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Good evening.

The key decision of the week was Reference re Greenhouse Gas Pollution Pricing Act, in which the Court found the Greenhouse Gas Pollution Pricing Act (the “Act”) to be constitutional. The Act puts a price on carbon pollution in order to reduce greenhouse gas (“GHG”) emissions and to encourage innovation and the use of clean technologies. It places a fuel charge on certain producers, distributors, and importers who produce carbon-based fuels. It also establishes emissions limits for large industrial emitters of GHGs. The Act serves as a backstop and applies in provinces and territories that have not adopted sufficiently stringent carbon pricing mechanisms. The Province of Ontario asked the Court of Appeal to determine whether the Act is unconstitutional. It argued that Parliament does not have the power under the Constitution to enact the Act and that the charges the Act imposes are unconstitutional taxes. The Court determined that the main thrust of the Act was to establish minimal national standards to reduce GHG emissions. Further, the Court held that the Act properly falls within Parliament’s power to legislate on matters of national concern for the peace, order, and good government of Canada. The Act leaves ample opportunity for provinces to pass legislation on other aspects of GHG regulation, and the charges it imposes are not unconstitutional regulatory charges.

The jurisdiction of a court to make an order for costs against a non-party in litigation, specifically Legal Aid Ontario (“LAO“), was considered in Hunt v Worrod. The Court began by stating that courts have inherent jurisdiction to make an order for costs against a non-party in cases where there is an abuse of process. However, the Court emphasized that without conduct amounting to bad faith or an improper purpose, a finding of abuse of process cannot be made against LAO. LAO’s statutory mandate is to fund litigation for low-income individuals. As an independent, publicly accountable, and non-profit organization, LAO is not required to undertake legal and factual analyses of the cases it funds to determine merit. The Court also found that there is no leave requirement for an appeal against a costs award that was made pursuant to a court’s inherent jurisdiction.

In SFC Litigation Trust v. Chan, the Court of Appeal dealt with several issues relating to a Litigation Trust suing the former director of Sino-Forest for frauds committed against the corporation and its shareholders. Among the issues were the interpretation of an insolvency plan under the Companies’ Creditors Arrangement Act (“CCAA“), the factors to consider when awarding damages in such a case, and the doctrine of election. The Court ultimately determined that the claim was not barred by the terms of the CCAA plan, and that the trial judge considered the appropriate factors and made sound findings of fact when arriving at the damages award.

There were also some family law decisions dealing with variation of support and with custody.

Wishing everyone an enjoyable long weekend and Happy Canada Day!

John Polyzogopoulos
Blaney McMurtry LLP
416.593.2953 Email

Table of Contents

Civil Decisions

SFC Litigation Trust v. Chan, 2019 ONCA 525

Keywords: Torts, Fraud, Breach of Fiduciary Duty Contracts, Interpretation, Standard of Review, Corporations, Doctrine of Separate Identity of Corporate Personality, Causation, Damages, Double Recovery, Doctrine of Election, Bankruptcy and Insolvency, Companies’ Creditors Arrangement Act, RSC 1985, c. C-36, Clements v Clements, 2012 SCC 32; Hercules Management Ltd. v. Ernst and Young, [1997] 2 SCR 165, Bilta (UK) Ltd v. Nazir (No. 2), 2015 UKSC 23

Knight v. Knight, 2019 ONCA 538

Keywords: Family Law, Marriage Contracts, Separation Agreements, Equalization of Net Family Property, Civil Procedure, Leave to Appeal, Costs, Courts of Justice Act, R.S.O. 1990, c. C.43, s. 133(b)

Hunt v. Worrod, 2019 ONCA 540

Keywords: Civil Procedure, Costs, Costs Against Non-Party, Inherent Jurisdiction, Abuse Of Process, Appeals, Leave To Appeal, Courts of Justice Act, R.S.O. 1990, c. C.43, ss. 131(1), 133(b), Legal Aid Services Act, 1998, SO 1998, c. 26, ss. 89, 99, 1318847 Ontario Limited v. Laval Tool & Mould Ltd., 2017 ONCA 184

Makwana v. Bishnu, 2019 ONCA 543

Keywords: Family Law, Child and Spousal Support, Variation, Material Change in Circumstances, Fraudulent Conveyances, Costs, DBS v. SRG, 2006 SCC 37, Gray v. Rizzi, 2016 ONCA 152, 129 OR (3d) 201, Kerr v. Baranow, 2011 SCC 10, Fraudulent Conveyances Act, RSO 1990, c. F.29, s 2

Rigillo v. Rigillo, 2019 ONCA 548

Keywords: Family Law, Joint Custody, “Maximum Contact” Principle, Divorce Act, RSC, 1985, c. 3 (2nd Supp.), ss 16(10), Young v. Young, [1993] 4 SCR 3, BV v. PV, 2012 ONCA 262

Reference re Greenhouse Gas Pollution Pricing Act, 2019 ONCA 544

Keywords: Constitutional Law, Division of Powers, Peace, Order, and Good Government, National Concern, Pith and Substance, Environmental Law, Carbon Tax, Climate Change, The Constitution Act, 1982, being Schedule B to the Canada Act 1982 (UK), 1982, c 11, Courts of Justice Act, RSO 1990, c. C.43, Greenhouse Gas Pollution Pricing Act, Part 5 of the Budget Implementation Act, 2018, No. 1, SC 2018, c. 12, Cap and Trade Cancellation Act, 2018, SO 2018, c. 13, Ocean Dumping Control Act, SC 1974-75-76, c. 55, Canada Temperance Act, RSC 1927, c. 196, Food and Drugs Act, RSC 1970, c. F-27, Reference re Pan-Canadian Securities Regulation, 2018 SCC 48, Johannesson v. Municipality of West St. Paul, [1952] 1 SCR 292, Re: Anti-Inflation Act, [1976] 2 SCR 373, R. v. Crown Zellerbach Canada Ltd., [1988] 1 SCR 401, Reference re Securities Act, 2011 SCC 66, Rogers Communications Inc. v. Châteauguay (City), 2016 SCC 23, Reference re Firearms Act (Can.), 2000 SCC 31, Friends of the Oldman River Society v. Canada (Minister of Transport), [1992] 1 SCR 3, Reference re Employment Insurance Act (Can.), ss. 22 and 23, 2005 SCC 56, R. v. Hydro-Québec, [1997] 3 SCR 213, Attorney-General for Ontario v. Attorney-General for the Dominion, [1896] A.C. 348, Attorney-General for Ontario v. Canada Temperance Federation, [1946] AC 193 (P.C.), Munro v. National Capital Commission, [1966] SCR 663, R. v. Hauser, [1979] 1 S.C.R. 984, Labatt Breweries of Canada Ltd. v. Attorney General of Canada, [1980] 1 SCR 914, Schneider v. The Queen, [1982] 2 SCR 112, R. v. Wetmore, [1983] 2 SCR 284, Attorney-General for Canada v. Attorney-General for Ontario, [1937] AC 326 (P.C.), Ontario Hydro v. Ontario (Labour Relations Board), [1993] 3 SCR 327, R. v. Comeau, 2018 SCC 15, Rogers Communications Inc. v. Chateauguay (City), 2016 SCC 23, Alberta (Attorney General) v. Moloney, 2015 SCC 51, Connaught Ltd. v. Canada (Attorney General), 2008 SCC 7, Lawson v. Interior Tree Fruit and Vegetable Committee of Direction, [1931] SCR 357, Westbank First Nation v. British Columbia Hydro and Power Authority, [1999] 3 SCR 134, Canadian Association of Broadcasters v. Canada, 2008 FCA 157, Re: Exported Natural Gas Tax, [1982] 1 SCR 1004

