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Contracts

EXEMPTION CLAUSES

No error in trial judge’s conclusion that exclusion clauses did not protect appellant

Appellant, in business of storing and servicing vessels, agreed to remove respondent’s vessel from water in order to effect repairs. Respondent signed Statement of Acceptance of Responsibility which stated that respondent accepted responsibility for all damage which may result during lift of vessel except that resulting from negligence by crane operator. Statement incorporated by reference notice and warning at appellant’s premises stating that owners took all responsibility for vessels. While respondent’s vessel undergoing repair, heavy winds swept through and dislodged respondent’s vessel, causing serious structural damage. Respondent commenced action. Appellant claimed it was respondent’s responsibility to build cradle to secure vessel and relied on exclusion clauses in Statement of Acceptance, and more particularly, statement that respondent understood and agreed that securing and locking of vessel was his responsibility. Trial judge allowed respondent’s action. Appellant appealed, arguing that trial judge erred in drawing adverse inference against appellant for allegedly disposing intentionally of relevant evidence and in concluding that exclusion clauses did not protect appellant from its negligence. Appeal dismissed. Trial judge did not make any reviewable error in concluding that exclusion clauses did not protect appellant. She found that “securing and locking” related to securing of lines, buoys and equipment and closing of hatches, windows and doors of vessel while vessel on appellant’s premises. Since it was clear that appellant was responsible for erection of cradle, this interpretation did not constitute error. Appellant took over from respondent the obligation to secure vessel, notwithstanding contractual provision in statement. Appellant, having decided to assume obligation of securing vessel, was bound to secure it properly. Warning signs applied to situations where boats had been left on appellant’s premises for purpose of storage and not applicable.
Burin Peninsula Marine Service Centre v. Forsey (Oct. 9, 2015, F.C.A., M Nadon J.A., Johanne Trudel J.A., and Yves de Montigny J.A., File No. A-506-14) Decision at 246 A.C.W.S. (3d) 699 was affirmed.  258 A.C.W.S. (3d) 314.

Evidence

ADMISSIBILITY

Statements to be redacted to conform with Apology Act, 2009

Plaintiff was guest of defendant homeowners. Resident was close to harbour entrance. Plaintiff allegedly was never at residence before and was not warned of possible hazards of swimming off homeowners’ dock. Plaintiff was swimming in proximity to harbour entrance. Plaintiff was injured when she was struck by motorboat. Plaintiff brought action in negligence. Plaintiff proposed to call witness who would say she was told by homeowners that they knew swimming at end of their dock was dangerous. Homeowners asserted evidence was coupled with apology and entire paragraph was inadmissible under provisions of Apology Act, 2009. Anticipated evidence contained separate sentences, with each sentence being separate thought. Second and fourth sentences of excerpt were to be redacted so as to conform with requirements of Act. Statements in question each conveyed separate and distinct thoughts or messages. There were statements of fact and statements of regret.
Cormack v. Chalmers (Sep. 8, 2015, Ont. S.C.J., Timothy Ray J., File No. CV-12-0240-00) 258 A.C.W.S. (3d) 88.

Conflict of Laws

LETTERS ROGATORY

Application for orders giving effect to letters rogatory was dismissed

Plaintiff commenced action in United States District Court (“USDC”) against company based in Ontario seeking to recover some $30 million allegedly owed for satellite and telecommunications services provided pursuant to various agreements, including one entered March 2009. Defendant filed counterclaim alleging agreement should be rescinded for misrepresentation. At plaintiff’s request, and with defendant’s consent, USDC issued letters rogatory to compel defendant’s former in-house counsel, chief financial officer and chief operating officer to attend to be examined under oath in Toronto. Plaintiff then brought application under s. 60 of Evidence Act for orders giving effect to letters rogatory in relation to counsel and CFO, but not COO. CFO consented. Counsel objected on basis she had no relevant evidence, having ceased employment with defendant in December 2008, evidence sought could be obtained from CFO and COO, giving evidence would violate her obligations of confidentiality and attending examination would be burdensome to her as sole practitioner. Application dismissed. Plaintiff had not established counsel had any relevant evidence that could not be obtained from CFO and COO. There was no question COO had specific knowledge of broader range of matters than counsel. Why plaintiff chose not to steps to examine him was mystery. In those circumstances, requiring counsel to attend examination would impose unfair burden upon her. Application should be dismissed without prejudice to plaintiff’s right to bring further application after examinations of CFO and COO if necessary.
Intelsat USA Sales LLC v. Hyde (Sep. 16, 2015, Ont. S.C.J., M.D. Faieta J., File No. CV-15-53057) 258 A.C.W.S. (3d) 52.

