Litigation 2021

Last Updated December 04, 2020

Canada

Law and Practice

Authors



Thornton Grout Finnigan LLP is a leading boutique firm in Toronto, with 27 lawyers practising exclusively in commercial litigation and restructuring. TGF’s trial lawyers practise at all levels of court, including the Supreme Court of Canada, and before arbitration and regulatory tribunals. They have expertise in litigating complex insolvency, construction, shareholder, financial services, class action, estate, real estate, franchise and other commercial litigation matters. They teach and serve in leading roles in Bench–Bar committees and professional organisations. TGF’s expertise is reflected in the high-profile retainers it has enjoyed over the years and in its wide range of clients, including financial institutions, regulatory agencies, publicly traded companies, and officers and directors. The firm would like to thank William Loumankis and Bogdan Nae, articling students in the firm, for their contribution to the chapter.

Legislative and regulatory authority in Canada is conferred on the federal, provincial and territorial levels of government. All legal systems in Canada are based on the English common law, except for the Province of Quebec, where the private legal system is governed by a civil code that finds its roots in French civil law.

Both legal systems are subject to the Canadian Constitution, which includes the Canadian Charter of Rights and Freedoms, the Constitution Act, 1867, various treatises between the Crown and Indigenous Peoples, and unwritten principles, conventions and traditions.

The Canadian legal system follows an adversarial model that can include motions or applications and trials, either before a judge or before a judge and jury. Proceedings usually include both oral arguments and written submissions.

There are two classes of courts in Canada: Superior Courts with original jurisdiction, and courts of more limited jurisdiction. These courts are creatures of statute which limit the scope of the matters they preside over.

Each province and territory has its own Superior Court and its own Court of Appeal. The Superior Courts are constituted under s. 96 of the Constitution Act, 1867; although they are provincial/territorial courts, the federal government has exclusive authority to appoint judges to these courts.

Superior Courts have jurisdiction over all matters, unless a matter has been conferred to the jurisdiction of another court or administrative tribunal by statute. Superior Courts preside over civil and criminal matters in jury and non-jury cases, and can hear judicial reviews of administrative actions.

Inferior provincial courts include small claims court, and courts constituted to hear less serious criminal matters and some family disputes. Judges of these courts are appointed by the provincial government.

There are also specialised courts at the federal level, including the Federal Court of Canada, which hears cases in areas such as immigration, intellectual property and maritime law, and the Tax Court of Canada, which deals with cases regarding federal tax issues.

Both the provincial and federal governments may by statute establish administrative tribunals. These tribunals maintain limited jurisdiction to the matters set out in their enabling legislation and deal with specific subject matters. For example, each province has its own securities law, which is administered by its own securities commission.

Depending on the jurisdiction, the courts may be organised by some specialisation or subject matter. For example, in the Province of Ontario, the Superior Court of Justice in the City of Toronto maintains a Commercial List and an Estates List. The judges who hear cases on these lists have experience in managing complex cases within their respective area of law. Specific Practice Directions are issued to guide practitioners in the effective and efficient management of these complex proceedings.

The highest court in Canada is the Supreme Court of Canada, which is comprised of nine judges appointed by the federal government. Three of these judges must be from Quebec, and by convention the remaining judges are divided up between Ontario, the western provinces and the Atlantic provinces. The Supreme Court hears appeals from federal, provincial and territorial Courts of Appeal, and may be asked to decide disputes or questions referred to it by the federal government.

Canadian court proceedings are premised on the open court principle: unless a court orders otherwise, hearings and filings are open to the public.

In criminal proceedings, special considerations for excluding members of the public include the impact on public morals, the maintenance of order, and the proper administration of justice.

In order to obtain a court order that seals the court file or seeks a publication ban on the proceedings, the applicant must generally prove two elements:

  • that the order is necessary to prevent serious risk to an important interest (eg, a commercial interest, the administration of justice, etc) because reasonable alternative measures will not prevent the risk; and
  • that the salutary effects of the order or publication ban outweigh its deleterious effects on the rights of the parties and the public’s interest in open and accessible court proceedings.

Generally, individual litigants may be self-represented in legal proceedings, while other entities, such as corporations, cannot have a non-lawyer representative without permission from the court. The rationale for this rule is that it helps ensure that the person who represents the company acts in its best interests and not for his or her own interest.

Lawyers are licensed and regulated at the provincial level. They are also self-regulated through their provincial and territorial law societies. Canadian lawyers may practise in provinces and territories outside the jurisdiction in which they are licensed for up to 100 calendar days per year through a National Mobility Agreement and in Quebec through the Canadian Legal Adviser special status.

Lawyers from other countries who have not been admitted to the bar of a Canadian province or territory are not permitted to conduct cases or provide legal advice or representation in the common law provinces. However, in Quebec, foreign-trained lawyers may apply for a special temporary status to practise law in that province.

Third-party litigation funding is generally permissible in Canada, but the specific terms on which it is permissible vary between provinces. Restrictions and limits applicable to third-party litigation funding are generally imposed not by statute, but by judicial treatment. Judges have historically given careful consideration to proposals for third-party litigation funding, wary of having third parties interfere in legal disputes and changing the dynamics of such disputes.

Historically, third-party litigation funding contravened the common law doctrines of maintenance and champerty, and such funding was not permitted.

However, the attitude towards third-party litigation funding in Canada has changed in recent years; statutory restrictions have been removed, and it is gaining popularity. Its use in Canada is most commonly found in class action and personal injury disputes, but it can be applied to many types of cases. For example, in its decision in 9354-9186 Quebec Inc. v. Callidus Capital Corp., 2020 SCC 10, the Supreme Court of Canada unanimously upheld the supervising judge’s decision to approve third-party litigation funding as a form of interim financing in the context of an insolvency proceeding.

Third-party funding is available for both plaintiffs and defendants, but it is most often used by plaintiffs.

There is no minimum or maximum amount that a third-party funder will fund.

The costs that a third-party funder will consider funding depend on the facts and circumstances of each case. The funder will focus on the complexity and expected duration of the lawsuit. Also, the parties to the funding agreement will likely have to decide whether the funding agreement deals with the possibility that a decision may be appealed and cost awards redistributed.

Contingency fee agreements are permitted in every Canadian province and territory and are commonplace. They are common in class proceedings, personal injury cases, and tort claims. They are not permitted in criminal and family matters.

Restrictions and conditions relating to contingency fee agreements vary from province to province, but in most jurisdictions there is a requirement that any such agreement be “fair and reasonable” in the circumstances. There has been a movement to standardise contingency agreements, with the Province of Ontario recently introducing legislation to require a standard form agreement for most contingency matters involving individuals.

There are no time limits as to when a party should obtain third-party funding. Funding may be sought earlier on as the litigation strategy is being developed, or later in a case when funding is needed or when the merits of the case have become clearer.

Parties are generally not required to send a demand letter or a pre-action letter before starting litigation.

However, in certain cases notice is required. For example:

  • notice may be required by statute before an action can be brought against certain municipal or provincial governments (for example, for actions arising out of an injury suffered on a public road, notice may be required within a short period of time, typically ten to 30 days);
  • in certain claims for defamation a potential plaintiff is typically required to serve a notice of libel prior to starting litigation; and
  • in enforcement proceedings, specific notices may be required by the governing security or insolvency legislation.

In several provinces, the rules of professional conduct governing the legal profession require lawyers to advise and encourage their clients to compromise or settle a dispute where it is possible to do so on a reasonable basis. Lawyers must discourage their clients from commencing or continuing useless legal proceedings.

Canada’s limitation periods vary greatly depending on numerous factors, including:

  • the level of government;
  • the specific province;
  • the claim’s underlying subject matter;
  • the plaintiff’s capacity; and
  • the defendant’s identity.

Keeping these differences in mind, each province has a “basic limitation period”, which applies to a claim unless a different limitation period is specifically mandated by statute. These basic limitation periods vary from two years to six years depending on the province.