Short Civil Decisions

Asghar v. Ruffudeen, 2019 ONCA 533

Keywords: Civil Procedure, Appeal Abandoned, Costs

Wilson v. Fatahi-Ghandehari, 2019 ONCA 532

Keywords: Civil Procedure, Judicial Discretion

Richard v. Niagara Falls (City), 2019 ONCA 531

Keywords: Real Property, Adverse Possession, Vesting Orders

BGOI Films Inc. v. 108 Media Corporation, 2019 ONCA 539

Keywords: Civil Procedure, Appeals, Motion to Quash, Arbitrations, Arbitration Act, 1991, S.O. 1991, c. 17, ss. 45(1), 50(3)

Massoumi v. Bafas, 2019 ONCA 536

Keywords: Civil Procedure, Appeals, Extension of Time

Theberge-Lindsay v. 3395022 Canada Inc. (Kutcher Dentistry Professional Corporation), 2019 ONCA 550

Keywords: Civil Procedure, Appeals, Costs, Small Claims Court, Rules of Civil Procedure, Rule 57.05(1)

Criminal Decisions

R v. Passera , 2019 ONCA 527

Keywords: Criminal Law, Importing Cocaine, Sentencing, Pre-Sentence Custody Credit, Parole Eligibility, Bail, Criminal Code, s. 718.1, s. 719(3.1), s. 719(1), Corrections and Conditional Release Act, S.C. 1992, c. 20, s. 120, s. 128(1), s. 115, s. 119, 139(1), Canadian Charter of Rights and Freedoms, s. 1, s. 7, s. 12, R v. Suter, 2018 SCC 34, R v. Zinck, 2003 SCC 6, R v. Summers, 2014 SCC 26, R v. Wust, 2000 SCC 18, R v. Carvery, 2014 SCC 27

R v. Cusick , 2019 ONCA 524

Keywords: Criminal Law, Child Pornography, Evidence, Exclusion, Canadian Charter of Rights and Freedoms, Section 8, Section 24(2), Criminal Code, ss 163.1(1) & 487(1), R. v. Spencer, 2014 SCC 43, R. v. Debot, [1989] 2 S.C.R. 1140, R. v. Araujo, 2000 SCC 65, R. v. Grant, 2009 SCC 32

R. v. Donoghue , 2019 ONCA 534

Keywords: Criminal Law, Expert Evidence, DNA Evidence

R. v. L.T , 2019 ONCA 535

Keywords: Criminal Law, Sexual Assault, Consent, Defences, Honest but Mistaken Belief, Evidence, Credibility, R. v. Barton, 2019 SCC 33, R. v. Park, [1995] 2 SCR 836

R. v. J.L , 2019 ONCA 523

Keywords: Criminal Law, Sexual Assault, Sexual Touching, Evidence, Admissibility, Disclosure, Jury Instructions, Sentencing, Criminal Code, ss.152, 278, R. v. Shearing, [2002] 3 SCR 33, R. v. T.C., [2004] OJ No. 4077

R v. R.S. , 2019 ONCA 542

Keywords: Criminal Law, Sexual Assault of a Minor, Breach of Prohibition Order, Dangerous Offenders, Sentencing, Criminal Code, s. 161, s. 752.1, s. 753(4.1), R v. Anthony-Cook, 2016 SCC 43

R v. Cepic , 2019 ONCA 541

Keywords: Criminal Law, Sexual Assault, Evidence, Credibility, Stereotypes, Myths, Assumptions

R v. Espinoza-Ortega , 2019 ONCA 545

Keywords: Criminal Law, Impaired Driving Causing Bodily Harm, Refusing to Provide Breath Sample, Dangerous Operation of a Motor Vehicle, Failure to Stop at the Scene of an Accident, Criminal Negligence Causing Bodily Harm, Sentencing, Joint Submission, Criminal Code, s. 722(2), s. 722(5), R v. Anthony-Cook, 2016 SCC 43, R v. Wong, 2018 SCC 25

R. c. Lauzon , 2019 ONCA 546

Keywords: Droit pénal, Criminal Law, Négligence criminelle causant la mort, Criminal Negligence Causing Death, Preuve, Evidence, Crédibilité, Credibility, Déclarations antérieures incompatibles, Prior Inconsistent Statements, l’al. 219(1)(b) du Code criminel, LRC (1985), ch. C-46, l’art. 13 de la Charte canadienne des droits et libertés, R. c. Nedelcu, 2012 CSC 59, R. v. Wenham, 2013 ONSC 7431, R. c. Henry, 2005 CSC 76, ACI Brands Inc. v. Pow, 2014 ONSC 2784

CIVIL DECISIONS

SFC Litigation Trust v. Chan, 2019 ONCA 525

[Hoy A.C.J.O., Brown and Zarnett JJ.A.]

Counsel:

R. Rueter, S.J. Erskine, and M. Martin, for the appellant

R.W. Staley, J.G. Bell, W.A. Bortolin, J.M. Berall and P. Bell, for the respondent

FACTS:

The appellant was the co-founder, Chief Executive and Chairman of the board of directors of Sino-Forrest Corporation (“SFC”). Between 2003 and 2010, SFC showed massive financial growth and ultimately raised nearly three billion dollars in Canadian debt and equity markets. However, after an investor report in 2011 called into question the legitimacy of SFC’s revenues and assets, SFC was revealed to be a massive fraud scheme and ultimately entered Companies’ Creditors Arrangement Act (“CCAA”) protection in 2012.

As part of the insolvency plan under the CCAA, all of SFC’s litigation claims were transferred to a litigation trust, the respondent in this appeal. The respondent brought a claim against the appellant and several members of his “inside management team”, for fraud and breach of their fiduciary duties to the corporation.

At trial, the Judge ultimately found for the respondents, finding that the appellant had committed at least four separate fraudulent transactions, and a breach of fiduciary duty separate from the frauds. All of the frauds essentially focused on the appellant’s use of non-arm’s length parties to consummate “paper transactions” where only money changed hands, but never actually any assets. There was little to proof that any of the assets actually existed, but rather that these ‘paper transactions’ were being used to funnel money into companies affiliated with the appellant for his own personal gain. On the basis of these transactions, the balance sheet and financial statements of SFC were grossly overstated, allowing them to access vast amounts of capital in Canadian financial markets that they would not have had access to otherwise.

The trial judge awarded just over $2.6 billion in damages, and $5 million in punitive damages to the respondent. The appellant appealed the decision on four grounds:

ISSUES:

(1) Did the Litigation Trust have standing to bring this claim?
(2) Did the trial judge err in his assessment of causation and damages?
(3) Does the doctrine of election apply to nullify the claim?
(4) Did the trial judge err in his acceptance of certain evidence?

HOLDING:

Appeal dismissed.

REASONING:

(1) Did the Litigation Trust have standing to bring this claim?

Yes. The appellant relied on three main arguments as to why this claim was not properly transferred to the Litigation Trust under the insolvency plan:
1. The claims are the same as, or overlap with, the claims asserted in separate Class Actions proceedings, which were explicitly not transferred under the plan.
2. The claims constituted “Excluded Claims” under the insolvency plan, and so were not transferred.
3. The claim constitutes an “SFC Intercompany Claim’ which was expressly transferred to a different group under the insolvency plan.

Before analyzing the three arguments, the Court first discussed the standard of review and the contractual interpretation principles to be used in this appeal, such as reading the document as a whole, determining the intentions of the parties and avoiding commercial absurdity. Regarding the standard of review, the Court held that a CCAA plan is essentially “… a contract, sanctioned by the Court.” CCAA plans are often highly fact-specific, and must be interpreted in light of the factual matrix. Given that the trial judge is in the best position to consider this factual matrix, the standard of review ought to afford a high level of deference to the trial judge and appellate intervention is only warranted for extricable legal error.

