Aboriginal Law

The Paths We Walk: New Ways to Address Ancient Rights?

John Rowinski*

It is trite to conclude that this relationship has been rife with conflict since its very beginnings.  The roots of the problems are notorious.  The obvious causes include different understandings of treaty entitlements and promises and a persistent patriarchal attitude and administration of Native affairs, all of which are perpetuated by archaic legislation.

The broken relationship can be spared yet another forensic analysis.  What it needs are viable solutions.  Resources in the form of financial aid, education and training are often brought up, but on their own are mere band-aids that barely cover open wounds.  There is certainly a place for money and educational infrastructure, but these fall far short of the more comprehensive re-definition of the relationship required to alleviate the culture of dependence and stamp of Crown control over Canada’s Indigenous Peoples.

Independence is a two-way street.  The governments of the land understandably do not want to write cart blanche cheques.  First Nations do not want to be reliant on government funding which is unstable at best and subject to inevitable bureaucratic processes and constraints.  Independence, therefore, must come in part from policy and in part from a new mindset.  It is a mindset of mutual respect and goals, from agreements between equals.

Developments in the past few years seem to be pushing this change of mindset to the forefront of the relationship.  The federal government’s recognition of First Nations’ fundamental right to self-government, the Supreme Court’s direction that Indigenous Peoples be meaningfully consulted (with a goal of reconciliation), and numerous public stands taken by Native stakeholders including a national day of action have increased the urgency of relationship repair.

So from all of this, is anything on the horizon that gives reason for optimism?  The short answer is “maybe”.  The federal government has recently indicated its intention to once again review the claims resolution process.  The earliest toe dipping in the water is reform of the process to create an independent body to examine claims and administer appropriate remedies including compensation.  The idea is to end the longstanding practice of having the federal government act as defendant, investigator and judge of First Nations’ claims.

Reform of the claims process is an obvious first step to healing the Crown – First Nation relationship.  With hundreds of claims stalled in the current regime, and unknown hundreds more still undiscovered, a process needs to be established in which all sides can have some faith that a fair and impartial resolution can be reached, in a timely fashion, rights long assumed for all other citizens of this Canada.

A specialized body with knowledgeable adjudicators also recognizes that there are two different systems of law to be considered in the process.

Our optimism must be cautious.  We have heard these overtures before, only to see them washed away with changes in government or a shifting of priorities.  Even if the momentum for change continues, the process for determining useful reform will be critical.  Aboriginals, Métis and Inuit must have a meaningful say in reform.  The reformed system must not be subject to arbitrary limits such as “cut-off” dates for making claims or “caps” on compensation.  In other words, the system must be the equal of the best and most efficient judicial system, or else nothing will have been fixed.

And of course dispute resolution is only one step along the way to healing Crown – First Nation relations in Canada.  Hundreds of years of simmering animosity will not go away with a quick wipe of the slate.  But the renewed prioritization of Aboriginal issues on the socio-political agenda is significant, and is the source of some hope that leadership on both sides will seize upon this current momentum to walk a new path of friendship together.  Otherwise we may never leave this current road of discord and disdain.

These are exciting and vibrant times in the field of First Nation relationships with the Crown, and those of us who are intertwined professionally and personally with these relationships have much to work on in the months and years ahead in order to get the parties on the right path together.

* John Rowinski, Olthuis, Kleer, Townshend, (416) 981-9343, jrowinski@oktlaw.com.  John is the Chair of the Aboriginal Law Section, 2006-2007.





 

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 Carole Prest*

Background

These questions arose in the context of an appeal from a decision of the Canadian Transportation Agency ordering VIA to modify its “Renaissance Cars” to make them more accessible.  The Renaissance Cars had initially been used on the overnight train service through the Channel Tunnel.  VIA purchased 139 cars at a discounted price when this service was discontinued.  To summarize in very broad terms, the Council of Canadians with Disabilities had complained that many features of the cars constituted undue obstacles to the mobility of persons with disabilities, citing the “minimum standards” set in a voluntary Rail Code which had been adopted by VIA in 1998.  VIA was given the opportunity to provide specific evidence on why the obstacles were not undue and to submit feasibility and costing information on the remedial options being considered.  VIA did not cooperate whole-heartedly in providing information and, instead of asking for more time to submit more complete information, asked the Agency to render its final decision.  The Agency did so, requiring VIA to modify 13 economy coach cars and 17 service cars, so that there would be one personal wheelchair accessible car on each daytime train and one car with personal wheelchair accessible sleeper facilities on each overnight train.

In the Federal Court of Appeal, VIA succeeded in having the decision remitted to the Agency for redetermination, taking into account VIA’s network and cost considerations.  This was partly based on a report which VIA obtained shortly after the Agency’s decision issued, which estimated that the cost of implementation would be at least $48 million.

Standard of Review

A majority of the Supreme Court of Canada reversed the Federal Court of Appeal and upheld the Agency’s decision.  Abella, J., on behalf of McLachlin, C.J. and Bastarache, LeBel and Charron, J.J., emphasized the need to respect the Agency’s expertise and not to undercut it by treating every provision of the governing legislation as raising jurisdictional issues.  The patently unreasonable standard of review applied to the decision as a whole; there was no separate jurisdictional issue requiring review on a standard of correctness. While the Agency’s mandate had human rights aspects, the human rights and transportation issues were inextricably interwoven and the standard of correctness did not apply.

The Agency’s decision was characterized as one “with many component parts, each of which fell squarely and inextricably within its expertise” which was entitled to a “single deferential standard of review”.  Abella, J. went on to say at paras. 102-3:

I appreciate it is a conceptual challenge to delineate the differences in degrees of deference between what is patently unreasonable and what is unreasonable.  Both, it seems to me, speak to whether a tribunal’s decision is demonstrably unreasonable, that is, such a marked departure from what is  rational, as to be unsustainable.  This issue was, in my view, persuasively canvassed by my colleague LeBel J. in his concurring reasons in Toronto (City) v. C.U.P.E., Local 79, [2003]3 S.C.R. 77…and requires no further elaboration here.

But whatever label is used to describe the requisite standard of reasonableness, a reviewing court should defer where “the reasons, taken as a whole, are tenable as support for the decision” (Ryan, at para 56) or “where…the decision of that tribunal [could be] sustained on a reasonable interpretation of the facts or of the law” (National Corn Growers Assn. v. Canada (Import Tribunal), ….The “immediacy or obviousness” to a reviewing court of a defective strand in the analysis is not, in the face of the inevitable subjectivity involved, a reliable guide to whether a given decision is untenable or evidences an unreasonable interpretation of the facts or law.” [emphasis added]

The minority, written by Deschamps and Rothstein, J.J. (Binnie and Fish, J.J. concurring), relies instead on the standard of review jurisprudence which recognizes the value of segmenting decisions into discrete issues and then applying the appropriate standard of review to each issue.  In their view, subjecting all aspects of a decision to a single standard of review does not account for the diversity of questions and runs the risk of either insulating the decision from an appropriately exacting review or requiring too exacting a review.  The minority also objects to the addition of another term, “demonstrably unreasonable” to an already complex area.

The minority segmented the Agency’s decision into jurisdictional issues and determinations based on the application of human rights principles to federal transportation.  These issues all required a correctness standard; they were pure questions of law and the Agency did not have greater expertise than the courts.  While the minority agreed that the Agency had jurisdiction on a correctness standard, the Agency had erred in law regarding the test for determining an “undue obstacle”. 

The minority’s “undueness” analysis places more emphasis on the magnitude of the costs of the remedial order and its impact on an entity trying to operate within a federal subsidy.  Even though VIA declined the opportunity to submit additional evidence, the minority found it was an error of law not to determine a total cost estimate for the remedial order, where cost constraints were at issue.  An “undueness” analysis could not be completed without the total cost estimate.  Deschamps and Rothstein, J.J. wrote at paragraph 365:

Where the cost is potentially significant and where the Agency adopted a dismissive approach to cost and funding of corrective measures, it is apparent that relevant considerations were not taken into account.

The majority takes a more general approach to “undueness” and finds that, “viewed as a whole” the Agency applied its mandate reasonably and “complied substantially” with British Columbia (Public Service Employee Relations Commission. v. BCGSEU, [1999] 3 S.C.R. 3.  The majority was also more concerned about the integrity of the Agency’s proceedings, noting that the onus was on VIA to adduce evidence:

The threshold of “undue hardship” is not mere efficiency.  It goes without saying that in weighing the competing interests on a balance sheet, the costs of restructuring or retrofitting are financially calculable, while the benefits of eliminating discrimination tend not to be.  What monetary value can be assigned to dignity, to be weighed against the measurable cost of an accessible environment?  It will always seem demonstrably cheaper to maintain the status quo and not eliminate a discriminatory barrier.

But the issue is not just cost, it is whether the cost constitutes undue hardship.  VIA was required to discharge the burden of establishing that accommodating persons with disabilities was an undue hardship for it: Grismer, at para. 32.  Concrete evidence is required to establish undue hardship: Hutchinson v. British Columbia (Ministry of Health) (No. 4) (2004), 49 C.H.R.R. D/348, 2004 BCHRT 58; Grismer, at para. 41.  As in most cases, this means presenting evidence in the respondent’s sole possession.

…….

Where VIA refuses to provide evidence in its sole possession in support of its undue hardship argument, it cannot be said that any reasonable basis exists for refusing to eliminate an undue obstacle.

Voluntary Code

The majority deals with the Rail Code relatively briefly, holding that it is a proper factor for the Agency to consider.  The Code was intended to set minimum standards and the standard of “personal wheelchair use” was consistent with human rights jurisprudence and with domestic and international acceptance of this standard.  The majority describes this as a public commitment at paras. 163-164:

VIA is required to accommodate this right as far as is practicable not only because Canadian law requires it to do so, but because it itself has committed publicly to doing so by agreeing to the Rail Code, a set of standards devised by it and the Agency in consultation with the Canadian Human Rights Commission.  And the way VIA had agreed to do so was through access based on personal wheelchair use when it purchased new cars or undertook a major refurbishment of existing cars.  The operating paradigm it accepted is the Canadian and internationally accepted norm, not the exception.

The minority views the matter very differently.  Far from treating the Rail Code as a commitment which VIA failed to honour, they draw an analogy to Ainsley Financial Corp. v. Ontario Securities Commission (1994), 21 OR (3rd) 104 which held that a policy cannot be elevated to the status of a law and made mandatory.  By treating the Code as setting minimum standards, the Agency effectively gave the Code the force of law.  Despite the desirability of meeting the Rail Code standards, the Agency could not treat them as legally binding.  This would result in failure by the Agency to exercise the discretion vested in it as an adjudicative agency.

Implications

The implication from the majority judgment seems to be that the patently unreasonable standard, now explained as “demonstrably unreasonable”, should apply in most cases, and that the correctness standard should be limited to a very few cases involving strictly jurisdictional issues.  Whether this more deferential approach will be applied in future cases remains to be seen.  In Lévis (City) v. Fraternité des policiers de Lévis Inc, [2007] S.C.J. No. 14, which issued shortly after VIA, only Abella, J. applied a single deferential standard of review.

Because the effect of a voluntary code is not frequently considered by the Supreme Court of Canada, the 5:4 split on how strictly a code can be applied without breaching Ainsley is unfortunate.  There is an increasing use of codes, interpretation bulletins and other policy documents by tribunals.  It would have been helpful if a more consistent approach had emerged. 

Some of the division may have been due to the Court’s reaction to the lack of co-operation with the Agency’s processes.  The majority clearly was concerned by the failure to adduce evidence and the minority judgment concludes with the observation that VIA “must recognize and respect the role of the Agency.”

As a practical matter, the main implication arising from the Court’s treatment of the Code may be to underline the need to present evidence and argument at the first opportunity to justify varying standards set in a code or other policy document.

* Carole Prest, Workplace Safety and Insurance Appeals Tribunal, (416) 314-8848, carole.prest@wst.gov.on.ca.  Carole is the Chair of the Administrative Law Section, 2006-2007.  The views expressed in this article are the author's, as are any errors or omissions.

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Alternative Dispute Resolution

He Said, She Said

Gary Furlong and Genevieve Chornenki

This article originally appeared in the OBA Alternative Dispute Resolution Section Newsletter, Volume 15, No. 2, March 2007.

ADR these days appears to be just like the universe about three seconds after the Big Bang – expanding rapidly in all directions. While not quite having reached the local corner store as a dispute resolution system for customers unhappy with a 25 cent licorice, it seems it’s heading in that direction. More and more, organizations are setting up dispute resolution systems, arbitrators are taking parties out into the hall to mediate, and boards and agencies are offering different types of alternative dispute resolution to minimize the amount of adjudication that is done. This may, to many, seem laudable, if not downright heavenly. But many others are starting to feel like they felt owning Nortel in late 1999 as the stock hit $125 per share – are we in the middle of a bubble? Are we going too far too fast? Are we putting ADR in places where it doesn’t belong? Are we treating this like a religion that everyone needs to get, rather than a good process that must only be put where appropriate?

As is frequently the case, the editors see this quite differently. Here are their thoughts.

He Said

Gary Furlong*

ADR is expanding in many different directions, and it is a thing of beauty. The field of ADR has finally begun to pick up momentum, to spread itself through society, and to become part of the culture. ADR is popping up in the most unusual places, and changing the way many people experience the friction points in their lives. And like a father pushing his child on a swing, our job is to keep pushing, and to keep the momentum building.

Over 13 years ago, when I went full time into the dispute resolution field, it existed far on the fringes of society. Mediation was commonly mistaken for “meditation”, and many lawyers reacted with confused silence when asked if they mediated their files. This was a time when mediation and ADR simply didn’t register on the public’s consciousness.

Today, however, all that has changed. Mediation has now gained a foothold in many areas. But before we begin patting ourselves collectively on the back, we should realize that it is really only a foothold, a beginning, a good start, and not much more. We cannot sit back and wait for the phone to ring just yet. In fact, we are at a significant and risky point in the growth of this field, and if we rest on our laurels, we could slip back into obscurity, not because this is simply a fad that has passed but because we didn’t help bring the promise of effective dispute resolution into the very fabric of our culture. We have to continue to spread the ADR message.

There is most definitely the risk that ADR will start to be seen as a flavour of the month and dropped when the hard work is required. And make no mistake, for mediation and ADR to truly become deeply imbedded in society it must expand significantly from where it is today. It therefore makes no sense to pull back, to start tempering the use of ADR or encouraging ADR only in the safe and obvious areas. Quite the opposite, ADR needs to continue to be promoted and attempted in the widest possible way, in the most interesting and unusual circumstances, in situations where it would be least expected. It is only when ADR becomes a normal part of our everyday lives that the true promise of alternative dispute resolution will be realized. It is only when the average employee, embroiled in a dispute with management, immediately starts thinking about and choosing his/her corporate conflict resolution options that we will have succeeded. Or when our kids immediately request a conflict resolution meeting at school to resolve a problem that we will know we’re almost there.

We must be wary of the attitude that tries to keep ADR “in its place” – in other words, keep ADR away from challenging the traditional dispute resolution processes, which most typically resemble rights-based advocacy or power-based authority. As in all great movements of change in our society, new attitudes and new approaches are feared, in the same way that mediation and other interest-based processes are feared by the status quo and the powers that be. Adjudication in court is necessary, but it, quite frankly, is and should be the “alternative”, not mediation. Put simply, we, in the dispute resolution field, are leading the conflict “revolution”, and we shouldn’t stop until the attitudes and practices have changed. Permanently.

So until that time, let’s keep pushing the boundaries. Let’s celebrate peer mediation for our 7 year olds. Let’s cheer for healing circles in corporate boardrooms. And let’s applaud each and every introduction of ADR wherever and whenever it takes place.

* Gary Furlong, Agree Dispute Resolution Inc., (416) 462-9848, gary@agreeinc.com.  Gary is the Newsletter Co-Editor of the Alternative Dispute Resolution Section, 2006-2007.


She Said

Genevieve Chornenki*

It’s tough being cast in the role of a naysayer, but this is a balloon that I feel compelled to pop. The proliferation of mediation may be a thing of beauty from a distance but so is a field of burning tires. Up close, is another story. We owe it to ourselves and to our clients to approach the ADR pandemic with caution.

First, the proliferation of mediation encourages us to take for granted (and disrespect) the process of adjudication which is the backbone of our open, public and accountable system of justice. We see the courts and other statutory decision-makers as inconvenient nuisances when in fact their strength and vitality create the civil society that we enjoy, the climate that permits the luxury of “alternatives.”

Presumptively favouring mediation over public adjudication can also lead to serious injustices, particularly where the public interest is concerned. I once had a consulting mandate for a tribunal with a regulatory mandate whose chair favoured mediation as soon as a file came in. Trouble was, without investigating, the tribunal had no way of knowing whether some form of negotiated outcome was proper, let alone possible. A complaint classified as a “personality conflict” on receipt could easily involve serious competency or safety issues not apparent from the presenting problem.

Second, mediation allows people and organizations to avoid or obfuscate the real problem, especially where money or other resources are concerned – and nothing fuels conflict more than scarce resources.

In downsizings, amalgamations and other situations of scarcity, mediation is a useful deflection technique.

Rather than addressing the core issue (resources) we can recruit mediators to conjure warm and fuzzy feelings with anesthetic qualities. Inside the newly created happy bubbles, distributive problems turn into win-win solutions – provided the people involved tighten their belts.

Third, the results of indiscriminate mediation can be coercive. People get the message – implicitly and explicitly – that it’s wrong to advocate or disagree and that to do so is profoundly counter-cultural with serious consequences. One employee contacted me asking why she had to mediate concerns that her manager was incompetent. She wondered why upper management was more concerned with getting rid of her complaint than investigating the problem, but she was afraid to say no to mediation for fear of reprisal.

Fourth, the quality of some of these programs is atrocious. Last year, I sat in as an observer for a community-based mediation project, a program that had received endorsement and acclaim from people I admire and respect. What I saw in practice, however, was heartbreaking. Mediators belittling people, coercing them, threatening them.