Generally, the “discoverability principle” applies to limitation periods in Canada: a cause of action arises – and therefore the limitation period starts running – when a plaintiff discovers, or ought to have discovered by exercising due diligence, that it has suffered a loss or injury giving rise to a claim. The full extent of damages to the plaintiff does not need to be known before the limitation period starts to run.

Depending on the jurisdiction, the basic limitation period may be paused while the parties attempt to reach a settlement. Parties may also contractually alter or suspend the basic limitation period.

Some provinces also have “ultimate limitation periods”, which run from when the event giving rise to the claim occurs, irrespective of when the plaintiff discovered or ought to have discovered it. These ultimate limitation periods range from six to 30 years. These are especially important in environmental and construction claims given the long time it may take to discover the defendant’s wrongful conduct. There are often carve outs from the application of ultimate limitation periods for certain types of claims, such as sexual assault.

For a defendant to be subject to a lawsuit in Canada, the court must be satisfied that it has jurisdiction to deal with the matter. Courts will apply a “real and substantial connection” test, which considers certain factors that will presumptively bestow jurisdiction on the court, namely whether:

  • the defendant is domiciled or resident in the province;
  • the defendant carries on business in the province;
  • a tort was committed in the province; or
  • a contract connected with the dispute was made in the province.

The defendant may rebut a presumption of jurisdiction by adducing evidence of the weakness of these factors or their irrelevance to the issues in the action.

Even if jurisdiction is established and not successfully rebutted, the court may nevertheless decline to exercise its jurisdiction. Generally, this will occur when a more appropriate forum is clearly available.

These requirements are generally the same throughout the country and do not differ between jurisdictions. Notably, some provinces (for example, British Columbia) have enacted statutes to more fully address jurisdiction. These statutes generally codify the “real and substantial connection” test, but may differ slightly and should be consulted if a jurisdictional question arises in a legal proceeding in those provinces.

Since each province maintains its own rules of civil procedure, the initial complaint or document that is filed to initiate the lawsuit varies across the country. Generally, the originating process that commences a lawsuit is a statement of claim, notice of action, notice of application, or petition.

Allegations in an originating process must comprise sufficient material facts that, if accepted as true, would support a cause of action at law. The failure to plead such facts may result in a claim being dismissed. The originating process is meant to plead allegations of fact and is not meant to set out the evidence by which a claimant intends to prove its case.

Generally, it is possible to amend an originating process after it has been filed, provided that the amendments are legally tenable. The rules for doing so vary from province to province and are generally dependent on the stage in the proceeding when the amendments are proposed. In some cases, such as before a defence has been filed or where there is consent, an originating process may be amended without permission from the court. In other circumstances, permission may be needed. Permission will generally be granted, unless doing so would prejudice the defendant(s) in a manner that is not compensable by costs.

Although service requirements vary by province, generally an originating process must be served personally or by a prescribed alternative to personal service. Service on a legally competent individual is effective upon leaving a copy of the document with him or her. Service on a corporation is effective upon leaving a copy of the document with a director, officer, agent of the corporation, or any person who seems to be in control or management at any of the corporation’s places of business.

If a defendant is avoiding service or cannot be located, courts may grant orders for substituted service or validating service, which will permit plaintiffs to serve defendants by means other than personal service. Courts also have the power to dispense with the requirement for service if justified under the circumstances.

Service must be effected within a certain period of time after the original process is issued. This time period will vary from province to province. Failing to effect service within this time will render a proceeding a nullity, unless a court order extending the time for service is obtained.

A party located outside of Canada may be sued in Canada. In such cases, service must be effected in a manner permitted by the defendant’s jurisdiction. Canada is a party to the Hague Convention on the Service Abroad of Judicial and Extra-Judicial Documents in Civil or Commercial Matters, which sets out the channels for the international service of documents for its signatory countries. Generally, the Hague Convention requires the service of documents through one “Central Authority” for each member country. The country-specific rules for each signatory should be consulted, as each may have rules and procedures specific to it, such as the requirement to have all documents for service translated into the official language of the country before they are served.

As a result of the COVID-19 pandemic, many courts across Canada have altered service rules to permit more situations where documents may be served and filed electronically.

If a defendant does not duly respond to a lawsuit, the plaintiff may seek default judgment from the court. The procedure will vary from province to province and is dependent on the type of claim.

Simpler claims, such as enforcement of a written loan agreement or other claims where the amount of damages is readily ascertainable, may entitle a plaintiff to default judgment from an administrative court officer such as a registrar, whereas more complicated claims that require an assessment of damages will likely require a plaintiff to bring a formal motion to a judge.

A defendant may bring a motion to set aside a default judgment. The factors that a court will consider in assessing whether to grant such a motion include:

  • whether the motion was made as soon as possible after the defendant became aware of the judgment;
  • whether there is a plausible explanation for the defendant’s default; and
  • whether the defendant has an arguable defence on the merits.

Where a defendant has not been properly served, this will be a standalone basis for setting aside a default judgment.

Class proceedings are permitted in Canada. The substantive and procedural rules governing such proceedings are determined at the provincial level, and can vary between jurisdictions. Cases that involve a national class of residents across Canada may be advanced in a single province, but it is common for plaintiff’s counsel to advance parallel claims in multiple provinces across the country, which are then co-ordinated based on the specific factors of the case.

In the common law provinces, the representative plaintiff’s claim must be certified (or “authorised” in Quebec). Generally, a claim will be certified where:

  • a cause of action exists based on the pleadings or notice of application;
  • there is an identifiable class of persons that can be represented;
  • the class members’ claims (or defences) raise common issues; and
  • the preferable procedure for the resolution of the common issues is through a class proceeding.

The court must also be satisfied that the representative plaintiff:

  • fairly and adequately represents the interests of the class;
  • has produced a plan for the proceeding which sets out workable methods for advancing the claim; and
  • does not have a conflict of interest with any class members.

Most of the provinces maintain an opt-out model. Therefore, once the class is certified, members are deemed to be part of the proceeding unless they follow procedures to formally opt out, which class members may decide to do in order to pursue claims on an individual basis.

Lawyers in Canada are not required to provide clients with a cost estimate relating to the conduct of a litigation matter. Although most lawyers across Canada charge by the hour, some enter into contingency fee agreements, flat fee agreements or combinations thereof. Contingency fee agreements can be subject to rules relating to form and content.

Regardless of the type of costs agreement, lawyers must ensure they communicate transparently with their clients regarding legal costs; such communications could (and likely should) include discussions about the length of the litigation, its complexity, possible difficulties and the overall chance of success.

Lawyers have professional obligations to inform clients that unsuccessful litigation will likely result in adverse costs awards being made against them.       

Parties may make various interim or interlocutory motions or applications in the course of a proceeding, which may give rise to substantive remedies.

A common example of a substantive remedy available on an interim basis is an injunction. Superior courts may grant injunctive relief, which is generally granted if the moving party can satisfy a judge that:

  • there are serious issues to be tried on the merits;
  • the moving party will suffer harm that is not compensable in costs – termed “irreparable harm” – if the injunction is not granted; and
  • the balance of convenience favours granting the injunction.

Injunctive relief may include a Mareva order, by which a moving party freezes the assets of a defendant; an Anton Piller order, by which a moving party may execute a civil search warrant; and a Norwich order, by which a moving party may obtain an order to seize and/or preserve the records of a third party.

Other more procedural motions are common in legal proceedings, and can include motions to:

  • grant an extension of time before a step must be done;
  • amend pleadings;
  • require the production of various documents;
  • require a responding party to answer questions posed during examinations; and
  • add other parties to the proceeding.

Depending on the jurisdiction, a motion or application for summary judgment may be brought by either a plaintiff or a defendant. Generally, motions for summary judgment will proceed based on a paper record, without the need for live evidence.

Summary judgment will be awarded where there is no genuine issue requiring trial. The judge must be able to reach a fair determination of the merits of the case with limited evidence, usually comprised of affidavit evidence.

There was a pendulum swing in Canadian law in the 2000s towards summary judgment, with its advocates touting the ability to obtain substantive justice faster and more cost-effectively than going to a full trial, and provincial rules of civil procedure were expanded to give judges more powers when considering summary judgment motions. However, the pendulum has swung back in recent years, with courts cautioning against summary judgment in certain circumstances, and even forbidding parties from bringing such a motion where the court is not convinced that it will result in any time or cost savings compared to a trial.