The Court addressed the appellant’s arguments as follows:

1. The appellant placed great weight on the fact that this claim, and the claims brought in class actions were based on nearly identical facts and acts, and sought nearly identical damages awards. In Hercules, the Supreme Court held that a tort committed against a corporation is actionable only by the corporation, and not the shareholders or creditors who may indirectly have suffered a loss. The trial judge found that a tort had been committed and that the corporation itself had suffered a loss. The insolvency plan expressly transferred “any cause of action … asserted by … SFC against any and all third parties.” Referring again to Hercules, the Court held that despite factual overlap, the same or similar facts may give rise to a cause of action by both the corporation and the shareholders. “… Where a shareholder has been directly and individually harmed, that shareholder may have a personal cause of action even though the corporation may also have a distinct cause of action.”

2. The Court quickly dismissed the second argument as a repackaging of the first argument and did not discuss it again.

3. In the insolvency plan, SFC Intercompany claims were defined as claims relating to money owed to SFC by subsidiaries. The appellant’s argument suggested that the claim is based on money lost because it was transferred to illegitimate subsidiaries, which is an intercompany claim. The Court rejected this argument, holding that in light of the interpretive principles discussed above, an intercompany claim was intended to cover debt obligations, and the rights SFC derived thereof, as between SFC and a subsidiary.

(2) Was there an error in the assessment of causation and damages?

No. The Court held that damages awards are findings of fact, and thus are owed a high degree of deference. An appellate court should not upset a damages award unless there is palpable and overriding error.

The Court broke this issue down into five sub-issues, addressed in turn below:

1. Factual findings appropriately underpin causation conclusions and damages assessments

The trial judge relied primarily on five findings of facts to underpin the damages award. The five findings related primarily to establishing but-for causation of the respondent’s loss stemming from the appellant’s actions. The trial judge ultimately held that the loss resulted from a chain of events flowing from the appellant’s fraud and breach of fiduciary duty. The Court did not see any error in these findings and was unwilling to overturn the damages award.

2. There was no legal error in the trial judge’s causation analysis.

The Court found that the trial judge applied the proper but-for causation test, and interpreted it appropriately in accordance with Clements. While the appellant submitted that there were other possible explanations for the loss, it is the defendant who bears the onus of proving these alternate causes once a loss arising from fraud has been established. The trial judge did not feel these alternates were sufficiently proven, and so was entitled to reject them.

3. The trial judge did not award compensation for amounts that could not legally be considered losses of SFC.

The appellant’s submissions on this point focussed on the concept that the money raised by SFC in the capital markets did not belong to the corporation, but to the shareholders and creditors of the company, and therefore SFC could not attempt to recover for the loss of said money. The trial judge dismissed this argument because the appellant’s fraud caused SFC to incur obligations and raise money on the capital markets that it would not have otherwise done. The appellant’s fraud subsequently deprived SFC of the means with which to satisfy its obligations and so SFC did indeed suffer a loss. Applying Bilta, the Court upheld this finding by the trial judge and did not find a legal error warranting appellate intervention.

4. Double recovery doctrine does not apply

The appellant submits that even if both this claim, and the class action claims are allowed to proceed, the risk of double recovery would arise and the doctrine of double recovery would bar recovery in one of the claims. The Court rejected this submission, as it amounted to a conflation of the doctrine. Double recovery does not relieve a defendant from being liable to two groups in separate actions. Instead, it serves to prevent a plaintiff from recovering for the same loss in different actions. That was not the case here, and so the argument was dismissed.

5. The trial judge applied the correct principles of damages assessment.

The appellant submitted that the trial judge erred by awarding damages based on principles of equity only applicable in breach of trust cases. The Court dismissed this argument for two reasons. First, the trial judge found the appellant had control over the direction of the fraudulent funds and so this was a relationship in the character of a trust. Second, the trial judge did in fact rely primarily on the correct common law principles of damage, and the references to equitable factors was a slight one, in relation to a sub-issue of the damages determination.

(3) Does the Doctrine of Election apply?

No. The doctrine of election essentially prevents a party from asserting that an agreement is valid to obtain benefit thereunder, only to turn around and claim the agreement is void to secure a different benefit. The appellant submits that since the insolvency plan deemed the obligations of SFC to have full force and effect, SFC elected to treat these agreements as valid. The Court dismissed this argument. Firstly, the cases relied upon by the appellant were easily distinguishable on their facts. Secondly, at the trial level, it was found that the timber assets (which this litigation is primarily based upon), did not actually exist, or if they did, had no value until actually discovered and recovered upon. It would be inconsistent for the Court to treat the plan as deeming the non-existent to be existent, or to ascribe value to valueless items. The trial judge found that the plan did not do this, and that no election occurred. The Court affirmed this finding and dismissed the doctrine of election argument.

(4) Did the trial judge err in his acceptance of certain facts?

No. The appellant submitted there were fundamental errors of fact. The first relates to one of the four proven frauds. The fraud was deemed to have occurred in all 525 transactions completed by a subsidiary, based on the analysis of one contract of that subsidiary. While fraud cannot always be proven by reference to a sample, the trial judge considered this argument and dismissed it. Relying on much evidence, contracts were all concluded from a template and the appellant himself testified that the content of much of the contracts was identical. The appellant had the opportunity to prove that some contracts were different, but failed to lead such evidence. The trial judge’s finding was also not based solely on the contracts, but an incredibly lengthy discussion of how the subsidiary’s business model as a whole was fraudulent. Where a trial judge has found fraud after weighing large quantities of complex evidence, this decision is owed significant deference. Absent a palpable error to the very outcome of the case, the finding should not be disturbed.

The appellant also submitted that the trial judge erred by allowing the respondent to give affidavit evidence consisting of its opinions, despite the appellant not being an expert. The Court dismissed this argument. The trial judge considered this argument at trial and accepted it. He only relied on the affidavit as a description of events that would need to be later proven by admissible evidence.

Knight v. Knight, 2019 ONCA 538

[Feldman, Brown and Miller JJ.A.]

Counsel:

G. Joseph and K. Younie, for the appellant

J.P. Schuman, for the respondent

FACTS:

This appeal arises out of hard-fought – and expensive – matrimonial litigation. The parties’ marriage contract dated June 24, 2011, excluded the appellant’s corporate assets from division. It specifically provided that the parties agreed “to exclude [the appellant’s] interest in the Corporations… and monies owing to him from the Corporations… which may require [the appellant] to transfer assets or pay monies to [the respondent] as part of an equalization payment to her under the Family Law Act, as amended”.

At trial, however, the question arose as to the status of monies owed by the appellant to his corporations. The appellant was unsuccessful at trial in seeking an unequal division of net family property. The court wrote to the parties, requesting that they advise as to the specific quantum of equalization payment and the amounts of child and spousal support payable. The parties could not settle the calculation of the equalization payment.

Far overshadowing the amount in issue in the substantive appeal was the costs order of $490,000 plus HST, enforced through the Family Responsibility Office (“FRO”). The appellant seeks leave to appeal. The respondent’s legal fees were in the amount of $265,000, while the appellant’s legal fees came in at $172,000. The largest component of the costs award is a disbursement of $228,306 paid to the respondent’s accounting expert. The respondent delivered an offer to settle prior to each stage. The appellant argued that he did not have a fair opportunity to review the bill of costs at trial. The trial judge rejected this submission. The trial judge wholly blamed the appellant for the high costs, whose approach to the litigation he characterized as unreasonable: “his goal was to ensure that [the respondent] suffer a considerable financial defeat even if she enjoyed success at trial.”