Mental Illness

ADVISORY REVIEW BOARD

Concept of “disease of the mind” had no application to inquiry under s. 672.54 of Criminal Code

Patient submitted that board had no jurisdiction to make any order under s. 672.54 of Criminal Code because patient did not suffer from “disease of the mind”. Appeal dismissed. Patient misunderstood jurisdiction. Board was statutory body and its jurisdiction over patient came from relevant provisions of Criminal Code. That jurisdiction was not affect by assertions of patient, or even medical evidence to effect that patient did not and never did have disease of mind. Concept of “disease of the mind” was legal one with such determination being made by court in criminal proceeding. Concept had no application to inquiry under s. 672.54 which was concerned with safety of public and mental health of “accused”. There was no merit to Charter arguments.
R. v. Smethurst (Sep. 24, 2015, Ont. C.A., Doherty J.A., Tulloch J.A., and Huscroft J.A., File No. CA C58603) 124 W.C.B. (2d) 476.

Evidence

CHARACTER EVIDENCE

Real danger existed that jury could convict based solely on fact that accused was gang member

Accused was charged with attempted murder and discharging firearm with intent to wound. Identity of shooter was at issue and Crown sought to introduce discreditable conduct of accused as part of its theory that accused was ordered to commit offence as lieutenant in gang. Crown sought to identify boss and other accused as being gang members with accused arguing Crown could introduce its theory by fact all of them had grown up in same neighbourhood. Application dismissed. There was real danger that jury could convict accused based solely on fact that accused was member in gang. Crown could introduce its theory through other means that would not be so prejudicial to accused.
R. v. Charlton (Sep. 25, 2015, Ont. S.C.J., Barnes J., File No. CRIMJ(P) 250/13) 124 W.C.B. (2d) 471.

Elections

POLITICAL PARTIES

Conservative Party of Canada was not legal entity that exercised powers by or under act of Parliament

In underlying proceeding applicant challenged decisions of respondent, Conservative Party of Canada, disqualifying him as candidate for nomination to run under Conservative Party banner in Kanata-Carleton riding. Applicant brought motion for order enjoining Conservative Party of Canada from conducting proposed candidate nomination meeting for federal riding of Kanata-Carleton. Motion dismissed. Federal Court’s jurisdiction to grant prerogative relief that applicant sought was limited to decisions made by federal board, commission or other tribunal. Political parties were voluntary associations. Conservative Party of Canada was not legal entity that exercised powers by or under act of Parliament. Decisions applicant sought to challenge were private matters that did not constitute decisions of federal board, commission or other tribunal. Federal Court had no jurisdiction to grant interim relief that was sought and it had no jurisdiction to deal with underlying application for judicial review.
Olumide v. Conservative Party of Canada (Jul. 22, 2015, F.C., R.L. Barnes J., File No. T-970-15) 258 A.C.W.S. (3d) 71.

