Law Times

Law Times • November 14, 2016 Page 7 www.lawtimesnews.com COMMENT Case highlights mobility issues BY MARTA SIEMIARCZUK I n this day and age, we see more and more mobility issues and self-help remedies. As lawyers, we need to be prepared. A recent case is an interesting and informative decision on those issues. In Balev v. Baggott, 2016 ONCA 680, the Court of Appeal for Ontario took a firm stand in enforcing the Hague Con- vention on the Civil Aspects of Inter- national Child Abduction, despite the fact that the children at the centre of the legal battle had been living in Ontario for more than three years. Justice Robert Sharpe, writing for a unanimous court, ordered the children of the marriage returned to Germany, where they had lived most of their lives before travelling to Canada with their mother for a period of time. The basic facts are that the parties were married in Ontario and moved to Germany in 2001. They had two children during the marriage, who were born in Germany. The parents sep- arated in 2011 and the father was awarded temporary custody. They resumed living together in the matrimonial home in 2012. During the marriage, the children did spend brief periods of time in Canada on two occa- sions, but, unquestionably, they lived in Germany and were German residents. In 2013, the children began having trouble in school and, as a result, the fath- er signed a time-limited consent allowing the mother to travel with the children to Ontario and spend a school year here. He also agreed to give the mother custody of the children temporarily to facilitate her ability to en- rol the children in school in Canada during the period of the consent. The mother did not return the children to Germany at the expiry of the consent, and she and the children had been in Canada since April 2013. The consent ran from April 2013 to August 2014. Prior to the Ontario Hague application proceeding, there were some delays as the father attempted to pursue remedies in Germany, which were declined for lack of jurisdiction. Ultimately, however, the application, which was started in Ontario within 10 months of the children being withheld, proceeded. The application judge ordered the re- turn of the children to Germany, after finding the children were habitually resi- dent in Germany, were only in Canada under a time-limited consent for a specif- ic purpose and that there was a settled in- tention that the children habitually reside in Germany. The mother appealed to the Divisional Court, which set aside the decision. Relying in part on s. 22(2)(b) of the Children's Law Reform Act and in part on evidence that the children had by this time acclimatized to life in Canada, the Divisional Court concluded that the time-limited consent for a lengthy period of time given by the father had the effect of changing the chil- dren's habitual residence and, therefore, the "change" did not occur as a result of one parent's unilateral action in contravention of the Hague Convention. The Court of Appeal dis- agreed. What is made clear is that time-limited consents should not be construed in a broad way to allow them to create a new habitual resi- dence even if the period of the stay is of a longer duration. The Court of Appeal also reaffirmed that if Hague Convention applications are brought within one year of the removal or retention of a child, the mere fact that the children have now "settled in" to the new location is irrelevant and the language of the convention is mandatory with respect to a return of the child. The Court of Appeal further discussed the exception relied on by the mother, that if a child objects to being returned and has attained an age and maturity making it appropriate to consider views and preferences, the court can deny an order for return. In this case, the Office of the Children's Lawyer was involved. Its evidence was that the children expressed objections that centred on things such as "too much homework" in Germany, missing friends and missing the family dog in Canada. While these can be immediate issues for a child, the Court of Appeal held that such views do not amount to the level of objec- tion necessary by a child to warrant apply- ing such an exception because these are all things that, subject to an adjustment per- iod, will generally settle down. The court was also quite clear to note that in a Hague Convention application, the court is not determining custody or the best interests of the children (subject to some discrete exceptions), nor that success on such an application means those issues cannot be addressed. They can, but in Germany. I like this decision, both from a factual point of view in this case specifically and, from a larger perspective, in terms of a global community. The reality in today's world is that international, time-limited opportun- ities are very prevalent for families. This means a rise in international conf lict of laws and jurisdictional issues within family law. While there are statutory pro- tections in these situations both under the Hague Convention and the Children's Law Reform Act, they are all still open to interpretation. This is especially evident in cases where the children have stayed in the new jurisdiction for an extended period of time such as in this case. Given how globally focused society has become, it is very important for our courts to keep people to their agreements and in- itial intentions, as well as deter unilateral actions and self-help remedies in cases where no safety concerns are posed. LT u Marta Siemiarczuk is a lawyer practising family law litigation and collaborative family law at Nelligan O'Brien Payne LLP in Ottawa. She can be reached at marta.siemiarczuk@nelligan.ca. Ledcor is unlikely to settle the dust BY ANNA WONG I t was meant to be an opportunity to clear the air, but the Supreme Court of Canada's decision in Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co., 2016 SCC 37 only added to the humidity when it comes to the standard of