The appellant also sought to appeal the decision to make the entirety of the costs award enforceable as support by the FRO (“FRO order”), as opposed to only that part of the costs award attributable to the issue of support. As set out in s. 133(b) of the Courts of Justice Act, a discretionary order of costs may not be appealed without leave. Leave to appeal a costs order are not granted without strong grounds upon which the appellate court could find that the trial judge had erred in the exercise of his or her discretion.

ISSUES:

(1) Did the trial judge not provide sufficient reasons on the issue of the inclusion of certain promissory notes in the equalization payment calculation to allow for appellate review?

(2) Did the trial judge err in including the promissory notes in the calculation of net family property since the promissory notes are “corporate in nature” and therefore excluded by the marriage contract from the calculation of net family property?

(3) Did the trial judge err in principle such that the appellant should be granted leave to appeal the costs award against him?

HOLDING:

Appeal dismissed. Motion for leave to appeal costs also dismissed.

REASONING:

(1) No. The trial judge made an obvious slip in his initial reasons in characterizing $67,315 as a de minimis amount, and he corrected this. Nothing further was required.

(2) No. The marriage contract specifically excluded from the net family property calculation monies owed to the appellant by the corporations. It does not exclude monies owed by the appellant to the corporations, which are personal debts. The promissory notes are not, in the sense used in the marriage contract, “corporate in nature”.

(3) No. The costs appeal is fact-based and seeks to have the Court to perform a line-by-line analysis that was not pursued at trial. The trial judge correctly referred to the relevant factors to be considered in awarding costs under Rule 24(11). The Court found nothing in the costs endorsement that reveals an error in principle or an error in the exercise of discretion on the part of the trial judge. Although the appellant frames the proposed appeal as a question of the proportionality of the costs award, there is no genuine argument advanced as to how the order is disproportionate, given the trial judge’s explanation that the costs order is necessary to defeat what he perceived to be the appellant’s tactic of ensuring the respondent would not benefit from her success in the litigation. In this instance, the appeal to proportionality is nothing other than an attempt to have the Court second-guess the quantum of the award.

With respect to the FRO order, there was no error in principle in the trial judge not having expressly addressed whether a lesser sum would have sufficed for enforcement. The enforcement decision is discretionary.

Hunt v. Worrod, 2019 ONCA 540

[Sharpe, Pepall and Roberts JJ.A.]

Counsel:

G. Forrest and M. Stephenson, for the appellant/moving party Legal Aid Ontario

M. Barrack, A. McEwen and K. Whaley, for the respondent/responding party

R. Muscolino, for the respondent/responding party

J. Martin and E. Rathbone, for the Intervener Ontario Association of Child Protection Lawyers

J. Phillips and W. Wanless, for the Intervener Family Law Association

FACTS:

The respondent K.H. suffered a brain injury in June 2011. His sons were appointed as his guardians of property and personal care (collectively the “Hunt respondents”). K.H. had a relationship with K.W. prior to the accident.

In a dispute over title to a property, K.H.’s sons commenced an application against K.W. seeking a declaration that the marriage was void ab initio. Legal Aid Ontario (“LAO”) granted K.W. a legal aid certificate and funded her legal fees throughout the proceedings. K.W. hired A.T. to be her counsel in the litigation. LAO was not a party to the application and did not participate in the trial.

In his reasons for decision on the issue of costs, the application judge characterized K.W.’s claims to the title of the property as “meritless”. He ordered K.W. to pay the Hunt respondents’ costs of $385,279.54 on a full recovery basis. The application judge also noted that it was highly unlikely that K.W. would ever be in a financial position to pay any of these legal costs.

The application judge then considered the Hunt respondents’ requests for costs against A.T. personally. Their request was based on the alleged failure of A.T. as legal counsel to meet his reporting requirements to LAO. Specifically, they submitted that if A.T. had properly reported to LAO, then LAO would not have continued to fund K.W.’s “meritless” defence. The application judge did not make an order of costs against A.T., stating that his communications with LAO were privileged. Therefore, there is no evidentiary basis for finding that he acted improperly in his reporting requirements.

Turning to the request for costs against LAO, the application judge commented that in ordering costs against a non-party, a court should exercise caution. The circumstances meriting such an award must be “exceptional and constitute an abuse of the court’s process”. The application judge concluded that LAO had failed to properly carry out its mandate to monitor the proceedings, contributed significantly to the hardships and challenges faced by the Hunt respondents, and needlessly wasted judicial resources. This constituted an abuse of process and LAO was ordered to pay $192,639.77 to the Hunt respondents.

ISSUES:

(1) Is leave to appeal the costs order required?

(2) Did the application judge err in ordering costs against LAO?

HOLDING:

Appeal allowed.

REASONING:

(1) Is leave to appeal required?

No. LAO argued that, with the exception of the “person of straw” category under s. 131(1) of the Courts of Justice Act, non-party costs awards are made pursuant to the inherent jurisdiction of the court and as such, leave to appeal is not required. Both parties agreed that the “person of straw” category was inapplicable in this case.

Leave to appeal is required for costs awards made pursuant to statutory jurisdiction under s. 131(1) by virtue of the language of s. 133(b). However, the Court found that there is no such leave requirement for an award of costs that relies on inherent jurisdiction.

(2) Did the application judge err in ordering costs against LAO?

Yes. The Court found that the application judge fundamentally misconstrued the role of LAO. In addition, the application judge’s findings with respect to LAO were inconsistent with his conclusions relating to the claim for costs against A.T. personally.

The Court reasoned that LAO does not represent the client nor does it direct the litigation. Rather, it simply provides funding to the client to retain counsel from the private bar. The statutory system is not established on the basis that LAO is required to engage in a detailed factual and legal analysis independent of and disconnected from counsel’s legal opinion. The costs award against LAO based on its failure to adequately monitor the litigation is inconsistent with and would frustrate the statutory scheme.

Furthermore, as Strathy C.J.O. explained in 1318847 Ontario Limited v. Laval Tool & Mould Ltd., 2017 ONCA 184, when exercising inherent jurisdiction against a non-party, courts must do so “sparingly and with caution”.

Without evidence of something more, such as bad faith or a collateral or improper purpose in granting funding to a litigant, LAO’s conduct in funding litigation pursuant to its statutory purpose, and any conduct incidental thereto, including its monitoring of the litigation it funds, cannot support a finding of abuse of process.

However, the Court found that even if the application judge’s finding of abuse of process was correct, any conclusion of improper conduct by LAO would require the impermissible review of the reporting and opinion letters of the lawyer holding the legal aid certificate. Sections 93 and 89 of the Legal Aid Services Act create a tripartite relationship of solicitor-client privilege. Therefore, allowing this type of scrutiny would risk putting LAO in a position where it must seek a waiver of privilege from clients in order to mount a defence to claims against it for non-party costs.

In this respect, the crux of the allegations against A.T. were substantially the same as those asserted against LAO. The Court therefore found that the application judge’s findings against LAO were also inconsistent with his findings in favour of A.T.

Makwana v. Bishnu, 2019 ONCA 543

[Sharpe, Trotter and Harvison Young JJ.A.]

Counsel:

G. S. Joseph and M. Newman, for the appellant

A. Chima, for the respondent

J. Madhany, for the respondent (Respondent / Appellant by way of cross-appeal)

H. Wasserman, in person

FACTS:

The applicant and respondent were involved in a romantic relationship and lived together for a short period of time in the 1990s. They had one daughter together. After the breakdown of the relationship, the appellant was awarded sole custody as well as child and spousal support. The trial judge at the time had made adverse findings as to the credibility of the respondent and found he attempted to conceal his true income. The trial judge awarded spousal support at $1,750 per month and child support at $733 per month. The spousal support could be reviewed in three years, even without proving any material change in circumstances.

