Law Times

Law Times • June 6, 2016 Page 13 www.lawtimesnews.com caselaw 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. These cases may be found online in BestCase and other electronic resources from carswell.com. To subscribe, please call 1-800-387-5164. Supreme Court of Canada Civil Procedure DISCOVERY Partial voluntary disclosure of documents did not amount to waiver of immunity WBG, international organiza- tion composed of separate or- ganizations, provides loans, guarantees and grants for devel- opment projects in developing countries and primary lender for Multipurpose Bridge in Bangladesh. Three former em- ployees of SNC-Lavalin, one of several companies bidding to supervise construction, and one representative of Bangladeshi of- ficial, charged under Canadian Corruption of Foreign Public Officials Act after allegedly con- spiring to bribe Bangladeshi of- ficials. Articles of Agreement of two WBG constituent organiza- tions, IRBD and IDA, set out im- munities and privileges. Articles provided archives inviolable and officers and employees immune from legal process for acts in of- ficial capacity unless immunity waived. INT, independent unit within WBG, forwarded emails suggesting corruption in process for awarding supervision con- tract to RCMP which obtained authorizations to intercept pri- vate communications and search warrant. Sgt. D prepared affida- vits but made no handwritten notes and lost all emails. Crown intended to present intercepted communications at trial. Ac- cused challenged wiretap autho- rizations pursuant to R. v. Garo- foli and applied for order requir- ing production of INT records. Trial judge held that immunities and privileges facie applicable but WBG waived immunities by participating in RCMP investi- gation. He concluded documents were not archives and invio- lable referred to protection from search and seizure or confisca- tion, not production. Trial judge ordered documents be produced for review. WBG's appeal al- lowed. Despite its operational independence, INT's documents formed part of IBRD's or IDA's archives, and INT's personnel benefit from legal process im- munity for acts in official capac- ity. Partial voluntary disclosure of some documents did not amount to waiver. In absence of express waiver, trial judge erred in finding WBG waived immunity. Production order should not have been issued un- der framework for third-party production. Garofoli framework assesses reasonableness of search when wiretaps used to intercept private communications. To obtain third-party records on Garofoli application, accused must show reasonable likelihood records will be of probative value to narrow issues in play on such application. Although docu- ments sought could be relevant to ultimate truth of allegations in affidavits, they were not rea- sonably likely to be of probative value to what Sgt. D knew or should have known. Not unrea- sonable for Sgt. D to rely on INT information. World Bank Group v. Wal- lace (Apr. 29, 2016, S.C.C., McLachlin C.J.C., Abella J., Mol- daver J., Karakatsanis J., Wagner J., Gascon J., Côté J., and Brown J., 36315) 264 A.C.W.S. (3d) 1026. Federal Court of Appeal Industrial and Intellectual Property TRADEMARKS No palpable and overriding error in judge's discretionary decision to require delivery up of domain name Plaintiffs brought trademark ac- tion. Federal Court Judge found plaintiffs established they were owners of trademarks and that defendants infringed marks. Plaintiffs were granted default judgment. Defendants appealed. Appeal dismissed. Exercise of discretion to proceed with mer- its of motion was reasonable. Defendants had ample notice of motion and on return of motion offered only draft statement of defence that was not filed and on which they indicated they would not rely. Corporate defendant did not retain counsel. There was no merit to argument that order was without jurisdiction. No pal- pable and overriding error was established in judge's discretion- ary decision to require delivery up of domain name. Michaels v. Michaels Stores Procument Co. (Mar. 15, 2016, F.C.A., Noël C.J., Stratas J.A., and Donald J. Rennie J.A., A-256- 15) 264 A.C.W.S. (3d) 1019. Federal Court Industrial and Intellectual Property PATENTS Prothonotary's conclusion that strong possibility of infringe- ment was present could not be characterized as an error Defendant brought motion to appeal order of prothonotary in which she declined to strike out plaintiffs' statement of claim in its entirety. Statement of claim alleged infringement of patent. Although prothonotary struck some of plaintiffs' pleadings, she allowed action to continue on basis of amended allegations of likely future infringement. De- fendant contended that aspect of decision was made in error and that action should be dis- missed in its entirety. Motion dismissed. Defendant had de- clared clear intention to come to market with its competing version of plaintiffs' product as soon as it could obtain notice of compliance. That could occur if court invalidated patent follow- ing impeachment trial. Protho- notary drew inference that de- fendant's abbreviated new drug submission had been approved by Minister and was on patent hold. That inference was unas- sailable. Conclusion that strong possibility of infringement was present could not be character- ized as error, let alone palpable and overriding error. Gilead Sciences, Inc. v. Teva Canada Ltd. (Mar. 21, 2016, F.C., R.L. Barnes J., T-1888-15) 264 A.C.W.S. (3d) 1015. Tax Court of Canada Employment Insurance ENTITLEMENT That parties agreed to charac- terize contract as contract for services was not determina- tive of nature of contract Insurance company hired in- dividual as agent under Agent Contract in April 2012 and was terminated in November 2012. Company issued 2012 T4A in name of