MLB-Slaw Selected Case Summaries

Harkat, Re 2012 FCA 122 

Aliens - Exclusion and expulsion - Power to detain and deport - Minister’s certificate - Review - Evidence

In 2002, Harkat was detained pursuant to a ministerial security certificate issued under the Immigration and Refugee Protection Act (IRPA) as a person inadmissible to Canada on grounds of national security. Numerous security certificate proceedings ensued. In 2006 he was released from detention on stringent conditions, which were substantially modified over time in favour of Harkat. Another security certificate was issued in 2008 when a new security certificate regime was implemented following the Supreme Court of Canada’s constitutional rulings in Re Charkaoui #1 (SCC 2007). Harkat’s case was referred to the court to determine the reasonableness of the 2008 certificate. In accordance with the amended legislation, special advocates were appointed to protect Harkat’s interests. Also, in accordance with the procedural rulings in Re Charkaoui #2 (SCC 2008), Harkat became entitled to additional disclosure from the Canadian Security Intelligence Service (CSIS). The special advocates requested access to human sources who provided information to CSIS regarding Harkat. That is, the special advocates wanted to know the identity of the covert human intelligence sources and have them made available for cross-examination in the closed door hearings.

The Federal Court, in a decision reported 339 F.T.R. 65; 2009 FC 204 (i.e., the Privilege Decision), denied the special advocates’ requests on the basis of “covert human intelligence source privilege” (i.e., the judge extended the police informer common law privilege to covert human intelligence sources, subject to a “need to know” exception). The reasonableness proceedings proceeded.

The Federal Court, in a decision reported 380 F.T.R. 81; 2010 FC 1241 (the Reasonableness Decision), held that the issuance of the security certificate was reasonable. Therefore, the security certificate issued against Harkat on security grounds was upheld. Harkat brought a motion challenging the constitutionality of a number of provisions of the IRPA relating to the reasonableness review scheme (ss. 77(2) (filing of evidence and summary), ss. 83(1)(c)(d)(e)(h) and (i) (protection of information), s. 85.4(2) and 85.5(b) (restrictions on communications involving special advocates)). Harkat claimed that those provisions violated s. 7 of the Charter in that they did not provide for fair trial standards, failed to grant to the named person the right to know and answer the case made against him and made it impossible for the Court to render a sufficiently informed decision on the basis of the facts and the law.

The Federal Court, in a decision reported 380 F.T.R. 163, 2010 FC 1242 (the Constitutionality Decision), dismissed the motion. The impugned provisions were constitutional. Harkat brought a motion seeking the exclusion of the summaries of conversations as evidence, based on the doctrine of abuse of process (i.e., because the original conversations from which the summaries were prepared had been destroyed). Alternatively, he sought a stay of proceedings under s. 24(1) of the Charter.

The Federal Court, in a decision reported 380 F.T.R. 255; 2010 FC 1243 (the Abuse of Process Decision), dismissed the motion.

The Federal Court, in a decision reported 382 F.T.R.274; 2011 FC 75, certified the following two questions of general importance for appellate consideration under s. 82.3 of the IRPA:

“1. Do sections 77(2), 78, 83(1)(c) to (e), 83(1)(h), 83(1)(i), 85.4(2) and 85.5(b) of the Act breach section 7 of the Charter of Rights and Freedoms by denying the person concerned the right to a fair hearing? If so, are the provisions justified under section 1?

2. Do human sources benefit from a class-based privilege? If so, what is the scope of this privilege and was the formulation of a ‘need to know’ exception for the special advocates in Harkat (Re), 2009 FC 204, a correct exception to this privilege?”

Harkat utilized the certified questions as a chance to advance other grounds of appeal respecting the Privilege Decision, the Reasonableness Decision, the Constitutionality Decision and the Abuse of Process Decision referred to above.

The Federal Court of Appeal answered the certified questions in the negative. The court dismissed the appeal with respect to the Constitutionality Decision. The court allowed the appeal with respect to the Privilege Decision, set it aside and declared that CSIS human sources do not benefit from the police informer class privilege or a class privilege analogous to the police informer class privilege. The court allowed the appeal with respect to the Abuse of Process Decision, set it aside and allowed Harkat’s motion and ordered that the confidential summaries made of the destroyed originals of the conversations be excluded as evidence, except for the conversations that Harkat was privy to. The court also allowed the appeal with respect to the Reasonableness Decision, set it aside and referred the matter to the designated judge for a new determination of the reasonableness of the security certificate on the basis of the evidence on the record, excluding the confidential summaries made of the destroyed originals of the conversations to which Harkat was not privy. In light of the exclusion, further submissions on the certificate’s reasonableness were necessary and it would be up to the designated judge to determine whether those submissions would be oral, written or both. The court declared as a s. 24(1) remedy that Harkat’s s. 7 Charter right of disclosure of the originals of the conversations to which he was privy was violated.

