Law Times

Law Times • November 17, 2008 It's off to advocacy group. It's an important case that is almost sure to go all the way to the Supreme Court. The outcome could have a ma- jor impact on future federal elec- tions as well as provincial elections in Ontario, British Columbia, and Newfoundland. Duff Conacher and his Dem- P ocracy Watch claim the last fed- eral election was not legal, and that Parliament should never have been dissolved, because the decision was in violation of Harper's own fixed date election law passed by his gov- ernment on May 3, 2007. They don't blame Governor Gen- eral Michaëlle Jean. Harper made her do it, they say. He gave her bad advice and she took it when she ignored the new fixed election date provisions in the Canada Elections Act and went along with Harper's advice to dissolve Parliament on Sept. 7 and hold a gen- eral election on Oct. 14. Conacher's group says it doesn't question that Jean had the power to dissolve Parliament. It contends that it was illegal for Harper to advise her to do it. It's Harper they are after. Back in the fall of 2006 the New Conservative government, as it called itself, brought in Bill C-16, to set a fixed election date. The United States, and Ontario, British Columbia, and Newfoundland all have similar laws. It set Oct. 19, 2009, as the date of the next federal election. There was one exception — un- less the Harper government was defeated in a non-confidence vote in Parliament. The Conservatives' front man on the legislation was their Gov- ernment Leader Rob Nicholson — he wasn't justice minister yet. He spoke most eloquently. Nicholson is always eloquent when he speaks about democracy. He argued long and hard about the benefits of having a fixed date so that a prime minister could not pick the best partisan time pos- sible for re-election. Nicholson said it wasn't fair that "the prime minister and a small group of advisers" could be "the only ones who know when the country would move into the next general election." Nicholson said on Sept. 18, 2006, in the Commons "this prime minister will live by the law and spirit of this particular piece of legislation." So the legislation became law. Then Harper decided he wanted majority government. He went to great lengths to force a defeat of his own government in the Commons so as to justify an election. But Stéphane Dion didn't go along. He kept allowing the Harper government to win vote after vote to prevent an election he knew he would lose. Harper resorted to another trick. The Conservatives organized systematic sabotage of three of the 21 Parliamentary committees — they even wrote a guide for their MPs on how to orchestrate it. Then Harper went to see the Governor General and Parliament had become 'dysfunctional' and should be dissolved. court for Harper The rime Minister Stephen Harp- er is being taken to Federal Court by a citizens public Hill By Richard Cleroux She could easily have said to him, "I need a reference deci- sion from the Supreme Court." But instead she went along with Harper's request for an election. He got his wish. The Opposition parties could have raised a stink, but for various reasons, they didn't. Harper got his election, but not his majority and it cost taxpayers $300 million. Back to square one. Democracy Watch wants to call Harper to account and make him pay for what he did. It has filed affi- davits from experts that include Peter Russell and Lawrence LeDuc of the University of Toronto; University of Ottawa law professor Errol Mendes; John Bennett from the Green Party; Sinclair Stevens from the Canadian Progressive Party; various people who might have been candidates; and various Jewish groups and indi- viduals who didn't like an election on the Sukkoth holiday. The Harper government has 30 days to reply with its own affidav- its. Then they go to cross-exam- ination, and after that they go to arguments. Actually they could get a court date in February 2009, and hearing some time in June 2009. The issue is important because if Harper could call an election on the grounds that Parliament isn't working, can he do it again on the same grounds next spring, before the Liberals can replace Dion? Or call another snap election after the Liberals have a new lead- er, before they can re-organize and raise money? And what about the revised elec- tion law — the one that says in black and white "the next election shall be held on Oct. 19, 2009?" Does that mean we have to have another federal election on that day, and go through the whole thing all over again, or do we just pretend the Elections Act provision doesn't exist? What if the court says what Harper did is legal? Does that mean Ontario Premier Dalton Mc- Guinty can ignore his fixed elec- tion date law and call a snap elec- tion any time he wants? And what about Newfound- land? Won't Premier Danny Wil- liams just love to get into the case too so he can tell Harper to his face he acted illegally, or would he rather go along with Harper's move so he could use it himself later on in Newfoundland? Should Harper lose, it would not be long before somebody would try a class action suit against him for the $300 million his elec- tion cost Canadians. Maybe they could ask the court to impose a symbolic fine — some- thing such as $1 per person, or per voter — in Canada. Wouldn't Harper like that. LT Richard Cleroux is a freelance reporter and columnist on Parliament Hill. His e-mail address is richard cleroux@rogers.com. www.lawtimesnews.com COMMENT PAGE 7 Jurisdiction clauses and the standard proof BY STEPHEN G.A. PITEL For Law Times C ommercial parties are inserting jurisdic- tion clauses — under which the parties agree to submit some or all disputes aris- ing under or in connection with