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Leave to Appeal Granted in NRCB Case Concerning Participatory Rights and the Interpretation of ‘Directly Affected’ Persons Entitled to a Hearing

Thu, 04/17/2014 - 10:00am

By: Shaun Fluker

PDF Version: Leave to Appeal Granted in NRCB Case Concerning Participatory Rights and the Interpretation of ‘Directly Affected’ Persons Entitled to a Hearing

Decision commented on: JH Drilling Inc. v Alberta (Natural Resources Conservation Board), 2014 ABCA 134

The Alberta Court of Appeal has granted leave to JH Drilling to appeal a ‘standing’ decision by the Natural Resources Conservation Board (NRCB).  While not a decision on the merits of the issue, this leave decision is significant because the question for appeal will concern the NRCB’s interpretation of ‘directly affected’ in its governing legislation to determine participatory rights before the Board.  Moreover, the interest asserted by JH Drilling to be directly affected here is one of a commercial nature – JH Drilling is not a landowner or resident in the immediate vicinity of the proposed project in this case.  To my knowledge, this merit hearing will be the first time the Court of Appeal considers participatory rights before the NRCB.

The NRCB was created in 1991 at a time when Alberta overhauled its regulatory framework governing environmental management. The Board’s original mandate was to review non-energy resource projects and assess whether the development of such projects is in the public interest. The Board still holds this mandate, but today also regulates some aspects of feedlot operations.

Resource projects within the public interest jurisdiction of the NRCB are prescribed by section 4 of the Natural Resources Conservation Board Act, RSA 2000 c N-3 (NRCB Act).  Reviewable projects include pulp and paper, water storage, quarry, and recreational projects.  The project in question here is a limestone quarry proposed by Parsons Creek Aggregates to be located on crown lands in the Fort McMurray region.

No person may commence a reviewable project without the approval of the NRCB (NRCB Act, s 5(1)), so project proponents apply to the Board for approval.  Prior to submitting the application for approval of its quarry project, Parsons Creek completed an environmental impact assessment under the Environmental Protection and Enhancement Act, RSA 2000 c E-12. The only real opportunity for interested persons to comment on the impact of the Parsons Creek quarry is in a project review hearing conducted by the NRCB.

Section 8(2) of the NRCB Act obligates the NRCB to give persons who may be directly affected by a proposed project the usual suite of hearing entitlements: an opportunity to review the application; an opportunity to furnish evidence relevant to the application, cross-examine the applicant and other parties before the Board, and make arguments to the Board on the merits of the application. Some readers will note these are the same entitlements that were set out by section 26(2) of the now-repealed Energy Resources Conservation Act, RSA 2000 c E-10 concerning participatory rights before the Energy Resources Conservation Board (ERCB) – now superseded by the Alberta Energy Regulator (AER).

The record disclosed on the NRCB website (see here) suggests JH Drilling objects to the proposed quarry because the Parsons Creek mining operations will prejudice JH Drilling’s pending request with Alberta Environment and Sustainable Resource Development (AESRD) to recover sand and gravel from the same area. There is undoubtedly an issue of overlapping resource exploitation in this case, reminiscent of the ‘gas over bitumen’ and ‘coal versus methane gas’ disputes in recent times. In an August 2013 decision the NRCB ruled that JH Drilling’s objections were outside its jurisdiction as they relate to AESRD approvals on the sand/gravel extraction and otherwise  amount to a “ . . . commercial dispute between potentially competing entities in the aggregate supply business.” Accordingly, the NRCB held JH Drilling failed to establish itself as a person who may be directly affected by the Parsons Creek project and denied JH Drilling participatory rights to object to the application. (See here at 4, 5). Since no other persons filed objections with the NRCB, the Board proceeded to consider the quarry application without a public hearing, and ultimately approved the application this past February.

The specific question of law in this case will be whether the commercial or economic interest of JH Drilling arising from its application to AESRD for a surface lease to recover sand/gravel is sufficient to satisfy the ‘directly affected’ test for participatory rights at the NRCB. This test is also set out in provisions governing participatory rights before AESRD and the Alberta Environmental Appeals Board under the Environmental Protection and Enhancement Act.  The Environmental Appeals Board (EAB) has provided its interpretation of ‘directly affected’ in numerous decisions, and generally speaking requires a person to give evidence on how a project will harm them personally or their use of land impacted by the project (For commentary on this see Nigel Bankes, “Shining a Light on the Management of Water Resources: The Role of an Environmental Appeal Board” (2006) 16 J of Envtl L & Prac 131). The Court of Queen’s Bench has endorsed this interpretation in Court v Alberta (Director, Bow Region Regional Services, Alberta Environment) (2003), 1 CELR (3d) 134).   It will be interesting to see if and/or how the Court of Appeal in this case draws upon this earlier jurisprudence concerning the EAB. But hopefully the Court of Appeal looks beyond the specifics of this case.

Perhaps the Court of Appeal will build upon its observation in Kelly v Alberta (Energy Resources Conservation Board), 2012 ABCA 19 that hearings are an integral component of resource development in Alberta and seize this opportunity to consider participatory rights in the context of the public interest character of these decisions and the overall socio-political context of resource development in Alberta today. Judicial consideration on this point so far consists largely of rather uninspiring exercises in the literal interpretation of statutory text and judicial deference to administrative decisions and policy: See Friends of the Athabasca Environmental Assn v Alberta (Public Health Advisory and Appeal Board), [1996] AJ No 47 (QL), 1996 ABCA 6 (CanLII); Kostuch v Alberta (Environmental Appeal Board), [1996] AJ No 311 (QL), 1996 CanLII 10565 (AB QB); Court v Alberta (Director, Bow Region Regional Services, Alberta Environment), 2003 ABQB 456; Dene Tha First Nation v Alberta (Energy & Utilities Board), 2005 ABCA 68; Kelly v Alberta (Energy Resources Conservation Board), 2009 ABCA 349; and Kelly v Alberta (Energy Resources Conservation Board), 2011 ABCA 325. Meanwhile resource project decision-makers in Alberta – including the NRCB, AER, EAB and AESRD – have  increasingly interpreted the ‘directly affected’ provisions in their governing legislation to restrict the scope of persons having the right to participate in decision-making to a very narrow class of individuals – basically landowners or other residents in close vicinity to a project.

We are now at the point where public concerns on a resource project must either be argued by a nearby individual who is personally affected by the project, or perhaps by others but only where the ‘directly affected’ individual triggers a public hearing. The opportunity for public interest groups, in particular, to participate in resource project reviews has been severely compromised by the narrow interpretation given to ‘directly affected’ by statutory agencies.  It is difficult to comprehend how these agencies ensure resource development decisions are in the public interest when they seem so reluctant to hear public input and expressly refuse to do so in some cases. In my view, it is time for the Court of Appeal to make some sense of this and substantively weigh in on who can be ‘directly affected’ by a resource development project.

I examine the issue of public participation in resource project decision-making more fully in “The Right to Public Participation in Resources and Environmental Decision-Making in Alberta” forthcoming this Fall in volume 52(2) of the Alberta Law Review.

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Access to Justice and Costs Against the Crown

Wed, 04/16/2014 - 10:00am

By: Sarah Burton

PDF Version: Access to Justice and Costs Against the Crown

Case commented on: R v A.Y.A., 2014 ABQB 103

In R v A.Y.A., 2014 ABQB 103 [AYA], the Honourable Madam Justice C.A. Kent suggested that access to justice considerations have a role to play in awarding costs against the Crown. AYA built on pre-existing case law that laid the groundwork to make this exceptional award in situations where there was no Crown misconduct. Prior to AYA, however, applicants had been unsuccessful in achieving these ends. This decision is particularly fascinating because Justice Kent used access to justice concerns to distinguish the case before her from the earlier unsuccessful case law. In the process (and despite Justice Kent’s best efforts to narrowly confine the decision) AYA raises wide-ranging questions about remedial entitlements for access to justice breaches.

The accused in AYA was charged with a series of sexually related offences. He required the use of an interpreter during the course of a scheduled 5-day trial. The Crown engaged an interpreter but (minutes before the trial was to begin) the interpreter quit — citing a personal sensitivity to the nature of the charges. Given the unique language of interpretation (Ahmaric), the trial had to be adjourned for several months while a new interpreter was located. When the trial finally proceeded, the accused was acquitted (at para 1).

Post-trial, the accused sought to be reimbursed for some of the costs he incurred as a result of the adjournment. Defence and Crown counsel agreed that s. 14 of the Charter guaranteed the accused an interpreter, and that adjournment was the only way to preserve this right. The parties disagreed, however, on who ought to bear the costs related to this unexpected and significant delay.

Defence counsel submitted affidavit evidence demonstrating that the accused had to bear the costs related to the unused trial time, and that his total bill ($17,500.00) was higher than it would have been but for the adjournment (at para 2).

The Crown filed affidavit evidence demonstrating that it had followed all correct procedures in retaining the interpreter (who was not a Crown employee). The Crown further submitted that, given the interpreter’s uneventful involvement in pre-trial procedures, they could not have anticipated her sudden departure (at paras 3 and 4).

Justice Kent reviewed the relevant case law and considered the two sources of authority she possessed to make such an award: s. 24(1) of the Charter and her inherent jurisdiction. Case law was clear that, regardless of which authority is invoked, a costs award against the Crown is an exceptional remedy that is typically premised on serious Crown misconduct. As McFadyen J.A. explained in the leading case on point — R v Robinson, 1999 ABCA 367:

[29] The Crown is not an ordinary litigant, does not win or lose criminal cases, and conducts prosecutions and makes decisions respecting prosecutions in the public interest. In the absence of proof of misconduct, an award of costs against the Crown would be a harsh penalty for a Crown officer carrying out such public duties.

In Robinson, the Court of Appeal held that a costs award pursuant to s. 24(1) of the Charter must be premised on “[s]ome degree of misconduct or an unacceptable degree of negligence” (at para 30). However, it declined to rule on whether the same restriction applied to a costs award made pursuant to inherent judicial jurisdiction.

Case law developed pursuant to Robinson built on this opening, but declined to exercise the inherent jurisdiction. In R v Griffin, 2011 ABCA 197, the Alberta Court of Appeal canvassed Canadian case law, and found that costs may be awarded against the Crown in situations that were not based on misconduct but were nonetheless “exceptional”, “remarkable”, or “unique” (at para 27). The Nova Scotia Court of Appeal opined that costs could be awarded against the Crown in “exceptional circumstances” that could include situations of “conduct by the police or systemic failures so extraordinary as to be virtually unique in character” (Griffin at para 29 citing R v Taylor, 2008 NSCA 5 at para 54).

Justice Kent agreed with Crown counsel that it could not have anticipated the interpreter’s last minute refusal to act (at para 8). Thus, the adjournment was not the result of any Crown misconduct, foreclosing on any recovery pursuant to s. 24(1) of the Charter. Justice Kent was, however, persuaded that the situation was a unique and exceptional systemic failure that was unlikely to occur again (at para 9). Thus, while the Crown was not to blame for the interpreter’s departure, it did bear responsibility for a systemic failure – entitling the accused to partial indemnity of $5,000.00.

To bolster her decision (and to distinguish it from Robinson and Griffin) Justice Kent reflected on how the systemic failure could have impacted the accused’s ability to access justice:

[10] I make one comment on the application of the law to cases of interpretation. The cases which bind me [Robinson and Griffin] do not deal with interpretation. The concern I raise is that the right to an interpreter is fundamental for access to justice, for without interpretation, the accused cannot provide an adequate defence. In addition to adequate interpretation, the best defence is one provided with the assistance of counsel. Although the accused in this case was able to maintain his relationship with his counsel, that may not always be the case. What if an accused in a similar situation but with fewer resources (but not so few as would qualify himself for legal aid) is left with the choices of defending himself without counsel, or worse yet, pleading guilty simply because he could not defend himself? That would be a serious denial of access to justice.

In this passage, Justice Kent engages two distinct access to justice concerns to tip the balance in favour of exercising her inherent jurisdiction: a) the original adjournment was necessary to preserve the accused’s right to an interpreter, which is fundamental to access justice; and b) the delay caused by a systemic failure imperiled the accused’s relationship with his counsel. This had the potential to impact the accused’s ability to access justice (though ultimately it did not).

These two grounds are interesting for several reasons. As it relates to the first rationale, Justice Kent articulates a narrow view of the scope of what access to justice encompasses. To explain, Justice Kent distinguished AYA from Robinson and Griffin on the basis that her case dealt with fundamental access to justice issues. This distinction implies that Griffin and Robinson lacked this concern. A closer review of those cases casts doubt on her assumption.

Robinson dealt with an alleged s. 7 Charter violation based on the Crown’s “egregious” failure to fulfill its disclosure obligations (Robinson at paras 23 and 28). Justice Kent does not explain why disclosure breaches do not engage access to justice concerns. One can imagine that the accused in Robinson felt that his ability to access justice was impacted by the Crown’s “egregious” failure to provide him with relevant information.

Griffin dealt with a s. 8 Charter violation resulting from the Crown’s inappropriate use of privileged documents to obtain production of the accused’s confidential medical records (para 11). One may similarly assume the accused in Griffin felt his ability to access justice was impeded by the Crown’s illegal access to his medical records.

Justice Kent’s suggestion that her exercise of discretion was justified in AYA because it dealt with access to justice concerns (while implying that Griffin and Robinson did not) fails to consider whether access to justice requires more than just access to courts.

While this first point raises interesting questions for debate, it is Justice Kent’s second rationale (imperiling a relationship with counsel impacts access to justice) that is particularly striking. Despite her attempt to narrowly confine the decision to unique or remarkable interpretation issues, Justice Kent’s statement conflates access to justice with access to counsel. She then justifies a remedial and exceptional costs order because this relationship was threatened.

This reasoning has potential implications for the thousands of Albertans who cannot afford to retain counsel. There is near universal acceptance of the fact that Alberta is facing a legal aid crisis, and that the system is drastically underfunded. While the law is clear that there is no general constitutional right to counsel (British Columbia (Attorney General) v Christie, 2007 SCC 21 at para 23) Justice Kent has suggested that an individual may be entitled to a remedy if systemic failings impede their ability to access counsel.

Before getting ahead of ourselves, it is worth emphasizing that the current law would not permit an exceptional costs award based purely on the legal aid crisis. Sadly, the denial of legal aid services because of underfunding is not the unique, remarkable, once in a life time occurrence articulated in Griffin. Justice Kent’s statement does, however, raise an interesting query as to who ought to bear responsibility for individuals who are precluded from accessing justice because of a systemic failing.

Interestingly, there may be room for developing the law on this point. In AYA, Justice Kent suggested that she would have been receptive to an argument that some broad Crown policies could themselves qualify as systemic failures:

[8]…Not argued was whether there is anything in the process of retaining and training interpreters that would have impressed upon this interpreter the need for an early determination about her capacity to act or whether the absence of such training is itself a systemic failure. That may be for another day.

As the issue was not argued, there was no opportunity to consider this angle.

It is unlikely we’ll have the unanswered questions from AYA clarified any time soon. The Crown has not appealed the decision, and the time for doing so has expired.  This was a curious choice, given that both Robinson and Griffin were Crown appeals from a trial judge’s award of exceptional costs. In both of those cases, the Court of Appeal reversed the trial judge’s costs award, and emphasized the narrow scope of a judge’s inherent jurisdiction.

Because the Crown decided not to appeal, Justice Kent’s comments on access to justice remain a valid and unaltered precedent. It will be interesting to see how future courts treat AYA as a precedent that not only expands on the ability to award costs against the Crown, but possibly opens the door to remedial entitlements for access to justice breaches.

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The Abatement of Rent Remedy under Alberta’s Residential Tenancies Act

Mon, 04/14/2014 - 10:00am

By: Jonnette Watson Hamilton

PDF Version: The Abatement of Rent Remedy under Alberta’s Residential Tenancies Act

Case commented on: Perpelitz v Manor Management Ltd., 2014 ABPC 63

There are few enough written decisions considering the landlord’s duties under Alberta’s 10-year-old Residential Tenancies Act, SA 2004, c R-17.1, that almost any decision considering the statute is worth bringing to the notice of the province’s landlords and tenants. But this decision by Judge Gordon Yake is interesting on its own merits for a few reasons.

One is its almost exclusive reliance on the landlord’s implied covenant of quiet enjoyment when rental premises are partially uninhabitable, despite the existence of the landlord’s implied covenant that the premises will meet minimum housing standards and the landlord’s promise in the written lease in this case that the premises would be kept in a good state of repair. Reliance on the landlord’s covenant of quiet enjoyment implied by section 16(b) of the Residential Tenancies Act focuses attention on the tenant’s right to exclusive possession, which is the right such a covenant protects. Most tenants living in flooded, bedbug infested, or other uninhabitable premises might not think of their problems in terms of exclusive possession. It is not clear why the landlord’s implied obligation under section 16(c) of the Residential Tenancies Act to ensure that the premises meet at least the minimum standards prescribed for housing premises under the Public Health Act, RSA 2000, c P-37 and the Housing Regulation, Alta Reg 173/1999 and the Minimum Housing and Health Standards issued under the Public Health Act do not play a larger role in cases where the tenants want to remain in the premises.

However, the focus of this post is on the abatement of rent remedy available to tenants who stay in partially uninhabitable premises. That remedy is not a very generous one. Nor was Judge Yake generous in this case when it came to the awarding of costs to the tenants. However, because he did not give reasons for not making the usual award of costs to the successful party in this case there is not a lot that can be said about this aspect of his decision.

The decision of Judge Yake also tells a cautionary tale about just how persevering tenants in almost uninhabitable premises have to be in order to prevail.

Facts

Cindy Perpelitz and Dale Wood rented a Red Deer townhouse from Manor Management Ltd. on a month-to-month basis. As part of their written residential tenancy agreement, the landlord was required to ensure that the premises remained in a reasonably good state of repair (para 21). That same agreement also provided that the landlord would, except in the case of emergencies, give the tenants 24 hours written notice to enter to inspect the state of repairs or to make repairs to the premises (para 22). More importantly — because these implied promises by the landlord cannot be waived by tenants — the landlord made similar promises under section 16(b) and (c) and section 23 of the Residential Tenancies Act:

16. The following covenants of the landlord form part of every residential tenancy agreement:

(b) that, subject to section 23, neither the landlord nor a person having a claim to the premises under the landlord will in any significant manner disturb the tenant’s possession or peaceful enjoyment of the premises;

(c) that the premises will meet at least the minimum standards prescribed for housing premises under the Public Health Act and regulations.

23(1) Except as otherwise permitted in this section, no landlord shall enter residential premises rented by the landlord without the consent of the tenant or of an adult person lawfully on the premises.

(2)  A landlord is entitled to enter residential premises rented by the landlord without consent or notice if the landlord has reasonable grounds to believe that

(a) an emergency requires the landlord to enter the premises …

(3)  Subject to subsection (4), a landlord is entitled to enter residential premises rented by the landlord without consent but after notice to the tenant

(a) to inspect the state of repair of the premises,

(b) to make repairs to the premises …

(4) A landlord is not entitled to enter residential premises under subsection (3) unless

(a) the notice is served on the tenant at least 24 hours before the time of entry ….

The major problems with the premises in this case appeared to be caused by water leaking from a dishwasher and from plumbing under the kitchen sink into the basement, and by water leaking from other parts of the plumbing system that were behind the interior walls (at para 33). The leaking water eventually flooded the basement and the damp conditions eventually resulted in black mould.

The tenants did not stand idly by while their rented premises became (at least in part) uninhabitable (at para 33). The female tenant handled the multiple notices to the landlord. She first notified the landlord of the leaking water early in October 2011, in a written report that was hand-delivered to the landlord’s offices. Due to a lack of response, she followed up on October 18, November 1, November 16, November 25, and December 1. By December 1 she was reporting a flooded basement and ruined drywall. The tenants then took action under the Public Health Act and called upon a Public Health inspector to inspect the premises in January 2012. The judgment is vague about what happened as a result of that inspection, but it appears that no order under section 62 of the Public Health was made. (An order under section 62 of the Public Health Act, and the landlord’s non-compliance with that order, is required if a tenant wants to serve 14 days’ notice on the landlord to terminate the tenancy under section 28 of the Residential Tenancies Act. However, these tenants did not want to terminate and so the lack of an order is irrelevant.)

Although a plumber hired by the landlord telephoned on November 10, no plumber actually visited the premises until January 26, 2012 — almost 4 months after the tenants’ first report of trouble. Carpet cleaners, plumbers, builders, mould removers, and others hired by the landlord showed up to work on the premises at the end of January and in February, usually on short notice or no notice (para 33). Those visits without proper notice were all breaches of section 23(4) of the Residential Tenancies Act, as well as clause 11 of the parties’ agreement.

Eventually, the kitchen and bathroom floors and subfloors were torn out and replaced, the kitchen countertops and cupboards were removed and replaced, the dishwasher was replaced, and plumbing fixtures were replaced, as was drywall in the basement. Except for a period of 3 days in February when the landlord paid for the tenants to rent a hotel room, the tenants occupied the rented townhouse during all of this work. It appears they could not afford to go elsewhere (at para 33(bb)). Then the furnace quit working, and between March 13 and April 2 the premises were very cold. Finally, to top it all off, the landlord’s contractors left a mess and the tenants spent 112 hours painting, carrying drywall, carrying chip board, removing garbage, and otherwise cleaning the premises — all work that was the landlord’s responsibility.

The tenants initially applied to the Residential Tenancy Dispute Resolution Service in December 2012, but were unable to resolve the issues in the telephone conference that service provided in January 2013.

Abatement of Rent

The tenants then applied to the Provincial Court under section 37(1) of the Residential Tenancies Act for abatement of their rent and for compensation for performing some of their landlord’s duties with respect to the townhouse. Judge Yake did grant them compensation for the 112 hours they spent painting, carrying drywall, carrying chip board, removing garbage, and otherwise cleaning the premises at $20 per hour, for a total of $2,240 (at para 42). That claim seemed uncontroversial.

The abatement or withholding of rent remedy was more controversial. Under the Residential Tenancies Act, a tenant is not allowed to withhold rent and abandon the premises if they become uninhabitable. The withholding of rent by a tenant is not a self-help remedy. A tenant must pay rent unless and until a court relieves him or her of that obligation in whole or in part under section 37 of the Residential Tenancies Act:

37(1) If a landlord commits a breach of a residential tenancy agreement or contravenes this Act, the tenant may apply to a court for one or more of the following remedies:

(b)    abatement of rent to the extent that the breach or contravention deprives the tenant of the benefit of the residential tenancy agreement;

(Emphasis added)

The tenants had first asked for abatement of their rent on November 1, 2011.  It took almost 2 ½ years to get it. The hearing in Provincial Court started on May 9, 2013, continued on July 30 after an adjournment of a June 12 date, continued on December 17 after an adjournment of an October 22 date, and concluded on December 31. The tenants were self-represented throughout the proceedings, with the male tenant taking the lead. He did an excellent job according to Judge Yake (at paras 28-32), based on contemporaneous, careful and comprehensive notes he had made over the years and corroborating photographs and other exhibits. Whenever the evidence of Mr. Wood conflicted with that of the landlord’s representative, the judge accepted Mr. Wood’s testimony, as well as his other evidence.

Judge Yake found that the landlord was in breach of its obligations under sections 23(4) (requiring 24 hours’ notice of entry) and section 16(b) (requiring the landlord to refrain from significantly disturbing the tenant’s possession or peaceful enjoyment of the premises) of the Residential Tenancies Act, as well as its contractual obligations to give notice and to maintain the premises in a reasonably good state of repairs under the lease (at para 34).

Oddly enough, Judge Yake did not find a breach of section 16(c) of the Residential Tenancies Act, which requires that the landlord ensure the premises meet at least the minimum housing standards prescribed by the Public Health Act.  Section 16(c) is not even mentioned in the Judge’s list of relevant statutory provisions (at paras 15-20). As previously mentioned, however, an order under the Public Health Act is only required if a tenant wants to serve 14 days’ notice on the landlord to terminate the tenancy under section 28 of the Residential Tenancies Act. A tenant can apply for an abatement of rent under section 37 of the Residential Tenancies Act based on the landlord’s breach of section 16(c) alone. It is true that, as Judge B.R. Hougestol said in a different Residential Tenancies Act case, Yang v. Brett, 2011 ABPC 112 (CanLII) at para 4, “the landlord’s bare obligations are negligible” under section 16(c): “[a]ll the landlord has to do is to keep the property habitable” (at para 16).  Still, it is difficult to believe that premises which required the extensive replacements of flooring, drywall, cupboards and plumbing that these premises required are habitable or meet the minimum housing standards.

The breach of section 16(b) — the significant disruption of the tenants’ possession or peaceful enjoyment of the rented townhouse — was found to be the most significant breach. The covenant of quiet (or peaceful) enjoyment is the promise that protects a tenant’s right to exclusive possession of rented premises. Under section 37 of the Residential Tenancies Act, abatement of rent is available whenever a landlord breaches any of its covenants in a written lease or the 3 covenants implied by section 16. However, in Alberta, abatement of rent seems to be confined to cases where the breach is of the covenant of quiet enjoyment in section 16(b). In Boardwalk Rental Communities v Ravine, 2009 ABQB 534 (CanLII), for example, a bedbug infestation was found (at para 17) to be a significant breach of a landlord’s obligation to provide peaceful enjoyment of the premises because the infestation was a physical interference with the tenant’s use of the premises, one of the two things a covenant for quiet enjoyment protects against: 581834 Alberta Ltd v Alberta (Gaming and Liquor Commission), 2006 ABQB 47 (CanLII) at para 9. It may be that finding a breach of the covenant of peaceful enjoyment is easier than finding a breach of other obligations because a landlord who is not negligent or unreasonable in dealing with problems can still be found to be in breach of that covenant if the tenant cannot occupy all or a part of the premises: Boardwalk Rental Communities v. Ravine at para 20.

The landlord’s right to enter the premises, on proper notice, to make repairs — found in section 24(3)(b) of the Residential Tenancies Act — does compromise the tenant’s right to exclusive possession to some extent. A breach of the exclusive possession promise was easy to find in this case because the landlord did not give proper notice. Even if the landlord had given proper notice, a landlord who acts reasonably when renovating or repairing may still be liable to a tenant if the tenant’s ability to use and enjoy the premises is diminished by the renovations or repairs, as Judge Yake notes (at para 24).

Judge Yake awarded the tenants only $3,011 on their abatement of rent claim (at paras 37-39). Because they were renting the premises for $1,075 a month, this abatement is the equivalent of just under 3 months’ rent. It does not seem like much for putting up with what these tenants put up with.

It is important to note that Section 37(1(b)) of the Residential Tenancies Act restricts the amount of rent a court can abate by saying it can only do so “to the extent that the breach or contravention deprives the tenant of the benefit of the residential tenancy agreement.” Judge Yake relied (at para 25) on Brown v Libertas Property Management Inc., 2011 ABPC 148 (CanLII) at para 24 for an interpretation of section 37(1)(b). In Brown, Judge Ingram held:

An abatement claim is a claim for breach of express or implied terms of a tenancy agreement. Damages are limited to the difference between the rental value of the premises if they had not been subject to the ‘deprivation of benefit’… The intent of abatement of rent is that the tenant should pay only reduced rent if the property is of lesser benefit and therefore diminished value compared to the value at which it was rented.

How much rent is abated depends on the degree of interference with a tenant’s possession and use of the premises. It does not appear that the courts are very generous in their application of this provision. In Boardwalk Rental Communities v Ravine at paras 1 and 11, only half a month’s rent was abated following a bedbug infestation that was found to render the premises uninhabitable. In Brown v Libertas Property Management Inc at para 2, a tenant paying $1,520 per month was only awarded a $1,000 abatement of rent even though an order had been made under the Public Health Act and the landlord had not corrected the deficiencies, which included an absence of screens on kitchen and bedroom windows, an unusable deck, and mould in a bathroom from a leaky toilet.

In this case Judge Yake found that the tenants lost the entire use of the basement for 5 months and, because the basement amounted to roughly half of the premises’ normally used space, he awarded the tenants an abatement of $475/month of their $1,075/month rent — 44 percent or roughly half — for November 1, 2011 to April 2, 2012 (at para 37). The tenants also lost the use of a large portion of their main floor, including their kitchen and the upstairs bathroom, in February and March 2011 (at para 38).  Judge Yake awarded them $300/month for two months for that loss. How the amount of $300 was reached is not explained, but it is half of the $600/month the tenants were left to pay after the abatement for the loss of the use of the basement.

Total rent abated was therefore $3,011, much less than the tenants claimed. There was no abatement of rent for the lack of heat for three weeks in March and April, 2012, although heat is normally a necessity in early spring in Alberta. It is difficult to believe that rented premises lacking heat, a kitchen, two bathrooms and a basement was worth $400/month. It appears that not much is required to raise rented premises from “no benefit” to “lesser benefit”.

In addition to an hourly wage for performing the landlord’s work and the equivalent of less than three months’ rent abated, Judge Yake also granted the tenants some minor amounts for a table destroyed by the landlord’s contractors (at para 43) and the cost of the their filling fee with the Residential Tenancy Dispute Resolution Service (at para 45). That was it. He decided that the landlord had already compensated them fully for their hotel costs (at para 44).

Costs

Although Judge Yake granted the tenants the cost of their filing fee with the Residential Tenancy Dispute Resolution Service, he did not award them costs for their Provincial Court action (at para 45). No reasons were given for not awarding those costs.

