DIGEST
OF RECENT DECISIONS FROM CANADA’S COURTS
Michael Hamilton, LL.B. E-mail: jandm@hfx.eastlink.ca
ADMINISTRATIVE LAW
JUDICIAL REVIEW – Respondent
entitled to proceed by way of action in
Ontario Superior Court of Justice
without first proceeding by way of
judicial review in Federal Court.
Appeal by the Crown from a Federal
Court of Appeal judgment allowing
respondent to seek damages in an action
resulting from a decision of Industry
Canada not to grant it a personal communication services licence. When its
application for a licence was refused,
respondent brought an action in the
Superior Court of Justice against the
federal Crown for breach of contract,
negligence and unjust enrichment, and
sought compensation for claimed losses
of $250 million. The Crown challenged
the jurisdiction of the court on the
ground that the Federal Court had
exclusive judicial review jurisdiction in
relation to decisions of all federal
boards, commissions or other tribunals,
and that respondent could not bring an
action. The court dismissed the objection on the ground that it was not plain
and obvious that the claim would fail.
The Court of Appeal upheld the decision. Section 17 of the Federal Courts
Act and s. 21 of the Crown Liability
and Proceedings Act (CLPA) conferred
concurrent jurisdiction on the superior
courts and the Federal Court for claims
against the Crown, and s. 18 of the
Federal Courts Act did not remove relief by
way of an award of damages from the
jurisdiction of superior courts.
HELD: Appeal dismissed. Apart from
constitutional limitations, none of which
were relevant here, Parliament may, by
statute, transfer jurisdiction from the
superior courts to other adjudicative
bodies including the Federal Court.
However, any derogation from the jurisdiction of the provincial superior courts
required clear and explicit statutory language. Nothing in the Federal Courts
Act satisfied that test. The explicit grant
to the provincial superior courts of concurrent jurisdiction in claims against
the Crown in s. 17 of the Federal Court
Act and s. 21 of the CLPA directly refuted
the Crown’s argument. If a claimant
sought compensation, he or she could
not get it on judicial review, but must
file an action. Respondent was not
attempting to nullify or set aside the
decision to issue licences. Nor did it seek
to deprive the decision of any legal
effect. Its causes of action in contract,
tort and equity were predicated on the
finality of that decision excluding it
from participation in the telecommunications market. The Ontario Superior
Court of Justice had jurisdiction over
the parties and the subject matter, and
had the power to grant the remedy of
damages.
Canada (Attorney General) v. Tele-Zone Inc., [2010] S.C.J. No. 62,
S.C.C., per Binnie J. (LeBel, Deschamps, Abella, Charron, Rothstein
and Cromwell JJ. concurring), Dec.
23/10. Digest No. 3034-001 (Approx.
31 pp.)
ASSOCIATIONS, CLUBS
& NON-PROFIT
ORGANIZATIONS
MEMBERSHIP – Court dismissed
application for declaration that a 2003
constitution was invalid and that
respondent association was governed by
its original constitution.
Application for declaration that
respondent association was governed by its
original constitution and not the one
adopted in 2003. Applicant also sought to
appoint an impartial observer to oversee
future elections and preside at the next
annual general meeting and restrain the
association from accepting the mass payment of membership dues by third parties.
HELD: Application dismissed. There was
no evidence before the court to justify the
appointment of an outsider to ensure the
fairness of elections or annual general meetings or to show that there are current problems which demonstrated the need for such
orders. The 2003 constitution was adopted
by the executive committee and brought
before a special meeting of members for
approval. Written notice of the meeting was
given and copies of the constitution were
available. Applicant presented no evidence
to show there was no quorum and no objection appeared to have been raised at the
time. The language of the old constitution,
which required a vote of 80 per cent of the
membership, was ambiguous. The court
interpreted it to be 80 per cent of those
present at the meeting. Under that interpretation, the 2003 constitution was validly
adopted. The constitution had been in place
for over seven years without objection.
Bala v. Scarborough Muslim Assn.,
[2010] O.J. No. 5373, Ont. S.C.J., Swin-
ton J., Dec. 13/10. Digest No. 3034-002
(Approx. 3 pp.)
CIVIL PROCEDURE
ADJOURNMENTS – Trial judge failed
to consider whether prejudice to plaintiff
was reparable by indemnity in refusing to
grant defendant adjournment of the trial.
Appeal from the dismissal of defendant’s
motion to adjourn the trial. In 2001 there
was a fire on a ship owned by plaintiff. In
March 2002 plaintiff filed an originating
notice against defendant based in negli-
gence. The originating notice was served on
defendant in May 2004 and it filed a defence
in October 2004. In June 2009 the trial was
scheduled for December 2010. Defendant
applied for an adjournment because its lead
counsel was committed to a trial in Ontario,
which was expected to last until April 2011.
