In this week’s headline decision, Thales DIS Canada Inc. v. Ontario (Transportation), Ontario’s Ministry of Transportation faced a challenge from a French company, Thales DIS Canada Inc. to MTO’s bid procurement process for the production of identification cards (driver’s licences and health cards). The request for bids required that production of the cards take place in Canada. Thalesproposed using a manufacturing plant in Poland, arguing that the Canadian production requirement violated the Canada-European Union Comprehensive Economic and Trade Agreement (CETA). A majority of the Divisional Court found in favour of Thales on its application for judicial review. The Court allowed the appeal from the Divisional Court’s decision, finding errors in the Divisional Court’s reasoning, particularly in its application of the reasonableness standard of review.

Tran v Taylor is a family law case where there were parallel proceedings in both the Ontario Court of Justice and the Superior Court of Justice. In the result, both matters were ordered to be heard at the same time in the Superior Court.

In Skymark Properties, the Court dismissed an appeal from the enforcement of a letter of request (letters rogatory) of a US Court compelling an Ontario resident and his company to provide documents and to be examined under oath in respect of a US action.

Our blog started in the Summer of 2014, and we are now entering our tenth calendar year of bringing Blaneys’ Court of Appeal summaries to you. We would like to thank all of our readers for their ongoing support of our blog and wish everyone a safe and Happy New Year!

John Polyzogopoulos
Blaney McMurtry LLP
416.593.2953 Email

Table of Contents

Civil Decisions

Thales DIS Canada Inc. v. Ontario (Transportation), 2023 ONCA 866

Keywords:International Trade Law, Public Procurement, Administrative Law, Judicial Review, Standard of Review, Canada-European Union Comprehensive Economic and Trade Agreement, Canadian Free Trade Agreement, General Agreements on Tariffs and Trade, General Agreement on Trade in Services, Agreement on Government Procurement, Statutory Powers Procedure Act, R.S.O. 1990, c. S.22, s. 15(1), Public Inquiries Act, 2009, S.O. 2009, c. 33, Sched. 6, s. 8(1), Turkiewicz (Tomasz Turkiewicz Custom Masonry Homes) v. Bricklayers, Masons Independent Union of Canada, Local 1, 2022 ONCA 780, Canadian Federation of Students v. Ontario (Colleges and Universities), 2021 ONCA 553, Agraira v. Canada (Public Safety and Emergency Preparedness), 2013 SCC 36, Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, R. v. Hape, 2007 SCC 26, R. v. Appulonappa, 2015 SCC 59, Laporte v. United Steelworkers, Local 1998, 2019 ONSC 3705 (Div. Ct.), Payne v. Peel (Regional Municipality) Police Services Board, 186 O.A.C. 69 (Div. Ct.), Uniboard Surfaces Inc. v. Kronotex Fussboden GmbH & Co. KG, 2006 FCA 398, US – Stainless Steel (Mexico) (2008), WTO Doc. WT/DS344/AB/R (Appellate Body), Wauzhushk Onigum Nation v. Minister of Finance (Ontario), 2019 ONSC 3491 (Div. Ct.), Bot Construction Limited v. Ontario (Minister of Transportation), 2009 ONCA 879, Air Canada v. Toronto Port Authority, 2011 FCA 347, Canada (Border Services Agency) v. C.B. Powell Limited, 2010 FCA 61, Volochay v. College of Massage Therapists of Ontario, 2012 ONCA 541, McLean v. British Columbia (Securities Commission), 2013 SCC 67

Tran v. Taylor , 2023 ONCA 858

Keywords: Family Law, Divorce, Equalization of Net Family Property, Divorce, Spousal Support, Civil Procedure, Jurisdiction, Multiplicity of Proceedings, Transfer, Family Law Act, RSO 1990, c F3, s 2(2), Family Law Rules, O Reg. 114/9, r 2(2) – (4)

Skymark Properties Corporation, Inc. v. 63263101 Canada Inc. (First Line Canadian Investment Group), 2023 ONCA 861