The respondent failed to comply with the support orders and the order for costs. Further, he filed for bankruptcy in 2003 and remains undischarged. The appellant has since moved to the United States with her daughter and is remarried.

The respondent brought this motion to vary the spousal and child support in October 2011. He had brought an earlier motion to vary in 2002, but it was not permitted to proceed until he paid the outstanding costs from trial. The respondent’s income from 2002 to 2009 was essentially zero. Further, he led evidence indicating that he has suffered from physical and mental health issues since 1999 and that he is living on social assistance.

The appellant, however, sought an order setting aside certain conveyances made by the respondent as fraudulent. As a result of that application, SB and the respondent’s trustee in bankruptcy were added as parties.

The motion judge made adverse findings of credibility against the respondent, but did find that the respondent had developed medical problems that impacted his ability to earn income. Further, the motion judge found that given the appellant’s employment and re-marriage, there had been a material change in her circumstances and the spousal support should terminate as of December 31, 2002. The motion judge also ordered that the child support terminate as of June 30, 2013, at which date the daughter was 18 years old and no longer in full-time school. The motion judge also reduced the child support amount due to the respondent’s declining health from 2004 to 2009 at $300 monthly, and from 2010 to 2013 at $176 monthly. The motion judge dismissed the fraudulent conveyance action.

ISSUES:

(1) Whether the motion judge erred by varying the orders for child and spousal support.

(2) Whether the fraudulent conveyance application should have been dismissed.

(3) Whether the application judge erred by refusing to award SB costs despite the dismissal of the fraudulent conveyance application.

HOLDING:

(1) Appeal allowed in part.

REASONING:

(1) Yes.

(i) Child Support

The motion judge erred as he appears to have fixed child support on the basis of what he found the respondent’s income had likely been, rather than considering the factors mandated in D.B.S. v. S.R.G., 2006 SCC 37. Two factors of particular concern were (a) whether there is a reasonable excuse for the respondent’s delay in applying for relief; and (b) the respondent’s conduct, including whether he made any effort to comply with the order and his compliance with financial disclosure requirements.

The respondent had a long history of failing to comply with the support order, and while he did launch a motion to vary in 2002, he failed to proceed because he was unable to satisfy prior costs awards. Therefore, the 2002 motion does not stand as an excuse for failing to proceed expeditiously with the application to vary. Further, the respondent’s failure to make child support payments may have had an adverse effect on the daughter’s decision to pursue post-secondary education. However, the ongoing financial capacity of the respondent, including his ability to make payments towards outstanding arrears, is a relevant factor.

The motion judge did not err in failing to pay adequate attention to the income imputed in the 1999 judgment. There was sufficient evidence that the respondent’s income has changed significantly since that time. The motion judge was correct to terminate the child support as of June 30, 2013. However, the Court held that the motion judge’s order reducing the amounts should be varied, as it would unduly reward the respondent for the failure to move more quickly and to comply with the 1999 order and disclosure. The Court held that the monthly child support should be reduced between 2004 and 2013 from $733 monthly to $366 monthly.

(ii) Spousal Support

The motion judge did not err in treating the review clause in the 1999 judgment as a termination clause. The 1999 judgment contemplated that the appellant would become self-sufficient within three years, which turned out to be the case.

While considerations similar to the D.B.S. factors are relevant to spousal support, spousal support has a different legal foundation than child support, and there is no presumptive entitlement to spousal support. The SCC has emphasized the need for flexibility and a holistic view of each matter on the basis of its particular factual matrix. The motion judge’s variation of the arrears for spousal support did not rest upon the means or income of the respondent, but instead on the appellant’s entitlement to support, her means and needs and the material change of circumstances. By 2002, the appellant was earning a significant income and had married someone else. Therefore, the appellant’s changed circumstances as of December 31, 2002, were justification to discontinue spousal support.

(2) No. The application judge was correct in finding that while the conveyance by the respondent of his interest in the property in December 1999 was fraudulent, the subsequent transfer to SB in 2002 was not. SB acted in good faith and without any knowledge of fraudulent intent within the meaning of s. 2 of the Fraudulent Conveyances Act. While the appellant and the trustee may have a remedy against the proceeds of the earlier conveyance that was found to be fraudulent, they have no remedy against the property or the transferee as the property had been transferred to a good faith purchaser for value.

(3) No. SB was not denied procedural fairness and the application judge did not err by refusing to order costs in SB’s favour. The application judge set out a clear procedure to be followed for making costs submissions. Months had passed and counsel made no costs submissions. Therefore, the application judge was entitled to end the matter and order that no costs award would be made.

Rigillo v. Rigillo, 2019 ONCA 548

[Hourigan, Paciocco and Fairburn JJ.A.]

Counsel:

M. Stangarone and S. Kirby, for the appellant

H. Niman and K. Normandin, for the respondent

FACTS:

The appellant (father) had sought joint custody and shared parenting of the couple’s six year old child. The father appeals the decision of the trial judge that the child’s primary residence should be with the respondent (mother), with the father receiving one overnight with the child per week and alternating weekends. While the parties have joint custody, the trial judge ordered that if the parties are unable to agree on matters relating to the child’s physical, emotional and educational well-being, then ultimately those decisions are to be made by the mother.

ISSUES:

Did the trial judge err in the custody order and decision-making authority granted to the respondent?

HOLDING:

Appeal allowed.

REASONING:

Yes. The trial judge erred by failing to address the “maximum contact” principle set out in s. 16(10) of the Divorce Act, RSC, 1985, c. 3 (2nd Supp.). That provision states:

In making an order under this section, the court shall give effect to the principle that a child of the marriage should have as much contact with each spouse as is consistent with the best interests of the child and, for that purpose, shall take into consideration the willingness of the person for whom custody is sought to facilitate such contact. [Emphasis added.]

The trial judge makes no reference to the maximum contact principle in the reasons for judgment. The Court here referenced the findings of the trial judge that prior to the party’s separation, they had parented effectively as a team. Further, the father’s conduct post-separation in and of itself was not a reason to ignore the contribution he made to raise the child. Based on these findings of fact, there was no reason why the maximum contact principle would not apply in this case.

The trial judge further erred by premising the decision on the assumption that the respondent was entitled to remain the child’s primary caregiver. The respondent had been named the child’s primary caregiver only under an arrangement embodied in a consent order made a few years prior. The order specifically noted that it was made “without prejudice to either parties’ claim with respect to custody and access”.

The Court found that the trial judge used an “erroneous approach” by failing to apply the maximum contact principle without providing any reason for departing from it, as well as by proceeding on the basis of the status quo that had developed as a result of an interim without prejudice order. Given the trial judge’s findings of fact that while both parties had misbehaved, the child had enjoyed the benefits of “effective parenting” by both, it was an error to make an order that departed significantly from equal parenting time.

The Court also held that the order regarding decision-making authority should be set aside and reconsidered alongside the issue of parenting time. The Court stated that there was nothing in the record or the trial judge’s findings of fact that would suggest that anything other than an order granting both parties meaningful decision-making authority is appropriate.

Reference re Greenhouse Gas Pollution Pricing Act, 2019 ONCA 544

[Strathy C.J.O., Hoy A.C.J.O., Macpherson, Sharpe and Huscroft JJ.A.]