Summary judgment motions can generally be brought any time after a defendant has filed its Statement of Defence, although their timing may impact the cost/benefit analysis when comparing summary judgment to a trial, and may therefore affect whether the court will permit the motion to be brought.

Parties may also seek to strike a pleading or claim on the basis that it is redundant, irrelevant, scandalous, vexatious or an abuse of process, or does not disclose a reasonable cause of action. Unlike summary judgment, such motions usually proceed based on the pleading itself and without evidence.

If a motion to strike a pleading is successful, it can result in the full dismissal of an action, although courts tend to prefer to permit plaintiffs to rectify deficiencies in the pleadings via amendment, if possible.

Parties may seek a final disposition of an action before trial by a motion for summary judgment, as described in 4.2 Early Judgment Applications.

Defendants may also bring a motion to have a proceeding stayed or dismissed on the grounds that:

  • the pleadings are insufficient (as described in 4.2 Early Judgment Applications);
  • the court lacks jurisdiction over the subject matter or lacks territorial jurisdiction (see 3.3 Jurisdictional Requirements for a Defendant);
  • the plaintiff lacks capacity to sue; or
  • another proceeding is pending in a different jurisdiction between the same parties regarding the same subject matter.

A court may grant such a motion to dismiss in full or in part, in which case it will dismiss some claims and permit other claims to proceed to trial.

The rights of interested parties not named in the pleadings to join a lawsuit vary with the subject matter of the claim (eg, estates proceedings or Constitutional issues). For example, in Ontario, a party can join a proceeding if it can prove that:

  • it maintains an interest in the subject matter of the proceeding;
  • it will be adversely affected by a judgment; or
  • there is some common question of law or fact between that party and the one subject to the proceeding.

A party may also seek to intervene as a “friend of the court” (ie, amicus curiae). In this role, the party will be limited to assisting the court by way of legal argument and may not participate in the development of the factual record.

Interventions can take place at the trial or appeal stage. The appropriate procedure is to bring a motion for the party to “intervene” in the proceeding. On that motion, the court will determine whether the intervention is appropriate and under what terms, including whether the interested party may be subject to costs of their intervention.

A defendant may apply for an order that the plaintiff/claimant post security for costs as a term of continuing the litigation. Security for costs may be awarded where:

  • the claimant is ordinarily resident outside the province or territory;
  • the claimant has another ongoing proceeding for the same relief in the same or another jurisdiction;
  • the claimant has an order against it for costs in the same or another proceeding that remains unpaid;
  • the claimant is a corporation or nominal plaintiff and there is good reason to believe that it has insufficient assets in the jurisdiction;
  • the proceeding is frivolous and vexatious; or
  • there is good reason to believe the claimant has insufficient assets in the jurisdiction to pay the costs of the defendant.

Such awards are discretionary and the amount of security ordered to be posted will vary depending on the circumstances of the particular case. Security can take a variety of forms, including a cash deposit or letter of credit.

Awarding costs for interim application/motions varies between jurisdictions. In some jurisdictions, such as British Columbia, costs for interim steps are generally not available. For jurisdictions where these costs are available, some courts have wide discretion to award costs as deemed appropriate, while others are restricted by applicable tariffs that govern the amount of costs that may be awarded for a certain step.

Each province and territory has its own timeframe for dealing with applications or motions. Even within a province, factors that may influence how quickly a motion may be heard include the expected length of the motion, the nature of the relief sought, and the urgency of the matter.

While Canadian courts have generally been very adaptive to the changes necessitated by the COVID-19 pandemic, including by hearing motions virtually and by increasing the number of motions heard in writing, an inevitable consequence of government shutdowns that has affected courthouses across the country is that backlogs in hearing motions have worsened.

Discovery is generally available in civil cases across Canada, the purposes of which are to:

  • enable the parties to know the case they have to meet;
  • obtain admissions that eliminate the need for formal proof and weaken the opponent’s case;
  • facilitate settlement;
  • narrow issues; and
  • avoid surprises at trial.

Although the specific rules vary across the provinces, the general components of the discovery process are similar.

First, parties must disclose documents that are relevant to any matter in issue, subject to proportionality considerations. Unless privilege is claimed or the relevant documents are not in the party’s control or possession, they must be listed in an “affidavit of documents” and produced to the other side.

Secondly, parties may conduct oral examination for discovery (similar to US depositions). These examinations will usually take place in the absence of the judge before a certified reporter, who will transcribe what is said at the examination. Video recordings are not usually made of examinations.

Discovery may be obtained from third parties not named in the proceedings by seeking permission from the court. Generally, such permission will be granted if:

  • the information could not be obtained from the parties to the litigation;
  • it would be unfair to proceed to trial without the discovery; and
  • the discovery will not unduly delay the commencement of trial, create unreasonable expense, or result in unfairness to the third party.

Please see 5.1 Discovery and Civil Cases.

This section is not applicable in Canada.

Solicitor-client privilege and litigation (or work product) privilege are recognised across Canada.

As held by the Supreme Court of Canada, solicitor-client privilege can only be waived by the client, and is:

  • a fundamental civil and legal right;
  • a principle of fundamental justice;
  • a rule of evidence;
  • absolute in scope; and
  • permanent.

Communications with in-house counsel may also be considered solicitor-client privileged, but the privilege will only attach to legal advice, and not business advice.

Litigation privilege creates a “zone of privacy” to protect documents and communications created for the dominant purpose of litigation.

There are other forms of privilege recognised in Canadian law, including settlement privilege, which protects documents or communications that are exchanged for the purpose of attempting to resolve a dispute.

Litigants may seek protective orders from the court to prevent the disclosure of documents that are publicly produced as evidence in affidavits on motions or at trial, but courts are hesitant to grant such orders because of the open-court principle.

Documents produced by parties in litigation that are not produced as evidence on motions or at trial are subject to the “deemed undertaking” rule. They cannot be used for any purpose other than the litigation that they were produced in connection with, absent either the agreement of the party that produced them or subject to an order of the court.

Statutes, such as privacy legislation, may further prevent or restrict the disclosure of specific documents.

As a general matter, injunctive relief is available when necessary to prevent or restrain injuries to property, or to ensure that a party is not deprived of its legal rights. Canadian courts may grant injunctions on either a temporary basis pending trial or on a permanent basis, and the injunction may be either mandatory (compelling certain conduct) or prohibitive (restricting certain conduct). A party may request an interim or interlocutory injunction from the court, with or without notice to the other parties.

To obtain a temporary injunction, an applicant must satisfy the three-part test set out in 4.1 Interim Applications/Motions.

A different test applies when an applicant seeks a permanent injunction: the applicant must establish its legal rights and show that an injunction is an appropriate remedy. In applying this test, the court will consider (i) whether the wrong is sufficiently likely to recur in the future, such that a permanent injunction is necessary, and (ii) whether there is an adequate alternative remedy, such as damages.

Examples of the types of injunctions typically granted by Canadian courts include injunctions freezing assets (known as a Mareva injunction), prohibiting breaches of contract, prohibiting the use or disclosure of confidential information, prohibiting intellectual property infringement, and preventing the destruction of evidence (known as an Anton Piller order).

Where a matter is sufficiently urgent, a party can move for an interim injunction without notice on an ex parte basis. Interim injunctions are generally to preserve the status quo until the court can hear full argument on a motion for an interlocutory injunction. An appearance before a judge is generally required to obtain an interim injunction, and such an appearance can ordinarily be scheduled on very short notice when necessary. Each jurisdiction has specific practice directions and procedures for obtaining this urgent relief.

As discussed in 6.2 Arrangements for Obtaining Urgent Injunctive Relief, injunctions can be obtained on an ex parte basis where urgency or the circumstances demand, such as on a motion for a Mareva injunction where there is a risk that the responding party will disperse its assets if given notice of the motion. A party bringing a motion on an ex parte basis has an obligation to make full and fair disclosure of all material facts, including those that are not favourable to the applicant. If such injunctions are granted, they are usually granted on a time-limited basis, and the renewal of the injunction is then argued with notice to the responding parties.