Judge Yake reviewed the legal principles governing awards of costs in the Civil Division of Provincial Court in a February 2014 judgment in Horn v Hoyda, 2014 ABPC 34 (CanLII). He summarized the eight principles (at para 7) as follows:

(a) the ordinary rule in civil matters in Provincial Court [RSA 2000, c P-31] is that costs are awarded to the successful party unless there are special circumstances which might dictate a different outcome;

(b) section 44 of the Provincial Court Act states that when judgment is given, the judgment shall include costs;

(c) pursuant to section 9.8(1) of the Provincial Court Act this Court may at any time in any proceedings and on any conditions that the Court considers proper award costs in respect of any matter coming under Part 4, which governs Civil Claims in Provincial Court;

(d) pursuant to section 2 (L) of  the Provincial Court Fees and Costs Regulation, A.R. 18/91 (as amended) upon application or hearing, this Court may award payment for additional costs;

(e) there are published “Guidelines for Costs in Provincial Court” (the “Guidelines”) which relate to party and party costs and are not intended to fully indemnify the successful party;

(f) although the trial judge has a broad discretion with respect to the nature and amount of costs to be awarded, that discretion is not unlimited;

(g) the factors to be considered by the Court when awarding costs are described in the Guidelines; and

(h) when determining costs to be awarded the Court may also take into consideration the matters described at Rule 601(1) of the Alberta Rules of Court.

Subparagraph (e) above refers to published “Guidelines for Costs in Provincial Court” but they are not available on the Alberta Courts: Provincial Courts website. A document called “Guidelines for Costs in Provincial Court – Civil Division” was reproduced seven years ago in Laforce v. Kaye, 2007 ABPC 245 (CanLII) at para 8 and it appears to be the most recent publicly available version. These Guidelines indicate that parties appearing without counsel should be awarded five percent of the amount in issue, as well as $150 for an opposed application and, presumably, the filing fee of $200. However, the Guidelines quoted in Laforce v. Kaye also note that “Costs are in the discretion of the court and are intended to provide a degree of indemnification with respect to the actual expense incurred or which it would be reasonable to incur in conducting litigation having regard to the amount” and that consideration ought to be given to the following factors:

1. The complexity of the cause of action;

2. Difficulties encountered in respect of service;

3. Adjournments or delays and who has responsibility;

4.  Attendances upon application for adjournment and whether Witnesses are present;

5.  Expert witness (where properly required-Disbursement to a maximum of $150.00 for each witness);

6.  Time engaged in preparation for trial; or preparation of written argument where ordered by the court;

7.  The type of disbursements and whether or not they are necessary;

8.  The necessity of a trial when there was no valid cause of action or defence.

Because no reasons were given by Judge Yake for not awarding costs to the successful tenants in this case, it is futile to speculate on the possible reasons. However, the lack of an award seems out of keeping with the judge’s praise for Mr Wood’s testimony and its basis (at para 28), his finding that the tenant’s testimony and evidence was to be preferred to that of the landlord whenever there was a conflict (at paras 28 and 32), his criticism of the landlord’s conduct in failing to produce relevant records and witnesses with first-hand information (at paras 29-31), and the adjournments and delays that caused the hearing of the tenants’ application to stretch over 6 court dates between May 9 and December 31, 2013, only one of which was due to the tenants and only then because Mr Wood was in an accident shortly before an October court date (paras 6-14).

Conclusion

A total of $5,826 does not seem like much for putting up with the kind of conditions that these tenants put up with for more than 6 months, especially considering they paid $600/month rent for 4 of those months and $300/month rent for 2 of those months, and especially considering that a huge chunk of that amount was $20/hour wages for the hard work of painting, carrying drywall, carrying chip board, removing garbage, and otherwise cleaning the premises after the landlord failed to do so. Consider also the 15 months that it took them to pursue the landlord though the Dispute Resolution Service and the Provincial Court. From Judge Yake’s account, these tenants seemed to have done everything right. They gave prompt and adequate notice to the landlord of the problems. They took careful and contemporaneous notes of all the problems and backed them up with photographs. Requesting a Public Health inspection was found to be a reasonable course of action (at para 33(n)). Judge Yake even found the tenants took all reasonable steps to mitigate their losses (at para 33(gg)).

Such stingy compensation is apparently all that the Residential Tenancies Act will allow. Alberta is not exactly known for tenant-friendly legislation. A landlord was not even responsible for making sure rented premises continued to be habitable until 2004. Compared to the pre-2004 legal situation, I suppose these tenants will have to be grateful for small mercies.

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A Pricked Condom: Fraudulently Obtained Consent or No Consent in the First Place?

Wed, 04/09/2014 - 10:00am

By: Joshua Sealy-Harrington

PDF Version: A Pricked Condom: Fraudulently Obtained Consent or No Consent in the First Place?

Case commented on: R v Hutchinson, 2014 SCC 19

This post discusses a recent decision from the Supreme Court of Canada addressing consent in the context of sexual assault. The Court was unanimous on its final destination: dismissing the appellant’s appeal of his conviction for sexual assault. However, the Court narrowly split, 4-3, on the path taken to get there. More specifically, the Court split on whether deliberately and secretly sabotaging a condom renders sexual activity with that condom non-consensual because the victim’s consent was obtained fraudulently or because she never consented in the first place. This post reviews these two alternate approaches, notes their subtle overlap, and concludes that the state of consent in Canadian law is left unclear following this decision.

1. Background

In R v Hutchinson, 2014 SCC 19, the Supreme Court of Canada unanimously upheld the conviction of the appellant/accused, Mr. Hutchinson, for sexual assault under the Criminal Code, RSC 1985, c C-46, section 271.

The facts are plain and undisputed. Mr. Hutchinson deliberately and secretly poked holes in the condoms he used when having sex with his partner, the complainant, who testified that she only consented to sex with a condom (at para 2). As the concurring judgment points out, “[i]t goes without saying that when someone agrees to sexual intercourse with a condom, she is agreeing to sexual intercourse with an intact condom” (at para 79; emphasis in original). It’s called “protected sex” for a reason.

Consequently, the complainant was sexually assaulted by Mr. Hutchinson – but why exactly; because her consent was fraudulently obtained, or because she never consented in the first place? The answer to that question is what divided the Court in Hutchinson. In fact, a majority of both judgments is spent comparing and justifying their respective approaches to consent.

2. Two Paths to a Sexual Assault Conviction

Both judgments grapple with the same fundamental question: “where should the line between criminality and non-criminality be drawn when consent is the result of deception?” (at para 3). Further, both judgments employ a two-step analysis rooted in the same statutory foundation:

1. The consent inquiry: whether there is consent based on its definition under section 273.1(1) of the Criminal Code, and

2. The vitiation inquiry: whether consent was vitiated under section 265(3) of the Criminal Code (at para 4 per the majority and para 92 per the concurring judgment).

However, both judgments resolve the issue of a sabotaged condom at different steps in the analysis. According to the majority judgment (authored by McLachlin CJ and Cromwell J, with Rothstein and Wagner JJ concurring) sex with a sabotaged condom amounts to sexual assault because consent is vitiated by fraud (at para 6). In other words, there is no consent under the vitiation inquiry. By contrast, the concurring judgment (authored by Abella and Moldaver JJ, with Karakatsanis J concurring) considers sex with a sabotaged condom a sexual assault because there is no consent “in the first place” (at para 79), i.e. no consent under the consent inquiry.

These two separate paths to a sexual assault conviction in Hutchinson are best explained by the conflicting approach to the consent and vitiation inquiries described in the two judgments.

(a) Two approaches to the consent inquiry

The majority judgment approaches the consent inquiry more narrowly. In particular, the majority opines that section 273.1(1) of the Criminal Code requires a consideration of consent to three discrete aspects of the sexual activity:

1. the touching,

2. the sexual nature of the touching, and

3. the identity of the partner (at para 5).

By contrast, the concurring judgment approaches the consent inquiry more broadly and argues that consent must be considered in relation to the following three aspects of the sexual activity:

1. the identity of the partner,

2. the sexual nature of the touching, and

3. “the manner in which the sexual touching was carried out” (at para 92).

Consequently, the concurring judgment employs the same consent inquiry as the majority save for the addition of the “manner in which the sexual touching was carried out.” The remaining factors (the touching, its sexual nature, and the identity of the partner) are otherwise found in both judgments’ consent inquiries.

This overlap is best explained by example. For instance, both judgments would consider identical twins swapping places as amounting to sexual assault because a component of the consent inquiry common to both judgments (the identity of the partner) would not be met. By contrast, there are circumstances where the consent inquiry would not overlap between the judgments. Take the example of a woman lying about using a diaphragm. Presumably, the concurring judgment would consider this as an aspect of “how the physical act was carried out” analogous to condom use, and would conclude that lack of consent to this aspect amounts to sexual assault. The majority, however, would likely not consider this a sexual assault (that is, unless the increased risk of a female partner’s pregnancy vitiated the male partner’s consent under the majority’s approach).

(b) Two approaches to the vitiation inquiry

The two judgments also differ in their approaches to the vitiation inquiry.

Both judgments endorse the basic two step approach to vitiated consent from R v Mabior¸ 2012 SCC 47 at paras 104-05:

1. dishonesty, including the non-disclosure of important facts, and

2. deprivation or risk of deprivation that results from the dishonesty (at para 67 per the majority and para 94 per the concurring judgment).

However, the two judgments disagree with respect to the scope of “deprivation.” More precisely, while the majority judgment adopts a narrower conception of consent, it offers a broader conception of deprivation.

According to the majority, whether or not a complainant experiences deprivation depends on if they experience harms that are “equally serious” to the “significant risk of serious bodily harm” contemplated by R v Cuerrier, [1998] 2 SCR 371 in the context of sexually transmitted diseases (Hutchinson, at para 69). On that basis, the majority held that the harm of an unintended pregnancy (or an increased risk thereof), with the physical and psychological implications that entails, amounts to deprivation sufficient to meet the vitiation inquiry (at para 70).

The concurring judgment, by contrast, adopts a narrower conception of deprivation. The concurring judgment argues that deprivation should be restricted to a narrower reading of Mabior and only apply to circumstances in which there is a “significant risk of serious bodily harm” rather than also applying to other “equally serious deprivations” (at para 95). In their view, the majority’s approach results in a “moving target” that is uncertain (at para 95).

Again, like with the consent inquiry, the two judgments’ approaches to the vitiation inquiry partially overlap. In particular, both judgments would find fraud vitiating consent if that fraud exposed the complainant to a “significant risk of serious bodily harm.” For example, both judgments would likely approach the issue non-disclosure of HIV in the same way (though the majority thinks otherwise: see para 40).

By contrast, the judgments would differ if a complainant was exposed to equally serious harms that do not amount to significant risk of serious bodily harm. For example, the majority would conclude that substituting a women’s birth control pills for sugar pills would amount to fraud vitiating consent (at para 47) whereas the concurring judgment would not (as I explain below).

(c) A distinction without a difference?

There are many circumstances, described above, in which both judgments would reach the same conclusion with respect to consent, and by the same reasoning. In addition, there are circumstances where both judgments would reach the same conclusion with respect to consent, but by different reasoning. Though such circumstances are theoretically fascinating, they arguably amount to a distinction without a difference.

The most obvious example of this is in Hutchinson itself. While the judgments discuss, at length, their conflicting approaches to assessing the impact of a sabotaged condom on consent, both judgments ultimately conclude that it results in a sexual assault (at para 6 per the majority and para 79 per the concurring judgment).

More broadly, any deception resulting in an “equally serious” harm to that described in Cuerrier (failing the vitiation inquiry according to the majority) that relates to the “manner in which the sexual touching was carried out” (failing the consent inquiry according the concurring judgment) would similarly attract criminal liability under the reasoning of both judgments, though at different stages of the analysis.

3. Commentary

Both judgments have weaknesses. Neither judgment provides a predictable approach to assessing consent in the context of deception – an admittedly complex area of law. Further, as I describe below, neither judgment recognizes how their disagreement is a consequence of a tension inherent to the Criminal Code provisions they rely on: two provisions which support consent and vitiation inquiries that are both separate and overlapping. Greater engagement with this tension is the key to greater clarity regarding consent.

(a) Lacking clarity under the consent inquiry

Neither the majority nor the concurring judgment provide for a clear consent inquiry. This lack of clarity is problematic; especially in sexual assault law, which has received notoriously inconsistent treatment by courts and is related to social circumstances that are already difficult for individuals to navigate with certainty.

The majority claims its approach to the consent inquiry is clearest, going so far as to describe the concurring judgment’s approach as one “lead[ing] to empty semantic arguments incapable of furnishing a principled and clear line between criminal and non-criminal conduct” (at para 49). The purported clarity of the majority comes from its omission of the “manner in which the sexual touching was carried out” from its consent inquiry. I agree that this factor lacks clarity. I disagree, however, that the majority avoids this lack of clarity.

Before discussing the obscurity of the majority judgment on the consent inquiry, I begin with the consent inquiry of the concurring judgment, the obscurity of which is most evident from the decision.

The key clarity problem in the concurring judgment’s consent inquiry is its incorporation of “how the touching will occur” (at para 83). The majority correctly points out that “it is difficult to tell what matters [form] part of the [...] ‘how’ and which do not” (at para 41). For example, some of the concurring judgment’s elaboration on the “how” aspect of consent merely refers to synonyms, which provide limited guidance: the “manner” of touching (at paras 79, 85, 88, 93-94, 97 and 102-03), the “means” of touching (at para 83), and the “specific” or “actual” touching that takes place (86, 88 and 92).

Clearer guidance comes from the concurring judgment when it indicates that the “how” of consent includes “where” the touching occurs and “by what” an individual is touched (at para 92). However, even with that basic description there are many unanswered questions. A dialogue between the majority and concurring judgments best illustrates the obscurity in the “how” factor of the consent inquiry.

First, the majority describes the obscurity in the concurring judgment’s approach as follows:

[46]   [...] Under Abella and Moldaver JJ.’s test, the quality or effectiveness of a condom changes the sexual activity that takes place; why would it not follow that an individual might be prosecuted for using an expired condom or a particular brand of condom?  Anomalies abound.

(Emphasis in original)

In response, the concurring judgment replies:

[103]   [...] Mr. Hutchinson deliberately sabotaged the condom without her knowledge or agreement.  It trivializes the seriousness of the violation of the complainant’s integrity that occurred to analogize a sabotaged condom, as our colleagues have done, to its brand or expiration date.

Why does the majority’s confusion over whether brand or expiration date fall within the “manner” of sexual activity “trivialize the seriousness of [...] a sabotaged condom”? If manner includes “by what” the complainant is touched, why would a change to the nature of the condom – that by which the complainant is touched – not impact consent? An expired condom could be much less effective at serving its protective purpose, and that purpose is presumably the basis for why “[i]t goes without saying” that consent to sex with a condom is consent to sex with an “intact condom” as the concurring judgment points out (at para 79). Further, a brand of condom could have practical consequences and falls, at least in principle, within the concurring judgment’s view that the consent inquiry involves control over what an individual is touched by. A partner could insist on a brand of polyurethane condom because of a latex allergy, or a woman could insist that her partner use the regular Trojan condom because the Magnum brand may be too big and fall off (reducing effectiveness), or because she dislikes the taste of the flavoured version.

What is the principled basis for excluding from the scope of consent the decision of whether an expired or polyurethane condom touches you but not a sabotaged condom? I agree that sabotaging a condom is a more serious deception because of the significant consequences flowing from unprotected sex, but the concurring judgment rejects the relevance of those consequences to the consent inquiry because, in its view, an individual should be able to insist on condom use “for whatever reason” (at para 98). Accordingly, the concurring judgment’s reasoning is not based on risks posed by a sabotaged condom, but rather, on a robust (and vague) “commitment to protecting a person’s autonomy and dignity” (at para 83). Without a clear understanding of when deceptions cross the line between a violation of autonomy and dignity, and when they do not, the concurring judgment’s approach keeps us guessing.

The majority judgment is similarly unclear, and does not provide “a clear line between criminal and non-criminal conduct” as it claims (at para 42). The majority limit their consent inquiry to “the basic sexual activity” and exclude “conditions and qualities of the act or risks and consequences flowing from it” (at para 21), but what is a “condition” or “quality” of a sexual act, and what does the “basic sexual activity” consist of? I can think of fewer elements more basic to sexual activity than whether or not a condom is used. Providing a bare definition of “sexual activity” and then excluding broader considerations such as the “quality” of the act, which the majority itself admits to be a vague notion (at para 30), brings limited clarity to its analysis of consent.

Some of the majority’s elaboration on the meaning of the “basic sexual activity,” similar to the concurring judgment’s treatment of the “manner” of the sexual activity, merely repeats synonymous phrases: the “physical act,” “sexual act,” or “physical sex act” agreed to (at paras 22, 24, 27 and 54-55).

Clearer guidance comes later when the majority opines that the consent inquiry concerns only “the physical sex act itself (for example, kissing, petting, oral sex, intercourse, or the use of sex toys)” (at para 54). However, such a narrow view of the consent inquiry leaves only two options: either (1) the concurring judgment is justifiably critical of this scope of consent for “adverting to generic, categorical labels of sexual activity [that obscure] the purpose of the consent inquiry” (at para 86), or (2) the majority’s approach is broader than it admits.

Consider the example of a woman having vaginal intercourse with a partner who is being too rough. If she desired vaginal intercourse but told her partner to be less rough and he persisted, would the majority conclude that her consent to the “physical sex act itself [...] for example [...] intercourse” was still present? Otherwise, on what basis could the majority deny the presence of consent if not through reference to the “manner” of the intercourse, in this case, its degree of aggression? Would such a complainant be limited to an argument of vitiated consent under section 265(3)? As another example, what if a partner enjoyed the “specific sex act” of “[using] a sex toy” but only wanted the toy to be used if it was on a low vibration setting because of over-stimulation? The most intuitive way to explain this “condition” would be that it is “how” the sex act is being carried out, but the majority only considers the basic sex act. Would deliberately overlooking this condition be consensual according to the majority? To consider the performance of a specific sexual activity that a partner expressly forbid as consensual would be a shallow interpretation of consent. I doubt that the majority would consider excessively aggressive sex contrary to the express wishes of a complainant to be consensual. As a consequence, the majority likely considers aspects of “manner” as well and, like the concurring judgment, adopts an unclear consent inquiry.

That being said, the majority’s approach to consent is not only unclear because of how it would presumably include aspects of the “manner” of touching similar to the concurring judgment. In particular, its list of “basic sexual activities” suffers from similar semantic flaws as the “how” factor in the concurring judgment. Enumerating a list of basic sexual activities without qualifying the characteristics of that list provides limited guidance. By what criteria does the majority include “the use of sex toys” within the basic sexual activity but not the use of protection? If “intercourse” being a category does not prevent a complainant from only consenting to the “specific sexual act” of anal or vaginal intercourse, why does it not contemplate the specific sexual act of protected intercourse? In other words, which specifications are allowed, and which are not? The majority purports to exclude “conditions or qualities of the physical sex act” (at para 55) but those exact terms have led in prior jurisprudence to the precise semantic problems the majority claims to avoid (at para 30). For example, how should a woman’s consent to vaginal intercourse be characterized? As consent to a specific act or as consent that is conditional on a specific location of penetration? What if a specific sexual position or technique (such as the withdrawal method) is chosen to prevent the risk of pregnancy, should it then be treated like a condom, as only a condition related to the nature of the act (with a low risk of pregnancy) and not as the basic sexual activity itself (intercourse)? In my view, the majority do not overcome these uncertainties – they merely disregard them.

I note, parenthetically, that the majority’s basis for rejecting advance consent to unconscious sexual touching in R v JA, 2011 SCC 28 is undermined by the narrow conception of consent the majority provides in Hutchinson. In JA, the Supreme Court rejected advance consent because “the consent of the complainant must be specifically directed to each and every sexual act, negating the argument that broad advance consent is what Parliament had in mind” (at para 34 per McLachlin CJ). But if consent is only directed at the basic category of sexual activity as the majority claims in Hutchinson, then why is a complainant prevented from consenting to that basic sexual activity being performed on them during her subsequent unconsciousness? Perhaps the majority was concerned that, in unconsciousness, though a category of sexual activity could be consented to in advance, the “manner” of its performance may not align with a complainant’s wishes. In JA, the majority even opined that advance consent should be rejected because “[t]he unconscious partner cannot meaningfully control how her person is being touched” (at para 60; emphasis added), the factor which the majority rejects in Hutchinson.

Finally, the subtle overlap between the consent inquiries of the two judgments compounds the obscurity each judgment provides independently.

As I described above, the majority, though it claims otherwise, likely considers aspects of the “manner” of sexual touching in its consent inquiry. For example, the clearest guidance from the concurring judgment on the scope of the “manner” of sexual activity is the following:

[92]   [...] [T]he analysis under s. 273.1(1) must link consent to the specific sexual activity which occurred, including how the sexual touching was physically carried out.  In other words, did the complainant consent to where she was touched and by what?

(Emphasis in original)

The majority rejects the “how” criterion, but surely the majority also thinks that the consent inquiry includes where sexual touching occurs and with what an individual is touched; maybe not in the context of a sabotaged condom, but presumably in other circumstances. This is most clearly illustrated by examples raised by the concurring judgment about why “manner” is a necessary component of the consent inquiry:

[87]   [...] A person who has consented to being touched over her clothing above the waist, is not consenting to being touched under her clothing below the waist. Both instances are “touching”, but only one was agreed to.  In the same way, agreeing to “penetration” does not thereby mean consenting to any or all forms or penetration. The notion that general consent is given under s. 273.1(1) so long as the other person’s actions fall somewhere within the generic category of what the complainant agreed to, such as touching or penetration, is untenable.

These examples hardly draw the line between the majority and concurring judgments. Anally penetrating a woman who consented only to vaginal penetration would be considered non-consensual at the stage of the consent inquiry in both judgments, just by different phrasing. As the majority expressly state, they would consider such touching to be non-consensual because only vaginal intercourse was “the specific physical sex act” agreed to (at para 54; emphasis in original). Alternatively, according to the concurring judgment, such touching would be non-consensual because the manner of sexual touching agreed to did not include anal intercourse.

These are not the only intersections between the judgments. These examples demonstrate a broader issue in the two judgments – a false dichotomy between their approaches which converge more than either decision admits. The concurring judgment’s “expansive” approach that includes the “manner in which the sexual touching was carried out” (at para 92) and the majority’s narrow approach that includes only the “basic sexual activity” (at para 21) are separated by a blurry line. Consequently, when read independently, and when read in concert, the judgments in Hutchinson provide for an unclear consent inquiry.

(b) Lacking clarity under the vitiation inquiry

Both judgments also provide for an unclear approach to the vitiation inquiry.

The majority judgment creates an unclear vitiation inquiry by failing to provide any criteria for the assessment of “deprivation.” It characterizes pregnancy (or an increased risk thereof) as deprivation because of the “profound changes” it entails (at para 70). In so doing, the majority extends the prior test from Mabior (“significant risk of serious bodily harm”) to include other “equally serious deprivations” (at para 69). Pregnancy certainly entails profound and significant changes in a woman’s body. In particular, becoming pregnant inadvertently from deception is an immense violation of personal autonomy. As a consequence, I agree that being rendered non-consensually pregnant is equally serious to the harms contemplated in Mabior, but why? The notion of “equally serious” harms fails to outline a principled basis from which to assess future claims of deprivation. As the concurring judgment notes:

[95]   [...] By further redefining the deprivation component of the fraud test affirmed in Mabior only two years ago, our [colleagues] leave open the possibility that other “equally serious deprivations” could establish deprivation in future cases.  This makes the deprivation component a moving target, and generates uncertainty in an already complex area.

The majority’s application of Mabior to Hutchinson is reasonable. Linking the standard of a “significant risk of serious bodily harm” to the context of disease transmission (at para 69) is a robust approach to legal reasoning, which should always take the factual underpinning of legal precedents into account. However, the majority should have gone further to explain why pregnancy is equally serious for a clearer approach in future cases. Otherwise, the identification of ‘analogous harms’ to HIV transmission and pregnancy will be left indeterminate.

The concurring judgment’s vitiation inquiry also suffers from obscurity despite its purported reliance on the clarity established in Mabior.

First, the concurring judgment claims to affirm a two-step approach in which the second step applies the Mabior vitiation standard: deception causing a “significant risk of serious bodily harm” (at para 94).

However, the concurring judgment then opines that the consent and vitiation inquiries could both simultaneously determine a lack of consent:

[96]   While the starting point for the analysis is s. 273.1(1), unlike our colleagues, we see no legal danger or uncertainty in recognizing that in a given case, lack of consent could theoretically have been established under either provision.

I appreciate how scenarios such as a sabotaged condom intuitively fall under both the consent and vitiation inquiries. The complainant never consented to unprotected sex (no consent) and her willing participation in the sexual activity was only by virtue of fraud (vitiated consent). However, to describe such an approach as without “uncertainty” is questionable.

Just four paragraphs earlier the concurring judgment outlines a two-step inquiry in which both steps are discrete (at para 92). The second stage of the concurring judgment’s vitiation inquiry is only reached if there is a finding of consent at the first stage (the test reads: “has the complainant consented [...] if so, are there any circumstances that vitiate the complainant’s consent”: at para 92). Indeed, the concurring judgment expressly states that “[t]he two inquiries are conceptually distinct and must remain so” (at para 93). On that basis, the simultaneous use of both sections 273.1(1) and 265(3) to support a finding of non-consent is logically impossible, and yet, the concurring judgment describes their simultaneous use as certain.

While the concurring judgment’s approach to deprivation is clearer than the majority in so far as it does not allow for “equally serious” harms, its view that a lack of consent could co-exist with vitiated consent, when the premise of vitiated consent is that consent exists but for its vitiation, results in a confusing analytical framework.

Further, the concurring judgment’s approach to consent and vitiation contradicts its commitment to sexual autonomy and integrity. At paragraphs 47 and 48, the majority judgment describes the scenarios of a male partner substituting his girlfriend’s birth control pills with sugar pills or lying about being sterile – two circumstances which, on my reading, would not result in a sexual assault according to the concurring judgment’s reasoning. First, the consent inquiry would be satisfied: there would be no issue with respect to the sexual nature of the touching, identity of the partner, or the manner of sexual touching (though the “manner” factor is admittedly vague). Second, the vitiation inquiry would not be satisfied (leaving consent intact). The concurring judgment expressly affirms the “significant risk of serious bodily harm” standard (at paras 94-95) in addition to considering the characterization of pregnancy as bodily harm to be “problematic” (at para 98). Accordingly, the concurring judgment would not consider an increased risk of pregnancy sufficient to qualify as deprivation, and in turn, neither lying about sterility nor sabotaging birth control pills would amount to a sexual assault. How could the reprehensible conduct of sabotaging birth control pills or lying about sterility not result in a sexual assault while sabotaging a condom does? If the concurring judgment’s primary focus is on the preservation of sexual integrity and autonomy, how can it overlook the violated autonomy caused by what is arguably the most fundamental consequence of sexual activity?

In sum, the majority and concurring approaches in Hutchinson lack clarity in both the consent and vitiation inquiries.

(c) The likely source of a strained statutory interpretation

In my view, a strained interpretation of sections 273.1(1) and 265(3) of the Criminal Code is unavoidable.

The majority reasonably concludes, based on the presumption of non-redundancy in legislative drafting, that the “two-part scheme” (consent and its subsequent vitiation) requires an analytical framework in which the fraud provision is separate from the consent provision (at para 26).

However, the definition of consent under section 273.1(1) of the Criminal Code as a “voluntary agreement” inherently engages with the circumstances of vitiated consent under section 265(3) of the Criminal Code and in that way mandates partial redundancy. A voluntary agreement must reflect the free will of the complainant, and that free will is violated when consent is obtained through fraud. Similarly, a complainant who “does not resist” because of “threats or fear of the application of force” is surely not acting voluntarily. This overlap between sections 273.1(1) and 265(3) may be the source of the concurring judgment’s view that there is “no legal danger or uncertainty in recognizing that in a given case, lack of consent could theoretically have been established under either provision” (at para 96). An accused that sabotages his condom both undermines the complainant’s “voluntary” agreement under section 273.1(1) of the Criminal Code and obtains her consent (or at least, her willing participation) through fraud under section 265(3) of the Criminal Code.

Engagement with this overlap – a two-stage analysis where both stages logically intersect – is where the Supreme Court should turn to next. This tension, which arguably underlies the 4-3 split in Hutchinson, must be resolved. Only then will the Court find a unanimous voice and be able to invest greater time outlining a clear approach to consent, rather than debating between two approaches that both find support in the Criminal Code.

I note, however, that in resolving this tension, both the majority and concurring members of the Supreme Court will need to sacrifice aspects of their analysis in Hutchinson.

The majority should embrace the inherent redundancy in certain provisions of the Criminal Code addressing consent. Consent has long been misinterpreted by the courts, and the use of partially overlapping provisions, in my view, serves to strictly regulate the assessment of consent. Such redundancies in the Criminal Code are not only found, as I described earlier, between the “voluntary agreement” of consent (section 273.1(1)) and the vitiation of consent by coercion or fraud (section 265(3)). For example, the Criminal Code provides that “[n]o consent is obtained” where “the complainant expresses [...] a lack of agreement” (section 273.1(2)(d)) or where “the complainant, having consented to engage in sexual activity, expresses [...] a lack of agreement” (section 273.1(2)(e)). Technically, the first provision (section 273.1(2)(d)) covers both circumstances. However, these minor redundancies help ensure proper legal reasoning, such as preventing a judge from ruling that a woman was not sexually assaulted, despite changing her mind about sexual activity (and expressing that changed mind), because she had agreed earlier. In this regard, it is no surprise that there is overlap between the more general consent provisions in the Criminal Code (section 265(3)) and the more detailed consent provisions which came later (section 273.1) and arose out of concerns of judicial misinterpretation of consent in the context of sexual assault.

