Ontario Take Five Feb 2013

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February 2013

ONTARIO EDITION EDITION

INSIDE THIS ISSUE:

Featured Cases:

Municipal Law; By-Laws; Permissible Uses

Income Tax; Tax Liens; Priorities

Municipal Law; Elections; Procedural Irregularities - With 2 Counsel Comments

Insurance Law: Statutory Accident Benefits; Use or Operation of Motor Vehicle

International Law: State Immunity; Jus Cogens - With Counsel Comments

Municipal Law; Conflict of Interest - BONUS SUMMARY of Magder v. Ford, 2013 ONSC 263

op

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St. Mary’s Cement Inc. (Canada) v. Clarington (Municipality), 2012 ONCA 884Areas of Law: Municipal Law; By-Laws; Permissible Uses

The appellant St. Mary’s Cement Inc. (Canada) (“SMC”) operated a

cement manufacturing plant on the north shore of Lake Ontario in the respondent Municipality of Clarington (“Clarington”), within the Regional Municipality of Durham. Clarington, under By-Law 84-63, permitted the use of the site for a “cement manufacturing plant” as well as any accessory uses that are “customarily incidental and subordinate to, and exclusively devoted to, the main use”. SMC proposed to substitute fuel consisting of post-composting and post-recycling materials for some of the conventional fossil fuel that it currently used. Clarington opposed SMC’s proposal on the basis that it would give rise to a new land use; namely, the use of the site as a “waste disposal area,” which was not permitted under the by-law. SMC contended that its proposal did not give rise to a new land use. In the alternative, it argued that use of the alternative fuels was a permissible accessory use authorized under the by-law. SMC applied for a declaration to that effect. The application judge issued an order declaring that SMC’s proposed use was neither a permissible use nor an acceptable accessory use under the by-law. SMC appealed.

BACKGROUND

~Cement manufacturing plant’s alternative burning of environmental-friendly fuels not constituting impermissible land use under by-law~

CLICK HERE TO ACCESS THE JUDGMENT


http://www.canlii.org/en/on/onca/doc/2012/2012onca884/2012onca884.pdf




February 2013


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St. Mary’s Cement Inc. v. Clarington, (cont.)

APPELLATE DECISION

The appeal was allowed. The determinative issue was whether

SMC’s proposed use of alternative fuel constituted a new land use that was not permitted at the site in question. The application judge erred in concluding that the use of “waste” as fuel brought the plant within the definition of “waste disposal area,” and that it therefore constituted a new and additional use. In reaching this decision he did not apply the express language used in s. 2 of the by-law to define “waste disposal area.” Under the proposal, SMC would not be

dumping, destroying or storing waste. As a result, there was no “waste disposal area” within the meaning of the by-law. Accordingly, the sole use continued to be the use expressly permitted by s. 25.4.1 of the by-law – that is, the operation of a “cement manufacturing plant.” The use of one fuel as opposed to another did not alter the fact that the SMC plant was in essence a cement plant and not a waste disposal area. The burning of fuel was inherent in the production of cement, and the use of alternative fuel did not amount to a separate use of the land.


http://www.tvsbarristers.com



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The respondent Alexander Trang owed the appellant Canada Revenue Agency

(“CRA”) approximately $1.6 million in unpaid income taxes and GST. In 2005 and 2007, the CRA registered liens for the amounts owing against the title to three Ontario properties which Tran owned, or co-owned with his wife, the respondent Carolyn Nguyen. Tran was convicted of income tax evasion in 2009. Following his conviction, his sister, the respondent Rosaline Trang (“RT”), and his wife each brought a lawsuit against Tran seeking a declaration that they held an unregistered equitable interest in one or more of his properties. RT claimed she had equitable mortgages over all her brother’s lands. Nguyen claimed she was entitled to a 50% share of a business property registered in Trang’s name alone based on work she did in the business. On consent, the CRA was added as a party to Nguyen’s family law proceeding, which was transferred to the Ontario Superior Court to be heard together with RT’s civil claim. The CRA then brought a motion under rule 21.01(1)(a) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, to determine whether the equitable interests claimed by RT and Nguyen could, if proven, entitle them to payment in priority to the CRA’s registered liens. On the motion, McKinnon J. held that the unregistered equitable interests of the wife and sister could be payable in

priority to the CRA’s subsequent liens. The CRA appealed, contending that s. 223(5)(b) of the Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.), adopts the scheme of priority created for collection of amounts owing to the provincial Crown. The CRA submitted that, under the Ontario scheme, once a notice of indebtedness to the Crown was registered, it secured a “lien and charge” on a debtor’s lands. By its terms, s. 93 of the Land Titles Act, R.S.O. 1990, c. L.5 gave the “charge” priority over any unregistered interests in the land.