And fifth, indiscriminate mediation does not produce meaningful behavioural or attitudinal change. A colleague works at a tribunal with a decades-old ADR initiative and many repeat players. One of her recent mediations went something like this:

“He didn’t give me that document.”
“I did so.”
“Did not.”
“Did too.”
“Did not.”
“Did too.”

The mediator’s intervention consisted of shutting people up and then brokering a schedule for the transmission (or re-transmission) of the document in question. The response of the parties? “Gee, thanks. This was a really useful meeting.”

Now before Barry Fisher and other business-types jump all over me, let me concede that there’s money to be made in ADR systems design, as well as in mediating what flows from the pipe. I, like others, have made respectable money as a service provider to ADR programs. That, however, doesn’t cancel out the need to be thoughtful, even critical of mediation here, there and everywhere.

The goal of these programs is laudable. Many seek to foster better decision-making and to support people in taking responsibility for themselves. Here, here! We (and I include myself) have a lot to learn about quality conversations. Our discourse could be seriously improved from Parliament right down to the dining room table. But gluing mediation on to established undertakings isn’t the way to go. One size doesn’t fit all and some people don’t wear pantyhose. Besides, as long time mediation advocate Peter Bruer put it, “There’s a lot going on in this world that mediation isn’t going to fix.”

* Genevieve Chornenki was inaugural Chair of the ADR Section of the OBA. She has practised ADR since 1989, (416) 975-9898, gac@chornenki.com.  Genevieve is the Newsletter Co-Editor of the Alternative Dispute Resolution Section, 2006-2007.

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Business Law

The Ontario Corporations Act - Business Law Modernization Phase 3

Chris Moon*

This article originally appeared in Business Beat, the OBA Business Law Section Newsletter, Volume 17, No. 3, May 2007.

Ontario’s Corporations Act is the target of the third and final phase of the Ontario Government’s Business Law Modernization Project. The Act, which governs not-for-profit or non-share corporations, is widely regarded as outdated and will be the subject of considerable work over the next year or two to bring forward a modern act.

The Business Law Modernization Project itself has been ongoing for almost two years, having been first announced by the Honourable Jim Watson, Minister of Consumer and Business Services (now Ministry of Government Services), at an OBA program held on May 16, 2005. Phase 1 resulted in the passage of the Securities Transfer Act, 2006, which came into force on January 1, 2007. The Business Law Section played a central role in promoting this legislation, which gives legal recognition to the ownership, transfer and pledge of interests in securities in both the direct and indirect holding systems.

The Business Corporations Act and the Personal Property Security Act were the focus of phase 2 of the Project. Some 64 amendments to these two statutes and related statutes have been enacted as part of the Consumer Protection and Service Modernization Act, 2006 (Bill 152) which will come into force on August 1, 2007. The Corporate Law and Personal Property Security Law Subcommittees, chaired respectively by Wayne Gray and John Cameron, had significant input into the legislation.

Our current Corporations Act was first enacted 100 years ago and was last updated more than 50 years
ago. The not-for-profit sector has been recognized by the government as significant in the economy and in need of a modern statute. There are more than 50,500 not-for-profit corporations governed by the current Corporations Act. It is estimated that Canada’s GDP from the not-for-profit sector is over $80 billion and it employs more than 2 million full-time workers and 11 million volunteers. The objectives of the phase 3 of the Project are to respond to the 21st century realities for this sector, as well as strengthen protection for not-for-profit members, directors and the public and to enhance governance.

Phase 3, Corporations Act reform, is now underway. A presentation was done by the Ministry to the OBA on March 14, 2007, and is being followed by consultations throughout the process. The next major stage of the process will be the issuance of consultation white papers on a series of topics by the Government, followed by consultation with major stakeholder groups, including the OBA.

The Business Law Section is holding or sponsoring various education programs on these changes over the next several months. A key event was the joint OBA/Law Society Business Law Modernization half-day program held on June 5th. The Honourable Gerry Phillips, current Minister of Government Services, was the keynote speaker at this event. Allen Doppelt, Senior Legal Counsel of the ministry spoke to reform of the Corporations Act.

* Chris Moon, Davis Webb LLP, Brampton, (905) 451-6714, Chris.Moon@DavisWebb.com.  Chris Moon is a Member-At-Large of the Business Law Section, 2006-2007.

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Citizenship and Immigration

Privacy at Risk: Can Your Laptop be Searched at the Border?

Sergio R. Karas*

Lawyers throughout North America are trying to come to grips with the fallout of a decision by the Ninth Circuit Court of Appeals of the United States. The opinion of the Court, which held that computer devices and the data they contain can be thoroughly examined at the border, opened the floodgates to more thorough border crossing searches. However, even as the ink on that decision was beginning to dry, another opinion released by a court in the Central District of California, in the same Ninth Circuit, reached the opposite conclusion, adding to the confusion of an otherwise settled doctrine of border searches of persons and their goods.

The Doctrine of Border Searches

The question of whether or not a border search can be fairly intrusive was settled by the United States Supreme Court in U.S. v. Flores-Montano,¹ a recent case where the Court held that a thorough border search of a vehicle did not require reasonable suspicion, and that the government’s interests in preventing the entry of unwanted persons and effects is at its zenith at an international border.

In that case, at the international border in Southern California, Customs officials seized 37 kg of marijuana from Flores-Montano’s vehicle by removing and disassembling the gas tank. Flores-Montano was indicted on federal drug charges, but he tried to suppress the evidence, arguing that such an intrusive search required reasonable suspicion, because it engaged the protection of the Fourth Amendment of the United States Constitution against unreasonable search and seizure.

The Supreme Court disagreed and held that the search did not require reasonable suspicion. The Court affirmed the principle that a border search of goods was considered “routine” and not “intrusive”, and that a balancing act to determine whether a search of a vehicle was so intrusive as to necessitate a warrant or probable cause, was not required. The Court also held that Congress has always granted the Executive plenary authority to conduct routine searches and seizures at the border, without probable cause or a warrant, in order to regulate the collection of duties and to prevent the introduction of contraband into the United States.

The Court rejected the argument that Flores-Montano had a privacy interest in his fuel tank, and that the disassembly of the tank was an invasion of his privacy. The Court noted that the privacy expectation is less at the border than it is in the interior of the country, and persons crossing a border can reasonably expect to be subjected to searches. While the protection of the Fourth Amendment extends to property as well as privacy, the interference with a motorist’s possessary interest in his gas tank was justified by the government’s paramount interest in protecting the border. Thus, the government’s authority to conduct suspicionless inspections at the border includes the authority to remove, disassemble and reassemble a vehicle fuel tank.

With its opinion in Flores-Montano, the Court followed a long line of cases that have interpreted the government’s power to conduct border searches in a very expansive manner.

Computer and Data Searches Create New Problems

Shortly after the Supreme Court decision in U.S. v. Flores-Montano,² the United States Court of Appeals for the Fourth Circuit was confronted with the novel question of computer and data searches. In U.S. v. Ickes,³ the Court rejected a defendant’s argument that the search of his computer at the border was invalid because it involved “expressive material”.

In that case, Ickes was attempting to enter the United States from Canada when U.S. Customs agents searched his van. The agents found several illegal items, most notably images of child pornography stored in photo albums and on Ickes’s computer. Ickes was charged and convicted of transporting child pornography in violation of federal law. Prior to trial, the district court denied Ickes’s motion to suppress the evidence obtained at the border. The Court of Appeals for the Fourth Circuit affirmed the decision that a warrantless search of Ickes’ van was permissible, and held that both Congress and the Supreme Court had made it clear that extensive searches at the border are permitted, even if the same search elsewhere would not be.

The Court refused to undermine the doctrine of border searches by restrictively reading the language of the statute, or by carving out a First Amendment exception. Ickes claimed that the statutory language authorizing U.S. Customs officials was insufficient to cover the search of his computer and disks. The statutory language in 19 U.S.C. § 1581(a) (2000) prescribes that:

Any officer of the customs may at any time go on board of any vessel or vehicle at any place in the United States or within the customs waters, . . . or at any other authorized place . . . and examine the manifest and other documents and papers and examine, inspect, and search the vessel or vehicle and every part thereof and any person, trunk, package, or cargo on board. . . .

Ickes argued that, since the statute did not specifically mention electronic equipment, the search was illegal and required a warrant. The Court disagreed, and held that, despite Ickes' contention to the contrary, the plain language of the statute authorizes expansive border searches. The Court was not persuaded that the transportation of a laptop computer was somehow exempt from the ordinary definition of “cargo” in the statute, and opined that to hold otherwise would undermine the long-standing practice of seizing goods at the border even when the type of good is not specified in the statute. The Court followed the language in U.S. v. Flores-Montano⁴ and held that the government’s authority to conduct border searches is broad enough to cover the search of computers and disks.

As a last ditch effort, Ickes argued that the search of his computer was invalid because it involved “expressive material” protected by the First Amendment. In essence, Ickes asked the Court to carve out an exception to the border search doctrine based on the nature of the material. The Court rejected this contention and held:

“…the ramifications of accepting Ickes’ First Amendment argument would be quite staggering. Ickes suggests that the border search doctrine does not apply when the item being searched is something “expressive.” But this cannot be the case. The border search doctrine is justified by the longstanding right of the sovereign to protect itself. Flores-Montano, 124 S. Ct. at 1585, quoting Ramsey, 431 U.S. at 616. Particularly in today’s world, national security interest may require uncovering terrorist communications, which are inherently “expressive”. Following Ickes’ logic would create a sanctuary at the border for all expressive material – even for terrorist plans. This would undermine the compelling reasons that lie at the very heart of the border search doctrine. Ickes’s argument, at bottom, proves too much.” (emphasis added)

In rejecting Ickes’ request for protection of computers and data, the Court further held:

“Ickes claims that our ruling is sweeping. He warns that “any person carrying a laptop computer . . . on an international flight would be subject to a search of the files on the computer hard drive.” This prediction seems far-fetched. Customs agents have neither the time nor the resources to search the contents of every computer.”

The Court held that the search of computers and disks was legal, and refused to carve out a First Amendment protection which would have required a difficult balancing test to determine what material is “expressive” as opposed to illegal contraband.

Courts Expand the Scope of Computer and Data Searches

In U.S. v. Romm⁵ the Ninth Circuit Court of Appeals was confronted with a difficult case, which involved the search of data contained in a laptop held by an individual who attempted to enter Canada but was returned to the United States as an inadmissible person due to a previous criminal conviction.

The Court was called upon to decide whether, absent a search warrant or probable cause, the contents of a laptop computer may be searched at an international border. In that case, the search conducted by Customs officials was much more thorough and intrusive, and involved the use of external tools and software.

The defendant, Stuart Romm, connected to the internet from a Las Vegas hotel room and visited websites containing images of child pornography. As he viewed the images online and enlarged them on his screen, his computer automatically saved copies of the images to his “internet cache”. Based on forty images deleted from his internet cache and two images deleted from another part of his hard drive, he was convicted of knowingly receiving and knowingly possessing child pornography, in violation of U.S. law.

Romm had attended a training seminar held by his new employer in Las Vegas, Nevada. When the training seminar ended, he flew from Las Vegas to Kelowna, B.C., on business. However, at the airport in B.C., Canada’s Border Services Agency (CBSA) discovered that Romm had a criminal history and directed him for further questioning. At that time, Romm admitted that he had a criminal record and was currently on probation. The CBSA agent asked Romm to turn on his laptop and briefly examined it, when several child pornography websites appeared in the laptop “internet history”. The CBSA agent asked Romm if he had violated the terms of his probation by visiting those websites, and Romm answered in the affirmative. Romm was placed under detention until he could take the next flight to Seattle, WA. However, at the same time, CBSA agents informed U.S. Customs in Seattle that Romm had been denied entry and probably had illegal images on his computer, a violation of his probation order. Upon arrival at the Seattle-Tacoma Airport, Romm was interviewed by agents from the Immigration and Customs Enforcement (ICE). The agents arranged for a preliminary forensic analysis of the laptop hard drive by an expert using complex software tools, which revealed ten images of child pornography stored in the computer. When confronted with the evidence, Romm admitted that he had downloaded the images and breeched the terms of his probation. The officers conducted the investigation as a “border search” and never obtained a warrant to examine the data contained in the laptop.

At trial, the U.S. government called three witnesses to testify about the forensic analysis of the hard drive in Romm’s laptop, who described the use of different types of software to recover deleted files. The government also let evidence to show when the images were downloaded, viewed and deleted. Before trial, Romm’s defense counsel moved to suppress the evidence obtained through the border search of his laptop. However, the Court denied that motion. Romm was convicted of possession of child pornography and appealed the convictions.

The most important issue arising out of the facts of this case was the legality of the laptop search. The Ninth Circuit Court of Appeals held that the forensic analysis of Romm’s laptop fell under the “border search” exception to the requirement to obtain a warrant. Under this exception, the government may conduct searches of persons entering the United States without probable cause, reasonable suspicion or a warrant, as previously held in Untied States v. Montoya De Hernandez.⁶ The Court also affirmed that, for the purposes of the Fourth Amendment, an international airport terminal is the “functional equivalent” of a border. Thus, passengers deplaning from an international flight are subject to routine border searches. The Court rejected Romm’s contention that the search was illegal and required a warrant because he never legally crossed the U.S.-Canada border, as he had been denied entry to Canada. The Court held that there is no authority for the proposition that a person who fails to obtain legal entry at his destination may freely reenter the United States: to the contrary, he or she may be searched just like any other person crossing the border. The Court further held that the border search doctrine is not limited to those cases where the searching officers have reason to suspect that the entrant may be carrying foreign contraband. Instead, “searches made at the border are reasonable simply by virtue of the fact that they occur at the border”, as the court previously held in United States v. Flores-Montano,⁷ quoting United States v. Ramsey.⁸ Thus, the Court held that the routine border search of Romm’s laptop was reasonable and a warrant was not necessary.

Private and Personal Information in a Laptop Protected?

In a recent ruling released on October 2, 2006, in the Ninth Circuit, the Central District of California appears to have taken a different position from that of the Court of Appeals in U.S. v. Romm,⁹ attempting to draw a distinction between “personal” and “business” electronic data. In U.S. v. Arnold,¹⁰ that Court held that Customs agents do not have free reign to search files on a laptop computer which may include trade secrets, attorney-client privileged information, and other proprietary business information.

In that case, Michael Arnold arrived at Los Angeles International Airport (“LAX”), following a long flight from the Philippines. Customs and Border Patrol Officers at LAX searched Arnold’s laptop, hard drive, compact discs, and memory stick. Following the search, Arnold was indicted for transportation of child pornography and possession of a computer hard drive and CDs containing images of child pornography. In response to Arnold’s motion to suppress the evidence, the government argued that a border search of information stored in a computer hard drive is not subject to Fourth Amendment protection. Surprisingly, the Court rejected the government’s argument, noting that the issue was “ripe for determination because technological advances permit individuals and businesses to store vast amounts of private, personal and valuable information within a myriad of portable electronic storage devices including laptop computers, personal organizers, CDs, and cellular telephones.”

The Court compared a search of the private information stored on a computer with a strip or body cavity search, recognizing that electronic storage devices were an “extension” of the person, unique in its storage capabilities. The Court held:

“[w]hile not physically intrusive as in the case of a strip or body cavity search, the search of one’s private and valuable personal information storage device can be just as much, if not more of an intrusion into the dignity and privacy interests of a person. This is because electronic storage devices function as an extension of our own memory. They are capable of storing our thoughts, ranging from the most whimsical to the most profound. Therefore, government instructions into the mind – specifically those that would cause fear or apprehension in a reasonable person – are no less deserving of Fourth Amendment scrutiny than intrusions that are physical in nature.”

The Court concluded that such a border search must be based, at a minimum, on a reasonable suspicion. The Court also held that, in that case, the search was not caused by a reasonable suspicion that the confidential information stored in the defendant’s computer contained evidence of a crime.

The position of the Court in U.S. v. Arnold¹¹ seems to be at odds with the expansive interpretation given to border searches by the Ninth Circuit Court of Appeals, in U.S. v. Romm¹² and by the Supreme Court in U.S. v. Flores-Montano.¹³

Conclusion:

The decision of the Ninth Circuit Court of Appeals in U.S. v. Romm,¹⁴ has sent shockwaves through the legal profession in the United States and Canada, and has raised serious concerns about the limits of border searches conducted without warrants. Interestingly enough, the Ninth Circuit Court of Appeals, based in San Francisco, is generally known for its liberal views, so this decision comes as somewhat of a surprise to legal observers. While Romm deserves no sympathy for his actions, the decision may result in very thorough searches of electronic data at U.S. borders and airports. The decision appears to follow the expansive interpretation given to border searches by the Supreme Court and by the Court of Appeals for the Fourth Circuit. The recent decision of the California Central District in U.S. v. Arnold,¹⁵ appears to be somewhat far-fetched and at odds with well-established jurisprudence.

Practitioners must be careful and advise clients concerning the risks involved in international travel, and now, they must add the prospect that the data contained in laptops and electronic devices can be searched without a warrant at a U.S. port of entry.

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This article originally appeared in the OBA Civil Litigation Section Newsletter, Volume 15, No. 2, January 2007

[T]he apprehension of bias must be a reasonable one, held by reasonable and right-minded persons, applying themselves to the question and obtaining thereon the required information. In the words of the Court of Appeal, that test is ‘what would an informed person, viewing the matter realistically and practically – and having thought the matter through – conclude.¹⁶

This is the general test for discerning bias - and is now considered trite law - but de Grandpré J. alludes to the real problem when he asserts that the reasonable person must think the matter through “realistically and practically.” The legal community has admitted that bias can go undetected within the rigours of the law, but, when approaching the question of whether there is a reasonable apprehension of bias in a proceeding, an “objective and properly informed third party” can only truly be so when he examines the context of each circumstance. As L’Heureux Dube J. noted in Baker v. Canada (Minister of Citizenship and Immigration),¹⁷ “the concept of procedural fairness is eminently variable and its content is to be decided in the specific context of each case… [a]ll of the circumstances must be considered in order to determine the content of the duty of procedural fairness.”¹⁸ As a result, courts can apply the same law to fairly similar fact patterns and produce wide-ranging results.

