12.16.06

The new amendments to the Ontario Human Rights Code permit litigants, finally, to claim full discrimination damages in the courts, and an apparent limitation on this right may be no limitation at all.

The statutory wording is a study in ambiguity.

In Seneca College of Applied Arts and Technology v. Bhadauria, [1981] 2 S.C.R. 181, the Supreme Court of Canada held that the courts could not enforce the Human Rights Code (“the Code”).

The Code amendments, passed on December 5, 2006, come close to making Bhadauria a dead issue. Section 42.2(1) states, “If, in a civil proceeding in a court, the court finds that a party to the proceeding has infringed a right under Part I of another party to the proceeding,” then the court may award monetary compensation or non-monetary restitution.

I will come back to what might be non-monetary restitution.

OK, so now the court has full jurisdiction, but then comes an apparent limitation in section 46.2(2): “Subsection (1) does not permit a person to commence an action based solely on an infringement of a right under Part I.”

Undoubtedly, with this limitation, the legislature was thinking about giving plaintiffs claiming wrongful dismissal or sex assault the right to one-stop shopping for remedial jurisdiction where the facts disclose a Code infringement.

But not so fast. What is “an action based solely on an infringement”?

First off, subsection (1) says nothing about anyone commencing an action based on anything. All it does is to give a civil court remedial powers which are based on the court’s findings. There is no requirement that a plaintiff plead or prove anything. The subsection is simply a bald, broad statement of jurisdiction.

Of course, to access that jurisdiction, someone must commence an action. However, a limitation on a court’s jurisdiction must be read narrowly. Subsection (2) only requires that to access a court’s jurisdiction the plaintiff must plead something other than an infringement of the Code.

Therefore, the limitation is oddly confined to consideration of what a plaintiff’s action is based upon at the point of commencement.

There is no requirement that the non-infringement claim succeed or even that it have prima facie validity. Students of absurdity will note that there is not even a requirement that the non-infringement claim survive a Rule 21 motion based on substantive inadequacy.

Even if courts do require a plaintiff to plead something plausible in addition to the infringement claim, the requirement to plead something outside the Code may be met by pleading a tort disclosed by the same facts. There are already cases permitting discrimination claims to proceed in civil courts where they are dressed up as the tort of intentional infliction of mental distress.

Such a tort could almost always be pleaded in a discrimination case.

Also, simply pleading punitive damages should be sufficient to beat the subsection (2) limitation. Just last September, prior to the Code amendments, the Court of Appeal held in Keays v. Honda Canada Inc. that punitive damages may flow in a civil action from proof of a Code infringement, the idea being that a claim for punitive damages was held not to be something based directly on the Code.

The last dying embers of Bhadauria way well have been stamped out.

Also, on another topic, what is the legislature thinking about with awards of “restitution” which are not monetary? Does this anticipate returning property taken in a discriminatory fashion? That must not come up often. Weirdly, the statutory provision for non-monetary restitution includes “restitution for injury to dignity, feelings and self-respect.” Would that be an apology by the perp? A week in the stocks? A flogging?

04.18.06

The recent OCA decision in Alcatel Canada Inc. v. Egan is thought by some to settle whether a plaintiff can double dip disability benefits and wages in lieu of notice. However, it is still an open question whether a plaintiff can establish his entitlement to both (as in McNamara v. Alexander Centre Industries Ltd.), based on evidence that he would have bargained for a higher salary were it not for the existence of a benefit package, including disability benefits, when he negotiated his employment contract. This seemed a very easy hurdle in McNamara. It fascinates me that the decision in Alcatel does not mention McNamara, although there is reference in paragraph 27 to a finding of the trial judge which engages the wording of McNamara: “[27] The trial judge found that it was not part of the contract of employment and that it could not be inferred that the parties had agreed that Ms. Egan would be entitled to receive both damages for wrongful dismissal and disability benefits…�? This issue is not settled.

03.27.06

The Ontario Court of Appeal released its decision in Lysko v. Braley today.

The plaintiff Michael Lysko, who is my client, is the former commissioner of the Canadian Football League. The CFL Board of Governors dismissed him from his position in a lightning storm of publicity in March 2002.

In a widely publicized decision in November 2004, Madam Justice Low struck out most of my client’s claims and ordered that he pay the defendants $102,000.00 in legal costs.