Counsel:

Hunter, P. Ryan and T. Lipton, for the Attorney General of Ontario

Telles-Langdon, C. Mohr, M. Matthews and N. Goodridge, for the Attorney General of Canada

W.E. Gould, for the intervener Attorney General of New Brunswick

J.G. Morley, for the intervener Attorney General of British Columbia

P.M. McAdam, Q.C. and A. Jacobson, for the intervener Attorney General of Saskatchewan

Wuttke and A.S.R. Williamson, for the intervener Assembly of First Nations

Attaran, for the intervener Athabasca Chipewyan First Nation

Elgie, for the intervener Canada’s Ecofiscal Commission

F. Castrilli and R.D. Lindgren, for the interveners Canadian Environmental Law Association, Environmental Defence, and Sisters of Providence of St. Vincent de Paul

King, M. Finley and L. Langstaff, for the intervener Canadian Public Health Association

B. E. Hallsor, Q.C., C. Van Geyn and A. Wudbrick, for the intervener Canadian Taxpayers Federation

Robitaille, for the interveners Centre québécois du droit de l’environnement and Équiterre

Christensen and J. Ginsberg, for the intervener David Suzuki Foundation

Hume, for the intervener Intergenerational Climate Coalition

DeMarco and J. McGillivray, for the intervener International Emissions Trading Association

Westaway and N. Chalifour, for the intervener United Chiefs and Councils of Mnidoo Mnising

Martin, for the intervener United Conservative Association

FACTS:

Parliament has determined that atmospheric accumulation of greenhouse gases (“GHGs”) causes climate changes that pose an existential threat to human civilization and the global ecosystem. There was no dispute that global climate change is taking place and that human activities are the primary cause. The combustion of fossil fuels, like coal, natural gas and oil and its derivatives, releases GHGs into the atmosphere. When incoming radiation from the Sun reaches Earth’s surface, it is absorbed and converted into heat. GHGs act like the glass roof of a greenhouse, trapping some of this heat as it radiates back into the atmosphere, causing surface temperatures to increase. Carbon dioxide (“CO2”) is the most prevalent GHG emitted by human activities. This is why pricing for GHG emissions is referred to as carbon pricing, and why GHG emissions are typically referred to on a CO2 equivalent basis.

Temperatures in Canada have been increasing at roughly double the global average rate. With the longest coastline in the world, high altitude areas where warming is amplified, and significant Arctic territory, Canada has been disproportionately impacted by global warming. In the Canadian Arctic, for instance, the rate of warming has been even higher than in southern parts of Canada, estimated at three times the global rate. It is predicted that temperatures in Canada will continue to increase at a rate greater than the rest of the world.

Both nationally and globally, the economic and human costs of climate change are considerable. Canada’s Minister of Finance has estimated that climate change will cost Canada’s economy $5 billion per year by 2020, and up to $43 billion per year by 2050 if no action is taken to mitigate its effects. The World Health Organization has estimated that climate change is currently causing the deaths of 150,000 people worldwide each year. Rising sea levels threaten the safety and lives of tens of millions of people in vulnerable regions.

As a practical matter and indeed as a legislative matter, there is nothing the provinces and territories can do to address the emission of GHGs by their geographic neighbours and constitutional partners. Without a collective national response, all they can do is prepare for the worst. In December 2015, the parties to the United Nations Framework Convention on Climate Change adopted the Paris Agreement. The Preamble to that agreement recognized that climate change represented “an urgent and potentially irreversible threat to human societies and the planet”.

A UN Working Group produced a Final Report, on a consensus basis, which noted that “[m]any experts regard carbon pricing as a necessary policy tool for efficiently reducing GHG emissions”. Based on this report, the federal government announced the Pan-Canadian Approach to Pricing Carbon Pollution (the “Pan-Canadian Approach”). This stated that economy-wide carbon pricing is the most efficient way to reduce emissions and that carbon pricing would be a foundational element of Canada’s response to climate change. The Pan-Canadian Approach included a national benchmark for carbon pricing (the “Benchmark”). The stated goal of the Benchmark is to ensure that carbon pricing mechanisms of gradually increasing stringency apply in all Canadian jurisdictions by 2018, either in the form of an explicit price-based system (e.g., a “carbon tax”) or a “cap-and-trade” system. It also stated that the federal government would introduce “backstop” carbon pricing legislation to apply in jurisdictions that do not meet the Benchmark.

Shortly after announcing the Pan-Canadian Approach, and after extensive discussions with the provinces, Canada ratified the Paris Agreement. Canada is required to report and account for progress towards achieving a “nationally determined contribution”, which Canada stated at 30 percent below 2005 levels by 2030. On December 9, 2016, eight provinces, including Ontario, and the three territories adopted the Pan-Canadian Framework on Clean Growth and Climate Change (the “Pan-Canadian Framework”), which explicitly incorporated the Benchmark. At that time, British Columbia, Alberta and Québec already had carbon pricing mechanisms, and Ontario had announced its intention to join the Québec/California cap-and-trade system. Manitoba subsequently adopted the Pan-Canadian Framework on February 23, 2018. Saskatchewan did not adopt it. The Pan-Canadian Framework emphasized the significant risks posed by climate change to human health, security and economic growth and recognized carbon pricing as “one of the most effective, transparent, and efficient policy approaches to reduce GHG emissions”, promote innovation and encourage individuals and industries to pollute less.

On March 27, 2018, the Greenhouse Gas Pollution Pricing Act (the “Act”) was introduced in Parliament as part of the Budget Implementation Act, 2018, No. 1. On June 21, 2018, it received Royal Assent. The Act gave effect to the principles expressed in the Pan-Canadian Framework and fulfilled the federal government’s Benchmark commitment to introduce “backstop” legislation. In July 2018, Ontario announced its withdrawal from the national carbon pricing program, revoked its cap-and-trade regulation and prohibited trading of emissions allowances. It introduced the Cap and Trade Cancellation Act, 2018, S.O. 2018, c. 13, and cancelled seven programs that the federal government had agreed to co-fund, through the Low Carbon Economy Fund.

The Preamble of the Act includes, among other observations: “Recent anthropogenic emissions of greenhouse gases are at the highest level in history and present an unprecedented risk to the environment, including its biological diversity, to human health and safety and to economic prosperity. … The United Nations, Parliament and the scientific community have identified climate change as an international concern which cannot be contained within geographic boundaries. … As recognized in the Pan-Canadian Framework … climate change is a national problem that requires immediate action by all governments in Canada as well as by industry, non-governmental organizations and individual Canadians.”

The Act puts a price on carbon pollution in order to reduce GHG emissions and to encourage innovation and the use of clean technologies. It does so in two ways. First, it places a regulatory charge on carbon-based fuels. This charge is imposed on certain producers, distributors and importers and will increase annually from 2019 through to 2022. Second, it establishes a regulatory trading system applicable to large industrial emitters of GHGs. This is referred to as an Output Based Pricing System (the “OBPS”). It includes limits on emissions, a “credit” to those who operate within their limit, and a “charge” on those who exceed it. Net revenues from the fuel charge and excess emissions charge are returned to the province of origin, or to other prescribed persons.

The Act does not apply in all provinces. Rather, the Act and its regulations serve as the “backstop” contemplated by the Pan-Canadian Framework in those provinces that have not adopted sufficiently “stringent” carbon pricing mechanisms. Many provinces have enacted legislation establishing their own carbon pricing mechanisms. Some provinces have not and are, therefore, “listed provinces” and subject to the backstop regime. The fuel charge applies in Ontario, New Brunswick, Manitoba and Saskatchewan and will apply in Yukon and Nunavut. The OBPS applies in Ontario, New Brunswick, Manitoba, Prince Edward Island and partially in Saskatchewan and will also apply in Yukon and Nunavut.

Part 1 of the Act establishes the “charge” on carbon-based fuels. Subject to a number of exceptions, the charge applies to fuels that are produced, delivered or used in a “listed province”, brought into a “listed province” from another place in Canada, or imported into Canada at a location in a “listed province.” Other provisions in Part 1 of the Act address a rebate regime, registration and reporting requirements, the administration and enforcement of the fuel charge, and other miscellaneous matters. Finally, the Governor in Council has authority under this part of the Act to make regulations to carry out Part 1. Part 1 of the Act has applied in Ontario, New Brunswick, Manitoba and Saskatchewan since April 1, 2019, and will apply in Yukon and Nunavut effective July 1, 2019.