With this in mind, we have summarized and commented on several recent cases on bias and apprehension of bias of judicial bodies, noting the similarities and differences between the cases throughout.

Wewaykum Indian Band v. Canada; Mugesera v. Canada

Two recent cases in the Supreme Court of Canada have involved alleged apprehension of bias.

The first, Wewaykum Indian Band v. Canada,¹⁹ occurred in 2003. This case dealt with a long-simmering discord between two sister bands, the Campbell River and Cape Mudge bands, of the Laich-kwil-tach First Nation. Both bands had claimed exclusive entitlement to two reserves, and, in 1985, Campbell River started an action against Cape Mudge and the Crown in Federal Court. Cape Mudge counterclaimed against Campbell River, and brought its own claim against the Crown; the cases were joined, then dismissed; appeals to the Federal Court of Appeal were made and subsequently dismissed by unanimous judgment. The bands were granted leave to appeal to the Supreme Court of Canada and were heard by the full Court on December 6, 2001, at which point the Court, in a unanimous decision written by Binnie J., dismissed the appeal.

Binnie J.’s reasons, however, did not sit well with the bands. Counsel for the Campbell River band stated that the bands did not appreciate the “tenor” of the judgment and were left feeling as though their arguments had not been properly addressed.²⁰ As a result, the band made a request for information under the Access to Information Act and subsequently discovered that Binnie J. had some involvement in the case in the years 1985 to 1986 while acting as Associate Deputy Minister at the Department of Justice. Several internal memos from the Department of Justice that discussed issues raised by the Campbell River claim were addressed to Binnie J., and, in addition, it became clear through the released documents that Binnie J. had even discussed their situation at some length with others in the Department of Justice (albeit before Campbell River had submitted its statement of claim). Another memo indicated that Binnie J. had confirmed that Bill Scarth, another lawyer at the Department, was in charge of the file. Both Campbell River and Cape Mudge filed motions to have the unanimous decision of the Court set aside on the basis of a reasonable apprehension of bias.

The bands’ submissions were very similar. While Cape Mudge believed that Binnie J. did not remember the Campbell claim by the time he heard the case on the bench, the Cape Mudge band nevertheless submitted that his tenure at the Department of Justice raised “legitimate questions as to whether the positions he formulated and recommended and the various memoranda and documents he read would have had an influence on his approach to the same case as a judge.”²¹ The Campbell River band similarly alleged that some “contaminating knowledge,” albeit
“unconsciously,” would have remained with Binnie J. since his tenure as Associate Deputy Minister in the mid-eighties.²² Both bands also claimed that a reasonable apprehension of bias existed: Campbell River alleged, for example, that the “subjective evidence of a judge’s state of mind, and thus Binnie J.’s absence of recollection, [was] legally irrelevant to a determination of whether there is a reasonable apprehension of bias.”²³ Finally, each band argued that since Binnie J. would have recused himself had the Department of Justice documents been revealed before the hearing, a reasonable apprehension of bias existed at the time of trial.²⁴

In its analysis, the court noted that there is no Canadian jurisprudence to support the “automatic disqualification” of a decision-maker who was in some way involved in the litigation at an early stage, let alone before a statement of claim was issued.²⁵ The court emphasized, moreover, that the bar for a party seeking to prove the apprehension of bias is high. Each case must be scrutinized on its facts and, more importantly, the test to be applied to these facts “rests on serious grounds, in light of the strong presumption of judicial impartiality.”²⁶ The court saw fit to reiterate de Grandpré J.’s important addition to the reasonable apprehension standard cited supra:

The ground for this apprehension must, however, be substantial, and I … refus[e] to accept the suggestion that the test be related to the “very sensitive or scrupulous conscience.”²⁷

With this in mind, the court went on to state that this high standard applies regardless of when the issue of disqualification is brought up. “The fact that a judge would have recused himself or herself ex ante cannot be taken to be determinative of a reasonable apprehension of bias ex post.”²⁸ In other words, a small degree of involvement in a case is grounds for a reasonable apprehension of bias and voluntary recusal before the issue of disqualification, but not conclusive evidence of apprehension of bias after the fact.

The court determined that the case turned on two points. First, the germane issue was the nature and extent of Binnie J.’s involvement in the case while he was Associate Deputy Minister. On this point, it is worth noting the court’s observations at some length:

Admittedly, Binnie J.’s link to this litigation exceeded pro forma management of the files. On the other hand, it should be noted that he was never counsel of record, and played no active role in the dispute once the claim was filed… The facts do not support the proposition that Binnie J. planned litigation strategy for this case, as is suggested by the bands… Furthermore… Memos 8, 9 and 10… establish that any views attributed to Binnie J. earlier on were offered in the context of wider implications of the negotiation process, and not in the context of litigation.²⁹

The court also pointed out that any reasonable person gauging the potential for bias arising from Binnie J.’s activities would also have to take the realities of legal practice within the Department of Justice into consideration. Unlike a lawyer in private practice, Binnie J. had “responsibility for thousands of files at the relevant time.”³⁰ As such, the advice he gave in the Campbell River file did not pertain to an issue unique to the instant case, but rather an issue which had a much wider application to many contemporaneous claims. Indeed, “[t]his was presumably the reason,” the court noted, “why he was approached in the first place.”³¹

The second major factor that the court examined was the length of time that had passed between Binnie J.’s involvement in the case as an Associate Deputy Minister and a Supreme Court Justice. The court cited Locabail (U.K.) Ltd. v. Bayfield Properties Ltd.³² with approval:

… every application must be decided on the facts and circumstances of the individual case. The greater the passage of time between the event relied on as showing a danger of bias and the case in which the objection is raised, the weaker (other things being equal) the objection will be.³³

In the end, the court held that a reasonable person, viewing the matter realistically, would not believe that Binnie J.’s involvement with the case as an Associate Deputy Minister imbued him with any kind of bias, conscious or otherwise. The court concluded by outlining the decision making process of the Supreme Court of Canada and noting, in particular, that each Justice prepares for each hearing independently. The resulting reasons are thus “the fruit of a truly collegial process of revision of successive drafts” and express “the individual views of each and every judge who signs them, and the collective effort and opinion of them all.”³⁴ As such, the court held that:

…[e]ven if it were found that the involvement of a single judge gave rise to a reasonable apprehension of bias, no reasonable person informed of the decision-making process of the Court, and viewing it realistically, could conclude that it was likely that the eight other judges were biased, or somehow tainted, by the apprehended bias affecting the ninth judge.³⁵

The concluding remarks of Wewaykum would prove prescient. Only one year later, the court heard a motion for a permanent stay of proceedings in the case of Mugesera v. Canada (Minister of Citizenship and Immigration)³⁶ in which the War Crimes Committee, an organization which Abella J.’s husband chaired, was an intervenor. Despite the voluntary recusal of Abella J., the respondent Mugesera alleged that her mere presence on the court impaired the ability of its members to remain impartial.

The court, after observing that the motion was “flagrantly without basis in fact or in law,”³⁷ quickly dispatched the respondent’s claim for alleged bias by stating that “no reasonable person would think, after Abella J. voluntarily recused herself, that her mere presence on the court would impair the ability of the balance of its members to remain impartial.”³⁸

What is notable about this case, however, is not the substance but the tone of the court’s reasons. It quickly becomes clear from the judgment’s severe – and, at times, even scolding - language that the court in Mugesera was vigorously defending the famous dictum that “justice must not only be done, but should manifestly and undoubtedly be seen to be done.”³⁹ There is a reason, after all, that there is a strong presumption of impartiality in the test articulated by Grandpré J.: entertaining groundless allegations of bias will, over time, undermine the public’s view of the court’s ability to make impartial decisions.

In Wewaykum it was noted that the submissions of the parties were such that the “personal integrity” of Binnie J. was “not in doubt.”⁴⁰ In Mugesera, however, the court took exception to, inter alia, the “astounding proposition” of the respondents that the entire court, because of Abella J.’s connection to an intervener, had a duty to recuse itself. “To reach this conclusion,” the court noted, “would be to ascribe a singular fragility to the impartiality that a judge must necessarily show, and to the ability of judges to discharge the duties associated with impartiality in accordance with the traditions of our jurisprudence.”⁴¹ The court went on to state that the motion was “unprofessional and unacceptable” and “constitute[d] an unqualified and abusive attack on the integrity of the Judges of this Court.”⁴²

SOS – Save our St. Clair Inc. v. Toronto (City)⁴³

The case of Save our St. Clair was heard two years after Wewaykum and a month before Mugesera, and is interesting for several reasons.

Save Our St. Clair was an organization incorporated in order to oppose the building of a dedicated Streetcar Right of Way on St. Clair Avenue West in Toronto. The public had participated throughout the process and planning stage of the project and study results had been reported to a city planning committee. After much debate, the City of Toronto (“the City”) decided to go ahead with the project. Save Our St. Clair subsequently made submissions to the ministry for an order requiring an environmental assessment, but their request was dismissed. Soon thereafter, the group made an application for a judicial review of the city’s decision to continue the project, and the application was unanimously endorsed by three judges, including Justice Matlow, of the Ontario Superior Court of Justice with reasons to follow.

Subsequently, however, the City learned details – or perhaps, more fairly, learned more details - about Justice Matlow’s zealous and very publicized opposition to another city project called the “Thelma Project” as well as his association with a committee of his neighbors called “the Friends” who shared his beliefs on the issue. Before the reasons in Save our St. Clair were released, the City made a motion seeking an order that the chair of the judicial panel, Justice Matlow, recuse himself because of an apprehension of bias, the panel be struck, and the original application for judicial review which was unanimously endorsed by the court be set aside and heard de novo. Although Justice Matlow refused to recuse himself, the remainder of the court nevertheless struck the panel and ordered the application to be heard de novo because they “consciensciously believe[d]” that there was a perception of bias.⁴⁴

Justice Matlow, in dissent, would have dismissed the motion for several reasons, although he states that the City’s delay in raising the issue of bias early enough in the proceedings was itself sufficient. He found that the City had “been in possession of all of the pertinent facts” relating to the alleged apprehension of bias, and had, by the end of the first day of the hearing, “considered the implications of those facts.”⁴⁵ Nevertheless, the hearing continued the next day with no objections from the city, “nor,” he states, “did counsel for the City of the TTC display any urgency or concern when, at the conclusion of [the hearing], they expressed the wish that we release our judgment if possible, prior to October 12, 2005…”⁴⁶ Indeed, it was only days after receiving the adverse judgment, Justice Matlow concluded, that the moving parties showed any real interest in bringing a motion seeking a new panel.

Justice Matlow then cites E.C.W.U. Local 916 v. Atomic Energy of Canada Ltd.⁴⁷ for the proposition that waiver can be implied from the parties’ failure to allege a violation at the earliest practicable opportunity, and, as such, it is not necessary to expressly waive the right to object on the grounds of bias. He also cites the Federal Court of Appeal case of Eckervogt v. British Columbia,⁴⁸ noting that a party must not remain silent and rely on an allegation of apprehension of bias only when the outcome “turns out badly:”

I do not think it is proper for a party to hold in reserve a ground of disqualification for use only if the outcome turns out badly. Bias allegations have serious implications for the reputation of the tribunal and in fairness they should be made directly and promptly, not held back as a tactic in litigation. Such a tactic should, I think, carry the risk of finding a waiver. Furthermore, the genuineness of the apprehension becomes suspect when it is not acted on right away.⁴⁹

However, this case law does not seem to completely square with the facts before the panel. In Atomic Energy and Eckervogt, it was clear that both parties had full knowledge of the nature of the allegation of bias. Indeed, in Atomic Energy, Marceau J. observes that “[t]here is no waiver or acquiescence unless the party entitled to object to an adjudicator’s participation was made fully aware of the nature of the disqualification and had an adequate opportunity of objecting.”⁵⁰ Marceau J. goes on to quote Cartwright J. in Ghirardosi v. Minister of Highways for British Columbia:⁵¹

There is no doubt that, generally speaking, an award will not be set aside if the circumstances alleged to disqualify an arbitrator were known to both parties before the arbitration commenced and they proceeded without objection.⁵²

Yet in the instant case, despite finding that the City had “all the relevant facts” and had “considered all of the implications arising from those facts,”⁵³ he observes at paragraph 29 that the “inquiry” into his activities “began in earnest” only after October 11, 2006.⁵⁴ It is thus interesting to note that, at the end of the day, Justice Matlow seems to dismiss the motion on the basis that the City, even though they may have had an incomplete picture of the situation, should have alerted the court that they were concerned about “something” and request an adjournment:

If the City wished to have more time to investigate the facts before deciding what to do, it was open to counsel for the moving parties to appear before the panel when the hearing resumed on the following day, October 7, 2005, to request an adjournment for a few days. At that stage it would not have been necessary for counsel to tell us what the City’s concern was. It would have been quite enough had counsel, as an officer of the Court, told us that something had come to the City’s attention that could affect the regularity of the hearing then in progress and that the City needed more time to look into whatever it was. In those circumstances, the hearing of the judicial review application would almost certainly have been adjourned and the issue of my participation could have been clarified a few days later before further arguments on the merits were to be made.⁵⁵

Justice Matlow then begins to address why he has found that there was no apprehension of bias involved in the instant case. He reminds the parties of the judicial oath he took upon his becoming a judge, his record of impartiality in cases involving the City, and insists that he would never allow his “personal feelings about the Thelma project interfere with [his] judging cases in which the City [was] a party.”⁵⁶ While reviewing the law on apprehension of bias, he observes that the threshold “for a finding of real or perceived bias is high” and notes that “an allegation of apprehension of bias calls into question not simply the personal integrity of the judge, but the integrity of the entire administration of justice.”⁵⁷ He goes on to note, moreover, that
“[b]ecause the tendency of disgruntled litigants to raise ‘angry objection’ in their attempt to win at any cost, judges have been cautioned against … accepting that they should remove themselves, particularly after a hearing or trial has begun.”⁵⁸

Justice Matlow goes on to deny many of the City’s allegations and corrects facts put forth by the City which he considers to be erroneous. For example, he denies that the “Friends” were ever any kind of association; he observes that he never acted as “counsel” for the group, but rather represented himself while the Friends simply participated without official status; and he points out that the letter that he wrote to the Mayor was not on his official judicial letterhead, but rather had headings and footers created by his computer which provided his name, address, and phone number. Justice Matlow also confirms that he granted many interviews to the press, and describes several instances of his public objections to the City’s plans. He even acknowledges sending documents to a Globe and Mail reporter regarding the Thelma project a day before the St. Clair case was heard.

One of the only allegations Justice Matlow neither denies nor deflects is the allegation that he spoke to politicians and “willingly responded to invitations from the news media for comments which I willingly gave.” Indeed, he gives no apologies for this wide-ranging activism, and instead insists that he “was entitled to argue with governments at all levels about things that affected [him] directly…”⁵⁹ and cites an opinion about municipal democracy that was circulated to federal judges in 1999 by an advisory committee of the Canadian Judicial Council:

As a ratepayer and citizen the judge is entitled to have and express views on a purely local and municipal question provided, of course, that the judge realizes that in doing the judge must be disqualified from any participation in any litigation arising from the matter.⁶⁰

Yet even if there were an apprehension of bias, Justice Matlow observes, the decision should stand since the decision was unanimous and his recusal would have led to the same result. He cites the observation of the court in Wewaykum regarding the independent, collegial nature of the decision-making process in the judiciary:

In the circumstances of the present case, even if it were found that the involvement of a single judge gave rise to a reasonable apprehension of bias, no reasonable person informed of the decision-making process of the Court, and viewing it realistically, could conclude that it was likely that the eight other judges were biased, or somehow tainted, by the apprehended bias affecting the ninth judge.⁶¹

Justice Matlow concludes his argument by emphasizing that the threshold for a finding of real or perceived bias is high and the result of his colleagues’ decision to strike the panel will result in “draconian consequences for a blameless party.”⁶² He also adds that his colleagues “had no superior or appellate function to perform,” and, as such, did not have jurisdiction to make the decision they did. “Although my colleagues appear to acknowledge that it is my exclusive right to decide whether a reasonable apprehension of bias has been established … their decisions conflict directly with mine on these very issues.”⁶³ “Such intrusions,” he adds, “do not contribute to the proper resolution of issues such as these.”⁶⁴

The majority, interestingly enough, avoids discussing the particular circumstances and events which were alleged to have created an apprehension of bias on the part of Justice Matlow. In fact, it is the sheer notoriety surrounding of the original hearing that seems to be the most important factor weighed by the majority in reaching their decision. The majority acknowledges the publicity swirling about the case before emphasizing that the concepts of impartiality and independence “are tied to individual and public confidence in the administration of justice.”⁶⁵ “Perception in the minds eye of the public and the litigants,” the majority observes at one point, “is of unique importance in this case.”⁶⁶

The majority also takes issue with Justice Matlow’s claim that it is acceptable for a judge to enter public or political debate at all, and asserts the paramount importance of judges “[striving] to ensure that their conduct, both in and out of court, maintains, and enhances confidence in their impartiality and that of the judiciary.”⁶⁷ For the majority, a judge should be wary of entering into any public discourse which may find its way to court for fear of compromising the public’s perception of the judiciary’s ability to hear the matter in a neutral, objective manner:

A judge speaking about a matter likely to come before the court harms both the judiciary as a whole and the sound administration of justice. Such conduct undoubtedly gives rise to a reasonable suspicion by litigants that if it came to a hearing the matter would probably not be handled with complete impartiality.⁶⁸

The majority’s legal justification for ordering a new panel by which the application could be heard de novo is, however, quite novel. Notably, the majority does not address Justice Matlow’s argument that the majority of the unanimous court would have carried the day regardless of whether or not Justice Matlow had recused himself. Instead, they cite an academic article which quotes an “argument” by Sir Anthony Mason, the former Chief Justice of the High Court of Australia:

[Judges of the same panel] cannot “order” [the challenged] judge to stand down. No doubt, the challenged judge will discuss the matter with his colleagues and seek their views. But if the most that fellow judges can do is to make informal suggestions, then the problem of ensuring that the court is properly constituted has to be approached from another angle. The only practical solution seems to be that a fellow judge who conscientiously believes that the impugned judge ought to stand down and wrongly refuses ought himself to stand down on the ground that he believes that the matter is proceeding in breach of the principles of justice.⁶⁹

Thus while the majority refuses to recuse Justice Matlow on the grounds that “it is not for [them]” to do so, it nevertheless orders the panel itself be struck because they find a reasonable perception of bias. De facto, then, this case arguably stands for the proposition that judges of a collegial court can, in fact, consider whether or not a fellow panel member ought to recuse himself and grant relief to the moving party, if required.

