Message From the Chair - Small Steps, Big Goals
 

David Sterns

 

The OBA Award for Excellence in Civil Litigation, 2010
 

On Wednesday, September 29, 2010, about 450 civil litigators convened at the Royal York Hotel for a wonderful dinner and tribute in honour of Bonnie Tough, this year's winner of the OBA Award for Excellence in Civil Litigation. 
 

We Want to Hear from You!
 

The OBA Civil Litigation Executive is looking for input from members from all regions in Ontario. Getting participation from civil litigators across the province will help us develop programming of interest to you.  You will be teamed up with a member of the executive.  This is your opportunity to have a say, get some programming for your area and meet other lawyers interested in the latest trends in the courts.

If you would like to participate, contact Colin Stevenson, vice chair of the Civil Litigation Section cstevenson@stevensonlaw.net

A "Momentous" Decision on Consent-Based Jurisdiction
 

Antonin I. Pribetic

The recent decision of the Ontario Court of Appeal in Momentous.ca Corporation v. Canadian American Association of Professional Baseball Ltd., 2010 ONCA 722 ["Momentous.ca] is indeed momentous for Canadian conflict of laws jurisprudence. While the appeal decision confirms that consent still forms a basis for establishing jurisdiction simpliciter; it now appears that some forms of consent are more important than others.

 

The Test for Intentional Interference with Economic Relations:  Two Recent Court of Appeal Decisions
 

Eric Adams

A breach of contract will often impact economic interests of persons outside of the contract.  A breach with a retailer can impact a wholesaler, for example.  A breach with an employer can affect employees.  As a generalization, the party in breach is only held to account for damages caused to contracting parties.   Damages to non-parties are generally considered too remote. The tort of intentional interference with economic relations provides a limited exception to the general principle.  The tort is made out where a defendant: (i) intends to cause injury to a plaintiff; (ii) does so through unlawful means; and (iii) causes the plaintiff an economic loss. While this test is clear, courts have often struggled with the “intentionality” and “unlawful means” requirements.  The recent Ontario Court of Appeal decisions, Alleslev- Krofchak v. Valcom Limited2 and Barber v. Molson Sport & Entertainment Inc, provide some guidance. 

Noonan et. al. v. Alpha-Vico et al. – Disclosing Settlement Agreements to Non-Settling Parties
 

C. Jill Alexander

In 2006, eight-year-old Jonathan Noonan died tragically when a cafeteria table fell on him while he was moving the table across the gymnasium floor of his school. Two separate lawsuits were initiated by the Noonan family. In a recent decision, Master MacLeod found that plaintiffs who elect to bring multiple proceedings as a result of a single cause of action cannot completely insulate their lawsuits from each other.

Consultation with Aboriginal Peoples: Supreme Court Confirms No Duty Absent Adverse Effects
 

Ryan Dalziel

On October 28, 2010, the Supreme Court of Canada gave judgment in Rio Tinto Alcan Inc. v. Carrier Sekani Tribal Council, 2010 SCC 43, the first Supreme Court decision since a trilogy of cases in 2004 and 2005 to consider the nature and scope of the Crown’s duty to consult aboriginal peoples.  The decision clarifies the circumstances in which the Crown will be required to consult, and sheds some light as well on the role of administrative tribunals in the consultation process.

Editors:
John Archibald

 

David Sterns*

Once a year, the chairs of all of the civil litigation sections of the Canadian Bar Association get together for an annual conference.  Last year, the meeting was held in beautiful Banff, Alberta.  Where would it be this year, I wondered?  Victoria, B.C.?  Quebec City?  Halifax, perhaps?  Apparently not.  Oh well, Ottawa can be beautiful in October, if you are in the right frame of mind. 

It turned out to be a very informative meeting.  I was able to sound out the other section chairs on a topic of concern to me: the under-representation of women on our executive.  I’ve noticed this trend within our section for a few years now and I must admit that this year it is more pronounced than ever.  Was this a reflection of the decline in the number of women in civil litigation generally?  Was it part of a larger trend within the CBA?  Was it something I said?