Michael Lysko’s lawsuit is back on track today with the release of reasons in which the court allowed his appeal in part and restored his claims for negligent misrepresentation, as well as five defamation claims. The court also restored Mr. Lysko’s claim for an unpaid signing bonus.

Justice Low had dismissed the lawsuit entirely against the defendants Robert Wetenhall, Lyle Bauer, George Grant, Jeffrey Giles, John Tory, Robert Ellard, Hugh Campbell, David Macdonald and David Braley. After today’s decision, all of these defendants, except for Robert Wetenhall and Jeffrey Giles, are back in the action as defendants. The lawsuit will also continue against the defendants David Asper, Sig Gutsche and Sherwood Schwartz, as well as against those CFL clubs which did not become insolvent after March, 2002.

The court also made an important ruling about the plaintiff’s having made claims in both tort and contract. Madam Justice Low had held that these must be made in the alternative–i.e., that the plaintiff could claim one or the other, but not both. The Court of Appeal reversed that finding in favour of the plaintiff.

The court upheld, however, the dismissal of Mr. Lysko’s claims that certain unidentified CFL Governors deliberately gave false information to sportswriters Bob McCown and Marty York. The plaintiff must now consider whether he will be able to restore those claims following the trial of his defamation actions against those writers, the first of which is scheduled for April, 2007. He will seek to learn the identity of the news sources at those trials.

The release of this decision is a major step in moving the lawsuit forward. It is unknown if any of the defendants will seek leave to appeal to the Supreme Court of Canada, but it is likely that the legal ground rules for this lawsuit were carved in stone today. Hopefully, we will see statements of defence soon.

02.11.06

Rule 49.09 deals with non-compliance with an accepted offer of settlement. It says an aggrieved party has an option of seeking judgment on the accepted offer or continuing with the proceeding as though there had been no settlement. In Gianopoulos v. Olga Management Limited, the Court of Appeal stated, however, that the rule “is procedural in nature and does not change the substantive law on the breach of contract.” But doesn’t it, though? Doesn’t it give an option to rescind in the event of breach? The rules varies the common law in other ways, too. It says that a rejected offer may be subsequently accepted if it has not been withdrawn. Should there be an amendment to the Courts of Justice Act to give muscle to the rule?

02.08.06

It is hard to quibble with today’s OCA decision in Cira v. Rico Resources that courts in one jurisdiction should not issue orders purporting to direct or regulate the internal affairs or governance of a corporation incorporated in another jurisdiction. I wonder if a more complicated fact situation might bend this rule.

12.09.05

Here are some very simple facts and a decision that should make everyone run right out and buy title insurance.

Husband and wife own a home in joint title.

Husband is away.

Wife forges a power of attorney and mortgages home to pay gambling debts.

So, who loses, the husband or the mortgage company?

Based on a section of the Land Titles Act, the husband loses, despite his total innocence.

So think about it. While you are reading this, some plausible hoodlum is forging your signature to a power of attorney, and tomorrow he will receive mortgage proceeds from a brand new mortgage on your home.

Before you get too excited about attacking the mortgage, read Household Realty Corp. Ltd. v. Liu, a decision of the Court of Appeal released November 24, 2005.

And then pack your bags.

Pearson v. Inco has finally been certified as a class proceeding. Let me express a sigh of relief, and then go off on a rant.

Sometimes I wonder if our courts are unduly influenced by the size of claims. This comes into bold relief where a plaintiff claims an entitlement that threatens a whole industry.

For example, last June in David Polowin Real Estate Ltd. v. The Dominion Of Canada General Insurance Co., the Court of Appeal overturned its own recent decision in McNaughton on the very same issue of whether auto insurers must credit insureds for their deductibles when exercising salvage rights.

In the previous decision, Justice Sharpe held for the court, “I am unable to accept the proposition that the phrase ‘actual cash value’ in statutory condition 6(7) can be interpreted as ‘actual cash value minus any deductible’.�?

Indeed, black is not white.

But in David Polowin, that very proposition carried the day, following the submissions of nine sets of insurance company lawyers. Judicial redrafting was not an available remedy in Tuttle v. The Travelers Indemnity Company, where the auto insurance statute was just as arguably deficient but where the circumstances were quite unusual. This is commented on elsewhere in this blog.