Contempt of Court

PUNISHMENT

Contemnors fined $50,000 for continuing to use trade-mark

Judge ruled that respondent infringed applicant’s trademark HIGH TIMES, contrary to ss. 19 and 20 of Trademarks Act. Judge determined that respondent directed public attention to its goods, services or business in way that caused or was likely to cause confusion between its goods, services or business and those of applicant, contrary to s. 7(b) of Act. Judge permanently enjoined respondent from selling, distributing or advertising goods or services in association with applicant’s registered trademark or trademark likely to be confused with that of applicant. Respondent continued to use trademark and name HIGH TIMES. Respondent pleaded guilty to five counts of contempt. This was to determine penalty. Acts of contempt were objectively and subjectively serious. Respondent’s behaviour challenged judicial authority of court and public’s confidence in administration of justice. Aggravating factors included seriousness of acts of contempt and unexplained delay in compliance. Mitigating factors included this being first offence, guilty plea and fact that respondent’s business was relatively small and unsophisticated. Respondent had not accepted responsibility or apologized. Applicant was diligent in efforts to rectify contemptuous conduct, which warranted award of solicitor-client costs. Applicant was awarded solicitor-client costs of $62,500, payable jointly and severally by respondent and officer and director. Given history of trademark infringement and primary consideration of general deterrence, it was appropriate to order respondent and officer and director were to pay fine of $50,000 on joint and several basis.
Trans-High Corp. v. Hightimes Smokeshop and Gifts Inc. (Jul. 27, 2015, F.C., Simon Fothergill J., File No. T-1004-13) 258 A.C.W.S. (3d) 57.

Taxation

INCOME TAX

Decision striking portions of taxpayer’s notice of appeal was reversed in part

Predecessor corporations made deductions for payments to employees for surrender of share options. Minister assessed taxpayer under Income Tax Act, denying deductions as current expense. Taxpayer appealed. Minister’s motion to strike certain portions of claim was granted in part. Certain portions of notices of appeal struck. Trial judge found sole issue set out in notices of objection was whether taxpayer could deduct payments on current account. Trial judge found notices of objection proposed one reason why deduction should be permitted but that did not preclude corporation from raising other reasons in its notices of appeal. Trial judge found some alternate arguments by corporation were new reasons, not new issues. Trial judge found arguments that payments were deductible on income account due to operation of s. 20(1)(e) of Tax Act were alternative reasons. Trial judge found argument that payments were deductible under ss. 20(1)(b) and 111(5.2) was new issue and not alternate argument, as operation of s. 111(5.2) would entitle taxpayer to deductions unrelated to payments at issue. Trial judge found s. 111(5.2) was not optional and was required to be claimed if preconditions met. Trial judge found taxpayer not entitled to make arguments based on s. 20(1)(b) on ground that minister assessed large corporation in respect of certain issues, large corporation objected and minister confirmed assessment, but on different basis trial judge found minister had not abandoned original basis of assessment. Trial judge found relief sought was adequately described as required by large corporation rules in s. 165(1.11)(b) of Act. Taxpayer and Crown appealed. Appeal by taxpayer allowed, appeal by Crown dismissed. Taxpayer entitled to appeal. Taxpayer was seeking to claim deduction under s. 9 of Act in computing income or loss of its predecessors, and surrender payments were not on account of capital and therefore deduction of such payments would not have been denied as result of s. 18(1)(b) of Act. Notice of objection did not encompass alternative and inconsistent arguments related to s. 20(1)(b) and (e) of Act, which were new arguments. New deductions claimed were based on different premise (payments on account of capital versus current expense) and on different statutory provisions. However, Canada Revenue Agency acting on behalf of minister, responded in relation to merits of submissions with respect to s. 20(1)(b) and (e) and minister, in notices of confirmation, stating that basis of objection included argument that predecessors of taxpayer should be entitled to deduction under s. 20(1)(b) of Act. Minister explicitly accepted that issue related to s. 20(1)(b) of Act was part of objection. Minister accepted additional submissions at objection stage and treated them as part of objection, and submissions should be considered to be part of notice of objection for purposes of s. 169(2.1) of Act.
Devon Canada Corp. v. R. (Oct. 8, 2015, F.C.A., Johanne Trudel J.A., Wyman W. Webb J.A., and Donald J. Rennie J.A., File No. A-388-14, A-389-14, A-390-14, A-391-14) Decision at 243 A.C.W.S. (3d) 758 was reversed in part.  258 A.C.W.S. (3d) 238.