Additionally, the concurring judgment should be more willing to incorporate context into its assessment of consent. The majority persuasively critiques the concurring judgment for its inconsistent treatment of sabotaged birth control when the only difference is between a physical device (a condom) and a drug (the pill). While I applaud the concurring judgment’s firm commitment to sexual autonomy, not all physical aspects of sexual touching should have the same impact on consent. The secret removal of a physical device that prevents pregnancy is not equivalent to the secret removal of a physical device that enhances sexual pleasure, and a principled approach to consent should recognize this.

4. Conclusion

Consent procured through deceit is a profoundly complex question of law and policy. As the majority judgment notes, there are “potentially infinite collateral conditions” (at para 27) that may or may not subjectively factor into an individual’s agreement to engage in sexual activity.

Most of the pages in Hutchinson are directed at advancing the virtues of two purportedly distinct approaches to consent. In the future, more time should be invested in acknowledging where these approaches overlap and grappling with their true differences. Hopefully, with a greater appreciation for the significant agreement amongst the member of the Court regarding the assessment of consent, a single coherent approach to its assessment may be found.

There is a difficult balance to be struck between the desire to promote fully-informed sexual actors (in the interest of sexual autonomy) and the acceptance that some degree of being under-informed must be tolerated (in the interest of preventing over-criminalization). Not every deception merits the intervention of the criminal law. Distinguishing between a partner who sabotages a condom, conceals their marital status, or lies about their age is not easy. While the Court was unanimous in this case, the physical and psychological implications of unprotected sex and the overwhelming significance that condom use frequently plays in the negotiation of sexual consent makes Mr. Hutchinson’s conduct clearly criminal. It will be interesting to see how the Court deals with the next case of vitiated consent that comes before it. If the deceit in that case relates to something less significant than a condom, it may result in a Court that not only takes two separate paths, but arrives at two separate destinations as well.

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Seasonal Workers and Discriminatory Benefits: The NWTCA Provides Some Clarity

Tue, 04/08/2014 - 10:00am

By: Jennifer Koshan

PDF Version: Seasonal Workers and Discriminatory Benefits: The NWTCA Provides Some Clarity

Case commented on: NWT (WCB) v Mercer, 2014 NWTCA 01 (Can LII)

This decision from the Northwest Territories Court of Appeal was passed on to me by an ABlawg reader in response to one of my recent posts on the ongoing uncertainty regarding the test for discrimination under human rights legislation. The decision is important in several ways. First, it finds that the standard of review for a decision on discrimination is reasonableness. Second, it affirms the application of the prima facie test for discrimination, most recently discussed by the Supreme Court of Canada in Moore v British Columbia (Education), 2012 SCC 61 (CanLII), [2012] 3 SCR 360. Third, and relatedly, it indicates that the government’s objectives for a particular statute should be considered at the justification stage of analysis rather than under the prima facie discrimination stage. Fourth, it finds that seasonal workers can be seen as a group protected by human rights legislation under the ground of social condition (which includes source of income). I will elaborate upon all of these findings in this comment.

Philip Mercer worked seasonally for about 6 months each year as a transport truck driver in the Northwest Territories. In the off season, he would return to his home in Newfoundland and either work there or collect employment insurance (EI) benefits. In February, 2001, Mercer broke his hip while on the job in the NWT, and applied for temporary disability benefits from the Workers Compensation Board (WCB). Under the Workers’ Compensation Act, RSNWT 1988, c W-6, temporary disability benefits are tied to the worker’s gross annual remuneration. The WCB had a written policy providing that for permanent workers, gross annual remuneration would be calculated based on their salary at the time of the accident; for seasonal workers, gross annual remuneration was estimated based on the worker’s actual remuneration for 12 months before the accident.  The practice of the WCB was to exclude EI benefits from the calculation of gross annual remuneration of seasonal workers. Had Mercer been a permanent worker, he would have received $265 more in benefits every 2 weeks than he was paid as a seasonal worker. Mercer’s financial situation following his accident was dire; he had to mortgage the family home, cash in RRSPs, and take out loans to be able to pay his living expenses (paras 4, 10-14, 17).

Mercer brought a complaint of discrimination in the receipt of services customarily available to the public based on the ground of social condition under section 11 of the Human Rights Act, SNWT 2002, c 18. The Human Rights Act defines social condition in section 1(1) as follows:

“social condition”, in respect of an individual, means the condition of inclusion of the individual, other than on a temporary basis, in a socially identifiable group that suffers from social or economic disadvantage resulting from poverty, source of income, illiteracy, level of education or any other similar circumstance (as cited at para 15, emphasis in original).

The adjudicator appointed under the Human Rights Act found that Mercer was a member of a group “composed of seasonal workers who live in areas of high unemployment; are required to work away from home, and often outside their home province; they earn less than the national and provincial average salaries; and they have lower education levels with fewer job opportunities.” (Appeal Book, Vol 2, p 239, cited in 2014 NWTCA 1 at para 16). She held that the lower level of disability benefits received by seasonal workers as a result of EI payments being excluded from their gross annual income amounted to discrimination on the basis of social condition, and ordered that Mercer’s workers’ compensation benefits be adjusted accordingly. She did not award any additional damages to Mercer for pain and suffering and did not provide reasons for that decision (para 16).

The WCB appealed the finding of discrimination, and Mercer appealed the adjudicator’s conclusion that he was not entitled to additional damages. The reviewing judge, Justice Smallwood of the NWT Supreme Court, upheld the finding of discrimination as reasonable, and allowed Mercer’s appeal on damages, remitting the matter to the adjudicator. The WCB brought a further appeal to the NWT Court of Appeal (paras 18-21).

Writing for the NWT Court of Appeal, Justice Myra Bielby (Justices Virginia Schuler and Barbara Veldhuis concurring) determined that the reviewing judge had applied the appropriate standard of review, reasonableness, to the issues of discrimination and damages (at paras 24-25).

This aspect of the Court’s decision provides an interesting contrast with the recent Alberta Court of Queen’s Bench decision in Bish v Elk Valley Coal Corporation, 2013 ABQB 756. In that case, Justice Michalyshyn found that the question of whether a workplace policy was discriminatory was a question of law requiring a correctness standard of review. As I noted in my post on this case, Justice Michalyshyn seemed particularly persuaded by the Alberta Court of Appeal’s decision in Lethbridge Regional Police Service v Lethbridge Police Assn, 2013 ABCA 47 “that human rights issues may be decided by a number of tribunals and that where a number of tribunals have concurrent jurisdiction over an issue, consistency requires that review be conducted on a correctness standard” (Bish at para 20, citing Lethbridge Police Assn at para 28).

The WCB did not dispute a reasonableness standard of review in Mercer, but it is interesting that Mercer’s challenge to his WCB benefits could have been brought under the Workers’ Compensation Act as an alternative to the Human Rights Act, or under section 15 of the Charter for that matter. This multiplicity of possible forums did not dissuade the NWT Court of Appeal from affirming reasonableness as the appropriate standard of review.

The Court of Appeal went on to find that the reviewing judge had correctly concluded that the adjudicator’s finding of discrimination was reasonable. The Court of Appeal articulated the test for discrimination as follows:

[28] A claimant who alleges discrimination in the provision of a service customarily available to the public must prove that he or she has a characteristic protected from discrimination under the HRA; that he or she experienced an adverse impact with respect to the service; and that the protected characteristic was a factor in the adverse impact: Moore v British Columbia (Education), 2012 SCC 61 (CanLII), 2012 SCC 61 at para 33, [2012] 2 SCR 360 [Moore]. If the claimant proves these elements, prima facie discrimination is established. The onus then shifts to the respondent to establish that it has a bona fide and reasonable justification.

This is a nice, clear statement of the test for discrimination that can once again be contrasted with the Bish decision. In Bish, Justice Michalyshyn held that the third stage of the test for prima facie discrimination “includes some consideration of whether that adverse treatment was based on stereotypical or arbitrary assumptions” (Bish at paras 36, 38, relying on Wright v College and Association of Registered Nurses of Alberta (Appeals Committee), 2012 ABCA 267, leave to appeal dismissed, 2013 CanLII 15573 (SCC)).

The WCB made a similar argument in Mercer, that “not all distinctions which create a disadvantage are discriminatory” (at para 31, citing Ontario (Disability Support Program) v Tranchemontagne, 2010 ONCA 593 (CanLII) at para 93). It also relied on Withler v Canada (Attorney General), 2011 SCC 12 (CanLII), [2011] 1 SCR 396, where the Supreme Court found that the purpose of benefit schemes should be considered at the discrimination stage. According to the Supreme Court in Withler,

Where, as here, the impugned distinction is the denial of a benefit that is part of a statutory benefit scheme that applies to a large number of people, the discrimination assessment must focus on the object of the measure alleged to be discriminatory in the context of the broader legislative scheme, taking into account the universe of potential beneficiaries. (Withler at para 3, cited in Mercer at para 33).

The WCB’s argument was that the adjudicator should have considered the broader legislative scheme, specifically the fact that “workers’ compensation premiums are not subtracted from EI benefits, [so] EI benefits do not contribute to funding the scheme” (at para 34). If she had done so, the WCB argued, this would have precluded a finding of discrimination.

The NWT Court of Appeal agreed with the reviewing judge that the adjudicator’s failure to consider the object of the Workers’ Compensation Act was reasonable. The Court noted that the exclusion of EI benefits for seasonal workers was a matter of practice rather than a legislative exemption with an obvious purpose. Even if the objective of the legislation had been considered, the inclusion of EI benefits may have been seen as consistent with that objective – i.e. replacement of employment related earnings (at para 38). Furthermore, consideration of the entire scheme would have made it apparent that permanent workers were entitled to have EI benefits counted as part of their gross annual income, which “starkly illustrates the discriminatory impact of the WCB policy” for seasonal workers (at para 39).  The Court also noted that Withler could be distinguished, as it was a case decided under section 15 of the Charter rather than human rights legislation and it involved a claim of age-based discrimination that was apparent on the face of the legislation, making the legislative intent clear.

The NWTCA’s approach is especially compelling in this paragraph:

[42] [A] claimant seeking to establish prima facie discrimination in the provision of services need not establish the purpose behind the allegedly discriminatory conduct. In this case, prima facie discrimination is established if the WCB policy had an adverse impact on Mercer and his social condition was a factor in that adverse impact, never mind the purpose for it: Moore at para 33. The purpose of the WCB’s policy, or of the wider legislative scheme under which it was adopted, may be relevant to whether the WCB has a justification for a policy that is otherwise discriminatory but, as noted above, justification was not argued in this case.

This is exactly how claims for discrimination should be analyzed, if one takes Moore seriously (and ignores a few offhand references in Moore to “arbitrary” discrimination – see here). The prima facie discrimination stage is not the appropriate locus for considering the objectives of the government or other respondents, and this was well recognized until the test for discrimination under human rights legislation became muddled by importing aspects of the test for discrimination under the Charter (see e.g. Peel Law Association v Pieters, 2013 ONCA 396 (CanLII) at paras 67-74).

The final noteworthy aspect of the Mercer decision is the finding that seasonal workers can be considered a group protected from discrimination on the ground of social condition. This finding was not subject to challenge on appeal, but it is important nevertheless. There have been a number of discrimination claims rejected under section 15 of the Charter on the basis that “occupational status” or status as a particular kind of worker does not qualify as an analogous ground under section 15 (see e.g. Delisle v Canada (Deputy Attorney General), [1999] 2 SCR 989 (per Bastarache J for the majority); Baier v Alberta, 2007 SCC 31, [2007] 2 SCR 673 (per Rothstein J for the majority); Ontario (Attorney General) v. Fraser, 2011 SCC 20, [2011] 2 SCR 3 (per Charron and Rothstein JJ, concurring); but see Dunmore v Ontario (Attorney General), 2001 SCC 94, [2001] 3 SCR 1016 at para 166 (per L’Heureux Dube, J, finding that occupational status as an agricultural worker should be protected as an analogous ground). Mercer does not deal with the issue of analogous grounds, since human rights legislation protects only those grounds that are explicitly set out in the legislation. Still, its finding that seasonal workers are protected by the ground of social condition provides hope that workers in similar scenarios may be able to mount human rights claims where they are discriminated against based on their source of income (and note that in Alberta, “source of income” is a protected ground under the Alberta Human Rights Act, RSA 2000, c A-25.5).

In turn, perhaps social condition will eventually be accepted by the courts as an analogous ground under section 15 of the Charter, allowing discrimination claims to be brought by particular groups of workers identifiable by their source of income. The issue of whether homelessness – another element of social condition – may qualify as an analogous ground under section 15 of the Charter will soon be considered by the Ontario Court of Appeal in the case of Tanudjaja v Canada (Attorney General) (for a post by Joshua Sealy-Harrington on an earlier decision in that case see here).

Overall, the Mercer decision is a welcome example of clarity on the test for discrimination under human rights legislation. It is to be hoped that the Alberta Court of Appeal – whose members largely make up the NWT Court of Appeal – will adopt this approach in Bish when the appeal of that case is decided.

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ABlawg participates in the Launch of Can LII Connects

Fri, 04/04/2014 - 3:08pm

On April 4, 2014, Can LII launched a new project called Can LII Connects. This site will provide summaries of and commentary on Canadian cases reported on Can LII. Case comments will be accessible via Can LII Connects and via the Can LII website, and Can LII Connects also has a blog.  ABlawg was very pleased to be asked to participate in this project as one of a few law blogs to post historical content in time for the launch. To access ABlawg’s content on Can LII Connects, readers can use the Search function or choose to filter by Publisher.  Readers can concur with comments on Can LII Connects, or add their own commentary.  All new case comments on ABlawg will be cross-posted to Can LII Connects from here on in. We encourage our readers to check out this excellent new resource.

What the ELA Tells Us About Alberta’s New Monitoring Agency

Thu, 04/03/2014 - 10:00am

By: Martin Olszynski

PDF Version: What the ELA Tells Us About Alberta’s New Monitoring Agency

Developments commented on: Government of Canada announces that a new operator for the Experimental Lakes Area has been secured; Appointment of Chair and Vice-Chair of Alberta’s Environmental Monitoring, Evaluation and Reporting Agency’s Board

This past Tuesday, the Canadian and Ontario governments, together with the Winnipeg-based International Institute for Sustainable Development (IISD) announced that an agreement had been reached to transfer responsibility for the Experimental Lakes Area (ELA) from the federal Department of Fisheries and Oceans (DFO) to the IISD.  Many readers will know that the ELA is the world-renowned research facility located in northern Ontario where since 1968 freshwater ecologists and other scientists have conducted numerous important and unique whole-lake experiments, including one by a then-recent Rhodes Scholar named David Schindler that resulted in the phasing out of phosphorus additives in cleaning products.  These same readers will also likely know that DFO’s funding for the ELA, a whopping $2 million per year, was cut as part of the (in)famous 2012 federal budget (which also took an axe to the National Roundtable on the Environment and Economy).  What readers might not know, however, is what these events tell us about the potential success of Alberta’s new independent monitoring agency, the Alberta Environmental Monitoring, Evaluation and Reporting Agency (AEMERA).

My colleague Professor Shaun Fluker previously wrote about AEMERA here, wherein he rightly raised concerns about its implementing legislation, and specifically the failure to ensure AEMERA’s independence from Cabinet and other line departments (see also here).  This post steps back a bit from the legislative details and focuses instead on some of the institutional challenges and dynamics that AEMERA will face, and in particular those similar to the ones faced by the ELA.

There is actually a burgeoning literature on environmental monitoring in the environmental law scholarship.  In one relatively recent article (2011), American law professor Eric Biber observes that there are several features of effective ambient environmental monitoring – precisely the kind of monitoring AEMERA will be carrying out – that make it different from conventional compliance monitoring:

    • There is a need to measure environmental variables for an extended period of time (think decades), which requires continuity in both sampling and sampling protocols, and longevity;
    • There is a need to ensure that the right kind of data is being collected, which in turn requires considerable technical expertise in choosing the appropriate indicators (i.e. the environmental features, such as population levels of a given species, which can act as proxies for ecosystem status and change).  At the same time, this complexity makes it very difficult – if not impossible – for the average person to assess whether a given monitoring program is in fact effective;
    • There is a need to ensure adequate funding. The long-term nature of environmental monitoring, coupled with its technicality, means that it is generally very costly to implement.  At the most basic and practical level, continuity and longevity require safe and secure data collection and storage facilities, and systems and personnel to analyze and identify trends.

(Eric Biber, “The Problem of Environmental Monitoring” (2011) 83 U Colo L Rev 1 at 8 – 33)

The remainder of this post will consider each of these features in further detail, drawing on lessons from the ELA. It is worth noting, however, that many of the features were also discussed in the two expert monitoring reports (one federal and one provincial) that preceded the creation of the Canada-Alberta Joint Oil Sands Monitoring Plan (JOSMP) in 2012, and that they can also be used to explain why previous monitoring efforts, such as the Regional Aquatics Monitoring Program (RAMP), failed. As noted in those reports, there was inconsistency in sampling protocols and insufficient spatial and temporal sampling coverage, while the inherent complexity and opacity of the various programs allowed industry and governments “to claim for a decade that monitoring was fully under control.

The Need for Continuity and Longevity

Anyone following events with respect to the ELA would have noted that there was considerable anxiety preceding Tuesday’s announcement. The main reason for this is that many of the experiments being conducted in the ELA are multi-year projects that, like the monitoring of ambient air, land or water conditions, require continuity of data. A gap of even one month, let alone of a year, can be fatal to the reliability of any results and their interpretation.

The lesson for AEMERA, or perhaps more accurately Albertans, is that there is no such thing as “close enough” when it comes to ambient environmental monitoring.  AEMERA will need to ensure that its monitoring activities, whether for air, land or water, are run continuously and with rigor not just this year or the next, but rather for decades to come; a gap in monitoring data five or six years down the road could easily lay waste to the preceding five years of robust monitoring, essentially leaving Albertans in the dark as to the state of their environment.

Technical Complexity, Obscurity and the Role of Trust

Many commentators have wondered why, if the ELA was so successful, the Conservative government would choose to terminate its funding in its 2012 budget.  While I consider this question further below, it is equally important to ask how, i.e., how did the Conservative government come to the conclusion that it was politically safe to do so.

One answer lies in the relative complexity and obscurity of the ELA.  The unfortunate reality is that most Canadians probably still don’t know anything about it, let alone enough to determine whether it is providing a valuable service to society worth voting about. AEMERA runs the risk of suffering a similar fate; anyone who has visited the Joint Oils Sands Monitoring Portal will know that the data displayed there is largely meaningless to a lay person (see e.g. the data for enhanced monitoring of total gaseous mercury).

Fortunately, there is one powerful “shortcut” to the question of efficacy (at least), one with which Canadians have considerable experience in other monitoring contexts: trust.  As noted by Professor Biber, if we trust the institutions implementing monitoring programs, we can more or less “ignore the ‘technical’ questions of the statistical power, scale and frequency…” (Biber, above at 33). With respect to the Canadian experience, UBC Professor Natasha Affolder has observed that the emergence of several independent monitoring agencies in the Northwest Territories, in conjunction with the approval of several diamond mines, was driven by “a lack of trust on the part of the local, predominantly First Nations communities, that either government or the project proponent would live up to their commitments.” (Natasha Affolder, “Why Study Large Projects? Environmental Regulation’s Neglected Frontier” (2011) 44:3 UBC L Rev 521 at 549).

It is precisely for this reason that Professor Fluker and the Pembina Institute expressed concerns about AEMERA’s implementing legislation, and why eyebrows were again raised by the recent announcement of former Environment Minister and Progressive Conservative MLA Dr. Lorne Taylor as its first Chair.  While I am personally inclined to give Dr. Taylor the benefit of the doubt, there is very little in AEMERA’s institutional and legal structure to instill trust on any objective basis.

Costliness: Financial and Political

As noted above, the ELA’s budget was relatively small ($2 million/year), nowhere near the $50 million that industry was expected to pay in the initial stages of the JOSMP.  Nevertheless, the ELA was axed. One theory is that no amount was deemed too trivial in the government’s quest to balance the budget before the next election, in which case the ELA was just another casualty – no ill-will intended. An alternative theory, however, is that the decision to terminate the ELA was precisely that – a carefully calibrated one intended to stem the flow of bad environmental news, including with respect to the oil sands.

Both possibilities offer a lesson for AEMERA. The first theory, entirely plausible because of the weight given to balanced budgets in electoral politics, suggests that AEMERA’s budget – even if supplemented significantly by industry – may never be totally secure, and will be especially vulnerable during leaner economic times.  This is why most commentators recommend “dedicated funding streams that are more resistant to political whims” (Biber, above at 55).  The second theory is also plausible; there is no shortage of examples of monitoring programs both in Canada and the U.S. that were terminated or weakened because their results were inconvenient to governments or private interests. Without wanting to pre-judge the matter, it is entirely foreseeable that at some point AEMERA will start to deliver some bad news (indeed, to some extent it already has). At that time, Albertans will have to be vigilant if they don’t want it to be weakened or scrapped altogether.

In sum, when considering AEMERA’s potential effectiveness there is much that can be learned from the ELA’s trials and tribulations. For those readers interested in environmental monitoring – and in the oil sands context specifically – my most recent article, “Environmental Monitoring and Ecosystem Management in the Oil Sands: Spaceship Earth or Escort Tugboat?” is set to be published in the McGill International Journal of Sustainable Development Law and Policy (JSDLP) next month.

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The Decision in Smith v St. Albert (City): An example of a Municipality’s Expansive Powers to Regulate Just About…Everything?

Fri, 03/28/2014 - 10:00am

By: Ola Malik and Theresa Yurkewich

PDF Version: The Decision in Smith v St. Albert (City): An example of a Municipality’s Expansive Powers to Regulate Just About…Everything?

Case commented on: Smith v St. Albert (City), 2014 ABCA 76

In our system of cooperative federalism, it is well settled that limiting a government’s powers to the boundaries of its jurisdiction is a futile exercise. The dual aspect of a single jurisdictional subject matter is a reality for any federal system. It is more than likely that any one single jurisdictional subject matter can be shared by several different levels of government without leading to outright conflict. The courts’ modern approach to resolving the overlap is to recognize the dual aspect of a single subject matter, so long as the subservient legislation does not adversely affect or impair any vital element of the core competence of, or conflict with, legislation enacted by the higher level of government (Canadian Western Bank v Alberta, [2007] 2 SCR 3).

It might at first blush appear that municipalities, created entirely by statute and granted delegated powers from the province under section 92(8) of the Constitution Act, 1867, are mere diminutive figures in the pecking order of jurisdictional powers that exercise little real power. However, as this commentary will explore, municipalities have become very adept at navigating the crowded field of overlapping and shared jurisdictional spheres, thereby finding their own space to exercise their powers, all the while receiving broad protection by Canadian courts to do so.

Enacting a municipal bylaw for the purpose of suppressing crime falls within a municipality’s jurisdiction

In Smith v St. Albert (City) (blogged about by Linda McKay-Panos here and here), the Alberta Court of Appeal held that a provision of the City of Edmonton’s business license bylaw which restricts the sale and display of items associated with illicit drug consumption is properly within the municipality’s jurisdictional power and that the bylaw does not constitute an unlawful intrusion into the federal government’s criminal law power.

In particular, the Court held (at para 32) that the pith and substance of the bylaw provision was to suppress conditions likely to lead to the commission of crimes and that ultimately, the bylaw’s aim was to promote public order and safety:

Based on the foregoing, we find that, in pith and substance, the Bylaw creates a business licensing regime designed to create safe and viable communities by restricting the cumulative sale of goods linked to drug consumption…Therefore, the essential character of the Bylaw is about suppressing conditions likely to lead to the commission of all types of crime that may ultimately affect public order and safety in the community.

At paragraphs 48-51 of its decision, the Court of Appeal held that the bylaw fell within the powers of the Province of Alberta since the suppression of conditions giving rise to criminal activity is within the province’s jurisdictional competence under section 92(13) and (16) of the Constitution Act, 1867.

Support for this proposition can be found in a number of Supreme Court of Canada cases such as Bedard v Dawson, [1923] SCR 681, where the Court upheld the validity of a provincial law authorizing a judge to close a disorderly house for up to one year on the basis that the legislation was aimed at suppressing conditions calculated to favour the development of crime rather than the punishment of crime; Reference Re The Adoption Act, The Children’s Protection Act, The Deserted Wives’ and Children’s Maintenance Act, [1938] SCR 398, where the Court acknowledged that the provinces, sometimes acting directly, or through delegation to municipalities, have since Confederation assumed responsibility for controlling social conditions which tend to encourage vice and crime; and in Canada (Attorney General) v Dupond, [1978] 2 SCR 770, where the Court upheld a municipal ordinance regulating public demonstrations on the basis that it was aimed at preventing conditions which could lead to breaches of the peace and threaten the administration of justice.

The distinction between a bylaw which purports to exercise a criminal law power (exercisable only by the federal government under section 91(27) of the Constitution Act, 1867) and one which merely seeks to suppress the conditions which might contribute to criminal activity (and therefore properly within provincial jurisdiction) is critical to understand.  This distinction was discussed by the Supreme Court of Canada in Ontario (Attorney General) v Chatterjee, [2009] 1 SCR 624:

[29] The question, however, is at what point does a provincial measure designed to “suppress” crime become itself “criminal law”? There will often be a degree of overlap between measures enacted pursuant to the provincial power (property and civil rights) and measures taken pursuant to the federal power (criminal law and procedure). In such cases it is necessary for the Court to identify the “dominant feature” of an impugned measure. If, as is argued by the Attorneys General here, the dominant feature of the CRA is property and civil rights, it will not be invalidated because of an “incidental” intrusion into the field of criminal law.

How does a court determine what the dominant feature of a challenged municipal bylaw really is? As the Alberta Court of Appeal explains in Smith v St. Albert (at paras 22 to 27), evidence of the bylaw’s purpose can come from both intrinsic and extrinsic sources. Examples of intrinsic sources include the bylaw’s purpose clause or the general empowering provisions set out in sections 3 and 7 of the Municipal Government Act, RSA 2000, c M-26, which define a municipality’s objectives. Extrinsic evidence includes the various reports and materials submitted by a municipality’s administration, including the minutes of discussions regarding the bylaw at municipal council. Whatever the source relied upon to identify a bylaw’s purpose, municipal councillors consider a broad range of factors when deciding whether to enact a bylaw including social, economic, political, administrative, and other grounds. Given that a council may consider all of these factors in its political calculus when enacting a bylaw, it can be extremely difficult for a challenger of a bylaw to identify what the overriding or dominant purpose for enacting a bylaw might have been. Conversely, it will be relatively easy for a municipality to establish that at least one of the reasons for enacting a bylaw properly falls within its jurisdiction.

And this is partly why few will ultimately succeed in arguing that a municipal bylaw is ultra vires on the basis that it does not fall within a municipality’s jurisdiction. Partly too, is the modern approach to interpreting municipal powers and jurisdiction which recognizes that  it is municipal councils, not courts, which are ultimately best situated to assess the needs of the people they serve and that it is really up to municipal councillors to assess what mischief a bylaw is intended to address.

The proper approach for reviewing the exercise of municipal powers and jurisdiction:

In Alberta the legislative authority for our municipal institutions and their jurisdiction is found in the Municipal Government Act, RSA 2000, c M-26 (“MGA”). Comparable legislation is found in other provinces. The MGA grants broad powers to municipalities pursuant to section 3 which states that the purposes of a municipality are:

    • to provide good government,
    • to provide services, facilities or other things that, in the opinion of council, are necessary or desirable for all or a part of the municipality, and
    • to develop and maintain safe and viable communities.

Section 7 of the MGA empowers municipalities to pass bylaws in furtherance of achieving its purposes, chief among those:

    • the safety, health and welfare of people and the protection of people and property;
    • people, activities and things in, on or near a public place or place that is open to the public;
    • nuisances…;
    • businesses, business activities and persons engaged in business; and
    • services provided by or on behalf of the municipality.

Section 8 of the MGA grants municipalities the power to enact a regulatory system of licenses, fees and permits over matters within their jurisdiction. Section 9 makes it clear that a municipality’s power to pass bylaws must be interpreted broadly to:

    • give broad authority to councils and to respect their right to govern municipalities in whatever way the councils consider appropriate, within the jurisdiction given to them under this or any other enactment, and
    • enhance the ability of councils to respond to present and future issues in their municipalities.

Read together, there can be little doubt that the delegation of powers to municipalities regarding matters within their jurisdiction is vast and expansive. Consider, for example, the specific wording in section 9(a) of the MGA in which the Alberta Legislature has delegated to municipalities the right to govern in “whatever way the council considers appropriate”.

It has taken Canadian courts some time to accept the fundamental role that municipal councils play in dealing with the complexities of decision-making at a local level.  But it is now largely beyond dispute that a broad and purposive approach must be taken when interpreting municipal powers and the exercise of those powers. Courts have clearly signaled that they will exercise deference when reviewing municipal decision making and that it is ultimately a municipality, not the court, that is in the best position to determine how its powers are to be exercised.

