1. Wang v. Canada, 2018 ONCA 798 (Hourigan, Nordheimer, and Harvison-Young JJ.A.), October 3, 2018
1. Wang v. Canada, 2018 ONCA 798 (Hourigan, Nordheimer, and Harvison-Young JJ.A.), October 3, 2018
The Court of Appeal heard the appellants’ appeal from a judgment which dismissed their application for habeas corpus.
The appellants, Zhenhua Wang and Chunxiang Yan, are foreign nationals who were in Canada on temporary resident visas. In November 2013, the Canada Border Services Agency ("CBSA") received information that the appellants allegedly had multiple identities, were fugitives from China, and had entered into a multi-level marketing and pyramid scheme in which they defrauded approximately 60,000 people of approximately $180,000,000.
The CBSA arrested the appellants under section 55 of the Immigration and Refugee Protection Act, S.C. 2001, c. 27 and detained them for an admissibility hearing on the grounds of misrepresentation. The admissibility hearing never occurred, however, as the appellants made refugee claims that, by operation of law, precluded the hearing.
Over a period of fourteen months, the appellants were the subjects of three detention reviews. On each occasion, the Immigration Division of the Immigration and Refugee Board ordered the appellants’ continued detention, finding that they were unlikely to appear and had both the willingness and financial means to elude detection in Canada.
The appellants sought judicial review of all three of the Immigration Division’s decisions, and each decision was quashed by the Federal Court.
The appellants were released from detention following the third judicial review application, subject to terms and conditions that they had proposed. Those terms and conditions amounted to virtual house arrest. In addition, the appellants were required to pay approximately $130,000 per month for armed security guards to maintain a 24/7 presence outside of their home. The appellants later requested and obtained modifications to their terms and conditions of release, which permitted them to spend time outside in their backyard, and to leave their home, under security escort, for outings related to groceries, banking, and church services.
The appellants then filed another application with the Immigration Division to make further modifications to their terms and conditions. That application was rejected.
The appellants did not seek judicial review of that decision, instead filing an application for habeas corpus. The application judge dismissed the application. He identified the central issue as whether the applicants’ house arrest amounted to a detention or deprivation of their liberty, and concluded that once the appellants were released from custody, they were no longer “detained” for the purpose of habeas corpus.
The Court of Appeal disagreed, holding that habeas corpus applies where a person seeks to challenge a deprivation of liberty that arises from a situation other than being held in a custodial facility.
Writing for the court, Nordheimer J.A. found that the application judge erred in two respects: first, he equated detention for purposes of habeas corpus with incarceration in a custodial facility; and second, he appeared to have restricted the operation of habeas corpus only to situations where a person is formally detained rather than to broader situations where liberty interests are infringed.
In Nordheimer J.A.’s view, the application judge’s decision did not accord with the fundamental values that underlie the principle of habeas corpus: the protection of individuals against erosion of their right to be free from wrongful restraints upon their liberty. He emphasized that protection is not restricted to imprisonment; it includes any form of restraint upon liberty.
The appeal was allowed and the judgment set aside. The court declined the appellants’ request that it impose conditions of release, however, holding that it was not the proper forum to do so. The court remitted the application back to the Superior Court of Justice.
2. Shah v. LG Chem Ltd., 2018 ONCA 819 (Rouleau, Roberts and Fairburn JJ.A.), October 12, 2018
The appellants, Khurram Shah and Alpina Holdings Inc., are representative plaintiffs in a certified class action. They sued the defendant manufacturers and suppliers on the basis that they conspired to raise, maintain, fix and/or stabilize the price of lithium-ion batteries (“LIBs”) sold in Canada between January 2000 and December 2011. LIBs are a form of rechargeable battery, commonly used in notebook computers and cellphones. This collusion wass said to have impacted the entire LIB market by triggering an increase in the price for all LIBs and lithium-ion products during the conspiracy period, beyond what the free market would naturally produce.
