Canada here). Regardless of one’s opinion on that broader issue, this post argues that reporting the quantum of funds paid to Canadian Aboriginal governments through confidential impact and benefit agreements (IBA), without providing essential context, is folly. In other words, the contents of IBAs should be publicly disclosed in full or remain entirely confidential.

The History of Indigenous “Payees” Under ESTMA

Section 2 of ESTMA contemplates Indigenous governments as “payees” and, therefore, resource companies will be obligated to disclose reportable payments made to these payees. However, Section 29 of the Act includes a two-year deferral period during which time payments made to Canadian Aboriginal governments need not be reported (although payments made to Indigenous governments abroad must now be reported). Already, one year of this hiatus has elapsed.

In 2014, the Standing Senate Committee on Energy, the Environment and Natural Resources noted that: “NRCan and Justice Canada officials said this deferral period arose as a result of concerns expressed by Aboriginal governments, industry and some provinces about how the Act will affect impact benefit agreements. In many cases, these agreements are confidential and therefore stakeholders need to work out how information will be reported.”

Now, NRCan’s information sheet responds directly to this issue:

Are extractive companies required to disclose impact and benefit agreements?

No. Extractive companies are not required to disclose impact and benefit agreements (IBA). The Act requires extractive companies to report certain types of payments of $100,000 or more made in relation to the commercial development of oil, gas or minerals. Some of these reportable payments might be included in IBAs (emphasis added).

That is to say there is no obligation to disclose IBAs in their entirety but qualifying payments made pursuant to an IBA must still be reported.

Why IBAs Are Negotiated

Mandating the public reporting of only select portions of IBAs is ill-advised because of its unintended negative consequences.

To understand the full implications of this proposed practice, it is essential to consider the nature of payments made by resource extraction companies to Aboriginal governments through IBAs. Payments made to Aboriginal governments under IBAs serve one of two purposes: to provide compensation and/or benefits. Compensation is owed to an Aboriginal government by a project proponent for any interference the project may have with their Aboriginal or treaty rights. Common examples of interferences include damages to the environment or loss of quiet enjoyment of traditional lands, impact on wildlife, and socio?economic impacts on members and the community. Alternatively, the provision of benefits refers to a sharing of wealth of the resources that are being extracted from traditional lands.

Simply put, parties negotiate IBAs to ensure compensation for interference with Aboriginal and treaty rights and a fair share of the benefits flowing from resources extracted from their lands.

Why Portions of Confidential IBAs Cannot be Severed and Made Public

As such, IBA negotiations are inherently a “give-and-take” process in which a party may compromise on an important issue in order to gain a favourable overall outcome. Therefore, severing and reporting only limited elements of IBAs fails to provide the necessary context for this “give-and-take” process.

If only select portions of IBAs are reportable, the broader public receives an incomplete, and therefore, flawed understanding of the issues negotiated by the parties. For example, reporting merely the total quantum paid to an Aboriginal government on a particular project without casting this transfer in the context of the infringement of an Aboriginal or treaty right is misleading.

In fact, Aboriginal communities highlighted this exact concern when they were invited to comment on the proposed legislation in 2015: “Concerns were also expressed that the information disclosed could be misinterpreted, taken out of context or somehow used against Aboriginal communities.”

Conclusion and Final Considerations

If ESTMA serves to inform non-Aboriginal Canadians of moneys paid by resource extraction companies to Aboriginal governments and does so without context, then this could result in the perpetuation of inaccurate and prejudicial stereotypes of Aboriginal communities. In turn, this may result in continued disengagement from indigenous perspectives and hamper Canada’s broader objective of reconciliation.

Finally, including only certain elements of IBAs as reportable payments may, perversely, provide an incentive to creatively administer funds under IBAs to subvert this reporting. This would result in the formation of IBAs that do not optimally fulfill their stated purposes: to compensate and provide benefits.

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Occupier’s Liability Arises at the Garage Party

Thu, 04/21/2016 - 10:00am

By: Shaun Fluker

PDF Version: Occupier’s Liability Arises at the Garage Party

Case Commented On: Motta v Clark, 2016 ABQB 211

This recent judgment written by Mr. Justice R.J. Hall caught my attention because the facts are a scenario with which I am familiar and I suspect other readers are as well: The impromptu garage party hosted by a neighbour. While some of us actually park vehicles in our garage, others turn their garage into a very comfortable social venue fully equipped with a state-of-the-art sound system, stocked beer and wine fridge, humidor, gas heating, and possibly even lounge chairs. In these households, the garage takes on the persona of a “man-cave”, where neighbours and friends get together for small talk in the surroundings of golf clubs, hockey nets, skis, bikes, tires, wrenches, air compressors, camping gear, dogs and a table saw. On the odd festive occasion, the garage becomes a sort of time vortex where you step in during the early evening and the next thing you remember is walking out the next morning. Motta v Clark tells the story of such a garage party gone wrong, and provides a word of caution for those who host such parties. It also reads like a tragedy of sorts, with the downfall of a friendship being played out in cross-examination before Justice Hall at the Court of Queen’s Bench.

The story begins innocuously enough, and the facts are set out in the initial paragraphs of Justice Hall’s decision (at paras 1 to 10):

The plaintiff Mr. Motta and the male defendant, Mr. Clark were good friends. Mr. Clark had invited Mr. Motta to come to the Clarks’ house on the upcoming Saturday to celebrate Mr. Clark’s birthday. However, on Friday night Mr. Clark texted Mr. Motta to say the party would not be happening on Saturday but invited Mr. Motta to come to the Clarks’ garage and socialize that night instead.

Mr. Clark had five beers in his garage before Mr. Motta got there. Mr. Motta had 6 beers at his home before he walked to a strip mall nearby, picked up a case of beer and walked over to the Clarks’ garage at the Clarks’ home. This amount of beer drinking was not unusual to either of the men. Neither says the beer affected him, and neither says the other was intoxicated. Given that evidence I attribute no causal relation between the beer drinking and the events that later occurred.

Mr. Motta had visited Mr. Clark in his garage on many occasions to drink beer and socialize. When any of the participants needed to urinate, they did so in the backyard. Hence there was usually no need for anyone to enter the house.

However, on this occasion after Mr. Motta had arrived and had a beer, he felt in need of a bowel movement. He asked Mr. Clark if he could use a bathroom in the house. Mr. Clark, at the time was on the phone listening to birthday congratulations from a friend. He interrupted his call to tell Mr. Motta he was welcome to enter the house and use a bathroom, and he suggested using the upstairs bathroom.

About one week before these events, Mr. Clark had noted that the light outside the back door to the house was acting up. There were two bulbs attached to a motion detector device, but the device was not working correctly and the light was staying on in the day time. Mr. Clark didn’t like the wasted electricity, and so he had commenced the practice of turning off that outside light fixture by use of the switch inside the back door. Indeed, when Mr. Motta approached the back door the switch to the outside light was off, and so the light did not come on to illuminate either the outside, or the inside landing. There were no lights on inside the house.

Mr. Motta opened the screen door, then opened the back door which swung inwards and to his right. He could not see inside the house or on the landing.

He took a step into the house, then reached his right hand across his body to feel for the light switch on the wall to the left of the doorway. He swiped his hand up and down as he reached in but could not feel the light switch. He felt a box on the wall, which proved on later inspection, to be a box for keys that was above the light switch for which he was searching.

Mr. Motta says that he then stepped further into the house and to his left with his right foot.

Where he went to put his foot down there was no landing; the stairwell to the basement was immediately left of the entrance through which he had entered. Mr. Motta fell down the stairs in the dark and injured his wrist and arms in the fall.

The set up of the inside landing was such that, as one entered through the doorway from the outside, there was a strip to the left of the doorway approximately 4 inches wide, then the landing dropped off to the first stair, the stairwell being a left turn from entering the landing. Mr. Motta could not see this in the dark.

The parties agreed on the extent of damages suffered by Mr. Motta, but came before the Court for a determination of liability.

Liability in this case was governed by the Occupiers’ Liability Act, RSA 2000, c O-4. In particular, section 5 of the Act establishes the legal duty of an occupier of premises to ensure the premises are reasonably safe for visitors. The Act defines ‘occupier’ in section 1 as a person who has physical possession of the premises or control over the premises, and there doesn’t appear to be any doubt that this includes the owner(s). The Alberta Court of Appeal set out and interpreted the test for occupiers’ liability in Wood v Ward, 2009 ABCA 325 (at paras 6-7):

The Duty of an Occupier

The Act provides as follows:

5. An occupier of premises owes a duty to every visitor on the occupier’s premises to take such care as in all the circumstances of the case is reasonable to see that the visitor will be reasonably safe in using the premises for the purposes for which the visitor is invited or permitted by the occupier to be there or is permitted by law to be there.

The effect of the Act is to modify the duty of care owed by the occupier to a visitor at common law. At common law the occupier only had a duty to protect the visitor from unusual dangers of which he was aware or ought to have been aware, and he could discharge his duty by warning of the unusual danger. As the Court stated in Preston v. Canadian Legion Kingsway Branch (1981), 1981 ABCA 105 (CanLII), 123 D.L.R. (3d) 645, 29 A.R. 532 (C.A.) at p. 536:

This change is most marked because it does away with the old common law position that an occupier was only liable for unusual dangers of which he was aware or ought to have been aware. Under the old law the occupier could escape liability by giving notice. Now, the occupier has to make the premises reasonably safe. That does not absolve the visitor of his duty to take reasonable care but does place an affirmative duty on each and every occupier to make the premises reasonably safe.

If a risk of injury to a visitor is reasonably foreseeable, the occupier will owe a duty of care to prevent visitors from being injured. Under s. 5 the occupier must take reasonable care, which is the ordinary common law standard in tort, meaning that the occupier must keep the premises reasonably safe.

It does not follow that the occupier is automatically liable for any injury suffered as a result of a foreseeable risk. Foreseeability of the risk creates a duty to the visitor, but it is still necessary to show negligence on the part of the occupier to impose liability. The Act does not intend to create no fault liability. Further, the fact that the risk is foreseeable by the occupier, or that the occupier is negligent in failing to protect the visitor from the risk, does not mean that the visitor has no duty to have regard for his own safety. A duty or negligence by the occupier does not foreclose contributory negligence on the part of the visitor: Preston at p. 536; Lorenz v Ed?Mon Developments Ltd. (1991), 1991 ABCA 82 (CanLII), 118 A.R. 201, 79 Alta. L.R. (2d) 193 (C.A.) at p. 194. It follows that the duty of the occupier is not only to protect the reasonably diligent visitor, but also to be aware that some visitors might themselves be careless, that is, contributorily negligent. The occupier’s duty ends only when either the risk on the premises or the conduct of the visitor becomes reasonably unforeseeable.

Essentially then, the owner of premises has a statutory duty to prevent visitors from suffering reasonably foreseeable injury while on the premises, even if that visitor fails to exercise ordinary diligence or is otherwise careless. As the Court of Appeal states in Wood, the occupier’s duty ends only when either the risk on the premises or the conduct of the visitor becomes reasonably unforeseeable. For more on occupier’s liability on ABlawg see David Laidlaw’s 2012 discussion in the context of urban gardens here.

In this case Justice Hall concluded that Mr. Clark owed Mr. Motta a duty of care because it was reasonably foreseeable that someone who left the garage and entered the house in the dark would be unable to find the light switch and may fall down the stairs, and that he was negligent in directing Mr. Motta to the unlit doorway and exposed staircase without taking steps to either ensure the lights were on or otherwise accompany Mr. Motta to help him navigate the entrance to the house (at paras 21 to 31). However, Justice Hall also found on the evidence that Mr. Motta contributed to his injuries, by failing to use the flashlight on his phone or otherwise failing to seek assistance to find the light switch knowing the staircase was nearby (at paras 32 – 37). Justice Hall thus ruled that Mr. Motta was contributorily negligent pursuant to section 15 of the Occupiers’ Liability Act and the Contributory Negligence Act, RSA 2000, c C-27, and he apportioned the liability for Mr. Motta’s injuries as 2/3 to Mr. Clark and 1/3 to Mr. Motta.

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Alberta Human Rights Act Applies to Condominium Corporations

Wed, 04/13/2016 - 1:00pm

By: Jennifer Koshan

PDF Version: Alberta Human Rights Act Applies to Condominium Corporations

Case Commented On: Condominium Corporation No 052 0580 v Alberta (Human Rights Commission), 2016 ABQB 183 (CanLII)

A few years ago I wrote a post arguing that the Alberta Human Rights Act, RSA 2000, c A-25.5 (AHRA), applies to the relationship between condominium owners and their condominium corporations. The Alberta Court of Queen’s Bench was recently faced with a case where it had to address that issue directly. In Condominium Corporation No 052 0580 v Alberta (Human Rights Commission), 2016 ABQB 183 (CanLII), Justice Robert A. Graesser held that the AHRA does indeed apply to condominium corporations. This post will explain his reasons for decision, and comment on a remark he made about the lack of authoritativeness of blog posts as secondary sources.

This case arose when Condominium Corporation No 052 0580 (the Corporation) brought an application for judicial review challenging the jurisdiction of the Alberta Human Rights Commission to investigate a human rights complaint by one of its owners. The underlying dispute involved Dennis Goldsack, the owner of a condominium unit in Tradition at Southbrook, Edmonton, who was confined to a wheelchair and had been assigned a parking stall closest to the building’s elevators. The Corporation’s Board decided to repurpose that stall for bicycle parking and storage, and reassigned Goldsack a parking stall that was further from the elevators and narrower. After failed negotiations with the Corporation, Goldsack brought a human rights complaint against it under section 4 of the AHRA. This section prohibits discrimination on the ground of physical disability (as well as other grounds) in the provision of “goods, services, accommodation or facilities that are customarily available to the public”.

In its judicial review application, the Corporation argued that the Alberta Human Rights Commission lacked jurisdiction to investigate Goldsack’s complaint, based on its contention that section 4 of the AHRA does not apply to condominium corporations and their owners. In response, the Commission argued that Justice Graesser should not hear the Corporation’s application for judicial review on the merits, as the decision of the Commission to proceed to an investigation was a matter of “screening and administration, not of adjudication” (at para 36, citing Halifax v NS (Human Rights Commission), 2012 SCC 10 (CanLII)). It also argued that the Corporation should have proceeded by way of an application for prohibition rather than judicial review (at para 50). Justice Graesser decided to hear the Corporation’s jurisdictional challenge on the merits, finding that resolution of this issue would be economical and expedient (at paras 51-57). The standard of review of the Commission’s decision to investigate was found to be reasonableness (at para 39).

On the merits, Justice Graesser examined Ganser v Rosewood Estates Condominium Corporation, 2002 AHRC 2 (CanLII), a decision of the Alberta Human Rights Tribunal finding that the previous version of AHRA section 4 did apply to condominium corporations. In Ganser, Tribunal member Deborah Prowse relied on the leading case involving services customarily available to the public, University of British Columbia v Berg, 1993 CanLII 89 (SCC), [1993] 2 SCR 353, in which the analogous section in British Columbia’s human rights legislation was interpreted broadly so as to include the provision of services to particular subsets of the general public. According to Berg, “every service has its own public”, and Prowse applied Berg to hold that Alberta’s human rights legislation applies to condominium corporations offering services such as parking to condominium owners (2016 ABQB 183 at para 14).

Condominium Corporation No 052 0580 argued that Ganser was not binding and should not be followed (at para 15). It also argued that the applicability of the AHRA to condominium corporations had been decided in the negative in other decisions of the Court of Queen’s Bench: Condominium Plan No 931 0520 (Owners) v Smith, 1999 ABQB 119 (CanLII) and Condominium Plan No 991 0225 v Davis, 2013 ABQB 49 (CanLII) (at para 30).

Justice Graesser noted that the Davis decision relied on Smith, which in turn relied on a Supreme Court case, Gay Alliance v Vancouver Sun, [1979] 2 SCR 435, which had been “effectively overturned” by Berg (at para 61). I made the same point in my post on the Davis decision. I also noted that, in any event, Davis did not directly consider the applicability of the AHRA to condominium corporations, and Smith involved a complaint based on age, which is not a protected ground under the AHRA in the area of services customarily available to the public.

Justice Graesser also referenced several cases from British Columbia cited by the Commission, where the courts “have had no difficulty” with the applicability of human rights legislation similar to Alberta’s to condominium corporations (at para 65). Moreover, the Supreme Court of Canada applied Quebec’s human rights legislation to a condominium corporation without comment in Syndicat Northcrest v Amselem, 2004 SCC 47 (CanLII).

Condominium Corporation No 052 0580 also made an interpretive argument for why section 4 of the AHRA should not apply to condominium corporations. It argued that because section 5 of the AHRA provides specific protection against discrimination for tenants of commercial and self-contained dwelling units, section 4 of the AHRA “inferentially excludes residents who are property owners” (at para 23). To hold otherwise, argued the Corporation, would create a redundancy in the AHRA, because residential tenants would fall under both sections 4 and 5. Justice Graesser found that there was “nothing inconsistent with providing express remedies for tenants” in section 5, which was “intended to deal with landlords refusing to rent premises to people on the basis of their personal characteristics”, and at the same time, interpreting section 4 broadly enough to include landlords and condominium corporations (at paras 84-5).

Another argument by the Corporation was that the Condominium Property Act, RSA 2000, c C-22, section 67, provides a “complete code” for complaints by condominium owners against their corporations in circumstances of “oppressive conduct” by the latter (at para 68). However, the Corporation did not provide any precedents where that section had been used “to address human rights-prohibited discrimination” (at para 69). Section 67 requires the commencement of an action in the Court of Queen’s Bench, which Justice Graesser noted is “a difficult and expensive process” before a body that does not have specialized expertise in human rights (at para 72). He found that there was likely concurrent jurisdiction under both the AHRA and Condominium Property Act, as the latter did not oust the jurisdiction of the Commission (at paras 74-5).

Lastly, the Corporation argued that condominium corporations are owed deference as democratically elected boards, and that they are unique given their decision making and bylaw making powers in relation to condominium owners. In support of this argument, the Corporation cited a blog post by Calgary lawyer, Richard I. John, Condominium Complexes are Private: A Defense Against the creeping expansion of the Alberta Human Rights Commission (at para 79; see that post here). Justice Graesser indicated that he was “doubtful that self-published blogs should be considered as authorities for court purposes” (at para 80). In any event, he rejected the substance of John’s blog post, finding that it ran contrary to the broad scope given to human rights legislation by the courts. In a helpful statement of why we need human rights legislation, Justice Graesser also found that no deference was owed to condominium corporations, as “the tyranny of the majority does not withstand unlawful discrimination” (at para 86).

I believe that Justice Graesser’s decision is correct – in fact I argued in favour of this interpretation of the AHRA in my post on the Davis case, and Richard John’s blog post was published as a response to my comments on Davis. And while I disagree with John’s analysis, I also disagree with Justice Graesser’s suggestion that blog posts “should [not] be considered as authorities for court purposes.” It may be that Justice Graesser was only expressing doubt about the persuasiveness of “self-published blogs”, in which case ABlawg and similar law school blogs could be distinguished as institutional publications. It bears mention that ABlawg posts have been cited in a number of judicial decisions – see for example the references to Jonnette Watson Hamilton’s posts on the Residential Tenancy Dispute Resolution Service in Abougouche v Miller, 2015 ABQB 724 (CanLII) and Hewitt v Barlow, 2016 ABQB 81 (CanLII). However, Université de Montréal Professor Paul Daly’s blog, Administrative Law Matters, could be dismissed as “self-published” because it is the work of a single law professor, and yet it is an award-winning blog that should be seen as a valuable resource for courts and other decision makers in the challenging area of administrative law.

As Coordinator of ABlawg I may be biased, but I believe that it is important to recognize that law blogs provide accessible commentary on law and policy that is available much more expeditiously than case comments in traditional law review format. Courts and other legal decision-makers are not bound to follow the analysis in blog posts any more than they are bound to follow traditional case comments or academic analyses, but it would be unwise in my view for these decision-makers to ignore the rich source of commentary and analysis provided by law blogs.

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When Should Judicial Discretion Trump Expert Testimony?

Thu, 04/07/2016 - 10:00am

By: Erin Sheley

PDF Version: When Should Judicial Discretion Trump Expert Testimony?

Case Commented On: R v Clark, 2016 ABCA 72 (CanLII)

In Regina v Clark the Alberta Court of Appeal reinforced the principle that trial courts should enjoy broad discretion in making evidentiary decisions. On the other side of the scale in this particular case was the great problem of ensuring the accuracy of witness identifications when they are the primary basis for conviction. In the United States at least, 70% of exonerations obtained through DNA evidence occurred in cases involving eyewitness misidentifications (see data collected by the Innocence Project, available here).

Clark involved a trial by judge of a bank robbery case. During the crime the suspect had partially obscured his face with a hood and a hat pulled down over most of his features (at paras 3-4). At trial, the Crown relied on the testimony of three eyewitnesses, and in particular that of one woman who had stood about 5-6 feet away from him at the bank counter and glanced at him several times during the robbery at para 54). Several other witnesses identified a photograph of the robber taken from the security camera as an individual who went by the street name “Lips,” a name by which the accused had identified himself to a police officer prior to the robbery (at para 51).

The defense sought to lead testimony by a Dr. Reid, an expert in the construction and administration of photo lineups (at para 38). Dr. Reid proposed to testify to the general unreliability of photo line-ups (and in particular the lack of correlation between the confidence of a witness in their identification and actual accuracy) (at para 39). He also proposed to testify to various aspects of the photo lineups in question which he believed made them less likely to be accurate. Specifically:

  • The lineups were suspect-based, rather than description-based.
  • The lineups included other people taken from the immediate community, making it more likely that a witness might recognize someone they knew and, thus, that the number of genuine suspects would be reduced.
  • The photos showed more of the suspect’s face than the witnesses had actually seen in real life due to his disguise.
  • The police officer administering the line-up left the witness alone with the pictures for a time and then drew her attention, upon his return, to a particular photo.
  • The lineups occurred several months after the robbery itself (at paras 40-43).

In excluding Dr. Reid’s testimony, the trial court emphasized that it was unnecessary to resort to expert testimony for the purposes of reinforcing the frailties of eyewitness testimony (at para 48). In his reasons for judgment the trial judge noted that he had been a lawyer for 37 years prior to coming to the bench and that he had “conducted many civil and criminal trials as well as complex regulatory hearings, many of which involved the extensive use of technical and scientific experts who gave opinion evidence clearly outside the knowledge base of the decision makers involved” (at para 48). The judge also noted that since becoming a judge he had taken a number of National Judicial Institute courses dealing with the assessment of witnesses and the types of evidence allowed in criminal cases (at para 48).

The accused raised four issues on appeal:

  1. Whether the trial judge erred in failing to admit the evidence of Dr. Reid
  2. Whether the trial judge failed to apply the correct legal test to the issue of eyewitness identification
  3. Whether the trial judge reversed the burden of proof, requiring the defence to demonstrate a lack of link between the appellant and the crime
  4. Whether the trial judge failed to apply the proper legal standard for a circumstantial case, resulting in an unreasonable verdict

The Court of Appeals dismissed the accused’s arguments in fairly abbreviated reasons. Referring to the rule in R v Seaboyer, [1991] 2 SCR 177, that probative evidence should be admitted unless an exclusion can be justified on some ground, the Court concluded that “once the trial judge reasonably concludes that the admissibility threshold is not met, he is entitled to refuse to admit the evidence” (at para 65). In holding that the trial judge had not erred in excluding the evidence of Dr. Reid, the Court repeatedly emphasized the “gatekeeping” function of trial courts, which “deserves deference absent prejudicial error” (at para 67).

The Court addresses the second and third issues at once, holding that nothing in the trial judge’s reasons demonstrate that he had reversed the burden of proof as to the issue of identification, but only that none of the evidence raised a reasonable doubt in his mind as to the appellant’s guilt (at para 72). In coming to this conclusion the Court noted that the trial judge was “alive to the frailties of identification evidence” and had in fact taken these problems into account in evaluating whether the Crown had proven its case beyond a reasonable doubt (at para 71).