In her landmark dissent in the case of Shell Canada Products Ltd. v Vancouver (City), [1994] 1 SCR 231, Madam Justice McLachlin (as she then was) articulated what has now become the accepted view of how to deal with the exercise of municipal power.  Starting at page 244 of the decision, Justice McLachlin rejected the narrow, pro-interventionist approach to the review of municipal powers, in favour of a more generous, deferential approach.  This reasoning was based on a principle known as “subsidiarity” which recognizes that local councils best understand the problems and issues facing their constituents at a local level and are best able to craft an appropriate response (for example, see Justice L’Heureux-Dubé’s reasons in the Supreme Court of Canada case of 114957 Canada Ltee (Spray-Tech, Societe d’arrosage) v Hudson (Ville), [2001] SCR 241 at para 3).

In Shell Canada Products, Justice McLachlin extensively develops and articulates her thinking on the issue of judicial restraint with respect to a court review of the exercise of municipal powers (at 244-247):

…courts must respect the responsibility of elected municipal bodies to serve the people who elected them and exercise caution to avoid substituting their views of what is best for the citizens for those of municipal councils. Barring clear demonstration that a municipal decision was beyond its powers, courts should not so hold…

Such an approach serves a number of purposes which the narrow interventionist approach does not. First, it adheres to the fundamental axiom that courts must accord proper respect to the democratic responsibilities of elected municipal officials and the rights of those who elect them…

Second, a generous approach to municipal powers will aid the efficient functioning of municipal bodies and avoid the costs and uncertainty attendant on excessive litigation…

Thirdly, a generous approach to municipal powers is arguably more in keeping with the true nature of modern municipalities…

…Primary responsibility for deciding the welfare of the community belongs to the municipal corporation. If the courts take upon themselves the judgment of the rightness or wrongness of council’s decisions in these matters, they, as a body having no connection with local inhabitants, usurp the choice which the inhabitants conferred, by democratic process, on the council. If the courts are to interfere in this process, they must have a positive justification for doing so and that justification must relate to their own peculiar nature and function…

Finally, the broader, more deferential approach to judicial intervention in the decisions of municipalities is more in keeping with the flexible, more deferential approach this Court has adopted in recent cases to the judicial review of administrative agencies…

These considerations lead me to conclude that courts should adopt a generous, deferential standard of review toward the decisions of municipalities…

Justice McLachlin’s approach in Shell Canada Products has been endorsed in subsequent decisions of the Supreme Court of Canada.  In the recent case of Catalyst Paper Corp v North Cowichan (District), [2012] 1 SCR 5, Chief Justice McLachlin, in delivering the Court’s decision, continued to develop the theme she first raised in Shell Canada Products and concluded (at paras 19, 20 and 30) that:

…review of municipal bylaws must reflect the broad discretion provincial legislators have traditionally accorded to municipalities engaged in delegated legislation. Municipal councillors passing bylaws fulfill a task that affects their community as a whole and is legislative rather than adjudicative in nature. Bylaws are not quasi-judicial decisions. Rather, they involve an array of social, economic, political and other non-legal considerations. “Municipal governments are democratic institutions”…In this context, reasonableness means courts must respect the responsibility of elected representatives to serve the people who elected them and to whom they are ultimately accountable.

The decided cases support the view of the trial judge that, historically, courts have refused to overturn municipal bylaws unless they were found to be “aberrant”, “overwhelming”, or if “no reasonable body could have adopted them”…

……….

…municipal councils have extensive latitude in what factors they may consider in passing a bylaw. They may consider objective factors directly relating to consumption of services. But they may also consider broader social, economic and political factors that are relevant to the electorate.

This deferential approach to the interpretation of municipal powers also complements the current thinking on statutory interpretation in which there is a general presumption that all forms of legislation, including municipal bylaws, intend to comply with their jurisdictional limits. To be precise, there are two presumptions at play here: the presumption of jurisdictional limits (also known as the presumption of constitutionality), and the presumption of preferred interpretation.  These presumptions encourage courts to exercise judicial restraint and apply a broad, purposive interpretation in order to save, rather than to strike down legislation, wherever possible.

Challenging a bylaw’s jurisdiction – with what result?

It should come as no surprise that in keeping with the modern judicial treatment regarding the interpretation of municipal powers, few challenges which are made to the exercise of a municipality’s jurisdiction to enact a bylaw succeed.

There are two important Canadian decisions which mark opposite ends of the ultra-viresintra-vires spectrum. On the one end is the Supreme Court of Canada’s decision in R. v Westendorp, [1983] 1 SCR 43, where a Calgary bylaw prohibiting a person to remain on a street for the purpose of prostitution or the purpose of approaching another person on a street for the purpose of prostitution was not found to be an attempt at controlling public nuisance. Rather, it was a colorable attempt at regulating the criminal offence of prostitution. On the other, is the Supreme Court of Canada’s decision in Rio Hotel Ltd. v New Brunswick (Liquor Licensing Board), [1987] 2 SCR 59 where the Court held that provincial legislation imposing restrictions on liquor license holders regarding nude entertainment related to both matters of a purely local nature and matters relating to property and civil rights within the Province; rather than the exercise of a criminal law power.

Since then, the Rio Hotel decision has generally held sway. Bylaws enacted in Edmonton and Red Deer regulating body-rub parlours, massage clinics, and the licensing of escorts have been upheld on the basis that their pith and substance relates to the regulation of businesses and does not constitute an exercise of criminal law power (Moffat v Edmonton (City), [1979] AJ No. 545; R. v Morse, [1984] AJ No. 2627; and Strachan (c.o.b. Kats) v Edmonton (City) 2003 ABQB 309; a Red Deer bylaw which attempted to deal with violence in bars by increasing a licensing fee based on the size of drinking establishments was found to be within a city’s jurisdiction regarding the issuance of fees for the purpose of raising revenue (Passutto Hotels (1984) Ltd. v Red Deer (City), 2006 ABQB 641); a Calgary bylaw requiring boaters to wear lifejackets was properly within the municipality’s jurisdiction to promote the safety and welfare of boaters rather than comprising an unlawful intrusion into the federal sphere of navigation and shipping (R. v Latouche, 2010 ABPC 166), an Edmonton bylaw which prohibited fighting in public was found to be within the municipal jurisdiction as it provided safe and enjoyable public places by deterring public fighting (R. v Keshane, 2012 ABCA 330), and most recently, although in respect of provincial legislation, in the case of R. v Kirk, 2013 ABPC 130, where provisions of the Alberta Securities Act were held to fall within the Province’s jurisdiction as they were more concerned with the conduct of actors in the securities market rather than the attempt to exercise a criminal law power.

Generally speaking, we suggest that bylaws which impose licensing regimes with a view to regulating, rather than prohibiting, certain types of activities or behaviour pertaining to property and civil rights or pertaining to a purely local matter will be upheld – notwithstanding they may trigger the dual aspect doctrine. That being said, in May 2014, an appeal will be heard in the Ontario case of Tsui v Vaughan (City), 2013 ONCJ 643, where a Justice of the Peace found that a bylaw which imposed restrictions on the hours of operation of body rub parlours, and the nudity of the attendants, was not really about protecting against the spread of communicable diseases. Rather, the court concluded that the bylaw represented a colorable attempt to exercise a criminal law power or, as the court colourfully put it, “remove the “night” from ladies of the night” (at para 54).

The weight of blogosphere commentary is leaning heavily in favour of the City of Vaughn successfully appealing on the basis that prohibiting body rub parlours from being open overnight into early morning hours suppresses the conditions giving rise to prostitution or deals with public nuisance, and is, like Smith v St. Albert (City), a proper exercise of a municipality’s jurisdiction  (See, for example, Scott McAnsh’s article “Body Rub and the Suppression of Crime” on his firm’s website). The outcome may simply lie in the fact that municipalities have the jurisdiction to license businesses, especially those related to body-rub and massage activities for any number of properly articulable reasons, and that absent any argument that the bylaw infringes upon the business’s section 7 Charter right for being overbroad, has a good chance of being upheld.

This blog does not necessarily represent the views of The City of Calgary. The authors wish to acknowledge the thoughtful editorial feedback provided by Toby Eines, Research Lawyer, City of Calgary Law Dept.

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Hate Speech and Human Rights in Alberta

Wed, 03/26/2014 - 10:00am

By: Jennifer Koshan

PDF Version: Hate Speech and Human Rights in Alberta

Motion commented on: Motion 502 (Alberta Legislative Assembly, March 17, 2014)

It was a tumultuous time in the Alberta Legislature last week, culminating with the resignation of Alison Redford as Premier (for an excellent recap see Susan on The Soapbox).  And of course there were significant events at the national level as well, with the resignation of Jim Flaherty as finance minister and the Supreme Court of Canada’s decision that Marc Nadon was ineligible for appointment to its ranks.  Readers therefore may be forgiven if they missed last week’s debate in the Alberta Legislature on the repeal of section 3(1)(b) of the Alberta Human Rights Act, RSA 2000, c A-25.5 (AHRA).

Section 3(1)(b) provides that “No person shall publish, issue or display … before the public any statement, publication, notice, sign, symbol, emblem or other representation that … is likely to expose a person or a class of persons to hatred or contempt because of the race, religious beliefs, colour, gender, physical disability, mental disability, age, ancestry, place of origin, marital status, source of income, family status or sexual orientation of that person or class of persons.” The debate about repeal occurred in the context of a motion introduced by Wildrose Justice Critic Shayne Saskiw, which stated: “Motion 502: Be it resolved that the Legislative Assembly urge the government to introduce legislation to repeal section 3(1)(b) of the Alberta Human Rights Act to restore the freedom of speech of all Albertans” (Alberta Hansard, March 17, 2014 at 280).

Previous posts on ABlawg have discussed judicial decisions concerning the constitutional validity and application of section 3(1)(b) (Lund v Boissoin, 2009 ABQB 592, aff’d on other grounds 2012 ABCA 300 (see here and here)), as well as the justifiability of a similar provision in the Saskatchewan Human Rights Code, SS 1979, c S-24.1 as a reasonable limit on freedom of expression (Saskatchewan Human Rights Commission v Whatcott, 2013 SCC 11 (see here)). In spite of decisions upholding the constitutionality of human rights based hate speech provisions, however, the political discourse around repeal has not abated (see e.g. here and here). The arguments of the critics are often tied to broader allegations about human rights commissions and tribunals as “kangaroo courts” (see e.g. here). Most recently, the federal government repealed the equivalent hate speech provision in the Canadian Human Rights Act, RSC 1985, c H-6, section 13, which will take effect in June 2014 (see An Act to amend the Canadian Human Rights Act (protecting freedom)).

In support of Motion 502, Saskiw referred to section 3(1)(b) as “hurt feelings legislation”, and noted that (now former) Premier Redford had promised to repeal the section during her leadership campaign on the basis that it interfered with freedom of expression.  He also noted that hate speech is a criminal offence under the Criminal Code, RSC 1985, c C-46, section 319, and argued that this is sufficient protection. Moreover, criminal complaints will be investigated by the RCMP and adjudicated by “real Queen’s Bench judges” (as opposed to what he called “state-controlled commissions [which] are not part of our justice system”).   He also claimed that “If we repeal paragraph 3(1)(b), we have the opportunity to make Alberta the freest place in Canada” (Alberta Hansard, March 17, 2014 at 280-281).

Justice Minister Jonathan Denis spoke next. He noted that “section 3 complaints to the Human Rights Commission are relatively rare”, with less than 1 per cent of all complaints citing section 3 in 2012, and only 1 or 2 complaints a year citing section 3 before that.  He also referred to the Alberta Court of Appeal decision in Lund, which criticized the language of section 3(1)(b), noting that its “lack of clarity will cast a chill on the exercise of the fundamental freedoms, such as freedom of expression and religion.” (2012 ABCA 300 at para 94).  Minister Denis questioned “whether or not having a section like this works against its intended purpose by drawing more attention to the hateful views of an individual than if they had not been prosecuted” (though it should be noted that individuals are not actually “prosecuted” under the AHRA). He pointed out that organizations such as the Rocky Mountain Civil Liberties Association and the Sheldon Chumir Foundation, “hardly bastions of right-wing thought”, support changes to section 3 of the AHRA. Although he recounted the hatred experienced by his German family members in the 1940s and 1950s, which led to them leaving their community in Saskatchewan, Minister Denis indicated that he would support the motion. (Alberta Hansard, March 17, 2014 at 281-282).

New Democrat Opposition House Leader Rachel Notley then weighed in to oppose Motion 502. She quoted from the Supreme Court decision in Whatcott, where the Court said that “Hate speech is antithetical to [democracy] in that it shuts down dialogue by making it difficult or impossible for members of the vulnerable group to respond, thereby stifling discourse.”  (2013 SCC 11 at para 117).  Notley also argued that Motion 502 was part of a “three-plank effort … through the combined efforts of this Conservative government and the Wildrose opposition, to undermine human rights in this province.” She referred to the other planks in this strategy as the introduction of section 11.1 of the AHRA in 2008, which requires school boards and teachers to notify students of curriculum content involving issues of sexuality, sexual orientation and religion, as well as the failure of the government to include reference to the Canadian Charter of Rights and Freedoms in the preamble to the Education Act. She argued that the criminal response to hate speech was not an adequate alternative, as the standard of proof is much higher, it is punitive rather than remedial, and it operates at the discretion of the police, to whom only a fraction of hate speech cases are reported. She also noted that a “broad range of different minority communities” were present in the Legislature for the debate, who “concluded that section 3 in our human rights code continues to serve a very, very important purpose in our province and that its removal will result in more discrimination, more discriminatory acts, and fewer opportunities to resolve those issues.” (Alberta Hansard, March 17, 2014 at 282-283, and see the blog Disability Action Hall).

Then followed Raj Sherman, Leader of the Liberal Opposition, who spoke about the hatred he had experienced as a child immigrant to Canada in the 1970s and how words have the power to do serious harm. His speech is available on YouTube:  http://www.youtube.com/watch?v=lUpJuZkcDjE.  Sherman spoke of a competing freedom to freedom of expression:  “we must be allowed to walk freely without being called bad names and horrible names that promote hatred and contempt.” He urged all members of the Legislature to vote against the motion, and closed by stating: “I would say that all of those who aren’t coloured in this Assembly, who aren’t visibly different – you know what, I’m not even going to stand up and vote on this, Mr. Speaker. I think everyone else who isn’t a visible minority should be the ones standing up fighting for this.” (Alberta Hansard, March 17, 2014 at 283-284).

In a short statement, Official Opposition House Leader Rob Anderson noted that hate speech could also be directed at religious minorities, and expressed his view that hate speech should be dealt with “in the court of public opinion” rather than under human rights legislation. (Alberta Hansard, March 17, 2014 at 284).

Teresa Woo-Paw, the Associate Minister of International and Intergovernmental Relations, was the first Conservative MLA to speak in favour of section 3(1)(b). She argued that “the Alberta Human Rights Commission serves an important role that cannot be substituted by the criminal justice system at the current time”, noting the remedial functions of the commission and the ability “for those on the receiving end of hateful incidents to seek recourse and justice.” She quoted extensively from a paper prepared by the Ethno-Cultural Council of Calgary in support of section 3(1)(b), and noted that “When we discuss hate speech, we also need to understand and recognize that power is not equally shared in our society, that certain groups continue to have more power than others, that men continue to make more money than women, that people of colour are at greater risk of discrimination, that members of the LGBTQ communities are more likely to be victims of violence than straight people, and that people with disabilities face greater barriers to employment than those without disabilities. … Hate speech serves to further marginalize and silence groups who are already marginalized and leads to conditions where hatred and violence against minority groups are acceptable.”  (Alberta Hansard, March 17, 2014 at 285).

Short statements in opposition to the motion were also made by MLAs Laurie Blakeman (Liberal – Edmonton Centre), Frank Oberle (Deputy Government House Leader) and Deron Bilous (New Democrat – Edmonton-Beverly-Clareview), and in support of the motion by Rick McIver (Minister of Infrastructure). (Alberta Hansard, March 17, 2014 at 286-287).

Motion 502 was subject to a free vote, and the results were 38 votes against and 8 votes for the motion. Former Premier Redford did not vote on the motion, and current Premier Dave Hancock voted against. (Alberta Hansard, March 17, 2014 at 287).

Despite the Justice Minister’s support of Motion 502, it is unlikely that the government will introduce legislation to repeal section 3(1)(b) this term, especially in light of recent events surrounding the leadership of the PC party. But this debate is likely to rear its head again at some point.  My hope is that people in this province will take the time to inform themselves about the critical role of human rights legislation and procedures in this province, including the important role played by section 3(1)(b) of the AHRA. When our next election rolls around – perhaps sooner than we thought a week ago – it is important to have an informed debate on the subject of hate speech and human rights, and the protection of human rights more broadly.

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Decision of the High Court of Australia of Interest to Canada’s Energy Bar

Tue, 03/25/2014 - 10:00am

By: Nigel Bankes

PDF Version: Decision of the High Court of Australia of Interest to Canada’s Energy Bar

Decision commented on: Electricity Generation Corporation v Woodside Energy Ltd, [2014] HCA 7

In this majority decision the High Court of Australia (HCA) concluded that the obligations of a seller under a gas purchase agreement (GSA) to use “reasonable endeavours” to provide the purchaser with a supplemental maximum daily quantity of gas (SMDQ) in addition to an agreed maximum daily quantity of gas (MDQ) did not require the seller to provide any gas at the SMDQ price when market opportunities emerged which afforded the seller the opportunity to sell all its available production beyond MDQ at a much higher price. While any case such as this turns on the particular language of the GSA in question, including the surrounding circumstances known to the parties and the commercial purpose or objects to be secured by the agreement, the case serves as a reminder that terms such as “best efforts” or “reasonable endeavours”, at least when viewed in the self-seeking paradigm of contract, may not offer much comfort to the counterparty in this sort of commercial arrangement.

Rather than providing a detailed description of the facts of this case this post seeks to highlight the key contractual provisions in the agreement that convinced the majority to rule in favour of the seller. The most significant provisions in the GSA were the SMDQ clauses which provided as follows (at para 17):

3.3 Supplemental Maximum Daily Quantity

(a) If in accordance with Clause 9 (‘Nominations’) the Buyer’s nomination for a Day exceeds the MDQ, the Sellers must use reasonable endeavours to make available for delivery up to an additional 30TJ/Day of Gas in excess of MDQ …

(b) In determining whether they are able to supply SMDQ on a Day, the Sellers may take into account all relevant commercial, economic and operational matters and, without limiting those matters, it is acknowledged and agreed by the Buyer that nothing in paragraph (a) requires the Sellers to make available for delivery any quantity by which a nomination for a Day exceeds MDQ where any of the following circumstances exist in relation to that quantity:

(i) the Sellers form the reasonable view that there is insufficient capacity available throughout the Sellers’ Facilities (having regard to all existing and likely commitments of each Seller and each Seller’s obligations regarding maintenance, replacement, safety and integrity of the Sellers’ Facilities) to make that quantity available for delivery;

(ii) the Sellers form the reasonable view that there has been insufficient notice of the requirement for that quantity to undertake all necessary procedures to ensure that capacity is available throughout the Sellers’ Facilities to make that quantity available for delivery; or

(iii) where the Sellers have any obligation to make available for delivery quantities of Natural Gas to other customers, which obligations may conflict with the scheduling of delivery of that quantity to the Buyer.

(c) The Sellers have no obligation to supply and deliver Gas on a Day in excess of their obligations set out in Clauses 3.2 and 3.3 in respect of MDQ and SMDQ respectively.

(Emphasis supplied by the Court).

What was convincing for the majority was the italicized language which emphasised that a seller’s “ability” to supply must be assessed not only in terms of its physical ability to deliver, but also in terms of “relevant commercial, economic and operational matters”. Seen within the self-seeking frame of reference of contract rather than the fiduciary’s duty of undivided loyalty (the GSA expressly denounced any intention to impose a fiduciary obligation on any party, see note 56 in the decision), the Court did not hesitate long before concluding (at para. 47) that the seller was entitled to take into account its own commercial interests in deciding whether it had SMDQ gas to deliver at SMDQ prices (which were considerably lower than the spot price):

What is a “reasonable” standard of endeavours obliged by cl 3.3(a) is conditioned both by the Sellers’ responsibilities to Verve in respect of SMDQ and by the Sellers’ express entitlement to take into account “relevant commercial, economic and operational matters” when determining whether they are “able” to supply SMDQ. Compendiously, the expression “commercial, economic and operational matters” refers to matters affecting the Sellers’ business interests. The relevant ability to supply is thus qualified, in part, by reference to the constraints imposed by commercial and economic considerations. The non-exhaustive examples of circumstances in which the Sellers will not breach the obligation to use reasonable endeavours to supply SMDQ, found in cl 3.3(b)(i), (ii) and (iii), are not confined to “capacity” (or capacity constraints). The effect of cl 3.3(b) is that the Sellers are not obliged to forgo or sacrifice their business interests when using reasonable endeavours to make SMDQ available for delivery. Verve’s submission that “able” should be construed narrowly, so as to refer only to the Sellers’ capacity to supply, fails to give full effect to the entire text of cl 3.3(b) and must be rejected. The word “able” in cl 3.3(b) relates to the Sellers’ ability, having regard to their capacity and their business interests, to supply SMDQ. This is the interpretation which should be given to cl 3.3.

Two other extracts from the judgement are also worth quoting in extenso. The first passage (para. 35) is worth quoting because it encapsulates the HCA’s approach to interpreting commercial contracts and in particularly succinct manner (and it will be recalled that an earlier HCA judgement, Hospital Products Ltd v. United States Surgical Corporation, 1984 HCA 64 had previously emerged as a significant authority in the common law world on the interpretation of contracts). This passage (references omitted) reads as follows:

Both Verve and the Sellers recognised that this Court has reaffirmed the objective approach to be adopted in determining the rights and liabilities of parties to a contract. The meaning of the terms of a commercial contract is to be determined by what a reasonable businessperson would have understood those terms to mean. That approach is not unfamiliar. As reaffirmed, it will require consideration of the language used by the parties, the surrounding circumstances known to them and the commercial purpose or objects to be secured by the contract. Appreciation of the commercial purpose or objects is facilitated by an understanding “of the genesis of the transaction, the background, the context [and] the market in which the parties are operating”. As Arden LJ observed in Re Golden Key Ltd, unless a contrary intention is indicated, a court is entitled to approach the task of giving a commercial contract a businesslike interpretation on the assumption “that the parties … intended to produce a commercial result”. A commercial contract is to be construed so as to avoid it “making commercial nonsense or working commercial inconvenience”.

The second passage (paras 40 – 43, references omitted) is useful because it provides us with the Court’s general views on contractual clauses like “best efforts and “reasonable endeavours”:

40. Contractual obligations framed in terms of “reasonable endeavours” or “best endeavours (or efforts)” are familiar. Argument proceeded on the basis that substantially similar obligations are imposed by either expression. Such obligations are not uncommon in distribution agreements, intellectual property licences, mining and resources agreements and planning and construction contracts. Such clauses are ordinarily inserted into commercial contracts between parties at arm’s length who have their own independent business interests.

41. Three general observations can be made about obligations to use reasonable endeavours to achieve a contractual object. First, an obligation expressed thus is not an absolute or unconditional obligation. Second, the nature and extent of an obligation imposed in such terms is necessarily conditioned by what is reasonable in the circumstances, which can include circumstances that may affect an obligee’s business. This was explained by Mason J in Hospital Products Ltd v United States Surgical Corporation which concerned a sole distributor’s obligation to use “best efforts” to promote the sale of a manufacturer’s products. His Honour said:

“The qualification [of reasonableness] itself is aimed at situations in which there would be a conflict between the obligation to use best efforts and the independent business interests of the distributor and has the object of resolving those conflicts by the standard of reasonableness … It therefore involves a recognition that the interests of [the manufacturer] could not be paramount in every case and that in some cases the interests of the distributor would prevail.”

 42. As Sellers J observed of a corporate obligee in Terrell v Mabie Todd & Co Ltd, an obligation to use reasonable endeavours would not oblige the achievement of a contractual object “to the certain ruin of the Company or to the utter disregard of the interests of the shareholders”. An obligee’s freedom to act in its own business interests, in matters to which the agreement relates, is not necessarily foreclosed, or to be sacrificed, by an obligation to use reasonable endeavours to achieve a contractual object.

43. Third, some contracts containing an obligation to use or make reasonable endeavours to achieve a contractual object contain their own internal standard of what is reasonable, by some express reference relevant to the business interests of an oblige.

My final comment is that it is useful for the Canadian energy bar to see a senior appellate judgement on such an important matter as this precisely because I doubt very much that we can expect to get this sort of guidance from a Canadian court if only because of the penchant of the energy industry in Canada to opt for confidential arbitration rather than open court litigation in such matters. This is a source of disappointment for academics but it also deprives the courts of the ability to develop a transparent jurisprudence to guide the drafting of important commercial agreements. Each such arbitral award is but a single instance with no normative authority beyond the specific dispute and the particular parties to the dispute.

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What does Fearn v Canada Customs add to OPCA jurisprudence?

Mon, 03/24/2014 - 10:00am

By: Admin

PDF Version: What does Fearn v Canada Customs add to OPCA jurisprudence?

Case commented on: Fearn v Canada Customs, 2014 ABQB 114 (CanLII)

The leading case on Organized Pseudolegal Commercial Argument (OPCA) litigation is the Alberta Court of Queen’s Bench decision of Justice John Rooke in Meads v Meads, 2013 ABQB 571 (CanLII) (summarized here). In Fearn v Canada Customs, Justice W A Tilleman very deliberately builds on Meads and develops the court’s responses to OPCA litigants in two ways. First, Fearn sets out guidelines for awarding costs against OPCA defendants in criminal proceedings, a context in which costs are very rarely awarded (at paras 113-139). Second, Fearn adds to what Meads had to say about when OPCA concepts and litigation strategies might amount to contempt of court, whether civil or criminal contempt (at paras 140-256). In this regard, Justice Tilleman identifies some OPCA strategies which, in and of themselves, are prima facie civil contempt. He also urges the use of criminal contempt prosecutions against some of the activities of OPCA “gurus”, i.e., those who sell instructional material and training in OPCA schemes.

Costs in Criminal Proceedings

The petition before the Court of Queen’s Bench in Fearn was an application to halt Provincial Court criminal proceedings.  As a proceeding associated with a criminal trial, Justice Tilleman concluded the matter before him was better characterized as a criminal, rather than a civil, matter (at para 118).  This characterization is relevant to the costs discussion because an award of costs is exceptional in the criminal context, especially against a defendant (at para 119, citing R v 974649 Ontario Inc, 2001 SCC 81 at para 85).

The Charter right of an accused to make a full answer and defence constrains courts’ evaluations of defence conduct (at para 122). Nevertheless, superior courts have the inherent jurisdiction to order costs in criminal proceedings (at paras 120, 123). Justice Tilleman relies on an oft-cited Quebec Court of Appeal description of what type of conduct justifies a cost order:

[123] A superior court has the power to maintain its authority and to control its procedure so as to put justice in order and efficiently. That this implies sometimes ordering one of the parties and even lawyers to pay the costs of a proceeding in cases of the abuse or the frivolity of proceedings, of misconduct or dishonesty or  of taken [sic] for some other ulterior motive, is a recognized principle.

In the absence of reprehensible conduct by the appellants, or a serious affront to the authority of the Court or of a serious interference with the administration of justice … the imposition of costs on appellants … is in no way justified. (A-G Quebec v Cronier (1981), 63 CCC (2d) 437 at 449, 451).

Justice Tilleman reviews the increasing incidence of the use of OPCA strategies in criminal proceedings across Canada (at para 128). By definition, the OPCA arguments used in those proceedings were frivolous and vexatious and an abuse of process and, as such, they met the criteria set out in A-G Quebec v Cronier.  Justice Tilleman therefore concludes that costs may be awarded against an accused “who employs OPCA strategies to cause illegitimate and unnecessary steps in a criminal proceeding” (at para 133).  He suggests that an award of costs may be made where the following four criteria are met:

1. The accused is the one who initiates a hearing, application, or process;

2. The accused’s position relies on a clearly illegal or incorrect basis, such as a known, identified, and rejected OPCA strategy;

3. The accused is entirely unsuccessful; and

4. The hearing, application, or process is not a direct component of the criminal trial or sentencing process, but instead is ancillary to the criminal proceeding itself, for example:

a) a meaningless application to a different court to challenge the criminal proceeding or court jurisdiction;

b) an application to deny trial court jurisdiction;

c) an attempt to enter irrelevant evidence or witnesses;

d) an application for representation of the accused by an inappropriate representative, such as an OPCA guru; and

e) an application for release of the accused from pre-trial detention outside the judicial interim release process, such as a frivolous habeus corpus application. (at para 133)

Note that Justice Tilleman restricts these criteria to matters that are separate from the main criminal trial process itself, due to an accused’s Charter right to make full answer and defence  (at para 135).  He does suggest that an appeal of a conviction that has no legitimate basis might also attract a cost award, but leaves that question to be dealt with in the context of such an appeal or leave to appeal application (at para 134).

Contempt of Court

As Justice Tilleman notes (at para 140), the possibility that use of OPCA litigation strategies might result in a contempt of court finding was discussed in Meads (Meads at paras 567-87), but a more substantial analysis was left for more appropriate proceedings. And although Justice Tilleman concluded the petitioner was not in contempt in this particular case, he explores in some detail three topics:

1. What kind of speech or communication attracts civil contempt?

2. What, if any, OPCA schemes inherently represent contempt of court?

3. Whether commercial promotion of strategies intended to disrupt or impede court operation are criminal contempt of court?