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Girouard v. Druet 2012 NBCA 40 

Contracts - Formation of contract - Signing - Electronic signature

The plaintiff expressed an interest in purchasing the defendant’s (vendor’s) condo. The parties agreed to carry on their discussions through e-mail. Following an exchange of e-mails, the plaintiff claimed that the defendant was contractually bound to sell the condo unit to him. The plaintiff commenced an action against the defendant/vendor seeking specific performance or damages for breach of contract. Following examination for discovery, the plaintiff brought a motion under rule 23.01(a) of the Rules of Court for an interpretation as to whether the e-mails constituted a binding agreement for sale of the condo.

The New Brunswick Court of Queen’s Bench, Trial Division, in a decision reported 379 N.B.R.(2d) 1; 978 A.P.R. 1, determined that there was a binding agreement of purchase and sale respecting the condo. The e-mails constituted, in this case, a written document, as required under the Statute of Frauds and the “signatures”, as indicated on the e-mails constituted a signature for the purposes of the Statute of Frauds. The defendant/vendor appealed.

The New Brunswick Court of Appeal allowed the appeal and set aside the decision below. The record before the motions judge disclosed no binding agreement of purchase and sale. The court assumed, without deciding that the signing requirements of the Statute of Frauds/Electronic Transactions Act were met, and accepted that the writing requirement (Statute of Frauds) was also met. However, the parties lacked the requisite intention to enter into a binding contract for the purchase and sale of the condominium unit.

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Donell et al. v. GJB Enterprises Inc. et al. 2012 BCCA 135 

Barristers and Solicitors - Relationship with client - Confidential communications - General

The petitioner was a Receiver appointed in March 2009 by a California court over the assets of GJB Enterprises Inc. (a “Ponzi scheme”) and its principals, the Berkes (the GJB parties). The court ordered the Berkes to disclose certain personal financial information. In July 2010, Mr. Berke came to British Columbia, and a Vancouver law firm (“Farris”) paid him some $524,000 through its trust account. The Receiver learned that Mr. Berke had a bank account at HSBC.

The British Columbia Supreme Court made a recognition order pursuant to s. 270 of the Bankruptcy and Insolvency Act, recognizing the California receivership proceedings. The court ordered that HSBC pay into court all monies it held in the name of any of the GJB parties. HSBC paid some $374,000 into court. The Receiver learned that the source of those funds was the $524,000 trust cheque drawn by Farris in July 2010. Farris declined the Receiver’s request to produce documents and records belonging to the GJB parties, on the grounds of solicitor-client privilege. The Receiver applied for: (1) “a declaration that no solicitor-client privilege or other privilege attaches to communications, files or other documents of any kind in the possession of Farris relating to the GJB Parties as a result of the GJB Parties’ unlawful conduct. (2). Alternatively, a declaration that no solicitor-client privilege or other privilege attaches to communications, files or other documents of any kind in the possession of Farris relating to the GJB Parties from March 23, 2009, to the present.”

The British Columbia Supreme Court, in a decision reported at [2011] B.C.T.C. Uned. 758, dismissed the Receiver’s application. “[N]ot only are almost all of the files not producible on the basis of relevance in the civil context, I conclude that solicitor-client privilege attaches to all of the files and documents in the possession of Farris”. The Receiver sought leave to appeal the order to the extent it applied to the trust account ledgers of Farris that pertained to the funds paid to Berke in July 2010.

The British Columbia Court of Appeal, per Newbury, J.A., in a decision reported at [2011] B.C.A.C. Uned. 89, granted leave to appeal.

The British Columbia Court of Appeal, K. Smith, J.A., dissenting, allowed the appeal and ordered that the trust account ledger information and entries identified by the Court be provided to the Receiver.

