Law Times

Page 13 Law Times • January 20, 2014 caselaw CaseLaw is a weekly summary of notable civil and criminal court decisions by the Supreme Court of Canada, the Federal Court of Canada, and all Ontario courts. FEDERAL COURT OF APPEAL Admiralty COLLISION Collision resulted from error in navigation by those in command of tugboat Ship was being towed by tugboats during process of being berthed in harbour next to shipping company's vessel. While passing between ship and vessel, line tugboat contacted another tugboat and veered into vessel. Line tugboat damaged vessel's propeller. Line tugboat owner's liability was admitted. Shipping company brought action against ship and its owners for damages for negligence based on vicarious liability. Action was dismissed. There was no reviewable error on part of trial judge in concluding that there was no vicarious liability on part owners of ship in respect of collision. There was evidence to support trial judge's finding that collision resulted from error in navigation by those in command of tugboat. Trial judge did not err in law or commit palpable and overriding error. Grieg Shipping A/S v. "Dubai Fortune" (The) (Owners) (Sep. 16, 2013, F.C.A., M. Nadon J.A., Pelletier J.A., and Gauthier J.A., File No. A-446-12) Decision at 223 A.C.W.S. (3d) 557 was affirmed. 233 A.C.W.S. (3d) 270. Labour Relations JUDICIAL REVIEW Policy substantially and fundamentally different from guidelines Library was employer under Parliamentary Employment and Staff Relations Act (Can.). Library implemented new workforce adjustment ("WFA") policy after notice to bargain collectively had been given and before arbitral award establishing terms and conditions of employment had been made. Union brought reference to Public Service Labour Relations Board alleging that library violated s. 39 of Act by implementing WFA policy. Board found that redeployment of human resources surplus employees guidelines and WFA policy were terms and conditions of employment that could be embodied in collective agreement as contemplated by s. 39 of Act. Board found that WFA policy substantially and fundamentally altered terms and conditions of employment set out in guidelines and introduction of WFA policy was not result of normal business practice. Board declared that library had violated s. 39 of Act. Library applied for judicial review of board's de- These cases may be found online in BestCase and other electronic resources from carswell.com. To subscribe, please call 1-800-387-5164. cision. Application dismissed. Both guidelines and WFA policy included terms or conditions of employment. Those terms and conditions were not precluded from ever forming part of collective agreement by operation of ss. 5(3) or 55(2) of Act and were consequently contemplated by s. 39 of Act. Board implicitly dealt with s. 5(3) of Act and decision was reasonable even though board did not explicitly refer to s. 5(3). Board reasonably concluded that WFA policy was substantially and fundamentally different from guidelines. Board's finding of fact that WFA policy was not result of normal business practice was reasonable and was supported by evidence. CAPE v. Library of Parliament (Oct. 8, 2013, F.C.A., Marc Noël J.A., Eleanor R. Dawson J.A., and Robert M. Mainville J.A., File No. A-119-13) 233 A.C.W.S. (3d) 476. between parties. Tax debtor did not have to represent to tax authorities that funds did not belong to him in order for art. 1452 to operate in favour of Minister. It was enough that tax debtor made it appear to third parties that funds belonged to respondent when they were really his. By application of art. 1452 of Code assessment made against respondent was valid even if ownership of money remained unchanged. Liability of respondent was engaged by combined effect of art. 1452 of Code and s. 160(1) of Act. 9101-2310 Québec Inc. c. R. (Oct. 18, 2013, F.C.A., Marc Noël J.A., Johanne Gauthier J.A., and Robert M. Mainville J.A., File No. A-483-12) 233 A.C.W.S. (3d) 518. Taxation Arbitration INCOME TAX Assessment against respondent valid even if ownership of money remained unchanged Insurance company issued cheque for $305,441.32 to tax debtor as compensation for damages when building he owned was destroyed by fire. At that time tax debtor was embroiled in number of legal difficulties and he owed significant amount of money to bank. Tax debtor did not have personal bank account for fear it would be seized. Tax debtor's long time friend offered to deposit the funds in bank account of respondent. Assessment was made under s. 160(1) of Income Tax Act (Can.), which held respondent solidarily liable for tax debtor's tax debt. On appeal, Tax Court Judge vacated assessment on ground that no transfer had taken place because parties entered into agreement to effect that amount in issue still belonged to tax debtor despite deposit. Minister of National Revenue appealed. Appeal allowed. In light of evidence, there was simulation within meaning of art. 1451 of Civil Code of Quebec. Cheque was given to friend and deposited into respondent's account in order to prevent funds from being seized in hands of tax debtor. In giving cheque to friend so he could deposit it into respondent's account, tax debtor gave impression that money belonged to respondent despite that, according to agreement with friend, money remained his. That situation amounted to simulation within meaning of art. 1451 of Code. Minister was entitled to rely on apparent transfer made AWARD Property was not utility right-of-way corridor Plaintiff male was seriously injured while tobogganing on reservoir property owned by defendant city. Plaintiff female was former spouse of male and made claim under Family Law Act (Ont.) ("FLA"). Male was injured when toboggan hit edge of snow covered ditch. Parties agreed to arbitrate