On the final point, the Court states that the test for the unreasonableness of a verdict is whether “the verdict is one that a properly instructed jury, acting judicially, could reasonably have rendered” (at para 75, citing R v Biniaris [2000] 1 SCR 381). It holds that in this case the trial court’s conclusion that the Crown had proved its case beyond a reasonable doubt was reasonable because, in fact, it was “the only reasonable inference on the totality of the evidence” (at para 76, emphasis added).

A couple of observations flow from the Court’s reasons in this case. The first is that Clark provides a particularly striking example of the general disinclination of appellate courts to interfere with trial courts’ prerogatives in balancing the probative value of potential evidence against other reasons for exclusion, such as redundancy and waste of time (both factors which appeared to motivate the trial judge in this case). In describing the trial judge as a “gatekeeper” the Court alludes to certain systemic characteristics that drive this discretion. The trial court has the best view of the facts of an individual case, and—to the extent that the justice system would not have the bandwidth to function at all if it attempted to process ALL proffered probative evidence—the trial court must be empowered to make game time decisions without overly invasive appellate review.

The second observation relates to the trial court’s function as factfinder. In discussing the first issue on appeal, the Court noted that “appellate courts have consistently held that this type of evidence is unnecessary because it is clearly within the knowledge of judges and properly instructed jurors” (at para 66). While the reference to properly instructed jurors is obiter, it nonetheless suggests that the outcome of the case would have been the same regardless of whether it had been a jury deciding the case instead of a judge with many years of experience and training. This begs the question: can we in fact rely on jury instructions to drive home the scientific context in which they must understand evidence?

This problem arose in R v D.(D.), [2000] 2 SCR 275, in which the Supreme Court of Canada held that expert evidence is not admissible to counter the argument that a complainant’s delay in reporting sexual assault is evidence of fabrication. Because the trial court must instruct the jury as a matter of law that it cannot infer fabrication from the complainant’s delay, the Court held that expert testimony on the matter is therefore unnecessary. The dissent in that case, authored by Justice McLachlin, argued that such evidence should be considered on a case-by-case basis because the jury might in fact need assistance to understand psychological facts that go beyond immediate experience. The dissent’s concerns in that case—that jury instructions may inadequately substitute for expert explanation of such phenomena—apply equally in cases of eyewitness identifications. When an untrained jury is faced with a witness who expresses certainty as to identification, we cannot be certain what weight they might give it, even under circumstances that might warrant caution. R v Clark, like R v D.(D.) is a vote of confidence not only in trial judges acting appropriately as gatekeepers, but in juries understanding and fully taking to heart the often labyrinthine instructions they are given. Whether such confidence is warranted may be a question that requires more empirical research to answer properly. In the meantime, it seems clear that courts are willing to treat a trial judge’s occupational familiarity with certain specialized areas of knowledge such as the psychology of sexual assault and the risks of misidentification as adequate substitutes for a jury’s. These assumptions should give us pause.

The failed prosecution of Jian Ghomeshi provides a particularly striking example of where expert evidence might have assisted even a judge as trier-of-fact. In his reasons for judgment Justice Horkins noted the understandable limitations on the complainants’ memories of long-ago assaults, but at other moments questioned them about details as precise as the orientation of the accused’s hands around their neck (see discussion of the evidence and critiques of trial court’s reasons in R v Ghomeshi by Joshua Sealy-Harrington). Furthermore he made a number of factually inaccurate statements about the ease with which a sexual assault complainant may navigate the criminal justice system, and the facility she should have in assessing the relevance of particular aspects of a traumatic event in the course of reporting it. Despite the training and experience judges bring to bear on these questions, the Ghomeshi case illustrates how lack of expert testimony can result in at least partially uninformed credibility determinations.

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Mastery or Misogyny? The Ghomeshi Judgment and Sexual Assault Reform

Fri, 04/01/2016 - 10:00am

By: Joshua Sealy-Harrington

PDF Version: Mastery or Misogyny? The Ghomeshi Judgment and Sexual Assault Reform

Case Commented On: R v Ghomeshi, 2016 ONCJ 155

On March 24, 2016, Justice Horkins of the Ontario Court of Justice acquitted Jian Ghomeshi of five criminal charges: four counts of sexual assault and one count of overcoming resistance to sexual assault by choking. The judgment, like the original controversy surrounding his CBC dismissal and related sexual assault allegations, has polarized Canadian discourse on sexual assault – with reviews of Justice Horkins’ reasons ranging from a “total masterclass in misogynist, arrogant windbaggery” to a “masterful job of analyzing the evidence, identifying the weaknesses in the prosecution’s case and coming to the right decision.”

It is undeniable that the Canadian administration of sexual assault law must be improved. But, in pursuing that improvement, it is critical to isolate where this administration truly fails, and how best to address those failures in a manner that properly balances the interests of the accused and victims of sexual assault. The Ghomeshi judgment, which contains both strengths and weaknesses, provides a unique opportunity to deconstruct our administration of sexual assault laws, note its flaws (and strengths), and begin developing a constructive strategy moving forward. This balanced approach is most likely to manifest in targeted reforms that will actually enhance the administration of justice and provide greater protection and support to victims of sexual assault.

The Evidence and Judgment

Justice Horkins’ judgment depended “entirely on an assessment of the credibility and the reliability” of the three complainants: Lucy DeCoutere, and two complainants shielded from identification with initials LR and SD (see paras 1-4 and 11). Specifically, the judgment turned on various inconsistencies throughout the complainants’ description of events in police interviews, examinations in-chief, cross-examinations, and media interviews. On this basis, Justice Horkins held that “[t]he evidence of each complainant suffered not just from inconsistencies and questionable behaviour, but was tainted by outright deception” (at para 138), and accordingly, acquitted Mr. Ghomeshi of all charges.

This post comprehensively summarizes the evidentiary inconsistencies that Justice Horkins relied on in reaching his judgment. I provide this comprehensive summary because understanding how the Court reached its judgment is integral to critiquing it in an informed and thoughtful way, and in a way that can actually bring about change to our criminal justice system.

I also comprehensively summarize these evidentiary inconsistencies because some responses to the Ghomeshi verdict pay inadequate attention to the actual judgment and the evidence it relied upon. I spoke with many people who wanted Mr. Ghomeshi convicted because, in essence, “everyone knows he did it.” But surely a conviction based solely on reputation, and without resort to evidence, would be unjust. And surely social justice advocates, with their awareness of how things like “reputation” are subject to myriad societal inequalities, could not advocate for a system of criminal justice that relies on such biased considerations. Leaving aside whether Mr. Ghomeshi’s poor reputation was well earned, a criminal justice system that convicts (or acquits) based on reputation is an unjust system. Indeed, as Defence Counsel Marie Henein alluded to in a recent interview (at 3:00-3:59), good reputation (i.e. presumed credibility) of priests and police officers has been at the foundation of some of the most egregious injustices in history.

With the above in mind, I now turn to a review of the evidence in this case.

LR: Evidence and Judgment

The first complainant, LR, testified during examination in-chief to two separate sexual assaults:

  1. an assault in December 2002, in Mr. Ghomeshi’s car, where Mr. Ghomeshi suddenly and aggressively pulled LR’s hair (at paras 16-17; the “Car Assault”); and
  1. an assault in January 2003, at Mr. Ghomeshi’s home, where he suddenly pulled her hair, punched her head several times, and pulled her to her knees (at para 21; the “Home Assault”).

Justice Horkins viewed LR’s evidence in-chief as “[seemingly] rational and balanced” (at para 44). However, Justice Horkins identified multiple inconsistencies that ultimately led to his conclusion that LR was “a witness willing to withhold relevant information from the police, from the Crown and from the Court”, who “deliberately breached her oath to tell the truth”, and whose “value as a reliable witness [was] diminished accordingly” (at para 44).

Specifically, the inconsistencies on which Justice Horkins relied with respect to LR were:

  LR’s Initial Claim Contradiction(s) LR’s Explanation Kissing During Car Assault LR testified that the Car Assault occurred during kissing (para 26) LR described during media interviews that the Car Assault occurred “out of the blue” i.e. not while kissing (para 26)

 

LR in her police report, initially described the hair pulling and kissing as separate, but near the end described them as intertwined (para 26) LR explained that during her media interviews she was “unsure of the sequencing of events and “therefore […] didn’t put it in” (para 27) Hair Extensions Following her police interview, LR told the police that she was wearing hair extensions during the Car Assault (para 28) During cross-examination, LR claimed she was not wearing hair extensions (para 28) LR explained that she genuinely reversed this memory following her email to the police (para 28) Disclosing Reversal of Memory Re Hair Extensions to the Police Initially during cross-examination, LR claimed that she disclosed to the police her reversed memory about wearing hair extensions during the Car Assault (para 29) Later during cross-examination, LR conceded that she did not disclose this reversed memory to the police (para 29) No explanation for this inconsistency was identified in the judgment (paras 28-29) Car Window Head Smash During four initial accounts to the police and media, LR never claimed that Mr. Ghomeshi smashed her head into his car window (para 30) Following her police interview, LR told the police that Mr. Ghomeshi smashed her head into the window during the Car Assault (para 30)

 

During cross-examination, LR reverted to the version of the Car Assault with no head smash (para 30) LR explained that, during her police interview, she was “throwing thoughts” at the investigators (para 31) Demonstrating Car Window Head Smash in Police Video During cross-examination, LR denied demonstrating in her police video that her hair was pulled back towards the seat of the car, rather than towards the window (para 32) During, cross-examination, the police video was played, and Justice Horkins held that it clearly showed LR demonstrating how her hair was pulled back towards the seat of the car (para 32) LR explained that during the police interview she was “high on nerves” (para 32) “Thrown” or “Pulled” to Ground during Home Assault LR told the Toronto Star and CBC TV that she was “pulled” down to the ground during the Home Assault (para 33) LR told CBC Radio that she was “thrown” down to the ground during the Home Assault (para 33)

 

LR told the police that the events were “blurry” and that she did not know how she got to the ground (para 33) LR explained that being “thrown” or “pulled” to the ground are the same (para 33) Kissing During Home Assault During her police interview, LR did not describe kissing as part of the assault (para 34) At trial, LR described kissing Mr. Ghomeshi on the couch and while standing around the time of the Home Assault (para 34) No explanation for this inconsistency was identified in the judgment (para 34) Yoga Pose Before Home Assault During her examination in-chief, LR did not mention doing a yoga pose just before the Home Assault (para 34) During cross-examination, LR was reminded that she did a yoga pose and that she had previously disclosed that it bothered Mr. Ghomeshi (para 34) No explanation for this inconsistency was identified in the judgment (para 34) The Make of Mr. Ghomeshi’s Car During her examination in-chief, LR testified that Mr. Ghomeshi’s car was a yellow Volkswagen Beetle, a “clear” memory that was a “significant factor” in her impression of Mr. Ghomeshi at the time of the assault (para 35) Justice Horkins found as a fact that Mr. Ghomeshi did not acquire this Volkswagen Beetle until seven months after the assault (para 35) No explanation for this inconsistency was identified in the judgment (paras 35-36) Contacting Mr. Ghomeshi and Watching his Show Post-Assault During examination in-chief, LR testified that after the Home Assault: (1) she never had further contact with Mr. Ghomeshi and (2) every time she heard Mr. Ghomeshi on TV or the radio, she had to turn it off because the sight and sound of him made her relive the trauma of the assault (para 37) LR sent Mr. Ghomeshi a flirtatious email a year after the Home Assault, saying it was “good to see [him] again”, that “[his] show is still great”, and providing him with her contact information as an invitation for his reply (para 38)

 

LR sent an email to Mr. Ghomeshi 18 months after the Home Assault, saying “I’ve been watching you” (a reference to watching his show) and attaching a photo of her in a bikini (para 39) LR explained that these emails were part of a plan to “bait” Mr. Ghomeshi into contacting her so that she could confront him about the assaults (para 41)

Lucy DeCoutere: Evidence and Judgment

The second complainant, Ms. DeCoutere, testified during examination in-chief that, in July 2003 at Mr. Ghomeshi’s home, he put his hand on her throat, pushed her forcefully against the wall, choked her, and slapped her in the face (at para 48).

However, after cross-examination, Justice Horkins considered Ms. DeCoutere’s evidence unreliable because she suppressed evidence and maintained deceptions under oath. In particular, Justice Horkins sought to make clear his basis for finding Ms. DeCoutere’s evidence unreliable:

Let me emphasize strongly, it is the suppression of evidence and the deceptions maintained under oath that drive my concerns with the reliability of this witness, not necessarily her undetermined motivations for doing do. It is difficult to have trust in a witness who engages in the selective withholding [of] relevant information (at para 94).

Specifically, the inconsistencies on which Justice Horkins relied with respect to Ms. DeCoutere were the following:

  Ms. DeCoutere’s Initial Claim Contradiction(s) Ms. DeCoutere’s Explanation Late Disclosure of Kissing Around Time of Assault During Ms. DeCoutere’s police interview and 19 reported media interviews she never mentioned that Mr. Ghomeshi attempted to kiss her on their walk to his house, that they kissed on the couch after the assault, or that they kissed goodnight when she left his house that evening (para 58). This was despite being directly asked by a detective what happened between the assault and her departure from his home and responding that “nothing stuck” (para 59) Just prior to being called as a witness, Ms. DeCoutere met with the Crown and police and revealed that Mr. Ghomeshi attempted to kiss her on their walk to his house, that they kissed on the couch after the assault, and that they kissed goodnight when she left his house that evening (paras 56 and 58) Ms. DeCoutere explained that she disclosed this information late because she did not understand its “importance” or “impact” until just prior to being called as a witness (paras 57 and 59)

 

Ms. DeCoutere denied being aware that the previous witness, LR, had been confronted with embarrassing emails from 2004 (para 57) Selective Disclosure of Details Around Time of Assault Ms. DeCoutere reported specific details from her date with Mr. Ghomeshi, including his restaurant order and details about his home (para 61) Ms. DeCoutere did not report, until just prior to her being called as a witness, the details related to kissing and cuddling with Mr. Ghomeshi (para 61) Ms. DeCoutere explained that she left out intimate details from their date in the interest of brevity and succinctness (para 61) Mr. Ghomeshi’s Unappealing Suggestion Ms. DeCoutere repeatedly stated that Mr. Ghomeshi’s suggestion about lying down together and listening to music was creepy, cheesy or otherwise unappealing (para 61) Five days after the assault, Ms. DeCoutere wrote Mr. Ghomeshi a “love letter” reading: “What on earth could be better than lying with you, listening to music and having peace?” (para 62) No explanation for this inconsistency was identified in the judgment (para 62) Recounting Specific Order of Events Surrounding Assault During a Toronto Star interview, Ms. DeCoutere described how Mr. Ghomeshi first choked her, and then slapped her (para 63) A few days after the Toronto Star interview, Ms. DeCoutere told police that her recollection of the events surrounding the assault was “all jumbled” and that she could not recall the order of events (para 63)

 

When she spoke to CTV, Ms. DeCoutere was unsure about the order (para 63)

 

At trial, Ms. DeCoutere described a “specific sequence of events”: a push, two slaps, a pause, and then another slap (para 63) Ms. DeCoutere acknowledged during cross-examination that she provided multiple different versions of the order of events (para 63) Ongoing Relationship with Mr. Ghomeshi Ms. DeCoutere told police that, after the assault, she only saw Mr. Ghomeshi “in passing” and that she “didn’t pursue any kind of relationship with him” (para 66) Just before being called as a witness, Ms. DeCoutere swore another police statement describing how she (1) sent Mr. Ghomeshi “thank you flowers” days after the assault (paras 69 and 80); (2) spent considerable time with Mr. Ghomeshi in Banff in 2004, including multiple suggestive emails seeking to spend more time with him (paras 69 and 75-76); and (3) exchanged additional suggestive correspondence with him, including emails proposing further sexual activity and a “love letter” reading: “I love your hands” (paras 69 and 82-85) Ms. DeCoutere explained that she disclosed this information late because she thought it was of no importance (para 70) and because it was her “first chance” to do so (para 74)

 

Ms. DeCoutere explained that her ongoing relationship with Mr. Ghomeshi (including her specific reference to loving his hands) was a means of normalizing the situation and “flattening the negative” (paras 72, 80, 82, and 85-86) No Intimacy In Days Following Assault Ms. DeCoutere testified that, despite seeing Mr. Ghomeshi for the remainder of the weekend of the assault, she “kept her distance and certainly did not do anything intimate with him” (para 72) During cross-examination, Ms. DeCoutere was confronted with a photograph of her and Mr. Ghomeshi cuddling affectionately in the park the day after the assault (para 72) No explanation for this inconsistency was identified in the judgment (para 62)

In addition to Ms. DeCoutere’s evidence, one of her close friends, Ms. Dunworth, gave a sworn statement to police in November 2015 providing that Ms. DeCoutere told her about the assault ten years ago (at para 95). This evidence was tendered for the “limited use” of rebutting the claim that Ms. DeCoutere recently fabricated her complaint. Justice Horkins accepted that the evidence offset the inference that the complaint was fabricated in 2014, but noted that it did not offset the inference that the complaint may have been fabricated earlier and found it to be “of little assistance with respect to the general veracity of Ms. DeCoutere’s evidence at trial” (at paras 98-99).

SD: Evidence and Judgment

Lastly, SD testified during examination in-chief that in July or August 2003, while “making out” on a secluded park bench, Mr. Ghomeshi squeezed her neck forcefully enough to cause discomfort and interfere with her ability to breathe (at paras 101, 103).

However, after cross-examination, Justice Horkins held that SD’s evidence was unreliable because she was “playing chicken” with the justice system by telling only half the truth “for as long as she thought she might get away with it” (at para 118).

Specifically, the inconsistencies on which Justice Horkins relied with respect to SD were:

  SD’s Initial Claim Contradiction(s) SD’s Explanation Discussion of Assault Details with Ms. DeCoutere SD initially testified that she and Ms. DeCoutere never discussed the details of her experience before her police interview (para 107) During cross-examination, SD admitted to discussing with Ms. DeCoutere details of her experience before her police interview (para 107) No explanation for this inconsistency was identified in the judgment (para 107) Post-Assault Contact with Mr. Ghomeshi In her initial interviews, SD said that, after the assault, she “always kept her distance” and went out a couple times with Mr. Ghomeshi but only in public (para 112) At trial, SD admitted to bringing Mr. Ghomeshi to her home for sexual activity after being assaulted (para 113)

 

More than six months after the assault, SD sent an email to Mr. Ghomeshi asking him if he “[s]till want[ed] to grab that drink sometime?” (para 116) SD admitted that her earlier comments were a deliberate lie and an intentional misrepresentation of her brief relationship with Mr. Ghomeshi (para 113) Motivation Behind Late Disclosure of Post-Assault Contact with Mr. Ghomeshi SD initially explained that she did not disclose post-assault contact with Mr. Ghomeshi because she did not think it was important and was not specifically asked about it (para 115) When pressed on her explanation, SD acknowledged that she left out information regarding post-assault contact with Mr. Ghomeshi because it did not fit “the pattern” (para 115)

 

When pressed further, SD explained that she did not think that what had happened between them (“[messing] around” and a “hand job”) qualified as “sex” (para 115)

 

SD only made this late disclosure on the eve of being called as a witness and after the first two witnesses had given evidence and both been confronted with their own non-disclosures (paras 117-118) SD explained that she did not think it was important to disclose post-assault intimate contact and that she wasn’t “specifically” asked about it (para 115)

 

SD explained that she hid this information because this was her “first kick at the can” and she did not know how to “navigate” this sort of proceeding (para 119)

In addition to the above inconsistencies, Justice Horkins had additional concerns with SD’s evidence.

First, Justice Horkins considered SD’s evidence lacking in sufficient precision as illustrated by a portion of her examination during which she could not recall whether Mr. Ghomeshi’s hands were open or closed and the precise number of seconds his hands were around her neck (at para 106).

Second, Justice Horkins held that the evidence demonstrated “possible collusion” between SD and Ms. DeCoutere, who exchanged approximately 5000 messages between October 2014 and September 2015 describing themselves as a “team”, discussing witnesses, court dates, and meetings with the prosecution, and displaying significant animosity towards Mr. Ghomeshi and an “extreme dedication to bringing [him] down” (see paras 107-110).

Commentary

As discussed earlier, Justice Horkins’ judgment has deeply polarized Canadian discourse on sexual assault, receiving both warm praise and vitriolic criticism.

However, in my view, neither approach is optimal for deconstructing the judgment with a view to improving the Canadian administration of sexual assault law. Rather, a careful consideration of the judgment’s strengths and weaknesses permits the most comprehensive analysis of the genuine mistakes made by Justice Horkins (and others), and how best to avoid those mistakes in future cases.

We need to address the problems that pervade the Canadian administration of sexual assault law, and those problems must be understood before they can be solved.

Strengths of the Judgment

There are four strengths in Justice Horkins’ judgment:

  1. the outcome, which, in my view, properly relied on material inconsistencies to find a reasonable doubt;
  1. the repeated statements by Justice Horkins against the need for credible sexual assault victims to behave in a stereotypical manner (though he occasionally relies on such stereotypes at portions of his reasons);
  1. the recognition by Justice Horkins that limitations on memory are understandable, particularly in historical sexual assault claims (though he is occasionally too strict with his expectations on the complainants’ memories); and
  1. Justice Horkins statement that his finding of a reasonable doubt is not equivalent to positively finding that these complainants were never assaulted.

First, the outcome was, in my view, the correct legal conclusion reached in response to many material inconsistencies uncovered during the cross-examination of each complainant (a view echoed consistently in commentary from the legal profession; see here, here, here, here, and here). In particular, LR’s unqualified testimony that she never contacted Mr. Ghomeshi post-assault and avoided watching his show (at para 38) despite contacting him twice and both times alluding to watching his show (at paras 38-39), Ms. DeCoutere’s claim that she only saw Mr. Ghomeshi “in passing” and that she “didn’t pursue any kind of relationship with him” (see para 66) despite spending considerable time with Mr. Ghomeshi post-assault in Banff (at paras 69 and 75-76) and pursuing a relationship with him in multiple messages (at paras 69 and 82-85), and SD’s admission that her testimony of “always [keeping] her distance” and limiting her future encounters with Mr. Ghomeshi to public settings was an intentional misrepresentation of her brief relationship with Mr. Ghomeshi (at para 113) show material inconsistencies in the evidence of the complainants that reasonably undermine their credibility. This is in addition to the fact that the second and third complainants only disclosed certain information after the directly preceding witnesses had their reliability undermined on cross-examination by being confronted with evidence contradicting their initial testimony (see paras 56-57 and 111). In my view, Justice Horkins reasonably interpreted these late disclosures of evidence as the second and third complainants withholding information (regardless of motivation) until they realized it would likely come out during cross-examination (at paras 79 and 117), a legitimate basis for diminished credibility.

Some have argued that this line of reasoning stereotypes sexual assault victims and misunderstands the complexities of trauma and how victims of sexual assault may act in ways counter to societal expectations. I completely agree that it is critical to avoid stereotypical expectations on women when assessing sexual assault complaints, and have written previously about the often outrageous expectations placed on victims of sexual assault. But Justice Horkins (primarily) doubted the credibility of these complainants because they withheld information about their post-assault relationships with Mr. Ghomeshi, not because their post-assault relationships intrinsically undermined their credibility. In my view, these criticisms largely misunderstand the core basis of Justice Horkins’ reasons.

To be clear, I do not think that every inconsistency canvassed by Justice Horkins was material, and I do not think that everything that Justice Horkins highlighted supported the judgment. But, based on the record, there were, in my view, sufficient inconsistencies to support a reasonable doubt.

Second, Justice Horkins repeatedly asserted the importance of not imposing stereotypical assumptions on how a sexual assault victim should respond to abuse (though, as I discuss below, such assumptions still appear occasionally in his reasons).

