ADMINISTRATIVE LAW
JUDICIAL REVIEW AND STATU-
TORY APPEAL – Review for lack or
excess of jurisdiction – Practice and
procedure.
Application by Manitoba Hydro-Elec-tric Board (“Hydro”) for leave to appeal
from an order of the Public Utilities Board,
and for a stay of the order pending its
appeal. In 2009, Hydro applied to the
Board for approval of a rate increase, citing the need to finance new generation,
transmission and distribution facilities
over the next decade and the need to
maintain an adequate level of retained
earnings both to fund capital investments
and to deal with potential risks, such as
drought. The Board ordered Hydro to file
export contracts and pending term sheets
in support of its application. These contracts contained strict confidentiality provisions, so Hydro refused to provide the
Board with copies. Hydro did agree to
provide evidence about the contracts to
the Board’s experts, and granted the
experts access to the contracts after they
signed confidentiality agreements. The
Board subsequently subpoenaed the contracts. Hydro moved to set aside the subpoena, asserting the contracts were commercially sensitive and privileged. Hydro
questioned the Board’s power to compel
production. The Board dismissed the
motion and ordered production of the
contracts. It acknowledged that its experts
had reviewed the contracts but considered
production necessary for it to determine
whether the capital investments Hydro
was using to justify its proposed rate
increases were necessary only because of
the contracts. The Board accepted that it
did not have jurisdiction to approve or
direct Hydro’s capital expenditures, but
felt it had jurisdiction to review the contracts because of the impact the construction of new infrastructure would have on
domestic power rates.
HELD: Application allowed. Hydro
was granted leave to appeal on the ques-
tions of whether the Board exceeded its
jurisdiction in ordering Hydro to file the
export contracts, whether the Board erred
in determining the contracts were relevant
for the rate-setting process, and whether
the Board erred in dismissing Hydro’s
assertion of public interest immunity with
respect to the contracts. Hydro raised
arguable questions of jurisdiction and law.
Waiting until the final rate order was
issued was inappropriate because a final
order would not resolve these questions or
render them moot, given that the con-
tracts had already been disclosed. Resolv-
ing the questions was important for not
only the present case but also for future
rate-setting proceedings. It was in the
public interest to resolve the questions
now. A stay of the Board’s order was neces-
sary to ensure that Hydro did not suffer
financial and market losses from disclos-
ing contracts pursuant to which it had
pledged confidentiality. The question of
whether or not the Board’s order was a
final order was referred to a panel of the
Court of Appeal for review. The judge con-
sidered the order final for the purpose of
Hydro’s leave application, but acknow-
ledged there were reasonable arguments
supporting a different conclusion.
CONFLICT OF LAWS
JURISDICTION – Determination of
– Real and substantial connection.
Motions by British American Tobacco
(Investments) Ltd, BAT Industries PLC,
British American Tobacco PLC, Carreras
Rothmans, RJR Company and RJR International (collectively “the moving defendants”) to set aside service ex juris of the
Crown’s amended amended statement of
claim and to dismiss the action against
them on the basis that the court did not
have jurisdiction simpliciter over them.
Pursuant to the Tobacco Damages and
Health Care Costs Recovery Act, the
Crown claimed $50 billion for health care
costs arising from tobacco-related disease
against 14 foreign and domestic defendants. The moving defendants were six of
the foreign defendants. The Crown’s claim
alleged that there was a conspiracy within
the international tobacco industry, and
that after 1953 some of the defendants
conspired and acted in concert to prevent
the Crown and persons in Ontario from
acquiring knowledge of the harmful and
addictive properties of cigarettes. The
claim also alleged that the defendants
agreed to disseminate false and misleading information, to suppress research and
information on the risks of smoking, and
to orchestrate a public relations program
on smoking and health issues. The claim
further alleged that the defendants collectively agreed to make no statement or
admission that smoking caused disease
and not to issue product warnings unless
forced to do so by government action, and
in the early 1970s began to coordinate
their activities with respect to secondhand
smoke issues. The moving defendants
argued that the claim was based on conduct that was alleged to have occurred
outside the jurisdiction and decades before
the Act existed. They argued that the
Crown had no ability to pursue the claim
without relying on the retroactivity sections of the Act. The moving defendants
argued that for the Act to apply to any of
their past, extra-territorial conduct, the
Crown had to establish that there was a
meaningful connection between the moving defendants and the province. The
moving defendants also argued that the
claim was a deficient pleading and could
not be relied on, either to establish a good
arguable case or to support a connection
to Ontario. Specifically, they submitted
that the Crown had not properly pleaded
the allegations of conspiracy.