I was surprised to learn that in fact many of the sections in other provinces have a strong female component – males are often in the minority.  Only the Ontario section leans the other way.  I asked my counterparts for thoughts on why this might be and was surprised to learn that the reason for the imbalance may be simpler than it seems: our executive meetings have always been held after work in the evenings.  As many executive members (both male and female) can attest, the timing of the meetings often conflicts with family responsibilities. All of the other provinces hold their meetings at lunchtime. They all seemed to get through their agendas. So, with the concurrence of our civil litigation executive and the blessing of the OBA staff, we’re going to give lunch meetings a try for a while and gauge the response. 

Another issue that has been on my mind since the Fall OBA Council meeting is the lack of regional (i.e. non Toronto) representation among members of the OBA generally.  The leadership of the OBA has made increasing regional representation a priority for the OBA and has challenged the sections to follow their lead.  Our section executive supports this initiative and has made increasing regional representative a priority as well.  Section vice-chair, Colin Stevenson, has taken the first step toward this goal by arranging with our colleagues in Windsor-Essex to present one of the programs from the upcoming OBA Institute in Windsor in the new year.  The program will be on the amendments to the Rules of Civil Procedure and will feature prominent speakers from the region.  Our hope is that other programs will follow.  We would like to hear from you on which programs you would like to see in your region.  If you would like to volunteer to chair a program in your region, even better.

These are admittedly small steps toward larger goals.  As with anything though, it is better to light a single candle than to curse the darkness.  If you would like to get involved in these initiatives, or would like to light a candle of your own, get in touch with me or any other member of the section executive. 

In closing, I wish you the best for a happy and prosperous New Year.

The OBA Award for Excellence in Civil Litigation, 2010

Colin P. Stevenson*
 
On Wednesday, September 29, 2010, about 450 civil litigators convened at the Royal York Hotel for a wonderful dinner and tribute in honour of Bonnie Tough, this year's winner of the OBA Award for Excellence in Civil Litigation. 
 
Bonnie is the senior partner at Tough & Podrebarac LLP, the litigation boutique she helped establish after a distinguished career at Blake Cassels & Graydon LLP.  Bonnie was honoured for, amongst other fine attributes, her outstanding advocacy skills, her dedication to the highest levels of professionalism, integrity and civility and her leadership at the civil litigation bar. 
 
The evening commenced with a warm introduction by the Attorney General, the Honourable Chris Bentley, who spoke of his Ministry's appreciation for the hard work of the OBA.  We were then treated to a description of the "true" Bonnie, as she operates behind the scenes, back in the office: as described by her law partner, Kathryn Podrebarac.  It is no surprise that Bonnie is as warm and gracious in private as she is in public.
 
The keynote speaker, Harvey Strosberg, Q.C., then spoke with great conviction of Bonnie's contribution to commercial litigation, in general, and the class action bar in particular.  Amongst many other significant endeavours, Bonnie was counsel to the Canadian Hemophilia Society before the Krever Inquiry into the Canadian Blood System, and to this day is one of only four lawyers appointed by the courts to supervise the continued administration of the Hepatitis C settlement.  Over the course of a stellar career Bonnie has contributed immensely to the legal community, not only through her fine work, but also through extensive pro bono work and other projects which allowed her to share her knowledge, experience and skills with junior lawyers, as well as the community at large.  Harvey spoke also of Bonnie's work in various, diverse roles including as a director of the Toronto Lawyers' Association, director of the Advocates' Society, and as past vice-chair of the Law Society's Civil Litigation Certification Committee, as well as her  fellowship in the American College of Trial Lawyers. 
 
The evening concluded with Bonnie's acceptance of another wonderful piece of art painted by the Honourable Roy McMurtry, Q.C.  The entire evening stands as a testament to a great lawyer, as well as to the camaraderie and collegiality of the Ontario bar. 
 

A "Momentous" Decision on Consent-Based Jurisdiction
 

Antonin I. Pribetic*

The recent decision of the Ontario Court of Appeal in Momentous.ca Corporation v. Canadian American Association of Professional Baseball Ltd., 2010 ONCA 722 ["Momentous.ca] is indeed momentous for Canadian conflict of laws jurisprudence. While the appeal decision confirms that consent still forms a basis for establishing jurisdiction simpliciter; it now appears that some forms of consent are more important than others.