An applicant will be held liable for damages if they obtain an injunction that is later vacated. The applicant will be liable for all damages suffered by the respondent as a result of the injunction. To obtain an injunction, an applicant will normally be required to provide an undertaking as to damages.

Canadian courts can and will grant injunctions against a party’s worldwide assets, subject to considerations of comity and enforceability.

Injunctive relief is available against non-parties where necessary.

A party may be found in contempt of court if it fails to comply with the terms of an injunctive order. Penalties for contempt can include fines and imprisonment.

Trial proceedings are conducted through a combination of oral submissions by counsel and live testimony from lay and/or expert witnesses. Counsel for the parties will typically each make opening submissions, followed by examinations in chief and cross-examinations of each party’s witnesses, followed by closing submissions by counsel for each party. The court controls its own process, however, and may modify procedural rules as necessary or appropriate in a particular case. A common example is permitting parties to offer their affirmative evidence by written affidavit rather than oral examination, in the interests of saving court time.

Rules pertaining to case management hearings vary between provinces, but many jurisdictions institute judicial case management and permit parties to seek case conferences in order to informally resolve disputes without bringing formal motions.

Most jurisdictions also require parties to attend pre-trial conferences, where a judicial officer will attempt to settle the dispute or narrow the issues before scheduling the matter for trial.

As a general rule, jury trials are rare in civil cases in Canada, other than for personal injury claims. However, the specific availability of jury trials in civil matters varies by province. Some jurisdictions limit civil jury trials to specific causes of action, while Quebec, by contrast, does not permit civil jury trials at all.

Notably, even where civil jury trials are permitted, a jury notice can be struck if the subject matter is found to be too complex for lay persons.

The admissibility of evidence is governed by provincial and federal legislation, as well as the common law (except in Quebec).

The overarching principle is that all evidence relevant to an issue in a proceeding is admissible. The exception to this general rule is if the evidence is subject to an exclusionary rule (such as those pertaining to privilege or hearsay). Hearsay evidence is generally inadmissible, but can be admitted into evidence if it falls within a recognised exception to hearsay or is found to be sufficiently necessary and reliable.

Opinion evidence from a lay witness is generally inadmissible. The use of opinion evidence from an expert witness is discussed under 7.5 Expert Testimony.

Expert evidence, including expert opinion evidence, will generally be permitted where it is relevant, necessary in assisting the trier of fact, from a properly qualified expert, and does not contravene an exclusionary rule of evidence.

The trial judge is charged with determining whether expert evidence will be admissible in a particular case and, if so, how much weight the expert evidence will be afforded by the court when making its judgment.

Canadian court proceedings are generally open to the public. As set out in 1.3 Court Filings and Proceedings, Canadian courts apply the “open courts” principle. Orders excluding the public from a hearing or sealing court records are available in extraordinary circumstances but are rare.

Documents disclosed to the other party as part of the pre-trial discovery process and the transcripts of examinations for discovery are not presumptively part of the public record, and only become so if filed with the court. Documents obtained by a party in a proceeding are generally subject to the “deemed undertaking rule”, which prohibits parties from using documents obtained in a legal proceeding for purposes other than that legal proceeding.

The level of judicial intervention during a hearing or trial will vary by jurisdiction, by judge, and by circumstance. During submissions by counsel, most judges will regularly intervene with questions or to seek clarification. During witness testimony, however, judges typically reserve questions for a witness until the end of the witness’s testimony and will only interrupt an examination if they require clarification of a question or answer.

In terms of issuing a ruling, while judges are able to rule from the bench, and will do so where appropriate or required by the exigencies of the case, it is common for judges in more complex cases to reserve their decision in order to give them time to further review the parties’ evidence and the submissions of counsel, and to write their reasons for their decision. Those reasons will then be transmitted to the parties by court staff.

The timeframe for a proceeding to advance through to trial varies from province to province and from case to case. It will often be dependent on numerous factors, including the complexity of the matter, the volume of discovery and pre-trial motions, and the availability of court time for trial. However, by way of example, an uncomplicated matter requiring minimal discovery or pre-trial motions might progress through trial in one to two years, while a complex commercial case can easily take five years or more to reach a trial decision.

Settlements of civil actions in Canada do not generally require court approval. Exceptions to this general rule include class proceedings and settlements involving minors or persons under disability, which both require court approval.

Settlements can be made confidential, but this will generally not be possible for settlements that require court approval, as the open court principle will require parties to publicly disclose the settlement and its terms in order for approval to be granted.

A settlement agreement is a binding contract. If a party does not comply with the agreement, then another party to the agreement may bring a motion before the court to enforce a settlement.

Because a settlement agreement is a contract, it may be set aside on the same grounds as a contract. Potential grounds to set aside a settlement agreement include the following:

  • mistake – miscommunication of a client’s instructions to its legal counsel, or genuine mistake as to the terms of the settlement agreement;
  • misrepresentation – mis-statements or misunderstandings between the parties with respect to certain fundamental facts upon which the settlement agreement is based;
  • duress/undue influence/unconscionability – questions as to the competence and independence of the party entering into the settlement agreement; and
  • illegality – an agreement that is prohibited by law.

The most common award to a successful litigant is a monetary award of damages, which can include general damages, aggravated damages and punitive damages:

  • General damages are meant to be compensatory for economic loss or non-economic damages flowing from physical injuries.
  • Aggravated damages are also compensatory in nature and are meant to account for intangible injuries like humiliation.
  • Punitive damages are non-compensatory and are imposed where a party’s behaviour represents a marked departure from ordinary standards of decent behaviour. While punitive damages are available, they are the exception rather than the norm, and are rarely awarded in Canada.

In addition to monetary damages, permanent injunctive relief or mandatory orders requiring a party to take some positive action are also available, as discussed under 6.1 Circumstances of Injunctive Relief.

In Canada, damages are generally not capped and the award and amount of damages is, in most circumstances, at the full discretion of the court.

One exception to that rule is for damages regarding pain and suffering. In a trilogy of cases decided by the Supreme Court of Canada in 1978, the Court imposed a “cap” of CAD100,000 on damages for pain and suffering; the amount has grown via inflation to more than CAD350,000 in today’s dollars. There are exceptions to this cap, including for cases of defamation and loss of reputation.

In Canada, pre- and post-judgment interest are available pursuant to statute. The specific restrictions, conditions and rates of interest vary between provinces. Most provinces permit judges the discretion to award higher rates of interest or compound interest if agreed to by the parties, as may be the case in contractual disputes where, for example, a default interest rate may be specified in the contract itself.

In Canada, there are numerous mechanisms available to enforce a domestic judgment. The most common methods are by garnishing wages or bank accounts and by filing writs of seizure and sale, which effectively prevent a judgment debtor from transferring real property without payment of the debt.

Canadian provinces and territories, other than Quebec, are reciprocating jurisdictions, which means that judgments issued in one province can be registered and enforced via court application in another province.

In Quebec, enforcement of an extra-provincial judgment requires the commencement of an originating process.

In Canada, the enforcement of a foreign judgment will generally require a party to commence an originating proceeding and satisfy a court that the foreign judgment:

  • was issued by a court of competent jurisdiction;
  • is final in the original jurisdiction, meaning it is not subject to an appeal; and
  • is adequately precise, meaning that it is for a debt or definite sum of money or is of a nature whereby the principle of comity requires the court to enforce it.

Canada is also a party to several international conventions that affect the enforcement of foreign judgments, including the Convention Between Canada and the United Kingdom of Great Britain and Northern Ireland Providing for the Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial Matters. If such convention is applicable, it may be possible for a party to enforce a foreign judgment by simply following administrative steps to register a certified copy of the judgment with the court, rather than bringing an originating proceeding.

After a judgment from a foreign country has been recognised by a Canadian court, it can be enforced using the same enforcement methods used for domestic judgments, as described in 9.4 Enforcement Mechanisms of a Domestic Judgment.