In particular, Justice Horkins writes that “[t]he expectation of how a victim of abuse will, or should, be expected to behave must not be assessed on the basis of stereotypical models” (at para 43); “the Court must guard against assuming that seemingly odd reactive behaviour of a complainant necessarily indicates fabrication (at para 86); and “Courts must guard against applying false stereotypes concerning the expected conduct of complainants” (at para 135).

Indeed, Justice Horkins expressly rejects one of the most notorious rape myths – that credible sexual assault complainants will immediately report their assaults. He writes:

The law is clear: there should be no presumptive adverse inference arising when a complainant in a sexual assault case fails to come forward at the time of the events. Each complainant articulated her own very valid reasons for not coming forward at the time of the events. The law also recognizes that there should be nothing presumptively suspect in incremental disclosure of sexual assaults or abuse (at para 126).

These are all welcome comments from the Court on assessing the credibility of sexual assault complainants, which stand in stark contrast to the extensive reliance on rape myths and overt victim blaming found in previous judicial rulings. I am very sympathetic to critiquing the more subtle ways in which a judgment can problematically assess a sexual assault complaint (indeed, I provide such a critique below). But I am also concerned by commentary that characterizes the Ghomeshi judgment as “painfully misogynistic”, because conflating it with the other far more troubling judgments linked above fails to surgically identify its actual weaknesses in a manner that can translate into genuine reform.

Third, Justice Horkins explains how, with historical sexual assault claims, the Court should not be concerned about a complainant’s ability to recall every minor detail surrounding the assault (though, again, as I discuss below, such concerns occasionally appear in his reasons).

In particular, Justice Horkins writes that “[a]n inability to recall the sequence of such a traumatic event from over a decade ago is not very surprising and in most instances, it would be of little concern” (at para 64) and “[t]he courts recognize that trials of long past events can raise particular challenges due to the passage of time. Memories tend to fade, and time tends to erode the quality and availability of evidence” (at para 125). This, too, is welcome commentary from the Court.

Fourth, Justice Horkins clearly distinguishes reasonable doubt from positively finding that these assaults never occurred. Specifically, he writes:

My conclusion that the evidence in this case raises a reasonable doubt is not the same as deciding in any positive way that these events never happened. At the end of this trial a reasonable doubt exists because it is impossible to determine, with any acceptable degree of certainty or comfort, what is true and what is false (at para 140).

In other words, Justice Horkins declines the harder position that these complainants lied about being assaulted and adopts the softer position that, due to their inconsistencies, the veracity of their claims of assault is not beyond reasonable doubt – a reasonable conclusion based on the record before him, and a conclusion that carefully delineates the dishonesty he is actually identifying in his reasons.

In sum, Justice Horkins’ judgment reached what I consider to be the correct decision based on the record before him, and, in the course of his reasons, made some positive observations on how the Court should assess sexual assault complaints.

Weaknesses of the Judgment

That being said, Justice Horkins’ judgment also contained a number of dimensions worthy of criticism, including:

  1. his reliance on stereotypical assumptions regarding the behaviour of sexual assault victims (despite his claim of not relying on such assumptions);
  1. his reliance on unreasonable standards of memory for sexual assault victims (despite his claim of being understanding to such limitations, particularly in historical sexual assault claims); and
  1. most alarmingly, his view that navigating the criminal justice system is “really quite simple”.

First, Justice Horkins, despite claiming to appreciate the need to avoid stereotyping sexual assault complainants, applied certain stereotypes to the complainants’ conduct in this case. Indeed, immediately after denouncing the use of stereotypes in assessing complainant credibility, Justice Horkins then applied those very stereotypes to LR:

The expectation of how a victim of abuse will, or should, be expected to behave must not be assessed on the basis of stereotypical models. Having said that, I have no hesitation in saying that the behaviour of this complainant is, at the very least, odd (at para 43).

This passage is contained in the section of Justice Horkins’ reasons titled “The Flirtatious Emails”, and the “odd” (i.e. non-stereotypical) behaviour he is presumably referring to is LR flirting with Mr. Ghomeshi and sending him suggestive emails after her assault. It is undeniable that Justice Horkins’ description of this behaviour as “odd” is rooted in the stereotype that credible sexual assault victims avoid their abuser at all costs after an assault (even though the contrary has been consistently documented in the context of sexual abuse, and even though such an expectation surely imposes absurd expectations on women assaulted by their ongoing partners (see here and here).

Justice Horkins similarly applied these stereotypes to Ms. DeCoutere. After quoting a passage from a sexually suggestive email she sent to Mr. Ghomeshi “within twenty-four hours” of her assault, Justice Horkins writes: “[t]here is not a trace of animosity, regret or offence taken, in that message” (para 84). This is despite the fact the Ms. DeCoutere repeatedly sought to explain how her post-assault conduct with Mr. Ghomeshi was rooted in a desire to “flatten the negative” i.e. cope with the trauma of her assault (at paras 72, 82, and 86), another well-documented phenomena in cases of sexual abuse.

Most problematically, and with respect to all three complainants, Justice Horkins wrote the following:

Each complainant in this case engaged in conduct regarding Mr. Ghomeshi, after the fact, which seems out of harmony with the assaultive behaviour ascribed to him. In many instances, their conduct and comments were even inconsistent with the level of animus exhibited by each of them, both at the time and then years later. In a case that is entirely dependent on the reliability of their evidence standing alone, these are factors that cause me considerable difficult when asked to accept their evidence at full value (at para 136; emphasis added).

In other words, Justice Horkins admits that the failure of these victims to fall within a stereotypical narrative of abuse directly contributed to their diminished credibility.

Justice Horkins claims to have reached his judgment on the basis of material inconsistencies throughout the complainants’ testimony (at para 138), but the above references clearly illustrate that his reasons were influenced by the extent to which the significant post-assault contact between the complainants and Mr. Ghomeshi did not fit the stereotypical narrative of abuse that he expected. This is a significant deficiency in Justice Horkins’ reasons, and a rape myth that continues to illegitimately undermine the credibility of sexual assault victims. Justice Horkins was critical of SD for not being forthcoming about details regarding her post-assault contact with Mr. Ghomeshi because she was worried it did not fit “the pattern” of abuse one might expect (see para 115). With comments like this from Justice Horkins, one can see why.

Second, Justice Horkins, despite claiming to be sensitive to the legitimate limitations on memory with historical sexual assault claims, at times demanded an unreasonable standard of precision of the complainants.

In particular, he viewed the following paragraph as purportedly illustrative of the insufficient precision in SD’s account of her assault (at para 106):

He had his hand – it was sort of – it was sort of his hands were on my shoulders, kind of on my arms here, and then it was – and then I felt his teeth and then his hands around my neck. … It was rough but – yeah, it was rough.

Q: Were his hands open, were they closed?

A: It’s really hard for me to say, but it was just – I just felt his hands around my neck, all around my neck. … And I – I think I tried to – I tried to get out of it and then his hand was on my mouth, sort of smothering me.

Q: Okay. I’m going to go back. So the hands were around your neck. How long were they around your neck?

A: Seconds. A few seconds. Ten seconds. I don’t even – I don’t – it’s hard to know. It’s hard to know.

Q: And did his hands around your neck cause you any difficulties breathing?

A: Yes.

In my view, demanding that a victim recount the specific orientation of her abuser’s hands and whether she was choked for three or ten seconds imposes an unrealistic burden on sexual assault complainants. Sexual assault is a deeply traumatic experience. How an individual copes with that experience may vary widely, and that coping may fragment and jumble details of the assault (see here and here). I am not saying that sexual assault complainants can forget every aspect of their assault because they were traumatized, and still be seen as reliable witnesses. But the threshold imposed by Justice Horkins displayed in the paragraph above is, in my view, too strenuous. To be frank, if I was asked for such details during a cross-examination about a sexual encounter from the previous night (let alone a non-consensual sexual encounter ten years prior), I would genuinely struggle to remember those details with the clarity demanded by Justice Horkins here. Sex is a fluid, complex, and occasionally unpredictable experience, and those factors are only exacerbated in the context of abuse. We cannot demand actuarial precision from sexual assault victims.

Third, and most alarmingly, Justice Horkins claimed that it is “really quite simple” for sexual assault victims to navigate the criminal justice system (at para 119). This is empirically false, and a shocking pronouncement by the Court. Many have thoroughly explored the immense complexities in navigating the criminal justice system, particularly for sexual assault complainants, and so there is no need for me to reinvent the wheel here. Needless to say, there are few (if any) tasks more complex than occupying the role of complainant in a sexual assault trial, and a characterization by the judiciary that this role is “really quite simple” is both unnecessarily insensitive to victims of sexual assault and factually incorrect. Indeed, this very case illustrates that one of the biggest barriers for sexual assault complainants (simply reporting the assault in the first place) was experienced by these complainants (see paras 23 and 54).

Similarly, Justice Horkins repeatedly criticizes the complainants’ ability to assess relevance in the context of their own sexual assault trials. For example, Justice Horkins writes:

It is difficult for me to believe that someone who was choked as part of a sexual assault, would consider kissing sessions with the assailant both before and after the assault not worth mentioning when reporting the matter to the police. I can understand being reluctant to mention it, but I do not understand her thinking that it was not relevant (at para 60).

Even more surprisingly, Justice Horkins writes:

Another item in the new disclosure statement was the information that Ms. DeCoutere sent flowers to Mr. Ghomeshi following the Canada Day weekend in Toronto […] whether or not this behaviour should be considered unusual or not, this was very clearly relevant and material information in the context of a sexual assault allegation (at para 80; emphasis added).

The irony in these statements is that these “kissing sessions” and exchanges of flowers (or, similarly, a “yoga pose”; see para 34) are not relevant. Sexual assault is sexual touching without consent. And such an assault remains an assault whether or not consensual touching, yoga, or flowers surround it. The only reason these facts were (purportedly) relevant was because they were disclosed late, but they do not actually factor into the legal assessment of consent, which, arguably, explains why these facts were not disclosed in the first place. The nuances surrounding these facts and their relevance are complex enough for trained lawyers. Indeed, my own practice features frequent arguments between lawyers over the propriety of questions asked of witnesses on the basis of relevance. To view this analysis as “simple” for sexual assault complainants is unreasonable, especially when one of the complainants admits to you that, in her understanding, sexual assault only occurs when you are “beaten to pieces […] broken and raped” (at para 54), clearly reflecting how (understandable) misconceptions about the legal definition of sexual assault by non-lawyers can be significant.

The further irony in Justice Horkins’ above statements is that Justice Horkins’ reasons ultimately vindicated SD’s apprehension with full disclosure. Justice Horkins held that SD should have simply told “the whole truth”, and yet that whole truth – that she had been sexually intimate with Mr. Ghomeshi after her assault – was presumably the basis on which Justice Horkins ruled that her behaviour was “out of harmony with the assaultive behaviour ascribed to [Mr. Ghomeshi]”. SD’s concern that this disclosure would undermine her credibility for falling outside “the pattern” one would expect of a sexual assault victim was, accordingly, justified. Furthermore, the post-assault sexual activity between SD and Mr. Ghomeshi could be seen as protected by the rape shield provisions of the Criminal Code, such that its relevance was subject to determination at trial, not for SD to assess beforehand.

In sum, despite reaching what I consider to be the correct conclusion, Justice Horkins’ reasons contain multiple deficiencies that illustrate where reform efforts should be focussed.

Conclusion

An appreciation of the above strengths and weaknesses in the Ghomeshi judgment must be the starting point for our discussion on improving the Canadian administration of sexual assault laws.

Our pursuit of reforms must not resort to simplistic misrepresentations about alleged weaknesses in the current system. As Ms. Henein recently observed, our discourse surrounding sexual assault cannot be reduced to interpreting any conviction as “supporting” victims of sexual assault and any acquittal as “betraying” them (at 2:36-3:00), especially when such a reduction reveals the sexist double standard that characterizes Ms. Henein’s place atop the criminal defence bar – a space in which women face myriad barriers – as a “betrayal” of women rather than as a significant feminist accomplishment.

Instead, our pursuit of reforms must distill the issues plaguing the current system and how to correct for them. And, to be clear, it is a “system” that we are seeking to reform. Ms. Henein is one of the most accomplished criminal defence lawyers in the country, an advocate few if any criminal accused have access to. Certain proposed reforms – like displacing the burden of proof or compelling an accused person to testify against themselves to assist the state in making its case – must be considered not in the context of Mr. Ghomeshi and his outstanding counsel (which represents a tiny minority of cases) but in the context of the myriad accused who have far fewer resources and against whom significant injustice may occur. Indeed, those simultaneously decrying the conviction of Steven Avery and the acquittal of Mr. Ghomeshi should pay close attention to how foundational reforms to our criminal justice system transcend the class, race, and gender of the accused.

In light of the above, how do the Ghomeshi judgment’s weaknesses inform us of what reforms are needed?

First, Justice Horkins’ occasional reliance on stereotypes and unreasonable standards for the complainants’ memories indicate that broader use of judicial education and expert evidence may assist in improving the judicial process surrounding sexual assault. For example, Justice Horkins’ reliance on stereotypes in this case may have been corrected with the addition of expert testimony explaining how victims often respond to sexual abuse.

Second, the performance of these complainants on cross-examination suggests that greater support and resources must be provided to sexual assault complainants throughout the criminal process: reporting to police, initial legal consultation, through trial, and being briefed about the overall process. Indeed, in Ms. Henein’s view, the “one suggestion” for improving the administration of sexual assault is an increase in resources (at 11:16-12:51), though she felt the complainants in this case were properly resourced. Similarly, the complainants’ own descriptions for why they did not report their assaults earlier (see paras 23 and 54) and their descriptions of the Court process itself reflect the need for greater support and resources for victims of sexual assault.

In the aftermath of the Ghomeshi judgment, many formal reforms have been proposed that relate to providing greater support and resources to victims of sexual assault:

  1. Professor Alice Woolley recommends clarifying the role of the Crown in sexual assault prosecutions to provide greater guidance to sexual assault victims;
  1. David Butt (counsel to one of the complainants in this case) recommends providing a system in which complainants have greater control over the legal process that resolves their complaints; and
  1. Naomi Sayers and Samantha Peters recommend the creation of courts dedicated to exclusively hearing sexual assault cases.

All of these recommendations should be thoughtfully considered and further explored.

In addition to the above formal reforms, the desire to provide greater support to victims has translated, on social media, into the viral hashtag #WeBelieveSurvivors. And, subject to certain qualifications, I think this movement to show greater emotional support to victims of sexual assault is a positive informal reform, and one that may contribute to meaningful improvements in the administration of sexual assault laws. #WeBelieveSurvivors isn’t (or, at least, shouldn’t be) about disposing with sexual assault trials, in the same way #BlackLivesMatter isn’t about diminishing the value of white lives. These movements, rather, are about deconstructing silent hierarchies that exist in our society and perpetuate tangible harm on marginalized communities. For that reason, I’m proud to say I believe survivors. Not because false complaints are impossible, but because that belief counteracts oppression mediated through a society which presumptively distrusts women in a forum where that trust is all they can rely on to seek justice.

Indeed, as Professor Mathen writes:

[T]he interest in and the empathy demonstrated for the complainants must be harnessed into greater resources for those who are sexually violated, better legal education, and tools to wage the necessary fight against sexual assault as a social and cultural, not just legal, problem.

Mr. Ghomeshi’s legal journey is not over. He will be back in trial this June on a separate charge of sexual assault. Hopefully, following the judgment in that second case, commentary will be more balanced, and in turn, more constructive in its proposals for reform. Even better, maybe we will see some of the above reforms in action at trial.

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Does the Standard of Review Analysis Apply to a Vires Determination of Subordinate Legislation?

Wed, 03/30/2016 - 10:00am

By: Shaun Fluker

PDF Version: Does the Standard of Review Analysis Apply to a Vires Determination of Subordinate Legislation?

Case Commented On: Sobeys West Inc v Alberta College of Pharmacists, 2016 ABQB 138

The substance of the dispute in this decision is whether a prohibition enacted by the Alberta College of Pharmacists is lawful. Specifically, in April 2014 the College voted to amend its Code of Ethics to prohibit pharmacists from providing inducements – such as loyalty program points or other forms of consumer purchase rewards – to a patient for the acquisition of a drug or a service from them. The College provides a description of the inducement issue and its rationale for the prohibition here. Sobeys challenges the lawfulness of this prohibition, and thus seeks judicial review. It seems that the standard of review to be applied in this case became a significant issue in the hearing, and this decision by the Honourable Mr. Justice V.O. Ouellette is the Court’s reasons for selecting correctness – notwithstanding that both Sobeys and the College had agreed the standard should be reasonableness. The decision illustrates, or perhaps exposes, some uncertainty in the application of administrative law principles to legislative acts by delegates of the Legislature, and unfortunately I am not sure the reasoning provided by Justice Ouellette is helpful in resolving this uncertainty.

The authority of the College to enact a Code of Ethics governing pharmacists is provided by section 133(1) of the Health Professions Act, RSA 2000, c H-7. The text in this section suggests the Legislature contemplated that this Code, or at least some provisions of it, would constitute subordinate legislation – in other words that these provisions constitute law as opposed to internal guidance to pharmacists. Hallmarks of this intention include the requirement on the College to allow pharmacists and the Minister to review and comment on proposed provisions, as well to as publish the Code. These process provisions largely replicate the substance of the Regulations Act, RSA 2000, c R-14, which section 133(4) of the Health Professions Act states is not applicable to the Code enactments.

So we should start this analysis from the premise that the enactment of inducement prohibitions in the Code is a legislative act by a delegate of the Legislature. This starting point is crucial because, as such, it brings this judicial review on the lawfulness of the inducement prohibitions under the principles enunciated by the Supreme Court of Canada in Katz Group Canada Inc. v. Ontario (Health and Long?Term Care), 2013 SCC 64 at paras 24 – 28. These principles guide the review on the vires of subordinate legislation, and involve the following considerations: (1) is the impugned regulation consistent with the objective of its parent statute – in order to demonstrate invalidity a person must establish that the regulation is not consistent with such objective or that it addresses a matter which is not set out in the regulation-making provision of the parent statute; (2) there is a presumption of validity such that the onus or burden is on the challenger to demonstrate that the regulation is ultra vires – so where possible a regulation will be read in a ‘broad and purposive’ manner to be consistent with its parent statute; (3) the inquiry into the vires of a regulation does not involve assessing the policy merits of the regulation, nor does the reviewing court assess whether the regulation will successfully meet its objective.

The College no doubt argued that the Katz principles should be followed in this review. However Justice Ouellette distinguishes Katz. This exchange is captured in paragraph 32 of the decision as follows:

It is therefore the College’s position that the actions of the College in adopting the Inducement Prohibitions should be subjected to the analysis under the Katz principles. In that regard, it is important to determine exactly what Katz stands for. In my view, Katz stands for the principle that where the review is one of vires, then a guide has been provided as to how the application of the correctness review standard should proceed. Katz is not a case dealing with the selection of the applicable standard of review for vires challenges. Rather, it outlined the analytical framework for application when conducting substantive or merit inquiry in relation to vires challenges of administrative legislation. (emphasis is mine)

Since Justice Ouellette is focused here on the issue of selecting the standard of review, he distinguishes Katz.

But there must have been some confusion on this point during the hearing – it isn’t entirely clear why the selection of a standard of review is directly at issue in this case and deserving of such a lengthy dissertation.  And moreover, it seems to me that Katz is directly applicable to this case, as the substantive dispute is the vires of subordinate legislation – the inducement prohibition in the Code – which is very much the issue addressed in Katz. How this Court ended up focusing entirely on the Dunsmuir principles to select the standard of review is a mystery to me. Indeed it is noteworthy that the Supreme Court of Canada makes no reference to Dunsmuir in its 2013 Katz decision. Moreover, while we might read Katz as applying a ‘correctness’ standard on a vires determination, such a reading does need to grapple with the presumption of validity cited in Katz which seems to incorporate some aspects of deference as well. Justice Ouellette makes no reference to this in his distinguishing of Katz.

I think the application of the Dunsmuir principles to the issue concerning the vires of subordinate legislation has produced something of a jurisprudential mess here – a mess perhaps foreshadowed by the need for Justice Ouellette to coin the term ‘administrative legislation’. I’m not sure exactly what that phrase refers to. I think what is meant is ‘subordinate legislation’ – being legislation enacted by a delegate of the Legislature, with the delegate here being the College under authority given by the Health Professions Act.

Justice Ouellette goes on to apply the Dunsmuir principles on standard of review and concludes the standard to apply here is correctness on the basis that (1) the question of whether the inducement prohibitions in the Code are ultra vires the College is a jurisdictional question (at paras 37 – 40) as per Dunsmuir, and (2) the question of what constitutes the ‘public interest’ under the Health Professions Act is a question of law that is both central to the legal system as a whole and outside the College’s area of specialization (at paras 41 – 57) and thus also attracts correctness under Dunsmuir. With respect, I don’t think either of these grounds are proper applications of the Dunsmuir principles on selecting the standard of review.

Briefly put, a true question of jurisdiction is one which requires the College to ask whether it has the legal authority to embark on the line of inquiry posed by the question. It is difficult to see why the College needs to ask itself this sort of question in relation to inducement prohibitions that seek to ensure licensed pharmacists make healthcare decisions based on the medical needs of the patient. The Health Professions Act seems full of provisions that give the College power to make these sorts of determinations.

But the reasoning in ground (2) is probably the more difficult aspect of this decision. To begin with, the reference to ‘public interest’ in the Health Professions Act considered by Justice Ouellette is set out in the overall purpose section which states the College must carry out its activities in a manner that protects and serves the public interest (section 3(1)(a)). This is the statutory hook used by Justice Ouellette to conclude that this case raises a question of law that is of general importance to the legal system as a whole and outside the specialization of the College. Justice Ouellette provides an explanation for this in paragraphs 41 to 57, and I will let readers view it for themselves. I will simply state that this reasoning does not accord comfortably with the principles of judicial deference espoused in Dunsmuir.

I remember being disappointed in 2013 that the Supreme Court of Canada did not more carefully situate its reasoning in Katz within the broader context of administrative law. Katz deals with the vires of a regulation enacted by the Ontario legislature, and it would have been nice for clarity had the Supreme Court confirmed whether its Katz principles applied likewise to subordinate legislation enacted by delegates of the legislation – possibly adding another exception to the presumption of deference in judicial review. Such guidance may have proven useful in this case.

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What Ought Crown Counsel to do in Prosecuting Sexual Assault Charges? Some Post-Ghomeshi Reflections

Tue, 03/29/2016 - 10:00am

By: Alice Woolley

PDF Version: What Ought Crown Counsel to do in Prosecuting Sexual Assault Charges? Some Post-Ghomeshi Reflections

Case Commented On: R v Ghomeshi, 2016 ONCJ 155

The Ghomeshi trial made me think about the ethical duties of prosecutors in sexual assault cases. Not because I have any basis for saying that the prosecutors violated their ethical duties. I have no personal knowledge of what the prosecutors did or did not do in their preparation and presentation of the Ghomeshi case. I also do not know either the pressures they faced or the policies that governed their decisions.

Rather, I have thought about the ethical duties of prosecutors because of claims made by people in response to criticisms of the Ghomeshi prosecutors. Specifically, I have heard the following:

  • The prosecutor simply takes the case the police provide: “You do the best you can with the evidence you’re given” (Laura Fraser, “Jian Ghomeshi trial questions answered by criminal lawyers” CBC February 12, 2016, here).
  • The prosecutor should not prepare witnesses. Otherwise, the prosecutor risks becoming a witness due to his disclosure obligations pursuant to R v Stinchcombe, [1991] 3 SCR 326: “Crown interference, even through so-called preparation, can result in a Crown Attorney becoming a witness to the own proceeding or worse still a stay of proceeding for an abuse of process” (Sean Robichaud, “In Defence of the Crown in Ghomeshi”, here).
  • The prosecutor represents the public, not the complainants, and owes the complainants no obligation in his role as prosecutor.