In Momentous.ca, the defendants/moving parties brought a motion for stay or dismissal of the plaintiffs’ action against them pursuant to Rule 21.01(3)(a) of the Rules of Civil Procedure, on the ground that the court has no jurisdiction over the subject matter of the action or, alternatively, to have the plaintiffs’ claim struck pursuant to Rule 21.01(1)(b) on the ground that it disclosed no reasonable cause of action.  The dispute arose following the demise of the plaintiffs' Can-Am Baseball League team, the Ottawa Rapidz  which, after two seasons, became insolvent and asked for permission to voluntarily withdraw from the League. The League refused and, instead, triggered an automatic termination of membership for the plaintiffs and called on a letter of credit obligation under the Lease Agreement and the Bylaws. The League Affiliation Agreement and the League’s by-laws stipulated that any dispute between Rapidz Baseball and the League would be resolved by arbitration (or the League’s internal dispute resolution process) and could be litigated only in the courts of North Carolina. 

Relying upon the “strong cause” test the motion judge granted the defendants’ motion and dismissed the plaintiffs’ action.

The Court of Appeal affirmed. Laskin, J.A. (Gillese and Juriansz JJ.A. concurring) added to the  list of “strong cause” factors in Expedition Helicopters Inc. v. Honeywell Inc. (2010), 100 O.R. (3d) 241 (C.A.) the factor of "inordinate delay" in bringing a jurisdiction motion.  In the Momentous.ca case, the defendants brought their motion eight months after the plaintiffs started their action.

The Court of Appeal held:

[44] The sole ground the plaintiffs rely on to show strong cause is the defendants’ attornment to the jurisdiction of the Ontario court.  Attornment, however, is relevant only to the question whether an Ontario court has jurisdiction.  It has little or no relevance to the question whether an Ontario court should exercise that jurisdiction.

[45] Motions challenging the jurisdiction of an Ontario court may be brought under s. 106 of the Courts of Justice Act, rule 17.06 and rule 21.01(3)(a) of the Rules of Civil Procedure.  The Can-Am defendants brought their motion under rule 21.01(3)(a).  A motion under that rule, unlike a motion under rule 17.06, may be brought after the delivery of a notice of intent to defend and a statement of defence.  Nothing in rule 21.01(3)(a) suggests that a defendant is precluded from contesting jurisdiction because its statement of defence responds to the merits of a plaintiff’s claim.  The defendant is required only to bring its motion “quickly after the commencement of the suit”:  see Pompey at paras. 21 and 35.  The Can-Am defendants met that requirement. 

[46] Moreover, the plaintiffs agreed not only to a choice of forum provision, but as well to arbitration or internal dispute resolution provisions.  This court has stated more than once that when the parties agree to arbitration, the court shall favour giving effect to their agreement and preclude them from litigating in the courts:. .

[47] And where, as in the present case, the parties have agreed to both choice of forum and arbitration (or internal dispute resolution) provisions, the court has an even firmer basis to preclude the plaintiffs from suing in Ontario:  . .The motion judge therefore made no error in concluding that an Ontario court should not entertain the plaintiffs’ action.  I would not give effect to this ground of appeal.

The balance of Justice Laskin’s reasons briefly addresses and then dismisses the plaintiffs' fundamental breach and privity arguments.

What is remarkable about the Momentous.ca appeal decision is not the result. The arbitration and forum selection clauses were both valid and enforceable and the plaintiffs should have litigated in North Carolina. Rather, the Court of Appeal's reasoning is quixotic when minimizing the defendants' attornment.  Consent may be explicit or implicit; voluntary or involuntary; informed or uninformed. 

In any case, giving consent has consequences. In Momentous.ca, the defendants' attornment by defending on the merits constituted waiver and estoppel. In other words, while the defendants may have consented to another jurisdiction contractually, the deliberate act of defending the plaintiffs' action in Ontario equates to waiver of its original choice.

The implications are two-fold.