The power of superior courts to punish for contempt of court is part of their inherent jurisdiction, used to regulate the courts’ practices and prevent abuse of their processes (at para 143, quoting I H Jacob, “The Inherent Jurisdiction of the Court” (1970) 23 Current Legal Problems 23). Contempt has both a civil and a criminal form. A person who disobeys a court order or is otherwise disrespectful of the court commits civil contempt. Criminal contempt requires an additional public element, arising when “public defiance of the court’s process in a way that is calculated to lessen societal respect for the courts” (at para 148, quoting United Nurses of Alberta v Alberta (Attorney General), [1992)] 1 SCR 902 at 931). Civil contempt can be punished by incarceration, fines, costs, and restrictions on pleadings, applications and evidence (at para 154, citing Alberta Rules of Court 10.52 and 10.53 as further authority for the court’s power).

1. What kind of speech or communication attracts civil contempt?

When allegedly contemptuous behavior is speech, as it was in this case, a court must find there is a “clear and present” or “real and imminent” danger that the speech would bring the administration of justice into disrepute, a threshold that Justice Tilleman characterizes as “very high” (at para 168). Critical speech, in and of itself, cannot be the basis for a finding of contempt.  Justice Tilleman’s review of the cases and secondary literature considering contempt by derogatory or insulting speech (at paras 163-183) leads him to the conclusion (at para 184) that the content of the speech is less important than its impact or intended impact, and that it is only when insulting, derogatory or obnoxious statements disrupt the court process itself that speech is contemptuous and punishable.

2. What, if any, OPCA schemes inherently represent contempt of court.

Justice Tilleman’s determination that the courts’ contempt powers protect against active disruption of the court system and access to justice, leads him to consider whether OPCA schemes, by their very nature, can be a basis for finding civil contempt.  He concludes that they can be (at paras 190-191). He examines a variety of OPCA strategies, reviewed in Meads, that are clearly intended to disrupt court proceedings or intimidate the judiciary when directed at the judiciary, including:

    • A type of “foisted unilateral agreement”, i.e., a demand that a judge rebut certain statements within a certain time period with failure to do so meaning that the judge has accepted the truth of certain statements or outcomes (at paras 195-96, citing Meads at 447-528)
    • “Fee schedules”, a sub-type of foisted unilateral agreements, which threaten to impose an agreement on the recipient — judges — to pay certain amounts if certain events — such as testifying or incarceration — occur (at paras 197-200, citing Meads at 505-523
    • Threats of extrajudicial prosecution or sanctions on a judge, based on fictitious authority, the OPCA litigant’s own court, notaries as “true” judges, or fictional international courts (at paras 201-210)
    • The use of, or threats to use, liens or other property or financial registrations against a judge (at para 211)

Justice Tilleman’s conclusion that these four OPCA strategies (and perhaps others) are inherently contemptuous when directed at the judiciary and court processes leads him to consider the activities of gurus as criminal contempt (at paras 215-256).

3. Whether commercial promotion of strategies intended to disrupt or impede court operation are criminal contempt of court?

A unique characteristic of OPCA litigation is the existence of OPCA “gurus”, people sell OPCA strategies, documents and training as commercial products (at para 217, citing Meads at paras 85-158). Justice Tilleman explores the availability of the contempt power against these “Typhoid Marys” of the OPCA phenomenon (at para 219), even though their contemptuous conduct occurs outside the courtroom and the proceedings.

In other cases, public statements by people who were not involved in the court proceedings have resulted in findings of contempt (at para 224). In United Nurses of Alberta v Alberta (Attorney General), [1992)] 1 SCR 902, public statements made by a union when defying a court order were held to be criminal contempt due to the impact of the statements on the authority of the court. Justice Tilleman distinguishes “between speech that potentially attacks the function of the court as a whole by subverting its public authority, and a very distinct and different scenario, what is essentially training for ‘paper terrorism’ then conducted by a limited number of litigants and potential litigants” (at para 230). The former is what has, to date, been recognized as criminal contempt.  The latter scenario is what Justice Tilleman would add to the categories of conduct attracting criminal contempt sanctions.

In his opinion, OPCA “gurus” may in certain instances reach the “serious public injury” threshold for a finding of criminal contempt (at para 235, quoting R v Glasner (1994) 19 OR (2d) 739 (CA)). Not all ideas promoted by OPCA gurus are a potential basis for criminal contempt charges. The judgment is vague on exactly what type of ideas will attract those charges, preferring to leave the specifics to a case raising the guru misconduct issue (at para 250), but they seem to be ideas that result in what the courts are calling “paper terrorism” that impedes the courts’ function (at paras 232-46). Intent to disrupt the administration of justice will be a critical factor (at para 251).

In summarizing why OPCA gurus are appropriate targets of exceptional uses of the criminal contempt power against conduct that occurs outside of court, Justice Tilleman lists the following reasons (at para 247):

    • Their ideas harm their customers, innocent litigants, the court and the state
    • They are usually behind the scenes, invisible to the court and thus unlikely to attract civil contempt sanctions
    • Two decades of in-court failures has not deterred the gurus nor their customers
    • They make victims of the court and their customers for their own profit
    • Their activity parallels the actus reus and the mens rea of criminal counselling offences
    • To date their misconduct has had no consequences

Justice Tilleman sees courts’ failure to target OPCA gurus with criminal contempt charges and sanctions as a large gap in the response of courts and the state to the OPCA phenomenon (at para 248). Thus, he identifies the “[c]ommercial promotion of OPCA concepts intended to frustrate and impede court processes” as a new basis for criminal contempt prosecutions (at para 249).

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Drug Paraphernalia Bylaw Upheld as Constitutional

Fri, 03/21/2014 - 10:00am

By: Linda McKay-Panos

PDF Version: Drug Paraphernalia Bylaw Upheld as Constitutional

Case commented on: Smith v St. Albert (City), 2014 ABCA 76

University of Calgary Constitutional law students will find this case interesting and perhaps will feel vindicated when they read this decision; it may also bring back memories of the midterm exam. In an earlier blog (see here) I discussed Justice Terry Clackson’s decision that portions of St. Albert’s Bylaw “restricting the sale and display of items associated with illicit drug consumption are unconstitutional, on the ground that they are, in pith and substance, criminal law and therefore outside the jurisdiction of the municipality” (para 1).

St. Albert appealed the ruling, and Justices Jean Côté, Barbara Lea Veldhuis and Doreen Sulyma allowed the appeal. The Court of Appeal noted that the standard of review on issues of constitutionality is correctness, citing Consolidated Fastfrate Inc v Western Canada, 2009 SCC 53 at para 26 (para 20).

Pith and Substance

The Court started with an analysis of the pith and substance of the Bylaw, by looking at the purpose and effect of the legislation in order to characterize the law and determine its essential character. Courts use both intrinsic and extrinsic evidence to decide the purpose of a law, and determine the effect of a law from the legal effect of its text and the practical effects flowing from its application (para 22, citations omitted).

The Court of Appeal noted that the Bylaw in question did not contain a purpose clause, but that the purpose might be informed by the Municipal Government Act, RSA 2000, c M-26 (MGA). One of the MGA’s stated purposes under section 3(c) is the development and maintenance of safe communities. The Court of Appeal concluded that the overall Bylaw and its amendments, which address restricted products in illicit drug use were “concerned with developing and maintaining safe and viable communities through the regulation of business” (para 25).

The Court held that the available extrinsic evidence illustrated that the City wanted to “deter businesses from selling products that could act as vehicles for illegal drug use.” Further, while one of the reports relied upon by the City indicated some gaps in the criminal legislation, the primary concern of the City was to “curtail the negative effects of illicit drug use on the community and with providing a safe community by suppressing conditions likely to lead to the commission of a crime” (para 27).

The legal effect of the Bylaw was to “limit the range of ‘restricted products’ that a business can sell from a single location and to fine a business for selling or displaying three or more restricted products.” The Court noted that the Bylaw “does not outright prohibit businesses from selling restricted products”; it just limits the selling of restricted products from one location to two. There is also an exemption for licensed or regulated pharmacies to sell three or more restricted products (para 29).

Because the Bylaw had been in effect for only a short time, the Court of Appeal held that there was insufficient evidence to do more than speculate about its long-term practical effects, except the limitation on the businesses’ ability to sell “restricted products” (para 31).

Based on this analysis, the Court of Appeal held that the Bylaw created a business-licensing regime that was “designed to create safe and viable communities by restricting the cumulative sale of goods linked to drug consumption.” Since the Supreme Court of Canada has accepted that the consumption of drugs increases criminality generally (see Pushpanathan v Canada (Minister of Citizenship and Immigration), [1988] 1 SCR 982 at 1039), the essential character of the Bylaw is to suppress conditions that are likely to lead to the “commission of all types of crimes that may ultimately affect public order and safety in the community” (para 32).

Classification under Constitution Act, 1867

Next, the Court of Appeal analyzed what head of power the legislation falls under with respect to sections 91 or 92 of the Constitution Act, 1867. The Court noted that the Bylaw could fall under more than one head of power and could also fall under both federal and provincial legislative competence (para 34).

In analyzing the federal aspects of the Bylaw, the Court of Appeal noted that both sections 462.1 and 462.2 Criminal Code, RSC 1985, c C-46 (which prohibit the promotion of instruments for illicit drug use) and the Bylaw dealt with “vehicles for dangerous activities” (para 39) and enforced the general prohibition on illicit drug use. There is a “significant overlap” between the terms “restricted products” in the Bylaw and “instrument for illicit drug use” in the Criminal Code.  The main difference is that the “Criminal Code provisions prohibit the promotion or sale outright, while the Bylaw restricts the quantity and combination of what a license-holder can sell” (para 40).

While the Bylaw does consist of a prohibition backed by a penalty, this is not determinative of a dominant criminal aspect. The Constitution Act 1867, section 92(15) “authorizes provinces to impose …punishment… as a means of enforcing valid provincial law” (para 41).

Further, “the fact that the Bylaw overlaps with the Criminal Code provisions does not necessarily amount to an attempt by the City to fill a perceived gap in the criminal law and to catch a broader range of conduct” than that captured by the Criminal Code. The Court of Appeal noted that provincial and federal offences exist alongside each other in areas related to motor vehicle offences. In addition, even if the Bylaw did cover a wider range of conduct, “it does not criminalize that conduct” (para 42).

In response to the Chad Smoke Shop’s argument that the Bylaw is criminal because it is related to the maintenance of public peace, order and security, and the trial judge’s finding that there is a morality aspect to the Bylaw, the Court noted that morality legislation can encompass both criminal and local morality (para 43, citing Nova Scotia Board of Censors v McNeil, [1978] 2 SCR 662)).

Thus, the Court of Appeal concluded that the Bylaw has certain criminal aspects: overlap with the existing Criminal Code provisions in sections 462.1 and 462.2; penal consequences, including imprisonment for Bylaw violations; the “filling in of a perceived gap in the criminal law; and a focus on morality and public order” (para 44).

The inquiry next shifted to whether the Bylaw was firmly anchored in a provincial head of power. The Court of Appeal held that legislating to suppress “conditions that are likely to favour the commission of crime” is within the province’s competence (para 48, citations omitted). The Bylaw, however, must be tied to a provincial head of power. The Court of Appeal held that the provincial aspects of the Bylaw were: “(a) suppression of conditions that are likely to cause crime and prevention to enforce local standards of morality; and (b) business licensing and impacts on property and civil rights” (para 52).

The Court of Appeal concluded that the pith and substance of the Bylaw falls under both the federal power over criminal law under s 91(27), and the provincial power over licensing and regulating businesses in the community under 92(9) and 92(13). Because the federal and provincial aspects of the Bylaw were “roughly equivalent” in importance, the doctrine of double aspect was triggered (paras 53-55).

Under the double aspect doctrine, a matter may for one purpose and aspect fall within federal jurisdiction, and for another purpose and in another aspect fall within provincial jurisdiction. If there is no conflict between the two, then they can co-exist. Thus, the Court of Appeal upheld the validity of the Bylaw and allowed St. Albert’s appeal (para 56).

Neither Court explicitly analyzed whether there was indeed any conflict between the federal and municipal laws. Generally, if there were a conflict, under the doctrine of paramountcy the (federal) Criminal Code provision would prevail. The question of conflict is based on a legal test examining whether the provincial law frustrated the purpose of the federal law, or  whether it was impossible to comply with both laws (see Rothmans, Benson & Hedges Inc. v Saskatchewan, [2005] 1 SCR 188). In the circumstances of the St. Albert case, the Criminal Code provisions make it illegal to sell any instruments for illicit drug use, for the purpose of enforcing the prohibition on illicit drug use. It could be argued, however, that the Bylaw permits the sale of two or less instruments for illicit drug use and thus frustrates the purpose of the Criminal Code.  The Bylaw would not be in conflict with the Criminal Code if it did not permit the sale of any instruments for illicit drug use. But since it is more permissive than the Criminal Code, the Bylaw may have been found inoperative to the extent of the conflict if this argument had been made.

Perhaps the Court of Appeal was concerned with using “judicial restraint” when it upheld the constitutionality of the Bylaw (para 56). As for the conflict argument, it would not have assisted Smith and The Chad Smoke Shop in their efforts to have a more permissive regime for drug paraphernalia, which may be why they didn’t raise it.

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Unilateral Mistake in Integration: When is Rectification an Appropriate Remedy?

Thu, 03/20/2014 - 10:00am

By: Evaristus Oshionebo

PDF Version: Unilateral Mistake in Integration: When is Rectification an Appropriate Remedy?

Case commented on: Johnson v Moody, 2014 ABQB 80

A written contract may be executed by the parties on the basis of a unilateral mistake as to a term or terms of the contract. For example, the parties may reach an oral agreement but the terms of the oral agreement may not be accurately recorded in the written contract signed by the parties. This type of mistake, usually referred to as ‘mistake in integration’, may be remedied by an order of rectification particularly where the non-mistaken party’s attempt to take advantage of the written contract would amount to fraud or the equivalent of fraud. As discussed subsequently, a mistake in integration occurred in Johnson v. Moody, a recent decision of the Court of Queen’s Bench of Alberta.

The purpose of the equitable remedy of rectification is to restore the parties to their original agreement. An order of rectification corrects the written contract in a manner that restores the parties to their antecedent agreement. As the Supreme Court of Canada observed in Performance Industries Ltd. v. Sylvan Lake Golf & Tennis Club Ltd., [2002] 1 SCR 678 at para 40, “[t]he court’s equitable jurisdiction [to rectify a contract] is limited to putting into words that – and only that – which the parties had already orally agreed to.” Thus, in an action for the rectification of a contract, the overarching duty of the court “is to restore the parties to their original bargain, not to rectify a belatedly recognized error of judgment by one party or the other” (Performance Industries at para 31]. The remedy of rectification prevents the inaccurately recorded (written) contract “from being used as an engine of fraud or misconduct ‘equivalent to fraud’” (Performance Industries at para 31).

Facts                   

In 2002, Johnson and Moody commenced negotiation for the purchase of Johnson’s business. In June 2002, a draft agreement was prepared by Johnson’s counsel. Among other things, the draft agreement had Moody as a party to the contract; described Moody as guarantor of the purchaser, Greggor Promotional Ltd.; contained a personal guarantee on the part of Moody as well as a signature line for both Greggor Promotional Ltd. and Moody; and provided for a Certificate of Notary Public pursuant to the Guarantees Acknowledgement Act, RSA 2000, c G-11.

Moody refused to sign the draft contract. Rather, Moody revised the contract in a manner that differed significantly from the draft contract prepared by Johnson’s counsel. The revised contract provided that, of the purchase price of $105,000.00, Johnson shall be paid $65,000.00 on closing while the remainder is to be paid in installments. Perhaps more significantly, the revised contract neither included Moody as a party nor contained a provision for a Certificate of Notary Public.

Although Johnson signed the revised agreement, the transaction was never closed because Moody was not able to obtain the $65,000.00 required to be paid on closing of the transaction. Inevitably, Johnson and Moody negotiated a new arrangement. The parties agreed that $25,000.00 shall be paid to Johnson on closing. They also agreed on a schedule of payment with regard to the balance.

Johnson’s counsel drafted a contract reflecting the new arrangement (“the June draft”). The June draft identified Moody as both a party and a guarantor. It also contained a personal guarantee clause (“section 18”), a Certificate of Notary Public, as well a line for Moody’s signature. Johnson’s counsel testified that he instructed his assistant to type up this draft and send it to Moody’s counsel. However, at trial Johnson’s counsel testified that a copy of the revised typed draft was not on his file.

Eventually, a contract was signed by the parties but the contract did not contain a provision on personal guarantee. The contract, which identified Moody as the “Guarantor”, was signed by Moody for himself and on behalf of Greggor Promotional Ltd. Pursuant to the contract, Moody executed a Certificate of Notary Public. Johnson and his wife (the Plaintiffs) signed the contract at their counsel’s office. Johnson did not read or review the contract prior to signing the contract. Perhaps more significantly, prior to Johnson’s signature his counsel failed to review the contract to ensure that it contained all essential terms orally agreed by the parties.

The Plaintiffs sought the equitable remedy of rectification on the basis of a unilateral mistake with regard to the personal guarantee. The Plaintiffs contended that the parties agreed that Moody would provide a personal guarantee given the lower amount of the payment on closing. They also alleged that the personal guarantee clause was either mistakenly or deliberately removed by Moody from the final draft executed by the parties. Moody disputed the Plaintiffs’ contention and testified that he could not remember discussing a personal guarantee with Johnson.

Conditions Precedent to Rectification

Canadian courts recognize that unless restrictions are imposed on the remedy of rectification, it could potentially open the floodgates to individuals and business outfits seeking to avoid contractual obligations where they consider that the contract does not fully promote their personal interest. Thus in Performance Industries, the Supreme Court of Canada held that:

[35] high hurdles are placed in the way of a businessperson who relies on his or her own unilateral mistake to resile from the written terms of a document which he or she has signed and which, on its face, seems perfectly clear. The law is determined not to open the proverbial floodgates to dissatisfied contract makers who want to extricate themselves from a poor bargain.

There are several ‘high hurdles’ or conditions precedent to the rectification of a contract induced by unilateral mistake. To be entitled to rectification of a contract induced by unilateral mistake, the plaintiff must prove:

1. the existence of a prior oral contract whose terms are definite and ascertainable;

2. that the written document does not correspond with the prior oral agreement (that is, that the terms agreed to orally were not written down properly);

3. that at the time of execution of the contract the defendant either knew or ought to have known of the mistake in reducing the oral terms to writing and the plaintiff did not;

4. that the attempt of the defendant to rely on the erroneous written document amounts to “fraud or the equivalent of fraud” (Performance Industries at paras 31, 35-41).

In addition, the plaintiff must offer a “convincing proof” of their case. In other words, the plaintiff must prove the conditions precedent on a ‘convincing’ basis. Although the ‘convincing proof’ standard falls short of the criminal standard (proof beyond a reasonable doubt), it “goes beyond the sort of proof that only reluctantly and with hesitation scrapes over the low end of the civil ‘more probable than not’ standard” (Performance Industries at para 41).

These conditions precedent prevent contract makers from seeking to re-write their contracts simply because they are unhappy with the bargain they struck. For example, by requiring proof of a prior oral agreement, the ‘floodgate’ is closed “to unhappy contract makers who simply failed to read the contractual documents, or who now have misgivings about the merits of what they have signed” (Performance Industries at para 37). In Shafron v. KRG Insurance Brokers (Western) Inc. [2009] 1 SCR 157, a contract of employment contained a restrictive covenant preventing the defendant from engaging in insurance brokerage business within the “Metropolitan City of Vancouver” for three years after the termination of his employment with the plaintiffs. The defendant left the plaintiffs’ employment in December 2000 and in January 2001 he began working for an insurance brokerage firm in Richmond, British Columbia. The plaintiffs asked the court to rectify the contract such that the “Metropolitan City of Vancouver” becomes “the City of Vancouver and the surrounding towns of Richmond and Burnaby”. The Court declined to rectify the contract because the plaintiffs did not prove a prior agreement between the parties that the “Metropolitan City of Vancouver” meant the City of Vancouver and surrounding towns. According to the Supreme Court of Canada (at para 54), “[w]ithout pointing to a prior agreement that was departed from when the contract was put into writing, rectification is not available.” The Court concluded thus:

[52]… this is not a case in which rectification is properly applicable. … Here, there was nothing to indicate what the parties intended by the use of the term “Metropolitan” when they entered into the covenant and nothing to indicate that they agreed on an area and then mistakenly wrote down “Metropolitan”.

In view of the above-stated position of the law, we now proceed to consider the decision of the Court of Queen’s Bench of Alberta in Johnson v. Moody. Our purpose here is to determine whether the trial judge correctly applied relevant legal principles, especially those espoused by the Supreme Court of Canada in Performance Industries.

Analysis of the Decision

The Court of Queen’s Bench of Alberta (Justice B.E. Romaine) held that “the Johnsons are entitled to rectification, and that Mr. Moody is bound by the personal guarantee” (para 1). The court analyzed the conditions precedent to rectification as articulated by the Supreme Court of Canada in Performance Industries and held that the Plaintiffs offered a ‘convincing proof’ of their case. More specifically, the court held (at paras 24-31) that:

1. the parties had a prior agreement containing a term as to a personal guarantee;

2. the terms of the prior agreement were not written down properly;

3. at the time of execution of the contract Mr. Moody knew that an error had been made, while the Plaintiffs did not know an error had been made;

4. Mr. Moody’s attempt to rely on the erroneous agreement amounted to fraud or the equivalent of fraud.

Ultimately the court held (at para 32) that “the Plaintiffs are entitled to rectification and a clause using the language of section 18 of the June draft will be added to the written agreement”.

The trial court’s decision is supported by the evidence. It is beyond dispute that the parties had a prior agreement. The dispute in this case involved the precise terms of the prior agreement and more specifically, whether the prior agreement included a personal guarantee. The court was justified in concluding that the prior agreement included a personal guarantee. In arriving at its decision, the court did not rely solely on the parol evidence of the Plaintiffs. Rather, it found that the Plaintiffs’ evidence was corroborated by several other pieces of evidence, including the conduct of Mr. Moody and documentary evidence such as the text of the several drafts of the agreement and the Certificate of Notary Public. For example, there was evidence to the effect that Moody’s counsel’s office advised Johnson’s counsel that Moody came to their office to sign the guarantee in the presence of a different lawyer as the original counsel was on holidays (paras 12 & 13).

A more significant piece of corroborative evidence is the fact that Moody signed the Certificate of Notary Public in the presence of a Notary Public. As the trial court rightly held:

[15] The Certificate of Notary Public attached to the final agreement certifies that Mr. Moody, “the Guarantor” in the sale agreement made between Dave Johnson, Greggor Promotional Ltd. and Greg Moody as Guarantor appeared in person before the notary public and “acknowledged that he had executed the Agreement as Guarantor”. It also certifies that the Notary Public was satisfied “by examination of [Mr. Moody] that he [was] aware of the contents” of the agreement and understands it. It includes a “Statement of Guarantor” signed by Mr. Moody indicating that he was the person named in the certificate.

The court continued as follows:

[16] Section 3 of the Guarantees Acknowledgment Act requires that a guarantor appear before a notary public, acknowledging that he executed the guarantee and signing a statement at the foot of the certificate in the prescribed form before a guarantee has any effect, all of which was done.

In addition to these corroborative pieces of evidence, the contract identified Moody as the “Guarantor”.

Given the fact that the prior agreement included a personal guarantee, it follows logically that the terms of the prior agreement were not correctly recorded in the contract executed by the parties (para 25). The evidence also points to Moody’s knowledge that an error had been made in integrating the terms of the prior agreement. He received a copy of the ‘June draft’ containing a personal guarantee (para 30). In addition, while Moody claimed that he was unaware of the nature of the contract prior to executing the contract, the court found his evidence to be “disingenuous and unpersuasive” (para 20).

Finally, Moody’s attempt to rely on the erroneous contract qualifies as ‘fraud or the equivalent of fraud’ because it would be unconscientious for him to avail himself of the advantage gained through the omission of the personal guarantee (First City Capital Ltd. v. British Columbia Building Corp. (1989), 43 BLR 29 (BCSC), cited with approval in Performance Industries at para 39 ). Put simply, Moody’s conduct in not drawing the error in integration of the contract to the attention of the Plaintiffs was unconscionable.

Although the trial court’s decision is supported by the evidence, the decision is susceptible to criticism on grounds that the court did not give sufficient consideration to the issue of negligence. Negligence arises in this case in two senses: omission or deletion of the personal guarantee from the contract and the Plaintiffs’ failure to read the contract prior to signing it. The question is, if the Plaintiffs’ counsel was responsible for omitting or deleting the personal guarantee from the contract, should the Plaintiffs nonetheless be entitled to rectification of the contract?

On the issue of negligence the court held that “it doesn’t ultimately matter if the Section 18 guarantee language was deleted in error by Mr. Johnson’s counsel’s office or by the other law firm” (para 11). The court observed that the omission of the personal guarantee from the contract “could have happened by mistake, in either lawyer’s office, or Mr. Moody and his counsel eliminated the language from the draft that was sent to them” (para 25). The court then went on to say, “I do not have to decide which was the case, as either an innocent or fraudulent error will do” (para 25).

With respect, the court’s position on the issue of negligence is unsatisfactory. Rectification is an equitable remedy granted in the discretion of the court. Although negligence or “due diligence on the part of the plaintiff is not a condition precedent to rectification”, negligence is a factor to be considered by the court (Performance Industries at para 66). Thus the court ought to determine whether the Plaintiffs were negligent and if so, whether their negligence was sufficiently serious to deny them the equitable remedy of rectification. As the Supreme Court of Canada observed in Performance Industries (at para 66), “[t]he conduct of the plaintiff is relevant to the exercise of [the court’s] discretion.” Thus, “[i]n a case where the court concludes that it would be unjust to impose on a defendant a liability that ought more properly to be attributed to the plaintiff’s negligence, rectification may be denied” (Performance Industries at para 66).

It may well be that the trial judge refrained from a detailed analysis of the issue of negligence because she did not want to impugn the professional integrity of counsel. While, on the evidence, it is unclear whether the Plaintiffs’ counsel was responsible for omitting the personal guarantee from the contract, it is certainly the case that the Plaintiffs’ failure to read the contract prior to signing amounts to negligence or want of due diligence. However, this is not sufficient to deny the Plaintiffs an order of rectification because the peculiar circumstances of this case extenuate their failure to read the contract. As noted by the trial court, “the agreement that was returned to them looked on its face to be identical to the re-draft done by Mr. Johnson’s counsel” (para 31). Besides, the Plaintiffs checked the contract not only “to ensure that Mr. Moody was named as a guarantor” but also to ensure that the Certificate of Notary Public had been signed (para 31). Thus the trial judge was right to observe (at para 31) that “[t]his is not a case where the Plaintiffs’ lack of due diligence makes it unjust to impose a liability on the Defendants.”

Finally, this case offers a lesson for the practicing bar. The lesson is that lawyers should read documents before they are signed by clients. The pressure to close a deal sometimes makes lawyers overlook basic safeguards enjoined by the legal profession. As I often remind students in my Contracts course, the pressure of work is never an excuse for neglecting to read or review a document prior to signing the document.

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Worth the Wait – New Estate Administration Act Introduced

Wed, 03/19/2014 - 10:00am

By: Maria Lavelle

PDF Version: Worth the Wait – New Estate Administration Act Introduced

Legislation commented on: Bill 4, Estate Administration Act, Second Session, 28th Legislature, 63 Elizabeth II (2014)

In an earlier post, I indicated that the Government of Alberta was likely to introduce new estate administration legislation in the Fall term. Although the original timing estimate was off, new estate administration legislation has now been introduced and, as of the date of this blog, is adjourned in Third Reading.

Chances are, unless one has a legal practice in the area of wills and estates, estate administration is not something one thinks about on a regular basis. However, the chances are great that at some point in life, one is likely to have some involvement in the administration of an estate – whether acting as a personal representative, a beneficiary, or both. When the  Estate Administration Act comes into force, the process of estate administration in Alberta will be greatly simplified and modernized.

The Act includes the following key elements:

It clearly sets out the role of a personal representative who is administering an estate. This should help laypeople acting as personal representative better understand their role and responsibilities.

    • s 5 (1)  sets out the general duties of the personal representative. They must perform their role honestly and in good faith in accordance with the deceased person’s intentions and with the will and with the care and diligence and skill of a person of ordinary prudence. The personal representative must also distribute the estate as soon as practicable.
    • s 5(3) recognizes that professional personal  representatives, who administer an estate as their professional occupation or business, should be held to a higher standard.
    • s 7 sets out the four core tasks of a person administering an estate: identify estate      assets and liabilities; administer and manage the estate; satisfy debts and obligations; and distribute and account for the estate. To make the task of the personal representative even clearer, a Schedule sets out examples of each of the core tasks.
    • s 6 also directs the personal representative and others to the Funeral Services Act, RSA      2000, c F-29 and the Cemeteries Act, RSA      2000, c C-3 which applies to determine who has the authority to control and give instructions for the funeral and making funeral arrangements. It is unfortunate that the Act does not go the next step and incorporate the relevant provision of these statutes directly, rather than requiring a personal representative to look up these other statutes.