Constitutional Law

DISTRIBUTION OF LEGISLATIVE AUTHORITY

Labour relations of First Nation Police Service were provincially regulated

First Nation established First Nation Police Service under management of applicant, to provide effective, efficient and culturally appropriate police services for people of First Nation area. Canada Industrial Relations Board, acting under Canada Labour Code, certified respondent as bargaining agent for two bargaining units of employees working for applicant. Certification orders were based, in part, on view that labour relations of First Nation Police Service were federally regulated. After Supreme Court of Canada released two decisions, applicant thought that labour relations of First Nation Police Service might be provincially regulated and it applied to board to set aside certification orders. Board upheld certification orders, finding that labour relations of First Nation Police Service were federally regulated. Applicant applied for judicial review. Application granted. There was presumption that labour relations were provincially regulated. In order to rebut presumption, nature, operations and habitual activities of entity had to be examined to determine whether it constituted federal undertaking. Essential nature and function of First Nation Police Service was to provide policing services and was matter within provincial sphere. Presumption had not been rebutted. Status of being First Nation constable flowed directly from Police Services Act and not any federal law. First Nation constables had powers of police officer for purposes of carrying out duties. Appointment of First Nation constable allowed them to exercise policing authority only in Ontario, but First Nation Police Service was not limited to policing on reserves. Recruits had to train through Ontario Police College. First Nation constables performed essentially same functions as Ontario Provincial Police officers. First Nation Police Service was functionally integrated with OPP. First Nation Police Service was independent and autonomous from First Nation. Fact that First Nation Police Service had to deliver policing services in culturally sensitive way did not rebut presumption that labour relations of First Nation Police Service were provincially regulated. First step of inquiry was conclusive. Nature, habitual activities and daily operations of First Nation Police Service were provincial in nature and labour relations of First Nation Police Service were provincially regulated. Board did not have authority to make certification orders and they were set aside. Nishnawbe-Aski Police Service Board v. PSAC (Oct. 2, 2015, F.C.A., J.D. Denis Pelletier J.A., David Stratas J.A., and Wyman W. Webb J.A., File No. A-432-13) 258 A.C.W.S. (3d) 190.

Constitutional Law

CHARTER OF RIGHTS

Arbitrator did not err in finding that s. 3 of Charter did not apply to First Nation election

Applicant O was member of respondent First Nation and was nominated to run for Chief in election. However, O was told by election officer that he could not do so because s. 9.3(c) of Customary Election Regulations of the Peerless Trout First Nation stated that any elector who was plaintiff in civil action against First Nation was not eligible to be nominated and O had commenced civil action against First Nation that was ongoing. O appealed and brought action seeking to have s. 9.3(c) of Regulations declared invalid on grounds it was contrary to Canadian Charter of Rights and Freedoms. Master found that s. 9.3(c) of Regulations did not violate Charter. Arbitrator dismissed O’s appeal, finding that elections officer properly applied s. 9.3(c) of Regulations and that s. 9.3(c) of Regulations did not infringe Charter. O brought an application for judicial review. Application dismissed. There was no authority to support O’s argument that there was constitutional guarantee that members of First Nation could run for elected office of First Nation Council. Given clear line of authorities, arbitrator did not err in finding that s. 3 of Charter did not apply to First Nation election and therefore s. 9.3(c) of Regulations was not unconstitutional because it did not conflict with s. 3 of Charter. Arbitrator did not err in finding that eligibility requirement was not abuse of power or contrary to rule of law. It was open to arbitrator to find that s. 9.3(c) eligibility requirement was directed toward ensuring that First Nation Chief and councillors were able to fully and properly carry out duties and responsibilities and demonstrate responsible government. Arbitrator’s interpretation of s. 9.3(c) of Regulations was reasonable.
Orr v. Peerless Trout First Nation (Sep. 8, 2015, F.C., Cecily Y. Strickland J., File No. T-32-15) 257 A.C.W.S. (3d) 751.   
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