Keywords:Civil Procedure, Evidence, Letters of Request, Letters Rogatory, Ontario Evidence Act, RSO 1990, c E 23, s 60(1), Friction Division Products Inc v. E.I. du Pont deNemours & Co. (1986), 56 O.R. (2d) 722 (H.C.J.), R. v Zingre, [1981] 2 SCR 392, Ontario Service Employees Union Pension Trust Fund v Clark (2006), 270 D.L.R. (4th) 429 (Ont. C.A.), Perlmutter v Smith, 2020 ONCA 570, Actava TV, Inc. v Matvil Corp., 2021 ONCA 105, Connecticut Retirement Plans and Trust Funds v Buchan, 2007 ONCA 462

CIVIL DECISIONS

Thales DIS Canada Inc. v. Ontario (Transportation), 2023 ONCA 866

[Doherty, Hoy and Favreau JJ.A]

Counsel:

W.R. MacLarkey, A. Jin and J. Eidinger, for the appellants
P. Mantas, N.A. Malik, N. Khan, A. Logvin, M. Mills, G. Cyr and J. Frigon for the respondent

Keywords: International Trade Law, Public Procurement, Administrative Law, Judicial Review, Standard of Review, Canada-European Union Comprehensive Economic and Trade Agreement, Canadian Free Trade Agreement, General Agreements on Tariffs and Trade, General Agreement on Trade in Services, Agreement on Government Procurement, Statutory Powers Procedure Act, R.S.O. 1990, c. S.22, s. 15(1), Public Inquiries Act, 2009, S.O. 2009, c. 33, Sched. 6, s. 8(1), Turkiewicz (Tomasz Turkiewicz Custom Masonry Homes) v. Bricklayers, Masons Independent Union of Canada, Local 1, 2022 ONCA 780, Canadian Federation of Students v. Ontario (Colleges and Universities), 2021 ONCA 553, Agraira v. Canada (Public Safety and Emergency Preparedness), 2013 SCC 36, Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, R. v. Hape, 2007 SCC 26, R. v. Appulonappa, 2015 SCC 59, Laporte v. United Steelworkers, Local 1998, 2019 ONSC 3705 (Div. Ct.), Payne v. Peel (Regional Municipality) Police Services Board, 186 O.A.C. 69 (Div. Ct.), Uniboard Surfaces Inc. v. Kronotex Fussboden GmbH & Co. KG, 2006 FCA 398, US – Stainless Steel (Mexico) (2008), WTO Doc. WT/DS344/AB/R (Appellate Body), Wauzhushk Onigum Nation v. Minister of Finance (Ontario), 2019 ONSC 3491 (Div. Ct.), Bot Construction Limited v. Ontario (Minister of Transportation), 2009 ONCA 879, Air Canada v. Toronto Port Authority, 2011 FCA 347, Canada (Border Services Agency) v. C.B. Powell Limited, 2010 FCA 61, Volochay v. College of Massage Therapists of Ontario, 2012 ONCA 541, McLean v. British Columbia (Securities Commission), 2013 SCC 67

facts:

In 2021, Ontario’s Ministry of Transportation (“MTO” or the “Ministry”) issued a request for bids to produce identification cards, including drivers’ licences and health cards. The identification cards were to be produced with card stock with specified security features. The request for bids included a requirement that production of the identification cards, including the card stock, take place in Canada. The respondent, Thales DIS Canada Inc. (“Thales”), is a member of the Thales Group, which is based in France. Thales bid on the project and proposed to produce the card stock at a manufacturing plant in Poland.

Thales challenged the requirement that the card stock be produced in Canada through an internal bid review process within the Ontario government. One of Thales’ arguments was that the requirement that the card stock be produced in Canada breached Canada’s non-discrimination obligations under the Canada-European Union Comprehensive Economic and Trade Agreement (the “CETA”). The complaint was dismissed on the basis that the requirement fit within the public safety exception. Thales brought an application for judicial review, challenging the decision dismissing its complaint and the request for bids itself. The Divisional Court granted the application for judicial review.

issues:

1. Did the majority of the Divisional Court err in its application of the reasonableness standard of review to the decision?