individual, reporting amount of $7,084.91 in self-em- ployed commissions. In 2012 in- come tax return, individual de- clared gross commission income from self-employment of $7,084, and reported he incurred $7,098 in expenses to earn this income; individual declared net loss of $14. Individual appealed decision of Minister finding that he did not hold insurable employment. Appeal allowed. Individual was considered employee under art. 2085 of Civil Code of Quebec and held insurable employment. Fact that parties agreed to char- acterize contract as contract for services was not determinative of nature of contract. First, this was contract of adhesion; indi- vidual did not have opportunity to discuss whether he wanted to be independent contractor or employee. Second, individual was in vulnerable position given that he had been unemployed for several months at hiring. There was higher level of microman- agement than one would expect from most employers. Individual felt compelled to justify his ab- sence from office; individual's business card showed no indi- cation that he was independent contractor or agent; any ordinary person would assume individual was employee of company. Indi- vidual did not represent several insurance companies, although company claimed he was free to do so; this was red herring. Com- pany told agents how they should behave on internet, how to talk to people, how to dress to meet po- tential clients, what kind of pen to use for signing applications, how to deal with objections face to face and on phone, how to conclude sale, how to develop relationship over year, and when to send birthday cards. Compa- ny exercised control over every aspect of agents' work and cor- rected mistakes when any were found. Fact that individual paid weekly rent of $18 for use of com- puter was red herring; fact that agents were given large degree of autonomy in performing their duties was normal. Company executives were not just coaches; they were there to supervise, as- sist, and give direction. It was ob- vious from testimony of compa- ny witnesses that they knew they were not supposed to say agents were being supervised, that meetings were mandatory, and that agents were not free to do whatever they wished. Evidence showed company had power of direction and control over agents who hired assistant. Code did not expressly preclude employee from employing assistant or that someone who would otherwise be employee could not be one be- cause he hired assistant. Mazraani v. Minister of Na- tional Revenue (Apr. 12, 2016, T.C.C. [Employment Insur- ance], Pierre Archambault J., 2013-3484(EI)) 264 A.C.W.S. (3d) 1078. Ontario Civil Cases Civil Procedure CLASS ACTIONS Terms of settlement were revised in class action Class action on behalf of bank employees against bank was certified as class proceeding and settled for first time in Au- gust 2014. First settlement did not stipulate final compensa- tion amount and set out simple claims process. Claims process required class members to sub- mit claims for unpaid overtime by Oct. 15, 2014 and bank was to respond to claims by Nov. 28, 2014. Class members who were unsatisfied with bank's response could appeal decision to inde- pendent arbitrator. In early No- vember, representative plaintiff discovered that bank was taking steps appearing to be in breach of claims process, class counsel brought motion to address those concerns, and bank brought its own motion to extend deadline for responding to claims. Appeal process set out in settlement was suspended until resolution of motions and parties resolved is- sues in dispute without further judicial intervention. Parties agreed to new payment approach and terms of settlement were re- vised. Under revised settlement, bank agreed to pay further $20.6 million in addition to $18.7 mil- lion paid out to date, resulting in total payout amount of $39.3 million to approximately 1600 class member claimants. Revised settlement based additional pay- ments on thresholds that bank had used during claims process and claims were divided into two categories consisting of claims that had been partially reduced and those that had been com- pletely rejected. Under revised settlement, claimant's total re- covery inclusive of amounts already paid was capped ac- cording to certain percentages. Other key provisions in revised settlement provided for exten- sion of deadline for claims con- sideration to Dec. 31, 2014, that no further information need be submitted, that payments to claimants would be subject to tax and source deductions, and that compensation bands and payments were final. Explana- tions given by bank for concerns raised by claimant were accept- ed. Discussion with counsel sat- isfied court that no class mem- ber was losing money that was otherwise hers to receive. Each class member submitted claim that was subjected to one of three levels of scrutiny depending on amount claimed. Bands and pay- outs within those bands ref lect claim review experience within each band and could be justified as fair and reasonable when com- pared to alternative or protracted litigation and uncertain recover- ies. Revised settlement was fair, reasonable, and in best interests of class. Bank's proposal to pay class counsel $2.3 million in legal fees separate and apart from re- vised settlement amount was fair and reasonable. Fulawka v. Bank of Nova Scotia (Mar. 18, 2016, Ont. S.C.J., Edward P. Belobaba J., 07-CV-345166CP) 264 A.C.W.S. (3d) 853. PLEADINGS Trial judge properly recognized that court should only reluctantly strike statement of defence Appellant defendant landlord leased premises to plaintiff on five-year lease. Plaintiff ten- ant entered lease and operated restaurant there. Landlord was entitled to reasonable period to complete renovations during

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