Trang v. Nguyen, 2012 ONCA 885Areas of Law: Income Tax; Tax Liens; Priorities

BACKGROUND

~Unregistered equitable interests in real property having priority over tax lien~







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Trang v. Nguyen, (cont.)

APPELLATE DECISION

The appeal was dismissed. The main issue in this appeal was whether

an unregistered equitable interest takes priority over a lien registered by the Canada Revenue Agency against a taxpayer’s real property. A voluntary act on the part of the landowner is necessary to create a charge under s. 93 of the Land Titles Act. As the CRA’s liens were created by statute rather than by the voluntary act of the landowner, they do not qualify as a “charge” within the meaning of s. 93 of

the Land Titles Act. The provisions of the various Ontario tax collections statutes on which the CRA relied contain their own priority provisions. The priority they create is not the same as the priority created under s. 93 of the Land Titles Act. Accordingly, the Legislature did not intend to create “a charge” within the meaning of the Land Titles Act when it enacted the various tax collection provisions on which the CRA relied.




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In the October 25, 2010, municipal election conducted pursuant to the

Municipal Elections Act, 1996, S.O. 1996, c. 32 (“MEA”), appellant by way of cross-appeal Maria Augimeri defeated the appellant Agustine G. Cusimano by a plurality of 89 votes. Cusimano contested the validity of Augimeri’s election, chiefly on the basis of irregularities contained in the “Voters’ List Change Request Forms” (“VLCRFs”). VLCRFs are used when a person’s name is not on the voters’ list for a particular ward. An election official, having verified that identification was provided and the form was properly completed, will then add his or her signature to the end of the VLCRF and provide the voter with a ballot. In the Ward 9 election, 275 VLCRFs used to add voters to the voters’ list were submitted without an election official’s signature, though each contained a signed declaration of the voter attesting to his entitlement to vote. Cusimano applied to the Superior Court to determine

the validity of the election pursuant to s. 83(1) of the MEA. Cusimano submitted that, in order to comply with the statutory requirement that the clerk “endorse the application,” the election officials processing the VLCRFs were required to place their signatures on each submitted form. Their failure to do so amounted to an irregularity that provided a basis for annulling the election in Ward 9 and ordering a new one. The application judge declared the Ward 9 election invalid and ordered a by-election. The respondent City of Toronto appealed the application judge’s order to the Divisional Court. Maria Augimeri was granted leave to join as a party to the appeal. Dambrot J., writing for the court, allowed the appeal, declared the Ward 9 election valid, and set aside the application judge’s order for a by-election. Following the Divisional Court’s decision, the Supreme Court of Canada released its reasons in Opitz v. Wrzesnewskyj, 2012 SCC 55, a case analogous to the present case. Cusimano appealed the Divisional Court decision.

Cusimano v. Toronto (City), 2012 ONCA 907Areas of Law: Municipal Law; Elections; Procedural Irregularities

BACKGROUND

~Municipal election not invalidated by procedural irregularity in documents filed by voters~







February 2013


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Cusimano v. Toronto, (cont.)

APPELLATE DECISION

The appeal was dismissed. Applying the specific wording of the

MEA and the substantive approach endorsed in Opitz, the omission of the election official’s signature on the 275 VLCRFs did not compromise the voter’s underlying entitlement to vote. The irregularity in the present case was a procedural irregularity described in s. 83(7) of the MEA. Section 83(6) of the MEA provides that a procedural irregularity described in s. 83(7) will not invalidate an election so long as (a) the irregularity did not affect the result; and (b) the election was conducted in accordance with the principles of the MEA. The 275 ballots represented by those VLCRFs should not be discounted, as the procedural irregularities in issue did not “affect the result of the election.” The affidavits of the election officials and the declarations filed by the voters, taken together, can properly be used in the circumstances of the present case to conclude that it was likely that only entitled electors voted and, therefore, that the result of the election was not affected by the omitted signatures. In Opitz, the Supreme Court of Canada dealt with a challenge to the validity of an election under the Canada Elections Act, S.C. 2000, c. 9. A number of voter declaration forms in Opitz, which were

functionally equivalent to VLCRFs, were not signed by the voter, but were signed by the election official. The Supreme Court declared the election valid, holding that procedural requirements should not trump the substantive right to vote. The Supreme Court discussed the two approaches historically taken to determining when irregularities will justify invalidating an election. The procedural approach requires the court to discount any vote cast where there was a failure to comply with procedural steps set out in the governing act aimed at establishing an individual’s entitlement to vote. The substantive approach looks beyond procedural non-compliance and emphasizes the purpose of an election statute - to enfranchise all persons entitled to vote and to allow them to express their democratic preferences. The Supreme Court inclined toward the substantive approach, since it focused on the underlying right to vote, not merely on the procedures used to facilitate and protect that right.