Part 2 of the Act sets out the mechanism for pricing industrial GHG emissions by emission-intense industrial facilities. Covered facilities (located in a backstop jurisdiction) subject to the OBPS are exempt from paying the fuel charge, but are required to pay compensation for the portion, if any, of their GHG emissions that exceed their applicable emissions limit. Facilities covered by the federal regime are subject to periodic compliance reporting requirements. There are two mechanisms for pricing industrial GHG emissions. First, if a facility’s emissions fall below its prescribed limit, the facility will be issued surplus credits called “compliance units.” Second, if a facility’s emissions exceed its prescribed limit, the facility must pay compensation for its excess emissions. Compensation may be made by remitting compliance units, paying an excess emissions “charge payment” to Canada, or doing a combination of both. The Governor in Council also has a variety of other order and regulation making powers, including the power to set GHG emission limits. The other provisions in Part 2 of the Act address the collection of information and samples, administration and enforcement, and offences and punishment. Part 2 of the Act has applied in Ontario, New Brunswick, Manitoba, Prince Edward Island and partially in Saskatchewan since January 1, 2019, and will apply in Yukon and Nunavut effective July 1, 2019.

ISSUES:

(1) Is the Greenhouse Gas Pollution Pricing Act, Part 5 of the Budget Implementation Act, 2018, unconstitutional in whole or in part?

HOLDING:

The Act is constitutional.

REASONING:

(1) No. The Act is constitutional and falls within Parliament’s power to legislate on matters of national concern for the peace, order, and good government (“POGG”) of Canada. The majority determined that the main thrust of the Act was to establish minimal national standards to reduce GHG emissions. A.C.J.O. Hoy, in her concurring judgment, determined that the main thrust of the Act was establishing minimum national greenhouse gas emissions pricing standards to reduce greenhouse gas emissions. Establishing minimal national standards to reduce GHG emissions has a singleness, distinctiveness, and indivisibility that distinguishes it from matters of provincial concern. The Act leaves ample opportunity for provinces to pass legislation on other aspects of GHG regulation.

The analytical approach to the constitutionality of legislation on federalism grounds is well-established. In the first step, referred to as “characterization”, the court determines the true subject matter or “pith and substance” of the challenged law. This step of the analysis requires an examination of the purpose and effects of the law to identify its “main thrust.” The Court determined that the purpose of the Act was reflected in its Preamble and in Canada’s international commitments and domestic initiatives to reduce GHG emissions on a nation-wide basis. It does this by establishing national minimum prices for GHG emissions, through both the fuel charge and the OBPS excess emissions charge. The Act’s purpose and effects demonstrate that the pith and substance of the Act can be distilled as: “establishing minimum national standards to reduce greenhouse gas emissions.” The means chosen by the Act is a minimum national standard of stringency for the pricing of GHG emissions.

The second step in the federalism analysis is the classification of the Act based on its pith and substance so characterized. The Court addressed the principles relating to the national concern branch of the POGG power that emerged from R v Crown Zellerbach Canada Ltd, [1988] 1 SCR 401, and applied it to this decision.

First, the Court considered whether reducing GHG emissions was a new matter that was not recognized at Confederation. The record demonstrated that global warming and climate change and, in particular, the role played by anthropogenic GHG emissions in those processes, were not widely understood by the scientific community until well after Confederation. Accordingly, it cannot be said that establishing minimum national standards to reduce GHG emissions, as distinct from efforts to reduce local air pollution, was a matter in existence in 1867.

Next, the Court considered whether the matter before it had a singleness, distinctiveness, and indivisibility that clearly distinguished it from matters of provincial concern. The Court determined that establishing minimum national standards to reduce GHG emissions met these requirements. GHGs are a distinct form of pollution, identified with precision in Schedule 3 to the Act. They have known and chemically distinct scientific characteristics. They combine in the atmosphere to become persistent and indivisible in their contribution to anthropogenic climate change. They have no concern for provincial or national boundaries. Emitted anywhere, they cause climate change everywhere, with potentially catastrophic effects on the natural environment and on all forms of life. They are exactly the type of pollutant that both the majority and the minority in R v Crown Zellerbach contemplated would fall within the national concern branch of the POGG power.

The international and interprovincial impacts of GHG emissions inform not only the “national” nature of the concern, but the singleness, distinctiveness and indivisibility of the matter of establishing minimum national standards to reduce GHG emissions. Like the production, use and application of atomic energy, which was considered in Ontario Hydro v. Ontario (Labour Relations Board), [1993] 3 S.C.R. 327, the matter of establishing minimum national standards to reduce GHG emissions is “predominantly extra-provincial and international in character and implications, and possesses sufficiently distinct and separate characteristics to make it subject to Parliament’s residual power.”

The application of the “provincial inability” test leaves no doubt that establishing minimum national standards to reduce GHG emissions is a single, distinct and indivisible matter. While a province can pass laws in relation to GHGs emitted within its own boundaries, its laws cannot affect GHGs emitted by polluters in other provinces – emissions that cause climate change across all provinces and territories. However stringent a province’s GHG emissions reduction measures, they cannot, on their own, reduce Canada’s net emissions.

The final consideration from R v Crown Zellerbach was that a matter of national concern must have not only a singleness, distinctiveness, and indivisibility, but also a scale of impact on provincial jurisdiction that is reconcilable with the fundamental distribution of legislative power under the Constitution.

Properly characterized, the Act deals only with the establishment of minimum national standards to reduce GHG emissions. It operates on a nation-wide basis and leaves scope for provincial standards that meet or exceed that minimum. It also leaves ample provincial legislative opportunity for other aspects of GHG regulation, including laws aimed at the causes and effects of GHG emissions within the province. The characterization of the Act and its classification as falling within the national concern branch of the POGG power do not have the effect of drawing all regulation of GHG emissions into federal jurisdiction. On the contrary, federal jurisdiction in this field is narrowly constrained to address the risk of provincial inaction regarding a problem that requires cooperative action.

The Act recognizes and respects the jurisdiction of individual provinces to enact their own legislation in relation to GHG emissions, including the ability of provinces to legislate fuel charges, to set emissions limits and to participate in output based pricing systems, provided that they are sufficiently stringent. A number of provinces have done so. The Act strikes an appropriate balance between Parliament and provincial legislatures, having regard to the critical importance of the issue of climate change caused by GHG emissions, the need to address it by collective action, both nationally and internationally, and the practical inability of even a majority of the provinces to address it collectively.

While the principle of cooperative federalism cannot validate an unconstitutional law, it does support the concurrent operation of statutes enacted by governments at both levels. The Act encourages just that, making room for the operation of provincial carbon pricing legislation of sufficient stringency. Cooperative federalism, in which Parliament addresses a matter of national concern and the provinces address the aspects of the issue that fall within their enumerated powers, can also serve as an interpretative aid. The Court cited Reference re Pan-Canadian Securities Reference, 2018 SCC 48, to demonstrate that courts should favour a harmonious reading of statutes so as to permit their concurrent operation. A harmonious reading of the Act, which itself confines its operation to the creation of a national minimum pricing scheme to address a national and international concern, permits it to operate concurrently with provincial laws applicable to the environment in general, and to the reduction of GHG emissions in particular. The environment is an area of shared constitutional responsibility. The Act is Parliament’s response to the reality and importance of climate change while securing the basic balance between the two levels of government envisioned by the Constitution.