HELD: Motions dismissed. The Act
could apply to defendants located outside
the jurisdiction. The pleading was suffi-
cient for jurisdictional purposes. The claim
pleaded the essential elements of the
Crown’s cause of action under s. 2(1) of the
Act. It “connected the dots” between the
moving defendants and the province
through the allegations that the moving
defendants, either directly or by conspiring
or acting in concert with others, breached
duties to persons in Ontario. The claim
described the acts that constituted the
alleged breaches of duty and the means by
which the moving defendants allegedly
conspired and acted in concert with others.
The claim itemized the acts each of the
moving defendants allegedly took as a lead
company within its corporate group. Based
on the undenied allegations in the claim,
the Crown established a good arguable
case that the moving defendants became
“manufacturers” within the definition of
the Act; had knowledge of the addictive
quality of cigarettes and the health risks of
smoking and exposure to secondhand
smoke; and conspired to commit tobacco-
related wrongs. The claim was properly
served under Rule 17.02(g) as a claim “in
respect of a tort committed in Ontario.” A
real and substantial connection with the
province was presumed to exist. However,
even in the absence of a presumption, the
Crown established that a real and substan-
tial connection existed. The claim also was
properly served under Rule 17.02(h) as a
claim “in respect of damage sustained in
Ontario arising from a tort, wherever com-
mitted.” The action was to recover the costs
of health care benefits caused or contrib-
uted by a tobacco-related wrong. There
was no question that the claim was in
respect of damages sustained in the prov-
ince. The Crown established a good argu-
able case that the moving defendants con-
spired and acted in concert in committing
tobacco-related wrongs. The damage was
alleged to have occurred in Ontario. This
was sufficient to establish a connection
between the moving defendants and the
province. This conspiracy, if proven, related
to matters of significance in Ontario:
allegedly misleading the public and the
government about the harmful effects of
cigarettes and exposure to secondhand
smoke. The allegations of conspiracy and
concert of action established a real and
substantial connection between each of the
moving defendants and the province.
CONSTITUTIONAL LAW
DIVISION OF POWERS – Federal
jurisdiction – Peace, order and good
government – Federal powers.
Application by Canadian Blood Servi-
ces (“CBS”) for certiorari, prohibition and
a declaration that the Manitoba Human
Rights Commission did not have jurisdic-
tion to entertain a complaint. CBS was a
not-for-profit organization whose mission
included managing the blood and blood
component supply in Canada, with the
exclusion of Quebec. Pursuant to the poli-
cies of CBS, which were made pursuant to
the Food and Drug Act and approved by
Health Canada, male donors who had had
sex with another male even once since
1977 were excluded from donating blood.
In 2008, Zoldy filed a complaint against
CBS alleging that CBS’s policy discrimin-
ated against him on the basis of sexual
orientation. CBS filed an objection to the
complaint and commenced this applica-
tion. It took the position that the Commis-
sion did not have jurisdiction to hear the
complaint as the federal government had
authority, which arose under its criminal
law power to promulgate the Food and
Drug Act and regulations, which properly
legislated in the area of blood safety, under
the aegis of peace, order and good govern-
ment, because of the concept of interjuris-
dictional immunity and paramountcy. The
Commission took the position that it cor-
rectly accepted jurisdiction over the mat-
ter as donor screening fell primarily under
the provincial administration of health,
the CBS’s activities were a service, consid-
ering the complaint did not impair the
Food and Drug Act power to regulate
blood safety issues, and the Commission
could consider whether any discrimina-
tory practice might have presented a lesser
discriminatory option.
CONSTRUCTION LAW
LIENS – Priorities – Between lien
holders and other types of creditors –
Mortgagees.
Appeal by a lien holder, Peri Formwork
Systems Inc, from an order granting the
bank’s subsequent advances priority over
builders’ liens filed before the money was
advanced. Application by the bank to
admit fresh evidence. The bank was a
lender to the owners and developers of a
five-phase residential land development
project in Squamish pursuant to a lending
commitment of up to $37,968,750 plus
interest. The loan was payable on demand
or, failing demand, on July 31, 2009. Payment of the loan was secured in part by a
mortgage registered against title to the
property. Peri was subcontracted to supply
concrete formwork equipment, but was
not paid. The bank made a demand for
repayment of its loan and the owners
sought and received a stay of proceedings
under the Companies’ Creditors Arrangement Act (“CCAA”). Subsequently, Peri
filed a builders’ lien claim and the bank
advanced $2,000,000 in debtor-in-pos-session (“DIP”) financing. A further
$21,000,000 in DIP financing was
approved and the approval order included
a term that the DIP financing security