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“Justice Karen Weiler of the Ontario Court of

Appeal called this case “truly extraordinary”. It involved the interpretation of various sections of the Municipal Elections Act (“MEA”) which “was of great importance to all municipal elections in Ontario.”

Here’s why, along with some other (hopefully) interesting background and consequences. My client, incumbent city councillor Maria Augimeri, was the election day winner and the ultimate victor in the courts as well.

The Decision

On its face, the Court of Appeal unanimously (3-0) upheld a unanimous decision (3-0) of the Ontario Divisional Court, which overturned the initial Superior Court decision which had declared a municipal election for City Councillor invalid.

COUNSEL COMMENTS Cusimano v. Toronto (City), 2012 ONCA 907

The basis for the declaration of invalidity of the election in the first place was the failure of the election officials to sign forms which voters had submitted on election day to be added to the voters list and

obtain a ballot. The voters list change request forms (VLCRFs) in question were all signed by the voters themselves, who declared that they were Canadian citizens, 18 years of age, and entitled to vote. At first instance, the Superior Court Judge hearing the Application ruled that notwithstanding the signed voter declarations, the lack of election officials’ signatures on the VLCRFs was a procedural irregularity which could not be saved by the curative provisions of the MEA.

The Legal Issue

Form over substance? Should the ballots of voters who had done everything they could, be nullified by the admitted failure of an election day official to sign a form, in the context of thousands of VLCRFs

Comments provided by Julian Heller, Counsel for the Respondent/Appellant by way of cross-appeal, Maria Augimeri


February 2013


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COUNSEL COMMENTS, Cont.submitted across the City of Toronto, and no positive evidence that the voters were in fact not entitled to vote.

The Supreme Court of Canada weighs in in Opitz v. Wrzesnewskyj

After the Divisional Court decision was released, and just before the hearing of the Court of Appeal in Cusimano, the Supreme Court of Canada rendered its decision in the contested federal election case Opitz v. Wrzesnewskyj arising from the riding of Etobicoke Centre in Toronto. Although the procedural irregularities were different (in that the parties in Opitz had conceded that the mere lack of election official signatures was not enough to invalidate the ballots), the Supreme Court of Canada in a 4-3 majority decision upheld the validity of the Etobicoke Centre election, and adapted what it called the substantive approach to such issues, over the procedural approach endorsed by the minority (which included Chief Justice McLaughlin).

Legal Conclusion

The courts will look to the substantive question of whether the voters who cast their ballots were in fact entitled to vote. “Procedural requirements should not trump the substantive right to vote”. Methods, forms and processes designed to facilitate voters who fulfill the basic eligibility requirements of citizenship, age, and residency, to vote, should not be allowed to block the fundamental right to cast a ballot. The entitlement to vote is not restricted or qualified by later legislative provisions regulating how that right is to be exercised on a practical level.

Other Legal Lessons Learned

Evidence

The Court of Appeal reversed the Divisional Court on the admissibility of after-acquired evidence tendered by my client Augimeri, and accepted evidence gathered by Augimeri after the election that showed that the voters in question were eligible to vote. Augimeri had not been named a party at first instance, so




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COUNSEL COMMENTS, Cont.the evidence was not only allowed to supplement the evidence available as of election day (sworn declarations were obtained more than 6 months after the election itself ), but the evidence was admitted after the first court hearing, once Augimeri moved to be added as a party at the Divisional Court stage.