The trial judge denied the request for the
adjournment on the basis that the trial was
originally scheduled to allow time for the
trial in Ontario to take place, defence coun-
sel was aware of the scheduling problem for
many months, and he did not mention the
Nova Scotia proceedings during the sched-
uling of the Ontario trial. The judge found
that any prejudice to defendant was miti-
gated as defendant’s counsel was a partner
at a large firm with many experienced coun-
sel who would have had time to prepare for
trial. In addition, the judge found that
plaintiff would be prejudiced because it had
to arrange for the attendance at trial of wit-
nesses who worked outside of Canada. The
judge also found that an adjournment
would prejudice court operations as it was
too late to schedule other matters.
NON-SUIT – Trial judge did not err in
granting a non-suit at the conclusion of
the presentation of plaintiffs’ evidence.
Appeal from a judge’s decision to grant a
non-suit at the conclusion of plaintiffs’ evidence. Plaintiffs, Alberta residents, were
injured in a 2001 motor vehicle accident in
Quebec. They received no fault payments
from the Société de l’assurance automobile
du Québec, after which they were informed
that the Société had an agreement with the
Government of Alberta pursuant to which
plaintiffs were to seek compensation from
their own insurers in Alberta. Plaintiffs sued
respondent insurer, framing their causes of
action in negligence alone. In granting the
non-suit, the judge noted that the terms of
the plaintiffs’ policy with respondent limited
their entitlement to supplemental benefits to
that which would be payable under the
applicable laws of Quebec if the plaintiffs
had been Quebec residents. The judge found
that the plaintiffs failed to make out a prima
facie claim in negligence, by failing to show
that respondent breached any standard of
care owed to them, that they suffered a loss
or that respondent caused their loss.
HELD: Appeal dismissed. The judge
erred in failing to analyze whether or not
the non-suit application should have succeeded on the basis of breach of contract
rather than negligence, given that he was
aware of the provisions of the insurance
contract. Nonetheless, while the plaintiffs
did adduce some evidence that they sustained injuries in the accident, their evidence failed to establish that the payments
they received from the Société were less
than those to which they were entitled
under Quebec law. Had the judge assessed
the non-suit application against a breach of
contract cause of action, he would have
been correct in allowing the non-suit.
Jiwani v. Royal and SunAlliance
Canada, [2010] A.J. No. 1428, Alta.
C.A., per Martin, McDonald and Bielby
JJ.A., Dec. 13/10. Digest No. 3034-004
(Approx. 5 pp.)
CONTEMPT OF COURT
DISOBEYING COURT ORDER –
Appellate court allowed an appeal from
a finding of contempt of an injunction
because the order granting the injunc-
tion was unclear and ambiguous.
Appeal from a decision finding defendants in contempt of a court order. The individual defendants were former employees
of plaintiffs who incorporated a company
essentially in the same business as plaintiffs. Plaintiffs commenced an action
against defendants for breach of contract
and breach of fiduciary duties. Two interim
injunctions prohibited defendants from
soliciting or serving plaintiffs’ previous or
current customers and from soliciting any
of the plaintiffs’ employees. The parties differed in their opinions as to the scope of the
order. Defendants requested clarification of
the scope of the injunction on multiple
occasions. The judge who issued the order
issued his own corrigendum narrowing the
reach of the order. On an appeal by defendants, the injunction was further amended.
HELD: Appeal allowed. The order was
unclear and ambiguous because it incorporated overly broad and unclear language,
and external circumstances had exacerbated that lack of clarity, such that a finding
of contempt, in relation to it, could not be
sustained. The ambiguity of the order made
its application to the facts problematic.
Culligan Canada Ltd. v. Fettes,
[2010] S.J. No. 735, Sask. C.A., per
Jackson J.A. (Lane and Ottenbreit JJ. A.
concurring), Dec. 9/10. Digest No.
3034-005 (Approx. 13 pp.)
CORPORATIONS
SHOTGUN BUY-SELL CLAUSE –
Application judge erred in finding that
appellants had not complied with the
payment provisions in a buy-sell clause
entitling it to purchase respondents’
shares in two companies.
Appeal from a decision deeming that
appellants had accepted an offer from
respondents to purchase their shares.
Respondents owned 100 per cent of the
shares of respondent companies, M Corp.
and M Inc. Appellant G was hired as a consultant to the companies and in time became
an employee. G, through his company Z
Ltd., purchased 40 per cent of the shares in
the companies from respondents. The two
groups entered identical shareholders agreements for M Corp. and M Inc. G was
appointed president and CEO of the companies. In 2009 G left the companies.
Respondents triggered the buy-sell provisions under the shareholders agreement by
delivering a notice offering to purchase
appellants’ shares or to sell its own share-holdings. Appellants purported to accept the
offer to purchase respondents’ shares. G
applied to the court for declaratory relief to
that effect. The application judge ruled that
appellants’ acceptance to purchase respondents’ shares was invalid because they did not
provide for 100 per cent payment of the pur-
