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Caselaw is a weekly summary of notable civil and criminal court decisions by the Supreme Court of Canada, the Federal Court of Canada and all Ontario courts.

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Judgements and Orders

SETTING ASIDE

University satisfied test for setting aside default judgment, writ of execution and garnishment

On April 3, 2012, plaintiff obtained $163,000 default judgment against defendant university. On April 12, 2012, plaintiff obtained writ of execution, and on April 16, 2012, it issued garnishment notice, from which it recovered $163,000. University moved to set aside default judgment, writ and garnishment. Motion granted. Plaintiff’s action alleged that parties had entered into agreement for plaintiff to assist university in recruitment of students and share tuition fees. It claimed university had breached its fiduciary duty by cancelling agreement and establishing satellite campus in Toronto without involvement of plaintiff. In its proposed statement of defence, university claimed it had cancellation rights under arrangement if certain levels of recruitment were not achieved or minimal levels were not reached. University said that it was indebted to plaintiff for only $52,000, and thus, it had been overbilled. Thus, save for $52,000, university had shown defence for claim upon which default judgment was based. There was also genuine issue for trial about whether relationship between parties was fiduciary. University satisfied test for setting aside default judgment, writ of execution and garnishment. Save for $52,000, garnished monies should be returned to university.
Education Invention Centre of Canada v. Algoma University (Feb. 24, 2015, Ont. S.C.J., Perell J., File No. CV-11-433568) 250 A.C.W.S. (3d) 112.

Appeal

Final or interlocutory order

Decision granting leave to amend statement of claim was interlocutory in nature

Plaintiff sued defendant in negligence, alleging that defendant had actual and constructive knowledge of fraudulent dealings by third party that caused plaintiff to lose about $17 million. Judge struck out portions of statement of claim that alleged negligence as result of constructive knowledge on basis that circumstances of case were not capable of establishing relationship of sufficient proximity to found duty of care. Plaintiff brought motion to amend statement of claim to reintroduce allegations grounded in constructive knowledge. Plaintiff was granted leave to amend statement of claim. Defendant appealed. Plaintiff brought motion to quash appeal on basis that order was interlocutory, not final. Appeal quashed. Defendant misconceived nature of motion judge’s decision. Decision allowed matter to proceed to trial and did not have effect of depriving defendant of substantive defence. It remained open to defendant to advance substantive defence to argument that duty to non-customer could be created based on constructive knowledge and that constructive knowledge could be made out on facts. Decision was interlocutory in nature and appeal lay to Divisional Court.
Dynasty Furniture Manufacturing Ltd. v. Toronto-Dominion Bank (Feb. 23, 2015, Ont. C.A., John Laskin J.A., Paul Rouleau J.A., and Grant Huscroft J.A., File No. CA M44316, C59401) 250 A.C.W.S. (3d) 11.

Air Law

AIRPORTS

Cancellation of employee’s transportation security clearance upheld on judicial review

Employee worked for employer that operated out of airport. Employee had held transportation security clearance (TSC) since 2001. In 2013, Transport Canada received report from police indicating employee was involved in organized crime group that imported and exported drugs. Report noted lack of sufficient evidence to charge employee, but that he continued to facilitate movement of drugs with assistance of co-workers. Employee was notified his TSC was under review and was provided with information in report and given opportunity to make submissions. Employee denied any involvement in alleged incidents. Director General of Aviation Security cancelled employee’s TSC based on police report and recommendation of TSC Advisory Body. Employee brought application for judicial review. Application dismissed. Employee had not been denied procedural fairness, and Director General’s decision was reasonable. Duty of procedural fairness was at lower end of spectrum and was satisfied in this case. Employee knew allegations against him and had opportunity to make submissions. Decision was based on well-documented and extensive evidence with no suggestion of bias. Director General had wide discretion under s. 4.8 of Aeronautics Act (Can.), with respect to TSC. Decision was based on reasonable belief that employee could unlawfully interfere with civil aviation in accordance with TSC Program Policy. Director General was entitled to rely on police report, which was detailed and based on information from multiple law enforcement sources. Criminal convictions were not benchmark to justify revocation of TSC. Further, conduct at issue did not have to be direct interference with aviation security.
Brown v. Canada (Attorney General) (Nov. 14, 2014, F.C., Catherine M. Kane J., File No. T-1800-13) 250 A.C.W.S. (3d) 10.