First, when a defendant consents to the Ontario jurisdiction by submission or attornment, it concedes jurisdiction simpliciter and should not be permitted to rely upon a forum selection/exclusive jurisdiction clause or arbitration clause based upon its post-contractual conduct. Second, the defendant may still move to stay the proceedings based upon forum non conveniens.

In this way, the contractual principles, which inform consent-based jurisdiction, remain intact. 

* Antonin I. Pribetic, B.A. (Hons.), J.D., LL.M., MCIArb., is litigation counsel at Steinberg Morton Hope & Israel LLP. He is also an executive member of the OBA Civil Litigation Section and co-vice chair of the International Law Section.

The Test for Intentional Interference with Economic Relations:  Two Recent Court of Appeal Decisions
 

Eric Adams *

A breach of contract will often impact economic interests of persons outside of the contract.  A breach with a retailer can impact a wholesaler, for example.  A breach with an employer can affect employees.  As a generalization, the party in breach is only held to account for damages caused to contracting parties.   Damages to non-parties are generally considered too remote.¹  The tort of intentional interference with economic relations provides a limited exception to the general principle.  The tort is made out where a defendant: (i) intends to cause injury to a plaintiff; (ii) does so through unlawful means; and (iii) causes the plaintiff an economic loss. While this test is clear, courts have often struggled with the “intentionality” and “unlawful means” requirements.  The recent Ontario Court of Appeal decisions, Alleslev- Krofchak v. Valcom Limited² and Barber v. Molson Sport & Entertainment Inc,³ provide some guidance. 

In Alleslev- Krofchak, the plaintiffs entered into an agreement to provide the services of consultant, Alleslev-Krofchak, to a large American aerospace consulting firm, ARINC.  ARINC was retained as a subcontractor to Valcom Limited, which was hired to provide services to the Department of National Defence (DND).  Alleslev-Krofchak was heavily involved in a DND project.  At some point, Valcom and Alleslev-Krofchak had a falling out.  Valcom purported to terminate its contract with ARINC.  ARINC fired Alleslev-Krofchak and Alleslev-Krofchak was not reemployed on another DND project.  The trial judge held that Valcom defamed Alleslev-Krofchak and had conspired against her and against ARINC.  The trial judge held, moreover, that Valcom intentionally interfered with the plaintiffs’ economic relations. 

On appeal, Valcom argued that that the plaintiffs failed to establish “unlawful means”.  The Court of Appeal disagreed.  It held that Valcom’s breach of the ARINC contract constituted “unlawful means”. The acts of defamation and of conspiracy against Ms. Alleslev-Krofchak, however, did not.⁴  Following a recent majority decision of House of Lords, the Court held that the tort of intentional interference is not available if the unlawful conduct is directly actionable by the plaintiff.⁵  In this case, the plaintiff could sue Valcom for conspiracy and defamation directly.  As such, there was no need to resort to intentional inference to redress these wrongs. 

Ten days later, the Court of Appeal revisited the issue. Barber v. Molson Sport & Entertainment Inc. concerned a dispute arising from the sale of exclusive rights to sell bottled water at a concert promoted by Molson Sport.  Molson sold the rights to co-defendant, Jonathan Vrozos.  Vrozos then sold the rights to the plaintiffs.  Molson, however, sold further water rights to a catering company.  The trial judge found that this conduct constituted intentional interference.

On appeal, Molson argued that the plaintiff had not proven an “unlawful act”.   The Court, again, disagreed.  It held that the phrase “unlawful means” is to be interpreted broadly.   A plaintiff does not need to prove that a defendant committed an “actionable wrong”.  Rather, an “unlawful act” is something that a defendant merely is “not at liberty to commit.”⁶

The Court also held that proof of “intentionality” does not require a finding malice or of a predominant purpose to injure a plaintiff.  Rather, it is sufficient to show that an “unlawful act was in some measure directed against the [plaintiff]”.  In this case, it was sufficient that Molson was aware that its conduct would “interfere with the plaintiffs’ exclusive water rights and reduce the [plaintiffs’] profits. 