Henco Industries Ltd. v. Haudenosaunee Six Nations Confederacy Council⁷⁰

Perhaps the most sensational case in the news recently about a judge appearing to act according to extra-judicial reasoning is Henco Industries Ltd. v. Haudenosaunee Six Nations Confederacy Council.⁷¹ An apprehension of bias was cursorily dismissed by Justice Marshall early on in the case and no further allegations of bias were made by any party. The case, however, eventually unfolded in such a way that would illustrate why decision-makers should put the appearance of neutrality ahead of even well-intentioned motivations and be careful to exercise their discretion within the limits of the law.

The facts of the case are straightforward. In February 2006, a group of native protestors blockaded a large construction site in Caledonia. The court⁷² granted the applicant developer, Henco Industries, an injunction and issued an order requiring the protestors to leave by March 10, 2006. The protestors remained, and, a week later, the court found them in criminal contempt of court. The protesters did not leave. Some time later, and after much unrest, the applicant sold its land to the government and applied to the court to have the original order set aside. The government supported the application and wanted to allow the protestors to continue the occupation peacefully.

While the reasons of Justice Matlow in Save Our St. Clair were, at times, somewhat emotionally charged, the legal reasoning was very sound. The decision of Justice Marshall was, on the other hand, very strange from a legal perspective. First, he refused to dissolve the injunction until the court’s order for criminal contempt was disposed of. In his view,

[j]ust because Henco Ltd. and in this case, the Attorney General of Ontario and the Ontario Provincial Police are no longer interested in the enforcement of the injunction, this court is entitled to continue the prosecution of the case for the reason that defiance of court orders transfers the conduct in question from a mere civil contempt to the realm of public depreciation of the authority of the court and tends to bring the administration of justice into scorn.⁷³

In support of his decision, Justice Marshall noted that the sale of the property to the Crown should not affect the court’s efforts in continuing with the criminal contempt. “Surely,” Justice Marshall opined, “the injunction continues with the property till the court dissolves it – if the law were otherwise – an injunction could be defeated by transferring ownership.”⁷⁴

Second, Justice Marshall directed in his oral reasons of the August 8, 2006 decision that “there should be no further negotiations [between the Crown and the natives] until the barricades are lifted and the occupation is ended.”⁷⁵

On August 22, 2006, the Ontario Court of Appeal heard a motion to stay the order of Justice Marshall dated August 8, 2006 and would stay the order which delayed the dissolution of the injunction until the criminal contempt had been disposed of. In doing so, the Court of Appeal noted that Justice Marshall seemed to deal with the injunction issue as though the province was a defendant in the litigation. The court asserted that, contrary to Justice Marshall’s opinion, injunctions are personal orders and do not run with the land.⁷⁶ Having bought the property from Henco, the province “now stood in Henco’s shoes” and, as such, had a right to say whether or not it wished to continue enjoying the benefit of the injunction.⁷⁷ After all, the Court of Appeal pointed out, an injunction is for the benefit of the applicant.

Notably, the court conspicuously skirted the obvious issue of Justice Marshall overstepping his jurisdiction and issued an endorsement which simply emphasized that there was no formal order of Justice Marshall instructing the parties to cease negotiations. In order to dispel any confusion, however, the Appeal Court added that the “parties should be free to continue to negotiate if they choose to do so without fear of being in breach or contempt of a court order. To be clear the order of Justice Marshall does not preclude continued negotiations.”⁷⁸

The case would not have drawn the attention it did in the media, however, had there simply been mistakes in law. The legal leaps of Justice Marshall in his formal and oral judgments – each of which seemed squarely aimed at dissuading the natives from continuing their protest – were made suspect by his personal background. Justice Marshall, by his own admission, was very close to the community in which the case was heard. “I came back [to Cayuga],” he is quoted as saying in a recent Globe and Mail report, “because my roots are so deep here.”⁷⁹ He also owns hundreds of acres of land in the county.⁸⁰

Disconcertingly, this attachment could arguably be gleaned from the decision itself. Justice Marshall opens his judgment with what could safely be said to be a sentimental description of Cayuga as a “beautiful land” and “peaceful place” with a “large slow river” and a “clement climate [m]uch more kind than the rest of Canada.”⁸¹ Later, Justice Marshall notes how the citizens of Cayuga, “after 5 months of occupation, have seen security in their town replaced by lawlessness; protestors in battle fatigues, police officers in riot gear, and uncertainty of their future. Their property values reduced…”⁸² Perhaps most notably, Justice Marshall seems to be acting of his own accord throughout. After all, he called both parties to court to continue an injunction which neither party before him wanted any longer, and the decision, which is permeated with urgency and punctuated by many emphatic, one-sentence paragraphs, seems strangely focussed on affirming the court’s ability to enforce, single-handedly, what Justice Marshall refers to several times as “The Rule of Law.”⁸³ All of this did not go unnoticed by the media or the legal community. University of Toronto Professor Lorne Sossin comments thus:

The more you find out [about Judge Marshall’s background], the more questions are raised about where we draw the line about being of a community in which you preside as judge and having an interest in cases coming before you. The last connection I would draw is puzzlement over a judge acting so much on his own initiative in this case, and the closeness of identification with the community. And I wouldn’t say that those add up to bias or an improper action on his part, but they start to raise questions.⁸⁴

Indeed, when, at paragraph six of his judgment, Justice Marshall asks, “who is responsible for upholding the Rule of Law? The answer, of course is, each of us. I and each of my neighbours are equally responsible,” one cannot help but ask if he is writing as a concerned citizen of Cayuga or the neutral, third party that our judicial tradition demands of him to be.

Conclusion

As the Supreme Court noted in Wewaykum, supra, the impartiality of the courts “has been a matter of renewed attention across the common law world over the past decade.”⁸⁵ This is perhaps no more true than in Canada. Our multicultural society has come to define itself by the protection it affords minority cultures, and, as decision-makers at all levels are relied upon to promote and cultivate this ideal; their objectivity will likely continue to come under greater scrutiny in the future.

The best way for the courts to avoid allegations of bias is for both lawyers and judges to familiarize themselves with the growing jurisprudence on the topic so they can make parties aware of potential conflicts before they delay or discredit the adjudicative process. As this paper has illustrated, this will often involve far more than a theoretical or textbook understanding of the concept of impartiality. Context will continue to play a key role. This said, however, the legal community as a whole should remain cognizant of the kinds of bias that can arise in a decision-maker – such as those stemming from business relationships, lack of independence, prior adjudication or knowledge of a case – and exercise due caution when encountering them. It is the legal community itself, after all, which can best preserve its reputation and role within our democratic society.

* Barbara A. McIsaac, Q.C., McCarthy Tétrault LLP, (613) 238-2105, bmcisaac@mccarthy.ca.

Anthony Moffatt, Student-at-Law, McCarthy Tétrault LLP, (613) 238-2177, amoffatt@mccarthy.ca.

¹ Aristotle, The Politics, trans. Stephen Everson (New York: Cambridge Univ. Press, 1988), III, 1287a27-33 at 78.
² From the Latin ratio, rationis, (f). The seventh edition of Black’s Law Dictionary at 1269 defines “ratio decidendi” as meaning, literally, “the reason for deciding.”
³ L.L. Fuller, “The Forms and Limits of Adjudication” [1978] Harv. L.R. 352 at 364.
⁴ The internecine debate among law scholars has produced many labels by which they identify themselves, such as “realist,” “attitudinal,” or “strategic.” Here, however, I use the broad term “behaviouralist” to refer to those scholars who explore the extra-legal factors behind judicial decisions.
⁵ Nancy Maveety, “The Study of Judicial Behaviour” in Nancy Maveety, ed. The Pioneers of Judicial Behaviour (Ann Arbor: University of Michigan Press, 2003) at 2.
⁶ Sara C. Benesh, “Harold J. Spaeth: The Supreme Court Computer” in Maveety, supra note 4 at 128.
⁷ In the words of one commentator, for example, certain “sophisticated legal scholars” believed that if doctrine was not to be seen as the foundation of judicial decisions, commentators would become “doomed to spend their professional lives presenting the opinions as smoke screens for judges’ economic, social, personal, and political preferences.” Laura Kalman, The Strange Career of Legal Liberalism (New Haven: Yale University press, 1996) at 47.
⁸ Benesh, supra note 6 at 119.
⁹ Harold J. Spaeth, letter to Schubert, May 8, 1961, as quoted in Sara C. Benesh, supra note 6 at 119.
¹⁰ Bora Laskin, “The Role and Functions of the Final Appellate Courts: The Supreme Court of Canada” in F.L. Morton, ed. Law, Politics and the Judicial System in Canada (Calgary: University of Calgary Press, 1984) at 52.
¹¹ Randall P.H. Balcome et al. “Supreme Court of Canada Decision Making: The Benchmarks of Rand, Kerwin, and Martland” (Toronto: Carswell, 1990) at 349 [hereinafter Benchmarks]. It could be said that Chief Justice Laskin’s remark here is especially coy because the B.N.A. Act which is supposed to “guide” the court in federalism cases is over a century old, cannot be amended, and simply does not contemplate many of the legislative issues that face the courts today.
¹² Benchmarks, supra note 11 at 261.
¹³ Benchmarks, supra note 11 at 267.
¹⁴ This is far from merely a Canadian concern. In Wewaykum, infra note 19 at para. 57, the court noted that the impartiality of the courts “has been a matter of renewed attention across the common law world over the past decade.”
¹⁵ [1978] 1 S.C.R. 369 [hereinafter Committee for Justice].
¹⁶ Committee for Justice, supra note 15 at 394-395. de Grandpré dissented in Committee for Justice on the grounds that, inter alia, the majority held a standard to a Board similar to that which is applied to a judge. “While the basic principle that natural justice must be rendered is the same,” de Grandpré J. observed, “its application must take into account the special circumstances of the tribunal.”
¹⁷ Baker v. Canada (Minister of Citizenship and Immigration) [1999] 2 S.C.R. 817 [hereinafter Baker].
¹⁸ Baker, supra note 17 at para. 21.
¹⁹ [2003] 2 S.C.R. 259 [hereinafter Wewaykum].
²⁰ Wewaykum, supra note 19 at para. 16.
²¹ Wewaykum, supra note 19at para. 47.
²² Wewaykum, supra note 19 at para. 48.
²³ Wewaykum, supra note 19 at para. 48.
²⁴ Wewaykum, supra note 19 at paras. 47-48.
²⁵ Wewaykum, supra note 19 at paras. 71-72.
²⁶ Wewaykum, supra note 19 at para. 76.
²⁷ Wewaykum, supra note 19 at para. 76 as quoted in Committee for Justice, supra note 15 at p. 395.
²⁸ Wewaykum, supra note 19 at para. 76.
²⁹ Wewaykum, supra note 19 at para. 83.
³⁰ Wewaykum, supra note 19 at para. 84.
³¹ Wewaykum, supra note 19 at para. 84.
³² [2000] Q.B. 451 [hereinafter Locabail].
³³ Locabail, supra note 32 at 480 as quoted in Wewaykum, supra note 19 at para. 86.
³⁴ Wewaykum, supra note 19 at para. 92.
³⁵ Wewaykum, supra note 19 at para. 93.
³⁶ [2005] S.C.J. No. 40 [hereinafter Mugesera].
³⁷ Mugesera, supra note 36 at 14.
³⁸ Mugesera, supra note 36 at para. 15.
³⁹ Hewart, C.J. in R. v. Sussex Justices Ex p. McCarthy [1924] 1 K.B. 256 at 259 (Q.B.D.)
⁴⁰ Wewaykum, supra note 19 at para. 62.
⁴¹ Mugesera, supra note 36 at para. 15.
⁴² Mugesera, supra note 36 at para. 16.
⁴³ (2005) 78 O.R. (3d) 331 [hereinafter Save Our St. Clair].
⁴⁴ Save Our St. Clair, supra note 43 at para. 21. (Note that the reasons of the majority and minority of the court numbered their paragraphs separately.)
⁴⁵ Save Our St. Clair, supra note 43 at para. 19.
⁴⁶ Save Our St. Clair, supra note 43 at para. 27.
⁴⁷ [1986] 1 F.C. 103 (Fed. C.A.) [hereinafter Atomic Energy].
⁴⁸ [241 D.L.R. (4th) 685 [hereinafter Eckervogt].
⁴⁹ Eckervogt, supra note 48 at para. 48 as quoted in Save Our St. Clair, supra note 43 at para. 38.
⁵⁰ Atomic Energy, supra note 47 as quoted in Halsbury’s Laws of England (4th ed.) volume 1 at 87 (Emphasis mine).
⁵¹ [1966] S.C.R. 367.
⁵² at p. 372 as quoted in Atomic Energy, supra note 47
⁵³ Save Our St. Clair, supra note 43 at para. 19.
⁵⁴ Save Our St. Clair, supra note 43 at para. 29.
⁵⁵ Save Our St. Clair, supra note 43 at para. 32. Justice Matlow also states that the moving parties were free to “raise the issue with [him] and invite me to provide correct information about [his] conduct…”
⁵⁶ Save Our St. Clair, supra note 43 at paras 40-55.
⁵⁷ R. v. S. (R. D.) [1997] 3 S.C.R. at paras. 111 and 113 per L’Heureux-Dubé and McLachlin JJ. as quoted in Save Our St. Clair, supra note 43 at para. 64.
⁵⁸ Save Our St. Clair, supra note 43 at para. 65.
⁵⁹ Save Our St. Clair, supra note 43 at para. 46.
⁶⁰ Save Our St. Clair, supra note 43 at para. 46.
⁶¹ Wewaykum, supra note 21 at para. 93 as quoted in Save Our St. Clair, supra note 45 at para. 108.
⁶² Save Our St. Clair, supra note 43 at para. 113.
⁶³ Save Our St. Clair, supra note 43 at para. 116.
⁶⁴ Save Our St. Clair, supra note 43 at para. 116.
⁶⁵ Save Our St. Clair, supra note 43 at para. 15.
⁶⁶ Save Our St. Clair, supra note 43 at para. 13.
⁶⁷ Save Our St. Clair, supra note 43 at para. 14.
⁶⁸ “The Flynn Report,” Canadian Judicial Council (December 12, 2002) at paragraph 59 as quoted in Save Our St. Clair, supra note 43 at para. 16. Compare this proposition with Matlow’s argument, cited above; that a judge can enter a public debate so long as he recuses himself from any participation in any litigation arising from the debated matter.
⁶⁹ Geoffrey Lester, Disqualifying Judges for Bias and Reasonable Apprehension of Bias: Some Problems of Practice and Procedure (July 2001) 24 Advocates’ Quarterly at 338-339 as quoted in Save Our St. Clair, supra note 43 at para. 20.
⁷⁰ [2006] O.J. No. 3285 [hereinafter Henco].
⁷¹ Henco, supra note 43.
⁷² On March 9th, 2006, Justice Marshall made permanent an interlocutory injunction granted by Justice Matheson. (Conversation with Cayuga, Ontario Courthouse Registrar, Friday, September 29th, 2006).
⁷³ Henco, supra note 70 at para. 43.
⁷⁴ Henco, supra note 70 at para. 81.
⁷⁵ Henco Industries Ltd. v. Haudenosaunee Six Nations Confederacy Council [2006] O.J. No. 3285 (Q.L.) (Ct. of Appeal) [hereinafter Henco Appeal].
⁷⁶ Henco Appeal, supra note 75 at para. 15.
⁷⁷ Henco Appeal, supra note 75 at para. 14.
⁷⁸ Henco Appeal, supra, note 75 at para. 43.
⁷⁹ James Rusk, “Presiding over his home and native land” Globe and Mail, August 21, 2006, Section Front. Online: http://www.theglobeandmail.com/servlet/story/LAC.20060821.JUDGE21/TPStory/National [hereinafter Presiding over Native Land].
⁸⁰ Presiding over Native Land, supra note 79 at p. 3 (online)
⁸¹ Henco, supra note 70 at paras. 14-15.
⁸² Henco, supra note 70 at para 75.
⁸³ Paragraph 10, for example, reads: “Consider this statement by the Chief Justice of Canada’s Supreme Court: “In the constitutional arrangements passed on to us by the British and recognized by the pre-amble to the Constitution Act 1867, the provincial superior courts are the foundation of the rule of law itself.” This is quoted from MacMillan Bloedel Ltd. v. Simpson [1995] 4 S.C.R. 725 at p. 753. The emphasis, although not noted in the judgment, is Justice Marshall’s.
⁸⁴ Presiding over Native Land, supra note 79 at p. 3 (online)
⁸⁵ Wewaykum, supra note 19 at para. 57.

 

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Constitutional, Civil Liberties and Human Rights

Supreme Court Rejects Challenge to B.C. Tax on Legal Services

David A. Wright*

In its decision in British Columbia (Attorney General) v. Christie, 2007 SCC 21, released on May 25, 2007, the Supreme Court of Canada overturned a decision of the British Columbia Court of Appeal that found that British Columbia’s tax on legal services was unconstitutional.  In doing so, the Court rejected the respondent’s argument that there is a general constitutional right to legal representation in proceedings before courts and tribunals.