Or how about Albrecht v. Opemoco Inc. (1991), 5 O.R. (3d) 385, (C.A.), where Justice Rosenberg, a leading scholar on the Condominium Act, held that it was quite inconsistent with this consumer protection statute that condo developers could artificially inflate interim occupancy fees by requiring a “phantom mortgage�? that purchasers had to pay off a month after closing. In the face of submissions that this decision could subvert the entire industry, the Court of Appeal found that a 30 day mortgage was within legislative intent.

Perhaps the biggest logical leap over an ocean of money came in Stephens v. Globe and Mail 28 O.R. (3d) 481 (C.A.), where the Ontario Court of Appeal considered whether statutory severance pay was payable in addition to contractual wages in lieu of notice of dismissal. The act stated, “Severance pay under this section is payable to the employee in addition to any other payment under this Act or contract of employment without set-off or deduction.�? The court said that payment under a contract was entirely different from payment for breach of an implied term of that contract. Honestly, could the legislature have intended to penalize employers who reduce their commitments to writing and then honor them?

Similarly, I felt that environmental class actions were the subject of judicial flinching. First there was Hollick, in which courts said all the way up the ladder that class actions were well suited for environmental claims, yet at each level the courts refused certification of this apparently well suited proposed claim. Then there was Pearson v. Inco, in which the court of first instance not only refused certification but also visited on the proposed representative plaintiff a notoriously massive cost award. The conclusion was that if nickel oxide contamination over a defined area could not get certified, then why bother.

But things are changing. In Pearson, the Ontario Court of Appeal allowed an appeal from the courts below and certified the action. Crucially, the court pointed to its own decision from late last year in Cloud v. A.G. of Canada as representing a “more liberal approach�? to certifying class proceedings. The court said nothing about the brutal cost award, since that issue was now moot.

Now here’s the rant.

Why does the law expose representative plaintiffs to massive cost awards? The Class Proceedings Act is all about access to justice. It also requires that a representative plaintiff be a person who would fairly represent the interests of the class. Yet by exposing this person to costs which vastly exceed that individual’s total personal interest in the action, our courts and legislature have limited the choice of representative plaintiffs to the very rich, the very poor and the very stupid.

This impedes, not promotes, access to justice.

Saskatchewan perhaps has it right. Section 31(1) of the Ont. CPA vests judges with broad discretion to award costs while s. 40 of the Sask CAA limits a court to awarding costs only where a party was vexatious, frivolous or abusive, or unnecessary steps were taken, or other exceptional circumstances exist. Section 66(1) of The Consumer Protection Act, S.S. 1996, c. C-30.1 (”CPA”), provides that no costs are to be awarded against a consumer who brings an action against a manufacturer, retail seller or warrantor for breach of warranty.

12.03.05

I had never thought that it made any difference in making a costs award whether the paying party had the means to pay. This has always been a factor on a solicitor-client assessment, but on December 1, 2005, in Euteneier v. Lee, Justice Cronk of the Court of Appeal declared that ability to pay a costs award is a factor in making a costs disposition. She held that to award costs in that case “would visit an unfair and onerous human and financial hardship” on the unsuccessful party. No costs were awarded. Query whether this principle applies equally to quantum as to whether costs should be awarded at all. This principle is long overdue. Take note, class action plaintiffs.

10.15.05

Here’s a good one from the gotcha school of law, upheld by the OCA on September 8, 2005 in Amerato v. Registrar, Motor Vehicle Dealers Act.

You’re a car dealer. For this you need a licence.

The Registrar makes a statutory “proposal” to revoke your licence. You demand a hearing to oppose this. Before the hearing, your lawyers cut a deal. The deal sets out terms and conditions for you to abide by, but the Registrar wants it to have teeth. So the deal provides, “The Applicants agree and acknowledge that should they breach any of the terms and conditions set out herein, in whole or in part, the Registrar is directed to and shall carry out the proposal.”

This seems like a simple application of the dog bite rule: one freebie, but next time it’s straight to the pound.

So, the Registrar drops by one day, finds you in breach, says “ah-ha,” and revokes your licence. Not to worry, say your lawyers. The revocation is invalid. The deal you made “concluded and disposed of” the previous proposal. Therefore, there’s no proposal left for the Registrar to carry out.

You cannot bargain away your right to a hearing, and therefore you agreed to nothing. Presumably, all of the Registrar’s complaints, both initial and follow-up, are now res judicata, and life is good.

I love the law.