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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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Effect of renewal agreement was to reserve higher charge on arrears than that imposed on principal money not in arrears, contrary to Interest Act

Lougheed owned office building and granted mortgage to Equitable Trust to secure $27 million loan. Interest rate was agreed at prime interest rate plus 2.875 per cent per annum. When mortgage matured on June 30, 2008, Equitable Trust agreed to extend term by seven months. “First Renewal Agreement,” effective Aug. 1, 2008, carried per annum interest rate of prime rate plus 3.125 per cent over first six months and 25 per cent over seventh month. When First Renewal Agreement matured, parties entered into “Second Renewal Agreement” which provided per annum “interest rate” on loan of 25 per cent. It was effective Feb. 1, 2009, retroactive to one month prior to expiration of First Renewal Agreement. Second Renewal Agreement required Lougheed to make monthly interest payments at “pay rate” of greater of 7.5 per cent or prime interest rate plus 4.25 per cent. Difference between monthly payments and amount payable at stated interest rate would accrue to loan but would be forgiven if Lougheed made no default. Lougheed defaulted May 15, 2009 and Equitable Trust demanded repayment at stated rate of 25 per cent. Master found that both renewal agreements offended s. 8 of Interest Act (Can.). Chambers judge reversed master’s decision. Court of Appeal unanimously agreed that First Renewal Agreement complied with s. 8 and majority agreed that Second Renewal Agreement complied with s. 8. Lougheed’s appeal allowed. Pursuant to s. 8 of Act, mortgage agreement must not stipulate for, take, reserve or exact fine, penalty or rate of interest if effect of doing so imposes higher charge on arrears than that imposed on principal money not in arrears. Section 8 applies to discounts (incentives for performance) as well as penalties for non-performance. Inquiry is directed to effect of impugned mortgage term rather than term itself. Effect of Second Renewal Agreement was to reserve higher charge on arrears (25 per cent) than that imposed on principal money not in arrears (7.5 per cent or prime plus 5.25 per cent). Use of terms “pay rate” and “interest rate” of no consequence. 25 per cent per annum interest rate set by Second Renewal Agreement void and instead set at higher of 7.5 per cent and prime interest rate plus 5.25 per cent.
Krayzel Corp. v. Equitable Trust Co. (May. 6, 2016, S.C.C., McLachlin C.J.C., Abella J., Cromwell J., Moldaver J., Karakatsanis J., Wagner J., Gascon J., Côté J., and Brown J., 36123) Decision at 242 A.C.W.S. (3d) 438 was reversed. 265 A.C.W.S. (3d) 223.

Civil procedure


Partial voluntary disclosure of documents did not amount to waiver of immunity

WBG, international organization composed of separate organizations, provides loans, guarantees and grants for development projects in developing countries and primary lender for Multipurpose Bridge in Bangladesh. Three former employees of SNC-Lavalin, one of several companies bidding to supervise construction, and one representative of Bangladeshi official, charged under Canadian Corruption of Foreign Public Officials Act after allegedly conspiring to bribe Bangladeshi officials. Articles of Agreement of two WBG constituent organizations, IRBD and IDA, set out immunities and privileges. Articles provided archives inviolable and officers and employees immune from legal process for acts in official capacity unless immunity waived. INT, independent unit within WBG, forwarded emails suggesting corruption in process for awarding supervision contract to RCMP which obtained authorizations to intercept private communications and search warrant. Sgt. D prepared affidavits but made no handwritten notes and lost all emails. Crown intended to present intercepted communications at trial. Accused challenged wiretap authorizations pursuant to R. v. Garofoli and applied for order requiring production of INT records. Trial judge held that immunities and privileges facie applicable but WBG waived immunities by participating in RCMP investigation. He concluded documents were not archives and inviolable referred to protection from search and seizure or confiscation, not production. Trial judge ordered documents be produced for review. WBG’s appeal allowed. Despite its operational independence, INT’s documents formed part of IBRD’s or IDA’s archives, and INT’s personnel benefit from legal process immunity for acts in official capacity. Partial voluntary disclosure of some documents did not amount to waiver. In absence of express waiver, trial judge erred in finding WBG waived immunity. Production order should not have been issued under framework for third-party production. Garofoli framework assesses reasonableness of search when wiretaps used to intercept private communications. To obtain third-party records on Garofoli application, accused must show reasonable likelihood records will be of probative value to narrow issues in play on such application. Although documents sought could be relevant to ultimate truth of allegations in affidavits, they were not reasonably likely to be of probative value to what Sgt. D knew or should have known. Not unreasonable for Sgt. D to rely on INT information.
World Bank Group v. Wallace (Apr. 29, 2016, S.C.C., McLachlin C.J.C., Abella J., Moldaver J., Karakatsanis J., Wagner J., Gascon J., Côté J., and Brown J., 36315) 264 A.C.W.S. (3d) 1026.