(See also here and here)

In my view, each of these propositions is at best incomplete, and at worst wrong. The exercise of a prosecutor’s discretion requires her to examine, assess and even investigate a case. She cannot properly exercise that discretion without interviewing and assessing complainants and other witnesses. In addition, as the Supreme Court has made clear, a prosecutor at trial is an advocate in an adversarial system (R v Cook, [1997] 1 SCR 1113). No competent advocate presents a case at trial with witnesses unprepared for the rigours of cross-examination. No ethical advocate coaches witnesses, but no competent advocate fails to prepare them. The Stinchcombe risk is overstated and can almost always be addressed without requiring the prosecutor to be a witness at trial. And while the prosecutor does represent the public (technically, the Crown), that does not excuse the prosecutor from the ordinary moral obligation not to unnecessarily inflict injury on others, and it certainly does not excuse the lawyer from the obligation not to inflict an injury through dereliction of her professional obligations. That a complainant is not the prosecutor’s client – i.e., that the prosecutor’s primary professional obligation is to someone else – does not prove that the prosecutor owes a complainant no duty.

Each of these propositions would be wrong in any case – not adequately preparing the victim of an alleged robbery for cross-examination would be incompetent too – but adherence to them in a sexual assault case is more troubling. An accused suffers a worse reputational injury by going through an unnecessary trial than in other areas; given the credibility-based nature of most sexual assault trials, a case cannot be competently presented without adequate witness preparation; and the troubling reality of how sexual assault cases are sometimes defended makes sexual assault witnesses far more vulnerable than ordinary witnesses, and in need of better preparation before trial and better protection at trial than an average witness (see Craig and Tanovich). Competent and effective advocacy by a prosecutor matter in all cases, but they matter more in sexual assault cases.

I recognize that fulfilling these duties in practice can be very difficult. Prosecutors operate with extremely limited resources. Judges may not appreciate the difference between preparing a witness and coaching, and lawyers themselves may reasonably find maintaining that balance tricky – it is tricky. Any mistake by a prosecutor is likely to be seized upon by a zealous defence counsel, undermining the prosecutor’s reputation and her likelihood of success at trial. Prosecutors have disparate duties and obligations that can be hard to reconcile. But the practical difficulties must be resolved in light of the underlying norms that govern prosecutorial conduct. The worry that has motivated this blog post is that those underlying norms appear to be misunderstood or misrepresented, even by people participating in the criminal justice system.

Proposition One: The prosecutor takes the case he is given by the police; “You do the best you can with the evidence you’re given”

In our legal system prosecutors have two distinct functions. First, they exercise prosecutorial discretion about whether to proceed with a charge (and in some provinces about whether a charge should be brought, see Gary McCuaig, “British Columbia Charge Assessment Review”). Prosecutors exercise their discretion to determine whether there is a reasonable probability of conviction on a charge, and whether pursuing it is in the public interest, given factors such as the age and circumstances of the accused. Second, they prosecute cases at trial, “vigorously pursu[ing] a legitimate result to the best of its ability” and acting as a “strong advocate” (Cook at para 21).

In exercising those functions prosecutors enjoy independence. They are independent from the police, whose charging decisions they effectively review and have the power to overturn. And they are independent from the courts, who will not review prosecutorial discretion absent an abuse of process, and who will not hold prosecutors civilly liable for how they exercise that discretion absent malice. Prosecutors are not liable even if they prosecute “absent reasonable and probable grounds, by reason of incompetence, inexperience, poor judgment, lack of professionalism, laziness, recklessness, honest mistake, negligence, or even gross negligence” (Miazga v Kvello Estate 2009 SCC 51 at para 81).

In exercising those functions prosecutors also have obligations. They have an obligation to pursue justice and not simply conviction (Boucher v. The Queen, [1955] SCR 16, at p 23-24 (although see my critique of the ethical effectiveness of that obligation, here). They also have an obligation to disclose all relevant evidence to the defence, whether tending to show innocence or guilt (Stinchcombe).

The prosecutor thus has functions and obligations central to the operation of the criminal justice system, functions that she exercises independently. That means that her role in the prosecution is active not passive. She must independently determine whether a charge has a reasonable prospect of conviction. She must independently determine whether prosecuting the charge is in the public interest. She must determine what is necessary to vigorously pursue a legitimate result. She must ensure that proper disclosure has been provided. In some cases she may have to consider the propriety of police conduct in investigating a case. In other cases she may have to assess whether a witness on whose story a case depends has the credibility and testimony to create a reasonable prospect of conviction. She has to determine effective trial strategy – which witnesses to present (she has no duty to present every witness – Cook at para 39), which legal arguments to rely on and the narrative of the case that will discharge the Crown’s evidentiary burden.

A prosecutor obviously relies upon the police. Prosecutors do not investigate. But the prosecutor’s role in assessing, shaping and presenting a prosecution requires prosecutors to engage actively, both with assessing the merits of a case, and in presenting those merits effectively and vigorously. This could be described as doing the best you can with the evidence you are given, but that description makes the prosecutor seem like a mere functionary. It seriously underplays the prosecutor’s power and his responsibility in determining whether to proceed, and in how best to do so.

Proposition Two: The prosecution should not prepare witnesses

In a civil trial, preparing a witness requires talking to the witness about the evidence he is able to give on the matters at issue. It means telling the witness about the areas that you will be exploring in a direct examination, so that he can think about how to answer those questions, and provide you with some information about how he will. And it means telling the witness about what will be explored on cross-examination, areas in which the witness may be questioned in order to make that witness appear unworthy of belief.   It may involve far more than this as well, depending on the approach of the individual lawyer, and the resources available.

A criminal trial is different. The police talk to witnesses and obtain statements that set out the evidence the witness will be able to give on the matter; those statements are given to the prosecutor (and the defence). The police interviews with a witness may be videotaped, allowing the prosecutor to examine the witness’s demeanor and assess how the witness will be perceived at trial. The police will investigate the existence of other evidence that corroborates or contradicts the witness’s statements, giving the prosecutor the most valuable sort of information about the credibility of the witness’s testimony.

That means that a prosecutor who presented a witness in a criminal trial without talking to that witness first would not be blind in the way that a civil litigator would. But preparation is still essential for the prosecution of a criminal trial. Witness preparation does more than tell the lawyer about the nature of the evidence. It allows the lawyer to assess the witness’s ability to present the evidence, to determine whether the witness will advance the lawyer’s trial strategy and, ultimately, to determine if that trial strategy has a viable chance of succeeding given the nature of this witness’s evidence and capacity to testify. Further, it allows the lawyer to help ensure that the witness gets to provide her testimony, and that she will not end up looking like a liar when she is telling the truth.

Because let’s be absolutely clear: it is the ethical duty of a defence lawyer to make prosecution witnesses look like liars, even if those witnesses are telling the truth. That duty is constrained; a defence lawyer must not harass a witness, and must remain within the boundaries of the legal restrictions on cross-examination (in a sexual assault case, e.g., not asking improper questions about the complainant’s sexual history). But within those constraints a defence lawyer will do his best to exploit any inconsistency or weakness in the witness’s evidence to make that witness appear to be non-credible. Whether or not the witness is in fact telling the truth is not only irrelevant, it may make discrediting that witness essential to the defence lawyer’s ability to obtain an acquittal for his client (Abbe Smith has a terrific paper on the ethical implications of this role for the defence lawyer “Representing Rapists: The Cruelty of Cross-Examination and Other Challenges for a Female Criminal Defense Lawyer” (2016) 53 American Criminal Law Review (forthcoming) – summarized here).

A lawyer who prepares a witness will tell the witness about what cross-examination looks like. She will tell the witness the type of questions that are likely to be asked. She may ask some questions as “mock cross” in order to give the witness a chance to experience what cross-examination feels like.

Doing so allows her, if she is a prosecutor, to exercise her prosecutorial discretion about whether to proceed. Specifically, it allows her to assess whether, given the ability of this witness to testify effectively, there is a reasonable prospect of conviction. It will also, if the witness is a victim, allow her to consider public interest factors such as “Whether a prosecution is likely to have an adverse effect on the victim’s physical or mental health” (Public Prosecution Service of Canada Desk Book, Section 3.2(3)).

It also allows her to vigorously pursue her case to its legitimate end. A prosecutor cannot prevent a witness from being discredited – and nor should he. But he can reduce the likelihood that the witness will be discredited improperly, because she was confused or overwhelmed, or simply had not had the opportunity to think about the truthful answer to a question away from the pressure, stress, aggression and even hostility of cross-examination in a court room.

What about the three risks though – that a prosecutor will coach the witness; that a prosecutor will be accused of coaching a witness, and put the trial and her reputation in jeopardy; that a prosecutor may become a witness because of a coaching accusation or because she discovers new evidence?

A lawyer coaches a witness when the lawyer does not simply prepare a witness to testify, but rather plays a part in creating the testimony that the witness provides. Coaching witnesses is unethical and problematic – unethical because it disrupts the already fragile ability of a trial to produce truthful outcomes; problematic because lawyers who are not careful can unwittingly cross the line from preparation to coaching.

Human memory does not work like a video recorder. We do not remember facts; we remember facts mediated by our emotional experiences, subsequent events and our conversations about what happened – our memories are narratives that are rarely literally accurate. Our memories are also suggestible – a witness asked to estimate what speed a car smashed into another will “remember” a higher speed than a witness asked what speed a car hit another. Lawyers must be constantly alert to the possibility that what started as preparation becomes improper influence of a witness’s testimony (See in general, Alice Woolley Understanding Lawyers’ Ethics in Canada (Toronto: LexisNexis Canada, 2011), Chapter 7).

The fallibility of our memories is also, though, why witness preparation is so important – the fallibility of memory is part of what allows truthful witnesses to appear untruthful under cross-examination. Careful and well-prepared defence lawyers will be able to unpack inaccuracies and inconsistencies in a witness’s testimony. They will highlight in particular any differences between a statement to the police, statements to the media, evidence in a preliminary inquiry and the testimony given at trial.   They will use any external evidence they have in their possession to identify errors or inconsistencies in the witness’s memory. A prosecutor cannot tell a witness how to answer those questions. A prosecutor cannot protect a witness from having to answer them (unless they are otherwise improper). But a prosecutor can give a witness a good idea of what to expect, and some (really) basic tactics for effective testimony: keep answers brief; answer only the question you were asked; be careful of over-confident assertions; take time to think if you need it; don’t lose your temper; and if you don’t remember something it’s better to say so than to guess. The prosecutor can also familiarize the witness with the basics of how a court works – what it will look like and how people will act. As Elaine Craig has noted, courtrooms are inhospitable places, and can be intimidating and unsettling, even without the stress of cross-examination. Telling the witness to tell the truth is critical; but a truthful witness told nothing else risks slaughter on the stand.

Coaching is thus a risk, but not in my view one significant enough to outweigh the benefits of preparation, especially bearing in mind that they actually are not at all the same thing. Ethical preparation of a witness is not coaching.

What about the other risks, of the accusation of coaching, and that the prosecutor may become a witness? Again, this is a possibility. Courts have allowed counsel to cross-examine a witness to determine if coaching occurred (R v Weibe, [2006] OJ No 544 (CA)). They have been clear that coaching is inappropriate (see, e.g., R v Muise, [1974] NSJ No 298 (NSSCAD) at para 38 – obiter re coaching by police; General Motors of Canada Ltd. v Canada, 2008 TCC 117 – coaching by a lawyer in examination for discovery). Courts have noted that counsel may end up being a witness if coaching is alleged (R v Polani, [2006] BCJ No 915 at para 13).

But this is a risk that can be managed. Three obvious routes come to mind. First, the lawyer may prepare the witness with someone else present – a police officer or social worker. That ensures that the lawyer has both the appearance and reality of care in how she approached the witness. It also provides a person who can testify in the event that the lawyer’s preparation of the witness becomes an issue in the trial, or new evidence is disclosed. That person can also take “notes” to disclose to the defence. Second, if the lawyer prepares the witness alone, and new evidence arises, the lawyer can have that witness repeat that information to a police officer who discloses it to the defence. This approach is obviously less thorough than the first, but it would be appropriate for some witnesses. Third, the Crown’s office may develop standard materials and practices for the purpose of preparing a witness – preparation checklists – which they can use to ensure that they stay on the right line between preparation and coaching, and which they can use to support the claim that they have done so. Routinization both improves practices and educates people about the nature of the practices being engaged in.

I have been told by some prosecutors that judges do not always appreciate the difference between preparation and coaching, and can be alert to any allegation that a prosecutor has coached a witness. That is unfortunate. Coaching is bad. It would not just undermine trial fairness but would also be deeply unfair to the accused. But judges should be as aware of the importance of witness preparation to the discharge of the prosecutor’s duties as they are to the dangers of witness coaching. Judges do not need to take prosecutors at their word, or to be naïve about the risks of prosecutorial misconduct, but they do need to let prosecutors fulfill their function within the legal system.

Proposition Three: The prosecutor represents the public, not the complainants, and owes the complainants no obligation in his role as prosecutor

This proposition troubles me the most of the three. It is of course true that the prosecutor’s client is the Crown not the complainant. But there is a world of difference between saying that someone is not your client, and saying that you owe them no duty. Being a lawyer creates moral challenges. Sometimes the lawyer’s professional obligations require him to violate ordinary moral obligations. As Abbe Smith has carefully and bravely explored in the paper noted earlier, a defence lawyer has a professional obligation to challenge the credibility even of truthful complainants in a sexual assault case. Doing so puts that lawyer in the crosshairs of the moral demands of protecting the dignity and humanity of her client and the moral demands of respect for the dignity and humanity of the complainant. There is no answer to that dilemma which does not require some sort of moral sacrifice.

But the point of that observation is not that that lawyer has no moral obligation to the complainant. The point of that observation is that the defence lawyer has conflicting moral obligations, which she cannot simultaneously fulfill. That’s what makes being a lawyer morally difficult, some of the time.

The prosecutor has a legal duty to the state in conducting a prosecution. But that does not excuse or eliminate his moral, legal and ethical duties with respect to others in the court room. He has the same obligations he would have elsewhere not to participate in the wrongful infliction of harm on others. And where preventing the wrongful infliction of harm is not only not inconsistent with his professional duties, but is in fact required to fulfill those duties, it makes no sense at all to say that the lawyer has no duty to prevent such harm.

As I have been endeavoring to demonstrate, both the exercise of prosecutorial discretion and trial advocacy require the prosecutor to prepare witnesses. And it is through preparation of a witness – and in particular a sexual assault complainant – that the prosecutor can help to protect the witness from the wrongful infliction of harm. The prosecutor cannot prevent the witness from experiencing harm. Being cross-examined is inevitably awful, especially for a person testifying to a traumatic and personal experience, with respect to which she may feel shame, embarrassment or guilt. But that inevitable harm must not be confused with preventable wrongful harm. And it is the preventable wrongful harm with respect to which a prosecutor does have moral responsibility. A witness needs to know what is going to happen to her. She needs to have the chance to think about how she will respond to the questions she is going to be asked. She needs not to be intimidated by the ordinary processes of a criminal trial. She needs to be given basic strategies to avoid getting confused, distressed or angry on the stand. She does not need to be – and must not be – told what to say. But she does need general advice on how to say it, and on how to withstand being asked questions designed to confuse or unsettle her. The prosecutor cannot prevent her from being cross-examined, but through effective preparation he may well prevent her from being unduly harmed.

Some will respond to this point by noting that some complainants have counsel, as they did in Ghomeshi. But that point does not speak to the duties of the prosecutors. First, relatively few complainants will have counsel. Second, having a lawyer is not the same as having the resources to pay a lawyer to work for hours on your case. Third, the complainant’s lawyer does not know the prosecutor’s trial strategy, and has no access to the evidence and materials that have been provided to the prosecutor by the police – she may not even have the witness’s police statement. It may even be improper for the complainant’s lawyer to prepare her client in a way that undermines the prosecutor’s ability to prosecute the case ethically and effectively. Fourth, the complainant’s lawyer has the same duties not to coach a witness as the prosecutor, but is subject to far less scrutiny. If our concern is about preventing witness coaching, then it is prosecutors we should want to prepare witnesses, not a lawyer for the complainant. Finally, and most importantly, the existence of another lawyer does not change the duties of the prosecutor. The prosecutor has the duty to prepare, and the prosecutor has the moral obligation to ensure that people she can protect from wrongful infliction of harm are protected.

Conclusion

I understand that prosecuting cases ethically and effectively is difficult. We ask our prosecutors to occupy multiple roles. They have “clients” who are notional – the lawyer both identifies the interests of the Crown/client and pursues those interests. Prosecutors litigate against zealous opponents, who do not have duties reciprocal to theirs. Some cases – like Ghomeshi – are subject to overwhelming amounts of public scrutiny, much of it neither fair nor accurate. But none of that changes the importance of understanding accurately the role that prosecutors play. They occupy a central and powerful place within our criminal justice system, which places on them duties that they have to discharge ethically and effectively. Those duties include ethical preparation of witnesses, and the protection of those witnesses from the wrongful infliction of harm by others.

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R v LSM and the “Sanctity” of the Joint Submission

Mon, 03/28/2016 - 10:00am

By: Lisa Silver

PDF Version: R v LSM and the “Sanctity” of the Joint Submission

Case Commented On: R v LSM, 2016 ABQB 112

In R v LSM, 2016 ABQB 112, Associate Chief Justice Rooke of the Court of Queen’s Bench of Alberta, sitting as a summary conviction appeal court, considers the “sanctity” of the joint submission and the circumstances in which the subsequent sentence will be varied on appeal. In his view “an appeal of a joint submission should rarely succeed” (at para 20). He supports this position by outlining three very narrow exceptions to this rule. After a thorough analysis of the principles, Associate Chief Justice Rooke reluctantly allows the appeal in part. He does so by finding only one ground of appeal, the ground presented on consent, falls within an exception. The decision, on its face, appears to be a straightforward application of the principles at hand. Yet, on further contemplation, this decision may not be about the “sanctity” of a joint submission but rather about ensuring that, in the end, justice is done.

Associate Chief Justice Rooke immediately frames the issue in sweeping terms in the opening paragraph of the decision: “This case concerns the sanctity of the ‘joint submission’ on a guilty plea and sentence in the administration of justice.” On a review of case law, the descriptor “sanctity” seems overdrawn. Although joint submissions enjoy a “high level of deference” and must be given “serious consideration” by the sentencing judge (See R v GWC, 2000 ABCA 333, Berger, JA at para 20), they are not inviolable. A sentencing judge is not bound by the proposed sentence. Indeed, as explained by Justice Berger in GWC (at para 19), it is incumbent on the sentencing judge to undertake “a careful and diligent inquiry of counsel as to the circumstances underlying a joint sentencing submission” before exercising the discretion to accept it. This is done to ensure the proposed sentence, in accordance with sentencing principles, is a fit one. Accordingly, sentencing judges should only reject a joint submission where the sentence proposed is unfit or unreasonable (See R v Gibson, 2015 ABCA 41 at paras 9 – 10). Indeed, departing from a joint submission, which is fit, should not be done “even if he or she would impose a harsher sentence which would also be fit and reasonable” (See R v Bullock, 2013 ABCA 44, Berger, JA for the majority at para 18).

Some appellate jurisdictions have taken the position that a joint submission may also be rejected if the sentence is contrary to the public interest and would bring the administration of justice into disrepute. Currently, the efficacy of this additional more stringent ground for departing from a joint submission will be argued on March 31, 2016 before the Supreme Court of Canada in the Anthony-Cook case on appeal from the British Columbia Court of Appeal (R v Anthony-Cook, 2015 BCCA 22). In Alberta, this ground has not been consistently adopted. In the GWC decision, Justice Berger does refer to this position in paragraph 18 without endorsing it as a viable ground beyond fitness or unreasonableness. In her dissenting opinion in Shular, 2014 ABCA 241, Justice Hunt does rely on this ground as providing an additional basis for rejecting a joint submission (at para 106). However, leave to appeal to the Supreme Court of Canada was dismissed in this case (Robert Shular v Her Majesty the Queen, 2014 CanLII 76800 (SCC).

Additionally, the joint submission itself is not considered a binding undertaking between the defence and prosecution. In the 2011 Nixon case, 2011 SCC 34, the Supreme Court of Canada agreed with the Alberta Court of Appeal’s decision that the repudiation of a plea agreement, on the basis it was contrary to the public interest, was not an abuse of process but a proper exercise of prosecutorial discretion. In that instance, the plea negotiation included a joint submission on sentence.

Even though the original joint submission cannot be considered sacrosanct, is the sentence imposed on the basis of a joint submission essentially “appeal proof?” Associate Chief Justice Rooke finds that it is, except in three very narrow circumstances. In his view, where a joint submission is proffered by competent counsel and accepted by a sentencing judge, the offender should not be permitted to “resile” later on appeal (at para 2). Further, according to Associate Chief Justice Rooke, the appeal court should “support” joint submissions by upholding them on appeal (at para 21). As he explains (at paras 21 and 25), a joint submission is an efficient and effective way to deal with criminal matters in the “busy docket courts.” It would therefore be counter intuitive to the realities of the practice of criminal law and the quest for finality to provide a further forum for change. The appellate arena is not, as described by Associate Chief Justice Rooke, an opportunity to express “buyer’s remorse” (at para 25). This last comment has some truth to it as there must be articulable grounds for appeal in accordance with sentencing principles and s. 687 of the Criminal Code. However, Associate Chief Justice Rooke further contends that a sentence resulting from a joint submission does not exist “until we allege there is an error in the sentencing judge accepting our representations or some other way” (at para 25).This premise comes very close to suggesting an erroneous position: that even an error in principle should not be a ground for appellate intervention. As argued in this post, that is exactly when appellate intervention is not only permitted but also desired.

In any event, Associate Chief Justice Rooke cites three “very narrow” circumstances in which an offender can “resile” from a sentence imposed by way of joint submission (at para 2). The first exception is where the sentence imposed is illegal because it is statutorily unavailable (at para 3). The second instance is where the sentence, “for some unusual reason,” is demonstrably unfit (at para 4). Third, which according to Associate Chief Justice Rooke is the situation in LSM, is where there is a “change in circumstances” after sentence is imposed (at para 5).

The first exception, illegality of sentence, makes sense. Certainly, there is an obligation on the appellate court to correct an illegal sentence. Even in cases where an appeal has not been filed within the designated appeal period, the court has allowed extensions to file an appeal where an illegal sentence was imposed (see for example R v MJR, 2007 NSCA 35). In R v Hunter, 2004 ABCA 230, the Alberta Court of Appeal vacated the illegal conditional sentence of 18 months imposed for a summary conviction offence, where the maximum sentence was six months incarceration, in favour of time served.

The second exception permits an appeal where, for “unusual” reasons, the sentence imposed is demonstrably unfit. As an example of this, Associate Chief Justice Rooke refers to the unusual situation in which competence of counsel is raised on appeal (at para 4). Granted, competency of counsel as it relates to the efficacy of a joint submission is a valid ground and, due to the presumption of competency, may be viewed as rarely raised. Leaving that situation aside, there may be other situations, not as rare, where a sentence resulting from a joint submission is demonstrably unfit or unreasonable. Associate Chief Justice Rooke depicts the heightened circumstances in which a joint submission might occur as a “busy docket court” where counsel “deemed to be competent and knowledgeable in the law” proffer a joint submission thereby “impliedly certifying” the sentence is fit and requesting the sentencing judge to “endorse” it (at para 21). Indeed, as mentioned earlier, it is precisely those heightened circumstances of “busy docket courts” where matters are dealt with summarily, which may provide the perfect environment for an unfit sentence. It is in those scenarios where an accused may too readily accede to a joint submission or where “competent and knowledgeable counsel” may accept a position that upon further reflection may require appellate scrutiny. In the end, it is the ultimate fitness of the sentence imposed by whatever means, which is at issue on appeal. As Mr. Justice Wagner explains R v Lacasse, 2015 SCC 64 (at para 3), it is the very credibility of the criminal justice system at risk when an unfit sentence, be it “too harsh or too lenient,” is imposed. An unfit sentence does not become fit merely because everyone agrees to it, just as an illegal sentence, imposed on consent, does not then become legal. There are numerous appellate decisions upholding departures from joint submissions to further this contention. Surely, the same reasoning should hold in the converse situation of an offender appealing a sentence he or his counsel agreed to previously, particularly considering it is the offender’s liberty interest which is at risk.