Costs

Contested election and recount cases have historically generally awarded costs to both winning and losing candidates, and require the municipality or other government level or agent to bear the costs burden as the price of democracy. Cases have awarded costs on both substantial or partial indemnity bases. Legislative changes have cast some doubt on this norm, and as a result of both the Supreme Court of Canada decision in Opitz and the Court of Appeal decision in Cusimano, parties can no longer count on that being the case. Although the City of Toronto was required to pay both Augimeri and Cusimano’s costs (apart from some costs awarded to Augimeri directly from Cusimano due to Cusimano’s unwarranted opposition to Augimeri’s motion to intervene as a party) despite having been found blameless, the court has issued a clear alert for future cases “…on a go forward basis, when the validity of an election is challenged on account of procedural errors rather than misconduct, the City adopts a position of neutrality, and there is no indication that the parties do not have the necessary resources to bear their own costs, the parties can generally expect to bear their own costs”.

Political Consequences

It will be harder to challenge close election results. Given the practical impossibility of ensuring administrative perfection in running municipal, provincial, or federal elections, the courts have made it legally and financially more difficult to overturn election results.

That being said, problems with the accuracy of voters’ lists, and the potential for voter suppression, make this an important area for continued judicial oversight and ongoing legislative reform.


February 2013


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COUNSEL COMMENTS, Cont.Lastly, the reduction of costs recovery options, coupled with fundraising restrictions under the MEA in Ontario, render less affluent candidates subject to the possible effect of intimidation by litigation by wealthier opponents.

The strength of our democracy depends on ensuring that while legitimate challenges to election day results are possible, they are not open to abuse.”




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“The substantive approach set out by the Supreme Court

in Opitz v. Wrzesnewskyj and applied by the Court of Appeal in Cusimano clarifies the circumstances in which an applicant can challenge the results of an election on the basis of administrative or procedural errors that occurred in the conduct of the election. An election will only be overturned where the irregularities in question permitted individuals to vote who were not entitled to do so in numbers exceeding the margin of victory of the successful candidate.

The type of saving provision interpreted by the courts in Cusimano and Opitz is found in many, if not all, elections statutes across Canada at the federal, provincial and municipal levels. The

COUNSEL COMMENTS, Cont. Cusimano v. Toronto (City), 2012 ONCA 907

guidance provided by the courts in these decisions places a heavy burden on a party challenging the conduct of an election and will likely make litigation of this nature less common in the future.

Central to the substantive approach endorsed by the court is an understanding that elections are extraordinarily complex undertakings. This is particularly true for elections conducted under the Municipal Elections Act, where voters are electing three representatives: a mayor, a local councillor and a school board trustee for one of four school boards. The 2010 City of Toronto municipal election required the City Clerk to hire and train 11, 262 people over and above its permanent elections staff, most of whom were hired to work for only one day.

Technical or procedural irregularities are inevitable given the scale, complexity and pace of a modern election. A strict procedural approach that discounted any vote cast absent absolute compliance with voting procedures would impose a standard of perfection on election officials

Comments provided by Timothy Carre, Counsel for the Respondent/Respondent by way of cross-appeal, City of Toronto

Timothy Carre


February 2013


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COUNSEL COMMENTS, Cont.that would be impossible to achieve. In turn, such an approach would make a decision to challenge the conduct of an election practically automatic for an unsuccessful candidate in a close race.

Instead, the courts have focused the analysis on the fundamental prerequisites that establish entitlement to vote: age, citizenship and residence. This approach is consistent with two fundamental principles of Canadian elections: that the proper majority vote decides an election and that every effort should be made to enfranchise entitled voters.

The substantive approach also recognizes that a by-election held months or years after election day is an imperfect remedy to be employed only when absolutely necessary. As noted by the Divisional Court in Cusimano, a by-election is an entirely different election from the one it replaces. The availability of this remedy cannot serve to lessen the significance of setting aside an election.

The onus of establishing that votes were cast by individuals not possessing the necessary age, citizenship and residency qualifications rests on the applicant; however, a court is entitled to rely on any available evidence in making this determination. The evidence in this case included a description of the City Clerk’s program for training election officials and administering elections, compelling signed voter declarations on the impugned forms themselves regarding age, citizenship and residency, and direct evidence from a number of election officials who worked with the forms in question on voting day.

The Court of Appeal also provided guidance regarding costs that will be useful to election authorities going forward. In the future, where there has been no misconduct on the part of the election authority and the authority adopts a neutral role in the litigation, the parties can expect to bear their own costs. Such a role should not prohibit an election authority from responding to a court application by submitting relevant evidence and providing the court with assistance on the applicable legal principles.”




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Martin v. 2064324 Ontario Inc. (Freeze Night Club), 2013 ONCA 19Areas of Law: Insurance Law: Statutory Accident Benefits; Use or Operation of Motor Vehicle

BACKGROUND

~Carjacking-related injuries not caused by use or operation of motor vehicle~

The respondent Paul Martin was a part-time audio technician.