Parliament intended concept of “disturbed” mind to be broad and flexible legal standard

Accused charged with two counts of second degree murder. Accused admitted giving birth to two babies and abandoning them in dumpsters. Expert witnesses gave conflicting opinions on whether accused’s mind was “disturbed” at time of offences. Trial judge had reasonable doubt that accused’s mind was disturbed and so found her guilty of lesser included offence of infanticide. Majority of Court of Appeal upheld acquittals for murder. Appeal dismissed. Parliament intended concept of “disturbed” mind to be broad and flexible legal standard. Defence was not required to show causal link between disturbance and commission of offences. Trial judge did not err in his analysis of issue.
R. v. Borowiec (Mar. 24, 2016, S.C.C., McLachlin C.J.C., Abella J., Cromwell J., Moldaver J., Karakatsanis J., Wagner J., and Brown J., 36585) Decision at 123 W.C.B. (2d) 351 was affirmed. 128 W.C.B. (2d) 487.

Aboriginal Peoples


Metis and non-status Indians are “Indians” under s. 91(24) of Constitution Act, 1867

Plaintiffs sought three declarations: that Metis and non-status Indians are “Indians” under s. 91(24) of Constitution Act, 1867 (Can.), that federal Crown owes fiduciary duty to Metis and non-status Indians and that Metis and non-status Indians have right to be consulted and negotiated with respecting their rights, interests and needs as Aboriginal peoples. Trial judge concluded “Indians” was broad term referring to all Indigenous peoples but declined to grant second and third declarations. Federal Court of Appeal accepted that “Indians” included all Indigenous peoples but narrowed scope to exclude non-status Indians and include only Metis who satisfied criteria from R. v. Powley, [2003] 230 D.L.R. (4th) 1, 125 A.C.W.S. (3d) 1 (S.C.C.). Federal Court of Appeal declined to grant second and third declarations. Appellants appealed. Crown cross-appealed but conceded that non-status Indians are “Indians” under s. 91(24). Appeal allowed in part. Declaration can only be granted if it will have practical utility i.e. will settle “live controversy” between parties. There was no doubt first declaration met this test. Neither level of government acknowledged constitutional responsibility over Metis and non-status Indians. Declaration would guarantee certainty and accountability. Metis and non-status Indians are “Indians” under s. 91(24) by virtue of fact they are all Aboriginal peoples. “Indians” historically used as general term referring to all Indigenous peoples, including mixed-ancestry communities like Metis. Federal government has at times assumed it could legislate over Metis as “Indians.” Section 35 of Constitution Act, 1982 (Can.) states that Indian, Inuit and Metis peoples are Aboriginal peoples for purposes of Constitution. Sections 35 and 91(24) should be read together. Jurisprudence demonstrates that intermarriage and mixed-ancestry do not preclude groups from inclusion under s. 91(24). Group of distinct people with unique identity and history whose members self-identify as separate from Indians not barred from inclusion within s. 91(24). Whether particular individuals or communities are non-status Indians or Metis and therefore “Indians” is question of fact to be decided on case-by-case basis. No reason for presumptively and arbitrarily excluding certain Metis from Parliament’s protective authority based on Powley criteria which was developed pursuant to s. 35, which serves very different constitutional purpose from s. 91(24). First declaration granted. Second and third declarations lacked practical utility because they were restatements of settled law.
Daniels v. Canada (Minister of Indian Affairs and Northern Development) (Apr. 14, 2016, S.C.C., McLachlin C.J.C., Abella J., Cromwell J., Moldaver J., Karakatsanis J., Wagner J., Gascon J., Côté J., and Brown J., 35945) Decision at 239 A.C.W.S. (3d) 545 was reversed. 264 A.C.W.S. (3d) 552.