The case was brought by Vancouver lawyer Dugald Christie, who was tragically killed in an accident prior to the Supreme Court hearing while cycling across Canada to raise money on the issue.  Christie worked with poor and low-income people in Vancouver and was required to remit the tax, even if he was unable to collect his bills.  The chambers judge found as facts that some of his clients could not obtain needed legal services if he did not act for them, that if he were to charge them his hourly rate plus the tax, they could not pay him, and that if he is not paid the minimum amount which he charges in most of his cases he could not continue to practice law.  As a result, she found that in some cases of low-income clients, the tax denies access to justice.

Both the chambers judge and the Court of Appeal held that there is a constitutional right to access to justice.  The Court of Appeal found that this included “the opportunity to obtain legal services from qualified professionals, that are related to the determination and interpretation of legal rights and obligations by courts of law or other independent tribunals”. 

The Supreme Court, however, rejected the argument that such a general right exists.  It held that while there is a constitutional right to legal counsel in specific situations, namely under s. 10 (b) “on arrest or detention”, and under s. 7 in certain circumstances where an individual’s life, liberty, or security of the person is affected (New Brunswick (Minister of Health and Community Services) v. G. (J.), [1999] 3 S.C.R. 46), there is no right to representation in all circumstances where rights and obligations are at stake.

In finding that there is no such general right, the Court did not accept several arguments made by the respondent.  It rejected the idea that the rule of law, a central principle of the constitution, founds a general right, noting that the broad right would be inconsistent with the inclusion of a specific right in s. 10 (b) and the limited rights recognized under s. 7, and that it had not historically been recognized as a component of the rule of law.  It also found that the general right of physical access to courts recognized in B.C.G.E.U. v. British Columbia (Attorney General), [1988] 2 S.C.R. 214 does not mean that any legislated conditions on how and when people access courts are unconstitutional.  However, the Court did leave open the possibility that a right to counsel might be recognized in specific circumstances and suggested that it may exist in situations other than under ss. 10 (b) and 7.

The Court also questioned the finding that there is a necessary connection between an increase in the cost of legal services and access, suggesting that the evidentiary record in this case was insufficient to support the inference the respondent put forward.

The Court’s decision makes clear that while there is no general right of access to legal services, the questions of when and whether such a right may exist in a specific case, and what types of government actions may infringe this right, are left for another day.  In particular, the Court did not foreclose the possibility that the constitution, and in particular its guarantee of the rule of law, may provide a constitutional right to access to legal services in some circumstances.

The Court, therefore, has left open the possibility of development of the unwritten principles of the constitution articulated in cases such as Reference re Secession of Quebec, [1998] 2 S.C.R. 217 and Reference re Remuneration of Judges of the Provincial Court (P.E.I.), [1997] 3 S.C.R. 3 to address issues of access to justice.  Whether and to what extent these principles are developed will be of interest and significance in the coming years.

* David A. Wright, Human Rights Tribunal of Ontario, (416) 212-6875, david.a.wright@ontario.ca.  David is the Chair of the Constitutional, Civil Liberties and Human Rights Section, 2006-2007. 

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Construction Law

Mortgage Priorities under the Construction Lien Act

Gregory D. Hersen*

Whether you are a general practitioner who is requested to provide advice on the occasional real estate transaction or construction lien file, or if your practice specializes in construction, banking, commercial, insolvency, real estate, or any other area that involves real property law, it is important to recognize and understand the mortgage priorities codified within the Construction Lien Act R.S.O. 1990, c. C.30 as amended (“CLA”).  Understanding these priorities is critical to your ability to protect your client’s rights and interests in a situation where liens have arisen.

Section 78 of the CLA sets out the priorities which apply as between construction liens and mortgages.  The overarching rule established by s. 78 is that, unless otherwise specifically provided in that section, “the liens arising from an improvement have priority over all conveyances, mortgages or other agreements affecting the owner’s interest in the premises.”  Section 78 then goes on to identify the specific exceptions to this general rule.

There are a number of factors which are relevant to determining priorities under s. 78 of the CLA.  These include the purpose for which the mortgage is taken, and the dates on which the mortgage is registered and funds are advanced in relation to when the first lien arises on an improvement.

Section 78 of the CLA distinguishes between “building mortgages,” which are mortgages taken to secure the financing of an improvement to the premises, and those taken for other purposes. Liens arising from an improvement have priority over a building mortgage to the extent of any deficiency in the holdbacks required to be retained by the owner.   The section also distinguishes between mortgages registered prior to the date the first lien arose on an improvement, and those registered after that date. 

A “prior mortgage” is one that is taken and registered in advance of the time that a lien claimant first supplies services or materials to an improvement.  The priority of a lien over a “prior mortgage” is affected by the actual value of the premises at the time that the first lien arose and whether advances were made before, or after, the first lien arose.

A “subsequent mortgage” is one that is taken and registered after the first lien arose in relation to the improvement.  Lien claimants are given priority over “subsequent mortgages” to the extent of any deficiency in the holdbacks required to be retained by the owner.  Subsequent mortgages will generally have priority over any liens provided that at the time of any advance, there was not a preserved or perfected lien against the premises, and that the advance was not made in the face of a written notice of lien. 

A lien claimant will have priority over a mortgage to the full value of its lien if a mortgage advance is made in the face of a written notice of lien or a preserved or perfected lien.

When dealing with a situation where an improvement to land has received funding through mortgage financing and liens have arisen, a detailed review of the mortgage priority provisions of s. 78 of the CLA should be made.

* Gregory D. Hersen, Torkin Manes Cohen Arbus LLP, (416) 777-5400, ghersen@torkinmanes.com.  Gregory is the Chair of the Construction Law Section, 2006-2007.

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Criminal Justice

Membership in the Criminal Justice Section 

Eric Siebenmorgen*

These are some thoughts concerning my experience as a member of the Ontario Bar Association, and specifically the Criminal Justice Section.

I have enjoyed the privilege of being a member of the Section since the autumn of 2000. Prior to that year, I had been an active member of the Ontario Crown Attorneys’ Association (OCAA), serving on that Association’s Board of Directors and on its Education Committee.

While I enjoyed (and still do enjoy) the professional and educational opportunities that I share with my fellow Crown counsel, I also sensed the need to become involved in joint activities with my colleagues in the defence bar, who also share a passion to serve the public through the administration of criminal justice. As a result of a personal invitation from a like-minded colleague who was at that time on the Executive of the OBA’s Criminal Justice Section, I decided to attend a meeting and then joined the Section. I have never regretted that decision!

The Criminal Justice Section provides an environment where criminal lawyers can simply be criminal lawyers, without necessarily having to wear the label of “Crown” or “defence.” Each lawyer, judge or law student brings her or his unique perspective to bear upon the discussions at hand. Our varying experiences, taken from the particular work we do in the criminal justice system, inform our insights and ideas. We have an opportunity to challenge our own presuppositions, and those of our colleagues. As a result of listening to each other, our collective understanding of the particular subject of discussion is enhanced. Similarly, our own thinking about issues and problems confronting the administration of justice is informed and enriched by listening to the perspectives of others. Of even greater significance, understanding of one another grows, and solid working relationships and friendships are forged.

Within the Criminal Justice Section, we embrace the proposition that reasonable people can and do legitimately disagree on matters of both law and policy, and that it is not always necessary to present a single position on a particular issue. It is occasionally entirely appropriate to express the view that there are two (or more) points of view, and that there are sound reasons supporting each.

My involvement with the Criminal Justice Section has truly been an enriching experience. It is a great forum for dismantling the barriers to effective communication that can develop between Crown and defence counsel. Effective communication increases mutual understanding and appreciation for each other’s roles and work, with the result that relationships of trust and genuine friendship can be cultivated.

* Eric Siebenmorgen, Chief Counsel, Office of the Chief Coroner, (416) 314-4013, Eric.Siebenmorgen@ontario.ca.  Eric is the CLE Liaison of the Criminal Justice Section, 2006-2007.

 

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Education Law

Update from the Education Law Section

Melanie Warner*

To that end, we hosted or co-hosted three successful dinner meetings for our members and their guests this year. On October 11, 2006, we jointly hosted a dinner meeting called “A Discriminatory Code but Equal Health Services: Section 15 and the Autism Litigation” with the Constitutional, Civil Liberties and Human Rights Section. The panel was comprised of noted legal authorities in this field: Robin Basu (Ministry of the Attorney General), Alyssa Case (Ontario Human Rights Commission), Mary Eberts (lawyer for children with autism and their families), and Bruce Ryder (Professor, Osgoode Hall Law School). The panellists reviewed and offered their opinions on the recent Wynberg v. Ontario, Auton v. British Columbia, and Arzem v. Ontario cases.

On December 6, 2006, MPP Liz Sandals, Chair of Ontario’s Safe Schools Action Team, was the guest of honour at our Education Law dinner meeting entitled “Spotlight on Safe Schools”. Ms. Sandals reported that her Team’s consultations had revealed widespread misunderstandings about the safe schools provisions of the Education Act, and recommended changes to the legislation including a “preferred strategy” of progressive discipline. Many of Ms. Sandals’ comments and her Team’s conclusions are now reflected in Bill 212.

Finally, on May 23, 2007, our dinner meeting featured a panel of three experts on the issue of cyber-bullying: Lee Ann Chapman (Justice for Children and Youth), Collette Dowhaniuk (Protective Services Consultant at Ontario Principals’ Council) and Eric Roher (Borden Ladner Gervais LLP). Our panellists gave a thorough overview of the impact of cyber-bullying on students and staff, legal tools to address it, and practical strategies for educators.

Also this year, the Education Law Section hosted a half-day program at the OBA’s 2007 Institute of Continuing Legal Education. Our program featured a series of fast-paced and current sessions focussing on new and significant legislation in the education sector, new developments in privacy in the education sector, safety and security for staff and students in schools, top issues in special education, legal challenges inherent in supervision of students, and the five most significant court/arbitration decisions affecting education labour law. Guest speakers included education lawyers from both the public and private sectors, along with senior educators and a member of the Ontario Provincial Stability Commission.

The Education Law Section was also honoured this year to participate in a Law Day event sponsored by the Constitutional, Civil Liberties and Human Rights Section, held on April 17, 2007. The event was called “The Charter and You”, and was attended by approximately 125 Grade 10 and 11 students from five high schools across Toronto. The day’s events included various games and activities to develop and test students’ knowledge of the Charter, student debates on freedom of expression, an information session on being a lawyer, and guest speakers Dr. Justine Blainey-Broker, Robbie Barnett-Kemper, and Gurbaj Multani, all of whom were involved in successful Charter and/or human rights challenges as children.

We have also published four newsletters this year, in September 2006, November 2006, January 2007 and April 2007. Our newsletters focus on timely and provocative issues and cases of interest to education lawyers and educators.

In summary, it has been a positive and productive year for our Education Law Section, and we would like to thank all of those people who contribute to our success, including our members and those who attend our various functions and read our newsletters. Our goal is to provide meaningful and useful information about the developments in education law, and to get people interested in this exciting area of the law.

Finally, on a personal note, I would like to thank the other members of the 2006-2007 Education Law Section Executive, who are: Rob Weir, Nadya Tymochenko, Robert Brent, Brenda Stokes-Verworn, John Sullens, Sarah Colman, Rod Flynn, Jason Green, Michelle Henry, Hugh Kelly, Paul Marshall, Casey Picard, Elisabeth Scarff, Claire Vachon, and John Woon. Our OBA Staff Liaison, Janet Green, has also been an extraordinary help to us.

We look forward to another successful year in 2007-2008, with Nadya Tymochenko as our new Chair! Please join us!

* Melanie Warner, Borden Ladner Gervais LLP, (416) 367-6679, mwarner@blgcanada.com.  Melanie is the Chair of the Education Law Section, 2006-2007.

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Environmental Law

Proposed Rewrite of Property Clean-up Standards Could Chill Real Estate Development

Marc McAree*

 

These regulatory remediation standards, last amended in the 1990s, form the backbone of Ontario's brownfields regime. They determine clean-up standards required for filing a Record of Site Condition (RSC) on the Environmental Site Registry (ESR) (http://www.ene.gov.on.ca/environet/BESR/index.htm).

Under current law, municipalities cannot issue building permits for properties where land use will be changed to a more sensitive use, unless a RSC is filed, certifying that the property meets the standards. We are hearing from some in the scientific community that many of the proposed new standards are so stringent that they will be technically impossible to achieve, or owners will not be able to afford the cost to clean-up properties. Risk assessments may become more common but may also be even more difficult to obtain when the Standards become more stringent. Moreover, it is difficult for developers and owners to obtain conventional financing for risk assessed properties. And risk assessments require significant MOE review time – increased demand could result in significant project approval slowdowns given MOE’s limited staff and resources.

The Environmental Law Section submitted comments to the MOE about the proposal, pointing out a few key problems. The Section submission notes that up to half of the properties with RSCs filed on the ESR would not comply under the proposed new standards.

The proposed revisions, together with a 400+ page scientific rationale document, were recently posted for public comment – a public comment period that expired on May 22, 2007.

A quick comparison reveals that about 90 percent of the values have been revised, either upward or downward, to better reflect new science and levels that are protective of the environment and human health. Some of the proposed amendments are relatively minor, but others would see the decimal point shift one, two or even three places to the left … or the right. For example, the proposed new standard for the gasoline additive methyl tert-butyl ether (MTBE) in potable water would drop from 700 to 15 micrograms per litre (µg/L), while that for the chemical building block 2,4-dichlorophenol would rise from 0.3 to 900.0 µg/L. The proposed new standards for a commonly used degreaser solvent in prior decades, trichloroethylene (TCE), and a number of petroleum hydrocarbons in potable groundwater would be tightened by an order of magnitude or more.

To avoid disrupting site clean-ups and redevelopment work already underway, the MOE is proposing that the proposed new standards not take effect for 18 months after becoming law. RSCs that apply the current MOE Standards and file on the ESR within the transition period would be valid. Thereafter, all RSCs will have to be based on the proposed new standards. Developing site specific, risk-based standards, or using formal risk assessments would remain as options.

Environmental engineers have also expressed concern that some of the proposed new standards are not technically justified, or are below levels that can be measured using today’s standard laboratory technology. Some engineering, chemical and toxicology consultants report serious questions about the science behind some of the proposed new standards, and about the translation of this science into the numbers proposed as new standards.

According to the Ministry of Municipal Affairs and Housing Brownfields Ontario newsletter (May 2007), the MOE has:

commissioned an expert review of the science and methodology that was used to develop the standards and will be reviewing the resulting report over the next few months. The MOE is committed to working with stakeholders over the coming months to address issues raised during the recent standards consultations.

The Environmental Law Section will continue to track all new developments involving Ontario’s Brownfields laws. Stay tuned!

* Marc McAree, Willms & Shier Environmental Lawyers LLP, (416) 862-4820, mmcaree@willmsshier.com. Marc is the Chair of the Environmental Law Section, 2006-2007.

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Family Law 

Key Estate Issues for Family Law Practitioners

Part II: Deductions and Joint Tenancies

Jordan M. Atin*

A. Life Insured Loans

The husband died having, on the day before death, mortgage loans, personal loans and lines of credit. The fact that the loans were paid off with insurance proceeds does not detract from the fact that the loans were in existence on the valuation date, being the date before death. Therefore, the loans were a valid deduction in determining the net family property.²⁵

B. Government Loans

The testator was advanced funds from a government training program called, “Jobs Ontario”. The testator had arranged for training of the employees, but the full training had not been completed. Based on an assessment, Jobs Ontario took the position that ½ of the advance was repayable. However, the fact that the evidence was uncertain and vague as to the extent of the deceased’s obligation and that 4 years had elapsed and still no demand had been made by Jobs Ontario for repayment, the Court determined that that obligation did not qualify as a debt to be deducted.²⁶

C. Testamentary Expenses

Estate administration expenses are not, generally, permitted to be deducted since they do not exist on the valuation date, being the day before death.²⁷

“PROPERTY” THAT DOES NOT AFFECT NFP

Certain potential “property” has been considered by the Courts not to have an effect on net family property.

A. Government Support

The testator had agreed with the municipality to pay the costs of the wife residing in the nursing
home. The Court concluded that the value of being maintained at the home was not to be included in the wife’s family property.²⁸

B. Right of Survivorship

A right of survivorship has been considered not to affect the surviving spouse’s net family property.²⁹ However, the Court stated in obiter that if the right of survivorship did have a value, it was off-set by the other (now deceased) spouse’s similar right of survivorship. If hindsight is permitted in valuing property, this “set-off” may not be proper. The valuation of the right of survivorship takes place on the day before the date of death. If we can use hindsight, we are aware that the next day, the deceased joint tenant passes away. This would suggest that the surviving joint tenant’s right of survivorship is worth significantly more than the deceased’s joint tenants corresponding right.

For a comprehensive and excellent discussion of deductions, exclusions and inclusions, see Robert Halpern’s paper, “Splitting the Pie: Dividing Assets When Married and Unmarried Parties Separate”.³⁰


OCCUPATION RENT

Pursuant to section 26(2) of the Family Law Act, a surviving spouse has the right to occupy a matrimonial home for 60 days after the death of the spouse, rent free.

26(2) Despite clauses 19(2)(a) and (b) (termination of spouse’s right of possession), a spouse who has no interest in a matrimonial home but is occupying it at the time of the other spouse’s death, whether under an order for exclusive possession or otherwise, is entitled to retain possession against the spouse’s estate, rent free for 60 days after the spouse’s death.