The representative plaintiffs alleged that the conspiracy affected all purchasers of LIBs, including those whose LIBs originated from the defendants, known as the “non-umbrella purchasers”, and those whose LIBs originated from non-defendants, or “umbrella purchasers”.
The appellants sought to have multiple causes of action certified under the Class Proceedings Act, 1992, S.O. 1992, c. 6, including unlawful means conspiracy and a statutory cause of action under section 36 of the Competition Act, R.S.C., 1985, c. C-34, for breach of section 45 of the statute. The certification judge declined to certify the unlawful means conspiracy claim but certified the statutory claim, although only in relation to the non-umbrella purchasers. One of the certification judge’s reasons for excluding the umbrella purchasers from the class pursuing relief with respect to the certified statutory claim was that the defendants would be exposed to indeterminate liability if the claim by umbrella purchasers were allowed to proceed.
The appellants sought leave to appeal the certification judge’s decision to the Divisional Court. The Divisional Court granted leave to appeal only on the issues of whether the certification judge erred in denying certification of the appellants’ unlawful means conspiracy claim and whether he erred in removing the umbrella purchasers from class membership.
The Divisional Court held that the certification judge erred on the first issue, resulting in the certification of the unlawful means conspiracy claim, but found no error on the second issue, agreeing with the certification judge’s concern over indeterminate liability. The Divisional Court also found that the appellants failed to plead the requisite elements of the claims relating to the umbrella purchasers, establish common issues for the umbrella purchasers, and propose a separate representative plaintiff for the umbrella purchasers.
The appellants were granted leave to appeal to the Court of Appeal from that decision.
They argued before the Court of Appeal that the Divisional Court erred in concluding that (i) it was plain and obvious that the umbrella purchaser claims did not disclose a cause of action under section 5(1)(a) of the Class Proceedings Act, that (ii) the umbrella purchaser claims did not raise common issues within the meaning of section 5(1)(c) of the Class Proceedings Act, and that (iii) a separate representative plaintiff for the umbrella purchasers would be required under section 5(1)(e) of the Class Proceedings Act.
The Court of Appeal agreed with the appellants that the Divisional Court erred in concluding that it is plain and obvious that the umbrella purchaser claims do not disclose a cause of action under section 5(1)(a) of the Class Proceedings Act. In the court’s view, the principle of indeterminate liability does not apply to either the statutory claim or the unlawful means conspiracy claim.
With respect to the statutory claim, the court held that a plain reading of sections 36 and 45 of the Competition Act supported the appellants’ assertion that the Divisional Court was wrong to superimpose the principle of indeterminate liability on these provisions. Taking the language at face value, the umbrella purchasers’ right of recovery was limited only by their ability to demonstrate that the respondents conspired within the meaning of section 45 and that the losses or damages suffered by the appellants resulted from that conspiracy. This reading was consistent with the purpose of the Competition Act to “maintain and encourage competition in Canada in order to promote the efficiency and adaptability of the Canadian economy”, as well as to provide consumers with competitive prices and product choices. In the court’s view, the legislature did not intend that the principle of indeterminate liability would apply to claims under section 36 of the Competition Act for recovery of damages arising from conduct caught by section 45 of that statute. These provisions “do all of the necessary work in terms of limiting liability”.
The court noted that unlawful means conspiracy contained even stronger limitations than those contained in the Competition Act since it required that the impugned conduct be directed at the plaintiffs. Thus, there was no concern surrounding indeterminate liability in relation to the common law tort.
The court added that even if the principle of indeterminate liability were relevant to the two claims, the umbrella purchasers’ claims still would not fail on that basis. Because of the limitations built into both the statutory claim and the common law claim, there existed only the possibility for significant liability, which is not the same thing as indeterminate liability. The court rejected the respondents’ contention that they had no control over the non-conspirators’ actions and therefore should not be subject to liability for the umbrella purchasers’ losses, since the respondents in fact controlled the vast majority of the market.
With respect to the sufficiency of the pleadings, the court found that although the statement of claim was somewhat lacking in particulars, it was nonetheless worded broadly enough to encompass harm to umbrella purchasers and was therefore sufficiently pleaded.