Each of Canada’s provinces and territories has its own court of appeal, which will hear both criminal and civil litigation decisions rendered by the superior courts of that province or territory. Each jurisdiction will have its own rules about whether parties can appeal as of right, or whether they require leave (permission) to appeal – this is usually dependent on the nature of the order being appealed, including whether it is final or interlocutory.

Canada’s highest appeal court is the Supreme Court of Canada, which hears appeals from all provincial, territorial and federal courts of appeal. Parties to civil actions have no automatic right of appeal to the Supreme Court of Canada, and must be granted leave to do so by convincing a three-member panel of the Supreme Court of Canada, in writing, that the proposed appeal is of national importance or that there are conflicts in the jurisprudence and unsettled areas of the law that require appellate clarification.

The appellate standard of review is established in the case law and is dependent on the type of issue before the appellate court. In general:

  • questions of fact will be reviewed for palpable and overriding error;
  • questions of law will be reviewed for correctness; and
  • mixed questions of fact and law will be reviewed on a sliding scale between correctness and palpable and overriding error.

Each jurisdiction will have its own rules for taking an appeal; however, as a general matter, appeals are commenced by a notice of appeal, or, if leave is required, by way of a leave application. Generally, appeals must be commenced within 30 days after the entry of the judgment or order in respect of which an appeal is sought.

Subject to the specific rules of each court, the parties will usually each file written submissions and a panel of three judges will hear appeals.

Canada’s appellate courts will review whether a lower court made reasonable factual determinations and correctly applied the law to the facts.

Appellate courts do not rehear cases, and it is generally impermissible for parties to raise new issues on appeal that were not raised before the lower court. However, fresh evidence may be admitted on appeal if:

  • it was not available at the lower court proceeding;
  • it is relevant to the issues on appeal; and
  • it is credible and – if believed – could reasonably have affected the outcome of the proceeding.

The conditions that an appellate court might impose in connection with hearing an appeal include limiting the issues to be considered, declining to hear oral argument, or directing a hearing on its own jurisdiction. Appellate courts may also hear interim motions, such as a motion for security for costs of the appeal.

The court may affirm, modify, vacate, set aside or reverse a lower court’s judgment or order. An appellate court may also direct the case back to the lower court for further review and consideration, either by the same decision maker or by someone different.

While rules vary from province to province, the general principle in Canadian civil litigation is that costs are awarded to the successful party. In some provinces, this means that a successful party is usually entitled to be reimbursed for roughly 60% of its legal costs (which can be increased to 90% or even 100% depending on the circumstances). In other provinces, entitlement to costs is governed by a tariff, which will specify exactly how much the successful party is entitled to as compensation for its legal costs.

An award of costs by a court can be appealed; however, leave of the court is usually required where the appeal is only as to costs. Such awards are highly discretionary and are seldom overturned on appeal.

Canadian courts will consider a variety of factors when awarding costs in a proceeding, which can vary from province to province. Common considerations when fixing costs include:

  • the result of the proceeding;
  • the amounts claimed and the amounts recovered;
  • the importance and complexity of the issues;
  • any written offer to settle;
  • the amount of work required;
  • the public interest in having the issues litigated;
  • any conduct of a party that tended to shorten or unnecessarily lengthen the duration of the proceeding;
  • the failure by a party to admit anything that should have been admitted or to serve a request to admit;
  • what the unsuccessful party could reasonably have expected to pay in the event it was unsuccessful; and
  • any other matter that the court considers relevant.

Some provinces permit interest to be charged on costs via statutory provision, which will set out how it is to be calculated. Absent a statutory allowance, interest does not accrue on costs awards.

Because of the increasing cost and delays associated with court proceedings, alternative dispute resolution has become increasingly popular in Canada in recent years. Some of the most commonly cited reasons for using ADR instead of traditional litigation are that it is quicker and cheaper, the parties are able to choose their decision maker or facilitator, and there is increased potential to achieve creative and mutually beneficial outcomes.

The most popular ADR methods in Canada are mediation and arbitration. Mediation is mandatory in some jurisdictions, where parties are required to obtain a certificate from a qualified mediator certifying that they attempted to settle their dispute via mediation and failed before the court will schedule a trial in their action.

Arbitration is not mandatory in any jurisdiction in Canada (except for certain matters) and instead requires the consent of both parties, either through a pre-existing contract or a specific arbitration agreement entered into after the dispute has arisen.

Another new form of ADR that is increasingly being utilised is a mediation-arbitration, where the parties initially try to reach a resolution through mediation; if unsuccessful, an arbitrator (the same person who acted as mediator) renders a decision for the parties.

Canadian courts can, and will, stay court proceedings where the parties have agreed in a contract to mandatory ADR. Many commercial contracts now include provisions whereby mediation and arbitration are to occur before, or as a complete substitute for, court proceedings in the event of a dispute, and those provisions will generally be enforced by Canadian courts.

It should be noted that the vast majority of court proceedings in Canada – well over 90% – end in a settlement rather than a judicial pronouncement at trial.

Canadian courts cannot require litigating parties to engage in a binding ADR process. However, several provinces, including Alberta and Ontario, have introduced mandatory mediation as part of the litigation process to encourage early settlements between parties. Many courts will also use pre-trial conferences to actively encourage the parties to engage in ADR. However, there are no real sanctions in Canada for parties who refuse to engage in mediation in good faith.

ADR institutions in Canada are extremely well organised, professional and efficient. Canadian institutions offering ADR include the Canadian Arbitration Association, the ADR Institute of Canada, Arbitration Place and the Arbitration Committee of the Canadian Chamber of Commerce.

There are various institutions and tools across Canada that offer ADR services that operate at the international level. There are also arbitration services that specialise in various areas of the law, such as construction law, labour and employment law, and commercial law.

In Canada, arbitration is governed by provincial statutes. There is also a federal Commercial Arbitration Act, but it applies only to arbitrations where the federal government is a party, or to maritime and admiralty matters.

The specifics of the various provincial statutes vary, but as discussed in 12.1 Views of Alternative Dispute Resolution within the Country, Canadian courts have the power to enforce arbitration agreements between parties by granting a stay of proceedings where one party begins a court proceeding in the face of a valid arbitration agreement. Notably, the Supreme Court of Canada has recently placed some limits on the enforceability of mandatory arbitration clauses where the arbitration provision is found to be unconscionable. In Uber Technologies Inc. v. Heller, 2020 SCC 16, the Supreme Court of Canada held a mandatory arbitration clause unconscionable because it was part of a standard form contract that was non-negotiable and because there was a significant “gulf in sophistication” between the parties.

Provincial legislation also provides that arbitration awards can be enforced once they are entered as orders of the provincial courts. All of the usual methods of enforcement, as described in 9.4 Enforcement Mechanisms of a Domestic Judgment, are available.

Generally, an arbitration may be conducted in Canada with respect to any issue that can be litigated, excluding criminal law matters. Additionally, many provinces also place restrictions on the arbitration of family law disputes, with some exceptions.

In Canada, an arbitration award can be set aside on grounds relating to the validity of the arbitration agreement or the tribunal’s jurisdiction, and over concerns of fairness.

If the arbitration agreement is silent on appeal rights, a party may, with leave of the court, appeal a question of law (excluding arbitrations in Quebec and arbitration proceedings under the federal Arbitration Act). Appeals of questions of fact or mixed fact and law are not available under Canadian legislation.

Conversely, where an arbitration agreement provides for rights of appeal, leave of the court is not required. Courts in Canada are often hesitant to interfere with an arbitration award. In Teal Cedar Products Ltd v British Columbia, 2017 SCC 32, the Supreme Court of Canada affirmed that, even on a question of law, an appeal of an arbitration award should generally be reviewed on a reasonableness standard, and not a correctness standard.

As with appealing the decisions of a court, a party should be cognisant of any time limitations for appeals after an arbitration. These time limits vary from jurisdiction to jurisdiction. As an example, the Ontario Arbitration Act provides that a party has 30 days after an award to commence a leave application, whereas the British Columbia Arbitration Act provides for 60 days.