What happens after those 60 days expire? There are a number of cases which have dealt with the ability of the Estate to recover occupation rent after the death of the spouse. The Court will normally consider a number of factors, such as when the claim was first raised, the duration of the occupancy, the inability of the Estate to access the equity in the property and other competing claims for adjustment or compensation. In Szuflita, the Court held that the wife would be held responsible for a compensatory sum to the Estate in the amount of $750.00 per month for her occupation of the matrimonial home. The Court did point out that the Estate had received some benefit during the wife’s occupation as her possession of the property had acted to preserve the assets and protect them from deterioration or vandalism. Other cases which consider the possibility of occupation rent upon the death of a spouse, include Horne v. Horne Estate,³¹ Foffano v. Foffano,³² Irrsack v. Irrsack³³ and Higgins v. Higgins.³⁴


SEVERANCE OF JOINT TENANCIES**

Estate practitioners should never presume, without further investigation, that property originally held in joint tenancy remained so at the date of death, particularly in the case of separated spouses. It is quite possible that the joint tenancy has been converted, intentionally or inadvertently, to a tenancy-in-common, thereby significantly affecting post mortem entitlement. If a joint tenancy has not been severed prior to a joint tenant’s death, the property is thereafter owned by the surviving joint tenant(s), to the exclusion of the beneficiaries or heirs at law of the deceased joint tenant’s estate. If severed, a tenancy-in-common results and the deceased’s share falls into his or her estate for distribution to the beneficiaries or heirs at law.

A joint tenancy³⁵ can be severed in one of three ways:³⁶

1. by unilateral conveyance of the property by one of the joint tenants;
2. by mutual agreement of all the joint tenants; or
3. by a course of conduct indicating the joint tenants’ mutual intention to treat the joint tenancy as severed.

1. Unilateral Conveyance

Subject to family law legislation, a joint tenant has the right to sever unilaterally a joint tenancy³⁷ by conveyance of his or her interest in the property to a third party or to himself or herself.³⁸ Such a conveyance destroys the unity of title and, consequently, the joint tenancy. The Ontario Court of Appeal has confirmed that a spouse has an absolute right to convey his or her interest in a matrimonial home to himself or herself without the other spouse’s consent.³⁹ A search of title to real property will generally reveal whether a severance has been affected in this manner.⁴⁰

Some clients only want a severance to occur in the event that he or she dies first, but want to protect their own right to survivorship in the case that the other joint tenant predeceases. Sometimes, a transfer will be signed and deposited with the solicitor to be held until the death of the client and then registered. This may not be effective to sever the joint tenancy. To do so, there must be an immediate conveyance of interest, not merely a deferral of the transfer until her death.⁴¹

2. Mutual Agreement

A severance also occurs where all of the joint tenants enter into an agreement which specifically and expressly refers to a severance of the joint tenancy. Where, for example, a written separation agreement exists, but does not specifically address severance of a joint tenancy, courts generally require that the parties provide evidence of severance by mutual course of conduct.⁴²

3. By Mutual Course of Conduct

Where the parties cannot point to a deed or an agreement in writing, “a course of dealing sufficient to intimate that the interests of all were mutually treated as constituting a tenancy in common”⁴³ must be relied upon to prove⁴⁴ that a severance has occurred. For severance by course of conduct, there must be mutuality of intention to treat the tenancy as a tenancy-in-common. One joint tenant’s intention
“declared behind the backs of the others” is not sufficient to sever a joint tenancy.⁴⁵ Both joint tenants must openly and mutually treat the tenancy as a tenancy-in-common.

What actions are sufficient to “intimate” that the parties have a common intention to treat the tenancy as a tenancy-in-common? The courts have been reluctant to analyze strictly whether any of the “four unities” (title, interest, possession and time) has been destroyed, notwithstanding their frequent citation of the need for the unities in order to establish a joint tenancy in the first place.⁴⁶ Courts prefer to look at all of the circumstances to determine whether a common intention to treat the property as a tenancy-in-common exists.

Certain evidence which would appear to support an intention to continue a joint tenancy has been found not to be determinative of the issue. For example, neither the specific use of the term “joint tenancy” in an agreement⁴⁷ nor the fact that a joint tenant did not sever the tenancy by unilateral conveyance, despite having an opportunity to do so,⁴⁸ have been found to be persuasive.

Conversely, the following factors, while relevant, have been held not to constitute a severance on their own: separation of the parties,⁴⁹ divorce,⁵⁰ commencement of family law proceedings,⁵¹ delivery by one joint tenant of a writ of seizure and sale to the sheriff,⁵² the execution of dual (not mutual) wills,⁵³ exclusive de facto or de jure possession,⁵⁴ payment of property expenses by one tenant only,⁵⁵ and commencement of a partition application.⁵⁶

As noted above, separation of spouses itself does not automatically sever a joint tenancy.⁵⁷ However, other corollary factors relating to the separation may influence the court to find a severance. Evidence, such as maintaining a key to the property, whether both owners used the property after separation and whether there was a real possibility of resumption of cohabitation, will affect whether a severance is found to have occurred.⁵⁸ Orders for exclusive possession and petitions for partition and sale may also influence the decision of the court.⁵⁹

One factor that does appear to be decisive is the existence of a written agreement wherein the parties agree to either a purchase by one spouse of the other’s interest in the jointly held property, or a division of the proceeds of sale between the parties.⁶⁰ However, even where no agreement is reached on the disposition of the property, the courts have found that negotiations between the parties in respect of the property are sufficient evidence of an intention to treat the tenancy as a tenancy-in-common.

In Ginn v. Armstrong,⁶¹ the wife sent a letter to the husband requesting that the matrimonial home be sold to a third party and one-half of the proceeds be paid to her. In two counter-proposals, the husband sent proposed deeds to her, one transferring her interest to him and the other to their son, both of which she refused to sign. Notwithstanding the fact that there was no transfer of the property or agreement to sell, the court found a severance on the basis that “both of them looked upon her interest... as an undivided one-half interest only, that is to say, they mutually treated their interests as a tenancy in common”.⁶²

In Re Walters and Walters,⁶³ a joint tenancy was found to have been severed by the instructions given by joint tenants to their respective solicitors. An interim application for support had been adjourned. In a telephone conversation, counsel agreed to obtain valuations of the jointly-held property in order to calculate the extent of the parties’ financial interests. In a further conversation, the wife’s counsel, on instructions, offered to purchase the husband’s interest. Subsequently, the husband’s counsel rejected the offer and made a counter-offer to purchase the wife’s interest. Although the husband died before any agreement was reached, the court held that “the instructions given by the clients to their counsel” evidenced their mutual intention to treat the property as a tenancy-in-common.⁶⁴

Even negotiations between counsel which are acknowledged to be made on a without prejudice basis can lead to a severance of a jointly held property. In Robichaud v. Watson,⁶⁵ the solicitor for Ms. Watson wrote to Mr. Robichaud, the other joint tenant, to discuss obtaining his client’s equity out of the property. Mr. Robichaud retained a solicitor and counsel began negotiations aimed at settling the claim regarding the couple’s equity in the property. Mr. Robichaud’s cash buy-out offer was rejected by Ms. Watson and no further negotiations or legal proceedings were taken. The court found that the negotiations indicated that the parties regarded themselves as tenants-in-common, that their interests had been severed and that the only issue was the value of their respective interests. Consequently, the joint tenancy was found to be severed. Recently, in what may be considered a broadening of the test, a court stated that mutual intention by both parties to “cut all ties” between them was sufficient to sever a joint tenancy.⁶⁶

In one recent case, the court found that unilateral correspondence without response from the other party was also a factor in finding a severance. In Lam v. Le Estate⁶⁷ the wife’s counsel wrote to the estranged husband’s counsel as follows:

“I have received instructions from my client to make it absolutely clear that the property owned by the parties together at 1987 Burrows Avenue no longer constitutes a joint tenancy but is to be severed into a tenancy in common.

If necessary, I have her instructions to proceed with the appropriate documentation at an early date.”

No reply was sent by the husband’s counsel. That lack of response was seen by the court as a course of conduct on behalf of the husband. Thus, the court found a mutual course of conduct and found that the joint tenancy was severed.

The emerging trend appears to be towards the finding of a severance in cases of separated spouses. Consequently, it is extremely important for family law practitioners not to suggest to opposing counsel, even in passing, the purchase or sale of a jointly held property without clear instructions from the client to sever the joint tenancy. For the estate practitioner confronted with this problem, recourse must be had to a search of title, the papers of the deceased and, likely, to the spouses’ family law files, in order to determine whether a severance has occurred by conveyance, conduct or agreement.

* Jordan M. Atin, Barrister and Solicitor, (416) 369-0335, jatin@hullandhull.com.

²⁵ Patton v. Roach Estate, [1997] O.J. No. 4382 (G.D.)
²⁶ Patton v. Roach Estate, supra
²⁷ Bobyk v. Bobyk Estate (1993), 47 R.F.L. (3d) 310 (Ont. Gen. Div.) and Szuflita v. Szuflita Estate, supra
²⁸ Maw v. Maw Estate (1994), 6 E.T.R. (2d) 14 (O.C.G.D.)
²⁹ supra
³⁰ Law Society of Upper Canada 2002 and Jasmine Sweatman, “Family Law Issues for the Estate Planner”, supra
³¹ (1987) 60 O.R. 2nd 1 (C.A.)
³² (1996) 24 R.F.L. 4 398
³³ (1978) 22 O.R. 2nd 245
³⁴ (2001) 19 R.F.L. 5th 300
** This portion of the paper has been adapted and updated from my article “Severance of Joint Tenancies” in the Estates and Trusts Journal, Vol 16 No. 3 (1997).
³⁵ Joint Tenancy is dependent on the “four unities”, namely, interest, possession, title and time. A detailed explanation of the characteristics of joint tenancy is contained in Anger and Honsberger: Law of Real Property, ed. A.H. Oosterhoff and W.B. Rayner 2d ed. (Aurora, Ont: Canada Law Book, 1985) commencing at p.788.
³⁶ Williams v. Hensman, (1861), 70 E.R. 862 (V.-C.)
³⁷ Williams, note 2 at p. 867.
³⁸ For real property, this requires execution and delivery of a deed.
³⁹ Re Horne and Evans, (1987) 60. O.R. (2d) 1 (C.A.)
⁴⁰ Registration of an executed deed is a method of delivery, but is not necessarily required to effect the severance. See Stonehouse v. Attorney-General of British Columbia, (1962) 31 D.L.R. (2d) 118 (S.C.C.), Re Sorensen and Sorensen (1977), 90 D.L.R. (3d) 26 (Alta. C.A.) and Re Murdoch and Barry (1975), 10 O.R. (2d) 626 (H.C.J.) and Conveyancing and Law of Property R.S.O. 1990 c.C-34 s.41
⁴¹ Sorensen v. Sorensen, supra.
⁴² See Re McKee and National Trust Co. Ltd. (1975) 7 O.R. 614 (C.A.)
⁴³ Williams, note at p. 862
⁴⁴ The onus is always on the party who is seeking to establish the severance and the question is one of fact and evidence. See Re McKee, note 7
⁴⁵ Williams, note 2 at p. 867
⁴⁶ For example, see Robichaud v. Watson, (1983), 42 O.R. (2d) 38 (H.C.J.) at p. 44 and Re McKee, note 7 at p.616.
⁴⁷ Landon v. Blaskovits (January 31, 1986) Doc. Kelowna 84/871 (B.C.S.C.). A clause in a separation agreement stating that property was held jointly did not negate the finding of severance in the face of other operative provisions of the agreement indicating a severance.
⁴⁸ Sampaio Estate v. Sampaio (1992) 22 R.P.R. (2d) 314 (Ont. Gen. Div.), at p. 320; contra: see Dunn Estate v. Dunn, (1994) 2 R.F.L. (4th) 106 (Alta. Q.B.), at p. 113
⁴⁹ Rodrigue v. Dufton, (1976) 13 O.R. (2d) 613 (H.C.J.), Robichaud, note 11
⁵⁰ Dunn, note 13
⁵¹ Dunn, note 13
⁵² Power v. Grace, [1932] O.R. 357, (C.A.)
⁵³ Palmer Estate v. Cunningham (1985), 22 E.T.R. 8 (B.C.S.C.). In that case, the court found no evidence of mutuality even though both wills were executed at the same time. However, where joint tenants of property agree to make mutual wills and to dispose of their several interests in the property, and where they thereafter execute such wills, a severance of the joint tenancy there and then takes place and the property previously held in joint tenancy is converted into a tenancy in common, Szabo v. Boros (1967) 60 W.W.R. 754 (B.C.C.A.) AND Bryan v. Heath (1980) 108 D.L.R. (3d) 245 (B.C.S.C.)
⁵⁴ Robichaud, note 11, at p. 48, McKee, note 7, and Schofield v. Graham (1969), 6 D.L.R. (3d) 88 (Alta. S.C.)
⁵⁵ McKee, note 7, Robichaud, note 11
⁵⁶ Rodrigue, note 14 and Munroe v. Carlson, (1975) 59 D.L.R. (3d) 763 (B.C.S.C.)
⁵⁷ Lam v. Le Estate (2002), 25 R.F.L. (5th) 72 (Man. Q.B.)
⁵⁸ See Roby Estate v. Buley (1989), 38 E.T.R. 53 (N.S.S.C.) and O’Connor Estate v. Lindsay (1987), 51 Man. R. (2d) 65 (Q.B.)
⁵⁹ Lam v. Le Estate, supra
⁶⁰ Tessier Estate v. Tessier (2001), 44 R.P.R. (3d) 126 (Sask Q.B.); Sampaio, note 13, McKee, note 7
⁶¹ (1969) 3 D.L.R. (3d) 285 (B.C.S.C.)
⁶² note 22, at p. 286-7
⁶³ (1977) 16 O.R. (2d) 702 (H.C.J.) Aff’d 17 O.R. (2d) 592n (C.A.)
⁶⁴ note 24, at p. 707. Quaere whether the Statute of Frauds is available as a defence to a claim for severance where all negotiations were oral. See Ginn v. Armstrong, note 22 at p. 288. See also Burgess v. Rawnsley [1975] 3 All E.R. 142
⁶⁵ note 11
⁶⁶ Sampaio, note 13, at p. 320
⁶⁷ supra

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Information Technology and-Commerce

Facebook: A Prime Example

James Kosa*

It’s hard to have a lunch room conversation these days without someone mentioning something related to Facebook. The wildly popular social networking site is thriving among Canadians in the college age and older demographics, likely due to its ease of use, clean looks, and slightly viral and additive nature. (Myspace, another major social networking site, targets a younger audience, and structures pages in a fashion reminiscent of a teenager’s bedroom – messy and cluttered.)

For those that have never heard of the site, an individual makes a profile, and adds “friends”. Once added, a friend can view your profile. People find other people through networks, such as universities, workplaces, or locations, or just by searching by name. You can identify your friends by the icon of their face which is attached to all their activities on the site. When you log in, Facebook automatically tells you what all your friends have been doing with their profiles recently. It is strangely addictive for some, and you tend to connect with people that you knew long ago or only tangentially.

The site has become particularly popular in Canada, with over 2 million Canadian users, and 600,000 users that are part of the Toronto group alone. Canadians represent 10% of the Facebook population.

These social networking sites raise a number of interesting legal issues in privacy, copyright infringement, employment and criminal law. As it is a relatively new phenomenon, it is unclear where problems will arise, but one can be certain that Facebook clearly contains an enormous amount of personal information. A person’s profile may contain much or all of their contact information, their age, appearance, birth date, interests, and links to friends and family. ID theft and data-mining are serious concerns, especially for the uninitiated, as the default settings in Facebook allow practically anyone to view your profile. In 2005, as part of a research project, researchers were able to use a script to access and download over 70,000 user profiles, which highlighted some of the glaring security holes. Since then, Facebook has dramatically increased the privacy and security options, but it remains to the individual users to employ them.

Facebook allows the uploading of pictures and other content to the site, which can be displayed in conjunction with the user’s profiles. In particular, users can embed youtube videos directly on their Facebook page. As with other online sites, potential copyright infringement of such content remains an issue. Though Facebook attempts to disclaim responsibility for such content, like youtube, flickr, and other content driven sites, Facebook could be found liable for permitting copyrighted material to be distributed without the permission of the copyright holders.

Facebook has become a hot topic among employers. On one hand, you have employers banning Facebook at the workplace, because it consumes too much time. One of the most recent and largest examples has been the banning of access for government employees by the Ontario Government. On the other hand, employers have used Facebook and other social networking sites to investigate their employees’ or potential employees’ habits, and employees have been fired from their jobs for what has been posted on a Facebook page.

Law enforcement is also making use of Facebook to track potentially illegal activities. The police have found pages detailing plans for large bush parties, and have used the service to identify individuals present at a crime scene.

Facebook is a prime example of how a new technology or innovation can come sailing along, creating a wake of legal issues as it passes by. The OBA IT & E-Commerce Section is devoted to exploring these legal issues, and so invites you to attend a session in the fall, where we will delve deeply into the intersection of technology and law.

* James Kosa, Deeth Williams Wall LLP, (416) 941-9440, jameskosa@hotmail.com.  James is the Technology Liaison of the Information Technology and E-Commerce Section, 2006-2007.

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Insurance Law

Duty to Defend Extends to Passengers in a Motor Vehicle

Audrey P. Ramsay*

The plaintiff suffered serious injuries in a motor vehicle accident, which occurred on August 9, 2003. The accident occurred while the plaintiff was towed on inline skates by a rope behind a vehicle operated by the defendant Taylor Symons. The vehicle had been leased by Taylor’s father and was owned by Nissan Canada Finance Inc. (“Nissan”). Dominion of Canada General Insurance Company (“Dominion”) insured the vehicle under a standard automobile policy. The plaintiff commenced an action against the passengers in the vehicle as well as their parents. In turn, the passengers and their parents issued a third party against Dominion for indemnity and entitlement to the costs of defending the action.

The passengers and their parents subsequently brought a motion to determine whether they were entitled to a defence under the policy issued by Dominion. Justice Pattillo, who presided on the summary motion, noted that the definition of “occupant” in the policy, section 224 and section 239(1) of the Insurance Act included a person, including the driver, in or on an automobile, or moving into, on, out of, or off an automobile. As an occupant, the passengers were insureds under the policy. The judge also reviewed the allegations of negligence against the passengers, which included allegations that they encouraged the driver, Taylor, to operate the vehicle at an unreasonable rate of speed; they created a situation of emergency, among others, to determine whether the alleged claims fell within the terms of the policy and hence whether Dominion owed a duty to defend.