The court also accepted the appellants’ submission that the Divisional Court erred in concluding that the umbrella purchaser claims did not raise common issues within the meaning of section 5(1)(c) of the Class Proceedings Act. While the Divisional Court was in some sense justifiably concerned that no common issues had been proposed respecting the claims advanced by the umbrella purchasers, this concern was nevertheless misguided insofar as the common issues of the umbrella purchasers were essentially the same as those of the non-umbrella purchasers.
The court rejected the respondents’ argument that the appellants failed to advance a plausible methodology by which harm to the umbrella purchasers could be proven and quantified on a basis that was common to the rest of the class. The expert evidence on this point, while somewhat vague, was sufficient to establish a reasonable prospect of establishing loss on a class-wide basis.
The court did note, however, that quantification of aggregate damages could not be certified as a common issue as between umbrella and non-umbrella purchasers, holding that the umbrella purchasers would have to form a subclass for this issue. The statement of claim and the appellants’ expert report treated aggregate damages in such a way as to limit quantification to the losses suffered by non-umbrella purchasers; as such, there was no way of establishing a reasonable likelihood of proving damages for the umbrella purchasers. The court stressed that this did not mean that the action as a whole should not proceed as a class proceeding.
Finally, the court agreed with the appellants that the lower court erred in concluding that a separate representative plaintiff for the umbrella purchasers would be required under section 5(1)(e) of the Class Proceedings Act. The umbrella and non-umbrella purchasers had the same interest from the outset, namely, to demonstrate the existence of the conspiracy and the general increase in prices. The court noted that the conclusion that a subclass would be required for umbrella purchasers in respect of the quantification of damages did not put them in conflict with the non-umbrella purchasers. If a problem were to arise at a later stage, separate representation could be easily established at that time.
The respondents submitted that even if the appellants were successful in arguing that the Divisional Court erred on the foregoing issues, a class proceeding was not the preferable procedure for resolving issues related to the umbrella purchasers. The Court of Appeal disagreed. In the context of the action as a whole, the resolution of the common issues relating to the alleged wrongdoing and the impact of that wrongdoing on the class members would significantly advance the action. Proceeding as a class action would achieve judicial economy.
The court accordingly allowed the appeal.
3. Hashemi-Sabet Estate v. Oak Ridges Pharmasave Inc., 2018 ONCA 839 (Pepall, Lauwers and Paciocco JJ.A.), October 22, 2018
Rule 49.09 of the Rules of Civil Procedure provides that a party may bring a motion for judgment in the terms of an accepted offer and that the judge may grant judgment accordingly or continue the proceeding as if there had been no accepted offer to settle. This appeal concerns the enforcement of that rule.
The respondent sued the appellants for damages for breach of contract, oppression, and other causes of action relating to the operation of a pharmacy. He claimed damages in excess of one million dollars.
On June 8, 2015, the appellants served the respondent with a written Rule 49 offer to settle the action for $55,555.55. The settlement offer provided that it would remain open until the trial of the action. On September 20, 2016, counsel for both parties attended a pre-trial conference.
The dispute between the parties concerned what happened next.
The appellants claimed that that their offer had been rescinded orally at pre-trial, but, in any event, on September 19, 2016, they served a second written Rule 49 offer to settle the action for $17,333, and that this second offer expressly revoked the first. The respondent meanwhile claimed that the first offer had been accepted before receipt of the second.
The respondent brought a motion for judgment in accordance with the terms of the allegedly accepted offer to settle.
The motion judge noted that the parties agreed that the June 8, 2015 offer was made in accordance with Rule 49.02(1) and accordingly held that it had to be withdrawn in writing per Rule 49.04(1). She further found that the September 19, 2016 offer was served on the respondent’s counsel after the respondent had accepted the earlier offer.
The motion judge therefore granted judgment in the respondent’s favour.