Police

DISCIPLINE

Delay in issuance of suspension without pay and allowances order did not cause significant prejudice

Petitioner disputed issuance of suspension without pay and allowances order (SPAO) against him pending outcome of disciplinary proceedings taken against him by employer. Acting Commissioner of Royal Canadian Mountain Police (RCMP) denied petitioner’s grievance. Acting Commissioner found that petitioner was not victim of undue delay in issuance of SPAO and in processing of grievance. Acting Commissioner found that duration of SPAO was not unreasonable and that it was warranted in particular circumstances of case. Acting Commissioner held that petitioner’s behaviour constituted breach of Code of Conduct of RCMP and that it was so outrageous as to significantly affect performance of his duties under Royal Canadian Mounted Police Act. Petitioner applied for judicial review. Judge concluded that petitioner failed to establish that delay was so as oppressive as to taint proceedings and to cause serious prejudice. Judge was satisfied that Acting Commissioner’s conclusion was reasonable. Petitioner appealed. Appeal dismissed. Delay in matter did not impact fairness of hearing. Petitioner did not suffer significant prejudice as result of delay. Acting Commissioner’s decision was reasonable. Decision was based on interpretation of RCMP suspension policy of which he had significant expertise. Interpretation and conclusion of Acting Commissioner were open to him. Reasons were thorough enough to explain how Acting Commissioner reached conclusion and for judge to judicially review decision. Judge properly applied standard of review.
Camara v. Canada (Feb. 12, 2015, F.C.A., Johanne Gauthier J.A., D.G. Near J.A., and A.F. Scott J.A., File No. A-268-14) Decision at 240 A.C.W.S. (3d) 749 was affirmed.  250 A.C.W.S. (3d) 150.

Competition Law

MERGERS

No more than marginal efficiency gains required for efficiencies defence to apply

Oil and gas operations in northeastern B.C. produce hazardous waste, generally disposed of in secure landfill. Four permits for dedicated landfill operations issued; two held by Tervita, which operates two landfills, one for Peejay site, not yet constructed, and one for Babkirk site. BLS, owner of Babkirk, retained firm to prepare documentation to apply for secure landfill permit. At same time, individual respondents (Vendors) negotiated agreement to purchase shares of BLS. Shortly prior to issuance of Environmental Assessment Certificate for Babkirk secure landfill, Vendors acquired shares of BLS through Complete Environmental. Vendors, intending to operate Babkirk site primarily as bioremediation facility, subsequently sold shares in Complete to Tervita. Commissioner applied to Tribunal pursuant to s. 92 of Competition Tribunal Act (Can.), for order that transaction be dissolved on ground it was likely to prevent competition. Tribunal found that quantified anti-competitive effects of merger exceeded quantified gains in efficiency and ordered Tervita to divest itself of BLS shares. Appeal by Tervita, Complete and BLS to Federal Court of Appeal dismissed but further appeal allowed. There was sufficient evidence upon which Tribunal could find that merger would be likely to substantially prevent competition. In order for Tribunal to make most objective assessment possible in efficiencies analysis, Tribunal should consider all available quantitative and qualitative evidence. Commissioner failed to meet s. 96 of Act burden to quantify quantifiable anti-competitive effects; possible range of deadweight loss resulting from merger was unknown due to lack of price elasticity information. Those quantifiable anti-competitive effects, therefore, should be assigned zero weight. Federal Court erred by allowing for subjective judgment to overtake analysis in setting weight of these effects at undetermined. Also unfair to require merging parties to demonstrate that efficiency gains exceed and offset undetermined amount. Section 96 of Act does not require more than marginal efficiency gains for efficiencies defence to apply. Federal Court of Appeal erred in finding that anti-competitive merger could not be approved under s. 96 of Act if only marginal or insignificant gains in efficiency result from that merger. Weight given to quantifiable effects is zero and there were no proven qualitative effects. Tervita made out efficiencies defence by establishing overhead efficiency gains resulting from BLS obtaining access to Tervita’s administrative and operating functions.
Commissioner of Competition v. CCS Corp. (Jan. 22, 2015, S.C.C., McLachlin C.J.C., Abella J., Rothstein J., Cromwell J., Moldaver J., Karakatsanis J., and Wagner J., File No. 35314) Decision at 226 A.C.W.S. (3d) 719 was reversed.  248 A.C.W.S. (3d) 811.