The Act also recognizes that many estates will be administered without obtaining a grant from the court. It ensures that personal representatives acting without a grant are subject to all the same roles and responsibilities as those that apply when a grant is issued.

Additionally, s 8 provides that if a personal representative refuses or fails to provide the required notice or perform a duty or core task, a person can bring an application to the court to obtain an order to require the personal representative to comply with their duties, impose conditions on the personal representative, or have the personal representative removed.

Further s 20 updates the rules governing the authority of the personal representative in regard to the property included in the estate. It indicates that the personal representative can do anything the deceased person could do with their property subject to the will and any other legislation restrictions.

Finally, s 28 of the Act modernizes the law by reforming the marshalling rules. Marshalling rules are common-law rules that set out how the gifts are distributed to the beneficiaries if the estate does not have enough money to pay all the debts and to distribute all the gifts. Under the new legislation, all assets in the estate must contribute proportionately to the payment of the debts and liabilities of the estate. As a result, all assets in an estate contribute to the payment of the estate’s debts and liabilities, and it makes the final distribution of the estate to the beneficiaries fairer.

Except where a court orders otherwise, s 51 provides that the new Act applies to an existing administration, application or grant. If passed, the new Act will come into force on proclamation. Before coming into force, it is likely that the Surrogate Rules, Alta Reg 130/1995, will also need to be revised to be consistent with the new Act.

Many of the key provisions in the Act track closely to the recommendations contained in ALRI’s Final Report no. 102, Estate Administration and Report for Discussion 19, Order of Application of Assets in Satisfaction of Debts and Liabilities. The Alberta Law Reform Institute and Alberta Justice worked independently, but cooperatively to produce this legislation.

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Orders for Genetic Testing: Is the Genie Out of the Bottle?

Tue, 03/18/2014 - 10:00am

By: Geoff Costeloe

PDF Version: Orders for Genetic Testing: Is the Genie Out of the Bottle?

Case commented on: Adacsi v Amin, 2013 ABCA 315

A recent decision at the Alberta Court of Appeal raises a major issue in personal injury jurisprudence. Adacsi v Amin, 2013 ABCA 315, is a precedent setting ruling that allows for the forced collection of a blood test for the purpose of determining the existence of a possible predisposition to disease.

In Adacsi the appellant is a woman who was injured in a house fire allegedly caused by the negligence of the respondent (para 3). During an extended stay in hospital several medical professionals suggested that some of her symptoms could be caused by Huntington’s disease and not from the fire itself. Huntington’s disease was present in the appellant’s family, helping to bolster these claims. The disease is caused by the inherited presence of the HD mutant gene which can be easily detected through a straightforward genetic test.

The respondent made an application for an order to collect a blood sample from the appellant pursuant to Alberta Rules of Court  rule 5.44(2), which provides that “… if the Court so orders, the examining health care professional may (a) take or obtain samples from the person being examined, and make an analysis of the samples, and (b) perform any test recognized by medical science.”

In a brief decision delivered from the bench, the Court of Appeal (Justices Hunt, Paperny and O’Ferrall) affirmed the decision of the chambers judge that granted the order:

[5] She inferred from the evidence that the proposed test was reliable and useful. She noted that the test would not determine whether the appellant’s symptoms were a result of Huntington’s, but would indicate whether Huntington’s could be eliminated as a possible explanation. She considered this relevant to the lawsuit. Although a blood test is intrusive, she stated that it involved no real health risks to the appellant. She took account of the fact that the appellant did not wish to have the test and considered that it would be stressful. Balancing all the factors, the chambers judge concluded that the potential good to be achieved outweighed other considerations, such as the appellant’s reluctance.

This decision was contested by the appellant on four grounds that were considered by the Court of Appeal. These grounds of appeal were largely of a definitional nature, challenging the scope of words such as “samples” and “examining health care professional”. “Samples” was found to be broad enough to include blood samples, and an “examining health care professional” was found to include third party laboratory technicians and not just the physician herself (paras 8-9).

Additionally, the Court rejected the appellant’s submission that taking the test would cause her “severe panic, stress and anxiety, and further her pain and suffering” (para 13). Referring to the appellant’s affidavit, the Court of Appeal took notice that she had concerns regarding the test, but rejected them at para 13, noting the following:

Importantly, her affidavit does not say she is fearful of the knowledge that could result from the test, or discuss any possible psychological impact of such knowledge.

It is crucial to determine whether the above statement was intended to set a threshold that, upon exceeding it, would allow such an order to be granted. Essentially, is a reasonable apprehension of fear stemming from the knowledge of an ordered genetic test enough to dispose of the application? Secondly, why was the fact that the appellant claimed that such a test would increase her panic, anxiety and further her pain and suffering insufficient to block such an order? Does this decision pave the way for further genetic predispositions to be considered as evidence for or against causation arguments made in personal injury disputes? These are questions that will need to be fully examined by the legislature and legal community. This post is intended to be a primer for some of these issues.

Huntington’s Disease

While such arguments did not appear to be considered in the judgment, it is likely that the application was granted partially on account of the disease at issue. Huntington’s disease is an easily detectable and predictable genetic disease and is therefore a good case study of how the genetic finding of an underlying cause for the malady could impact findings of causation. These features allow a test for HD to accurately determine whether or not there is a genetic predisposition to the disease.

Huntington’s disease is contained in the Huntingtin gene (HTT), which codes for the protein Huntingtin (Htt). Each individual carries two copies of HTT. Within this gene is a trinucleotide repeat that varies in length from individual to individual. The length of this repeating region is heritable and when it is too long, symptoms appear that correspond to Huntington’s disease. The longer the trinucleotide repeat, the more severe the symptoms will be.

Huntington’s disease behaves as a typical mendelian autosomal dominant gene. Generally, if a carrier mates with a non-carrier wild type, then each child will have a 50% chance of inheriting the mutation (for more information, including some subtleties, see here). There are numerous other conditions that behave in this manner including neurofibromatosis, Marfan’s syndrome, and vitamin C deficiency. Theoretically the precedent set in Adacsi could be applied to these conditions as well as the likely thousands of traits that exhibit similar heritable behaviour, dramatically altering the way that such cases could be litigated.

Impact of Adacsi v Amin

Previous to Adacsi, evidence for genetic predisposition was provided by way of expert testimony. For example in R v Luedecke, 2005 ONCJ 294, the expert witness, a psychiatrist specializing in sleep disorders, explained that the accused’s state of parasomnia included a genetic component. No genetic test was completed, but the expert witness cited a genetic predisposition “as both his mother and brother have had a number of such episodes [sleepwalking]” (at para 18). The Ontario Court of Appeal ordered a new trial after finding that the expert’s evidence “establishes that the predisposition for parasomnia … is hereditary” (2008 ONCA 716 at para 106). This predisposition was described as the “epitome [of] an internal cause” (at para 106). Crucially, the accused was never tested for the predisposition through a genetic test.

Another example, EB v Order of the Oblates, 2001 BCSC 1783, involved a plaintiff alleging damages stemming from sexual abuse while attending a residential school. In this case the medical expert witness stated that “looking at what kind of family he came from and genetic and environmental and social [factors]”, he believed the plaintiff was at a high risk of becoming an alcoholic but that concurring sexual abuse could exacerbate the risk (at para 198). These factors contributed to a decision that resulted in damages being awarded. Again, the finding of genetic predetermination came from the expert testimony after a review of the plaintiff’s family history, not from an ordered genetic test.

Testimony of this nature must be weighed alongside various triggers and environmental factors. In most cases, this is completed by way of qualitative assessment after review of the individual’s family tree and familial traits. Essentially, it is the medical expert’s ‘best guess’ as to whether genetic predisposition plays a role in the case at hand and how much of a role it played in the eventual presentation of symptoms.

The application made in Adacsi is therefore a crucial divergence in the approach of courts to issues of genetic predisposition. An order for a blood sample and corresponding genetic test eliminates the uncertainty of an expert witness and any doubt of genetic predisposition. In exchange for this accuracy, several new and contentious dilemmas are looming.

Privacy

Because of the intimate nature of personal genetic information, there are additional concerns about its use. An individual’s genetic makeup is likely their most personal and private piece of medical information and, unlike other identifiers such as a Social Insurance Number, cannot be changed. Once the information becomes public, there is no taking it back. As a result, genetic information that is used to resolve legal issues in a civil or family dispute could, if entered into evidence, become public knowledge where it would be searchable by future employers or insurance companies. It is currently uncertain how these disciplines would react and interpret this sort of genetic information but the fact that this information is unchangeable and is highly personal necessitates a discussion about the risks of relying on such evidence.

Currently, there is no jurisprudence in Canada regarding the intersection of genetic information and an individual’s privacy. While the Privacy Act, RSC 1985, c P-21, covers “personal information”, it is not been determined whether genetic information would fall into this definition (section 3). Similarly, Alberta’s Personal Information Protection Act, SA 2003, c P-6.5, would appear to include genetic information as “information about an identifiable individual” (section 1(k)), but the matter has not been judicially tested.

However, the Privacy Act is designed to cover the federal government’s management of personal information, not necessarily the use of it in private litigation, where the government does not actively collect the information. Likewise, the Personal Information Protection Act does not apply to “limit the information available by law to a party to a legal proceeding” (s. 4(5)(b)). These statutes therefore do not provide much assistance in the personal injury litigation context.

Insurance

Further investigation needs to be undertaken by the legislature and legal community in order to assess the potential impact of genetic testing on other disciplines. For example, the Insurance Act, RSA 2000, c I-3, would appear to punish anyone who undertakes a personal investigation into the potential future health outcomes of their genetic makeup. Section 4(1) of the Statutory Conditions imposed in section 540 include a clause regarding knowledge of change in risk:

MATERIAL CHANGE IN RISK     4(1)  The insured must promptly give notice in writing to the insurer or its agent of a change that is

(a)        material to the risk; and

(b)        within the control and knowledge of the insured.

It does not appear to have been tested in the jurisprudence how knowledge of one’s genetic risk would be interpreted but a general reading of the above section certainly raises a concern that the Statutory Conditions would discriminate against and disadvantage individuals who had undertaken a genetic screening, even one forced upon them by court order.

If this is the case, it would still seem acceptable if an individual understood the possible consequences of getting a test done and voluntarily accepted them. It is another matter entirely if an individual is being forced to undergo such a test by way of a court order. There are numerous unresolved issues in this area that need to be examined before courts should be ordering such tests.

Interpretation of Test              

Further complicating matters is the challenge in accurately interpreting such tests. Some diseases, such as Huntington’s disease, can be ruled out through a genotypic test that can determine the non-existence of the gene responsible. But the inverse is not always the case. A genetic finding of a gene responsible for Huntington’s disease will not necessarily guarantee that symptoms will develop. More immediately, they don’t guarantee that the symptoms currently present are caused by that gene. [For further information, see a summary on Wikipedia or in The American Naturalist.]

In Adacsi, the medical observation of the expert witness was that some of the symptoms presented by the appellant could have been the result of either a genetic predisposition or through the at-issue accident. If the appellant tests positive for the HD gene, this does not provide evidence that the symptoms observed are stemming from the gene. Further tests would need to be conducted to determine what the actual cause of symptoms is. This and other numerous complicating factors surrounding interpreting genotypic evidence raise significant doubts about its usage.

Conclusion

It is important not to overlook the potential value that such tests could provide however. One clear advantage could be the use of an order for genetic testing only when the matter of causation is unresolvable without it. There are obvious advantages to using genotypic evidence and the information could prove vital in some limited situations. However, the introduction of court mandated genetic testing creates new legal and ethical dilemmas that have not been adequately examined judicially or by the legislature.

In Adacsi, the Court establishes the relatively low threshold of “not frivolous” in order to mandate a genetic test (para 16). For all of the reasons previously discussed (and many others that were not), the bar to force genetic testing on an individual certainly needs to be set higher than that.

For further information on the use of genetic information in Canadian jurisprudence, please see Mark Pioro et al., “Understanding the Use of ‘Genetic Predisposition’ in Canadian Legal Decisions”, (2013) 7 McGill Journal of Law & Health 1, available here.

Special thanks to Prof. Jennifer Koshan and Prof. Gregory Hagen for their support on this comment.

Professional Bodies, Internationally Educated Graduates and the Alberta Human Rights Act

Mon, 03/17/2014 - 10:00am

By: Jason Wai and Linda McKay-Panos

PDF Version: Professional Bodies, Internationally Educated Graduates and the Alberta Human Rights Act

Case commented on: Mihaly v The Association of Professional Engineers, Geologists and Geophysicists of Alberta, 2014 AHRC 1

A recent Human Rights Tribunal decision about the actions of the Association of Professional Engineers, Geologists and Geophysicists of Alberta (APEGGA, now called the Association of Professional Engineers and Geoscientists of Alberta or APEGA) has sparked a fair bit of critical commentary (see here and here). Mr. Mihaly filed a complaint with the Alberta Human Rights Commission on August 5, 2008, alleging that he was discriminated against when he was denied registration as a Professional Engineer (PEng). He argued that the requirements imposed upon him by APEGGA for registration are contrary to the Alberta Human Rights Act, RSA 2000, c A-25.5 (AHRA).

Mr. Mihaly was born in Czechoslovakia and has Masters degrees from the Slovak University of Technology in Bratislava and from the Institute of Technical Technology in Prague (para 4).

APEGGA is the professional regulatory body for the engineering profession. An individual cannot practice engineering in Alberta unless s/he has been approved for registration as a PEng, licensee, permit holder or certificate holder under the Engineering and Geoscience Professions Act, RSA 2000 c E-11. APEGGA admitted Mihaly under the discretionary category of an “Examination Candidate”, thus he was required to meet the following conditions as set out in the Engineering and Geosciences Professions General Regulation (paras 36-44):

13(1) A person who meets the following requirements and applies to the Registrar for registration is entitled to be registered as a professional member:

(e) the applicant meets one of the following requirements:

…..

(iii) the applicant is admitted as an examination candidate and

(A) has completed the examinations referred to in section 8(b), and

(B) has obtained at least 4 years of experience in work of an engineering or geoscientific nature that is acceptable to the Board of Examiners;…

Mihaly’s application for registration with APEGGA included names of three referees who could be sent questionnaires for completion. AGEPPA received his application and requested his transcripts and Landed Immigration form, and requested Mihaly to write the National Professional Practice Exam (NPPE) (paras 4 to 8). The NPPE is not a technical exam. It tests knowledge of law, ethics, professionalism, professional practice, professional responsibility, and understanding of the governing legislation, among other things (para 126).

On January 28, 2000, the Board of Examiners considered Mihaly’s transcripts, referees’ questionnaires and Mihaly’s experiences and concluded that he had “long but narrow experience” and that the references were from supervisors who had short exposure to him. APEGGA advised him on February 11, 2000 that he must first pass the NPPE, then complete three confirmatory examinations and take a course, or pass an equivalent exam in Engineering Economics by May 2001. That same letter informed Mihaly that he had failed the NPPE, and he applied to rewrite the exam, which would be held in October 2000. APEGGA next advised Mihaly that it had withdrawn his application for registration since he had failed to write the confirmatory exams by May 2001. Although he had applied to write the second NPPE, Mihlay did not attend to write the test (paras 9 to 13).

On May 31, 2002, Mihaly applied to re-activate his application, and he applied to write the NPPE on July 15, 2002. The reason for the delay in responding to APEGGA was a serious car accident and health problems arising after the accident. The file was re-activated and APEGGA indicated that he was required to write three confirmatory exams by May 2003 and the Engineering Economics exam by November 2003. Subsequent communication indicated that APEGGA considered these exams to be necessary because the Chemical Engineering degree from Bratislava did not meet APEGGA’s academic requirements and the degree is listed on the Canadian Council of Professional Engineers Foreign Degree List (FDL). The communication from APEGGA also noted that there are no Mutual Recognition Agreements (MRAs) in place between Canada and Mihaly’s former country. Further, if the institution had not been on the FDL, Mihaly would have been required to write nine examinations. Mr. Mihaly was surprised that he had to write any exams, asking for a waiver because he had 12 years of international experience, he used to teach his colleagues, he worked for years at a research institute and he could have tried to obtain further references but this was problematic as the company had gone out of business (paras 14 to 21). Mihaly was sent an Appeal form but did not file an appeal. Again, Mihaly failed the NPPE, and his file was withdrawn by APEGGA on August 1, 2003 because he had failed to write the confirmatory exams (paras 22 to 24).

On October 3, 2006, Mr. Mihaly asked APEGGA to reactivate his application once again. On October 18, 2006, APEGGA advised Mihaly that he would need an updated resume and a list of updated references. Mihaly submitted the names of a professional engineer he had worked for for more than a year in Calgary, the name of a gas company owner and the name of a co-worker for consideration. In August 2007, the Board of Examiners determined that Mihaly had to complete the three confirmatory exams plus a course in Engineering Economics or the Fundamentals of Engineering Examination. The Board also determined that Mihaly had not acquired the one-year North American professional engineering experience in the position where he had worked because it was not at a “D level” position. So, he was also required to obtain one year acceptable D level North American engineering experience. Mr. Mihaly did not write the required exams, and on August 5, 2008, filed a complaint with the Commission (paras 26 to 29).

Tribunal Chair Moosa Jiwaji heard the complaint. While Mihaly alleged that AHRA sections 4 (services), 7 (employment), and 9 (occupational associations) were all violated, the Commission determined that either section 4 or section 9 could apply, but section 7 did not.

Section 9 of the AHRA provides as follows:

No trade union, employers’ organization or occupational association shall

(a) exclude any person from membership in it,

(b) expel or suspend any member of it, or

(c) discriminate against any person or member,

because of the race, religious beliefs, colour, gender, physical disability, mental disability, age, ancestry, place of origin, marital status, source of income, family status or sexual orientation of that person or member.

(Emphasis added)

Section 44(1)(j) defines “occupational association” as meaning:

… an organization other than a trade union or employers’ organization in which membership is a prerequisite to carrying on any trade, occupation or profession;

While APEGGA argued that the Commission did not have jurisdiction to hear a complaint about discrimination based on “place of origin of academic qualifications”, Chair Jiwaji concluded that “place of origin” is broad enough to include any adverse treatment based on one’s foreign credentials. In addition, the evidence related to the FDL indicated that the applicant’s “place of origin” is important to APEGGA in analyzing foreign credentials (para 49).

Evidence provided at the hearing indicated that Internationally Educated Graduates (IEGs) who come from countries that have not entered into Mutual Recognition Agreements (MRAs) with APEGGA (i.e., those in Europe, Africa and Asia) are assessed using an Examination and Experience Standard. If the applicant’s institution is on the FDL, then APEGGA used to assign three confirmatory exams plus a course/exam in Engineering Economics to the applicant. Currently, APEGGA merely assigns only the Fundamentals of Engineering (FE) exam. If the applicant has other attributes, such as a Masters or Doctoral degree in Engineering completed at a Canadian institution or a country with which there is a MRA, then APEGGA may consider waiving the exams. In addition, exams may be waived if the applicant has ten years of progressively responsible engineering experience acceptable to APEGGA. In addition, all applicants are required to pass the NPPE (paras 153 to 160).

Mr. Mihaly alleged that he had been adversely impacted by the process instituted by APEGGA, in that he had to successfully complete the confirmatory exams and the FEE, while engineering graduates from Canada and those countries with which APEGGA has MRAs do not. This was found to amount to prima facie discrimination on the basis of place of origin (paras 168 to 172). Chair Jiwaji concluded that the underlying assumption made by APPEGA is that engineers with qualifications from foreign countries with which APEGGA has no MRAs have qualifications that are not equal to Canadian engineering accreditation standards. Further, the complainant need only show that “place of origin” was a factor in the adverse impact experienced by Mihaly (para 174).  Also, many Eastern European immigrants and those from Africa and Asia experience disadvantage and discrimination in the workforce because of language, culture and racial prejudice. The imposition of additional exams and/or requirements without appropriate individualized assessment restricts these immigrants from working in their professions and perpetuates disadvantage in these groups (para 180).

Because Chair Jiwaji found that a prima facie case of discrimination was made out, APEGGA had the opportunity to justify its actions under AHRA section 11, which provides that a contravention of the AHRA “shall be deemed not to have occurred if the person who is alleged to have contravened the Act shows that the alleged contravention was reasonable and justifiable in the circumstances.”  The factors which will be considered are set out in two decisions: British Columbia (Superintendent of Motor Vehicles) v British Columbia (Council of Human Rights) (Grismer), [1999] 3 SCR 868 and British Columbia (Public Service Employee Relations Commission) v BCGEU (Meiorin), [1999] 3 SCR 3. The respondent must show 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 the accomplishment of that legitimate work-related purpose. To show that the standard is reasonably necessary, it must be demonstrated that it is impossible (as further clarified in Hydro-Québec v Syndicat des employé-e-s de techniques professionnelles et de bureau d’Hydro-Québec, section locale 2000 (SCFP-FTQ), [2008] 2 SCR 561) to accommodate individual employees sharing the characteristics of the claimant without imposing undue hardship upon the employer. (Meiorin at para 54)

Rational Connection: Chair Jiwaji noted that APEGGA’s Board of Examiners had exercised their discretion to place Mihaly in the category of  “Examination Candidate”. This meant that he would have been registered as a PEng if he had satisfied the requirements set out in section 13(1)(e)(iii) of the regulation (above). Since APEGGA assesses the educational qualifications and the experience of international engineers in order to ensure that the public is protected from harm, using the Examination Standard and the Experience Standard as adopted to ensure safety and competency are rationally connected to APEGGA’s functions (para 191).

Good Faith: Chair Jiwaji held that APEGGA adopted the standards in good faith (para 192).

Standard Reasonably Necessary: Finally, Chair Jiwaji analyzed whether APEGGA could show that the standards used are reasonably necessary for the accomplishment of protecting the public and ensuring that IEGs perform competently. He noted that in Meiorin, the Supreme Court set out questions that may be asked in the course of this analysis (at para 65):

a)         Has the employer investigated alternative approaches that do not have a discriminatory effect, such as individual testing against a more individually sensitive standard?

b)         If alternative standards were investigated and found to be capable of fulfilling the employer’s purpose, why were they not implemented?

c)         Is it necessary to have all employees meet the single standard for the employer to accomplish its legitimate purpose or could standards reflective of group or individual differences and capabilities be established?

d)         Is there a way to do the job that is less discriminatory while still accomplishing the employer’s legitimate purpose?

e)         Is the standard properly designed to ensure that the desired qualification is met without placing an undue burden on those to whom the standard applies?

f)          Have other parties who are obliged to assist in the search for possible accommodation fulfilled their roles?

Chair Jiwaji noted that in considering whether the Examination Standard is reasonably necessary to accomplish APEGGA’s purpose, one must examine the purpose and process followed in preparing the FDL. The original purpose of the List was to provide Canada Immigration information for its point system to assess the suitability of engineers immigrating to Canada. This informal assessment tool was developed in the early 1980s and bases its considerations on documentation that is publicly available, such as World University Handbooks and other information about institutions and degrees offered. The FDL process does not look at particular engineering programs at the institutions and assess them.  Chair Jiwaji emphasized that there was “no evidence … of direct consultation or interaction with institutions in the country themselves [sic] in order to determine the quality and content of their engineering programs” (at para 200). Chair Jiwaji noted that this process is a “poor substitute for directly assessing the education of IEGs who come from many different countries.” (at para 201). It is also insufficient as a measurement of what is required to correct a perceived deficiency as required in the legislation.  APEGGA must use current, reliable and more detailed information on institutions. The “crucial categorization” of qualifications must not be based on secondary information using a tool that was originally developed for immigration purposes (para 202).

The Fundamentals of Engineering Exam (FEE) is prepared in the United States, and parallels the Canadian Accreditation Standard. However, Chair Jiwaji noted that the FEE fails to take into consideration an individual’s background, experience and training. Under the regulations, the exams are instituted to correct a “perceived academic deficiency.” Because APEGGA does not perform a meaningful individualized assessment of an engineer’s skills and experience, and the exams chosen are related to the particular engineering discipline the document review indicates the applicant falls under, these could not fulfill the purpose of correcting a “perceived academic deficiency” (paras 209 to 215). Further, the reviews of Mihaly performed by APEGGA were not to identify a deficiency in his academic credentials so that recommendations could be made to respond to any perceived deficiencies in knowledge or training (para 217).

Mihaly was also required to take the NPEE, which he took three times and failed. Chair Jiwaji found that there was no evidence that APEGGA explored any alternatives to the exam or offered any courses or instructions for exam preparation. Once again, there was a “one size fits all” approach similar to that taken with the FEE which was found to be “particularly unhelpful to foreign trained engineers who need assistance in understanding the APEGGA process and is requirements” (at para 223).

Noting that there was little evidence that APEGGA had considered appropriate alternative approaches, Chair Jiwaji held that APEGGA must explore other evaluation methods that are less discriminatory yet allow engineers to practice in a competent and reasonably safe manner (paras 226 to 227). Finally, APEGGA had not demonstrated that it had “properly considered alternatives or that it would suffer undue hardship by exploring or implementing alternatives to the Examination Standard” (at para 234).

With respect to the Experience Standard (“one year Canadian experience”), which is a policy of APEGGA, the purpose is for applicants to understand Canadian codes and practices. However, Chair Jiwaji found that this standard fails to consider the “serious challenges foreign professionals experience when looking for employment in the engineering field when the applicant is not a professional engineer or otherwise” (at para 237). Once again APEGGA did not provide any evidence regarding the exploration of options to help applicants to achieve sufficient knowledge of Canadian legislation and work codes. Thus, the standards used by APEGGA could not be justified under step 3 of the Meiorin analysis (para 240).

Chair Jiwaji concluded that Mihaly succeeded in establishing that the Examination Standard and the Experience Standard used by APEGGA to assess his educational credentials, “without more individualized assessment or exploration of other options”, amounted to discrimination which could not be justified under the AHRA (para 242). He ordered APEGGA to comply with the following remedies under AHRA s 32 (at para 249):

(a)  Review Mr. Mihaly’s transcripts and experience in direct consultation with the Slovak University of Technology, the Institute of Chemical Technology and any of his references who may still be available, to better identify Mr. Mihaly’s skills and qualifications and  to identify core areas of engineering from which Mr. Mihaly could be exempted

(b) Grant Mr. Mihaly the option to challenge specific examinations in areas where he is not granted an exemption by APEGGA

(c)  Within three months of the date of this decision, establish a committee that preferably includes engineers who received their qualifications in institutions and countries outside of Canada and who have successfully integrated themselves into the engineering profession, to specifically explore and investigate options to appropriately and individually assess the qualifications of Mr. Mihaly with a view to correcting any perceived academic deficiencies. Once these options have been evaluated, APEGGA shall apply these individual assessment options to Mr. Mihaly with a view to correcting any perceived academic deficiencies. These options may include exemptions from the Fundamentals of Engineering exam or the NPPE combined with the implementation of a different method of assessment, such as some type of graduated or modular approach which would provide Mr. Mihaly assistance and guidance to progress gradually in the engineering profession.  Other explorations could include a possible collaboration of  APEGGA  with Alberta’s post secondary institutions in terms of offering programs or courses which could be offered to foreign trained engineers to correct any perceived academic deficiencies.

(d) Use its best efforts to match Mr. Mihaly with a Mentor who has a similar background and who can provide him the necessary guidance to approach his challenges as an engineer and gradually integrate himself into the profession;

(e)  Direct Mr. Mihaly to resources within the profession which will allow him to network with other foreign engineering graduates facing similar challenges; and

(f)  Direct Mr. Mihaly to community resources which would assist him to increase his fluency and facility in the use of the English Language.

APPEGA (now APEGA) is appealing this decision to the Court of Queen’s Bench. Under the AHRA (section 37) the Court may confirm, reverse or vary the order of the human rights tribunal and make any order that the tribunal can make under section 32.

Commentary

NPPE for Foreign Engineers – English / no English

Mr. Mihaly failed the National Professional Practice Exam (NPPE), an ethics and law exam for engineers, and not the Fundamental Engineering (FE) exam, which tests an engineer’s competency in engineering. The NPPE does not show competency or incompetency when it comes to engineering. It does seem to show a prima facie lack of understanding of the ethics and law regarding the professional practice of engineering, but this needs to be analyzed further.

The questions that should be asked are two-fold: (1) whether or not Mr. Mihaly would have passed the exams in his native language; and (2) whether or not what is of importance is an engineer’s ability to command the English language.

Whether or not Mr. Mihaly would have passed the NPPE if it was given in his native language is a question that cannot be answered unless he writes the exam in that language and is assessed on it, so the issue will not be addressed here.

Whether or not a good command of the English language exists is, however, of importance. One can easily surmise the difficulty in learning rules of law and concepts of ethics in a foreign language. For example, difficulties arise when having to deal with double negatives – in several languages, such as French, double negatives remain as negatives compared to the English double negatives that make a positive. Issues of interpretation are another issue that may not translate well for someone who speaks English as a second language.

If APEGA’s focus is on its engineers having a strong command of English, then an English exam such as the Test of English as a Foreign Language (TOEFL) before taking any such further exams (such as the NPPE) is an adequate step. On the other hand, if the question is whether engineers in Canada understand the rules of law and ethics surrounding engineering, then certain steps may need to be taken to ensure that foreign engineers are not discriminated against simply on the basis of English being their second language.

It is likely that APEGA’s mandate would be to have all engineers do the NPPE in English as that would be a fair measure across the board. Translating an exam into multiple languages, especially on issues of law, is no easy feat as the nuances and interpretations are difficult to translate – this is easily seen when creating laws in both of Canada’s official languages, which must have the same meaning.