The judge also considered whether the plaintiff’s injuries arose out of the ownership, use or operation of the vehicle, and applied the two-part purpose and causation test in Amos v. Insurance Corp. of British Columbia. With respect to the first part of the test, the judge held that, regardless of the fact that the vehicle was towing the plaintiff, the operation of the vehicle was an ordinary and well known use of the vehicle. As for the second part of the test, the judge found there was a direct connection between the use of the vehicle and the injuries.

Justice Pattillo also adopted the view endorsed in the 1996 decision of Justice Wilkins in Wilkie v. Economical Mutual Insurance Company, which indicated the legislature intended to “broadly expand the indemnity provided to an occupant of an automobile to cover situations where that occupant had claims made against them in circumstances where persons claimed damages arising from the use or operation of the automobile in which they were an occupant” and intended “to afford indemnity to occupants for liability imposed by law for loss or damages arising from the use or operation of the automobile”.

Therefore, the judge found that Dominion, which insured the vehicle, owed the passengers a duty to defend.

As for the parents, the judge indicated they were not insureds under the policy as they were not occupants or alleged to be occupants of the vehicle. Justice Pattillo noted that even if the parents were insureds under the policy, there was no duty to defend as the allegations of negligence against them were outside the scope of the use or operation of the vehicle. Accordingly, he dismissed the passengers' parents' motion for a declaration that Dominion owed them a duty to defend.

* Audrey P. Ramsay, Chadwick & Associates, (416) 512-3260, audrey.ramsay@pos7@statefarm.com.  Audrey is the AGR Liaison and Newsletter Editor of the Insurance Law Section, 2006-2007.  The opinions expressed in this case comment are those of the author and do not necessarily reflect the opinions of Chadwick & Associates or the State Farm Companies.

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Municipal Law

Will Changes to the OMB Rules Follow Changes to the Planning Act?

Colin Grant and Ken Hare*

                                                        
The Ontario Municipal Board Rules Committee is currently reviewing the Ontario Municipal Board Rules of Practice and Procedure (OMB Rules or Rules).  The OBA Municipal Law Section suggests a number of OMB Rule changes, including some that may be helpful following Bill 51. 

CHANGE FOLLOWING BILL 51

The McGuinty Government made extensive changes to the Planning Act in 2006 with the Planning and Conservation Land Statute Law Amendment Act, 2006 (a.k.a. “Bill 51”).

Bill 51 empowers municipal councils to make local planning decisions.  Bill 51 modifies the role of the OMB: the OMB is meant to have an appellate role, to review local decisions, and is not meant to make planning decisions in the first instance.  To implement these stated goals, Bill 51 made changes to planning appeals that will impact the procedural conduct of hearings before the OMB.  Accordingly, modifications to some of the OMB Rules may assist the OMB in fulfilling its appellate function following Bill 51.  Here are just three examples:

1) Restrictions on Parties at the OMB

Bill 51 narrows the scope of persons who have a right to appeal a matter to the OMB in planning matters.  No persons (other than the Minister) shall be added as a party to an OMB hearing unless the Board believes there are reasonable grounds to add the person as a party, or they have made oral or written submissions to council prior to council making its decision.  

To launch a planning appeal, the application form pursuant to OMB Rules 13 and 14 set out the information required by the OMB.   

It would be useful to modify the Rules to require an appellant to indicate how the appellant participated in the municipal planning process prior to the refusal or adoption by council, including whether the appellant made oral or written submissions to council.

2) Restrictions on Evidence at the OMB

First, Bill 51 supports the filing of complete information at the outset of the application process.  Prior to Bill 51, a development proponent could “file and flip” its application by submitting minimal supporting documents, waiting the statutory period for an appeal, and then flipping the matter to the Board.  The proponent could then produce reports and studies to justify the proposal on planning grounds, shifting the planning process from local government to the OMB for a de novo hearing.  Municipalities are now empowered to prescribe in their official plans requirements for a complete application.

Second, information and material submitted at an OMB hearing but not provided to council before it renders its decision shall be subject to the new Planning Act provisions.  The intent is to ensure that all supporting material is filed with the municipality in advance of council’s decision.  With the changes to the Planning Act, while new evidence may be filed with the OMB, if the OMB determines that the new material could have materially affected council’s decision, it shall not be admitted until council is given an opportunity to reconsider its decision in light of the new information.  The provisions in Bill 51 providing that new information and material, that were not presented to council as part of the original application, may be sent back to council for consideration, is likely to have significant impact on pre-hearing and hearing procedure.

The OMB process may benefit from amendments to its Rules of Practice and Procedure so that the Board may address any new information prior to the start of a hearing, to maintain control over the hearing process.  Until the OMB has had the time to experience the impact on hearings of new information, the Rules could be revised to include standard requirements for notice of intent to provide new information or materials, and provide for a mandatory pre-hearing conference to address such issues in advance of any scheduled hearing date.

3) Dismissal without a hearing

The Rules currently set out when the Board may dismiss an appeal without a hearing (Rule 52).  In light of the new restrictions on parties and evidence, the Rules could be modified to provide guidance to the Board so that, where in the Board’s opinion the application to which the appeal relates is substantially different from the application that was before council at the time of its decision, the Board may dismiss the appeal without a hearing as a matter of fair and efficient procedure.

GENERAL CHANGES

The Municipal Law Section of the OBA also has a number of more general recommendations for changes to the OMB Rules.

For example, some participants, agents and legal counsel write correspondence to the Board, sometimes directly to Board Members, sometimes setting out facts, sometimes setting out grievances.  Opposite parties often feel compelled to respond.  And on it goes.  This practice should be addressed with an amendment to the OMB Rules, providing some clear guidelines on appropriate communications with the Board.  As an example, the Alcohol and Gaming Commission of Ontario has a helpful Rule with respect to communications with that Board. 

For a full review of the complete submissions of the Municipal Law Section of the OBA to the OMB Rules Committee, as previously circulated to all members of the Municipal Law Section for comment, please contact the OBA or any member of the Municipal Law Section Executive.

* Colin Grant, City of Brampton, (905) 874-2682, colin.grant@city.brampton.on.ca.  Colin is the CLE Coordinator of the Municipal Law Section, 2006-2007.

Ken Hare, Ministry of Municipal Affairs and Housing, (416) 585-6404, ken.hare@ontario.ca.  Ken is the OMB Rules Review Subcommittee Chair of the Municipal Law Section, 2006-2007.

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On November 9, 2006, the Ontario government announced the appointment of an expert commission to carry out province-wide consultations on possible changes to the Pension Benefits Act (“PBA”). The commission is to be chaired by labour lawyer and academic Harry Arthurs and includes actuaries and lawyers. The commission is mandated to examine the legislation relating to the pension system in Ontario, including defined benefit plan funding, surplus, the Pension Benefits Guarantee Fund, windups, splits and mergers, and other pension issues relating to the security, viability and sustainability of the pension system in Ontario.

Privacy Law

Identity (ID) Theft: How to advise your clients when they ask what to do?

Corinne D. Leon*

This article originally appeared in Eye on Privacy, the OBA Privacy Law Section Newsletter, Volume 7, No. 3, April 2007.

What is ID Theft?

Society generally views identity theft to be the act of unlawfully taking and collecting an individual’s personal information to use it for criminal purposes. These criminal purposes could be to commit financial fraud (e.g. through theft of an individual’s credit card) or to take over the person’s identity (i.e. become that person) with the intent to cause personal disruption and direct financial loss to the ID theft victim.

Is ID Theft on the Rise?

ID theft is said to be the “fastest growing crime” in North America. Canadian statistics^** for 2006 show 1137 victims in Canada for a total loss in Canadian dollars of $1,876,683.58. The growth of this crime is said to be due to:

• More personal information being collected and stored by organizations;
• Multiple storage sites within an organization (e.g. multiple copies of the same information in emails and personal files); and
• Potentially careless destruction procedures allowing for theft of information from garbage sites (e.g. dumpster diving).

** Source: As of February 27^th, 2006 - www.phonebusters.com – website of The Canadian Anti-Fraud Call Centre, operated by the OPP in conjunction with the RCMP and the Canadian Competition Bureau.

What is ID Theft’s Risk to Society?

If left uncontrolled, identity theft can result in wide-spread economic disruption and social upheaval. The ultimate risk to an organization is the loss of its business through:

• Loss of reputation
• Loss of trust
• Loss of customers/clients
• Loss of revenue
• Law suit damages

ID theft is therefore of great concern to both consumers and businesses alike.

Is ID Theft Addressed by the Criminal Code?

The Criminal Code does not contain a provision that directly addresses ID theft. The Criminal Code focuses on the unlawful use of personal information (through section 380: fraud; section 342: fraudulent use of credit cards/data; section 368 uttering a forged document; and section 403: personation), however the Code does not focus on the unlawful taking and possession of information per se.

To address ID theft, the Criminal Code would have to be amended to introduce a new provision to specifically target identity theft and would have to carefully delineate between information lawfully in someone’s possession (for example, your friend’s telephone number given to you by your friend) vs. information unlawfully obtained and possessed by someone with the intention to commit harm through fraud or otherwise.

Is ID Theft Addressed by PIPEDA?

The Personal Information Protection and Electronics Documents Act (PIPEDA) also does not directly speak to ID theft. However, PIPEDA does require organizations that collect and use personal information to (among other things):

• Limit collection of personal information to what is necessary to the organization’s business;
• Limit the use, disclosure and retention of personal information;
• Protect personal information and keep it secure; and
• When no longer needed securely dispose of the personal information.

The privacy statutes in Quebec, Alberta and B.C. have similar requirements in this regard.

How Can an Organization Manage the Risk of ID Theft?

An organization that works on managing the risk of ID theft is working in tandem with the federal privacy requirements to protect personal information. When clients ask for advice on how to protect personal information, they are also asking how they can manage the risk posed by ID theft to their organizations.

First, an organization should seek to establish an atmosphere of trust for its customers/clients and employees. An atmosphere of trust can be developed through the establishment of “policies of protection” that collectively demonstrate an interest in and concern regarding the collection, use and storage of personal information by that organization.

Generally, policies of protection are focused on the following goals:

• Determining if/what personal information needs to be collected and why;
• Limiting access to personal information within the organization on a “need-to-know” basis;
• Determining how long personal information must be retained by the organization;
• Establishing secure procedures to follow when storing and destroying personal information;
• Implementing “know-your-employee procedures as part of the organization’s hiring process;
• Installing a process to monitor and enforce compliance with your policies;
• Ensuring your policies require an annual written attestation of compliance and the performance of an annual compliance assessment.

The organization’s ultimate goal is to reduce/eliminate the possibility of unauthorized access to personal information.

What Kind of Checklists Should an Organization Use?

Each organization should come up with its own set of checklists to assess why, where and how personal information is collected, used and stored, as each organization will have unique business needs. However, there are certain basic checklists that can apply to all organizations regardless of the industry involved. The following is a non-exhaustive list of checklists that can be used as a starting point of assessment that may in turn generate more ideas about where in an organization personal information is held and whether it is secure and protected against unauthorized access:

1. Need and Storage Checklist

• Does the organization need to collect personal information? If personal information is required, have a written policy listing the reasons why. Even if personal information is not required, have a written policy to this effect.
• Where is personal information stored? Make a list of all locations, both physical and electronic, on-site and off-site and determine the physical/electronic protection measures that are or need to be in place.

2.  Retention Checklist

• The organization should assess its current retention requirements (legally, contractually and business/marketing-wise) and create a written retention policy based on these requirements.

3.  Physical Security Checklist

• The organization should assess its physical premises to determine if they are secure unauthorized access. For example, locked filing cabinets; badge access system for visitors and employees; controlled reception areas; and, if possible, meeting rooms on-site but not within office premises.

4.  Computer Security Checklist

• The organization should ensure its computers are secure against unauthorized access. For example: use of anti-virus protection software that is regularly deployed; installation of firewalls; use of alphanumeric passwords that must be changed at regular intervals; use of privacy screens and screen savers; use of 128 bit encryption or higher; two-factor authentication; mutual authentication protocol; forcing passwords to be site-specific; use of public key cryptography; saving data on network drives rather than hard drives which are much less secure; and requirements to store personal information in password-protected or encrypted file folders with access on a “need to know” basis only.
• The organization’s system administrator should regularly monitor the organization’s web site for malicious activity (e.g. phishing and hacking).
• The organization should set its security levels so that only the administrator can perform computer network tasks?

5.  Mail and Miscellaneous Security Checklist

• The organization should keep track of mail delivery ensuring it is not left unattended once delivered.
• Employees should be required to immediately pick up their documents and not leave them lying around at the printer.
• Reception areas should be free of magazines that contain personal address subscription labels.

6. Destruction Security Checklist

• The organization should ensure that any personal information is disposed of securely. Examples include: using cross-shredders; and ensuring that material sent for recycling (e.g. paper, CDs, tapes, diskettes, USB Keys) is shredded/disabled.
• The organization should be aware of who picks up its garbage and where it goes and what are the building’s general garbage policies and procedures.

7. Employee Hiring and Training Security Checklist

• The organization should have a documented employee hiring process that includes screening requirements, the performance of background checks (including criminal background checks), and obtaining copies of education credentials and written references.
• Regular employee training programs should be held to ensure that employees are aware of the organization’s policies regarding the handling and protection of personal information.
• Employees should be required to annually confirm in writing their compliance with the organization’s policies, and copies of these confirmations should be kept in each individual employee’s file.

8. Policies and Procedures

• They should be written, easily readable and accessible.
• Employees should be regularly reminded of their obligation to comply with the organization’s policies and procedures and encouraged to frequently reference them.
• They should be regularly reviewed and updated as may be required by law and/or business needs.
• There should be written investigation procedures to address any policy contraventions.
• Policy contraventions should be addressed quickly and effectively and any resulting updates to the policy should be immediately brought to the attention of all employees.

As mentioned earlier, these checklists are not exhaustive and do not cover the kind of detailed specifics that, for example, a computer administrator would need to address such computer fraud issues as “phishing”. However, these checklists are a good place to start the process of addressing the security and accessibility of personal information collected and used by organizations, in an effort to escalate the fight against and reduce/eliminate the incidences of identity theft that are currently on the rise.

* Corinne D. Leon is Senior Counsel at Visa Canada Association. This paper is based on a presentation prepared and delivered by Ms. Leon at the OBA 1^st Annual Privacy Law Summit on November 9^th, 2006.

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Public Sector Lawyers

Ontario Court of Appeal Ruling Increases Access to Law Enforcement and Solicitor-Client Records Under Ontario’s Access and Privacy Legislation

Priscilla Platt*

On May 25, 2007, the Ontario Court of Appeal issued its landmark decision about whether law enforcement records and solicitor-client records may be disclosed in consideration of the compelling public interest override in sections 23 of the Freedom of Information and Protection of Privacy Act (FIPPA) and section 16 of the Municipal Freedom of Information and Protection of Privacy Act (MFIPPA).  Prior to this decision, section 23 of FIPPA and section 16 of MFIPPA stated that:

An exemption from the disclosure of a record under sections 13 [7 MFIPPA, advice or recommendations], 15 [9 MFIPPA, other governments], 17 [10 MFIPPA, third party commercial information], 18 [11 MFIPPA, economic interests], 20 [13 MFIPPA, safety of an individual], 21 [14 MFIPPA, personal information] and 21.1 [endangered species] does not apply where a compelling public interest in the disclosure of the record clearly outweighs the purpose of the exemption.

In the Criminal Lawyers’ Association v. Ontario (Public Safety and Security),¹ the Ontario Court of Appeal decided that the two exemptions for law enforcement and solicitor-client records, should be read into the provision that allows for disclosure where there is a compelling public interest that overrides the purpose of the exemption.  Prior to this decision, records that were exempt as law enforcement or solicitor-client records could not be disclosed based on the compelling public interest override because the Legislature had not included them as exemptions that could be overridden under the Act in sections 23 of FIPPA and 16 of MFIPPA.  As a result of this decision, if records requested under FIPPA or MFIPPA are exempt as law enforcement or solicitor-client records, they may be disclosed despite the application of the exemptions where there is a compelling public interest that clearly outweighs the purpose of the exemptions.

This case dealt with the Criminal Lawyers’ Association’s request to the Ministry for an OPP report relating to the conduct of the police and the prosecution in respect of what was alleged to be a murder committed by organized crime.  The prosecution and the police were criticized by the Superior Court during a re-trial of the individuals charged in the murder and the criticism ultimately led to the OPP investigation. 

The majority of the Court held that the failure of the Legislature to include the law enforcement and solicitor-client records exemptions within the override provision was a breach of the Charter.  La Forme J.A., writing for the majority, indicated that section 2(b) of the Charter, dealing with freedom of expression, applied to this matter because, as the Court found, “the expressive content, therefore, is dependent on access to the excluded material.”²  In other words, the Criminal Lawyers’ Association (CLA) could only comment on the conduct of this matter if it could get access to the report.  The Court reasoned that since the exemptions were discretionary, as opposed to mandatory, if the Ministry took no action, then the report would have to be disclosed.  As a result, the Court found that “there is no requirement to decide whether there is a constitutional right to know, or a positive obligation on the part of the government to disclose”.³  The Court concludes that the failure of the override provision to include the law enforcement and solicitor-client exemptions infringes section 2(b) of the Charter for two reasons:

First …both the purpose and effect of the Act restrict expression.  In the case of the effects analysis, the expression that is restricted would promote two of the values underlying free expression—truth and democracy—and, therefore, there is an infringement of s.2(b).
Second … the CLA is engaging in expressive activity, and the expression is content-based, not form-based or location-based.⁴ 

In the result, the Court found that the violation of the CLA’s section 2(b) rights “cannot be justified by the Ministry under s.1, as it fails on all aspects of the proportionality analysis”⁵ and the matter was remitted to the Information and Privacy Commission to re-determine the matter based on the two exemptions read into the override.⁶

A strong dissent by Jurianz J.A. reflected disagreement with the majority decision.  Jurianz J.A. indicated that section 2(b) of the Charter did not guarantee a right of access to government information and rejected the argument that it may be applied where in effect there is a restriction of freedom of expression.  The minority opinion also disagreed with the remedy of reading in the exemptions into the override provision.⁷  Jurianz J.A. indicated that if there was a Charter breach, it would be preferable to direct the Ministry to exercise its discretion in relation to section 1 of the Charter, since that action would leave the Act intact.⁸ 

To date, leave to appeal has not been sought.⁹  This decision will significantly impact on institutions governed by FIPPA and MFIPPA.  Such institutions will have to consider the application of the override to law enforcement records and solicitor-client records in their decision making and in appeals before the Information and Privacy Commission.