review in contractual interpretation cases. The appropriate standard to deploy has been a sub- ject of intense contention in the last 10 to 15 years. As the concept of factual matrix rose to prominence, the historical approach of regarding contractual interpre- tation as a question of law reviewed for correctness lost favour with some provincial appellate courts, while others clung tight to it. At the height of the controversy, the top court in Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53 ushered in the modern approach by declaring that contractual interpretation is no longer to be char- acterized as a question of law. Instead, it is one of mixed fact and law attracting deferential review, save for the "rare" question of law that can be extricated from the interpretative process. Subsequent to Sattva, appellate courts disagreed over whether it is applicable to standard form con- tracts. Some courts faithfully applied Sattva. Others, meanwhile, sidestepped Sattva on the basis that stan- dard form contracts are fundamentally different from contracts where the parties had a real hand in negotiat- ing. The Alberta Court of Appeal in Ledcor did exactly that and scrutinized the trial decision for correctness. In a somewhat surprising move given how recently Sattva was decided, the majority of the Supreme Court proclaimed an exception to Sattva for standard form contracts, whose "interpretation is better characterized as a question of law subject to correctness review." It gave two reasons for doing so: (1) the factual ma- trix is less relevant for standard form contracts because the parties do not negotiate the terms, and other sur- rounding circumstances "tend not to be specific to the particular parties" and are "not inherently fact specific"; and (2) interpretation of a standard form contract has precedential value and, therefore, fits under the defini- tion of a pure question of law. The trouble with the majority's reasoning is twofold. First, it severely downplays the role that context plays in the interpretative process. Interpreting a con- tract is not simply a question of ascribing immutable legal meaning to the words. Rather, it involves applying the legal standard set by the contract to the facts of the situation at hand. Just because the factual matrix may be similar for many parties who signed the same stan- dard form contract — which is not necessarily the case — does not make it any less relevant to the interpretative exercise. While a standard form contract has no relevant surrounding circumstances relating to negotiation, oth- er contextual factors — such as the contract's purpose, the nature of the relationship it creates and the market in which the parties operate — must still be considered. Indeed, how the words apply to different situations most often turns on these contextual factors. If we accept that the interpretative process is the same for standard form contracts and bespoke contracts, then there is no reason to treat the interpretation of the former as a question of law and the latter as a question of mixed fact and law. In undercutting the importance of the factual matrix, the majority implicitly endorses an antiquated textual- ist approach to interpreting standard form contracts, one that is focused on the contractual text with little to no attention paid to the context. Yet contracts are not made in a vacuum. There is always a context in which they have to be placed. Hence, the textualist approach had been abandoned in favour of a contextual one that obliges consideration of surrounding circumstances in determining what the parties meant by their agreement. Context matters, even for standard form contracts, as illustrated by Dunn v. Chubb Insurance Company of Canada. When Dunn was initially heard without factu- al matrix evidence, the D&O policy was interpreted as excluding the claimed defence costs (2009 CanLII 7083). The opposite result was reached when the case was reheard with such evidence (2010 ONSC 2166). Second, it is difficult to reconcile the majority's deci- sion with the standard of review framework set out in Housen v. Nikolaisen, 2002 SCC 33, in which frame- work was unchallenged. According to Housen, ques- tions of law are "questions about what the correct legal test is," whereas questions of mixed law and fact are about "applying a legal standard to a set of facts." Con- tractual interpretation, as an exercise in applying in- terpretative principles to the words used considered in light of the factual matrix, ill fits the former. While it is not easy to draw the line between the two categories of questions, as Housen acknowledged, the key difference is the generality of the legal propositions involved. The greater the generality, the more it resembles a purely le- gal question. That a standard form contract is involved provides no guarantee of generality, for it still depends on the particular principle at issue in a particular case. Also, Ledcor's invitation for appellate intervention is out of step with the maxim anchoring the Housen framework: "An appeal is the exception rather than the rule." To allow for wide-ranging review of contractual interpretations when the generality of the principles engaged is not certain encourages more frequent and lengthier appeals, prejudicing litigants with fewer re- sources — who are more likely than not the weaker parties in take-it-or-leave-it contract situations — with little, if any, improvement in the result. Ledcor might have temporarily quelled debate, though it is unlikely going to be the last word on the issue. As the law evolves, the aim should be to set, to the extent possible, unified principles that apply to all contractual settings and avoid creating a web of excep- tions, which can lead to grey areas and, in turn, drive uncertainty and contracting costs. LT u Anna Wong practises civil litigation with Landy Marr Kats LLP. u SPEAKER'S CORNER Family Law Marta Siemiarczuk

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