At approximately 2:20 a.m. on April 23, 2005, as he was loading his car in a parking lot after finishing work at a Toronto night club, a man approached him and asked if he had any cigarettes. When Martin replied that he did not, the man pushed Martin up against his own vehicle. A second man approached Martin from behind and put what Martin believed to be a gun to the back of Martin’s neck. The two assailants sprayed Martin with pepper spray, pushed him to the ground while they searched him for money and valuables, and eventually forced him into the trunk of his car. The assailants attempted to drive away in Martin’s car, while Martin was still in the trunk. However, when they had difficulty working the car’s standard transmission, they forced Martin into the front seat of the car, demanding that he assist them with shifting the gears. The two thugs then drove to another

parking lot, forced Martin out of the car, and again assaulted him by pushing his head to the ground and kicking his chest and side. After being removed from his car, Martin was pushed, struck on the chest and side, and again pepper sprayed. In a further act of gratuitous violence, his fingers were broken with a blunt object and his car was driven over his right foot by his fleeing assailants. The perpetrators got back into Martin’s car, leaving


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Martin v. 2064324 Ontario Inc., (cont.)

Martin on the ground, and drove off. After about 15 or 20 minutes, Martin found running water and was able to rinse the pepper spray from his eyes. When he noticed his car parked nearby, he drove to a hotel. The police and an ambulance were called, and Martin was taken to the hospital. Martin’s car was insured by the appellant Certas Direct Insurance Company (“Certas”) under a standard motor vehicle liability insurance policy. After the assaults, Martin submitted claims to Certas for Statutory Accident Benefits (“SABs”) and for indemnity under the unidentified, uninsured and underinsured coverage provisions of the policy. Certas denied the claims. Martin sued Certas. Certas denied that Martin was involved in an “accident” as defined under s. 2(1) of the Statutory

Accident Benefits Schedule – Accidents on or after November 1, 1996 under O. Reg. 403/96 (“1996 Schedule”); and further denied that Martin’s injuries were caused by the use or operation of an automobile, within the meaning of s. 239(1)(a) of the Insurance Act, R.S.O. 1990, c. I.8 (“Act”). In November 2010, Certas moved for summary judgment in the form of an order dismissing the action as against it. By order dated December 5, 2011, the motion judge denied Certas’s motion and granted declarations that Martin was injured as a result of an “accident”, as defined in the 1996 Schedule, and that his injuries arose directly or indirectly from the use or operation of his automobile, as contemplated in s. 239(1)(a) of the Act. Certas appealed.




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Martin v. 2064324 Ontario Inc., (cont.)

APPELLATE DECISION

The appeal was allowed in part. At the time of the assaults on Martin,

s. 2(1) of the 1996 Schedule defined the word “accident”, in part, as “an incident in which the use or operation of an automobile directly causes an impairment”. Section 239(1) of the Act, which deals with indemnity coverage under the standard form of motor vehicle liability insurance policy in use in Ontario, provides in part that coverage extends to accidents “arising from the ownership or directly or indirectly from the use or operation of any such automobile”. Although the motion judge concluded that Martin’s vehicle was “part of the instrumentality through which the assaults were committed”, there was a strong argument that Martin’s car was nothing more than the venue where many of the assaults occurred. The Ontario Court of Appeal in Greenhalgh v. ING Halifax Insurance Co. (2004), 72 O.R. (3d) 338, leave to appeal to S.C.C. refused, [2004] S.C.C.A. No. 461, established a two-part test to assess causation: (1) Was the use or operation of the vehicle a cause of the injuries; and (2) If the use or operation of a vehicle was a cause of the injuries, was there an intervening act or intervening acts that resulted in the injuries that cannot be said to be part of the “ordinary course of things”? The motion judge failed to address and apply the

second branch of this modified causation test. The failure to do so was an appealable error. Based on the evidence before the motion judge, there was a strong argument that the injury sustained by Martin to his right foot was directly caused by the use or operation of his vehicle, that is, by an “accident” within the meaning of s. 2(1) of the 1996 Schedule. In contrast to Martin’s other injuries, the direct cause of the injury to Martin’s right foot was the operation of the car itself. As a result, Martin’s claims with respect to his right foot injuries may proceed to trial.