This argument may seem far-fetched to some. However, both the College of Physicians & Surgeons of Alberta (CPSA) (see International Medical Graduates) and the College of Physicians & Surgeons of Ontario (CPSO)  (see International Medical Graduate Living in Ontario), self-governing bodies for doctors that are comparable to APEGA, require proof of language proficiency in order to meet the registration requirement with the CPSA and CPSO to obtain a Certificate of Independent Practice (i.e. an applicant must show that s/he is authorized to practice medicine within the physician’s scope of practice, is responsible and accountable for his or her medical practice, and does not require another physician to be responsible for, or oversee any aspect of, his or her practice of medicine.)

“Real Court” vs Tribunal

The Commission has been in the cross hairs of those who oppose it by calling it a “Kangaroo Court” (including the Calgary Herald, see here). The reason for the name-calling is supposedly due to issues of “procedural fairness”, or rather, a lack thereof.  Procedural fairness was defined in Baker v Canada (Minister of Citizenship and Immigration) [1999] 2 SCR 817:

[28] The values underlying the duty of procedural fairness relate to the principle that the individual or individuals affected should have the opportunity to present their case fully and fairly, and have decisions affecting their rights, interests, or privileges made using a fair, impartial and open process, appropriate to the statutory, institutional and social context of the decisions.

The Commission allows both parties to make their case. The rules of evidence, although different from those of a “real court”, also apply in the same manner to both parties. Further, any decision that is made by the Tribunal may be appealed to the Court of Queen’s Bench (see AHRA section 37).

To call the Commission a “Kangaroo Court” on the grounds that there are relaxed or no rules of evidence is a poor assessment of the Commission’s mandate, which is to foster equality and to reduce discrimination (see here). The criticism that there are “no rules of evidence” does not mean that there are actually no rules of evidence. Simply put, the Commission has the discretion to accept all evidence, no matter how prejudicial, and to make decisions on how much weight to give each piece of evidence (Alberta Human Rights Commission Procedural Manual, Evidence – see here).

Other tribunals and boards, which make similar decisions outside the context of a formal court, have a similar approach to that of the Commission in that they have relaxed or no explicit rules of evidence. Some examples are the Residential Tenancy Dispute Resolution Service, the Workers’ Compensation Board – Alberta, and the Alberta Energy Regulator.

Are there issues of procedural fairness on a case-by-case basis? Yes, of course. An example would be if a complainant had two separate applications to the Commission and the investigator made a decision on one based on information from the other. However, in this scenario the aggrieved party could appeal any decision made by the Director of the Commission, the Chief of the Commission, and the Chair of a Tribunal hearing (see AHRA sections 26 and 37).

Fairness, Fairness, Fairness

The Oxford Dictionary of English, Third Edition defines the word “fair” as “treating people equally without favouritism or discrimination”. With respect to APEGA, fairness would be defined as treating foreign engineers equally. The Human Rights Commission has done its duty in this case in saying that no one, including self-governing bodies, is above the law of human rights, and, in this case, they cannot discriminate based on place of origin.

The problems arise when determining if a foreign engineer is discriminated against on the basis of place of origin. As noted above, APEGA has a list of schools, the Foreign Degree List (FDL), which is created and maintained by Engineers Canada. The official standing regarding an applicant from a FDL is that being on the list:

… will help with the academic review portion of your application, as this is an indication that your specific degree has been previously evaluated by Engineers Canada. This does not exempt you from writing any exams. The assessment of technical exams is determined by the Board of Examiners and cannot be determined until your file has been fully reviewed (see “Apply at APEGA”)

The discretionary power of APEGA in determining whether a candidate is required to write exams seems to be exercised in an arbitrary, unfair manner, which was exposed in the Mihaly decision.

For example, it seems to be common practice that if a person has an engineering degree from a university in the United States, then that person may come to Canada, work as an Engineer In Training for four years and then be permitted to take the NPPE and be qualified as a licensed PEng. That same person, however, would not have been able to become a PEng in the US without taking the FE exams. So, why allow it here in Canada? It can be said that each state in the US administers the FE exam because the US is unable to standardize engineering programs across each state, let alone the country. So it is odd for APEGA to argue standardization when it will likely allow an engineering graduate from a US school to come to Canada, practice, and become a PEng without first having to take the FE exam. However, this is not to say that if a PEng from the US came to Canada and then was automatically given a PEng Canada license, this would be unfair, because that individual must have taken the FE exam (similar if not the same FE exam administered to foreign engineers in Canada) in the US to become a PEng. So, for  Canadian engineers educated in the United States, the difference in treatment depends on whether they stay in the United States or come to Canada.

Currently, APEGA has discretionary powers as to how foreign engineers are treated. APEGA is able to decide which foreign engineers are qualified enough to be licensed in the province of Alberta without further testing and which ones are not. This is determined on a case-by-case basis similar to the Law Society of Alberta determining the fate of foreign lawyers (via the National Committee on Accreditation) and the governing body for medicine determining the fate of foreign doctors.

Where the situation differs is in the type of exam that the two other professions require in order for any member to be permitted to practice in their respective field. Prospective lawyers are required at minimum to do the bar exam or an equivalent of the bar exam (in Alberta, CPLED – Canadian Centre for Professional Legal Education course) (see: Section 60, Rules of Law Society of Alberta) while doctors are required, pre-residency, to take the Medical Council of Canada Qualifying Examination (MCQE) (see here) and after their residency, the specialty examination given by the Royal College of Physicians and Surgeons of Canada (RCPSC) (see here). These exams are all mandatory for Canadian and foreign trained lawyers and doctors. The difference between the exams of these professions and the NPPE, the only exam a Canadian trained engineer (from an accredited school) has to complete, is that law and medicine are competency-based exams, testing the knowledge and skill of the practitioners in the field, while the NPPE is not.

The issue of fairness also presents itself when comparing APEGA to similar bodies such as those governing the practice of medicine or law. Comparing the practice of medicine to engineering is more similar than comparing law to engineering. In both medicine and engineering, competency-based exams are generally focused on a person’s knowledge and ability in the sciences. Further, mistakes in both may have a life or death impact on the patient or the general public. This can be seen when doctors administer the wrong concentration of a certain drug and engineers use the wrong type of steel in the construction of a bridge. These are factual mistakes based on knowledge (or lack thereof) of science. This is simply to say that the most appropriate comparator self-governing body for engineers will be that of doctors, which is recognized in public opinion and the media (see e.g. here and here). Standards are important to all Canadians, especially in the field of engineering where people may be placed at harm.

It is helpful to think of medicine as a pyramid. At the top is the Medical Council of Canada, followed by the College of Physicians and Surgeons of Canada, and then the College of Physicians and Surgeons of Alberta (and the other provinces). A foreign doctor, more appropriately an International Medical Graduate (IMG), must go through the following process:

The Medical Council of Canada requires an IMG to confirm that their degree is from a recognized medical school, take an online self-assessment exam, submit their credentials with the Medical Council of Canada and take the Medical Council of Canada Evaluating Examination (MCCEE) which is an exam that tests competency skills in medicine. (“Overview of licensure process for IMGs”)

The Royal College of Physicians and Surgeons of Canada (RCPSC) process is complicated, having multiple routes to becoming certified. The one factor that is the same across any of the various routes is the requirement that all applicants take the Examination given by the RCPSC (see “Routes for Certification for Specialty Designation”). Further, the RCPSC requires IMGs — “someone who has completed his/her postgraduate training outside of Canada or the United States” – to complete an acceptable undergraduate medical degree from a list determined by the Foundation for Advancement of International Medical Education and Research (FAIMER) before being allowed to take the exam. The United States is special in that it has its own equivalent exam, the United States Medical Licensing Examination (USMLE) that all US resident graduates must take (see “Diplômés hors du Canada et des États-Unis (DHCEU)”).

There are, however, 29 international jurisdictions that the RCPSC has deemed to be of equivalence to Canada, and IMGs from those jurisdictions do not have to redo the residency requirements in Canada. This equivalency will permit an IMG to skip the residency requirement but not the competency examination. The RCPSC does allow an applicant to reduce the time for Canadian residency through an Individual Competency Assessment, but never waives the RCPSC Examination.

It is curious to see that in the requirements of the College of Physicians & Surgeons of Alberta (CPSA), the MCCEE is required; this, as mentioned before, is a competency-based exam. CPSA does not want any IMG practicing in the province without having taken at a minimum, the MCCEE, which is given to all undergraduate medical graduates in Canada before entering a residency program. The requirements of the CPSA are a medical degree from a school listed in the International Medical Education Directory, English Language Proficiency if medical education and patient care experience was not obtained in a country with English as the first and native language, passing marks on the MCCEE if outside of Canada or the US (recall that the US has the USMLE equivalent exam), an independent practice or a formal postgraduate training program within three years preceding application, and postgraduate training requirements for Family/General or Specialty Practice (see “Alberta Medical Practice Permit”). These requirements are identical for Ontario (see “International Medical Graduate Living in Ontario”).

It is clear that when comparing the two assessment systems, there is no issue of fairness in the medical field, as all IMGs have to go through a very similar process and at the least must have passed a competency-based exam, the MCCEE; in Engineering, there is discretion in whether or not a foreign candidate has to take a competency exam. Further, in medicine, all practicing IMGs in Alberta must have passed a separate English qualifying examination, unlike the situation for engineers regarding English exams.

Compared to medical graduates from a Canadian institution, there is an argument that APEGA and Engineers Canada (the national body) have created a program for accredited schools that is rigorous enough so that engineering graduates in Canada do not need to take further competency exams. However, the lack of fairness here only deals with foreign engineers, because all foreign engineers in Alberta are not assessed equally to each other.

APEGA is never going to be able to assess all universities individually, because it would be almost impossible to do so. That said, the standard should be the same for all foreign trained engineers, with no special permission given to any engineer with respect to competency exams.

At its core, the decision by Tribunal Chair Moosa Jiwaji did not take any power away from APEGA. The decision did not tell APEGA to give Mr. Mihaly PEng status. The decision was one about fairness towards foreign engineers in that APEGA should re-evaluate their procedure and system in determining whether or not it is fair to all, or in other words, non-discriminatory on the basis of place of origin. Standards are important so long as those standards are applied in a fair and just manner to all foreign engineers.

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To Be (Justified) or Not To Be: That is (Still) the Question

Wed, 03/12/2014 - 10:00am

By: Martin Olszynski

PDF Version: To Be (Justified) or Not To Be: That is (Still) the Question

Document commented on: Decision Statement Issued under Section 54 of the Canadian Environmental Assessment Act, 2012, SC 2012, c19, for Taseko’s proposed New Prosperity Mine Project

A couple of weeks ago, the federal Minister of the Environment, Leona Aglukkaq, released another highly anticipated “decision statement” pursuant to section 54 of the Canadian Environmental Assessment Act, 2012 (CEAA 2012), this time regarding Taseko’s New Prosperity Mine project. Most readers will know that this was Taseko’s second attempt to secure federal approval for its proposed mine and that the federal review panel that conducted the second environmental assessment (EA) concluded that, like the original Prosperity project, it too was likely to result in significant adverse environmental effects (SAEEs) (for more on the panel’s report, see my previous post here). As with Shell’s Jackpine Oil Sands Mine expansion project and Enbridge’s Northern Gateway Pipeline project, this meant that New Prosperity could only proceed if the Governor in Council (GiC) (which is to say, Cabinet) concluded that these SAEEs were “justified in the circumstances” (section 53). Unlike Jackpine (and probably Northern Gateway), however, the GiC has apparently concluded that New Prosperity’s SAEEs are not justified.  I use the term “apparently” here because, as in Jackpine, there is no explanation or rationale contained in the decision statement as to how or why the GiC reached this result.

In a previous post on Jackpine, I suggested that the failure to provide reasons as to why a project’s SAEEs are justified in the circumstances was contrary to basic principles of environmental law – and EA law in particular – and that it undermined the process of political accountability that this aspect of CEAA, 2012 (a holdover from the original CEAA, 1992) was intended to create. Following the release of the New Prosperity decision statement, or perhaps more precisely following an entertaining but ultimately futile round of speculation as to what might explain these different results in the Twitterverse (more on this later), I resolved to look further into the issue.

I began my journey with the Hansard: those official reports of debates in Parliament that Ruth Sullivan tells me can be useful when interpreting statutes (Sullivan, Statutory Interpretation, Essentials of Canadian Law (Concord: Irwin Law, 1997) at 199).  Although I won’t pretend to have reviewed all of it (recalling that the relevant debates come not from the recent (2012) omnibus budget legislation, of which there is scant substantive discussion by design, but rather from CEAA, 1992, of which there are approximately two years’ worth), what I did find essentially confirmed my previous post.

The debate on March 16, 1992, is especially illuminating.  On that day, Parliamentarians were discussing an amendment proposed by the opposition Liberals that would have explicitly tied the justification provision, which was described as an “immense loophole,” to the goal of sustainable development (i.e. “…justified in the circumstances because the project contributes to the goal of sustainable development”). Although the amendment was ultimately defeated, the Progressive Conservative government’s response is revealing.  According to the Hon. Mr. Lee Clark, then Parliamentary Secretary to the Minister of the Environment, the same result is essentially achieved if one considers the purpose section of the Act, which then (and now) included encouraging federal authorities “to take actions that promote sustainable development” (CEAA, 2012, section 4).  Although Mr. Clark admitted to no formal legal training, he was more or less correct when he stated “that which follows in the bill as direct result is governed by the purposes of the bill” (Commons Debates, p 8301).  Indeed, the then-Minister of Environment apparently committed “to ensuring that decisions under this clause are made within the principles of sustainable development” (ibid).

Opposition concerns would also be addressed by the addition of a provision that gave the Minister the power to issue guidance as to when a project would be “justified in the circumstances.”  That’s right, there was then – as there is now – authority in the CEAA regime to provide some clarity and certainty to the justification exercise.  For CEAA, 2012, the relevant provision is section 86:

86. (1) For the purposes of this Act, the Minister may

(a) issue guidelines and codes of practice respecting the application of this Act and, without limiting the generality of the foregoing, establish criteria to determine whether a designated project…is likely to cause significant adverse environmental effects or whether such effects are justified in the circumstances;…

(Emphasis added).

For the government of the day, “to go further than that… to establish the direct legal connection [between justification and sustainable development] would be to give the courts more of a role in the definition of the term “sustainable development” than we would think is advisable.”  (Commons Debates, p 8302).  Here, then, is the core of the matter. Giving judges a direct and relatively objective benchmark against which to test justification decisions would push accountability into the courts, whereas the government preferred political accountability. For Mr. Clark, it was “clear that politicians, elected representatives, are in the best position to accept this responsibility today, rather than to pass the buck, the responsibility, on to the courts.  In doing so, we are accepting a system whereby we are giving that responsibility to those who are accountable.” (ibid).

So what does all of this mean? At the very least, pressure ought to now be put on Ms. Aglukkaq to exercise her authority pursuant to section 86 and establish the criteria for determining when a project’s SAEEs are (or are not) going to be considered justified in the circumstances. All sides, and perhaps especially industry, would benefit from knowing the test against which projects will be judged at the outset.

In the meantime, I note that the Athabasca Chipewyan First Nation, in their legal challenge to Jackpine, have raised the justification issue, and specifically the government’s failure to provide any reasons or explanation.  The ACFN’s approach is entirely consistent with both the above analysis and my previous post. While it is clear that Parliament ultimately chose against an overtly substantive judicial role in the review of justification decisions, it does not follow that there is no role for the judiciary whatsoever.  Questions of statutory interpretation remain, including whether this part of CEAA, 2012, requires some form of reasons or explanation and the role, if any, of sustainable development (and the other purpose provisions) in framing that exercise. These are questions of law with respect to which the Minister should be accorded no deference (see Canada (Fisheries and Oceans) v David Suzuki Foundation, 2012 FCA 40).

As I have previously stated and in light also of the Hansard, the current Minister’s interpretation – that no reasons are required – seems untenable. I am reinforced in my view when I consider that previously mentioned round of speculation on Twitter with respect to Jackpine and New Prosperity. One commentator suggested that staunch Aboriginal opposition was the deciding factor (which doesn’t totally square with the Jackpine outcome), while another suggested that New Prosperity was essentially a pawn to be sacrificed in the larger pipeline war being waged in British Columbia. The Prime Minister, for his part, expressed concern for “the long-term destruction of (the local water system),” but Jackpine will be far more destructive on that front (resulting in the loss of approximately 8500 ha of wetlands).  The only real distinguishing factor, it seems, is that Jackpine is an oil sands project, of which the federal government is a staunch supporter.

What this speculation suggests is that the issue here may be even more basic than enabling political accountability or securing adherence to CEAA’s environmental aspirations. Rather, it may be about ensuring that the legislation is not being misused or applied in an arbitrary and capricious manner, much as was the case in the foundational Roncarelli v Duplessis, 1959 CanLII 50 (SCC). In that case, the citation of which appears to be on the rise in the environmental law context generally (see here and here), the defendant Minister revoked Mr. Roncarelli’s liquor license because of the latter’s use of his restaurant’s profits to bail out Quebec’s then much prosecuted Jehovah’s Witnesses.  The Supreme Court of Canada made clear that:

[140] In public regulation of this sort there is no such thing as absolute and untrammeled “discretion”, that is that action can be taken on any ground or for any reason that can be suggested to the mind of the administrator; no legislative Act can, without express language, be taken to contemplate an unlimited arbitrary power exercisable for any purpose, however capricious or irrelevant, regardless of the nature or purpose of the statute. Fraud and corruption in the Commission may not be mentioned in such statutes but they are always implied as exceptions. “Discretion” necessarily implies good faith in discharging public duty; there is always a perspective within which a statute is intended to operate; and any clear departure from its lines or objects is just as objectionable as fraud or corruption.

If CEAA, 2012 is the kind of “public regulation” to which the above quotation applies, and in my view it clearly is, it follows that Cabinet must provide some reasons or explanation for its decisions.  Bearing in mind also the very significant private interest at stake in such decisions, it is arguable that the failure to provide any reasons violates proponents’ procedural rights as well, something Taseko may wish to consider in its own legal challenge (the merits of which otherwise seem dubious, but that is a subject for a future post).

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Bill C-22 and the Proposed Regime for the Development of Transboundary Oil and Gas Pools and Fields

Tue, 03/11/2014 - 10:00am

By: Nigel Bankes

PDF Version: Bill C-22 and the Proposed Regime for the Development of Transboundary Oil and Gas Pools and Fields

Proposed legislation commented on: Bill C-22, An Act respecting Canada’s offshore oil and gas operations, enacting the Nuclear Liability and Compensation Act, repealing the Nuclear Liability Act and making consequential amendments to other Acts (Energy Safety and Security Act), Second Session, Forty-first Parliament, 62 Elizabeth II, 2013-2014

Bill C-15, An Act to replace the Northwest Territories Act to implement certain provisions of the Northwest Territories Lands and Resources Devolution Agreement and to repeal or make amendments to the Territorial Lands Act, the Northwest Territories Waters Act, the Mackenzie Valley Resource Management Act, other Acts and certain orders and   regulations, (Northwest Territories Act), Second Session, Forty-first Parliament, 62 Elizabeth II, 2013-2014. And see the coordination provision in s 118 of Bill C-22 coordinating the entry into force of the two statutes.

My colleague Martin Olszyinski has commented on one aspect of Bill C-22 here. This post analyses the provisions of Bill C-22 which aim to establish a regime for the development of transboundary oil and gas pools and fields. It refers more cursorily to the “straddling resource” provisions of Bill C-15. The relevant provisions in both Bills take the form of amendments to the Canada Oil and Gas Operations Act, RSC 1985, c. O-7 (COGOA). This post begins by describing the problem that Bill C-22 seeks to address and then examines the proposed regime. But first, two preliminary comments.

The proposed regime is very complex, especially when read together with the existing compulsory unitization provisions of COGOA. Much of the complexity results from the fact that in the future we will have two distinct unitization regimes for the federal lands covered by Bill C-22: one regime will apply to pools that are transboundary, the other, the existing regime, will apply to all other pools found entirely on the federal lands covered by this legislation. As if this were not enough, a third regime for the compulsory unitization of “straddling deposits” will apply within the Inuvialuit Settlement Region once the Northwest Territories devolution legislation, Bill 15, enters into force. The Bill 15 regime is a considerable improvement on the regime proposed by Bill C-22 and one wonders why greater efforts were not made to harmonize these different regimes.

Many of the concepts in the legislation (both Bill C-22 and even more clearly the case for Bill C-15) are drawn from the Agreement between Canada and the French Republic Relating to the Exploration and Exploitation of Transboundary Hydrocarbon Fields (2005). This Agreement, which has yet to enter into force, is designed to deal with the problem of transboundary fields that may be created as a result of the extraordinary delimitation created by the 1992 Award of the Court of Arbitration for the Delimitation of Maritime Areas between Canada and France delimiting the maritime areas pertaining to each state in the area around the French Islands of St. Pierre and Miquelon in that part of the Atlantic Ocean lying due south of Newfoundland. However, the provisions in this Bill do not apply to these particular federal lands. That is because the federal lands subject to the Canada/France treaty are subject to the Newfoundland (and perhaps the Nova Scotia) offshore accord legislation rather than COGOA. The transboundary provisions of Bill C-22 discussed here do not amend the parallel provisions in the Accord statutes: the Canada-Newfoundland Atlantic Accord Implementation Act, SC 1987, c 3 and the Canada-Nova Scotia Offshore Petroleum Resources Accord Implemetaion Act, SC 1988, c 28. Further amendments to these two statutes would be required in order to allow Canada to properly meet its obligations under the Canada/France treaty when it enters into force.

A. The problem

The problem of oil and gas deposits that straddle political boundaries is well understood in both national law and international law. In addition, there is extensive treaty practice on the subject. The general consensus seems to be that the rule of capture does not apply as between states and thus that states should seek to reach agreement on apportionment and unitization before allowing production to commence from a transboundary field. There is very little practice within Canada across jurisdictional boundaries in relation to these issues and it is thus perhaps more difficult to assess whether the rule of capture (which certainly applies as between adjoining owners of private land in Canada) also applies across jurisdictional boundaries within Canada.

B. The proposed  regime

The proposed regime is introduced by way of amendments to Part II, Production Arrangements, of COGOA under the heading in Bill C-22 of “Modernizing Canada’s Offshore Oil and Gas Operations Regime.”

1. The area of application of COGOA

COGOA applies to two categories of lands. First, it applies to lands in the northern territories for which there has been no devolution of oil and gas interests. Thus, COGOA does not apply to Yukon or the so-called adjacent area since devolution to Yukon has already occurred: see Yukon Act, SC 2002, c 7. It does apply to lands within Nunavut and the Northwest Territories although devolution of oil and gas interest to the NWT is in the works and should be effective as soon as April 1, 2014, see here and Bill 15. The devolution legislation will cause COGOA to be inapplicable to the land areas of the NWT. This tells us that the scope of these COGOA provisions will be reduced over time although it may be some long time before we see devolution of oil and gas interests to Nunavut. However, it bears emphasising that unlike the federal oil and gas leasing legislation, Canada Petroleum Resources Act (CPRA), RSC 1985, c 36 (2d Supp), COGOA is a law of general application and as such applies to all lands in the applicable territories i.e. not just to federal oil and gas interests but also to oil and gas interests in aboriginal lands under the terms of modern land claim agreements (e.g. the Inuvialuit Agreement). Second, COGOA applies to offshore areas within the NWT (post-April 1) as well as those submarine areas not within a province or territory and which are not subject to either of the two east coast Accord statutes.

2. Definitions

a. The definition of transboundary pools and fields

Bill C-22 defines this combination of words as follows:

‘transboundary’ means, in relation to a pool, extending beyond the National Energy Board’s jurisdiction under this Act (i.e. COGOA) or, in relation to a field underlain only (sic) by one or more such pools

b. The definition of regulator

The term “regulator” is defined as meaning a provincial government or regulator or a federal-provincial regulator with administrative responsibility for the exploration or exploitation of oil and gas in an area adjoining the perimeter. It is evident that the regulator (I will generally use the term “relevant regulator” or “adjacent regulator”) is the counter party to the National Energy Board.

3. The identification and delineation of transboundary pools or fields

The legislation (s 48.11) will require the National Energy Board to provide the adjacent regulator with prescribed information relevant to the determination of whether a pool is a transboundary pool whenever an exploratory well (as defined in the CPRA) is drilled within the perimeter area and under the jurisdiction of the NEB. The amendments define the perimeter as an area within 20 km of the boundaries of the Northwest Territories or Nunavut or that is within 10 nautical miles of the seaward (sic) limit of the submarine areas referred to in paragraph 3(b) of the Act. These submarine areas are described as those areas that are “not within a province” or the adjoining area, as defined in section 2 of the Yukon Act but which are within the internal waters of Canada, the territorial sea of Canada or the continental shelf of Canada.

If the NEB reaches the conclusion that a pool exists it must so notify the provincial regulator as soon as possible indicating, in addition, whether it believes the pool to be a transboundary pool (s 48.12(3)). Where the Board is unable to make this determination it must so notify the provincial regulator no later than one year after receiving data from the drilling of a third well on the same geological feature. In both cases the Board must provide the Minister and its provincial counterpart with the reasons for its determination and opinion (s 48.12(4)).

Where the two regulators agree that a pool exists they “shall jointly determine whether that pool is transboundary and, if so, they shall jointly delineate its boundaries” (s 48.14(1)). If they are unable to reach agreement on any of those three matters (whether a pool exists, whether it is transboundary, or its delineation) then either party (no later than 180 days after the issuance of the notice) may “refer the matter to an expert”.

4. Approval of work and benefits plans in relation to transboundary pools or fields

Under s 5.1 of COGOA no development of a field may occur without an approved development plan. The new s 5.1(8) of COGOA provides that the NEB shall not approve a development plan for work or activity in respect of a transboundary pool or field that is the subject of a joint exploitation agreement unless the appropriate regulator has agreed to its contents. Any disagreement about the contents of the plan may be referred by either the appropriate regulator or the Minister (on the NEB’s behalf) for expert determination (s 5.1(9)).

There is a parallel procedure prescribing and requiring approvals for benefits plans (s 5.2).

5. Joint Exploitation Agreements

The Minister and the appropriate regulator may enter into “a joint exploitation” agreement (JEA) providing for the development of a transboundary pool or field as a single unit. Once that has happened, the pool or field “may only be developed as a single field” and as such can only be developed under the terms of a unit agreement (UA) and a unit operating agreement (UOA) that has been approved under s 48.2. The terms of such agreements are further prescribed by s 40. In the event of a conflict between the terms of the JEA and the terms of the UA or the UOA the terms of the JEA shall prevail (s 48.17).

6. Where no joint exploitation agreement

Where the Minister and the appropriate regulator have been unable to reach agreement on the terms of a JEA but a federal “interest owner” (i.e. a party with a share in a production licence issued under the CPRA) (note that this would not apply to a party with a production interest on, say, Inuvialuit lands) has indicated that it intends to proceed to production from a transboundary field or pool then the Minister shall notify the appropriate regulator as soon as possible (s 48.18(1)). If the parties are still unable to reach agreement after 180 days (or sooner if both agree) either the Minister or the appropriate regulator may “refer the matter to an expert to determine the particulars of the agreement” (s 48.18(3)).

7. Unit and Unit Operating Agreements and Compulsory Unitization

The general COGOA regime (s 37) contemplates: (1) voluntary unitization, (2) unitization upon the order of the Oil and Gas Committee on the recommendation of the Chief Conservation Officer (CCO) of the NEB, and (3) unitization by order of the Committee on the basis of an application by working interest owners representing 65% of the tract interests within the area of the proposed unitization.

As to the first, voluntary unitization under the general COGOA regime requires only that a copy of any unit agreement be filed with the CCO of the NEB (s 37(1)). In addition, the Minister may enter into such an agreement (as the holder of a relevant royalty interest) (s 37(2)).

As to the second, s 38 provides that the CCO may seek an order requiring the relevant working interest owners (no mention of royalty owners) to enter into a unit agreement and unit operating agreement where necessary to prevent waste. The application is to be made to “the Committee” which, following a hearing, may make the order sought provided that it is of the opinion that unitized operation would prevent waste (s.38(3)).

Provision is made for the Committee in ss 6 – 13 of COGOA. The Committee is an expert committee with broad powers to conduct inquiries and appeals as provided for under the Act. Its orders may be made an order of the Federal Court.

And finally, as to the third, s 39 anticipates the working interest holders making an application to the Minister who refers the matter to the Committee (s 39(2)). The Committee, following a hearing, may make an order giving binding effect to the proposed unit agreement and unit operating agreement provided that it is satisfied inter alia that the proposed arrangement (s 41(2)(b)) “would accomplish the more efficient or more economical production of oil or gas or both from the unitized zone”.

The proposed amendments change this regime with respect to transboundary pools and fields in a number of ways. First, with respect to voluntary unitization arrangements, the proposed regime is not simply a notification and filing regime, it is an approval regime which extends to both the unitization agreement and the operating agreement: both must be “jointly approved” by the Minister and the appropriate regulator (s 48.2). Second, in the event that the working interest owners cannot reach agreement on the term of unitization 65% of the working interest owners may apply for a unitization order, but in this case the matter is to be referred to expert determination rather than to the Committee. And finally it is unclear whether the CCO – driven unitization on the basis of waste is available at all; although perhaps the better view is that this aspect of the general regime is inconsistent with the overall transboundary regime and would certainly present a problem of conflicting forums – i.e. the Committee or the expert procedure.