In order for the charges imposed under the Act to be constitutional, the charges must have a nexus to the purposes of the Act. The Court held that behaviour modification was one of the purposes of the charges, which has been recognized as an appropriate purpose for a regulatory scheme. The funds are returned to provinces, taxpayers and institutions to reward them for their participation in a program that benefits the provinces and the entire country. This promotes and rewards behaviour modification, encourages shifts to cleaner fuels, and fosters innovation, all of which are purposes identified in the Preamble of the Act. The fuel charge and the excess emissions charge under the Act are constitutional regulatory charges.

SHORT CIVIL DECISIONS

Asghar v. Ruffudeen, 2019 ONCA 533

[Juriansz, van Rensburg and Paciocco JJ.A.]

Counsel:

A. Asghar, for themself

M. Kropp, for the respondent

Keywords: Civil Procedure, Appeal Abandoned, Costs

Wilson v. Fatahi-Ghandehari, 2019 ONCA 532

[Juriansz, van Rensburg and Paciocco JJ.A.]

Counsel:

P. Robson, for the moving party

A. Mohammed and S. Siddiqui, for the responding party

Keywords: Civil Procedure, Judicial Discretion

Richard v. Niagara Falls (City), 2019 ONCA 531

[Juriansz, van Rensburg and Paciocco JJ.A.]

Counsel:

C. Du Vernet and C. Mcgoogan, for the appellant

M. Bordin, for the respondent

Keywords: Real Property, Adverse Possession, Vesting Orders

BGOI Films Inc. v. 108 Media Corporation, 2019 ONCA 539

[Hourigan, Paciocco and Fairburn JJ.A.]

Counsel:

J. A. de Jong, for the moving party

T. Dumigan, for the respondent

Keywords: Civil Procedure, Appeals, Motion to Quash, Arbitrations, Arbitration Act, 1991, S.O. 1991, c. 17, ss. 45(1), 50(3)

Massoumi v. Bafas, 2019 ONCA 536

[Hourigan, Paciocco and Fairburn JJ.A.]

Counsel:

S. Babwani, for the appellant

R. Kalanda, for the respondent

Keywords: Civil Procedure, Appeals, Extension of Time

Theberge-Lindsay v. 3395022 Canada Inc. (Kutcher Dentistry Professional Corporation), 2019 ONCA 550

[Lauwers, Pardu and Nordheimer JJ.A.]

Counsel:

C. Dockrill, for the appellants

R. Kornblum, for the respondent

Keywords: Civil Procedure, Appeals, Costs, Small Claims Court, Rules of Civil Procedure, Rule 57.05(1)

CRIMINAL DECISIONS

R v. Passera, 2019 ONCA 527

[Doherty, Brown and Trotter JJ.A.]

Counsel:

M. Smith, for the appellant

K. Wilson, for the respondent

I. Grant and S. Secter, for the intervener Criminal Lawyers’ Association (Ontario)

I.B. Kasper, for the intervener Canadian Civil Liberties Association

E.R. Hill and C, Kasper, for the intervener Aboriginal Legal Services

Keywords: Criminal Law, Importing Cocaine, Sentencing, Pre-Sentence Custody Credit, Parole Eligibility, Bail, Criminal Code, s. 718.1, s. 719(3.1), s. 719(1), Corrections and Conditional Release Act, S.C. 1992, c. 20, s. 120, s. 128(1), s. 115, s. 119, 139(1), Canadian Charter of Rights and Freedoms, s. 1, s. 7, s. 12, R v. Suter, 2018 SCC 34, R v. Zinck, 2003 SCC 6, R v. Summers, 2014 SCC 26, R v. Wust, 2000 SCC 18, R v. Carvery, 2014 SCC 27

R v. Cusick, 2019 ONCA 524

[Juriansz, Watt and Harvison Young JJ.A.]

Counsel:

M. Halfyard and B. Vandebeek, for the appellant

M. Goswami, for the respondent

Keywords: Criminal Law, Child Pornography, Evidence, Exclusion, Canadian Charter of Rights and Freedoms, s. 8, s. 24(2), Criminal Code, ss. 163.1(1) & 487(1), R. v. Spencer, 2014 SCC 43, R. v. Debot, [1989] 2 SCR 1140, R. v. Araujo, 2000 SCC 65, R. v. Grant, 2009 SCC 32

R. v. Donoghue, 2019 ONCA 534

[Brown, Miller and Trotter JJ.A.]

Counsel:

A. Marchetti, for the appellant

A. Wheeler, for the respondent

Keywords: Criminal Law, Expert Evidence, DNA Evidence

R. v. L.T, 2019 ONCA 535

[Benotto, Roberts and Miller JJ.A.]

Counsel:

N. Jamaldin, for the appellant

M. Petrie, for the respondent

Keywords: Criminal Law, Sexual Assault, Consent, Defences, Honest but Mistaken Belief, Evidence, Credibility, R. v. Barton, 2019 SCC 33, R. v. Park, [1995] 2 SCR 836

R. v. J.L, 2019 ONCA 523

[Doherty, Watt and Pardu JJ.A.]

Counsel:

K. Agnihotri, for the appellant

C. Suter, for the respondent

Keywords: Criminal Law, Sexual Assault, Sexual Touching, Evidence, Admissibility, Disclosure, Jury Instructions, Sentencing, Criminal Code, ss.152, 278, R. v. Shearing, [2002] 3 SCR 33, R. v. T.C., [2004] OJ No. 4077

R v. R.S., 2019 ONCA 542

[Sharpe, Brown and Roberts JJ.A.]

Counsel:

V. Singh, for the appellant

J. Cameron, for the respondent

Keywords: Criminal Law, Sexual Assault of a Minor, Breach of Prohibition Order, Dangerous Offenders, Sentencing, Criminal Code, s. 161, s. 752.1, s. 753(4.1), R v. Anthony-Cook, 2016 SCC 43

R v. Cepic, 2019 ONCA 541

[Benotto, Roberts and Miller JJ.A.]

Counsel:

C. McKeown, for the appellant

K. Rawluk, for the respondent

Keywords: Criminal Law, Sexual Assault, Evidence, Credibility, Stereotypes, Myths, Assumptions

R v. Espinoza-Ortega, 2019 ONCA 545

[Feldman, Roberts and Fairburn JJ.A.]

Counsel:

R. Gregor, for the appellant

A. Hotke, for the respondent

Keywords: Criminal Law, Impaired Driving Causing Bodily Harm, Refusing to Provide Breath Sample, Dangerous Operation of a Motor Vehicle, Failure to Stop at the Scene of an Accident, Criminal Negligence Causing Bodily Harm, Sentencing, Joint Submission, Criminal Code, s. 722(2), s. 722(5), R v. Anthony-Cook, 2016 SCC 43, R v. Wong, 2018 SCC 25

R. c. Lauzon, 2019 ONCA 546

[Les juges Sharpe, Benotto et Roberts]

Counsel:

C. Mainville, duty counsel for the appellant

P. Cowle, for the respondent

Keywords: Droit pénal, Criminal Law, Négligence criminelle causant la mort, Criminal Negligence Causing Death, Preuve, Evidence, Crédibilité, Credibility, Déclarations antérieures incompatibles, Prior Inconsistent Statements, l’al. 219(1)(b) du Code criminel, LRC (1985), ch. C-46, l’art. 13 de la Charte canadienne des droits et libertés, R. c. Nedelcu, 2012 CSC 59, R. v. Wenham, 2013 ONSC 7431, R. c. Henry, 2005 CSC 76, ACI Brands Inc. v. Pow, 2014 ONSC 2784

The information contained in our summaries of the decisions is not intended to provide legal advice and does not necessarily cover every matter raised in a decision. For complete information or for specific advice, please read the decision or contact us.