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Steen v. Islamic Republic of Iran, 2013 ONCA 30Areas of Law: International Law: State Immunity; Jus Cogens

BACKGROUND

~US civil judgments against Iranian authorities for kidnappings not enforceable in Ontario by virtue of State Immunity Act~

Between 1982 and 1988, Iran directed the kidnapping and

detention of 18 American citizens in Beirut, Lebanon, for the purpose of collecting a ransom. Appellants Alann Steen and David Jacobson were two of the individuals kidnapped. Both were detained for an extended period of time, kept in inhumane conditions, and subjected to mental and physical abuse. Alann Steen and his wife, Virginia Steen, sued the respondents the Islamic Republic of Iran, Iranian Ministry of Information and Security, and Iranian Revolutionary Guard in the United States District Court for the District of Columbia for damages arising out of Mr. Steen’s captivity. The respondents did not appear. On July 31, 2003, the court awarded a judgment of US$342,750,000 against the respondents. David Jacobsen’s children, Eric, Paul and Diane, and his sister, Doris Fisher, sued the respondents in the same court for damages arising out of David Jacobson’s captivity. Again, the respondents did not appear. On October 6, 2006, the court awarded

a judgment totalling US$6,400,000 against the respondents. These judgments have not been satisfied in the United States and the appellants commenced an action in Ontario seeking to enforce them. The respondents moved under rule 21.01(2) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, to dismiss this action on the basis that they are immune from the jurisdiction of any court in Canada pursuant to s. 3(1) of the State Immunity Act, R.S.C. 1985, c. S-18 (“SIA”). This provision reads: “Except as provided by this Act, a foreign state is immune from the jurisdiction of any court in Canada.” Justice Katherine B. Corrick of the Superior Court of Justice, dated November 1, 2011, granted the respondents’ motion. The motion judge held that kidnapping and detention did not constitute “commercial activity” under the SIA and therefore the exception under s. 5 did not apply. Following the Court of Appeal’s decision in Bouzari v. Iran (2004), 71 O.R. (3d) 675, the motion judge also concluded that the SIA was a complete code that permitted no common law exceptions. Steen and Jacobson appealed.








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Steen v. Islamic Republic of Iran, (cont.)

APPELLATE DECISION

The appeal was dismissed. The motion judge did not err in stating that the exchange of human beings for weapons and money did not fall within the

ordinary meaning of commercial activity in s. 5 of the SIA. A mere nexus to commercial activity is insufficient to invoke the exception. Rather, the nature of the acts for which relief is sought – in this case kidnapping, detention and torture – must be commercial. The language in s. 3(1) of the SIA is clear and does not permit the application of a common law exception to state immunity. The appellants also argued on the basis of the concept of jus cogens, contending that the motion judge erred in failing to conclude that the respondents lost their entitlement to sovereign immunity because their acts were in violation of peremptory norms of international law. This argument also fails. Peremptory norms of international law, or jus cogens, are higher forms of customary international law from which no derogation is permitted. The appellants’ contention that customary international law has developed to recognize an exception for state immunity where violations of jus cogens norms are alleged is contrary to the Court of Appeal’s conclusion in Bouzari v. Iran (2004), 71 O.R. (3d) 675, and the more recent decisions of the majority of the International Court of Justice in Jurisdictional Immunities of the State (Germany v. Italy: Greece Intervening), and the Quebec Court of Appeal in Islamic Republic of Iran v. Hashemi, 2012 QCCA 1449.


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“The appeal court was packed. The Jacobsen and Steen

families flew in from California. My 88 year old mother, Bertha Arnold, a long-time supporter and human rights activist flew in from Winnipeg to watch and give support. My wife, Joyce Weinman and son, Jonah Arnold, both lawyers sat behind me trying their best not to sigh or applaud. Everyone understood the hope; that something significant was about to happen!

Our mission was to enforce in Canada two prior American Judgments against the Islamic Republic of Iran obtained under the American “state sponsor of terrorism” exception to state immunity arising from the kidnapping, detention and ransoming of two Americans, Alann Steen and

COUNSEL COMMENTS Steen v. Islamic Republic of Iran, 2013 ONCA 30

David Jacobsen. We had submitted that because both the nature and purpose of those cruel deeds was fundamentally commercial, Iran could not benefit from sovereign immunity under Canadian law. Our claim for enforcement had been dismissed by the lower court on the basis of jurisdiction and state immunity under Rule 21, despite the fact that in such a motion, pleaded facts are always deemed to be true.