A person who is entitled to enforcement of an arbitration award made in Canada may make an application to the court for the enforcement of said award. Once an award is converted into a court judgment, all usual remedies available to the holder of a court judgment are available to that party.

Canadian courts will enforce international commercial arbitration awards rendered under the New York Convention and the UNCITRAL Model Law. The court will enforce an arbitral award unless the respondent satisfies the court that one of the criteria to refuse enforcement under the UNCITRAL Model Law is met. Generally, it is relatively quick to enforce an arbitration award, unless the enforcement proceeding is opposed by the other party.

The use of online platforms to resolve legal disputes is not yet widespread in Canada. However, in 2017, British Columbia implemented the Civil Resolution Tribunal (CRT) as Canada’s first online dispute resolution centre, which can resolve "strata property disputes" and small claim disputes up to CAD5,000. The tribunal has been so successful that the government of British Columbia introduced legislation in 2018 to expand the CRT’s jurisdiction to include some motor vehicle accident disputes, disputes under the Societies Act (which deals with how not-for-profit organisations are created and run) and the Co-operative Association Act (which deals with housing co-ops).

Despite only currently being available in one province, with the impact of the COVID-19 pandemic on the world and the increased need to utilise the internet and technology to function in our personal, professional and legal lives, online dispute resolution may become increasingly popular. All courts across Canada, including the Supreme Court and Federal Court, have had to adopt virtual hearings whenever possible.

Given those shifts in the practice of law in Canada, it is possible – and perhaps even probable – that a semi-permanent shift to virtual dispute resolution is afoot in Canada, particularly for small claims matters.

COVID-19 has significantly impacted the operation of the provincial and federal courts. In the initial stages of the pandemic in March 2020, most courts throughout the country stopped in-person attendances and were restricted to hearing only urgent matters (either by phone or by video-conference). Most non-urgent hearings, motions and other court attendances were postponed. Very quickly, however, many courts began conducting online hearings and case conferences using platforms such as Zoom. Within a few weeks, courts began expanding their operations to hear non-urgent matters via online hearings. The use of online hearings has continued throughout the year and remains the norm for many courts. As of November 2020, only some courts have reopened for in-person attendance and others are in the process of doing so, subject to local health guidelines.

The pandemic has also led to some provincial governments suspending limitation and procedural periods. The particulars of these suspensions have varied by province. For example, in Ontario, limitation and procedural periods were suspended from 16 March 2020 to 14 September 2020. At the federal level, the Time Limits and Other Periods Act (COVID-19) suspended limitation periods from 13 March 2020 to 13 September 2020. These provisions gave parties extra time to commence legal proceedings, or to take required steps within proceedings, in light of the pandemic.

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Lawson Lundell LLP is one of the largest and most experienced law firms in Western Canada. It is a leading, full-service business law firm, with more than 160 lawyers located in offices in Vancouver, Calgary, Kelowna and Yellowknife. The Litigation & Dispute Resolution group has 66 lawyers across four offices and is experienced in the following industries and practice areas: Aboriginal; administrative, constitutional and public law; alternative dispute resolution; appellate advocacy; class action; climate change; commercial litigation; competition and antitrust issues; construction and engineering; corporate governance and shareholder rights; creditors’ remedies and collections; defamation and media; environmental; healthcare; insolvency and restructuring; insurance litigation; natural resources, including forestry, mining, oil and gas, wind and water; pensions, benefits and trust issues; privacy and freedom of information; product liability; public utility and regulatory; real estate litigation; research and opinions; securities litigation; taxation; technology; and transportation.

The Environment, Indigenous Rights, Property Ownership Transparency… and Uber… A 5 Star Review!

Introduction and summary

Canada’s provinces and territories are common law jurisdictions, other than Quebec, where the Civil Code of Quebec governs private law. It is a hierarchical court system, comprised of both provincially and federally constituted courts. The Canadian Constitution of 1867 dictates the subject-matter jurisdiction of the country’s courts and regulatory tribunals. The jurisdiction of the Federal Courts is restricted to those matters governed by federal statutes, which expressly confer jurisdiction on these courts. The decisions of the provinces’ appellate courts and the Federal Court of Appeal are subject to review by the Supreme Court of Canada (SCC). And you thought Canada was just Celine Dion, maple syrup and ice hockey!

Despite the uncertainty and disruption caused by the COVID-19 pandemic, the SCC released several landmark decisions in 2020 that have important commercial and constitutional implications.

In Uber v Heller, released in June 2020, the SCC declared that the arbitration clause in Uber’s standard form service agreement with its Canadian drivers was unconscionable and therefore invalid. The SCC further held that, in the circumstances, the courts could properly determine the arbitrator’s jurisdiction to resolve the dispute, creating an exception to the “competence-competence” principle. The arbitration clause stipulated that arbitration was to take place in the Netherlands, and an Uber driver was required to pay a USD14,500 filing fee to commence arbitration (roughly half an average Uber driver’s annual salary). In this context, the SCC found the arbitration clause to be unconscionable, confirming that the doctrine can be applied to invalidate a contract even if one party does not knowingly take advantage of another’s vulnerability.

In September 2020, the SCC released two decisions that provide clarity in the ongoing judicial and legislative effort to prevent “strategic lawsuits against public participation” (SLAPP) from chilling debate on matters of public interest (170 v Pointes Protection and Bent v Platnick). The SCC has confirmed that anti-SLAPP legislation can be used to dismiss SLAPPs outside of the usual defamation context.

Also in September 2020, the SCC heard arguments in three cases known together as the Reference re Greenhouse Gas Pollution Pricing Act, concerning the constitutionality of the federal Greenhouse Gas Pollution Pricing Act, which came into force in June 2018 with the aim of instituting a national carbon pricing standard. The SCC’s decision is expected to be ground-breaking.

The SCC also considered the complex issue of Indigenous rights and claims over resource-rich lands in multiple jurisdictions. In February 2020 in Newfoundland and Labrador v Innu of Uashat, the SCC signalled that attempts to restrict claims of Aboriginal peoples to within provincial or territorial limits may not be tenable. In October 2020, the Court heard argument in R. v Deslautel, another case involving the inter-jurisdictional practising of Aboriginal rights, in which an American citizen who is a member of the Lakes Tribe of the Colville Confederated Tribes asserts that he was exercising his Aboriginal right to hunt in traditional territory when he killed an elk in British Columbia without a hunting licence.

Turning from cases to legislation and from the national to the provincial level, a novel piece of legislation coming into force in November 2020 is British Columbia’s Land Owner Transparency Act (LOTA). This first-of-its-kind undertaking in Canada is aimed at identifying all individuals who ultimately own real estate in British Columbia for the purposes of allowing government authorities and law enforcement agencies to address tax evasion and money laundering activities connected to the ownership of land. The scope of the reporting obligations under LOTA is extensive.

SCC on unconscionable arbitration clauses – Uber v Heller

In 2017, on behalf of Uber drivers in Ontario, David Heller commenced a CAD400 million class action in the Ontario courts for alleged violations by Uber of provincial employment standards legislation (ESA). The arbitration clause of Uber’s standard form service agreement with its Canadian drivers designates Amsterdam as the “place of arbitration” and requires drivers to pay a filing fee of USD14,500 to commence an arbitration. Uber applied to stay Heller’s proposed class action, relying on the arbitration clause. Heller argued that the arbitration clause was invalid because it was unconscionable – the cost to an Uber driver to pursue arbitration in the Netherlands exceeded the driver’s annual income. Heller also argued that the agreement contracted Uber drivers out of the mandatory provisions of the ESA.

At first instance, the Ontario Superior Court ruled in Uber’s favour, concluding that the validity of the arbitration clause had to be referred to arbitration in the Netherlands in accordance with the “competence-competence” principle that arbitrators are competent to determine their own jurisdiction. The Ontario Court of Appeal overturned this decision, finding that, in the circumstances of this case, a court should determine jurisdiction at first instance. The appellate court found that the arbitration provision was unconscionable, given the inequality of bargaining power between Uber and its drivers and the costs of arbitration that Uber drivers would have to incur.