On appeal, the appellants asserted that the motion judge erred in giving judgment in the terms of their June 8, 2015 offer because it was revoked before it was accepted. The respondent submitted that the offer had not been effectively revoked and that, since they accepted the offer, the motion judge did not err.
The Court of Appeal dismissed the appeal.
Writing for the court, Pepall J.A. found that the motion judge correctly identified and applied the two-step analysis from Capital Gains Income Streams Corp. v. Merrill Lynch Canada Inc. (2007), 87 O.R. (3d) 464, which is required on a motion to enforce the acceptance of a Rule 49 offer. The first step is to consider – as a Rule 20 summary judgment motion – whether an agreement to settle has been reached. The second is to consider whether, on all the evidence, the agreement should be enforced.
Pepall J.A. held that the first step of the test was satisfied because it was uncontested that the Rule 49 offer had to be revoked in writing and there was no evidence that the 2015 offer had been revoked at the pre-trial. Moreover, the motion judge found that the appellants had known for over a year that the respondent was taking the position that his counsel was not served with the second offer until 5:23pm on September 20, 2016, yet never provided an affidavit of service. In Pepall J.A.’s view, this finding was fatal to the appellants’ case. The case turned on the timing of service of the second offer; without an affidavit of service from the appellants, it was reasonable for the motion judge to find against them.
Pepall J.A. rejected the appellants’ submission that the motion judge erred in not hearing viva voce evidence and in failing to make credibility findings.
Pepall J.A. emphasized the principle that on a summary judgment motion, the motion judge is entitled to assume the record contains all evidence which the parties would present at trial. The same is true on a motion to enforce a Rule 49 offer. It was incumbent on the appellants to put their best foot forward and answer the respondent’s version of events. They failed to do so. They did not file an affidavit of service from the process server to establish the date and time of service, and did not provide an explanation for its absence. Nor did they propose that the process server be called as a witness. Further, the appellants chose not to cross-examine on any of the affidavits filed by the respondent, despite having had every opportunity to do so.
In Pepall J.A.’s view, this was not a case of a conflict in the evidence, but of a lack of evidence. The motion judge complied with the first step of the Capital Gains process and properly applied the analogous Rule 20 analysis. Based on the record before her, it was open to the motion judge to conclude as she did.
Turning to the second part of the Capital Gains analysis, Pepall J.A. rejected the appellants’ submission that the motion judge erred in neglecting to consider relevant factors, instead considering irrelevant factors on whether it would be unjust to enforce the settlement. Pepall J.A. noted that the motion judge was not asked to consider the second step, a fact conceded by the appellants before the court. In any event, the motion judge did consider whether she should enforce the offer and addressed a number of factors including the language of the offer and the presence of counsel, before concluding that the offer to settle should be enforced. Finally, Pepall J.A. noted that the appellants failed to point to any compelling inequity that arose from the enforcement of the settlement offer.
4. Campisi v. Ontario (Attorney General), 2018 ONCA 869 (Rouleau, Watt and Brown JJ.A.), October 30, 2018
The Court of Appeal heard the appellant’s appeal from the dismissal of his application for a declaration that certain provisions of the Insurance Act relating to automobile accident claims violate the Charter and the Constitution Act, 1867.
Section 267.5(1) of the Insurance Act, R.S.O. 1990, c. I.8 places limits on the recovery of pre-trial income loss, while section 280 of the Act confers jurisdiction over statutory accident benefits disputes to an administrative tribunal. Joseph Campisi, a lawyer, filed an application for a declaration that both provisions violate sections 7 and 15 of the Charter, and that section 280 also contravenes section 96 of the Constitution Act, 1867.
The application judge found that the appellant lacked private and public interest standing to bring the application. The fact that his law practice involved representing clients affected by these provisions did not give him standing to challenge them.
The Court of Appeal dismissed the appellant’s appeal, holding that the application judge did not err in denying both private and public interest standing.