Charter of Rights

ENFORCEMENT OF RIGHTS

Police failed to ascertain whether second strip search was necessary

Accused charged with importing cocaine into Canada. Accused applied for stay of proceedings or exclusion of evidence based on breach of s. 8 Charter rights. Upon her arrival at airport from Jamaica, officers discovered that accused had approximately 1.2 kilos of cocaine hidden in her bra. Customs officers conducted strip search of accused and shortly thereafter transferred custody of her to police. Accused was transferred to detachment and placed in cell, where female officer conducted further strip search of her. Door of cell remained open to hallway and search was video recorded by security camera located in cell. Officers did not discuss circumstances of case and whether strip search was necessary. No supervisory authorization was sought for strip search. After strip search accused provided statement that was video and audio recorded. Accused testified that she felt uncomfortable in circumstances, but that search had no real impact on her or her recorded statement. Accused argued second strip search by police was unreasonable. Accused argued that even though there was no causal connection between search and statement, statement should have been excluded. Search was not challenged until after jury had watched and listened to accused’s recorded statement. Application allowed, evidence excluded, mistrial ordered. Other male officers did not view any part of search and there was no one else in detachment at time of search. Officers were unfamiliar with, or unaware of, any written policy or protocol regarding strip searches, but knew that they were routinely done in drug importation cases. Police failed to ascertain from customs officers whether strip search had been conducted and whether second search was necessary. Suspicion that drugs may be hidden somewhere else did not validate conducting strip search. There were no reasonable grounds for second search since accused was in custody from time of first strip search and would not have had opportunity to acquire or hide on her person any other contraband. Strip search was unreasonable and violated accused’s s. 8 Charter rights. Given facts of case, especially circumstances and timing of bringing of application, stay was not justified. While accused’s statement was taken shortly after search, it was not causally connected to search. Strip search and accused’s statement were integral part of same transaction, there existed temporal connection, and s. 24(2) Charter analysis was appropriate. Charter-infringing conduct was very serious, as strip search was very significant violation of right to privacy and accused’s right to be protected from unreasonable search. Given that accused had attempted to re-enter Canada with cocaine on her person, impact of breach was less significant. Breach did not impact on accused’s demeanour or attitude when her statement was recorded. If statement was excluded, Crown still had case. There was heightened interest in prosecution of this case. Seriousness of breach overwhelmed other two considerations that favoured admission of statement. Actions of officers in relation to second search, while not intentional, reflected troubling lack of knowledge of law and principles to be applied to strip searches. While public had interest in adjudication of case on its merits, educated public would have demanded better police practices. Breach was so significant that accused’s recorded statement ought to have been excluded. As statement had already been viewed by jury, only recourse was to declare mistrial.
R. v. Foster (Dec. 12, 2014, Ont. S.C.J., Thomas A. Bielby J., File No. Crim J(F) 296/13) 118 W.C.B. (2d) 489.

Breathalyzer

DEMAND FOR BREATH (BLOOD) SAMPLE

Crown not required to disprove hypothetic theories not grounded on evidence

Accused appealed conviction for impaired care or control and refusal to provide breath sample. Witness observed tractor trailer driving in erratic manner. Witness testified that truck pulled up to gas pump and that he saw accused, who was swaying and unstable on his feet, trying to put card into pump. When police arrived, witness pointed out accused as driver of truck and then left scene. Officers testified that accused had red-rimmed eyes, slurred speech, and was unsteady on his feet. Officer testified that accused admitted that truck was his and that he was driving it. Officer made demand for breath sample into his approved roadside screening device but accused did not provide suitable sample. Breath technician, who also noted signs of impairment, demanded breath sample into breathalyzer, which accused refused to provide. No keys to truck, vehicle registration, or insurance particulars were ever found on accused or elsewhere. Accused argued that trial judge erred in ruling that only reasonable inference was that he was operator of truck or that he had care and control of it. Accused argued that witness did not see him driving truck or exit its cab. Accused argued that trial judge erred in not considering whether he was gas station attendant or passenger in truck, as either scenario was reasonably plausible explanation and inference that could have been drawn. Accused argued that inference drawn by trial judge was matter of conjecture or speculation and was not reasonable inference on evidence in its totality. Appeal dismissed. Crown was not required to disprove hypothetic theories not grounded on evidence. While accused’s admission that he was driver of truck could not be used to determine identity beyond reasonable doubt, it could be used in regards to reasonable and probable grounds. Given evidence as to erratic driving of truck, fact that accused, who exhibited signs of impairment, was refuelling it, and accused’s admission that he was driver, police had reasonable and probable grounds to make breath demand. Crown did not need to prove beyond reasonable doubt that accused was driver in order to argue that reasonable and probable grounds for demand existed. Trial judge was correct in ruling that reasonable and probable grounds were overwhelming. Trial judge found that there was no other reasonable explanation as to why accused was refuelling truck other than that he had care and control of it. Gas area of truck stop was self-serve facility, finding inconsistent with suggestion that accused could have been gas attendant. Reasonable inference, other than that accused had care and control of truck, would have been matter of conjecture or speculation and would not have raised reasonable doubt. Trial judge did not err and had evidence before him from which he could have drawn facts necessary to support his decision.
R. v. Pozniak (Jan. 5, 2015, Ont. S.C.J., Thomas A. Bielby J., File No. SCA(P) 700/13) 118 W.C.B. (2d) 507.