Admitting evidence would not greatly undermine public confidence in rule of law

When police intercepted car driven by accused, latter attempted to flee police. Police rapidly got out of their car and asked several questions to accused who admitted that he did not have driver’s licence. Accused was arrested and charged with driving while prohibited by court order and with failure to comply with probation order. Accused unsuccessfully brought motion seeking to exclude evidence and was found guilty as charged. Accused appealed to Court of Appeal. Majority at Court of Appeal agreed with trial judge that evidence should not be excluded. Police officers were justified to take rapid actions when accused attempted to flee on foot. Admitting evidence would not greatly undermine public confidence in rule of law. Impact of breach on accused’s protected interest in informed choice was less significant. Evidence should not be excluded to preserve integrity of justice system. Rule against multiple convictions was inapplicable here because there were two separate criminal offences. Court of Appeal dismissed appeal. Accused appealed. Appeal was dismissed. Reasons given by majority at Court of Appeal were agreed with. Therefore, appeal should be dismissed.
R. c. Gagnon (Feb. 23, 2016, S.C.C., Cromwell J., Wagner J., Gascon J., Côté J., and Brown J., 36581) Decision at 124 W.C.B. (2d) 122 was affirmed. 128 W.C.B. (2d) 250.

Charter of Rights

Fundamental justice

Section 117 of Immigration and Refugee Protection Act (Can.) declared overbroad

Accused charged with human smuggling under s. 117 of Immigration and Refugee Protection Act. Section 117 prohibits organizing, inducing, aiding, or abetting persons to illegally enter Canada. Attorney General must authorize prosecutions pursuant to s. 117(4). Trial judge found that section was unconstitutionally overbroad. Court of Appeal allowed Crown’s appeal and found section constitutionally compliant. Appeal allowed. Section is overbroad in permitting prosecution of persons aiding family members or providing humanitarian aid. Ministerial discretion not to prosecute did not cure overbreadth. Crown had not shown that overbreadth was demonstrably justified. Appropriate remedy was to read down s. 117 as not applicable to persons who give humanitarian, mutual or family assistance.
R. v. Appulonappa (Nov. 27, 2015, S.C.C., McLachlin C.J.C., Abella J., Rothstein J., Moldaver J., Karakatsanis J., Wagner J., and Gascon J., 35958) Decision at 113 W.C.B. (2d) 108 was reversed. 128 W.C.B. (2d) 236.

Constitutional Law


Extension of declaration of invalidity was granted

Court declared ss. 241(b) and 14 of Criminal Code of no force and effect to extent that they prohibited physician-assisted death in certain circumstances. Court granted 12-month suspension of declaration of invalidity. Attorney-General of Canada applied for six-month extension of declaration of invalidity. Extension granted for four months. Interruption of legislative work due to federal election justified extension. Exemptions to extension granted to Quebec at its request and individuals who apply to superior court for relief.
Carter v. Canada (Attorney General) (Jan. 15, 2016, S.C.C., Abella J., Karakatsanis J., Wagner J., Gascon J., Côté J., McLachlin C.J., Cromwell J., Moldaver J., and Brown J., 35591) 128 W.C.B. (2d) 130.

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