On 26 June 2020, the SCC released its decision in Uber Technologies Inc. v Heller, 2020 SCC 16 (Uber). The majority (seven of nine justices, with another concurring in the result) agreed with the Ontario Court of Appeal and dismissed Uber’s appeal. The lone dissenting justice focused on the freedom to contract and would have stayed the action in favour of Uber’s arbitration agreement.

The competence-competence principle is a foundational feature of domestic and international commercial arbitration, recognising that an arbitral tribunal normally determines its own jurisdiction. A court may only review that decision at a later stage, upon application by one of the parties. Of particular note to commercial arbitration practice in Canada, in Uber the SCC has carved out a new – albeit narrow – exception to the competence-competence principle, allowing a court to determine an arbitral tribunal’s jurisdiction in the first instance where there is a real prospect that the challenge to the arbitrator’s jurisdiction may never be resolved.

Under this new exception, the court (and not the arbitral tribunal itself) can resolve whether the arbitrator has jurisdiction over the dispute in the first instance if there is a genuine challenge to arbitral jurisdiction (it cannot be merely a delay tactic, for example) and a real prospect that the jurisdictional challenge may never be resolved by the arbitrator if the stay of the court action is granted and the matter is referred to arbitration.

The SCC did not consider Heller’s challenge to the validity of Uber’s service agreement on the grounds that it contracted drivers out of the mandatory provisions of the ESA. However, the Court found the arbitration clause in Uber’s service agreement was unconscionable and, therefore, invalid. In doing so, the SCC arguably expanded the doctrine of unconscionability by removing a strict “knowledge requirement”.

The two prongs for assessing whether an agreement is unconscionable are (i) inequality of bargaining power and (ii) an improvident bargain.

In finding that an inequality of bargaining power existed in Uber, the majority noted the following key factors:

  • the difference in sophistication between Heller and Uber;
  • the lack of information in the contract about the cost of filing an arbitration claim; and
  • the foreign choice of law clause, which circumvented legal protections in the domestic ESA that Heller would otherwise enjoy.

In the SCC’s view, the unfair terms prevented Heller from effectively seeking resolution of a claim, regardless of its legal merit. The bargain struck in the arbitration clause was held to be improvident for Heller and, ultimately, unconscionable and thus invalid.

The SCC made it clear in Uber that arbitration clauses should be tailored to the circumstances and should provide enough information to make the legal and financial consequences of the clause reasonably clear to the parties.

SCC on anti-SLAPP legislation – 170 v Pointes Protection & Bent v Platnick

In Canada, as in many other jurisdictions, lawsuits meant to dissuade persons from speaking out or taking positions on issues of public interest have proliferated of late. In a SLAPP, the proponent manipulates the court system to limit and deter their critics by consuming the latter's time and money in defending the SLAPP.

The Provinces of British Columbia, Ontario and Quebec have enacted “anti-SLAPP” legislation to mitigate the harmful effects of these types of lawsuit. The anti-SLAPP legislation in these provinces allows a defendant (a person named in a SLAPP) to apply to the court to dismiss the SLAPP on an expedited basis at an early stage of the litigation, applying the following framework. The party seeking to dismiss the SLAPP must satisfy the court that the proceeding against it arose from an expression it made, which relates to a “matter of public interest”. If the court accepts this is the case, the burden of proof shifts to the party who brought the SLAPP, who must satisfy the court of the following three things:

  • that there are grounds to believe its proceeding has substantial merit;
  • that the moving party has no valid defence; and
  • that the public interest in permitting the proceeding to continue outweighs the public interest in protecting the expression.

A failure to establish one of these three things is fatal: the court will dismiss the underlying proceeding as a SLAPP.

In September 2020, the SCC released two decisions applying the framework created under Ontario’s anti-SLAPP laws (the Ontario Framework).

1704604 Ontario Ltd. v Pointes Protection Association, 2020 SCC 22 (170 v Pointes) involved a dispute between non-profit land conservation association, Pointes Protection Association (Pointes), and a land developer, 1704604 Ontario Ltd. (170). After the president of Pointes testified before the Ontario Municipal Board that 170’s proposed development would cause environmental damage, 170 launched an action against Pointes seeking CAD6 million for breach of contract. 170 claimed that the president’s testimony breached the parties’ agreement, in which Pointes had agreed to limitations on its future conduct in respect of municipal approvals sought by 170.

Pointes applied to dismiss 170’s action under the Ontario Framework, alleging it was a SLAPP. The motion judge allowed 170’s breach of contract claim to proceed. The Ontario Court of Appeal allowed Pointes’ appeal, granted its motion under the Ontario Framework and dismissed 170’s lawsuit. The SCC further dismissed 170’s appeal.

The SCC found that Pointes successfully met its threshold burden – the president’s testimony constituted an expression related to a matter of public interest. When the burden shifted to 170, the SCC unanimously decided that 170’s claim against Pointes for breach of contract lacked substantial merit and, because 170’s interpretation of the agreement was not legally tenable, it was inevitable that 170 could not establish that Pointes had no valid defences. The SCC concluded that 170 also failed to convincingly show that any harm 170 might have suffered as a result of the president’s expression was sufficient to establish significant public interest.

The outcome in 170 v Pointes is important because it confirms that the anti-SLAPP legislation can be used to dismiss actions outside of the defamation context – the context in which SLAPP suits have typically arisen.

In companion case Bent v Platnick, 2020 SCC 23 (Bent), a defamation case, the SCC justices split five to four, with the majority dismissing the anti-SLAPP motion and allowing the underlying action to proceed. Ms Bent, a lawyer, had written a confidential (but subsequently publicly leaked) internal email to members of the Ontario Trial Lawyers Association, in which she essentially alleged that a medical doctor, Dr Platnick, misrepresented or altered the opinions of other medical experts. Dr Platnick commenced an action against Ms Bent, seeking damages for defamation. Ms Bent applied to dismiss Dr Platnick’s action on the basis it was a SLAPP.

Although Ms Bent succeeded in meeting the threshold burden, the majority concluded that Dr Platnick was able to clear both the merits-based hurdle and the public interest hurdle. The majority took the view that the professional reputational harm Dr Platnick suffered was sufficiently serious to establish a weighty public interest in permitting his defamation action to continue.

The bulk of the majority’s decision focused on the requirement under the Ontario Framework for the responding party to satisfactorily demonstrate that the moving party has “no valid defence” in the underlying proceeding. As Ms Bent had raised the defences of justification and qualified privilege to the defamation action, the majority considered the potential application of each at length, but ultimately rejected both. Ms Bent had apparently taken no investigative steps to corroborate her allegation of professional misconduct, and there were grounds to believe that it was not substantially true, thereby eliminating justification as a defence. There were also grounds to believe that the defence of qualified privilege (which arises when defamatory words are published in a manner and at a time that is “reasonably appropriate in the context of the circumstances existing on the occasion when that information was given”) was inapplicable due to Ms Bent having exceeded its scope by unnecessarily referring to Dr Platnick by name, and perhaps even by her seemingly “reckless disregard for the truth”.

The dissenting minority of four disagreed with the majority’s reasoning, taking the view that Ms Bent had sent her email in circumstances protected by qualified privilege.

Ultimately, both of these cases shed light on the requirements for bringing and defending anti-SLAPP motions, although the split in the Court over the defence of qualified privilege has left room for interpretation that will likely be explored in future cases.

Reference on federal Greenhouse Gas Pricing legislation

On 21 June 2018, the federal Greenhouse Gas Pollution Pricing Act came into force, with the overarching goal of instituting a national carbon pricing standard to combat climate change and to meet Canada’s international greenhouse gas reduction emissions.

The provinces of Saskatchewan, Ontario and Alberta brought the question of the Act’s constitutionality to their respective Courts of Appeal (the References), alleging that Parliament had exceeded the scope of its authority in passing the Act. A majority of the Saskatchewan and Ontario appellate courts found the Act constitutional under Parliament’s power to make laws for the peace, order and good government (POGG) of Canada under its national concern branch. In contrast, a majority of the Alberta Court of Appeal found the Act unconstitutional.