2. Did the Divisional Court err in finding that the issuance of the request for bids is a decision subject to judicial review?

holding:

Appeal allowed.

reasoning:

1. Yes.

Instead of considering whether the reasons, in light of the law, the record and the submissions made by the parties, contain a rational line of analysis, the Court held that the majority of the Divisional Court improperly decided the issue afresh. On an appeal from a judicial review decision of the Divisional Court, the Court must decide whether the Divisional Court identified the correct standard of review to be applied and whether it applied it correctly. To do so, the Court is to “step into the shoes” of the Divisional Court.

The Court agreed with the majority of the Divisional Court that the presumption of reasonableness was the standard of review to be applied. The issue of whether the domestic production requirement was an allowable exception was a question of mixed fact and law. Ontario submitted that the majority of the Divisional Court erred in its application of the reasonableness standard of review because it failed to focus on the reasons and instead conducted a de novo assessment of whether the requirement that card stock be manufactured in Canada contravened the CETA. The Court agreed with Ontario’s submissions. The Court held that the majority made three related errors.

First, in evaluating whether the Decision was reasonable, the majority failed to consider the context in which it was made and specifically the submissions made by the parties. MTO’s submissions relied on the material necessity test in Brazil, and explained why the test was met in this case. Thales, on the other hand, did not rely on Brazil. Instead, Thales took issue with MTO’s description of the applicable law and proposed alternative approaches. More importantly, the thrust of Thales’ submissions was that the public safety exception should not be accepted in this case because, based on its prior record, it had the ability to manufacture and transport the card stock securely from Poland to Ontario.

Second was that, contrary to Vavilov, the Divisional Court assessed the Decision against its own determination of whether the domestic production requirement met the public safety exception. Having found that the Decision was unreasonable because the Director who issued the Decision failed to apply the two-part material necessity test, the Divisional Court went on to assess whether the material necessity test would be met in this case, which was contrary to the direction in Vavilov.

Third, even if the Decision was unreasonable because the Director failed to apply the two-part material necessity test, the majority erred in deciding that the appropriate remedy was to quash the Decision without remitting it back to the Director. Where, as here, the reviewing court concluded that the reasons were flawed, for example by failing to follow the applicable law, then the reviewing court should refrain from conducting its own analysis to determine the appropriate outcome. Unless the matter fits into one of the “limited scenarios” described in Vavilov, the reviewing court should instead remit the matter back to the original decision-maker to be decided in accordance with the applicable law. In this case, it was an error for the majority to decide how the material necessity test should have been applied and to find that it was not made out. Rather, the matter should have been remitted back to the Director.

The Divisional Court erred in its application of the reasonableness standard of review, because the Decision was reasonable. The reasoning was found to be logical and coherent. It was not irrational or incoherent for the Director to reason that one manufacturer’s ability to do the work offshore securely was insufficient to displace the necessity of the requirement, in the face of evidence of an inherent and generalized risk.

The majority of the Divisional Court was persuaded that the Decision was unreasonable because it did not comply with trade law precedents, specifically the material necessity test as articulated in Brazil. The Court noted that an important point to make on this issue is that WTO decisions are not binding on either Canadian courts or subsequent WTO panels. The second point to be made was that, while MTO referred to and relied on the two-part material necessity step, Thales did not engage with the test in its reply submissions. The Decision describes MTO’s position and then addresses the specific issued raised by Thales. In the circumstances, the Director appears to have implicitly accepted MTO’s analysis of the applicable law but focused on responding to Thales’ submission. This too, according to the Court, was reasonable.

2. Yes.

The Court held that the Divisional Court erred in finding that the request for bids was subject to judicial review on its own apart from the Decision. Ontario relied on the decision in Wauzhushk Onigum Nation v. Minister of Finance (Ontario), to argue that the terms of the request for bids is not subject to judicial review. However, the Court noted that Wauzhushk does not stand for that proposition. In this case, the issue of whether the request for bids was subject to judicial review must be considered in the context of Ontario’s obligations to establish a dispute resolution process under the CETA. Given that the CETA foresees that the participant countries and their sub-governments must establish a review process, the ability to judicially review the request for bids must be considered in the context of that process.

