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Case Law is a sample selection from the weekly summaries of notable unreported civil and criminal court decisions published in Law Times newspaper.

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Legal tests to be applied to determine employment status were not considered

This was appeal and cross-appeal from judge’s decision varying assessments. Appellant engaged truck drivers to provide services to client. Respondent determined that 96 truck drivers engaged by appellant in 2002, 2003 and 2004 were employees. Respondent assessed appellant for premiums payable under Employment Insurance Act (Can.), and contributions payable under Canada Pension Plan. Appellant appealed. Judge divided workers into two groups. One group was made up of 43 drivers who had signed agreement with appellant and other group was 53 drivers for whom there was no evidence of written agreement. Judge concluded that 53 drivers were employees of appellant but other 43 drivers were not. Appeal allowed; cross-appeal dismissed. Judge did not err in considering two groups of drivers separately. Judge appeared to have considered that any driver who had signed one of 43 agreements was incorporated drivers but that finding was based on misapprehension of facts. Of 43 drivers who signed agreements only 2 were incorporated drivers. As result of judge’s approach to 43 drivers who had signed agreements, legal tests to be applied to determine whether they were employees were not considered. Agreement signed by drivers contained clauses that suggested common intention that driver would be engaged as person carrying on own business but other factors must be considered. Appellant did not supervise drivers. Drivers did not provide own trucks or equipment or bear any costs of operating trucks. Contracts provided right to driver to substitute another driver at own cost but there was no evidence that any driver exercised right. Drivers did not bear any financial risk related to any investment in trucks or equipment. Drivers did not bear any responsibility for investing in anything that was required to fulfill contractual obligations or for managing work. Drivers did not negotiate rates of pay. Factors, on balance, weighed in favour of conclusion that drivers who signed agreements with appellant were employees, in contradiction to intention clauses. With respect to remaining 53 workers who did not sign agreements, judge’s conclusion that drivers were not self-employed was reasonable. Judge did not make error of law or palpable or overriding error of fact.

TBT Personnel Services Inc. v. Canada (Sep. 22, 2011, F.C.A., Sharlow, Pelletier and Stratas JJ.A., File No. A-388-10) 207 A.C.W.S. (3d) 477 (19 pp.).



Application judge failed to consider prejudice caused to alleged contemnor

Both appellant and respondent sought same relief, namely that stay imposed by application judge be set aside and that matter be returned to him for decision based on record before him. While judge has inherent jurisdiction to control process before him, and inherent jurisdiction to adjourn or stay proceeding, that discretion must be exercised judicially, with regard to potential prejudice caused by adjournment or stay. Here, application judge failed to consider prejudice caused to alleged contemnor, which was entitled to prompt resolution of allegations against it, based on evidence parties chose to put before court. Appeal was allowed. Stay imposed by application judge was set aside and matter ordered returned to him for decision on basis of record before him.

Bremsak v. P.I.P.S.C.
(Sep. 20, 2011, F.C.A., Dawson, Pelletier and Noel JJ.A., File No. A-160-11) 207 A.C.W.S. (3d) 262 (4 pp.).

Administrative Law


Agency failed to consider and decide central issues including settlement agreement

Agency determined that it could adjudicate complaint concerning noise and vibration arising from operations at Rail Yard notwithstanding that parties previously entered settlement agreement with respect to same complaint. Appeal was allowed. Where parties finally resolved complaint in settlement agreement, practical effect of agency decision to ignore settlement agreement and adjudicate issues previously resolved would be to denude collaborative measures of any effect. Submission that parties did not present settlement agreement as final and binding agreement that would bar adjudication of second complaint was untenable. Agency failed to consider and decide central issues by parties including effect of settlement agreement. Decision was unreasonable.

BNSF Railway Co. v. Canadian Transportation Agency (Sep. 28, 2011, F.C.A., Noel, Pelletier and Dawson JJ.A., File No. A-25-11) 207 A.C.W.S. (3d) 183 (15 pp.).



Requirement to post bargaining unit vacancies would negate Senate’s hiring policy

Parliamentary Employment and Staff Relations Act (Can.), establishes special regime governing labour relations of employees who work within House of Commons and Senate. Section 55(2) prohibits board from including in arbitral award any matter dealing with standards, procedures or processes governing appointment, promotion or transfer of employees. Staffing and hiring governed by employer policies rather than collective agreements. Public Service Alliance of Canada (“PSAC”) certified to act as bargaining agent for “Operational Group” of Senate. Bargaining negotiations for renewal of collective agreement for this group did not lead to new collective agreement and PSAC sought binding arbitration under Act. Public Service Labour Relations Board issued arbitral award. PSAC took issue with only one determination which concerned posting of bargaining unit vacancies. PSAC proposed to include new provision in collective agreement which would require Senate to post bargaining unit vacancies. Senate objected on basis that s. 55(2) of Act prohibits such proposal from being considered. Board held it did not have jurisdiction to consider such proposal. PSAC’s application for judicial review dismissed. Applicable standard of review is reasonableness. Requirement to post bargaining unit vacancies would negate Senate’s current hiring policy allowing for appointments to proceed without any advertisement in appropriate circumstances. Board acted reasonably in concluding it did not have jurisdiction. Lack of detailed reasons result of Act and peculiarities associated with binding arbitral awards. Act limits extent of reasons required. Board focused on relevant factors and evidence, considered representations of parties and did not impede intelligent judicial review.