Section 2 of the State Immunity Act (SIA) defines commercial activity to mean “any particular transaction, act or conduct or any regular course of conduct that by reason of its nature is of a commercial character.” Re Canada Labour Code,[1992] 2 S.C.R. 50, created a common law add on to that statutory definition to include the word purpose. Section 5 of the SIA provided that “a foreign state is not immune from the jurisdiction of the court in any proceedings that relate to any commercial activity of the foreign state.”

We were trying to persuade the appeal court that kidnapping, detention and ransoming of human beings in exchange for billions of American dollars and missiles was by its very nature and

Comments provided by Mark H. Arnold, Counsel for the Steen and Jacobsen families, the Appellants/Respondents by way of cross-appeal

Mark H. Arnold




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COUNSEL COMMENTS, Cont.purpose, in light of the geo-political events of the day, related to a commercial activity.

As we dug deeper into the teeth of the argument, the President of the Panel, Justice Warren Winkler, leaned forward and in his usual gentle style asked the critical and decisive question:

Counsel…if someone stole my dog, Maggie, and I got a note that said “pay me $100 by noon or you will never see her again”…and I paid it…isn’t that a commercial activity?

I turned to my co-counsel, Francois LaRoque and whispered, “he got it” and I held my breath…for eight long months and then the Decision came down and I finally exhaled.

If they got it, which I think they did, their Decision reflected the opposite. In dismissing the appeal, the court simply agreed with the decision of the lower court judge who felt uncomfortably bound to apply a prior appeal decision, Bouzari v Iran (2004), 71 O.R. (3d) 675(C.A), to the effect that the nature of the act of kidnapping, detention and torture must be commercial for the commercial activity exception to state immunity to apply.

But we never pleaded or argued that the nature of kidnapping and detention per se, was a commercial activity. We submitted that when the nature (SIA, s.2) and purpose (Re Canada Labour Code) of those acts were analyzed within their entire factual context there could be only one logical conclusion; that the entire episode “related to a commercial activity” (SIA,s.5) of the Islamic Republic of Iran and that the commercial activity exception to state immunity applied.

We also urged the court to apply a recent decision of the Supreme Court of Canada in Kuwait Airways Corp v Iraq [2010] 2 S.C.R. 571. In that case, within the context of the 1992 Iraq/Kuwait war, the court made a factual distinction between the seizure of Kuwait’s commercial aircraft by Iraq as a sovereign act of state to which state immunity applied and the retention and use of those aircraft by Iraq as a commercial act to which state immunity did not apply. We submitted that our facts were “better”. The kidnapping of Steen and Jacobsen could not


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COUNSEL COMMENTS, Cont.possibly be considered the sovereign act of Iran because it took place in Lebanon, at the hands of the Lebanese group Hezbollah and was carried out by private persons and not state officials. We further argued that because our clients were detained in private dungeons, not state prisons and then ransomed back to their homes in America for money and weapons, that the commercial activity exception to state immunity applied.

In its decision, the court made passing reference to Kuwait Airways but only on the issue whether common law exceptions survived the SIA. The court made no reference to Re Canada Labour Code. Instead, the court applied its own prior jurisprudence in Bouzari without any attempt to distinguish the unique facts of that case from the case at bar.

In dismissing the appeal, the court made reference to a new legislative regime; the Justice for Victims of Terrorism Act, S.C. 2012, c.1 s.2, amendments to the SIA and Regulation SOR/2012-170,s.2. The combined new regime denies immunity to states that support terrorism and who are included on a list of such countries. That list now includes Iran and Syria and brings Canadian law into line with American law. The case of Steen and Jacobsen has now been re-issued and served under the new legal regime. Iran has failed to defend and has been noted in default. A motion for default judgment has been scheduled for the early Spring.

This case is the third in a triumvirate of international humanitarian law cases where I have acted as counsel for victims of serious provable violations of peremptory norms of international law (jus cogens). In all three cases our courts have failed to protect the right of victims to be free of such abuses. In fact, there are few cases in international law where courts have protected victims of jus cogens violations. Analysis of the judicial mind and the reluctance of judges to exercise their discretion to rule in favour of victims of such violations is beyond the scope of this case comment so we are left with the unanswered question; why do our courts have so much difficulty understanding and applying principles of jus cogens in the face of provable evidence of such violations?

But it is not that judges are without sympathy or compassion. In a moving gesture just before our panel rose for the day, Justice Winkler spoke directly to the Steen and Jacobsen families, expressed his deep regret and that of the court for their ordeal and wished them well.”