On the matter of private interest standing, the court held that the application judge correctly determined that the appellant failed to demonstrate the impugned provisions affected him “personally and directly”. The appellant’s experience litigating insurance claims and his concern for properly advising his clients as well as adequately settling their claims did not establish that the provisions had a direct impact on him. The appellant had not personally been injured in an automobile accident, he was not claiming for lost income, nor was he disputing a statutory benefit.
With respect to public interest standing, the court found that the application judge correctly listed the three factors set out by the Supreme Court in Canada (A.G.) v. Downtown Eastside Sex Workers, 2012 SCC 45 – namely, whether the case raised a serious justiciable issue, whether the applicant had a real stake or a genuine interest in its outcome, and whether, in all the circumstances, the proposed application was a reasonable and effective way to bring the issue before the courts – and considered them in combination and with the flexibility required.
The court rejected the appellant’s submission that his scholarly contributions regarding the Insurance Act demonstrated a genuine interest in the outcome of the application. The court further held that the appellant – who did not file an affidavit in his own name – failed to establish that the application was a reasonable and effective way of bringing the case to court.
5. Am-Stat Corporation v. Ontario, 2018 ONCA 877 (Doherty, van Rensburg and Hourigan JJ.A.), October 31, 2018
The appellant mortgage broker was defrauded by George Nastevski, who claimed to be the sole owner and officer of Aldrogian Holdings Inc., and persuaded the appellant to advance $1.8 million in loans secured by mortgages on property owned by Aldrogian. Am-Stat Corporation claimed that in advancing the money it relied on a corporation profile report and other documents obtained from the Ministry of Government and Consumer Services that incorrectly identified Nastevski as a director and officer of Aldrogian.
Nastevski, who in fact had no affiliation with Aldrogian, had filed a fraudulent notice of change to the Ministry.
Am-Stat brought a claim against Her Majesty the Queen in Right of Ontario for losses suffered as a result of the government’s negligence. The appellant took the position that the Ministry owed a duty of care to the public and, in particular, to the appellant to reasonably ensure the accuracy and reliability of the information it collected, maintained and disseminated for a fee, when it knew or ought to have known that the appellant would rely upon such information.
The motion judge concluded that there was no duty of care owed by the Ministry to the appellant to ensure the accuracy of the information it collected and provided upon the payment of a fee. She further held that such a duty would be against public policy.
The Court of Appeal dismissed Am-Stat’s appeal.
The court rejected the appellant’s submission that the motion judge erred in her application of the Anns/Cooper test. The court’s held that the appellant’s claim against the respondent failed at the first stage of the test.
As the Supreme Court explained in R. v. Imperial Tobacco, 2011 SCC 42, when the defendant is a public actor, a relationship of proximity giving rise to a prima facie duty of care may only arise explicitly or by implication from the language of the governing legislation or from the nature of the interactions between the parties. The Court of Appeal rejected the appellant’s assertion that because the Corporations Information Act, R.S.O. 1990, c. C.39 does not expressly exclude a private law duty of care, it must exist. As the court succinctly put it: “That is not the law”.
Moreover, nothing in the statute suggests an intention to create a private law duty of care on the part of the regulator to third parties to ensure the accuracy of information filed. The language of the statute itself is inconsistent with the imposition of such a duty. Section 21, for example, states that the Minister may accept the information contained in any return or notice filed under the statute “without making any inquiry as to its completeness or accuracy.”
The court rejected the appellant’s argument that because the Ministry had the discretion not to publish the information it received, once it decided to make the information public it undertook a duty to ensure its accuracy. The court noted that there is no such discretion: section 10 entitles the public to access the information that is filed and maintained by the Ministry upon payment of a fee. The court ag
reed with the motion judge that reliance by third parties on the information accepted by the Ministry is not contemplated by the statute.
Finally, the court held that the motion judge did not err in finding that the payment of a fee in exchange for access to the public corporate record was insufficient to constitute a direct interaction giving rise to proximity. The appellant pointed to no authority in support of its submission that the payment of a fee in and of itself creates a relationship that gives rise to a prima facie duty of care by a payee to a payor.
The appeal was dismissed.
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