On 22 and 23 September 2020, the SCC heard the Reference question in Reference re Greenhouse Gas Pollution Pricing Act (individually: Saskatchewan (Attorney General) v Canada (Attorney General); Ontario (Attorney General) v Canada (Attorney General); and British Columbia (Attorney General) v Canada (Attorney General)). The Court’s decision is expected to provide much-needed guidance on climate change law and the national concern branch of POGG.

In conjunction with Canada’s desire to limit greenhouse gas (GHG) emissions, the Canada Energy Regulator also released the “Strategic Assessment of Climate Change” (SACC) on 16 July 2020. The SACC includes rules and obligations that apply to designated projects under the federal Impact Assessment Act. In particular, the SACC outlines requirements for project proponents in relation to GHG emissions as well as associated climate change information, to bring consistency, transparency, efficiency and predictability to the impact assessment process in the climate change context.

Inter-jurisdictional Aboriginal litigation

In Canada, Indigenous traditional territories may span provincial or even international boundaries. In Newfoundland and Labrador (Attorney General) v Uashaunnuat (Innu of Uashat and of Mani Utenam) 2020 SCC 4, the SCC found that certain claims that straddle multiple provinces require jurisdictional rules to be interpreted flexibly, so as not to prevent Aboriginal peoples from asserting their constitutional rights.

The Innu First Nation (Innu) claimed against two mining companies responsible for a mega-project consisting of open-pit mines in Quebec, and Newfoundland and Labrador, as well as port, railway and industrial facilities in both provinces. The Innu claimed that the companies’ operations had been conducted on their traditional territory without consent, thereby infringing their constitutional rights. The Innu commenced its claim in the Quebec courts seeking, among other things, a permanent injunction against the mining companies ordering them to cease all work related to the mega-project, and CAD900 million damages. The mining companies and the Attorney General of Newfoundland and Labrador applied to strike the pleadings that concerned the operations in Newfoundland and Labrador, but the Quebec courts dismissed their applications, determining that the Quebec courts had jurisdiction to make orders that would invariably have an impact on land and people outside of Quebec.

In a five to four ruling, the majority of the SCC agreed with the lower courts and dismissed the appeal. The majority expressed concerns about the Innu having to re-litigate fundamentally the same issue in two different provinces. Furthermore, the Innu’s claim did not necessarily impact real property rights, but instead focused on sui generis rights (Aboriginal rights that existed pre-confederation and must be applied uniformly across Canada).

In contrast, the minority of the SCC found that Aboriginal and other treaty rights must be considered “real rights” for the purposes of inter-jurisdictional adjudication, as to find otherwise would essentially preclude them from the normal application of private international law, the basis on which provincial jurisdictional disputes have historically been addressed.

The fallout from the decision remains to be seen, particularly given the prevalence in Canada of Aboriginal title and rights claims that cross national and international boundaries.

In a similar vein, on 8 October 2020, the SCC heard argument in Deslautel, on appeal from the British Columbia Court of Appeal (2019 BCCA 151). Mr Deslautel is an American citizen and a member of the Lakes Tribe of the Colville Confederated Tribes; he lives on a reserve in Washington State. Mr Deslautel crossed into British Columbia and killed an elk. He immediately reported himself to local wildlife conservation officers and was charged with hunting without a licence.

Mr Deslautel maintains that he was exercising his Aboriginal right to hunt for ceremonial purposes in the traditional territory of his Sinixt ancestors. The question before the SCC is whether Section 35 of the Canadian Constitution, which grants rights to “Aboriginal peoples of Canada”, includes Aboriginal peoples whose ancestors once occupied territory that became Canada. The British Columbia courts found that Mr Deslautel was not foreclosed from claiming an Aboriginal right to hunt in British Columbia. The appellate Court found that imposing a requirement that Indigenous peoples may only hold rights in Canada if they occupy the same geographical area in which their ancestors exercised those rights does little towards achieving the ultimate goal of reconciliation.

The SCC does not give reasons indicating why it has allowed leave to appeal, but its decision may impact consultation rights for Aboriginal peoples even if they are not citizens.

Land Owner Transparency Legislation in BC

The areas in and around two of Canada’s largest cities, Toronto (in the East) and Vancouver (in the West), have seen housing prices increase exponentially over the past 20 years, to the point where both cities have some of the highest housing prices in the world. In an effort to stabilise the cost of housing, and to combat money laundering through the purchase of real property, both Ontario and British Columbia have introduced legislation to increase transparency in land ownership. The focus here is on the recent legislation enacted in British Columbia.

British Columbia’s Land Owner Transparency Act, SBC 2019, c 23 (LOTA) will come into force on 30 November 2020; British Columbia’s new beneficial ownership registry, the Land Owner Transparency Registry (LOTR), will come online at the same time. Beginning on 30 November 2020, anyone applying to register an interest in land will be required to make a concurrent disclosure filing under LOTA. Owners of existing registered interests in land will need to make any disclosure filings required to become compliant with LOTA by 30 November 2021 – one year after LOTA comes into force.

LOTA is new legislation introduced by the government of British Columbia with the objective of increasing “land ownership transparency” in BC. LOTA is intended to eliminate hidden ownership of land by requiring that certain corporations, trustees of certain trusts, and partners of certain partnerships holding registered interests in land disclose any significant beneficial owners or other indirect owners of those interests in land. This information will allow the public, government authorities and law enforcement agencies to look behind the ownership information available in the existing land title registry.

In implementing LOTA, the Province is attempting to create a system that hopes to achieve the following goals:

  • empower the government to determine who are the “real” owners of real estate in BC;
  • improve tax agencies’ ability to enforce taxation laws;
  • reduce tax evasion, tax fraud and money laundering; and
  • ultimately improve housing affordability.

Disclosures collected under LOTA will be maintained in BC’s new beneficial ownership registry, the LOTR. The BC Land Title & Survey Authority (LTSA) will administer the LOTR, but the LOTR will be separate from the existing land title registry maintained by the LTSA.

The LOTR will be searchable by the public, government authorities and law enforcement; however, LOTR searching is not anticipated to be available until 30 April 2021. As the LOTR will contain sensitive personal information, only certain information will be available to the public. Non-public information will only be available to certain government authorities and law enforcement agencies. It is speculated that data collected by the LOTR may be used as the basis for the Province to begin taxing beneficial transfers of real property, though this has not yet been confirmed.

At present, only legal professionals are able to submit filings in the LOTR, though the LTSA has indicated that it hopes to make some filing functions available to the general public in the future.

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Law and Practice

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Thornton Grout Finnigan LLP is a leading boutique firm in Toronto, with 27 lawyers practising exclusively in commercial litigation and restructuring. TGF’s trial lawyers practise at all levels of court, including the Supreme Court of Canada, and before arbitration and regulatory tribunals. They have expertise in litigating complex insolvency, construction, shareholder, financial services, class action, estate, real estate, franchise and other commercial litigation matters. They teach and serve in leading roles in Bench–Bar committees and professional organisations. TGF’s expertise is reflected in the high-profile retainers it has enjoyed over the years and in its wide range of clients, including financial institutions, regulatory agencies, publicly traded companies, and officers and directors. The firm would like to thank William Loumankis and Bogdan Nae, articling students in the firm, for their contribution to the chapter.

Trends and Development

Authors



Lawson Lundell LLP is one of the largest and most experienced law firms in Western Canada. It is a leading, full-service business law firm, with more than 160 lawyers located in offices in Vancouver, Calgary, Kelowna and Yellowknife. The Litigation & Dispute Resolution group has 66 lawyers across four offices and is experienced in the following industries and practice areas: Aboriginal; administrative, constitutional and public law; alternative dispute resolution; appellate advocacy; class action; climate change; commercial litigation; competition and antitrust issues; construction and engineering; corporate governance and shareholder rights; creditors’ remedies and collections; defamation and media; environmental; healthcare; insolvency and restructuring; insurance litigation; natural resources, including forestry, mining, oil and gas, wind and water; pensions, benefits and trust issues; privacy and freedom of information; product liability; public utility and regulatory; real estate litigation; research and opinions; securities litigation; taxation; technology; and transportation.

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