This provides a difficult standard.  The 2008 Ontario Court of Appeal decision, Correia v. Canac Kitchens,⁷ held that mere foreseeability of consequences is not enough.  Correia reads:⁸

[T]he intentionality of the defendant’s conduct is critical: it is not enough that the loss was a foreseeable consequence of the defendant’s conduct; to be actionable under this tort, the loss must have been the intended result.

Barber arguably makes this statement less clear.  The Court appears to have softened the “intentionality” requirement which could significantly expand the tort.  Nevertheless, these decisions also seem to draw a fairly difficult distinction between “foreseeability of consequences” on the one hand and “awareness” that an act is “in some measure directed against [a plaintiff]” and will negatively affect the plaintiff’s interests” on the other.  This distinction will need to be clarified in future decisions.

* Eric Adams is an associate at Dutton Brock LLP.

____________________________

¹ Quinn v. Leathem [1901] AC 495, 534-535 (H.L.).
² 2010 ONCA 557.
³ 2010 ONCA 570.
⁴ The Court, however, held that the conspiracy against ARINC also affected the plaintiffs’ interests and, thus, was actionable as intentional interference.
⁵ OBG v. Allan [2008] 1 A.C. 1.
⁶ This point appears to be moot, however, as Molson committed an “actionable wrong” by breaching its contract with Vrozos.
⁷ 2008 ONCA 506 affirmed in Alleslev- Krofchak, supra.
⁸ Ibid at para 100.
 

Noonan et. al. v. Alpha-Vico et al. – Disclosing Settlement Agreements to Non-Settling Parties
 

C. Jill Alexander*

In 2006, eight-year-old Jonathan Noonan died tragically when a cafeteria table fell on him while he was moving the table across the gymnasium floor of his school. Two separate lawsuits were initiated by the Noonan family. In a recent decision, Master MacLeod found that plaintiffs who elect to bring multiple proceedings as a result of a single cause of action cannot completely insulate their lawsuits from each other.

In his decision, Master MacLeod offers a comprehensive overview of the circumstances in which, and the reasons why, plaintiffs may be required to disclose to defendants the terms of a settlement reached with other potentially at-fault parties who have either been excluded from litigation or released from litigation because of a settlement.¹ The decision also speaks extensively about the various ways in which potentially at-fault parties who have been excluded or released from litigation could still be required to participate in legal proceedings to which they are not parties. 

The Noonans’ litigation was procedurally unique because of their decision to commence two separate actions for compensation flowing from Jonathan’s death. Their first action was commenced against the school board and its employees (“the school board action”). One year later the Noonans commenced a second action against two companies who were allegedly involved in the design, manufacturing and sale of the cafeteria table that fell on Jonathan (“the product liability action”). The statement of claim in the product liability action was cleverly crafted so as to prevent the defendants from bringing a third party claim against any other potentially at-fault parties.

When the defendants named in the product liability action discovered the existence of the school board action they brought a motion to consolidate the two proceedings. One month later the Noonans discontinued the school board action following a settlement that was reached without prior consultation or notice to the defendants named in the product liability action. Subsequently, the defendants named in the product liability action brought a motion for, among other things, disclosure of the terms of the settlement reached in the context of the school board action.

The Noonans strenuously opposed the defendants’ motion. They took the position that the defendants were not entitled to disclosure of the settlement reached in the context of their prior action unless or until a judgment had been rendered by a jury following a trial of the Noonans’ product liability action. The Noonans conceded that, in order to prevent double recovery and in accordance with the decision rendered by the Ontario Court of Appeal in Laudon v. Roberts 2009 ONCA 383 (CanLII), the defendants in the product liability action would eventually be entitled to a credit for any amounts they received pursuant to the settlement they reached with the school board. They maintained however that the defendants in the product liability action were not entitled to know, prior to the conclusion of a trial, what that credit would be. 

Master MacLeod released a carefully considered decision in which he ordered the Noonans to disclose the terms of the settlement they reached with the defendants in the school board action. In rendering his decision Master MacLeod held that “defendants are entitled to know what losses and damages the plaintiffs are claiming and they are entitled to know what amounts have been recovered in mitigation of those losses”. He noted that amounts recovered that “have the effect of providing compensation will be considered in determining if the plaintiff has suffered losses that remain legally compensable”.