It is the third exception, permitting a variation where there is a change in circumstance after imposition of the sentence, which seems an incongruous ground considering Associate Chief Justice Rooke’s position. Indeed, a change of circumstance (not even a material change of circumstance is required) is a generous ground for intervention. In paragraph 27 of the decision, Associate Chief Justice Rooke attempts to support this ground for intervention by reference to the 2012 decision of the Alberta Court of Appeal in R v Gangl, 2012 ABCA 121. There, the majority of the Court found the sentencing judge made no errors in imposing sentence yet reduced the sentence. In the majority’s view, the appellant’s circumstances were exceptional and the accused who had “serious health problems” was impacted by the “consequences” of the conviction. As a result, the majority converted the conviction to a conditional discharge. The dissenting justice disagreed as there was no “reviewable error.”

Although Associate Chief Justice Rooke characterizes the Gangl decision as authority for an exception to the general rule, this finding is questionable for two reasons. First, this was a case, according to the majority, for a conditional discharge. A discharge under s. 730 of the Criminal Code, is a sanction in which a finding of guilt is made but no conviction is entered. A discharge, per s. 730, is granted where it is “in the best interests of the accused and not contrary to the public interest.” A consideration in imposing a discharge is whether a conviction would have “serious repercussions” (See R v Sanchez-Pino, 1973 CanLII 794 (ON CA)) for the accused, such as employment difficulties or, as suggested by the court in Gangl, “a number of consequences flow from this conviction” (at para 2). Admittedly, the Court’s analysis in Gangl is brief and does not discuss the six factors to consider in granting a discharge as required by the MacFarlane decision (1976 ALTASCAD 6 (CanLII)), but, on the face of the record, one could argue that in Gangl there was a “reviewable” error.

Second, this exception for a change in circumstances post-sentence is not a ground for appellate intervention according to the newly released decision of the Supreme Court of Canada in Lacasse and as quoted by Associate Chief Justice Rooke in paragraph 24. Associate Chief Justice Rooke makes further reference to the Ontario Court of Appeal case in Wood (1988), 131 CCC (3d) 250. This is a case decided before the Supreme Court of Canada decision in Lacasse, which, as previously discussed, emphasizes the importance of deference to the sentencing judge. Further, Justice Lacourciere, in rendering the Wood decision, states that “certainly the accused is given greater latitude than the Crown on an appeal of this kind in that he is generally not bound to the same extent by the submissions of his counsel as to sentence” (at para 9). Wood was referred to approvingly in both the GWC decision (at para 19) and in the LRT decision (2010 ABCA 224 at para 11). As succinctly put by Justice Lacourciere in Wood (at para 9), “the ultimate responsibility to determine the fitness of sentence is on the Court of Appeal.”

Associate Chief Justice Rooke, applying his rule, ultimately finds only one ground of appeal as a matter properly coming under the third exception. Earlier, in outlining this exception in paragraph 5, he offered s. 161 as an example of when such a change in circumstances may occur. This section provides for a variance of conditions in a prohibition order imposed on an offender convicted of any number of sexual offences involving children. As he notes and as contained in the wording of s. 161(3), an application to vary the sentence is heard before the sentencing judge or “where the court is for any reason unable to act, another court of equivalent jurisdiction.” In other words, the proper forum for the change is not on appeal but on application to the originating court. Yet Associate Chief Justice Rooke, despite the matter of jurisdiction, varies sentence on this ground, not because of s. 161 but because the change in circumstance is a new joint submission proffered on appeal by two competent counsel (one can infer, as equally competent as sentencing counsel). Here, Associate Chief Justice Rooke finds himself between the proverbial “rock and a hard place”: on one hand, he outlined the difficulties of appealing a joint submission, the rarity of success, the limited circumstances in which it should be done, and the sound policy reasons for not permitting such an appeal. On the other, he accedes to the new joint submission, not based on any principles of sentencing, but rather on a procedural availability not even within his purview on a strict reading of the section.

Perhaps, in the end, this pragmatic and experienced trial judge, sitting as a summary conviction appeal court, recognized that principles and rules do not always produce a just outcome. Perhaps, he agrees with the majority of the Alberta Court of Appeal in Gangl that the appellate court “is the last stop on the road to mercy” (see Gangl, Watson JA at para 21). Or perhaps, as initially suggested by Associate Chief Justice Rooke, the LSM decision may indeed be all about the “sanctity” of the joint submission, in whichever forum it is offered and in whatever circumstances it arises.

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The Termination of Power Purchase Arrangements in Alberta: What is the Legal Position and What are the Implications of Termination?

Thu, 03/24/2016 - 10:00am

By: Nigel Bankes

PDF Version: The Termination of Power Purchase Arrangements in Alberta: What is the Legal Position and What are the Implications of Termination?

Case Commented On: The decisions of various buyers to “terminate” their interests in power purchase arrangements (PPAs)

In December 2015, Enmax announced that it was “terminating” its interest in a power purchase arrangement (PPA) with the owner of the Battle River 5 coal plant subject to the PPA (see Enmax terminates unprofitable-coal-fired electricity contract). That was followed this month (March 2016) with announcements from TransCanada Energy and ASTC Power Partnership (a partnership of Trans Canada Energy and AltaGas Pipelines) that they too had given notice to terminate and would be walking away from their obligations as buyers under PPAs relating to Sheerness and Sundance A and B. In announcing its decision, TransCanada indicated that it was doing so because “Unprofitable market conditions are expected to continue as costs related to CO2 emissions have increased and they are forecast to continue to increase over the remaining term of the PPA agreements.” It is generally understood that reference to “costs related to CO2 emissions” is a reference to the emissions penalty imposed by the Specified Gas Emitter Regulation (SGER), Alta Reg 139/2007. This Regulation, first introduced in 2007, requires regulated emitters (including owners of coal fired generating plants) to achieve improvements in emissions intensity at their facilities (or purchase offsets or emissions performance credits) failing which these emitters must pay into the Climate Change and Emission Management Fund. The emissions intensity target was originally set at 12% over the original baseline for the facility and the fund contribution at $15 a tonne (payable only for emissions in excess of the emissions intensity target for the facility). While the previous government dithered and procrastinated on changes to the intensity target and changes to the level of fund contribution (indeed the previous government extended the sunset provision in the regulation twice), the Notley government grasped the nettle, and, in June 2015 announced, as an interim step in the development of a more comprehensive climate change policy, that regulated emitters will be required to achieve an emissions intensity target of 15% in 2016 and 20% in 2017, while the compliance price for excess emissions will rise from $20 per tonne in 2016 to $30 per tonne in 2017. Those developments are discussed in an earlier post here.

There has been considerable coverage of PPA termination matters in the media and in law firm blogs (see Osler here). I discussed these issues with my Energy Law class this term and it seems useful to share the analysis that we developed. We can anticipate that various parties, including buyers under PPAs, the province’s Department of Energy, and the Balancing Pool (see further discussion of the Balancing Pool below and see Darcy Henton, Calgary Herald, March 19, 2016, “Balancing Pool to investigate impact of PPAs”) have already commissioned or will be commissioning detailed legal opinions on the issues surrounding termination, but it seems unlikely that those opinions will see the light of day. Hence, with a view to informing and stimulating more public debate on these issues, here are some of the elements of our discussion, principally presented in a Q & A format and with hyperlinks to some additional relevant sources.

What is a power purchase arrangement and why were they created?

PPAs were developed as part of the Province’s strategy to introduce competition into the generation sector of the electricity industry. Prior to 1995 the electricity sector in Alberta was subject to cost-based utility regulation. Coal generation was the dominant form of generation. Facilities were owned by one of the three main utilities – Edmonton Power (subsequently EPCOR and then publicly traded as Capital Power), Alberta Power (subsequently ATCO) or TransAlta (TAU). The generating facilities were part of the rate base and the cost of coal was recovered as an operating cost. Cost-based rates were approved by the Public Utilities Board (now the Alberta Utilities Commission (AUC)): see for example, Alberta Power Limited et al v Alberta Public Utilities Board (1990), 72 Alta LR (2d) 269 (CA).

A market dominated by three incumbent generators is not a competitive market (and will not attract new entrants because new entrants will worry about the market power that the incumbents may exercise). Hence, the province needed to come up with a strategy for limiting the market power of the incumbents. One option would be to force the incumbents to sell generation assets. There is little doubt that the province could do this (constitutionally) but it was not a politically attractive option. Instead, the province opted for “virtual divestiture” through the mechanism of the PPAs. The Court of Appeal summarized the position in ATCO Electric Limited v Alberta (Energy and Utilities Board), 2004 ABCA 215 as follows (at para 18):

The theory was that by compelling this generation capacity of the Alberta power producers to be disposed of under PPAs, it would increase the number of parties selling electricity which would, in turn, increase competition and result in lower prices for electricity. … PPAs cover the electrical output of most regulated plants (those in existence prior to the 1995 Act) from January 1, 2001 until December 31, 2020. … Viewed in this light, PPAs represent an example of the government’s attempts, on restructuring, to increase competition and promote a more balanced relationship, in terms of bargaining power, between utilities and their customers.

A PPA separates two things: (1) ownership and operation of the plant, and (2) the right to bid generation from the plant into the power pool (the market for generation). The incumbents continue to own and operate the facility but the buyer under the PPA decides at what price to bid generation into the pool. As the Minister of Energy (Dr. West) explained to the Legislature (and as quoted in AUC Decision, MSA v TAU, Nathan Kaiser and Scott Connelly, Decision 3110-D01-215 at para 545:

The power purchase agreements will remove control over around 7,500 megawatts, and that’s about what we have in the system today. It will remove control over around that much generation from the utilities and transfer them to new players. This will definitely address the market power concerns.

Under the terms of the PPA, the buyer compensates the owner for its fixed and variable costs on the basis of a formula which is intended to mimic the compensation that the owners would receive under traditional cost of service regulation. The evident purpose of this method of compensation is to ensure that the incumbents are made whole. The owners continue to receive a return of, and a return on, capital much as they would prior to the introduction of competition. There is no interference with their investment-backed expectations. The buyer takes the market risk. To the extent that pool prices generally exceed the fixed and variable costs that the buyer must pay the owner, the buyer will be in the money. To the extent that the pool price consistently falls below these costs the buyer will be under water. Buyers however did not, as we shall see, assume any risk for change of law – and neither did the owners. The same is true of the risk of force majeure: TransAlta Generation Partnership v. Balancing Pool, 2012 ABQB 2. These risks are borne by the ratepayers on the system.

Once the PPA comes to an end, offer control reverts to the owner but the expectation was that, by that time, additional parties would have entered the market such that the old incumbents would no longer have a dominant market share. The most recent report of the Market Surveillance Administrator (MSA) on market share (June 2015), Report on Market Share Offer Control records the following (at 1): ENMAX, 17%, TransCanada, 16.5%, TransAlta, 14%, Capital Power, 10.9%, ATCO, 10.5%, other 28.7%. Clearly these figures will need restating in light of the PPA terminations. Section 5(5) of the Fair, Efficient and Open Competition Regulation, Alta Reg 159/2009 (FEOC Regulation) provides that a market participant may not hold offer control in excess of 30% of the maximum capability of generating units in Alberta (18,855 MW according to the same MSA report).

The acquisition of a PPA

PPAs were auctioned in what turned out to be a series of rounds. The theory was that the auction price should serve to capture at least some of the upside potential that the buyers might anticipate earning on the difference between payments to the owner and the pool price. As it happened the first sale was far from successful. Of the 12 PPAs offered for sale in that auction only 8 were sold and only $1.1 billion received (for 4,249 MW of approximately 6,400 MW). The unsold PPAs were assigned to the Balancing Pool. The Balancing Pool subsequently conducted a series of additional sales between 2000 and 2006 (some of the details of the sales are discussed in AESO, Path to Transformation 2006, at 12 – 13). Most commentators consider that the auctions failed to capture the upside potential and that the buyers obtained significant windfall rents until the market started to soften in the last few years. According to AESO, data average hourly pool prices between 2000 and 2013 have ranged from $133.33/MWh in 2000 to $43.93/MWh in 2002; from 2010 to 2013 the average prices were $50.88, $76.22, $64.32 and $80.19/MWh).

What is the legal status of a PPA?

The proper name of these instruments is “Power Purchase Arrangements”. The use of the term “arrangements” rather than agreements must be taken to be deliberate. They are not contracts, or at least contract law cannot adequately describe or comprehend these instruments. The AUC put the point this way in AUC Decision, MSA v TAU, Nathan Kaiser and Scott Connelly, Decision 3110-D01-215 at para 289:

The Commission finds, for the reasons that follow, that the PPAs are a component of a comprehensive statutory scheme enacted to ensure the fair, efficient and openly competitive operation of the electricity market in Alberta. The Commission finds that neither the historical record nor the nature of the PPAs themselves support TransAlta’s assertion that the PPAs should be treated as commercial contracts that are immune from Commission review or interpretation. The IAT itself addressed the proper characterization of the PPAs in its August 1999 report to the EUB in which it stated:

The IAT has elected to proceed on the basis that the PPAs will not be agreements. It is proposed that the PPAs be specifically authorized and implemented in accordance with the legislation and the regulations which will specify that a particular arrangement attached by reference will operate as between the named Owner and successful bidder at the PPA auction(s)…

As a general rule, the IAT has drafted the PPAs to be as close to a contractual form as possible recognizing the limitations involved. There are recitals but they do not record any agreement as between the parties. Certain other clauses to contracts have been left out and, finally, there is no provision for the document to be executed since it will be in effect by virtue of the legislation and the regulations.

Are PPAs public documents?

Yes. The PPAs are public documents but they are not readily available. Here is the PPA for Sheerness. I understand that, with the exception of the TAU hydro PPA, the other PPAs (the thermal PPAs) take a standard form: see AUC Decision, MSA v TAU, Nathan Kaiser and Scott Connelly, Decision 3110-D01-215 at para 273. For a list of thermal PPAs see the MSA’s, Alberta Wholesale Market, “A description of basic structural features undertaken as part of the 2012 State of the Market Report”, August 2012 at 4.

The PPAs were ultimately approved and scheduled to Power Purchase Arrangements Determination Regulation, Alta Reg 175/2000, as amended by Alta Reg 215/2001 – but this regulation was never published in the Alberta Gazette due to its size and complexity: Dispensing with Publication Regulation, Alta Reg 201/2000 and they are not on CanLII. The regulation is available for purchase from the Alberta Queen’s Printer at $265. Alternatively you may access it through one of two subscription services, the QP Source Professional database, or Quicklaw/Lexis Advance Quicklaw (search under legislation). To find the PPAs through QP Source, click on “Non-Electronic Legislation” on the left-hand side of the screen then “Power Purchase Arrangements Determination Regulation.” You will find a list of each PPA, with a link to a Word document or Excel file for each section, schedule, table, or appendix. I am grateful to Nadine Hoffman, Natural Resources, Energy & Environmental Law Librarian, Bennett Jones Law Library, University of Calgary for providing text for this paragraph.

Does the buyer under a PPA have the right to terminate a PPA, and if so, on what grounds?

A buyer under a PPA may terminate a PPA under either Article 4.3 on the grounds of a “change of law” or under Article 17.4 “specific termination by the buyer”. The principal difference is that termination under Article 4.3 is without liability to the buyer whereas termination under Article 17.4 requires the buyer to make a payment to the Balancing Pool in accordance with a schedule to the PPA. I take it that this payment essentially covers the undepreciated value of the generation asset over the balance of the PPA.

What must a buyer establish in order to allow it to terminate the PPA on the basis of a change in law?

Section 4.3(j) of the PPA provides that

Notwithstanding any of the foregoing, to the extent that a Change in Law, after giving effect thereto and to this Section 4.3, could reasonably be expected to render continued performance by the Parties to this Arrangement for the balance of the Effective Term unprofitable to the Buyer in respect of a Unit, having taken account of any compensation entitlement under Section 4.3(i) or any amount due from the Balancing Pool, then the Buyer may terminate this Arrangement and shall not be liable for, nor entitled to any Termination Payment.

It is important to construe this paragraph in the context of the entire section 4.3. The overall intent of s.4.3 is to hold the owner harmless from the consequences of any change of law. In order to achieve this, the buyer is responsible for covering any incremental costs incurred by the owner as a result of the change of law. At this point paragraph (j) is triggered so as to allow the buyer to escape the terms of the arrangement if having “given effect” to the principle of holding the owner harmless it concludes that its continued performance as the buyer would be unprofitable.

In sum, in order to be able to terminate the buyer must be able to establish that: (1) there was a change of law, (2) the change of law resulted in the owner being able to pass along to the buyer incremental costs, and (3) the buyer having covered those costs (“to the extent that”) formed the “reasonable expectation” that continued performance for the balance of the PPA would be unprofitable.

Do the amendments to the SGER constitute a change of law? The answer must be yes. The PPAs define change in law as follows:

“Change in Law” means

(a) the adoption, enactment, promulgation, modification, amendment, or revocation after May 31, 1999 of:

(i) any Laws applicable to the Owner or the Buyer, which relate to the following: (A) taxes, including any charge or tax related to the use or consumption of fossil fuels or the production of any related by-products from any such use or consumption, but excluding any change with respect to any taxes in respect of which an amount is calculated in Article C5 of Schedule C, (B) any Unit or the Plant including the ownership, operation, maintenance or decommissioning thereof, (C) the electricity sector, including re-regulation or deregulation affecting generation, supply, sale or transmission of electricity, transmission system or Power Pool access charges, (D) the environment, including any environmental taxes, or (E) this Arrangement or the subject matter of this Arrangement;

(ii) any interpretation, reinterpretation or administrative position relating to any of the Laws referred to in paragraph (i) above of any Governmental Authority;

(iii) any material requirements or condition in connection with the issuance, renewal, extension, replacement or modification of any Governmental Approval required in connection with this Arrangement;

(iv) the effective rate of coal royalties or other fuel related royalties associated with the provision of Generation Services in connection with the action of any Governmental Authority; or

(b) the entering into after May 31, 1999 of any TA Agreement which provides for the replacement of or changes to Measuring Equipment to bring non-compliant Measuring Equipment into compliance with applicable Laws;

It is hard to overestimate the breadth of this definition and the scope of the protection it offers an owner. The SGER amendments would seem to fall within either (a)(i)A (any charge or tax related to the use of consumption of fossil fuels – and I note here that I have not worked through Article C5 of Schedule C) or (a)(i)(D) (a law pertaining to the environment including an environmental tax).

Have these costs been incurred by the owner and has the owner been able to pass these costs on to the seller? I assume this to be the case.

Did the assumption of these costs by the buyer lead to a reasonable expectation that performance over the balance of the term would be unprofitable? This is a much more difficult question to answer. In order to rely on this part of the clause it seems that the buyer must be able to establish that it is its obligation to meet the cost of giving effect to the change of law that is the proximate cause of the unprofitability. This follows from the language of “to the extent that”, “giving effect thereto” and the word “render”, all of which seem to import some degree of causality. If the proximate cause of unprofitability is something else then the buyer should not be able to trigger termination under this provision of the PPA.

From the buyer’s perspective the PPA will be unprofitable over the balance of the term if it forms the reasonable view (the test would seem to be an objective test and not a subjective test) that pool prices will, on average, not allow it to cover the payments that it must make to the owner over the balance of the term. The variables here include not only the costs that the buyer must cover but also the pool price. If the market is flooded with power, pool prices will drop. If that is the proximate cause of the unprofitability there is good reason for thinking that the clause as written will not allow a buyer to escape its liabilities. Current pool prices are weak. The MSA’s most recent quarterly report (Q4, 2015) notes that “Average wholesale electricity prices in Q4/15 set yet another all-time low. The pool price for the quarter averaged $21.19/MWh.” This is due to a number of factors including the low cost of natural gas, the amount of cogeneration that has been built in the province in recent years, a slowing in growth in demand due to overall economic conditions, and other capacity additions including wind generation and ENMAX’s 800 MW Shepard facility. It is not clear what the future holds except a high degree of uncertainty which is an inevitable consequence of the phase-out of coal fired generation under the terms of the province’s Climate Leadership Plan and the addition of natural gas and renewable capacity. The latter issue is currently being examined by the Alberta Electric System Operator.

However, there is a complicating factor in all of this. In the course of finalizing the terms of the PPAs, potentially interested buyers and others posed a number of queries to the Independent Assessment Team. One such query, query 8, related to the meaning of s.4.3(j) of the PPAs. The query and the IAT’s response were as follows (this material is from the record in AEUB Proceeding 990277; this was the AEUB Proceeding to review the terms of the PPAs, and the text is available here):

Query 8   PPA Section 4.3(j) – Unprofitability of the PPA Due to Change in Law

Clarification is required of the phrase “render continued performance by the Parties to this Arrangement for the balance of the Effective Term unprofitable to the Buyer in respect of a Unit…”

A literal interpretation of this clause could result in a Buyer being precluded from exercising its right to terminate the PPA pursuant to Section 4.3(j) because the Change in Law did not “render” the PPA “unprofitable” where the PPA was already “unprofitable” prior to the Change in Law.

It is proposed that Section 4.3(j) of the PPAs be clarified in a manner that makes it clear the Buyer shall be entitled to terminate the PPA and shall not be liable for, nor entitled to any Termination Payment if a Change in Law renders the PPA unprofitable, or more unprofitable.

Response:

The IAT has reviewed PPA Section 4.3(j) and confirms that the intention was to provide and (sic) exit provision with no right to or liability for a Termination Payment in the event that a Change of Law rendered a PPA unprofitable or more unprofitable. This intention would be made more clear in the PPAs with the insertion of the following (in bold italics) at S4.3(j) of the PPAs:

“Notwithstanding any of the foregoing, to the extent that a Change in Law, after giving effect thereto and to this Section 4.3, could reasonably be expected to render continued performance by the Parties to this Arrangement for the balance of the Effective Term unprofitable, or more unprofitable, to the Buyer in respect of a Unit, having taken account of any compensation entitlement under Section 4.3(i) or any amount due from the Balancing Pool, then the Buyer may terminate this Arrangement and shall not be liable for, nor entitled to any Termination Payment.”

The IAT provided this and other clarifications to Mr. Charach, Director of the Electricity Branch of the Department of Energy under cover of a letter dated 31 July 2000. In that letter the IAT stated that “The responses clarify what we believe to have been the obvious intent of PPAs as originally filed. We believe this responds to all additional queries which have been raised. The errata sheet should be considered as being attached to and forming part of each PPA, as applicable.” (emphasis added).

It is evident that this clarification which was “attached to and forming part of each PPA” considerably enhances the power of the buyer to terminate without liability. On its face it seems to suggest that even if market conditions are the principal cause for the unprofitability of the PPA from the buyer’s perspective, then any change of law, however small, which makes the PPA just that bit more unprofitable allows the buyer to terminate. This hardly seems to be a commercially reasonable conclusion – let alone the “obvious” intent of all of those interested in the structure of the PPAs. Nevertheless, the AEUB under the terms of Order U2000-190 did endorse the IAT’s conclusions.

Does termination really mean termination?

Termination by the buyer on the grounds of change of law does not in fact or in law terminate the PPA. Termination is a misnomer. Termination by the buyer merely serves to effect a statutory assignment of the buyer’s rights and liabilities under the PPA to the Balancing Pool. This follows from s.96(3) of the Electric Utilities Act, SA 2003, c. E-5.1 which provides that:

A power purchase arrangement, other than a power purchase arrangement held by the Balancing Pool, that is terminated other than under section 15.2 of the power purchase arrangement

(a) is deemed to have been sold to the Balancing Pool, and

(b) is to be held by the Balancing Pool in the capacity of a buyer for all purposes of this Act, the regulations and the power purchase arrangement.