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Dish Network L.L.C. et al. v. Rex et al. 2012 BCCA 161 

Practice - Costs - Funding before judgment - When interim or advance costs available

The plaintiffs were “direct to home” satellite based subscription program providers. Rex and other defendants offered “grey market” services to Canadian residents to facilitate the unauthorized reception in Canada of the plaintiffs’ broadcast signals. The plaintiffs brought statutory civil claims for damages against the defendants under the Radiocommunication Act (RCA), as well as common law claims, and obtained injunctions prohibiting the defendants from continuing their “grey market” businesses. Rex filed a Notice of Constitutional Question, questioning the constitutional validity of sections of the RCA that prohibited the decoding of encrypted signals, made it an offence to sell equipment used to decode signals, and provided a statutory action for damages. Rex then filed an application for an order for advance costs to fund the constitutional challenge.

The British Columbia Supreme Court, in a decision reported at [2011] B.C.T.C. Uned. 1105, found Rex’s constitutional challenge to be of the exceptional and special nature to warrant advance costs, based on a hypothetical scenario of foreign broadcasters willing to broadcast in Canada. The plaintiffs appealed.

The British Columbia Court of Appeal allowed the appeal. The hypothetical litigation could not meet the requirements of exceptionality and special circumstances to justify an order for advance costs.

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Saskatchewan Federation of Labour v. Saskatchewan 2012 SKQB 62

Civil Rights - Freedom of speech or expression - Limitations on - Labour legislation

The Saskatchewan Federation of Labour (SFL) and the intervenor unions challenged the constitutional validity of the Public Service Essential Services Act (PSES Act) and the Trade Union Amendment Act (TUA Act) on the basis that they infringed rights and freedoms guaranteed by the Charter in a manner that could not be demonstrably justified under s. 1 of the Charter. The challenges to the validity of the legislation required the court to determine the extent to which the Charter protected collective action by employees, including the interdependent freedoms to organize, to bargain collectively and to strike, and to balance those protections with the need to ensure the effective delivery of essential services to the community by public sector employees.

The Saskatchewan Court of Queen’s Bench concluded that the PSES Act infringed upon the freedom of association of employees protected by s. 2(d) of the Charter, in a manner that could not be justified under s. 1 of the Charter. Accordingly, the PSES Act was declared to be of no force or effect, with the declaration of invalidity suspended for a period of 12 months. The court concluded that the TUA Act did not infringe the Charter, and dismissed the plaintiffs’ claim for a declaration of invalidity.

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R. v. P.M. 2012 ONCA 162 

Criminal Law - Sentencing - Sentencing procedure and rights of the accused - Evidence - Exclusion where prejudicial effect outweighs probative value

Over a period of approximately 13 months the accused had forced anal and vaginal intercourse with his daughter (complainant), who was then 13 and 14 years of age. There were approximately ten incidents. Police also found 1,837 images of child phonography on his computer, including videos and pictures of the complainant. He pleaded guilty to sexual assault, incest, sexual interference, making child pornography, possession of child pornography and careless storage of a firearm. The trial judge imposed a sentence of five years for the various sexual offences involving the accused’s daughter, one year consecutive for the child pornography offences and six months concurrent for a firearms offence making a total sentence of six years. The Crown appealed the sentence, arguing that the judge erred by not viewing a disc containing images of child pornography tendered by the Crown as evidence and that the total sentence was unfit.

The Ontario Court of Appeal, Epstein, J.A., dissenting, dismissed the appeal.

Editor’s Note: Certain names in the following case have been initialized or the case otherwise edited to prevent the disclosure of identities where required by law, publication ban, Maritime Law Book’s editorial policy or otherwise.

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McCann et al. v. Canada Mortgage and Housing Corp. et al. 2012 ONCA 243

Master and Servant - Remuneration - Pension or retirement benefits - Termination or revocation of plan

Between 1995 and 2000, Canada Mortgage and Housing Corp. (CMHC) terminated approximately half of its workforce. During the downsizing period, there were significant surplus assets in the CMHC pension fund. CMHC made two “benefit enhancement decisions” on January 1, 1999, and January 1, 2001, respectively, that distributed surplus funds between CMHC and remaining pension plan members. A class action was certified on behalf of claimaints regarding the surplus funds, the “Lacroix plaintiffs” and the “McCann plaintiffs”. The Lacroix plaintiffs were downsized prior to January 1, 1999, and did not receive any benefit from the benefit enhancement decisions. The McCann plaintiffs were downsized between January 1, 1999, and January 1, 2001, and had received their share of the first benefit enhancement decision, but not the second. In 2007, Charbonneau, J., granted an order severing the McCann plaintiffs from the Lacroix action with permission for the McCann plaintiffs to raise proposed common issues in their action and for the Lacroix plaintiffs to add new common issues. The Lacroix plaintiffs requested amendments to their statement of claim and the McCann plaintiffs sought to certify certain claims.