The Court held that the majority failed to consider the impact of the review process on the issue of whether the Divisional Court should exercise its discretion to review the request for bids on its own and separate from the review of the Decision. The Court noted that as a general principle, if an administrative process is set up for dealing with an issue, what is typically referred to as an adequate alternative remedy, the parties should first participate in that process before seeking judicial review. The reviewing court then has the benefit of the administrative decision makers’ reasons and expertise. If the parties have participated in the administrative process, there is no basis for ignoring the administrative decision and separately reviewing the request for bids afresh. That is not the role of the court on an application for judicial review.

The concurring judge’s primary reason for finding that the process was not CETA compliant was his view that a right of appeal is not the same as a right of judicial review. The Court held that this is no doubt an accurate statement of the law as a general proposition. However, in the context of implementing the dispute resolution provisions of Article 19 of the CETA, this difference was of no moment.

Further, the Court held that it was not clear that it is the role of the Divisional Court or the Court of Appeal to determine whether Ontario’s process complies with its obligations under the CETA. While Article 19.17 contemplates that Ontario has an obligation to set up a dispute resolution process for resolving disputes under the CETA related to procurement, Article 29 of the CETA deals with the process for resolving disputes over the interpretation and application of the CETA. If Ontario had failed to meet its obligation to set up an appropriate dispute process, this may well be a matter more properly addressed under Article 29 through mediation and arbitration between the parties to the CETA.

Tran v. Taylor, ONCA 858

[Roberts, Paciocco and Monahan JJ.A.]

Counsel:

V. Pilnitz, for the appellant
RJRT, acting in person

Keywords: Family Law, Divorce, Equalization of Net Family Property, Divorce, Spousal Support, Civil Procedure, Jurisdiction, Multiplicity of Proceedings, Transfer, Family Law Act, RSO 1990, c F3, s 2(2), Family Law Rules, O Reg. 114/9, r 2(2) – (4)

facts:

The parties are spouses who are separated. While self-represented, the appellant brought separate proceedings for spousal support in the Ontario Court of Justice and for divorce and equalization in the Superior Court of Justice.

On September 12, 2022, the appellant’s application for spousal support was dismissed at the Ontario Court of Justice. The trial judge based her decision on the fact that the applicant had commenced parallel proceedings in both the Ontario Court of Justice and the Superior Court of Justice. The appellant appealed the dismissal of her spousal support claim in the Ontario Court of Justice to a single judge of the Superior Court of Justice. On February 28, 2023, the appeal judge dismissed the appeal and remitted the matter back to the trial judge “to hear submissions on the issue of jurisdiction and make whatever orders may flow.”

The appellant submitted that the appeal judge erred in returning this matter to the Ontario Court of Justice on the issue of jurisdiction only, since an uncontested trial had already taken place, and that the appeal judge should therefore have required the trial judge to make a decision on the issue of spousal support.

issues:

Did the appeal judge err in returning the spousal support matter to the Ontario Court of Justice?

holding:

Appeal allowed.

reasoning:

Yes.

The Court found that it was unfortunate that this matter was not transferred earlier and that the appellant had to incur the expense of the uncontested trial. As the appeal judge noted, it would have been preferable for the trial judge to have canvassed transferring the application, rather than simply dismissing it.

As the appeal judge suggested, it was clearly implied that the “dismissal” of the support claim was dismissed only in the Ontario Court of Justice without prejudice to the appellant’s right to file the same claim with the Superior Court of Justice so that it could be heard with the other financial claims. Since this was an appeal of the order made in the Ontario Court of Justice, the appeal judge could, and in the circumstances of this case, should have specified that the “dismissal” in the Ontario Court of Justice was without prejudice to pursuing the claim in the Superior Court of Justice and directed that all matters proceed together in the Superior Court of Justice.

The order the appeal judge made returning the matter to the Ontario Court of Justice failed to give effect to the primary objective set out in Rule 2(2) to (4) of the Family Law Rules, that cases should be dealt with justly, which includes ensuring that the procedure is fair to all parties and saving expense and time.