plaintiffs' claims. Arbitrator found city fully liable, with no contributory negligence by plaintiffs. Arbitrator found city breached its duty of care under s. 3 of Occupier's Liability Act (Ont.). Arbitrator awarded damages to male in amount of $482,657 and damages of $100,000 to female for housekeeping and childcare costs and FLA claim. City appealed. Appeal dismissed. In order for someone to voluntarily assume risk, that person must be aware of existence of risk. There was ample evidence that male was not aware of risk he was assuming. Arbitrator correctly found that property was not utility right-of-way or corridor. There was nothing to suggest arbitrator applied wrong test in finding plaintiffs were not contributorily negligent. Arbitrator did not err in awarding FLA damages to female. Evidence established that relationship between plaintiffs deteriorated as result of injuries to male. Uggenti v. Hamilton (City) (Oct. 7, 2013, Ont. S.C.J., R.A. Lococo J., File No. Hamilton 0412153) 233 A.C.W.S. (3d) 283. ONTARIO CIVIL DECISIONS DISQUALIFICATION OF ARBITRATOR Arbitrator may bring bias in favour www.lawtimesnews.com of expert given past experience and association Applicants applied to remove sole arbitrator in ongoing arbitration commenced by respondents. Applicants argued that reasonable apprehension of bias had arisen as result of simultaneous retainer of same accounting expert by both arbitrator, as counsel in another similar action, and respondents in arbitration. Applicants claimed that, similar to this arbitration, other action in which arbitrator was counsel involved similar dispute between franchisee and franchisor regarding purported rescission of franchise agreement, in which expert would have to opine on similar damages issues. Application allowed. Test for determining whether reasonable apprehension of bias existed in arbitrator was whether informed person, viewing matter realistically and practically, and having thought matter through, would conclude that arbitrator was seized with attitude or predilection for bias, whereby arbitrator must be taken to have prejudged matter. Standard or test was objective and no actual or intended bias need be established. Evidence indicated that arbitrator, as counsel in franchise matters, had retained expert on other occasions in past year. It was reasonable to assume that arbitrator reposed confidence in opinion and expertise of expert. That was sufficient to raise apprehension of bias that arbitrator may, in assessing expert's expertise, reliability and credibility, bring bias to assessment in favour of expert, given his past professional experience and association with expert. Arbitrator was removed. MDG Computers Canada Inc. v. MDG Kingston Inc. (Oct. 4, 2013, Ont. S.C.J., Carole J. Brown J., File No. CV-12-466897) 233 A.C.W.S. (3d) 285. Civil Procedure DISCOVERY Inspection as invasive as that proposed ought not to be undertaken simply on basis of suspicion Respondent filed motion for order that court appoint computer forensic expert to examine computer systems of applicant and its principal, and order that employees or agents of applicant assist expert with all reasonable requests to fulfill its mandate. Respondent wanted expert to verify whether two e-mails between applicant's principal and third party were authentic. Applicant's position was that the e-mails were not authentic, were never exchanged, and did not appear in its system. Motion dismissed. Motion judge accepted applicant's submission that no trace of e-mails was found following forensic investigation of its devices. Nor was any trace or e-mails found during execution of Anton Piller orders. Inspection as invasive as one proposed by respondent ought not to be undertaken simply on basis of suspicion, speculation or conjecture. Order sought by respondent was disproportionate and unnecessary, and value to be gained through order proposed was limited. Direct Energy Marketing Ltd. v. National Energy Corp. (Jun. 11, 2013, Ont. S.C.J., J.S. O'Neill J., File No. CV-11-431862) 233 A.C.W.S. (3d) 331. Conflict of Laws JURISDICTION Ontario court had jurisdiction over those who purchased stocks on Toronto Stock Exchange Plaintiff brought proposed class action against defendant. He alleged that defendant made various misrepresentations in its investor documents before and after Deepwater Horizon oil spill in Gulf of Mexico in April 2010. Plaintiff sought leave to bring statutory action for secondary market misrepresentation under Securities Act (Ont.), and made further claim for common law negligent misrepresentation. Defendant brought motion for order staying proceeding on basis that Ontario courts did not have jurisdiction over dispute or, alternatively, on basis of forum non conveniens. Motion dismissed. Plaintiff 's statutory claim was presumptively connected to province. With respect to persons who did not purchase shares in Ontario, there was nothing in wording of Act that restricted cause of action to investors who purchased their shares on Ontario exchange. There was real and substantial connection between plaintiff`s claim and Ontario. Defendant argued Ontario was not appropriate forum because actions had already been commenced in United Kingdom and United States. There were approximately 1,500 purchasers of defendant's stock in Canada. Defendant's submission would not avoid multiplicity of proceedings, as it conceded that Ontario court had jurisdiction over claims of those who purchased defendants stocks on Toronto Stock Exchange. There would be Ontario action regardless of outcome of motion. Neither action in United Kingdom or United States were at stage where it could said they were clearly more appropriate forum. Kaynes v. BP plc (Oct. 9, 2013, Ont. S.C.J., Conway J., File No. CV-12-00467836-00CP) 233 A.C.W.S. (3d) 362.

• Cover