The Ontario Superior Court, in a decision reported at [2009] O.T.C. Uned. 262, denied the motions. The plaintiffs appealed.

The Ontario Divisional Court, in a decision reported at (2010), 263 O.A.C. 273, dismissed the appeals. The plaintiffs appealed.

The Ontario Court of Appeal dismissed the appeals.

Editor’s Note: There are a number of reported decisions relating to these actions.

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Federation Insurance Co. of Canada v. Markel Insurance Co. of Canada 2012 ONCA 218

Insurance - Automobile insurance - Compulsory government schemes - Subrogation or indemnity - Arbitration (incl. limitation period)

At issue in these appeals was when the limitation period began to run for a “loss transfer claim” made by one insurer against another for indemnification for statutory accident benefits paid to an insured. Loss transfer claims, brought pursuant to s. 275 of the Insurance Act were fault-based claims available as between insurers for different classes of vehicles as defined by regulation. In Federation Insurance Co. of Canada v. Kingsway General Insurance Co., the arbitrator held that the limitation period began to run the day after the insurer seeking indemnification made a demand for loss transfer. In Markel Insurance Co. of Canada v. ING Insurance Co. of Canada, the arbitrator found that the limitation period ran only from the date the second insurer definitively refused to indemnify. Federation and Markel appealed the arbitral decisions.

The Ontario Superior Court, in a decision reported at [2011] O.T.C. Uned. 6496, upheld the approach of the arbitrator in Federation v. Kingsway and rejected that of the arbitrator in Markel v. ING. Federation and ING appealed.

The Ontario Court of Appeal dismissed the appeals.

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Girouard v. Druet 2012 NBCA 40 

Contracts - Formation of contract - Intention - Intention to create a legal relationship

The plaintiff expressed an interest in purchasing the defendant’s (vendor’s) condo. The parties agreed to carry on their discussions through e-mail. Following an exchange of e-mails, the plaintiff claimed that the defendant was contractually bound to sell the condo unit to him. The plaintiff commenced an action against the defendant/vendor seeking specific performance or damages for breach of contract. Following examination for discovery, the plaintiff brought a motion under rule 23.01(a) of the Rules of Court for an interpretation as to whether the e-mails constituted a binding agreement for sale of the condo.

The New Brunswick Court of Queen’s Bench, Trial Division, in a decision reported 379 N.B.R.(2d) 1; 978 A.P.R. 1, determined that there was a binding agreement of purchase and sale respecting the condo. The e-mails constituted, in this case, a written document, as required under the Statute of Frauds and the “signatures”, as indicated on the e-mails constituted a signature for the purposes of the Statute of Frauds. The defendant/vendor appealed.

The New Brunswick Court of Appeal allowed the appeal and set aside the decision below. The record before the motions judge disclosed no binding agreement of purchase and sale. The court assumed, without deciding that the signing requirements of the Statute of Frauds/Electronic Transactions Act were met, and accepted that the writing requirement (Statute of Frauds) was also met. However, the parties lacked the requisite intention to enter into a binding contract for the purchase and sale of the condominium unit.

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Minister of National Revenue v. Calgary (City) 2012 SCC 20 

Sales and Service Taxes - Goods and services tax (incl. harmonized sales tax) - Administration, collection and enforcement - Input tax credit - Eligibility for

The city constructed a transit system for city residents’ use under obligations imposed on it by the City Transportation Act (CTA). In the course of constructing the system, the city entered into funding agreements with the province as contemplated by the CTA. The city paid GST on purchases made in constructing the system. Since the provision of a municipal transit service was an exempt supply, as defined in the Excise Tax Act, the city was not entitled to claim input tax credits regarding purchases made in providing the transit system. The city took the position that the construction of the system (as opposed to its operation) was a separate supply to the province under its contracts with the province (the funding agreements) such that the construction was not an exempt supply. Accordingly, the city claimed input tax credits with respect to GST paid in connection with the construction (approximately $6.5 million). The Minister of National Revenue denied the claim. The city appealed.

The Tax Court of Canada (TCC), in a decision reported at 2009 TCC 272, allowed the appeal. The Minister appealed.

The Federal Court of Appeal, in a decision reported at (2010), 403 N.R. 41, allowed the appeal, setting aside the TCC decision and confirming the Minister’s assessment. The city appealed.

The Supreme Court of Canada dismissed the appeal.

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