The appellant was still proceeding with her equalization and divorce claims in the Superior Court of Justice. In the Court’s view, the disposition that best promoted the interests of justice was simply to transfer the appellant’s spousal support application to the Superior Court of Justice where it can be determined along with her claims for equalization and divorce. On the return of her application, she will be entitled to seek the wasted costs of the past attendances before the Ontario Court of Justice and the Superior Court of Justice.

The appellant’s application for spousal support was transferred to the Superior Court of Justice, to be heard at the same time as her claim for equalization and divorce. To the extent that it was necessary to permit the appellant’s spousal support application to proceed in the Superior Court of Justice, the Court set aside the part of the Ontario Court of Justice order dismissing the application and instead imposed a stay of the appellant’s spousal support application in the Ontario Court of Justice.

Skymark Properties Corporation, Inc. v. 63263101 Canada Inc. (First Line Canadian Investment Group) strong>, 2023 ONCA 861

[Rouleau, Benotto and Roberts JJ.A.]

Counsel:

J. Nasseri and G. Vance, for the appellants
S. Zucker, for the respondents

Keywords: Civil Procedure, Evidence, Letters of Request, Letters Rogatory, Ontario Evidence Act, RSO 1990, c E 23, s 60(1), Friction Division Products Inc v. E.I. du Pont deNemours & Co. (1986), 56 O.R. (2d) 722 (H.C.J.), R. v Zingre, [1981] 2 SCR 392, Ontario Service Employees Union Pension Trust Fund v Clark (2006), 270 D.L.R. (4th) 429 (Ont. C.A.), Perlmutter v Smith, 2020 ONCA 570, Actava TV, Inc. v Matvil Corp., 2021 ONCA 105, Connecticut Retirement Plans and Trust Funds v Buchan, 2007 ONCA 462

facts:

The appellants appealed the application judge’s order giving effect to the Letter Rogatory that was issued by the United States District Court in an action in the Eastern District of Michigan, Southern Division. The order issued by the application judge compelled RB to “be made available as a witness to testify concerning the contents of the declaration and related matters” and the appellants to produce various financial records and other documents for use in the U.S. proceeding.

issues:

1. Did the application judge err by admitting inadmissible hearsay evidence in support of the application?

2. Did the application judge err by failing to scrutinize the application in accordance with the Friction factors?

3. Did the application judge err in concluding that the evidence sought in the Letter Rogatory was not otherwise available?

holding:

Appeal dismissed.

reasoning:

1. No.

The application judge rightly distinguished between relying on what the appellants are alleged to have said, as opposed to the truth of what they are alleged to have said, noting that the latter issue will be determined at trial if, as the second Friction factor notes, the evidence is admissible. The application judge was entitled to use this evidence in his consideration of the Friction factors.

2. No.

The application judge made specific reference to and applied the Friction factors, as well as the broader governing principles that he was required to examine, in considering whether to grant the application in accordance with s. 60(1) of the Ontario Evidence Act.
The application judge considered the relevant principles and made the necessary findings that supported his conclusions.

3. No.

If the U.S. court had concluded that the respondents could have obtained the documentation through further legal process in Michigan, it would not have ordered the remedy of a Letter Rogatory. There was no evidence on the record that the appellants’ documents were available from other sources without the appellants’ consent or court order, or that the documents have been produced to date by others in the U.S. proceeding.

The fact that the appellants were now parties to the U.S. proceedings and have been deposed there did not undermine the U.S. court’s finding.

Notwithstanding the Letter Rogatory required the examination of Mr. B, it also required the production of documents and was therefore not duplicative.

As the Ontario Court of Appeal instructed in Connecticut Retirement Plans and Trust Funds v. Buchan, the criterion of evidence being otherwise unavailable ought to be interpreted as meaning “that evidence of the same value as that sought from the person to be examined cannot otherwise be obtained”, and, importantly, “where fraud is alleged, both confirmation of other information and credibility will be important issues”.

Accordingly, the application judge made no error in concluding that the evidence sought in the Letter Rogatory was not otherwise available.

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.