In his decision Master MacLeod referred to the principle of proportionality which, with the coming into force of Rule 1.04(1.1) of the Rules of Civil Procedure in January of 2010, requires a court to consider proportionality as an important interpretive element of the rules. Master MacLeod observed that “if the parties do not know what amounts are really at stake it is difficult to make informed decisions including proportionality as a principle” which he noted “is supposed to inform not only the decisions of the court concerning the application of the rules but also to inform the discovery planning that is now a mandatory step”. 

Master MacLeod’s ruling is of special interest to lawyers whose clients are thinking about entering into Pierringer agreements. Those parties should be prepared to promptly disclose to non-settling parties against whom litigation will continue the terms of the settlement.  In addition, lawyers who represent settling defendants should be aware that a settlement by way of a Pierringer agreement will not necessarily allow their clients to enjoy a full and final exit from ongoing litigation. Settling defendants should be cautioned that they could be subject to production and discovery orders in appropriate circumstances. And if a trial results, settling defendants will no doubt be required to give evidence so that the trial judge can properly assess the proportionate fault of the non-settling defendants. Master MacLeod’s decision includes an interesting discussion on both of these latter points. 

* C. Jill Alexander is a partner with Cavanagh Williams Conway Baxter LLP in Ottawa.  She practises exclusively in civil litigation with an emphasis on insurance law and professional liability.

____________________

¹ 2010 ONSC 2720 (CanLII)

Consultation with Aboriginal Peoples: Supreme Court Confirms No Duty Absent Adverse Effects
 

Ryan Dalziel*

On October 28, 2010, the Supreme Court of Canada gave judgment in Rio Tinto Alcan Inc. v. Carrier Sekani Tribal Council, 2010 SCC 43, the first Supreme Court decision since a trilogy of cases in 2004 and 2005 to consider the nature and scope of the Crown’s duty to consult aboriginal peoples.  The decision clarifies the circumstances in which the Crown will be required to consult, and sheds some light as well on the role of administrative tribunals in the consultation process.

The Crown conduct that was said to require consultation was a contract between BC Hydro, a Crown agent, and Rio Tinto Alcan, for the supply of hydroelectric electricity generated by Alcan to BC Hydro.  The Supreme Court held that the contract did not require consultation.

The proceedings began before the British Columbia Utilities Commission.  The Commission heard evidence and made findings of fact to the effect that the contract would not bring about any changes to the river resources claimed by the Tribal Council, because Alcan would have generated and sold the electricity regardless of whether the Crown purchased it or not.

The Supreme Court, speaking through McLachlin C.J., confirmed that its decision in Haida Nation requires consultation only where the Crown conduct in question has the potential to adversely effect the rights claimed by an aboriginal group.  For this reason, the Commission was found to have reasonably concluded that the Crown was under no obligation to consult with the Tribal Council before it purchased electricity from Alcan.

However, the Court emphasized that the Crown decision need not have an immediate adverse effect for consultation to be required.  High-level, strategic decisions will require consultation if they will set the Crown upon a course that may lead to adverse effects down the road. 

The Court explained further that the adverse effects requirement is relevant not only to the existence but also to the content of the duty.  The Crown’s duty is limited to consultation about the impact of its decision; it does not require consultation about matters such as past wrongs, or a perceived loss of leverage at the treaty table. 

The decision in Rio Tinto Alcan is of some further assistance in determining the role of administrative tribunals in consultation cases.  As in other constitutional contexts, tribunals that have the power to decide questions of law will generally have the power to decide whether a Crown actor before the tribunal owes and has breached the duty to consult.  However, tribunals are creatures of statute that must remain within their legislated mandates.  In keeping with these principles, the Court observed further that tribunals may only themselves engage in consultation where their enabling legislation permits them to do so, and rejected the argument that all tribunals are under a constitutional duty to resolve matters of consultation that are raised before them. 

* Ryan Dalziel is a partner with Bull, Housser & Tupper LLP in Vancouver.  He practises in the areas of constitutional and administrative law, with a particular focus on appeals and judicial reviews of government decision-making.