the contract to the courts of a particular country — into their contracts with increasing frequency. In doing so they aim to avoid ambiguity and debate about where any resulting litiga- tion is to take place. In Z.I. Pompey Industrie v. ECU-Line N.V., Jus- tice Michel Bastarache noted for the court that "these clauses are gener- ally to be encouraged by the courts as they create certainty and security in transaction, deriva- tives of order and fairness, which are critical components of private international law." This certainty is achieved by giving such clauses considerable weight in the analysis on motions for leave to serve a defendant outside the province, or to set such service aside, or for a stay of proceedings. Jurisdiction clauses are not in and of them- selves determinative, but they are — and should be — a very significant factor in these motions. However, before the court can rely on a jurisdiction clause, it should be satisfied on the full civil standard of the balance of prob- abilities that the clause forms part of the con- tract between the parties. This issue of the standard of proof does not arise often. In most jurisdiction clause cases the parties accept that the clause forms part of their agreement and proof is not in issue. But what if they do not? What if one of the parties alleges that the contract contains a jurisdic- tion clause and the other denies it? Disputes about the existence of a particular term of a contract are usually resolved at trial, on a full evidentiary record. However, disputes concerning jurisdiction clauses present a particular problem. Because issues of jurisdiction necessarily come before the determination of the merits of the case, disputes concerning jurisdiction clauses will almost always have to be resolved using a pre- liminary process before any hearing on the merits is commenced. In resolving this issue, the authorities point to two possible standards. The first is relatively low, most often referred to as a "good arguable case." On this standard, a party can rely on a jurisdiction clause if it can show a good argu- able case that it became part of the contract. This is also sometimes referred to as sufficient evidence to raise "a serious issue." The second is the full civil standard, under which the existence of the jurisdiction clause must be proven on the balance of probabilities. The traditional view favours the use of the lower standard. This is consistent with the standard of proof used for other factual issues on motions about jurisdiction or a stay of proceedings. On such motions, a wide range of factors can be relevant to the analysis: the location of the parties, the place where a con- tract was made or a tort was committed, the place where loss was suffered, and so on. The orthodoxy is that, to the extent there is a factual dispute about one of these factors, the standard of proof before the factor can be considered in the legal analysis is a good argu- able case: see for example the analysis in Eco- lab Ltd. v. Greenspace Services Ltd. But for jurisdiction clauses, the traditional Speaker's Corner view is inappropriate. Because of the major role that a jurisdiction clause plays in prelimi- nary motions and because the issue of jurisdic- tion will, in fact, not be raised at a subsequent trial, having become moot, the higher stan- dard of proof should be required. Preliminary deter- minations as to the existence of a jurisdic- tion clause can be, in a practical sense, final. The purpose of a juris- diction clause is to ensure that litigation oc- curs in a particular forum. If, on a motion for a stay of proceedings, the clause is held to not apply, it will have little further purpose to serve: see Z.I. Pom- pey Industrie. Another more obvious way in which preliminary decisions about the exis- tence of a jurisdiction clause can be final is in law. Issue estoppel prevents the re-litigation of an issue that has already been decided by an- other court of competent jurisdiction, includ- ing courts in a foreign jurisdiction. In the inter- ests of promoting finality and avoiding forum shopping, issue estoppel has been applied in cases where a foreign court has adjudicated a preliminary dispute concerning a jurisdiction clause: see The Sennar (No. 2), [1984] 2 Lloyd's Rep. 142 (C.A.). This strongly points towards insisting that the decision be based on the higher standard of proof. To this point there is little direct authority on the question of the standard of proof to be employed in cases involving disputes about jurisdiction clauses. Yet many cases have dealt with this is- sue: they simply fail to explicitly identify the standard of proof being used. However, a general reading of many of these cases sug- gests that the judges were indeed engaged in a weighing and balancing of available evi- dence, which would seem indicative of the full civil standard as opposed to a search for only a "good arguable case." To take a recent example, in Hershey Canada, Inc. v. Solae, the defendant sought to rely on a jurisdiction clause in favour of Delaware. The court stated that the defen- dant, "as the party asserting the forum selec- tion clause, has the burden of proving that the clause was part of the contract." In its subsequent analysis the court seems very much to use the full civil standard of proof. These cases suggest that judges have already recognized, at least implicitly, the problems with the traditional view and have moved to a more appropriate approach. It would be welcome if this was made ex- plicit in the future. LT Stephen G.A. Pitel is an Associate Professor at the Faculty of Law of the University of Western Ontario. His e-mail address is spitel@uwo.ca.

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