Who or what is the Balancing Pool?

It is clear from what I have written so far that the Balancing Pool (BP) plays a central role in these arrangements to introduce a competitive electricity market – so what is this entity? Its name certainly does not leave many readers any the wiser – neither does the BP’s website.

The BP is established (or now continued) by the Energy Utilities Act (EUA). In general one can say that the BP is an essential component in making sure that the PPAs deliver on their promise of holding owners harmless from any changes brought about by the introduction of competition into the generation sector through the PPAs. Section 85 provides a statement of the BP’s duties. To summarize that lengthy section so far as relevant here, the BP is responsible for exercising the buyer’s rights under a PPA where those rights have come into the hands of the Power Pool either because nobody bid to acquire the PPA at the auction, or because the buyer has terminated the PPA as described in the previous section. For so long as the BP holds the PPA it may exercise the right to bid the generation into the power pool (s.85(1)(b)) and thus bears the market risk as described above. Thus, at any one time, it may be in the money or under water. In either case the BP must balance its accounts (and that I think is the source of the name – only an accountant could give us that!) as instructed by s.85(1)(h) of the EUA which provides that any net amounts greater or less than $0 must be included in the ISO tariff. The ISO tariff is the tariff that must be filed by the Independent System Operator under s.30 and Part 9 of the EUA. The ISO (also known as the Alberta Electric System Operator (AESO)) is responsible for the Power Pool and for providing system access to the transmission system. The implication of this pass-through of costs and liabilities into the ISO’s tariff is that any such gains or losses are passed on to all electricity customers in Alberta through the transmission tariff on their bill.

What options are open to the Balancing Pool when a buyer terminates a PPA?

As noted above, termination by a buyer serves to assign the PPA to the BP. What options does the BP have when it receives such an assignment? I think that the EUA gives the BP three options (see also BP Press Release, February 24, 2016, Battle River 5 PPA – Buyer Termination).

The first option, as noted above, is to manage the PPA much as the former buyer did and bid the generation into the pool “in a commercial manner” (s.85(1)(a)) and in a manner (s.86) which is “responsible and efficient” and, since the BP is a “market participant” within the meaning of the EUA, in accordance with the general obligation to conduct itself (s.6) in “a manner that supports the fair, efficient and openly competitive operation of the market” (the FEOC Principle, and see the FEOC Regulation, above). What does all of this mean? Given the nature of the assets (coal-fired base loads plants) which cannot readily be turned on and off it means that the BP will likely follow a strategy of bidding into the pool at a price which ensures dispatch. In return, the BP will receive the hourly pool price which may or may not cover the fixed and variable costs that the BP now owes the owner of the plant. This may be an appropriate short-term commercial strategy. It becomes more suspect (commercially and politically) if this means (which will depend on pool prices) that the BP continues to operate these assets at a loss.

While the BP’s operations must always be a wash, with profits and losses passed on to consumers, the BP likely has an obligation to protect the interests of those consumers so as to minimize the losses that consumers must bear. The EUA perhaps has less to say about this than one might expect but s.85(1)(g) does indicate that the BP must “manage risk prudently” and s.83(1) requires the BP to follow prudent investment standards in “managing the balancing pool accounts” – and perhaps this imports a quasi-fiduciary obligation to protect the interests of those ultimately responsible for paying the bill (see s.83(2) & 85(h) & (j)).

A second option (s.85(1)(d)) is to sell the PPA “when, in the opinion of the Balancing Pool, market conditions are such that a competitive sale of the [PPA] will result in the Balancing Pool receiving fair market value for the [PPA].” Given that TransCanada and other commercial parties have formed the view that the PPAs are currently “under water” it seems unlikely that the BP would attract any bidders.

The third option is to terminate the PPA under s.97 of the EUA “notwithstanding anything in the terms of the PPA”. Unlike termination by a buyer this really is termination! In order to exercise this option the BP must: (1) consult with representatives of customers and the Minister “about the reasonableness of the termination”, (2) give the owner six months’ notice of its intention to terminate (unless the owner agrees to a lesser period), and (3) pay the owner or ensure “that the owner receives an amount equal to the remaining closing net book value of the generating unit, determined in accordance with the power purchase arrangement, as if the generating unit had been destroyed, less any insurance proceeds.”

These are the only options listed in the Act (and see also Balancing Pool Regulation, Alta Reg 158/2003, ss.2(1)(h)(i) & (j)). The BP may have a fourth option, which is to contest the validity of the termination. The BP is in a positon to do this since, while it is not a party to the PPA, the PPA affords the BP access to the dispute settlement provisions of the PPA.

The BP can contest the validity of the termination of a PPA

It seems obvious that the owner may contest the validity of the buyer’s right to terminate the PPA. However, the owner may have little incentive to do so. After all, the owner will be held harmless since the BP steps into the shoes of the buyer and assumes the obligations of the buyer. The owner doesn’t really care if the PPA is managed by the buyer or the BP. It is also conceivable that a buyer might seek judicial confirmation that it has successfully triggered termination under Article 4.3(j). I understand that ENMAX PPA Management Inc has made such can application (here) for such a declaration in relation to its Battle River Unit 5 PPA, which it claimed to have terminated in December 2015, effective January 1, 2016.

As noted above, the PPA provides the BP with access to the dispute resolution provisions of the PPA in the following terms (s.21.8):

In any instance where the Balancing Pool may be required to make a payment to either Party, the Party which may receive such payment shall promptly inform the Balancing Pool of the circumstances which may give rise to any such payment. With respect to any such payments and the surrounding circumstances as well as any matter requiring the agreement, confirmation or determination of the Balancing Pool, it shall, with respect to the settlement of disputes that arise between it and the Owner or the Buyer, have rights and obligations under Article 19 [Dispute Settlement Procedure] as if it were a party to this Arrangement.

The dispute resolution procedure contemplates binding dispute settlement by either litigation (s.19.3) or by arbitration (s.19.4). While arbitration has apparently been the preferred option for resolving disputes over PPAs (and with a very mixed record of success, see for example the recitation of previous and conflicting arbitration awards in Enmax Energy Corporation v TransAlta Generation Partnership, 2015 ABCA 383) litigation is certainly possible.

Can anybody else contest the validity of a buyer’s decision to terminate?

In general one would think that only the parties to the contract (plus in this case the BP for reasons just discussed) could raise this issue in a court. But there is some reason for thinking that an interested third party (e.g. a tariff customer or a party representing the interests of tariff customers generally such as the Utilities Consumer Advocate) might be able to do so indirectly. The argument here might go as follows. The BP is a statutory body which is in principle amenable to judicial review: TransAlta Generation Partnership v. Balancing Pool, 2012 ABQB 2. A decision of the BP to accept the validity of a buyer’s decision to terminate is a statutory decision which may be judicially reviewed. Such an application would clearly be unusual. A court would likely not hear the application if any of the more interested parties were seeking a determination of the issue either through litigation or arbitration (see Independent Power Producers’ Society of Alberta v Independent System Operator (Alberta Electric System Operator), 2016 ABQB 133 and the post on that decision here and TransAlta v Balancing Pool, above); and if such a determination had actually been obtained then any effort by a stranger to the relationship to seek judicial review of the BP’s decision would undoubtedly be an impermissible collateral attack. But if none of the above “more interested” parties had raised the issue then I do not think that we could rule out the possibility that the UCA or a consumer group might have standing to raise the issue given the statutory flavor of these PPAs.

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Alberta Court of Queen’s Bench Overturns Discrimination Decision on Foreign Trained Engineer

Wed, 03/23/2016 - 10:00am

By: Linda McKay-Panos

PDF Version: Alberta Court of Queen’s Bench Overturns Discrimination Decision on Foreign Trained Engineer

Case Commented On: Association of Professional Engineers and Geoscientists of Alberta v Mihaly, 2016 ABQB 61 (CanLII)

In an earlier post with Jason Wai, we discussed the decision of the Alberta Human Rights Tribunal (AHRT), in which Mr. Ladislav Mihaly succeeded in arguing that the Association of Professional Engineers and Geoscientists of Alberta (APEGA) discriminated against him on the grounds of place of origin, when it refused to recognize his education as the equivalent of an engineering degree from an accredited Canadian University, and by requiring him to write certain examinations to confirm his credentials. The AHRT also concluded that APEGA could not justify its registration requirements. Thus, Mihaly was successful in his claim of discrimination and was awarded $10,000 for injury to dignity. The AHRT declined to award lost wages to Mihaly.

APEGA appealed the finding of discrimination by the AHRT, and Mihaly cross-appealed, asking for $1,000,000 for lost wages and registration with APEGA, or $2,000,000 if not registered with APEGA (at para 2).

Madam Justice June Ross discussed the appropriate standards of review at paras 46 to 53. She then set out the issues in the case as follows:

[54] The Appellant raises the following issues:

1. Procedural fairness: Did the Tribunal breach the rules of procedural fairness when he decided issues that were not raised by or with the parties?

2. Jurisdiction: Did the Tribunal err when he held that he had jurisdiction to determine whether discrimination based on the place a person receives their education constitutes discrimination based on place of origin?

3. Prima facie discrimination: Did the Tribunal rely on the correct legal test, and reasonably apply that test, to determine whether Mr. Mihaly had demonstrated prima facie discrimination?

4. Justification: Was the Tribunal’s decision that APEGA’s registration requirements were unjustified unreasonable?

First, Justice Ross concluded that the AHRT did not breach the rules of procedural fairness when it did not ask for submissions on its interpretation of the Engineering and Geoscience Professions General Regulation, Alta Reg 150/1999 (EGPR), section 8.

Second, Justice Ross concluded that the Appellant did not establish that the AHRT lacked jurisdiction to hear the case as it was about discrimination based upon the “place of origin of academic qualifications.” APEGA was seeking to rely on the case of Grover v Alberta Human Rights Commission, 1999 ABCA 240 (CanLII) in which the Alberta Court of Queen’s Bench held that the Alberta Human Rights Act, RSA 2000 c A-25.5 (AHRA) did not protect against discrimination based upon the “place of origin of academic qualifications” (the Court of Appeal had later declined to comment on the jurisdictional question). Justice Ross concluded that the jurisdiction issue in this case was more properly determined by the legal test for prima facie discrimination as set out in Moore v British Columbia (Education), 2012 SCC 61 (CanLII). This would be discussed under issue #3 (Mihaly QB, at paras 60-69).

The bulk of Justice Ross’s decision addressed whether the AHRT had used and applied the correct test for prima facie discrimination, and whether the AHRT was reasonable in concluding the APEGA registration requirements were unreasonable (and thus not justified).

The AHRT relied on the test for prima facie discrimination as set out by the Supreme Court of Canada in Moore. Justice Ross summarized the test as follows:

[73] Under the Moore test, establishing a prima facie case of adverse effect discrimination requires complainants to show that they have a characteristic that is protected from discrimination; that they experienced an adverse impact; and that the protected characteristic was a factor in the adverse impact…

While APEGA had initially asserted that arbitrariness or stereotyping is a required element of prima facie discrimination, Justice Ross concluded that the presence of arbitrariness and stereotyping may support a finding of discrimination but they are not required elements of a finding of prima facie discrimination (at paras 74-76).

In applying the Moore test, the AHRT concluded that Mihaly was discriminated against on the basis of “place of origin” (treatment as a foreign graduate because of the origin of his educational credentials). Further, Mihaly was adversely impacted by APEGA’s requirements that Mihaly complete confirmatory examinations or the Fundamentals of Engineering Exam (FEE). Thus, “place of origin” was a factor in the adverse impact experienced by Mihaly.

There was no dispute in the appeal about the AHRT’s finding that Mihaly’s place of education was inextricably linked to his place of origin. Further, Mihaly’s place of origin was a factor in the adverse impact (at paras 100, 103).

Justice Ross emphasized that while the AHRT found the requirement to write confirmatory examinations or the FEE was an adverse impact related to Mihaly’s place of origin, any substantive disadvantage flowing from the requirements to pass the National Professional Practice Exam (NPPE) exams and possess one year of Canadian experience was not linked to the prohibited ground of discrimination (place of origin) (at paras 104-5). Justice Ross then found to be unreasonable the AHRT’s conclusion that APEGA assumed engineers with qualifications from foreign countries with which APEGA had no Mutual Recognition Agreements (MRAs) had qualifications which were not at par with Canadian engineering accreditation standards. She agreed that the AHRT’s finding was not supported by the evidence (at paras 84-85). Thus, the evidence did not demonstrate that Mihaly’s national origin was a factor in relation to any disadvantage that he may have experienced as a result of APEGA’s requirements (at para 105). There was no finding, and no basis for a finding, that the requirement to pass the NPPE constituted adverse impact discrimination (at para 106). Second, the requirement that registered professional engineers must have four years’ experience, one year of which must be in Canada, was not found to have had an adverse impact on Mihaly based on his national origin (at para 107). Justice Ross concluded that the AHRT’s failure to apply the Moore test in relation to the NPPE and Canadian experience requirements, and the lack of evidence to support a finding that these elements were present, rendered the AHRT’s finding of prima facie discrimination in relation to those elements to be unreasonable (at para 109).

Of the three bases argued for a finding of prima facie discrimination, only the requirement to write confirmatory examinations or the FEE was demonstrated to be related to Mihaly’s place of origin, constituting prima facie discrimination, and was thus subject to an analysis under AHRA section 11 to see if the contravention was reasonable and justifiable in the circumstances.

Justice Ross pointed out that the onus is on the respondent to establish a reasonable and justifiable defence, and that the AHRT had applied the correct legal test as set out in the case law:

To establish justification, the test requires the defendant to prove that:

(1) it adopted the standard for a purpose or goal that is rationally connected to the function being performed;

(2) it adopted the standard in good faith, in the belief that it is necessary for the fulfillment of the purpose or goal; and

(3) the standard is reasonably necessary to accomplish its purpose or goal, in the sense that the defendant cannot accommodate persons with the characteristics of the claimant without incurring undue hardship (at para 112, citing British Columbia (Public Service Employee Relations Commission) v BCGEU, [1999] 3 SCR 3 [Meiorin] and British Columbia (Superintendent of Motor Vehicles) v British Columbia (Council of Human Rights), [1999] 3 SCR 868 [Grismer]).

There was no quarrel with the AHRT’s findings with respect to the first two elements of the test. The appeal focused on the AHRT’s finding that APEGA did not reasonably accommodate Mihaly (at para 113).

The AHRT had found that the requirement to write confirmatory examinations was prima facie discriminatory and this requirement was not justified on two grounds (at para 118):

  •  that Mr. Mihaly should not have been required to write confirmatory examinations or the FE Exam, but only examinations to correct perceived academic deficiencies following an individualized assessment of his credentials;
  •  that Mr. Mihaly should not have been required to write a standardized “one size fits all” examination, rather than being individually assessed.

Justice Ross noted that the first ground arose from a misinterpretation by the AHRT of section 8 of the EGPR. This section provides that an applicant should be registered as an examination candidate where:

the Board of Examiners has required the applicant to complete one or more confirmatory examinations or examinations for the purpose of correcting a perceived academic deficiency [emphasis added].

The AHRT had concluded that the examinations assigned to Mihaly by APEGA were not for the purpose of correcting a perceived academic deficiency as required or contemplated by section 8. Justice Ross held that this interpretation ignored the disjunctive “or” in the statute (e.g., the examinations could also be confirmatory in nature). She concluded that the AHRT had no specific familiarity with the EPGR, did not request submissions from the parties, and thus made an unreasonable interpretation of section 8. Justice Ross noted that because there are several thousand engineering programs, APEGA does not have the capacity or resources to discuss and negotiate agreements with all of them, and must therefore assign examinations to assess the quality of engineering programs that are undertaken by applicants (at paras 120-122).

With respect to the criticism of the requirement of standardized examinations without individual assessments, Justice Ross concluded that there was no evidence internationally educated graduates with entry-level competence would have any difficulty passing the FEE (at para 130). She held that “the possession of entry level competence is reasonably necessary to safe practice as a professional engineer” (at para 135).

The possibility of individualized testing is supposed to be considered when analyzing whether an employer can accommodate an employee without undue hardship (Meiorin, supra at para 54). While APEGA individually assesses applicants to determine whether examinations may be waived (e.g., if applicants have completed a graduate degree in a Canadian university or an MRA country, or if they have ten years of progressively responsible engineering requirements), Mihaly did not meet the requirements for a waiver. Mihaly also did not pursue an internal appeal of APEGA’s waiver decision (at para 142).

The AHRT had ordered that APEGA establish a committee including foreign trained engineers who have successfully integrated themselves into the engineering profession and to specifically explore and investigate options for individually assessing Mihaly’s qualifications. APEGA was also directed to match Mihaly with a mentor who could provide guidance as to how to address his challenges as an engineer and integrate himself into the profession (at paras 144-145). Justice Ross found that these went “beyond the scope of any discriminatory conduct found or even alleged” and would have fundamentally altered APEGA’s standards and required it to act outside of its regulatory role (at para 147). She also held that Mihaly had an obligation to search for possible accommodations, and that the AHRT had failed to consider that Mihaly had never attempted the three confirmatory examinations or the FEE (at para 148).

Justice Ross concluded that the AHRT had failed to consider relevant factors in the assessment of undue hardship (at para 149). Therefore, the AHRT’s conclusions with respect to APEGA’s alleged failure to accommodate Mihaly to the point of undue hardship were unreasonable. APEGA had met its onus to establish that any prima facie discrimination was reasonable and justifiable (at para 150).

Justice Ross reversed the decision of the AHRT, and did not remit the matter back to the tribunal.

Commentary

Justice Ross’s decision seems to address any legal failings of the AHRT’s analysis in this particular case. Human rights decisions have been quite clear that blanket policies are problematic (e.g., mandatory retirement at a specific age without skill assessment) and that individual skills should be assessed wherever possible. Providing waivers in some circumstances for the requirement to meet competency exams like the FEE does strike a balance between the need to ensure competency for individuals from a wide range of backgrounds and the need for individual assessment. But it may also lead to decisions which appear arbitrary, where engineers from different countries are treated differently. This leads to the question of whether all engineers with foreign degrees should have to complete the same competency exams. That is the case for International Medical Graduates (IMGs), for example (for further commentary on this comparison, see our earlier post). At the same time, equality does not mean sameness of treatment, and recognizes that sometimes people may need to be treated differently to achieve equality of results.

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When is a Contract between Family Members Enforceable?

Thu, 03/17/2016 - 10:00am

By: Evaristus Oshionebo

PDF Version: When is a Contract between Family Members Enforceable?

Case Commented On: Hole v Hole, 2016 ABCA 34

At common law a contract is not enforceable unless the parties intended the contract to create legal relations. Whether or not the parties intended to create legal relations is determined objectively by examining the circumstances existing at the time of execution of the contract. However, there is a general presumption that contracts between family members are not intended to create legal relations. This presumption “derives from experience of life and human nature which shows that in such circumstances men and women usually do not intend to create legal rights and obligations, but intend to rely solely on family ties of mutual trust and affection” (Jones v Padavatton, [1969] 2 All ER 616 at 621 (CA)). The presumption is equally based on the reality that agreements between family members are usually not bargained or negotiated. However, the presumption is rebuttable by evidence. Thus, a contract between family members is enforceable where there is evidence that the parties intended the contract to create legal relations. The presumption could be rebutted by evidence showing that, although the parties are family members, the contract was reached or executed in commercial circumstances. As Professor John McCamus puts it, “[c]ommercial arrangements between family members may obviously be intended to create enforceable agreements” (John D. McCamus, The Law of Contracts, 2nd ed at 133).

The recent case of Hole v Hole, 2016 ABCA 34, raises an issue regarding enforcement of a contract between family members. In this case, the individual Appellant, James F. Hole, is the owner of the corporate Appellant, Hole Consultants Ltd. The individual Respondents own the Respondent companies as follows: James D. Hole owns Hole Engineering Ltd; Jack Hole owns Kessa Holdings Ltd.; Harry Hole owns Eloh Enterprises Ltd.; and Douglas Hole owns 512725 Alberta Ltd. The individual Appellant and the individual Respondents are members of the same family. Jack Hole and Douglas Hole are sons of the individual Appellant, while James D. Hole and Harry Hole are the individual Appellant’s brother and nephew, respectively.

These parties reached several agreements including the 1980 Transition Agreement, the 1993 Transition Agreement and the Letter of Understanding (LOU). Prior to the 1980 Transition Agreement, the individual Appellant and three members of the Hole family were shareholders in a company called Lockerbie and Hole Western Ltd. The individual Appellant held 25% interest in Lockerbie and Hole Western Ltd. while the three other family members held the remaining 75% interest. These original shareholders subsequently assigned their shares in Lockerbie and Hole Western Ltd. to two companies, Hole Consultants Ltd. (owned by the individual Appellant) and Hole Engineering Ltd. (owned by the Respondent, James D. Hole). The result was that Hole Consultants Ltd. held 80% of the shares while Hole Engineering Ltd. held 20% of the shares.

Pursuant to the 1980 Transition Agreement, Hole Consultants Ltd. and Hole Engineering Ltd. carried out joint venture projects in the name of a new company, Lockerbie and Hole Co. Ltd. Hole Consultants Ltd. held 80% equity in the joint ventures while Hole Engineering Ltd. held 20% equity. The 1980 Transition Agreement contained a retirement provision requiring all individuals involved in the joint ventures to sell their shares and cease being directors within a year of turning 60 years old. The individual Appellant turned 60 in November 1987 but as of 1991 he had yet to sell his shares and retire as director.

In 1991, the individual Appellant used his position as chair of the board of Westcan Malting Ltd. to procure a contract for Lockerbie and Hole Co. Ltd., Hole Consultants Ltd. and Hole Engineering Ltd. to build a malting plant on behalf of Westcan Malting Ltd. In keeping with the joint venture arrangements, Hole Consultants Ltd. and Hole Engineering Ltd. participated in this contract on an 80/20 equity interest basis. The malting plant was completed in 1993. Profits accruing from this contract, estimated to be $3.4 million, are the subject of the dispute between the parties.

The 1993 Transition Agreement was signed after “nearly two years” of negotiations and after 20 drafts of the agreement had been circulated by the parties (at para 12). The purpose of the agreement was to induce the individual Appellant to retire from the joint ventures. The agreement also anticipated that, upon the individual Appellant’s retirement, the individual Respondents and the companies controlled by them would be assigned equity interest in the joint ventures. Regarding the sharing of profits from the Westcan project, the 1993 Transition Agreement acknowledged that Hole Consultants Ltd. “will continue to participate in the earnings and claims associated with the various existing and future contracts which comprise the ‘Westcan’ project.” The agreement also provided that the “Successor Companies covenant and agree to pay to Consultants a participation in the earnings relating to these contracts for the period ended February 28, 1993, a fixed amount of $600,000.00.”

In order to encourage the individual Appellant to execute the 1993 Transition Agreement, the individual Respondents issued a ‘Letter of Understanding’ (LOU) to Hole Consultants Ltd. The LOU, which was addressed to the attention of the individual Appellant, stated that  

We, as the new group, fully recognize your efforts and contribution to the success of the Westcan project. We also acknowledge that your profit share for this project would be $1,600,000.00. In the Transition Agreement $600,000 of this amount is to be paid by the agreement of the Successor Companies (at para 14).

Upon receipt of the LOU the individual Appellant signed the 1993 Transition Agreement. However, the Respondents failed to discharge their obligation under the LOU. Thus, the individual Appellant and his company, Hole Consultants Ltd., filed this action against the Respondents for breach of contract.

Three issues were raised before the trial court but this comment addresses only one of the issues: whether the parties intended the LOU to create legal relations? On this issue the trial judge held that the LOU is not binding because the plaintiffs failed to establish that the parties intended the LOU to create legal relations.