P.S.A.C. v. Senate of Canada
(June 28, 2011, F.C.A., Blais C.J., Sharlow and Mainville JJ.A., File No. A-301-10) 205 A.C.W.S. (3d) 126 (17 pp.).

Industrial And Intellectual Property


Trial judge did not apply three-prong test for determination of inducement

Appeal of decision declaring that appellants had infringed respondents’ patent. Respondents had developed seal assembly used around pump shafts in oil wells to prevent oil from escaping around shafts. Respondents had sold prototype to two other companies and then obtained patent. Appellants started manufacturing and selling similar design. Lower court affirmed that appellants had infringed respondents’ patent rights and issued injunctive relief. Sale to other companies did not constitute disclosure to public even without confidentiality regime since expectation of confidence existed. Appeal was based on claims construction, prior disclosure, obviousness, witness credibility, inventorship, misrepresentations to Patent Office and adverse inferences. Appeal partially allowed with respect to adverse inferences. Ruling of infringement with respect to method claim was reversed as appellants did not practice such method. Trial judge had assumed that sales to customers occurred and that they would have used instruction manual, thus, inferring that there appellants had induced third parties to infringe method claim. Trial judge did not apply three-prong test for determination of inducement. Significant gaps in evidentiary support existed. Court returned issue of infringement of method claim to lower court judge for redetermination in accordance with established test. All other arguments failed as appellants did not show palpable and overriding error by trial judge.

Weatherford Canada Ltd. v. Corlac Inc. (July 18, 2011, F.C.A., Nadon, Evans and Layden-Stevenson JJ.A., File No. A-282-10) Decision at 189 A.C.W.S. (3d) 478 was reversed in part. 204 A.C.W.S. (3d) 888 (87 pp.).

Civil Procedure


Risks of costs being awarded did not disappear when complainant decided not to defend tribunal’s determination

Canadian International Trade Tribunal made procurement determinations upholding, in part, complaints made by complainant pursuant to Canadian International Trade Tribunal Act. Complaints related to contracts issued to qualified bidders in process governed by Networking Equipment Support Services National Master Standing Offer which is means by which federal government departments may obtain computer networking equipment. Crown contended tribunal lacked jurisdiction to determine complaints because complainant did not submit bid. Tribunal found that no act of Public Works and Government Services Canada (“PWGSC”) in procurement process precluded complainant from submitting bid. Crown’s application for judicial review granted. Amount of costs awarded to Crown should not be reduced or limited because complainant did not oppose consolidated application. Crown not relieved of normal burden on applicant to produce record, prepare memorandum of fact and law, and appear at hearing to make submissions. Having initiated complaint proceedings, complainant bore risk that tribunal’s determinations might be successfully challenged and that Crown might be awarded costs. Risk did not disappear when complainant decided not to defend tribunal’s determination.

Enterasys Networks of Canada Ltd. v. Department of Public Works and Government Services (June 20, 2011, F.C.A., Blais C.J., Sharlow and Mainville JJ.A., File No. A-264-10; A-312-10; A-321-10) 204 A.C.W.S. (3d) 899 (18 pp.).



Informer privilege did not apply to Canadian Security Intelligence Service human sources

This was appeal from Federal Court Judge’s decision ordering disclosure of documents that were allegedly sensitive and potentially injurious. Appeal allowed. Three-prong test to be applied was set out in R. v. Ribic (2003), 185 C.C.C. (3d) 129 (F.C.A.). Judge must first determine whether information sought to be disclosed was relevant to proceedings in which it was intended to be used. If information met relevancy test judge must determine whether disclosure of information would be injurious to international relations, national defence or national security. If judge was satisfied that disclosure of sensitive information would result in injury judge must determine whether public interest in disclosure outweighed public interest in non-disclosure. Informer privilege did not apply to Canadian Security Intelligence Service human sources, as that would be contrary to s. 38 of Canada Evidence Act and express will of Parliament. However, in applying Ribic test judge either discounted evidence of injury or did not give it weight it deserved. Judge committed palpable and overriding error and disclosure order was set aside.

Canada (Attorney General) v. Kalifah
(June 13, 2011, F.C.A., Blais C.J., Letourneau and Trudel JJ.A., File No. A-428-10) 203 A.C.W.S. (3d) 771 (32 pp.).
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