The main difference between the Committee procedure and the expert procedure is that the Committee is a standing Committee appointed by the federal ministers while the expert procedure is an ad hoc arrangement with the responsibility for appointments, the appointments being shared between the Minister and the relevant regulator. Both procedures allow for the resulting unitization order to be revisited but both provide that the original tract participations factors will not be subject to change (s 45 and s 48.25).

8. The expert  procedure

a. Triggering the expert procedure

It is clear from the above that there may be resort to the expert procedure in a number of different circumstances. In the order prescribed by the Act these circumstances are as follows:

1. Referral by either the federal minister (on behalf of the NEB) or the appropriate regulator in the event that the parties cannot agree on the terms of a development plan in relation to any proposed work or activity in a transboundary pool or field that is the subject of a joint exploitation agreement (s 5.1(8) & (9)).

2. Referral by either the federal minister or the appropriate regulator in the event that the parties cannot agree on the terms of a benefits plan in relation to any proposed work or activity in a transboundary pool or field that is the subject of a joint      exploitation agreement (s 5.2(8) & (9)).

3. Referral by either the NEB or the appropriate regulator in the event that the parties cannot agree whether a pool exists, whether the pool is transboundary or its delimitation (s 48.14(2)).

4. Referral by either the Minister or the appropriate regulator in the event that the parties cannot agree on the terms of joint exploitation agreement in relation to a transboundary pool (s 48.18(2).

5. Referral by the Minister and the appropriate regulator on the application of working interest owners owning at least 65% of the interests in a unitization agreement for a unitization order (s 48.21).

6. Referral by the Minister and the appropriate regulator on the application any working interest owner subject to a unitization order (s 48.24) for an amendment to the order.

It will be observed that on the federal side in some cases referral is by the NEB, in other cases by the Minister, and in still other cases by both the Minister and the appropriate regulator.

b. The appointment of an expert

Where the parties (and note that the parties will vary based upon who may be entitled to make the referral) cannot agree on the appointment of a single expert each shall appoint one member. Those members so appointed shall agree upon the appointment of a chairperson in default of which the Chief Justice of the Federal Court is to make the appointment (s 48.27(3)). The statute is silent as to what happens in the event that one party fails to appoint its expert. Regardless of the appointing party, the expert is to be “impartial and independent, and have knowledge or experience relative to the subject of disagreement between the parties” (s 48.27(4)). The expert’s decision is “final and binding on all parties specified in the decision” from the date specified in the decision, subject to any opportunity for judicial review (s 48.27(7)).

c. The procedure to be followed by the expert

s 48.22(1)), much like the procedure prescribed for the Committee under s 41(1)). The subsequent language of s 48.22 does not track the language of s 41(1) and seems unnecessarily convoluted.

C. Some observations

The Bill C-22 amendments are tremendously complex and need to be read together with the Bill C-15 amendments that result from the devolution of resources to the Northwest Territories. Together these amendments create no less than three regimes that address the problem of compulsory unitization on federal lands in the north. It is a challenging task to establish the precise area of application for each of the different regimes even if we assume that devolution to the NWT will go ahead and that both Bill C-22 and Bill C-15 will enter into force at approximately the same time. Take for example, a discovery of a straddling deposit in the Beaufort Sea. If the deposit straddles the Inuvialuit Settlement Region (ISR) and an offshore area in the Northwest Territories the straddling deposit and unitization rules of Bill C-15 will apply. If the deposit straddles the ISR and the Yukon adjoining area it would appear as if the transboundary pool provisions and unitization provisions of Bill C-22 apply. And if the pool simply straddles different federal production licences in the Beaufort Sea offshore, then it would seem that the current COGOA unitization rules apply.

Of the three regimes the Bill C-15 regime seems the most modern and the most in line with modern unitization practices which assume that governments should be able to require unitization where deposits straddle either political boundaries or licence boundaries. It seems odd to me that the federal officials who have drafted these complex arrangements did not take this opportunity to establish a uniform regime and in particular to modernize the current COGOA provisions on compulsory unitization which can only be triggered if the proposal is supported by two-thirds of the relevant interest owners.

The Bill C-22 regime is strangely unilateral and non-reciprocal. One of the interesting features of the legislative scheme is that it confers powers on adjacent regulators without imposing a requirement of reciprocity on them. Thus Yukon is entitled to notice and to trigger the expert determination procedure in one of the examples noted above but there is no reciprocal obligation imposed on Yukon. While there may be both political and legal constraints on the federal government in legislating for reciprocity it is clear that the obligations assumed by the NEB for example might be made conditional on the adjacent jurisdiction adopting similar measures. After all reciprocity is the basis of all international straddling deposit agreements.

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What is the Legal Effect of an Unenforceable Agreement in an Unjust Enrichment Claim?

Tue, 03/04/2014 - 9:00am

By: Jonnette Watson Hamilton

PDF Version: What is the Legal Effect of an Unenforceable Agreement in an Unjust Enrichment Claim?

Case commented on: Lemoine v Griffith, 2014 ABCA 46

The recent decision of the Alberta Court of Appeal in Lemoine v Griffith is interesting for what it tells us, in the context of a claim of unjust enrichment, about the legal effects of a prenuptial agreement that was both found and admitted to be unenforceable because of undue influence and a lack of independent legal advice. According to the majority, Justices Ronald Berger and Clifton O’Brien, once the trial judge found the agreement unenforceable for those reasons — and the appellant abandoned his challenge to that finding — the prenuptial agreement was not a factor in either supplying a juristic reason for any enrichment or evidence of the parties’ intentions. However, despite the fact that the unenforceability of the prenuptial agreement was not an issue, in his dissent Justice Frans Slatter would have overturned the finding of undue influence, holding (at para 103) that the “trial judgment cannot stand.”  While that is not the only point of disagreement between the majority and the dissent, it is the point that I will focus on in this comment.

Facts

The couple in this case, James Griffith and Constance May Lemoine, began cohabiting in 1995. They became engaged shortly thereafter, but never married. Four years into the relationship, in 1999, they entered into a prenuptial agreement which stated that it would apply whether or not they married. The couple had a son in 2001, and a child of Lemoine’s from a previous relationship was also a member of the family. The relationship between Lemoine and Griffith lasted for 14 years, until the couple’s separation in 2009. During their cohabitation, Griffith was primarily a farmer, initially as part of the Griffith Farms partnership with his father, although Griffith’s wealth was mainly due to his buying and selling of land. Lemoine assumed the major role in domestic matters, while also contributing to the farm operations and, in 2006, opening her own western wear store.

There is much more that can be said about the couple’s relationship and the property of one or the other or both of them, but I want to focus on the facts surrounding the drafting and execution of what I will refer to as the prenuptial agreement (in preference to the court’s use of matrimonial property agreement, which suggests the couple did marry and were governed by the Matrimonial Property Act, RSA 2000, c M-8, s. 37). That prenuptial agreement set up a “separation of property” regime. It protected each of the party’s assets from the other, even providing that Lemoine would not become entitled to share in any increase in the value of Griffith’s assets or in any property acquired by him during their cohabitation. Almost all of the evidence concerning the prenuptial agreement was given by Lemoine, but her evidence was uncontradicted by Griffith and the two lawyers involved and it was accepted by the trial judge.

The prenuptial agreement arose following the remarriage of Griffith’s father in 1998. According to the trial judge, Justice S.L. Hunt McDonald, in Lemoine v Griffith, 2012 ABQB 685 at paras 36-46, Lemoine was advised that the Partnership Agreement for Griffith Farms contained a clause wherein the parties agreed to “enter into a pre-marriage contract with any perspective [sic] spouse providing for, in part, the protection of the partnership assets herein.” It was not disputed that Lemoine orally agreed to sign a contract with Griffiths in order to protect his father’s interest in Griffith Farms.

The facts which formed the basis of the undue influence allegation were the following. Lemoine testified that she was told that she had to sign the prenuptial agreement or else Griffith’s father would make her move out of the farm house which she had occupied with Griffith and the children for 4 ½ years and which was located on the father’s land. Lemoine never saw a draft of the prenuptial agreement before attending with Griffith at the office of his lawyer, Robert Young, to execute the agreement. Both Griffith and Lemoine sat in Young’s office while he read through and explained the prenuptial agreement to them and Young had Lemoine initial the bottom right hand corner of each page as he read it aloud to them. Griffith then signed the prenuptial agreement in Lemoine’s presence.

Then Young called in another lawyer, Gerald Quigley, to meet with Lemoine for the purpose of providing independent legal advice. While Lemoine met with Quigley, Griffith waited in Young’s waiting room. Quigley asked Lemoine if she understood what she was signing and she confirmed to him that she did because Young had just read the document to her. Quigley then had her sign the prenuptial agreement. Quigley did not explain the agreement to her or its consequences for her. He witnessed her signature and then signed a Certificate of Independent Legal Advice and a Matrimonial Property Act Certificate. The whole interaction between Lemoine and Quigley took no more than 10 or 15 minutes, according to Lemoine. She was never billed for Quigley’s legal services. Instead his fees were paid by Griffith as disbursements in Young’s statement of account. The total amount of the disbursement for Quigley’s services was $75. Quigley testified that his hourly rate at the time was $120 to $250. As a result, the trial judge found that the amount he charged reflected a total time commitment of 18 to 30 minutes.

Law

Lemoine’s action included an unjust enrichment claim, as well as requests for support. It is necessary to set out the elements of a claim for unjust enrichment briefly in order to identify the points where the existence of a prenuptial agreement might be relevant.

The property rights of cohabiting parties are governed by the common law of unjust enrichment, most recently synthesized by the Supreme Court of Canada in Kerr v Baranow, 2011 SCC 10 (CanLII). That decision set out the elements of an unjust enrichment claim as follows (at paras 36-45):

(a) whether the defendant has been enriched by the plaintiff, with the plaintiff needing to show that he or she gave something to the defendant which the defendant received and retained;

(b) whether the plaintiff has suffered a corresponding deprivation, with the plaintiff needing to show that the defendant has been enriched and that the enrichment corresponds to a deprivation which the plaintiff has suffered; and

(c) the absence of a juristic reason for the benefit and corresponding detriment, i.e., proof that “there is no reason in law or justice for the defendant’s retention of the benefit conferred by the plaintiff, making its retention “unjust” in the circumstances of the case” (at para 40).

There is a two-step analysis for the third element, the absence of juristic reason:

[43] The first step of the juristic reason analysis applies the established categories of juristic reasons [e.g., a contract, a disposition of law, a donative intent]; in their absence, the second step permits consideration of the reasonable expectations of the parties and public policy considerations to assess whether recovery should be denied.

At the remedy stage, Kerr recognized the traditional two bases of recovery — a claim for the provision of unpaid services and a claim for contribution to the acquisition, improvement, maintenance or preservation of a specific property — and added a third basis for recovery for situations where the parties were engaged in a “joint family venture” (at paras. 57-60). If a joint family venture is identified, then the appropriate remedy is a monetary award that is a share of the increase in wealth over the course of the relationship. Joint family ventures are identified by looking at the relationship and, within it, mutual effort, economic integration, actual intent, and priority of the family (at paras 87-100). It is the “actual intent” aspect of the joint family venture that might make an agreement relevant, this time at the remedy stage.

Thus, a prenuptial agreement can have two roles in an unjust enrichment claim, either as a juristic reason justifying any enrichment or as an indication of the parties’ actual intention affecting whether there was a joint family venture entitling the claimant to a share of the increase in wealth.

Queen’s Bench Decision

At trial, Justice Hunt McDonald found that the prenuptial agreement was tainted by undue influence. She pointed (at para 134) to the fact that Lemoine was told the agreement was only about the partnership, told she would have to leave the farm if she did not sign, never received an advance copy of the agreement to review, was taken to Griffith’s lawyers’ offices where his lawyer went through the agreement in Griffith’s presence, and was “sent off with a complete stranger who spent approximately 15 minutes with her before she signed the agreement.”

Once the party to an agreement who is challenging it proves that circumstances amounting to undue influence surrounded the execution of the agreement, it is up to the party trying to have the agreement enforced to try to remove that taint. That is usually done by showing that the party challenging the agreement entered into it voluntarily and with a full understanding of his or her legal position and the effect of the agreement on their legal position. Proving they had access to, and took advantage of, independent legal advice is one way to prove voluntariness, knowledge and understanding. As the Alberta Court of Appeal stated in Corbeil v Bebris (1993), 105 DLR (4th) 759, 141 AR 215, 49 RFL (3d) 77:

[13] The function of the advice, in that context, is to remove a taint that, left unremoved, might, according to contract or equity law, invalidate the contract. Judges cannot therefore simply say that an agreement is unenforceable for lack of independent legal advice. At the very least, they must first find a taint.

Both Griffith and Lemoine had called expert evidence as to the standard of care applicable to a lawyer retained to provide independent legal advice on an agreement of this nature in 1999. Lemoine called Lonnie Balbi, QC, and Griffith called Wendy Best, QC, both well-known Calgary family law lawyers. Justice Hunt McDonald decided (at para 108) that Quigley did not meet the standard of care articulated by either expert. She found he fell short on both the “independent” requirement and the “legal advice” requirement.

Justice Hunt McDonald concluded (at para 141) “Mr. Quigley was chosen, briefed and paid by [Griffith] and his lawyers. There was nothing ‘independent’ at all in his services.” To reach this conclusion she relied upon (at paras 137-141) the fact that Lemoine did not retain Quigley’s services, that Quigley was presented to Griffith’s lawyer in his office, that Quigley did not open a file for Lemoine, that Quigley sent his statement of account to Griffith’s lawyer, and that Griffith paid Quigley’s account.

In considering whether legal advice was given, Justice Hunt McDonald determined (at paras 108 and 142-43) that, because Quigley spent only 18 to 30 minutes in total on the matter, he could not have made sure that Lemoine knew what she was signing, what she was giving up, and what her options were, in addition to discussing the agreement with Young and reviewing the agreement, in the time available. She suggested that the independent legal advice that was required in this context, following a finding of undue influence, mandated that Quigley provide Lemoine with legal advice about the implications of the prenuptial agreement by citing (at para 144) the Alberta Court of Appeal decision in Corbeil v. Bebris (at para 12):

But I distinguish attendance on execution from advice about the wisdom of entering into the agreement. The term “independent legal advice” has a very specific meaning in law. The duty of advising counsel has been summarized in Halsbury’s Laws of England, Fourth Edition, Vol. 18, Para. 343, at p.157:

The duty of the independent adviser is not merely to satisfy himself that the donor understands the effect of and wishes to make the gift, but to protect the donor from himself as well as from the influence of the donee. A solicitor who is called upon to advise the donor must satisfy himself that the gift is one that is right and proper in all the circumstances of the case, and if he cannot so satisfy himself he should advise his client not to proceed.

Justice Hunt McDonald therefore concluded that Lemoine did not receive independent legal advice in connection with her execution of the prenuptial agreement. Her expectations for independent legal advice in the context of a finding of undue influence seem quite modest in comparison to the Alberta Court of Appeal’s decision in Webb v. Birkett, 2011 ABCA 13 (CanLII), which places very high demands on lawyers in family law matters, as does the Law Society of Alberta in “Giving Independent Legal Advice.” It has often been acknowledged that in cases of undue influence, independent legal advice requires informed advice about the nature and consequences of an agreement: e.g., Wright v. Carter (1902), 87 L.T. 624 at paras 57-58, Brosseau v Brosseau, [1990] 2 WWR 34, 100 AR 15 (ABCA) at paras 22-23.

As a result of her findings on undue influence and independent legal advice, Justice Hunt McDonald found the prenuptial agreement could not provide a juristic reason to justify the enrichment that benefited Griffith. Lemoine was therefore entitled to make a claim for a division of the property in his name. She awarded Lemoine a 30 percent share of the increase in Griffith’s net worth over the 14 years they cohabited, based on her contribution to the joint family venture, which amounted to just over $915,000.

Grounds of Appeal

Griffith originally challenged, as one of three grounds of appeal, Justice Hunt McDonald’s failure to find that the prenuptial agreement was either a binding legal contract or compelling evidence of the parties’ intentions and as such a juristic reason to deny, or limit, Lemoine’s recovery. However, when the appeal was heard, Griffith did not contest her finding that the agreement was unenforceable due to undue influence. The majority characterize this decision (at para 22) as “understandable.”  Nevertheless, Griffith still argued that the unenforceable prenuptial agreement should have been taken into account in determining the parties’ intent with respect to the division of property upon separation.

Court of Appeal Decision

The majority decision

In their decision, Justices Ronald Berger and Clifton O’Brien first dealt with the issue of whether the prenuptial agreement represented the intentions of the parties regarding a property division, notwithstanding that the agreement was found to be unenforceable due to undue influence.

Griffith’s argument was that the subjective intent of cohabiting parties may be relevant to whether there is a joint family venture, or, if there is one, to its scope.  Therefore, the trial judge erred in law by failing to give the prenuptial agreement significant weight because, even if it was unenforceable, it reflected the parties’ intentions about property division.  He relied upon Kuehn v Kuehn, 2012 ABCA 67 (CanLII), for this argument. In Kuehn, the trial judge ignored an unenforceable prenuptial agreement for the purposes of property division. On appeal, however, the Court of Appeal held that an unenforceable agreement could still be relevant to the distribution of matrimonial property and pointed to section 8(g) of the Matrimonial Property Act which requires the terms of an oral or written agreement between the spouses be taken into consideration in dividing the matrimonial property, relying on its earlier judgment in Corbeil v Bebris.

The majority in Griffith v Lemoine easily distinguished Kuehn and Corbeil v Bebris because the agreements in the latter two cases were unenforceable since they did not comply with the formal requirements set out in the Matrimonial Property Act. That Act does not apply to unmarried couples. More importantly, the problem with the agreement in this case was undue influence, not the formalities of execution. The majority therefore concluded (at para 28) that because Lemoine did not sign the prenuptial agreement of her own free will, it could not be relied upon to provide evidence of her true intentions or expectations.

The only evidence of Lemoine’s true intent that the majority found relevant (at paras 30-31) was her intent to protect the Griffith Farms partnership and Griffith’s father from any claims that she might have. The Griffith Farms partnership, however, only leased the farm lands owned by Griffith. Lemoine’s intent was therefore irrelevant to the division of the increase in value of the lands owned by Griffith.

The majority summarized its conclusions on the legal effect of the unenforceable prenuptial agreement as follows:

[32] We conclude, therefore, that the [prenuptial agreement] cannot be relied upon to show (a) that the parties did not intend to enter into a joint family venture, (b) that they intended to exclude certain property from an existing joint family venture, or (c) that there was a juristic reason for Mr. Griffith to retain the benefits of Ms. Lemoine’s contribution to the joint enterprise.

For the majority, the answer to the question posed in the title to this post — “What is the Legal Effect of an Unenforceable Agreement in an Unjust Enrichment Claim?” — is that it has none.

The dissent

The most interesting aspect of this case is the dissent by Justice Frans Slatter.

The foundation of Justice Slatter’s dissent appears to be based upon the concept of autonomy and the role he sees it playing in whether parties marry or cohabit and whether they enter into property agreements or not. Near the start of his lengthy opinion (twice as long as that of the majority), he notes (at para 73) the Matrimonial Property Act has excluded cohabiting couples from its regime, and the distinction between married and unmarried couples when it comes to property division on the breakdown of relationships was most recently upheld by the Supreme Court of Canada in Quebec (Attorney General) v. A, 2013 SCC 5. Throughout his opinion he returns many times (at paras 75, 77, 116, 119, 123, 127) to his point that the law in Alberta makes a clear distinction between married and unmarried couples and therefore the law of unjust enrichment should not replicate the presumptions applicable to the sharing of property mandated by the Matrimonial Property Act. He asserts that matrimonial property law — by which he appears to mean property regimes governing both married and unmarried or cohabiting couples — assumes the autonomy of the spouses:

[78] The law assumes that the spouses have the free will, intelligence, and capacity to decide a) to marry or not marry, and to cohabitate or not cohabitate, and b) to decide what matrimonial property regime will apply to their relationship.

Autonomy did figure prominently in the decision of Justice LeBel in Quebec (Attorney General) v. A, but Justice LeBel was not in the majority when he  relied on the concept of autonomy to  determine that treating married and unmarried couples differently in connection with property divisions on the breakdown of relationships was not a violation of equality rights. And it is true that in Kerr v Baranow the Supreme Court of Canada allowed for “due consideration of the autonomy of the parties” (at para 41) at the second step of the third stage of the unjust enrichment analysis, if the case fell outside of existing categories. However, Justice Slatter does not confine his use of autonomy one step in his unjust enrichment analysis. Instead, it appears to be the foundation of his entire opinion. It is the heart of the section in his opinion headed “Spousal Property Division” (at paras 68-79), which follows immediately after his summary of the facts, the lower court decision and the standard of review and it therefore sets the stage for his analysis of the division of property in this case.

With respect to the grounds of appeal, like the majority, Justice Slatter deals with the impact of the prenuptial agreement first (at paras 82-103). But Justice Slatter first looks at the prenuptial agreement in the context of whether it offers a juristic reason justifying any enrichment. He acknowledges that Griffith “unexpectedly abandoned” his reliance on the prenuptial agreement during oral argument (at para 86) and did not contest the unenforceability of the agreement on the basis of undue influence (at para 91). Nevertheless, Justice Slatter reviews the trial judge’s reasons for finding undue influence (at paras 84-91) and finds them to be wanting. He critiques her reasons on the following bases:

    • Her mistaken view that courts are entitled to interfere with contracts (at paras 84-86)
    • Her inclusion of misrepresentation about, or ignorance of, the contents of the prenuptial agreement as a factor in finding undue influence (at para 87)
    • Her use of the nature of the relationship as giving rise to a presumption of undue influence, on the basis such a presumption would undermine the parties’ autonomy (at para 88)
    • Her use of the fact Lemoine was told she would have to leave the farm if she did not sign to find actual undue influence, on the basis that refusing to be in a relationship without an agreement is both normal and an exercise of autonomy (at paras 89-90)

In his critique, Justice Slatter therefore undermines every reason the trial judge gave for finding undue influence. He then goes on to critique her finding that there was no consideration for the prenuptial agreement (at paras 94-97) and her failure to give effect to the recital in the agreement that said it was to apply whether they got married or not (at para 98).

On the independent legal advice issue, Justice Slatter says very little. Of course, because the prenuptial agreement is not tainted by undue influence, in his opinion, independent legal advice is not needed to save it.

Still, what he does have to say about independent legal advice is intriguing. In his summary of his analysis of the abandoned ground of appeal (at para 102), he states “Further unfairness arises from the court having “gone behind” the statutory certificate attached to the agreement; whether this is permissible as a matter of law was not argued.” This sentence does not refer to Quigley’s Certificate of Independent Advice, but to his Matrimonial Property Act Certificate. That is the only “statutory certificate”. Why this is the relevant document when the Matrimonial Property Act is not applicable is not addressed. Neither is the fact that a Matrimonial Property Act Certificate under section 38 of the Matrimonial Property Act is not “independent legal advice” in the sense of advice about the wisdom of entering into an agreement: Brosseau v Brosseau, [1990] 2 WWR 34, 100 AR 15 (CA), Corbeil v Bebris (1993), 141 AR 215 (CA), Hanson v Hanson, 2009 ABCA 222 at para 12, Tardif v Campbell, 2008 ABQB 776 at para 25, Cope v Hill, 2005 ABQB 625 at paras 209-210.  Justice Slatter’s only comment on the challenge to the independence of the legal advice Lemoine received is found in the same paragraph:

So far as [Griffith] knew, the appellant had complied fully with the law. He had no way of knowing whether the privileged advice provided by the lawyer who signed the certificate of independent advice was adequate, or the circumstances under which it was given. It is unfair, 13 years later, to advise him that the agreement is unenforceable.

Although Justice Slatter concludes otherwise, Griffith did have knowledge of most of the circumstances the trial judge relied upon when finding the independent advice was not “independent” because Griffith was present for all but 15 minutes and paid the bill for the advice.

With his reference to “13 years later,” Justice Slatter seems to be suggesting some sort of time limitation for a challenge to independent advice or to a Matrimonial Property Certificate . Or perhaps he is suggesting that the independence or the sufficiency of independent legal advice can never be challenged so long as the spouse not receiving the advice is not in the room for the actual execution of the agreement by the spouse receiving the independent legal advice.

One might compare this opinion to his 10-year-old decision in Hearn v. Hearn, 2004 ABQB 75. That was a case where a settlement including property, custody, access and support provisions was challenged on the ground of duress, despite a Certificate of Independent Advice. Justice Slatter noted (at para 57) in that case that the effect of such certificates, which have no statutory authority, had not received much judicial consideration. He quoted from Corbeil v. Bebris which held that any party is free to attack an agreement on the ground it was unenforceable at law (e.g., unconscionable) despite a Certificate under section 38 of the Matrimonial Property Act and a Certificate of Independent Legal Advice. He noted that ruling was inconsistent with the effect given certificates under the Guarantees Acknowledgement Act, RSA 2000, c G-11. While conceding that section 5 of that statute makes its certificates “conclusive” and the Matrimonial Property Act does not,  he thought that certificates in the family law context should also be taken at face value (at para 58), or at least negate non est factum and duress defences, based on their wording (at para 59). He also noted that Certificates of Acknowledgment under the Dower Act, RSA 2000, c D-15, were held to be conclusive in Senstad v Makus, [1978] 2 SCR 44 at 60.  In the end, he was willing to see the occasional agreement that was in fact tainted by duress be enforced: “That would be an unfortunate circumstance, but it must be weighed against the advantages of bringing finality to the resolution of disputes and upholding the enforceability to settlement agreements” (at para 63).

Because a Certificate of Independent Legal Advice cannot be confined to defences of duress or non est factum, as can a Certificate under section 38 of the Matrimonial Property Act, it would seem that Justice Slatter may well be of the view in that a Certificate of Independent Advice can never be challenged, no matter the reason and no matter its lack of a statutory basis.

Were it not for the fact that the other three judges who heard the matter disagreed with Justice Slatter, one also might be forgiven for thinking that Griffith made a big mistake in dropping his challenge to the enforceability of the prenuptial agreement. In fact, Justice Slatter appears to forget that the “correctness” of the trial judge’s decision about the unenforceability of the prenuptial agreement is not an issue before him, seemingly disregarding the autonomy of the parties to abandon grounds of appeal.

What about a role for the prenuptial agreement in determining the existence and scope of a “joint family venture”, a role that the majority did consider? Looking at the “actual intent” element of this analysis, Justice Slatter refers to Lemoine’s intent to disclaim an interest in the Griffith Farms partnership assets (at para 115), as did the majority judgment (at paras 30-31). But the majority went on to note that the partnership only leased the lands in which Lemoine claimed an interest. Justice Slatter does not mention the fact the lands were leased. Because the land was listed in the partnership agreement that was appended to the unenforceable prenuptial agreement, Justice Slatter appears (at paras 115-116) to see a clear intent to exclude the farming assets and to see those farming assets as including Griffith’s ownership interest in the lands.

The entire discussion about “actual intent” is very short and not very clear. This reinforces the appearance that Justice Slatter’s focus is on the prenuptial agreement as a juristic reason for any enrichment. It appears to be on this basis that he concludes that the “trial judgment cannot stand” (at para 103), a conclusion stated in the summary to his discussion of the role of the agreement as a juristic reason for any unjust enrichment. This, however, is the ground of appeal that was abandoned: Griffith was no longer contesting the trial judge’s finding that the prenuptial agreement was unenforceable due to undue influence.  How it can be the basis of a conclusion that the “trial judgment cannot stand” is not addressed.

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Law Society of Alberta Responds on TWU Law School Issue

Mon, 03/03/2014 - 9:30am

By: Jennifer Koshan

PDF Version: Law Society of Alberta Responds on TWU Law School Issue

Back in February we posted a letter sent by signatories from the University of Calgary and University of Alberta law schools to the Law Society of Alberta concerning the process for approval of Trinity Western University (TWU)’s proposed new law school and the admission of TWU graduates as students at law in Alberta. We asked the Law Society to reconsider its delegation of decision making power to the Federation of Law Societies, or in the alternative, to work together with other Canadian law societies to consider amending the approval criteria to address the issues raised by TWU Law School and its Community Covenant. We received a response from Law Society of Alberta President Kevin Feth QC late last week. The letter: 

    • explains the rationale for the Law Society’s delegation to the Federation, focusing on the importance of national standards, mobility and the public interest
    • suggests the authority for that delegation lies in section 37(3) of the Legal Profession Act, RSA      2000, c L-8.
    • indicates that the Law Society communicated to the Federation and Canadian law societies in January “that a review of the existing criteria by the Federation is advisable”, including the possibility of a non-discrimination provision (though the Law Society takes no position on such a provision at this time),
    • reiterates  that the consultation on approval criteria should be national in scope,  and encourages our group to make submissions if and when the Federation  reviews the criteria.

A copy of the Law Society’s letter is available here.

With this letter, the Law Society of Alberta has distanced itself from the approaches taken by law societies in British Columbia, Ontario and Nova Scotia. In these provinces, law societies did not delegate decision making on accreditation to the Federation, and they are all holding public consultations to inform their decisions. People in Alberta who are concerned about the issues surrounding TWU Law School will have to await a review of the approval criteria by the Federation.

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