Decision of the Court of Appeal and Analysis of the Decision

The Court of Appeal of Alberta set aside the trial decision primarily on grounds that the trial judge applied incorrect principles in interpreting the LOU (at para 37). The Court held that the trial judge wrongly attached weight “to the subjective intentions of the parties and to circumstances which only came to light after the contract was formed” (at para 36, emphasis in original). In the words of the Court, “Evidence regarding what occurred after the LOU was signed or the subjective intentions of the parties is irrelevant and does not form part of the ‘surrounding circumstances’ to be considered in contractual interpretation” (at para 37).

A contract is interpreted objectively and as a whole on the basis of the surrounding circumstances at the time of execution of the contract (Humphries v Lufkin Industries Canada Ltd., 2011 ABCA 366 at para 13). In effect, a determination of whether the parties in this case intended the LOU to create legal relations is made on an objective basis in view of the surrounding circumstances at the time of execution of the LOU. Surrounding circumstances include the aim or objective of the contract and “the background commercial setting for the contract” (Humphries at para 19). Applying this objective standard, the Court of Appeal held at para 40 of Hole that:

… a reasonable person having knowledge of the admissible surrounding circumstances would have reasonably understood that the objective of the LOU was to defer payment of $1 million until the business of the respondents became financially stable, and that the signatories had agreed to pay and had a continuing obligation to pay $1 million plus interest to the appellants.

Thus, the “LOU was intended to create a legally enforceable obligation of the respondents to pay the appellants $1 million, with interest, at a time that was dependent on the success and financial stability of the joint venture companies” (at para 44).

The decision of the Court of Appeal can hardly be faulted. The trial judge committed a palpable error “in law by applying incorrect principles in her interpretation of the LOU” (at para 37). Moreover, the trial judge’s interpretation of the LOU resulted in an outcome which is commercially absurd, thus defeating the clear intention of the parties. In Consolidated-Bathurst Export Ltd. v Mutual Boiler and Machinery Insurance Co., [1980] 1 SCR 888 at 901, the Supreme Court of Canada held that, when interpreting a contract, the court should “search for an interpretation which, from the whole of the contract, would appear to promote or advance the true intent of the parties at the time of entry into the contract.” The court should also avoid interpreting a contract in a manner that leads to commercially absurd or unreasonable outcomes. Thus, “an interpretation which defeats the intentions of the parties and their objective in entering into the commercial transaction in the first place should be discarded in favour of an interpretation of the [contract] which promotes a sensible commercial result” (Consolidated-Bathurst at 901).

In this case the trial judge appears to have disregarded these hallowed rules of interpretation. The Court of Appeal observed correctly that:

… it is not commercially reasonable to interpret the LOU in a manner which would result in the appellants relinquishing their entitlement to a $1 million payment obligation. It is further commercially unreasonable that the $1 million obligation arising from the Westcan Project would be subject to a condition that the appellants bring new business to the respondents. Simply put, the appellants had already earned the $1 million as their share of the profits of the Westcan Project, which they brought to the joint venture companies and financed for two years by paying 80% of the overhead costs (at para 43).

Aside from the application of incorrect principles, the trial judge erred in failing to consider and give appropriate weight to evidence which, on an objective basis, rebutted the presumption that the individual Appellant and the individual Respondents did not intend to create legal relations.

First, an objective reading of the language of the LOU shows that the parties intended it to bind them. In particular, the LOU refers to “obligation for payment of one million dollars” and states further that “We also acknowledge that your profit share for this project would be $1,600,000.00.” The LOU also reveals that the Respondents requested “an extension of the obligation time period to pay you the balance of $1,000,000.00”.

Second, although the parties are members of the same family, the Transition Agreements and the LOU were reached in commercial circumstances. Moreover, the subject-matter of the LOU is the sharing of profits from the Westcan project and as such, “the LOU was a business transaction” (at para 38(d)).

Third, the sharing of profits from the Westcan project was negotiated by the parties, culminating in the 1993 Transition Agreement and the LOU. In the course of negotiations the “respondents agreed that the appellants’ profit share in the Westcan Project would be $1.6 million” (at para 38(a)). Furthermore, the “negotiation of the 1993 Transition Agreement was a lengthy process involving the exchange of over 20 drafts among the parties over the course of two years of negotiations” (at para 38(c)). Why would the parties engage in such protracted negotiations if they did not intend the transition agreement and the LOU to create legal relations?

Finally, the purpose of the LOU was partly to encourage the individual Appellant to sign the 1993 Transition Agreement and retire from the joint ventures so that equity in the joint ventures could be assigned to the individual Respondents and their companies (at para 11). The individual Appellant executed the 1993 Transition Agreement following receipt of the LOU (at para 14). The individual Appellant would not have executed the 1993 Transition Agreement if the Respondents had not assured him that profits from the Westcan project would be paid to him and his company, Hole Consultants Ltd. In effect, the individual Appellant relied on the enforceability of the LOU in executing the 1993 Transition Agreement. This is significant because “it is a common feature of the cases in which an intention to create legal relations is found to be present that the party seeking to enforce the agreement has detrimentally relied on the assumed enforceability of the agreement” (McCamus, supra at 133).

An Alternative Interpretation of the LOU

An alternative way to interpret the LOU is to say that the parties to the LOU are not family members. Rather, the parties to the LOU are the individual Respondents and Hole Consultants Ltd., a legal entity which is separate and distinct from its sole shareholder (that is, the individual Appellant). A fundamental principle of Canadian corporate law is that a company is a separate legal entity (Salomon v Salomon & Co., [1897] AC 22 (House of Lords)). As a legal entity Hole Consultants Ltd. has the capacity, rights, powers and privileges of a natural person including the power to own assets (Business Corporations Act, RSA 2000, c B-9, section 16(1)). The individual Respondents addressed the LOU to Hole Consultants Ltd. because they knew that the joint venture projects were executed jointly by Hole Consultants Ltd. and Hole Engineering Ltd. They also knew that the individual Appellant acted for and on behalf of Hole Consultants Ltd. in negotiating its share of the profits from the joint ventures. Thus, the LOU ought to be viewed and interpreted as a contract between independent and unrelated parties. This issue appears not to have been raised by the Appellants’ counsel; hence the Court of Appeal did not make any specific pronouncement on the issue.

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Shades of Grey in the Ride-Sharing World

Tue, 03/15/2016 - 10:00am

By: Theresa Yurkewich

PDF Version: Shades of Grey in the Ride-Sharing World

The past few months have seen a hubbub of debate surrounding Uber, the taxi industry, and whether ride-sharing services are presently incorporated under municipal bylaws, and if not, whether they should be (for previous posts on this subject see here, here and here).

In Alberta, and more particularly Edmonton and Calgary, it became a race to test the present regulatory framework and adapt it if necessary. In navigating around the bylaws, Uber was offering a lower cost method of transportation to the status quo taxi service. Concerns were raised on three main topics: fares, fees, and safety. Fast forward to this month, and both municipalities have an adapted framework in place, and the Government of Alberta has weighed in on insurance requirements for drivers operating for hire. In the midst of what seems like a saga of Uber battles, this post will discuss the amendments and outline what they mean for ride-sharing in Alberta.

Edmonton

Edmonton was the first Canadian municipality to legalize ride sharing services, revising its Vehicle for Hire Bylaw 17400, effective March 1, 2016. Previously, the bylaw only applied to taxis, limousines, and shuttles, and Uber was able to avoid a court ordered injunction to stop its services (see Edmonton (City) v Uber Canada Inc., 2015 ABQB 214, discussed here). Now, technology-based companies such as mobile app dispatchers (think Uber or Lyft) are specifically incorporated into the bylaw under a new class defined as “Private Transportation Providers” (PTPs). In short, a PTP is defined as a vehicle for hire which provides pre-arranged transportation services to passengers (Bylaw 17400, section 2(m)).

One of the main issues between ride-sharing and taxi or limousine services was that under the previous bylaw, the latter services operated with prescribed minimum fares, while Uber, for example, was able to charge competitively lower rates without any minimum. In considering that ride-sharing differs from taxi or limousine services, the City of Edmonton has now developed a hybrid fare model. Pre-arranged trips, such as those requested through a mobile app, can be offered by any vehicle for hire, and a minimum amount of $3.25 must be charged per ride (Schedule A, Part II). Rates above this amount, and for example during “surge pricing” when rates increase in response to higher demand, may be charged and negotiated between the ride provider and the customer. Trips arranged through stands or via on street hailing, can only be offered by taxis and will be regulated by a metered rate (Schedule A, Part I).

In addition to fares, the City of Edmonton collects fees to cover its resources required for enforcement. These costs are encompassed through licensing and dispatching fees. Again, in operating outside the bylaw, ride-sharing services were able to avoid paying these hefty user fees to keep costs low. Now, however, two types of PTP dispatchers are established: Regional (operating less than 200 vehicles) and Commercial (operating 200 vehicles or more). Regional PTPs and taxis are lumped into the same category, incurring dispatch licenses ($1,000), vehicle licenses ($400), and driver’s licenses ($60) all at an annual cost (“Vehicle for Hire Bylaw” Summary, or Schedule B). Commercial PTPs (such as Uber), however, will not incur costs for drivers or vehicle licenses, and instead will pay an annual dispatch license fee of $50,000 plus an additional $0.06 per trip (“Vehicle for Hire Bylaw” Summary, or Schedule B). The goal of this approach is to shift the costs incurred in a Commercial PTP operation from the driver onto the corporation itself, preventing fewer barriers in enticing drivers to join operations.

And finally, in regards to safety, annual vehicle inspections by licensed garages and mechanics are required (Bylaw 17400, section 7 and “Vehicle for Hire Bylaw” Summary), as well as criminal record checks (Bylaw 17400, section 30 and “Vehicle for Hire Bylaw” Summary), for all PTP drivers. The checks already completed by Uber in hiring its drivers, however, will suffice rather than having drivers incur additional fees. In addition, drivers will require proof of insurance (Bylaw 17400, section 26) and a valid class of driver’s license (see Bylaw 17400, section 30), as stipulated in provincial law.

All in all, these plans – subject to provincial insurance requirements – were workable for the Edmonton ride-sharing community, even receiving Uber’s support (“Edmonton becomes first city in Canada to pass Uber-friendly bylaw”, National Post).

Calgary

In beginning discussions, it was noted that Calgary was seeking a made-in-Calgary approach and would not simply adopt Edmonton’s workable plan to ride-sharing. The City of Calgary had sought and successfully obtained an injunction against Uber drivers (unreported decision in November 2015), and for that reason, the stakes on regulatory incorporation were even higher. In response, Uber called for the public to send mass emails to city councillors advocating for its return (“Uber sends critical letter of city council to users; Nenshi calls it a ‘tactic’”, 660 News) and local celebrities even weighed in on the debate (“Uber offer of $100,000 still stands”, Calgary Sun). In this instance, it seemed like much more of a targeted approach against Uber, rather than ride-sharing in general.

Amendments to the Livery Transport Bylaw 6M2007 (old version) were approved by council on February 22, 2016, incorporating ride sharing businesses into the framework as “Transportation Network Companies” (TNCs) (“TNC Driver Requirements” Summary). The new bylaw, effective April 4, 2016, has yet to be circulated and it is unknown how minimum fares will come into play. Most likely, we will see a flat minimum fare for taxi and TNC services or perhaps a hybrid system similar to Edmonton’s, above, which limits ride-sharing to providing services through a mobile app.

Under the new terms, ride-sharing drivers are required to purchase an annual operating license from the City of Calgary, at a cost of $220.00, and to possess a valid class 1, 2, or 4 driver’s license. In addition, drivers require valid commercial insurance (as required by the Government of Alberta), proof of eligibility to work in Canada, and a Calgary Police Service criminal background check. Vehicles must also undergo a 134 point mechanical inspection annually, or when they reach 50,000 km (whichever is first).

Ultimately, Uber slammed the amendments as unworkable and refused to resume its Calgary operations. In its concerns, Uber indicated that the stipulated fees (estimated at $600 per individual) would be imposed on drivers, most of whom are merely looking to supplement their income. This excessive and onerous start-up cost would, therefore, deter these drivers from taking part in operations (“Uber says city’s bylaw changes won’t work for ride-sharing service”, Calgary Herald), and does not properly reflect the differences between ride-sharing and taxi companies.

Alberta

Unfortunately, after all this hard work and just when we thought the battle was over, any bylaw amendments are likely now moot in encouraging ride-sharing operations. Under the Insurance Act, RSA 2000, c I-3, a motor-vehicle insurer may exclude liability “while the automobile is used as a taxi-cab, public omnibus, livery, jitney or sightseeing conveyance or for carrying passengers for compensation or hire” (section 569). At this time, therefore, the only acceptable insurance policy outlined by provincial law is a commercial insurance policy such as those allocated to taxi drivers (Commercial Vehicle Certificate and Insurance Regulation, Alberta Regulation 314/2002, section 27).

And, as stated above, in both Calgary and Edmonton, the bylaws require a valid commercial insurance policy or other policy that meets the requirements for a vehicle for hire in Alberta. Commercial insurance policies, of course, are much more costly to small businesses or independent drivers and as such, another form of policy that caters to drivers who operate for personal and compensation purposes would be ideal. The Government of Alberta has noted that it is working to develop its own set of rules, indicating that there are no strict deadlines in place for when changes might be made (“Uber threatens to quit Alberta if NDP fails to make insurance changes”, CBC News). It has stipulated, however, that by July 1, 2016, an interim insurance product could be in place to provide ride-sharing drivers with adequate coverage (“Uber temporarily suspends operations in Alberta’s capital”, Global News, “Uber insurance on the way in Alberta, but not in time for planned approval dates”, Calgary Herald).

A hybrid policy, made specifically for ride-sharing drivers, and set to cover passengers from the time they accept a ride to the time they exit the vehicle, has been developed by Aviva Canada, and approved by Ontario’s Insurance Regulator and the Financial Services Commission of Ontario (“Ontario insurance regulator approves coverage for Uber drivers in Canadian “first”, The Canadian Press). Talk of a similar policy here in Alberta by Intact Insurance has occurred (“Intact insurance working with Uber on new products for ridesharing”, The Canadian Press), yet no stamp of approval has been granted.

In addition to the hurdle over insurance, the Government of Alberta has determined that the same requirements in place for taxi drivers and passenger transportation services must be in place for ride-sharing drivers, even if these new drivers only provide services on a part time basis. This means that all drivers, ride-sharing or otherwise, must have a class 4 driver’s license (or better) and undergo police information background checks (“Alberta Government to regulate ride-for-hire services like Uber”, Calgary Metro).

Just hours after these requirements were put in place, Uber temporarily suspended its Edmonton operations, arguing that a class 5 license driver’s license should be sufficient for its part-time drivers. The Government of Alberta, however, did not concede (“Uber temporarily suspends operations in Alberta’s capital”, Global News).

Conclusion

In summary, as we stand now, ride-sharing services are legal in both Edmonton and Calgary, provided that the drivers have valid commercial insurance and a class 4 driver’s license. These two municipalities have shown an eagerness to regulate, utilizing the powers granted to them under sections 7 and 8 of the Municipal Government Act, RSA 2000, c M-26, and have reworked, albeit to a minor degree, their bylaws to specifically encompass ride-sharing. We must wait to see what the Government of Alberta will do with respect to insurance, licensing and other requirements. In any event, the development of a revised insurance policy, for those operating in personal and commercial contexts, may very well become a lucrative industry for insurance giants and motivate them to get involved in the game.

Previously, the bylaws surrounding vehicles for hire were vague enough that there was some debate over the legality of ride-sharing. This provided some grey area for Uber’s operation, on its own terms. Uber took a chance with Edmonton, and doubled down on its success with Calgary. With the new amendments, however, this grey area is no longer, and all ride-sharing services or drivers have no choice but to comply. The risk when advocating for change is that you might not like the end result, and it appears that particularly in Calgary, Uber got just that. Moving forward, it will certainly be interesting to see the approach taken in other Canadian cities such as Toronto and Montreal – not only by Uber advocates, but by city councillors and provincial governments.

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Calculating Damages for a Trespass to Land, Actionable Per Se

Mon, 03/14/2016 - 10:00am

By: Jonnette Watson Hamilton

PDF Version: Calculating Damages for a Trespass to Land, Actionable Per Se

Case Commented On: Corlis v Blue Grass Sod Farms Ltd., 2016 ABPC 55 (CanLII)

Frank Corlis, the plaintiff in this action, was awarded the precise sum of $5,500.80 in damages for Blue Grass Sod Farms’ trespass to his land. As an old-fashioned trespass to land case, this decision’s most interesting points are about the calculation of damages. Cases explaining damages for these torts that are “actionable per se” are not that common.

The facts were a little unusual. Glen Armitage owned a quarter section of land that produced sod and he sold a portion of it in 2005 to Corlis. Corlis’ land was undeveloped, except for its production of sod. Although Corlis planned to build a home on the land, he never took any steps to do so.

Blue Grass Sod Farms leased the Armitage land for $85 per acre in 2009. The company had some discussions with Corlis about looking after his land and harvesting the sod, but the two never reached an agreement then. By 2009, Corlis had stopped visiting his land very often. He did not look after it himself and he had not hired hire anyone to do so either. He apparently thought that Blue Grass was caring for his land as “the neighborly thing to do” (at para 10), but Judge James Glass, sitting in Red Deer, found that there was no agreement about harvesting sod between Blue Grass and Corlis.

When Blue Grass harvested the Armitage land in 2013, they also harvested sod from Corlis’ land, sold that sod and made a profit from that sale. When Cortis visited his land in 2013 with a prospective purchaser, he noticed that his sod was gone. When he phoned Blue Grass, he was told that if they were cutting the sod, then they were taking the sod. The company admitted that it harvested the sod from about 80,000 square feet of Corlis’ land.

When he sued, Corlis did not provide any evidence about his losses or damage. He relied entirely on his pleadings. Paragraph 12 of his claim provided:

The market rate for which Blue Grass sells sod is $0.46 per square foot. Based on the area of sod removed from the Lands, the amount owing to [Corlis] for the sale of his sod is $60,313.36, or such further amount as proven at a trial of this action.

The controller for Blue Grass did testify. He had calculated the costs of production and Blue Grass’ net profits from sod in 2013. He concluded that the net profit that Blue Grass would have received from the sod sold from the Corlis land would have been $5,500.80.

The tort of trespass to land is committed simply by entering upon, remaining upon or placing or projecting any object upon land that is in the possession of another without lawful justification: Salmond and Heuston on the Law of Torts, 19th ed (London: Sweet & Maxwell, 1987) 46 (quoted at para 21). Without an agreement between Blue Grass and Corlis, Blue Grass had no lawful justification to be on Corlis’ land, let alone to remove the sod on that land. Therefore, Judge Glass concluded that Blue Grass did trespass (at para 24).

A plaintiff is not required to prove actual damage in order to recover damages for trespass to land. As Judge Glass stated, liability flows from the mere act of trespass (at para 25). He cites G.H.L. Fridman, Q.C.’s explanation of this principle in The Law of Torts in Canada, vol 1 at 7 (Toronto: Carswell, 1989):

Trespass in all its forms is actionable per se, i.e., without the need for the plaintiff to prove he has sustained actual damage…[t]he absence of any requirement that damage must be shown before an action will lie is an important hallmark of trespass as contrasted with other torts.

But without proof of actual loss or damage, how does a court determine how much to award as damages?

One might think damages in such circumstances would be only nominal damages. However, as Judge Glass noted (at para 25), the Alberta Court of Appeal in Bank of Nova Scotia v Dunphy Leasing Enterprises Ltd., 1991 ABCA 351 at paras 60-61 [emphasis added], held that a court may decide that damages flowing from a trespass can be more than nominal:

There is no rule of law that restricts an award of damages for trespass to a nominal amount only. . . . Therefore, depending on the circumstances of a given case, a court may determine that an award of damages for trespass should be more that a nominal sum. As explained by A.I. Ogus in The Law of Damages (London: Butterworths, 1973) at 23:

Damages for torts actionable per se are said to be “at large”, that is to say the Court, taking all the relevant circumstances into account, will reach an intuitive assessment of the loss which it considers the plaintiff has sustained.

When does a court award more than a nominal sum for trespass to land when there is no proof of loss or actual damage? In Webb v Attewell, 1993 CanLII 6873 (BCCA), Southin J.A. relied upon

Halsbury’s, 4th ed, vol 45, at para 1403 [emphasis added] for an explanation of five different levels of damages. That explanation is as follows (quoted at para 26):

In an action of trespass:

  1. If the plaintiff proves the trespass he is entitled to recover nominal damages, even if he has not suffered any actual loss.
  2. If the trespass has caused the plaintiff actual damage, he is entitled to receive such amount as will compensate him for his loss.
  3. Where the defendant has made use of the plaintiff’s land, the plaintiff is entitled to receive by way of damages such a sum as would reasonably be paid for that use.
  4. Where there is an oppressive, arbitrary or unconstitutional trespass by a government official or where the defendant cynically disregards the rights of the plaintiff in the land with the object of making a gain by his unlawful conduct, exemplary damages may be awarded.
  5. If the trespass is accompanied by aggravating circumstances which do not allow an award of exemplary damages, the general damages may be increased.

The defendant’s conduct is thus key to the amount of the damages awarded. If the trespass was accidental or inadvertent, damages are lower. If the trespass was willful, damages are greater. And if the trespass was in-between — the result of the defendant’s negligence or indifference — then the damages are in-between as well (at para 26).

Judge Glass found Blue Grass’ conduct to be in the in-between area: more than accidental or inadvertent but less than arbitrary (at para 32). As such, he awarded Corlis the precise amount of Blue Grass’ net profit of $5,500.80.

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Court Confirms that the AUC Can Take the Lead in Examining the Scope of the ISO’s Reporting Obligations

Fri, 03/11/2016 - 10:00am

By: Nigel Bankes

PDF Version: Court Confirms that the AUC Can Take the Lead in Examining the Scope of the ISO’s Reporting Obligations

Case Commented On: Independent Power Producers’ Society of Alberta v Independent System Operator (Alberta Electric System Operator), 2016 ABQB 133

Alberta has a competitive electricity market which functions through the power pool coordinated by the Independent System Operator (ISO) known in Alberta as the Alberta Electric System Operator (AESO) (see the Electric Utilities Act, SA 2003, c E-5.1 ss 17 – 18 (EUA)). In simple terms power producers bid blocks of power (price/quantity pairs) into the pool at the price at which they are prepared to be dispatched (e.g. GenCo bids 10 MW at $40/MWh) on an hourly basis for the following seven days. Generators may change their offer prices closer to real time as the market unfolds: see MSA, Alberta Wholesale Electricity Market, 2010. The ISO ranks all bids in merit order (i.e. starting with the lowest bids) and moves up the ladder of bids until supply meets the load (demand). The last unit dispatched sets the system marginal price which is received by all generators which are dispatched. Thus, if the price settles at $80/MWh that is the price that GenCo will receive. If the price settles at $30/MWh GenCo will not be dispatched. See AESO, “Determining the Wholesale Market Price for Electricity”.

The ISO has rule making functions for the market under the EUA as well as reporting functions under the Fair, Efficient and Open Competition Regulation, Alta Reg 159/2009 (FEOC Regulation). In particular, s 6 of that regulation provides that:

6(1)  The ISO shall make available to the public the price, quantity and asset identification associated with each offer made to the power pool that is available for dispatch.

(2) The ISO shall

(a) develop information technology systems that are capable of identifying and tracking the market participant that holds the offer control associated with each price and quantity offer made to the power pool, and

(b) include that information in the reporting made available to the public under subsection (1), when the ISO’s information technology systems are capable of identifying and tracking that information.

(3) The ISO shall delay making available to the public the asset identification referred to in subsection (1) and the identification of the market participant that holds the offer control referred to in subsection (2) by 60 days after they are made to the power pool.