* Priscilla Platt, Heenan Blaikie LLP, (416) 360-3520, pplatt@heenan.ca.  Priscilla is the Program Coordinator of the Public Sector Lawyers’ Section, 2006-2007.

¹ 2007 ONCA 392.
² At para. 30.
³ At para. 40.
⁴ At para. 62-3.
⁵ At para. 96.
⁶ At para. 97(v).
⁷ At para. 99-104.
⁸ At para. 171.
⁹ As of the date of writing, June 19, 2007.
 

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Sole, Small Firm and General Practice

The Art and Craft of "Doing the Minutes"

Brian Bucknall*

This article originally appeared in the OBA Sole, Small Firm and General Practice Section Newsletter, Volume 2, No. 2, December 2004.

Introduction

For the past two years I have been the Secretary of the Ontario Bar Association.  I sat with the Table Officers Committee.  I sat with the Executive Committee.   I sat with Council.  For each meeting I prepared the Minutes.

It was a heady experience.  As I explained to my Committee and Council members, a Secretary has an almost godlike power to turn random and disjointed observations into insightful dialogue among intelligent colleagues.  I am among the group who subscribe to the maxim that “the meeting hasn’t taken place until the Minutes have been approved”. 

This note, of course, is by way of discouraging anyone who might feel that being Secretary of a volunteer group is a menial and undignified calling.  There are few roles a person can play which provide more perspective on the workings of an organization.

As Secretary, you will encounter a series of issues which might benefit from a few comments.

Does the Meeting Have an Agenda?

The answer should be self-evident.  If a meeting is worth the trouble of taking Minutes it must commence with an Agenda prepared by the Chair.  Sometimes this rule is not followed, in which event the prudent Chair or Secretary will develop at the outset a list of the topics to be discussed.

The further question with regard to the Agenda is whether Minutes should be organized by reference to the Agenda or, alternatively, by reference to the manner in which discussion proceeds.  If Item 8 is brought forward to be discussed after Item 2 (usually because the person speaking to Item 8 has another commitment), should the discussion appear chronologically or in accordance with the order set out in the Agenda?  My own preference is to recognize discussion, if possible, in accordance with the Agenda so that the Agenda together with the Minutes can appear in the Minute Book in a conveniently accessible form.

Is There a Format for the Minutes?

A well established organization will probably develop a standard format for the Minutes of its meetings.  The Bar Association, for example, commences its Minutes with the identification of the person presiding at the meeting and a list of the people in attendance.  The Bar Association also keeps a relatively complex system of identifying each item in the Minutes in a manner which allows those items to be cross-referenced at a later date.

If you have taken a position as Secretary with an organization which has not developed a format for its Minutes and minute books, do the organization a favour and develop your own.

For Whose Benefit are Minutes Prepared?

In this case, the answer may not be self-evident.  Minutes will, of course, be circulated to the people who attended the meeting.  Most likely they will also be circulated to members of the group who could not be in attendance.  The Minute Book itself will be read months or years later by people not involved in the original meeting.  The scope of anticipated circulation is a factor in how the Minutes are crafted.  In the case of the Bar Association there will be numerous members of council who are not able to get to a specific meeting but who will receive copies of the Minutes.  For people who were at the meeting, a simple outline of events is appropriate.  For people who cannot attend, or who consult the Minutes at a later date, a more extensive treatment of issues and discussions is required.

Is it Useful to Reflect Discussion in a Set of Minutes?

There are two schools of thought on this point.  Some Secretaries, and some organizations, believe that “the less said the better” – identify the issue under review and record any decision made.  The alternative position, and the one which I have used, is to make some reference to any discussion which takes place and, in fact, to identify people who express specific positions.  This is of assistance to people reading the Minutes who were not at the meeting.  It is also of assistance to people who were at the meeting but who would have difficulty capturing and remembering the ebb and flow of the ideas in the room.

Motions, Resolutions, Consensus, Action

We all share the modern bias against formality, particularly formality which does not seem to serve a purpose.  In what circumstances should an element in a meeting be resolved with a mover, a seconder and a vote?  Are there other ways of reflecting the matters under consideration?

The Chair of a meeting makes the call on these points, though the prudent Secretary will sometimes nudge his or her elbow.  A decision which will involve an organization in embarking on a particular course of action (the adoption of a budget would be a good example) should be the subject of a motion and a vote.  A matter which does not involve a specific step being taken (the presentation of the Treasurer’s Report), for example, might not require a motion and a vote.

There is, of course, no absolute rule.  A Treasurer’s Report which raised problematic issues or indicated financial problems might be the subject of a motion to accept the Report, simply for the better protection of the Treasurer’s position.

Where a discussion has gone forward and a particular view, not necessarily requiring any specific steps to be taken, has prevailed I often reflect that situation as being the “consensus” of the people in attendance.

Another device which I have used to some advantage is the identification of specific items which require “Action”.  A discussion might result in a decision that a letter should be sent, an inquiry should be made or negotiations should go forward.  The Minutes can reflect this as an item of “Action” and the “Action” items can be addressed when the Minutes are reviewed at the next meeting of the group. 

Reorganizing Discussion – Reshaping the Meeting

As I indicated above, a well thought out Agenda will not infrequently be hijacked by scheduling problems or, indeed by spontaneous discussions.  Continuing Education might be Item 5 on the Agenda but be the subject of useful and insightful discussion when Regional Issues are raised at Item 2.  Is it appropriate to reassemble discussions and observations by reference to topic areas even though they appear outside of the actual chronology of the meeting?

My own view is that it is not only appropriate but helpful to reassemble and conflate discussions in a manner which makes those discussions most meaningful to the reader.  In my experience, no person attending a meeting has ever complained that their observations were represented out of sequence so long as those observations had been fairly reflected and recorded.

Circulation and Approval of Minutes

My view has always been that Minutes should be prepared within twenty-four hours of the completion of the meeting they reflect.  No matter how complete the notes are that a Secretary keeps, details and nuances are inevitably lost as time passes.  I also think that Minutes should be circulated in draft as soon as they are made available to the organization.  This is particularly true where some items have been identified for “Action”.

Minutes are typically submitted for approval at the commencement of the next meeting of the body whose proceedings the Minutes reflect.  This process may seem perfunctory or overly formal but, in my experience, it remains highly useful.  This is particularly the case where a report has been presented which has some detailed and technical elements.  The person presenting the report should have the opportunity to correct any misstatements or misconceptions before the Minutes are put in the final form.

* Brian Bucknall, LSM, B.A., LL.B., LL.M., Osgoode Hall Law School of York University, (416) 736-5030, bbucknall@osgoode.yorku.ca.  Brian was the Secretary of the Ontario Bar Association, 2002-2003.

 

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Trusts and Estates

Promissory Notes and the New Limitations Act 

Ed Esposto*

This article originally appeared in Deadbeat, the OBA Trusts and Estates Section Newsletter, Volume 25, No. 2, February 2007.

Recently, I have been second-guessing my decision to become a lawyer. Certainly there are tremendous perks to being a lawyer that cannot be ignored. The vast sums of money, the tremendous self-importance, the imagined public adulation and the prescription drug habits. But even if you don’t work for the Department of Finance, there are many things that you and I can enjoy about being a lawyer. Like using Latin phrases to describe simple concepts opaquely. 

But now these many years into my legal career, I have come to the conclusion that there is one big problem with being a lawyer. There are just so many laws. And some clients expect you to know them. But it is like there is a rule for everything. And they are always changing the laws and making new laws. Where’s the spontaneity; that feeling of hurtling down the big snow hill on your toboggan with your eyes closed and your hands in the air?  Where’s the fun in reading law?  And there is particularly little joy to be found in reading changes to laws that you already spent some time trying to learn.

This brings me squarely to the Ontario Limitations Act and the recently released Ontario Court of Appeal decision in Hare v. Hare, Docket C45293, which was heard September 21, 2006. For some lawyers, the effect of this decision will be like that wild, crazy toboggan ride that ends abruptly on impact with an inconveniently-located oak tree. Shattered wood, torn snowsuits, tears, litigation.

The oak tree in the Hare v. Hare decision is the revised Limitations Act, 2002, S.O. 2002, c. 24, Sch. B. You may want to brace for the impact if you customarily draft demand promissory notes for clients in an estate planning context. Even simple interest free-loans between family members or privately held corporations are affected by this judgment.

In reading “between the lines” of this judgment, one gets the sense that it may have something to do with whether the new Limitations Act changed the law in respect of demand promissory notes so that refusal to repay the loan now triggers the running of the limitation period.  Or, as Madame Justice Gillese stated in the opening words of her judgment for the majority,

“Has the new Limitations Act … changed the law in respect of demand promissory notes so that refusal to repay the loan now triggers the running of the limitation period?” 

For an estate planner, the facts of the case are as simple and familiar as a nursery rhyme. In February 1997, a mother (let’s call her “Momma Hare”) lent her son (yes, “Baby Hare”) $150,000. By promissory note (the “Note”) dated February 10, 1997, Baby Hare promised to pay Momma Hare, on demand, the sum of $150,000. The Note also required Baby Hare to pay interest at the rate of prime plus one per cent per annum. Baby Hare made some payments of interest, the last one being on October 26, 1998.  It is at this point in the narrative that I resist the temptation to say “then things got hairy”.

On November 10, 2004, Momma Hare made a demand for repayment. Baby Hare failed to repay. So Momma Hare commenced an action on February 17, 2005 to enforce the Note. Baby Hare, demonstrating a complete lack of sportsmanship, moved for summary judgment. The motion judge granted the motion and dismissed Momma Hare’s claim on the basis that the old Limitations Act (R.S.O. 1990, c. L.15) statute-barred the claim. He ruled that Momma Hare’s claim arose when the Note was made, rather than when Baby Hare refused to repay the loan after a demand for repayment had been made. On that basis, under the old Limitations Act, Momma Hare had six years from the date of issuance of the Note to enforce payment. Momma Hare appealed to the Court of Appeal.

There were a number of conclusions that the Court of Appeal could have reached in considering this appeal:

1. The applicable limitation period is six years (under the old Act) commencing from the date the Note is issued;
2. The applicable limitation period is two years (under the new Act) commencing from the date the Note is issued;
3. The applicable limitation period is six years (under the old Act) from the date a demand for repayment is made and refused.
4. The applicable limitation period is two years (under the new Act) from the date a demand for repayment is made and refused.
5. The applicable limitation period is six years (under the old Act) commencing from the date the last partial payment of interest or principal is made.
6. The applicable limitation period is two years (under the new Act) commencing from the date the last partial payment of interest or principal is made.
7. The Limitations Act is so boring to read that the Court declines to rule.

Due to the facts of the case, Momma Hare could only win her appeal if the court chose options 3 or 4. You might have thought that the correct answer was, in fact, either option 3 or 4. You may ask yourself, why would a limitation period start to run before a demand for repayment is made?  Isn’t that the event that starts the clock?  In the words of the Limitations Act, isn’t a refusal to pay the “act or omission” which begins the limitation period?  Isn’t that the day when the claim or cause of action is known or “discovered”?  The limitation period doesn’t begin to run on the day the note is issued, does it?  Can I really have six interrogatory sentences in a row?

Let’s go back to the Court of Appeal’s opening description of the question at issue in this case. “Has the new Limitations Act changed the law in respect of demand promissory notes so that refusal to repay the loan now triggers the running of the limitation period?”  Note that I have italicized the word “changed” for a reason (other than the fact that it just looks neat). The assumption upon which the sentence is predicated is that the old law did not hold that the refusal to repay the loan triggers the running of the limitation period.

So when did the limitation period begin with respect to demand promissory notes under the old law?  The day the loan was made is the day the limitation period began to run. Not the date of a demand to make payment or a refusal to pay. Has that changed under the new Act?  No. What the Court found is that it has always been the law that the obligation to repay commences immediately upon the date the demand loan is signed. It is at that point that the debtor knows he or she could be asked to repay at any time. It is at that point that the creditor knows he or she can demand repayment.  This may all be self-evident, basic law, but because of the new Limitations Act, the practice management consequences are important.

In a two-to-one decision, the Court of Appeal found that the transition provisions in subsection 24(5) of the new Limitations Act applied, with the result that Momma Hare was presumed to have “discovered” her claim on the date the Note was issued, not the day she made demand for payment.  As a result, the old Limitations Act applied to the facts and the claim was statute-barred under that Act.  Had the claim been “discovered” after the date upon which the new Limitations Act came into force (January 1, 2004), Momma Hare would have had two years from that date to bring her claim.  The practical result is that for all demand promissory notes entered into since January 1, 2004, the limitation period is two years from the date of issuance of the note (or the last act in furtherance of the note such as an acknowledgment of the note or partial payment of interest or principal). 

What are the practice management consequences to us lawyers?  Let’s say your client wants to lend money to her daughter and you quite properly advise her to enter into loan documents to evidence the loan. Your client lends her daughter money and a demand promissory note is signed. As is often the case, the loan is payable on demand but no interest is payable until demand. As is also often the case, the daughter invests the money in cigarettes, scotch and slot machines. Let’s assume her return on those investments is below expectations. Three years pass and nothing has happened (other than the daughter’s reckless expenditure of the funds). Mother then asks daughter to repay the note. Daughter tells mother to do something that sounds like “go suck your felt”. Mother sues and is told that the Limitations Act prevents her from enforcing the note because the time began to run on the day the note was issued, three years earlier. Mother sues you for negligence. You feel tremendous guilt and shame.

Or here is another example that might lead to even more creative uses of the English language. Your client takes a bonus from his private company and lends the after-tax proceeds back to the company. You document the loan with a demand note. No further action takes place in respect of that note. Three years pass and the client’s company is pushed into bankruptcy. Your client is the biggest creditor of his company, via the note, but there are numerous other creditors. The receiver in bankruptcy disallows your client’s claim against the assets of the company, contending that the note cannot be enforced because more than two years have passed since the note was issued. Since no action was taken on the note (or renewing the note) to restart the limitation period, the two year limitation period passed. Your client gets no money and you get to notify LawPRO.

To make things even more distressing, if the hypothetical loans described in the preceding two paragraphs were entered into after January 1, 2004 but before, say, March 1, 2005, by the time you are reading this article the new Limitations Act has already statute-barred any claim on the notes (unless interest has been paid or some other act has taken place to restart the clock).

The reasons the Court of Appeal gave for its decision are quite interesting. A complicating dissent was also written. It is beyond the scope of this article to provide a detailed summary of the arguments for and against the majority and minority decisions. And, besides, I can’t type anymore because I have Cheetos stuck in my keyboard again.  You should note that the majority decision contains a very useful explanation of when the new Limitations Act applies to a matter and interesting commentary about the differences in language between the old and new Acts.  There is also some discussion regarding the ultimate 15 year limitation period that is worth considering.

If you listen carefully you can hear something. Be very quiet. Do you hear it?  Listen more closely. It’s the sound of a clock ticking.  Remember, you are the toboggan and your clients have their eyes closed and their hands in the air as you hurtle towards the end of the limitation period.

* Ed Esposto, RBC Private Counsel Inc., (416) 956-9365, ed.esposto@rbc.com.  Ed is a Newsletter Editor of the Trusts and Estates Section, 2006-2007.  The opinions expressed in this article are exclusively those of the author.

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Workers' Compensation

Update from the Workers' Compensation Section

Alec Farquhar*

The Workers' Compensation Section has had another very successful year in 2006-2007.

The Section focuses on workers' compensation (known also as workplace insurance) issues, as well as occupational health and safety issues from time to time. The Section's 146 members represent a broad spectrum from the employer and worker bar, Workplace Safety and Insurance Appeals Tribunal, Workplace Safety and Insurance Board, and other government agencies.  The membership is also open to non-lawyers - two of whom joined the Section Executive this year as associate members - Peter Shouldas and Laura Russell.

The Section held two evening programs during the year and one audio conference program:  October 26 "Key Developments in Occupational Health & Safety" - 44 registrants; November 21 "An Evening with The Honourable Steven W. Mahoney, Chair of the Workplace Safety and Insurance Board" - 36 registrants; and an audio conference on "New WSIB Return to Work Policies", with 15 registrants. 

Our annual daylong CLE program, held on May 17th, was a great success, with 147 registrants.  It dealt with "Current Issues in Workplace Safety and Insurance Law" and was the best attended and well received CLE event in our Section's history.

Our marquee event, the Ron Ellis award dinner, usually takes place in June but has been scheduled for September 7 instead, to accommodate the schedule of this year's eminent recipient, Paul Weiler.  It will be a major event for the workers' compensation community.

The Section produced four electronic newsletters as follows: October 2006, January 2007, March 2007 and May 2007.

The Section was very actively involved providing input on paralegal regulation, given the serious issues that have arisen in the workers' compensation field with unqualified paralegals.  We believe that we have contributed significantly to the protection of the public interest

* Alec Farquhar, Ministry of Labour - Occupational Health & Safety Branch, (416) 326-7866, alec.farquhar@mol.gov.on.ca.  Alec is the Chair of the Workers' Compensation Section, 2006-2007.  

 

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