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Appellant Robert Ford had served on Toronto City Council for over 12

years. He was elected Mayor of Toronto in 2010. Section 157(1) of The City of Toronto Act, 2006, S.O. 2006, c. 11, Schedule A (“COTA”) requires the City to establish codes of conduct for members of city council and of local boards. The Integrity Commissioner, in a report dated August 12, 2010, found that Ford, as a member of Council, breached three articles of the City of Toronto’s Code of Conduct (“Code”) dealing with gifts and benefits, use of city property, services and resources and improper use of influence. These allegations arose because of Ford’s use of the City of Toronto logo, City staff, and his status as councilor to solicit funds for a charitable foundation, the Rob Ford Football Foundation, which he had established to fund the purchase of football equipment for high school football teams. The Integrity Commissioner recommended that Ford repay donations received from lobbyists and a corporation engaged in business with the City in the amount of $3,150.00. The report was tabled at a City Council meeting on August 25, 2010, and approved without debate. As a result, City Council adopted the finding of the Integrity Commissioner that Ford had violated three provisions of the Code and adopted the recommendation respecting

sanction, with the added requirement that Ford provide proof of reimbursement to the Integrity Commissioner (“Decision CC 52.1”). After a number of attempts to obtain information about Mr. Ford’s compliance with Decision CC 52.1, the Integrity Commissioner issued a report on compliance dated January 30, 2012. Before a vote on the Integrity Commissioner’s compliance report at City Counsel on February 7, 2012, Councillor Ainslie made a motion to rescind Council’s Decision CC 52.1. Ford did not speak to this motion, although he voted in favour of it. The motion passed, with the result that Decision CC 52.1 was rescinded, and Ford was no longer required to repay any money to donors. Ford’s participation in the February 7, 2012, meeting of Council led the respondent, Paul Magder, to initiate an application under the Municipal Conflict of Interest Act, R.S.O. 1990, c. M.50 (“MCIA”). The application judge found that Ford had violated s. 5(1) of the MCIA by speaking and voting in the meeting. He concluded that s. 4(k) did not exempt the conduct, as the amount in issue was not insignificant. He also concluded that s. 10(2) did not provide a defense, as Ford had not committed a bona fide error in judgment. Rather, he had been wilfully blind as to his obligations under the MCIA. The application judge declared Ford’s post as Mayor vacant, although he imposed no further period of disqualification. Ford appealed to the Ontario Superior Court of Justice, Divisional Court.

BONUS DECISION Magder v. Ford, 2013 ONSC 263Areas of Law: Municipal Law; Conflict of Interest

BACKGROUND

~Toronto Mayor Rob Ford wins appeal on Municipal Conflict of Interest Act disqualification hearing; City Council sanction that Ford reimburse donors ruled ultra vires~



http://canlii.ca/t/fvsgj




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Magder v. Ford, (cont.)

The appeal was allowed. Ford did not contravene s. 5(1) of the MCIA

because the financial sanction imposed by Decision CC 52.1 was not authorized by COTA or the Code. Section 160(5) of the COTA permits Council to “impose either of the following penalties”, a reprimand or a suspension of remuneration, if the Integrity Commissioner reports that a member has contravened the Code. In Decision CC 52.1, City Council ordered Ford to pay monies to certain donors when he had never received such monies personally. While the application judge called the reimbursement obligation a remedial measure, it was in reality a penalty imposed on Ford. Subsection 160(5) of the COTA sets out a clear limit on the sanctions that Council can impose for a violation of the Code. Consistent with what the Supreme Court has indicated in cases like 114957 Canada Ltée (Spraytech, Société d’arrosage) v. Hudson (Town), [2001] 2 S.C.R. 241 and Montréal (City) v. 2952-1366 Québec Inc., [2005] 3 S.C.R. 141, it is inappropriate to invoke a general power found elsewhere in the COTA to extend the specific power conferred by the Legislature in s. 160(5). Subsection 6(1) of the COTA, the instruction to interpret the powers of the City broadly, did not permit the impugned sanction, given the clear limits in s. 160(5). As a result, the application judge erred in failing to find that Decision CC 52.1 was ultra vires by

imposing a sanction not authorized by the COTA. Given that the imposition of the financial sanction under Decision CC 52.1 was a nullity because Council did not have the jurisdiction to impose such a penalty, Ford had no pecuniary interest in the matter on which he voted at Council on February 7, 2012 - namely, the revocation of the Decision CC 52.1.

APPELLATE DECISION


Ontario Take Five Feb 2013

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Transcript of Ontario Take Five Feb 2013