The Alberta Utilities Commission (AUC) has some supervisory jurisdiction over the ISO. For example, market participants may complain to the AUC (EUA, s 25(1)) about ISO rules on the grounds that such a rule is technically deficient or that it fails to support FEOC values (i.e. the rule does not support the fair, efficient and openly competitive operation of the market), or that it is not in the public interest. In addition, the province’s Market Surveillance Administrator (MSA) has a mandate to monitor the electricity and natural gas markets and to promote behavior that supports FEOC. The MSA is continued by s 32 of the Alberta Utilities Commission Act, SA 2007, c A-37.2 (AUCA). The MSA also has specific responsibilities under the EUA. It too can complain to the AUC about ISO rules (EUA s 25(1.1)) on most of the grounds listed above but also on the grounds that an ISO rule “may have an adverse effect on the structure and performance of the market.” In addition, the MSA may refer to the AUC any matter related to the mandate of the MSA and have the AUC hold a hearing to investigate the matter and make any relevant orders (AUCA, ss 51(1)(b) and 56).

In this case, the MSA had become concerned about the implications of the way in which the ISO was fulfilling its reporting obligation under s 6 of the FEOC Regulation. The ISO has been doing this by publishing something called the Historic Trading Report (HTR). Justice Kim Nixon’s judgment describes the HTR as follows (at para 8):

The HTR provides information to the public about all offers made by generators to the Alberta power pool during the preceding hour to dispatch power at specified quantities and prices. It is published hourly, within 5-10 minutes after the end of each hour, and lists the prices and quantities of all offers made to the Alberta power pool.

The MSA had apparently reached the tentative conclusion that under certain market conditions the information provided resulted in spikes in market prices and undermined FEOC values. It also considered that the ISO could discharge its obligations in an alternative way by providing Merit Order Snapshot Reports which provide data on a less contemporaneous basis (60 days after the event).

The ISO responded to the MSA’s concerns and proposed, by way of a notice to market participants issued on January 8, 2015, to change its reporting practices as follows (at para 10):

[Henceforward] the HTR would be published 12 hours after the hour for which the offers corresponded but it would continue to publish, on an hourly basis, offer volumes and prices up to $250/MWh. The price-quantity pairs priced higher than $250/MWh would be aggregated in four offer ranges rather than each individual offer being listed.

The Independent Power Producers’ Society of Alberta (IPPSA) took exception to this proposal and filed an application for judicial review of the ISO’s decision to change the format and publication timing of the HTR Reports. In response, the ISO advised that it would suspend implementation of the change. For reasons not disclosed in Justice Nixon’s judgement, IPPSA’s application (which was originally scheduled to be heard in November) was adjourned sine die in September (with the agreement of both parties) with the result that the status quo on reporting would continue. Given that, the MSA decided to refer the matter of the publication of HTR reports to the AUC under s 51(1)(b) of the AUCA (referenced above). The filings for this application are available on the AUC’s website here. This in turn triggered IPPSA to re-schedule its adjourned JR application which leads to this decision by Justice Nixon.

Justice Nixon made two decisions. First, she decided (at para 21) that the MSA should be granted standing “in part because it plays a key role in the electricity market in Alberta” and also because “the MSA is directly affected by the subject matter of the judicial review.” Second, she concluded (at paras 22 – 25) that IPPSA’s JR application should be dismissed on the basis that JR is a discretionary remedy and that this would not be an appropriate matter for JR because there is an adequate alternative remedy.

The result here clearly makes sense. Contrary to IPPSA’s remarkable submission to the effect that “it is a simple and straightforward matter to interpret the FEOC Regulation and that no policy considerations, no expert knowledge of the electricity market, and no factual background is necessary to do so”, this is an exceptionally complex statutory scheme in which different regulatory actors (the MSA, the ISO and the AUC) have different and carefully calibrated roles and significant expertise. It makes all the sense in the world to have these issues examined in the first instance by these expert bodies. IPPSA will be free to participate in the AUC public consideration of the MSA’s application and if it doesn’t like the result it will then be free to make an application to the Court of Appeal for leave under s 29 of the AUCA on a point of law or jurisdiction. It would be completely inappropriate for the Court of Queen’s Bench to deal with the interpretation issue without the benefit of the considered reflection and opinion of the AUC provided in the context of the MSA’s application and background documents as well as any further evidence and opinion adduced at the AUC’s public hearing: see in particular Coldwater Indian Band v. Canada (Indian Affairs and Northern Development), 2014 FCA 277.

Whether it was appropriate to dismiss on the basis of an adequate alternative remedy for this applicant I am less sure since in this case the alternative remedy is being sought by the MSA rather than by IPPSA. But it certainly would not be unreasonable to adjourn the JR application pending the outcome of the process initiated by the MSA. IPPSA could hardly claim that it was seriously prejudiced by such an adjournment since it had already adjourned its own application sine die. There may be issues still to be resolved at the end of the MSA/AUC process and any subsequent appeal thereof, but likely there will not – at which point any remaining JR application would simply be an impermissible collateral attack on the outcome of the proceeding initiated by the MSA.

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The Public Interest Exception to the Normal Costs Rule in Litigation

Mon, 03/07/2016 - 10:00am

By: Shaun Fluker

PDF Version: The Public Interest Exception to the Normal Costs Rule in Litigation

Case Commented On: Gendre v Fort Macleod, 2016 ABQB 111

This judgment by Madam Justice K.D. Nixon touches on the public interest exception to the normal rule in Canadian law that the unsuccessful party in litigation is liable to the successful party for either a portion of or all the successful party’s legal costs (commonly known as ‘costs follow the event’). The substantive matter in this case involved an application by the Mayor of Fort Macleod seeking to have the Court set aside bylaws and resolutions passed by the Council of the Town of Fort Macleod which removed the Mayor’s powers. The Mayor argued the passage of such bylaws and resolutions amounted to an abuse of process by the Council. Justice Nixon dismissed this judicial review application in Gendre v Fort Macleod, 2015 ABQB 623, and the media reported that the Council sought approximately $100,000 in legal costs against the Mayor. One of the arguments put forward by the Mayor in an attempt to shield himself from costs was that his action constituted public interest litigation.

Over the duration of a career, every professor eventually accumulates many books. Over time, some books begin to stand apart from the others on the shelf as a dependable and trusted starting point for countless research projects. One of these stalwarts on my bookshelf is the Ontario Law Reform Commission’s 1989 Report on the Law of Standing. This Report investigated access to justice issues with respect to public interest litigation, noting at the outset that the traditional view of the elected government as the sole guardian of the public interest had given way to an acknowledgment that sometimes government is the wrongdoer and the role of guardian must be taken up by someone else (at pages 1-6). The Report made several recommendations for law reform to enhance access to the legal system for public interest litigation including recommendations on costs, noting that the prospect of an adverse cost award is a significant deterrent for someone contemplating a public interest action (at pages 146-149).

The Report gave the following recommendation for a public interest exception to the normal costs rule in Canada that costs follow the event (at pages 152-156, 179):

No costs should be awarded against a person who commences a proceeding where:

  • The proceeding involves issues the importance of which extends beyond the immediate interests of the parties involved;
  • The person has no personal, proprietary or pecuniary interest in the outcome of the proceeding, or, if he or she has such an interest, it clearly does not justify the proceeding economically;
  • The issues have not been previously determined by a court in a proceeding against the same defendant;
  • The defendant has a clearly superior capacity to bear the costs of the proceeding; and
  • The proceeding is not vexatious, frivolous or an abuse of process.

Professor Chris Tollefson at the University of Victoria has written extensively on public interest costs since the mid-1990s, and he more recently explored the status of the law on public interest costs in his 2011 article entitled “Costs in Public Interest Litigation Revisited”, (2011) 39 Adv Q 171. Professor Tollefson’s analysis demonstrates a growing appetite for a public interest costs exception in Canadian law, including the provision for an advance or interim costs award in exceptional circumstances. My colleague Professor Jennifer Koshan also explored this a few years back on ABlawg, see Interim Costs and Access to Justice at the Supreme Court of Canada.

We can distill the following points from their doctrinal work: (1) Canadian courts have endorsed a public interest costs exception and have applied the test recommended by the 1989 Ontario Law Reform Commission report – in Alberta this test was cited with approval by the Court of Appeal in Pauli v ACE INA Insurance Co, 2004 ABCA 253 at para 24; (2) a party seeking to shield itself from costs using this exception must satisfy each of the factors in the test; (3) obtaining an advance or interim costs award in public interest litigation (in contrast to the usual scenario where costs are determined ex post) is far more exceptional and reserved for the rarest of circumstances; and (4) the law on public interest costs, while developing, remains somewhat unpredictable and is no substitute for an access to justice program – such as the once-disbanded but likely to be reinstated Court Challenges program – that allocates public funds to support the cost of public interest litigation. This last point highlights the important point that it is one thing to shield the unsuccessful public interest litigant from liability for an adverse cost award, but this protection does nothing to actually facilitate public interest proceedings in the first place. This is one reason why law schools are increasingly operating clinical programs that offer pro bono legal services in public interest law, such as the new Public Interest Law Clinic operating here in Calgary.

The allocation of costs is ultimately a matter of judicial discretion. In Alberta, this discretion is to be exercised in accordance with sections 10.28 to 10.34 of the Alberta Rules of Court, Alta Reg 124/2010. It seems unfortunate that the public interest exception was not codified when the new Rules were enacted back in 2010. In any event, the prospect of an adverse cost award is a necessary conversation between a public interest litigant and their counsel at the early stages of a public interest case, and I can tell you from my years in the trenches of public interest environmental law that the prospect of adverse costs remains a deterrent to public interest litigation in Canada. Some will no doubt say this is a good thing! Moreover, the public interest litigant cannot assume the court hearing their case will be familiar with the law governing a public interest costs exception and therefore the public interest litigant must be prepared to argue for immunity from adverse costs.

All of which brings us back to the municipal dispute in Fort Macleod. Mayor Rene Gendre argued that his application for judicial review fell within the realm of public interest litigation as an action that engaged the principles of democracy and that he should accordingly be shielded from the significant adverse costs sought by the Council. Justice Nixon applied the test for a public interest costs exception and concluded the Mayor’s action did not qualify as public interest litigation because (1) this was not a test case that transcended the interests of the parties; (2) the Mayor had a significant personal interest in the outcome, albeit not an economic one; and (3) the case did not invoke truly novel points of law (at para 18). Justice Nixon went on to exercise her discretion on costs applying some of the factors set out in the Rules of Court, concluding that the appropriate amount of costs payable by the Mayor is $9750 plus disbursements (at paras 21-23).

I’ll end this comment with the following thought. While the test for a public interest costs exception has been developed in order to determine whether someone is entitled to costs immunity, the test seems to be more about determining when a person may be characterized as a public interest litigant. And so one reason why this area of law remains unpredictable is because this determination can be a very difficult exercise. As an example of the possible difficulties, consider how to determine when someone’s requisite genuine interest in a public matter is too personal or proprietary to qualify as a public interest concern. On the one hand someone with a significant stake in the matter is perhaps most likely to raise the public interest issue and best qualified to argue it before the Court – and yet the more personal or direct their interest the less likely the litigation will be seen as an adjudication on a public matter of concern. Perhaps some assistance could be garnered here by revisiting the public interest costs exception in light of how the Supreme Court of Canada restated the test for public interest standing in Canada (Attorney General) v Downtown Eastside Sex Workers Against Violence Society, 2012 SCC 45 (for some commentary on this decision from ABlawg see Christina Lam and Theresa Yurkewich, Some Much Needed R&R: Revisting and Relaxing the Test for Public Interest Standing in Canada).

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Constitutional Exemptions for Physician Assisted Dying: The First Case of Judicial Authorization in Alberta

Thu, 03/03/2016 - 10:00am

By: Jennifer Koshan

PDF Version: Constitutional Exemptions for Physician Assisted Dying: The First Case of Judicial Authorization in Alberta

Case Commented On: HS (Re), 2016 ABQB 121 (CanLII)

On February 29, 2016, Justice Sheilah Martin of the Alberta Court of Queen’s Bench released a decision providing authorization for physician assisted death to HS, an adult woman with amyotrophic lateral sclerosis (ALS). This is thought to be the first case outside of Quebec where a court has confirmed the eligibility of a claimant for a constitutional exemption following the Supreme Court of Canada’s decision in Carter v Canada (Attorney General), 2016 SCC 4 (CanLII) (Carter II). As I noted in a previous post, in Carter I (Carter v Canada (Attorney General), 2015 SCC 5) the Supreme Court struck down the criminal prohibition against physician assisted death (PAD) on the basis that it unjustifiably violated the rights to life, liberty and security of the person in section 7 of the Charter. That remedy was suspended for a year to allow the federal government time to enact a new law without leaving a gap in the legislative scheme that might be used to induce vulnerable persons to take their own lives. The Court declined to grant exemptions from the suspension in Carter I given that none of the claimants were in need of immediate relief; Gloria Taylor, the only Carter claimant who had originally sought an exemption, had died before the Supreme Court hearing (2015 SCC 5 at para 129). In Carter II, the Supreme Court extended the suspension of its remedy by 4 months to account for the change in federal government (see Elliot Holzman’s post on Carter II here). In light of the extraordinary nature of the extension — which permitted an unconstitutional law to remain in effect for an extended time — the Court granted a constitutional exemption to competent adults when they met certain criteria: (1) they clearly consent to the termination of life and (2) they have “a grievous and irremediable medical condition that causes enduring suffering that is intolerable to the individual in the circumstances of his or her condition and that cannot be alleviated by any treatment acceptable to the individual.” (2016 ABQB 121 at para 2). This post will focus on the role of courts that are called upon to assess claimants’ eligibility for constitutional exemptions, as discussed by Justice Martin in the HS case.

The application by HS to qualify for a constitutional exemption was heard on an expedited basis on February 25, 2016. Justice Martin described HS as a retired clinical psychologist who worked in the Calgary health care system for 34 years and had an active life. She was in good physical and mental health until she was diagnosed with ALS in April 2013. The disease progressed rapidly, and HS was in the final stages of ALS at the time of the application, with 6 months life expectancy at best. HS was “severely physically disabled”, living with significant pain, and was mentally alert but unable to speak, communicating through a device operated through the limited movements she could make with her left hand. HS sought a physician-assisted death “in which two named physicians would provide her with medication to induce death” on private property in Vancouver, British Columbia (at para 14). In her own words, HS described her position as follows (at para 15):

I am not suffering from anxiety or depression or fear of death. I would like to pass away peacefully and am hoping to have physician-assisted death soon. I do not wish to have continued suffering and to die of this illness by choking. I feel that my time has come to go in peace.

The legal context for Justice Martin’s decision was provided by Carter I and Carter II. She also noted that before Carter II was decided, Quebec passed An Act Respecting End-of-Life Care, CQLR c S-32, which allows physician-assisted dying in that province under similar circumstances to those considered in Carter I (at paras 35-39). A majority of the Supreme Court exempted Quebec from the extension of the suspension in Carter II, such that requests for PAD in that province will be governed by the Quebec legislation until the federal government decides upon its legislative response. The majority in Carter II also provided a constitutional exemption to those individuals who could meet the criteria set out earlier in this post, effectively shielding them from the ongoing criminal prohibitions.

Justice Martin stressed that the personal constitutional exemption was actually granted in Carter II itself, and was not for her to grant (at paras 46-47). This interpretation was supported by the wording of Carter II (see 2016 SCC 4 at paras 5-7), as well as the fact that four judges dissented in that case by finding that constitutional exemptions were inappropriate. Moreover, this interpretation of Carter II accorded with the majority’s concern for fairness and equality between those seeking immediate relief inside and outside of Quebec (at para 56). Justice Martin also noted that even after Carter I, it would have been open to other individuals to go to court to seek a constitutional exemption from the ongoing application of the criminal prohibition against PAD during the suspension. Such applications would require a detailed evidentiary record, notice to the relevant Attorneys General, and full constitutional analysis (at para 50). The impact of Carter II was to make that sort of “full blown inquiry” unnecessary (at para 57). The role of lower courts following Carter II is thus to authorize that individuals meet the criteria for the exemption laid out in that case — in other words, to decide whether they are “inside or outside the group which has already been granted the constitutional exemption” (at para 48).

As indicated by Justice Martin, the Supreme Court “did not prescribe particular procedures or evidence for the superior courts to consider in conducting the requisite … inquiry” into the claimant’s application to qualify for an exemption (at para 62). Although the Chief Justices in Ontario and British Columbia have released protocols for how to deal with these applications, Alberta has not yet done so. Justice Martin found that these other provincial protocols, along with the procedures in the Quebec legislation, could provide guidance, but she was ultimately bound to follow her interpretation of Carter (at paras 63-65). Similarly, the reports issued to date on the options for legislative responses to Carter by various government bodies could provide “background and context”, but they “address different and larger questions, compared with the more narrow focus of individual judicial authorizations” based on Carter II (at para 67).

With this background in mind, Justice Martin considered the proper approach to issues of notice, confidentiality, and evidence before turning to the Carter criteria. HS had given notice of her application to the Attorneys General of Canada, Alberta and British Columbia, who participated in the hearing at differing levels. Justice Martin found that there was merit in HS’s position that this notice was by way of courtesy rather than requirement because the constitutional issues had been dealt with already in Carter I and Carter II. However, “there is practical merit to providing notice to allow the Attorneys General the opportunity to make submissions in the public interest” (at para 71). She also found that no notice was required to HS’s family members residing outside Canada. HS had no children and her spouse and closest friend had been notified of the proceedings and were present in court (at para 72). A number of organizations representing health care providers had written to the Chief Justice of Alberta to request notice of applications such as that of HS, but Justice Martin held that these organizations had no role to play on the merits of the application. They might, however, play a role in assisting the court to craft an appropriate order in circumstances where the criteria for a constitutional exemption are met (at paras 73-75).

Overall, Justice Martin held that sufficient notice had been provided by HS to the relevant parties. While she provided some guidance for future courts on the question of notice, it appears that much will depend on the facts of individual cases.

As for confidentiality concerns, there were several aspects and angles to consider. Justice Martin indicated that these issues ideally should be addressed in the originating application so that the court can identify the need for any preliminary orders, but because HS’s application was novel and time sensitive she was prepared to deal with the issues when they were raised (at paras 77-79). Counsel for HS requested that the proceedings be held in camera, that the court file and documents be sealed, that a publication ban be granted, and that initials be used to protect the identities of HS and the physicians involved in the case. On the other hand, a representative of the media argued that the public had a right to know the details of the application, and a lawyer who represents physicians argued that he ought to be permitted to watch the hearing so as to advise his clients in future applications of this nature (at para 77).

Justice Martin granted HS’s request for a closed courtroom, finding that her privacy, dignity and autonomy interests outweighed the benefits of an open court, which could also be addressed by providing a written judgment in this case to provide accountability and transparency (at paras 81-82). In addition, weighing the common law criteria for a publication ban, she held that a ban was necessary in the interests of justice and that the salutary effects of a ban outweighed its deleterious effects in this case (at para 84, citing Dagenais v Canadian Broadcasting Corp, 1994 CanLII 39 (SCC), [1994] 3 SCR 835, R v Mentuck, [2001] 3 SCR 442, 2001 SCC 76 (CanLII) and Re Vancouver Sun, 2004 SCC 43 (CanLII), 2 SCR 332). She also noted that although the Alberta Rules of Court, Alta Reg 124/2010, provide for confidentiality protections on certain grounds, courts retain the discretion to depart from these general rules in appropriate cases. She exercised her discretion to order the sealing of the court file and use of initials to describe the parties, as requested by HS (at paras 85-86).

On the question of evidence, there was again no guidance from the Supreme Court in Carter II, so it was up to Justice Martin to determine what evidence she considered sufficient for the purposes of the application. She noted that it was the claimant’s burden to satisfy the court that she met the criteria for PAD based on “any form of admissible, authentic and reliable evidence” (at para 88). Justice Martin contrasted the evidentiary thresholds for PAD applications in British Columbia, Ontario and Quebec, which have differing requirements on the quantity, nature and form of the evidence. She was ultimately bound by Carter and found that it permitted her (and other judges hearing these applications) to take a flexible approach to the evidence as dictated by individual cases. Justice Martin determined that the following evidence was sufficient for the purposes of HS’s application (at para 89):

  • Two affidavits from HS, dated February 19 and February 23, 2016
  • Statements attached to the initial affidavit of HS from her treating physician and one of the physicians who agreed to assist her death
  • Medical records and statements from other physicians from the Calgary ALS and Motor Neuron Disease Clinic, again attached to the initial affidavit of HS
  • A letter from HS’s best friend of 38 years and a letter from HS to her counsel describing her life, both attached to the affidavit.

Justice Martin indicated that it would be preferable to have sworn affidavits from the physicians, but noted that introducing the statements as exhibits to an affidavit was nevertheless an acceptable practice. She also found that it was not necessary to have an affidavit or statement from a psychiatrist or psychologist, noting that none of the provinces with protocols have such a requirement (although Ontario recommends it), nor had the Supreme Court established this as a requirement in Carter (at paras 90-91, 96).

In the end, Justice Martin found that HS had demonstrated that she met the Carter criteria for PAD on the basis of admissible, authentic and reliable evidence. More specifically:

  • HS was a competent adult person, as shown by the statements of her physicians and friend and her own engagement in the court proceedings (at paras 95-97). Justice Martin found that she need not decide whether possible depression would affect a finding of competence, since the evidence showed that HS was not depressed (at paras 97-101);
  • HS clearly consented to the termination of her life, as shown by her affidavit and the letters from her friend and from the Calgary ALS Clinic. This evidence indicated that HS had been considering PAD for some time, had discussed this option with her spouse and friends, had considered other options and the risks of PAD, had undertaken counselling, and was not subject to any external pressure to agree to PAD (at paras 103-108);
  • HS had a grievous and irremediable medical condition, ALS, based on Carter and the evidence of HS’s assisting physician (at paras 109-110);
  • HS’s condition caused her enduring, intolerable suffering, as shown by her affidavits and the statements of the Calgary ALS Clinic, her physicians and friend (at paras 111-113); and
  • HS’s suffering could not be alleviated by any treatment acceptable to her, as shown by statements from physicians at the Calgary ALS Clinic (which HS stopped attending as there was nothing further they could do) and her own affidavits, where HS stated that “it is not acceptable to me to live sedated to the point of unconsciousness until I choke on my own bodily fluids” (at para 116).

Justice Martin also addressed two other important issues associated with HS’s application.

First, in response to questions from the Attorney General of British Columbia about the geographic scope of her order, Justice Martin indicated that it would apply not only in Alberta, but throughout Canada, based on HS’s mobility rights, the Charter’s status as the supreme law of Canada, and the fact that the exemption is from a federal criminal prohibition (at para 122). Moreover, the Supreme Court in Carter II stated that those seeking PAD should apply “to the superior court of their jurisdiction.” Justice Martin interpreted this to mean the applicant’s home province, and noted that if HS had brought her application in British Columbia she may have faced opposition based on her Alberta residency (at para 123).

Second, Justice Martin indicated that there had been “much debate” about who was covered by the Supreme Court’s use of the term “physician-assisted death” (at para 124). In HS’s case, it was not necessary to determine whether nurses, nurse practitioners and /or technicians were included, because HS’s plan did not involve these professionals in her death. However, because HS’s plan was based on the ingestion of medications to bring about her death, Justice Martin clarified that “licensed pharmacists who prepare and provide medications are necessarily and definitionally protected” under the term PAD (at para 126). Pharmacists who prepare and provide medications prescribed for use in PAD are thus exempt from the ongoing criminal prohibitions, as are the physicians themselves.

Justice Martin’s decision has been widely reported in the media, along with the subsequent development that HS exercised her right to PAD in Vancouver on March 1 (see e.g. here ). In my view, Justice Martin struck the appropriate balance in her approach to the issues of notice, confidentiality and evidence, respecting the rights of HS as well the practitioners involved and the broader public interest (including potentially vulnerable members of the public). She applied the Supreme Court’s decisions in Carter in a way that was practical and respected the proper role of the courts that will be hearing applications for authorization of PAD. Justice Martin’s detailed decision will be of great assistance to those who participate in future Carter applications, especially in those jurisdictions without their own protocols or legislation.

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