Contracts

BUILDING CONTRACTS

Motion judge erred in ignoring uncontested sworn evidence

Appellants purchased house from defendants and later discovered structural problems. Expert report identified problems including load-bearing ability of roof and recommended further investigation. Appellants brought action against vendors, their realtor, two real estate agents and City. Second expert report identified further problems and raised safety concerns about roof. One of defendants testified that respondents designed house and prepared working drawings. Appellants moved to amend claim to add respondents as defendants for negligent design of house causing it to be danger to safety. Respondents brought motion for summary judgment. Motion judge granted summary judgment dismissing claim on basis it was barred by limitation period. Plaintiffs appealed. Appeal allowed. Summary judgment was set aside. Motion judge erred in ignoring uncontested sworn evidence on central matter in issue without giving any reasons for so doing. Motion judge did not refer to lawyer’s affidavit that indicated second report was first information that house might be dangerous by design.
O’Dowda v. Halpenny (Jan. 19, 2015, Ont. C.A., K.M. Weiler J.A., K. Feldman J.A., and M.L. Benotto J.A., File No. CA C59091) 248 A.C.W.S. (3d) 816.

Civil Procedure

SETTLEMENT

Language of minutes of settlement not vague, contradictory or unclear

Deceased had been in common law relationship with wife for 18 years when he died. Deceased and wife resided in home that was in name of company, whose shares were in deceased’s name. Deceased had two children from prior union, son and daughter. Deceased’s will named wife executrix and trustee of estate. Will provided that residue of estate would be transferred in equal shares to wife, son and daughter. Wife filed application for certificate of appointment of estate trustee, which son objected to. Son raised issue of validity of will. Sister brought motion for directions. Court appointed B estate trustee during litigation. B tried to sell home but wife resisted his efforts, claiming she was owner of property. B sought advice and directions from court. Wife initiated lawsuits. Son brought motion to remove B as estate trustee and to have sister appointed estate trustee. Parties entered into minutes of settlement. Son brought motion for order nullifying settlement agreement. Motion dismissed. Minutes of settlement were binding contract between those who executed agreement. There was no issue of son’s capacity or intention to enter into minutes of settlement. Mediation and resulting settlement addressed all outstanding issues. Language of minutes of settlement was not vague, contradictory or unclear. There was no basis in law to nullify minutes of settlement.
Bryant v. Bryant Estate (Jan. 9, 2015, Ont. S.C.J., Louise L. Gauthier J., File No. 2013-6967) 248 A.C.W.S. (3d) 804.

Immigration

JUDICIAL REVIEW

Decision refusing adjournment was breach of applicant’s right to natural justice

Applicant came to Canada with his parents when he was 12 years old. Applicant had daughter with common law partner. Applicant was convicted and incarcerated for sexual assault of daughter when she was minor. Admissibility hearing was held while applicant was incarcerated and he was issued removal order. Applicant appealed. Applicant was not represented because he had not been able to obtain lawyer and he asked for adjournment. Board member refused to grant adjournment on basis that applicant had not made reasonable efforts to retain counsel. Applicant applied to reopen appeal but panel dismissed application. Applicant applied for judicial review. Application granted. Failure to consider all factors set out in R. 48(4) of Immigration Appeal Division Rules (Can.), constituted error of procedural fairness. There was no evidence that board member gave any consideration to at least two mandatory factors in Rule 48(4), nature and complexity of matter and previous delays. It was open to board member to grant postponement to fixed date. Panel’s decision to refuse to reopen appeal was unreasonable. Panel failed to consider Rule 48(4) or its jurisprudence and it failed to examine whether board member who refused adjournment had done so. Decision refusing adjournment was breach of applicant’s right to natural justice and fair hearing because board member failed to consider and weigh mandatory factors in Rule 48(4).
S. (V.L.) v. Canada (Minister of Citizenship and Immigration) (Dec. 10, 2014, F.C., Russel W. Zinn J., File No. IMM-5114-13) 248 A.C.W.S. (3d) 918.
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