I INTRODUCTION TO THE DISPUTE RESOLUTION FRAMEWORK

Canada’s system of government is divided into three distinct branches: the judiciary, the legislature and the executive. The legislature (Parliament) has the power to make, alter and repeal laws. The executive branch is responsible for administering and enforcing the laws. The judiciary resolves disputes by applying and interpreting the law.

Canada has a bi-jural legal system, meaning that two legal traditions co-exist – civil law in Quebec, and common law in the other nine provinces and all three territories. The main difference between these systems is that in Quebec the private law has been codified and can be found in the Civil Code of Quebec2 (the Civil Code). The Civil Code contains a statement of rules that are designed to deal with any dispute that may arise. In Quebec, unlike in the common law provinces and territories, judges first look to the Civil Code, and then refer to previous court decisions to help properly interpret the Civil Code’s provisions.

There are different levels and types of court in Canada – provincial and territorial courts, superior courts, courts of appeal and federal courts. The federal courts have limited jurisdiction to hear claims in certain federally regulated areas such as immigration and refugee law, navigation and shipping, intellectual property and tax. They can also deal with matters of national defence, security and international relations.

The provincial and territorial courts are comprised of a first-level trial court, which handles civil matters up to a certain threshold, a superior court, which is a court of general or inherent jurisdiction and is referred to as either the Superior Court, the Supreme Court or the Court of Queen’s Bench, depending on the province or territory, and an appellate court. These courts are arranged in a hierarchy, with the trial courts being subordinate to the appellate courts.

The Supreme Court of Canada is the final court of appeal from all other Canadian courts. It has nine judges and sits in Ottawa, Canada’s capital. Both the Supreme Court of Canada and the Federal Court deal with matters in both civil and common law.

Administrative tribunals run parallel to the provincial or territorial and federal court systems. These specialised bodies are created by statute and focus on particular matters of law, including employment insurance, labour relations, human rights and workers’ compensation. These tribunals are not part of the court system; however, it is possible to appeal a tribunal’s decision to the courts through a process called ‘judicial review’.

Private arbitration and mediation as a form of dispute resolution are also available and becoming increasingly popular in Canada. There are many organisations specialised in alternative dispute resolution, and qualified arbitrators and mediators can easily be found throughout the country. Most provinces now require certain alternative dispute resolution procedures (such as mandatory settlement conferences) as a part of the judicial process.

II THE YEAR IN REVIEW

This past year has brought exciting new legal developments in Canada. The following provides a brief overview of some of the most significant legal disputes recently adjudicated throughout the country.

i Canada (Attorney General) v. Fairmont Hotels Inc

In Canada (Attorney General) v. Fairmont Hotels Inc,3 the Supreme Court ruled that rectification is not available where the basis for seeking it is that one or both of the parties wish to amend not the instrument recording their agreement but the agreement itself. Rather, rectification is limited to situations where a written instrument has incorrectly recorded the parties’ antecedent agreement. In the context of tax planning, general intent to achieve tax neutrality is not enough to support a grant of rectification.

ii Mennillo v. Intramodal Inc

In Mennillo v. Intramodal Inc,4 the Supreme Court held that the fact that a corporation fails to comply with the requirements of the Canada Business Corporations Act (CBCA) does not, on its own, constitute oppression. Oppression can only be found when reasonable expectations are frustrated, and not simply when conduct is contrary to the CBCA.

iii Wilson v. Atomic Energy of Canada Ltd

In Wilson v. Atomic Energy of Canada Ltd,5 the Supreme Court held that employees under collective agreements can only be dismissed for just cause. This remains the case regardless of whether a generous dismissal package is offered to the employee by the employer.

iii Lizotte v. Aviva Insurance Company of Canada

In Lizotte v. Aviva Insurance Company of Canada,6 the Supreme Court confirmed that litigation privilege is a distinct class of privilege and that no balancing of interests is required to determine whether or not litigation privilege applies, provided the party claiming privilege can show the dominant purpose of the protected material was to prepare for litigation. The court also held that litigation privilege can be asserted against third parties as well as parties to the litigation.

iv Nortel Networks Corporation (Re)

In Nortel Networks Corporation (Re),7 the Ontario Court of Appeal upheld the decision of the Ontario Superior Court of Justice (which was reached as a result of a joint trial held with the Delaware Bankruptcy Court) to allocate the assets of the insolvent Nortel debtor estates on a pro rata basis based upon each estate’s accepted quantum of creditor claims. The court held that such a pro rata allocation did not ignore the separateness of Nortel’s component companies and that it was a fair and non-arbitrary method of allocating the Nortel debtor estates’ assets.

v Smoothwater Capital Corporation v. Marquee Energy Ltd

In Smoothwater Capital Corporation v. Marquee Energy Ltd,8 the Alberta Court of Appeal examined whether an arrangement of a company under the Business Corporations Act (Alberta) was fair and reasonable without a shareholder vote despite effectively amalgamating it with another company. The Court held that the test for fairness and reasonableness ought to be applied from the perspective of the company being arranged and that it is not bad faith to structure a transaction to avoid a shareholder vote. As the appellant held shares primarily in the company not being arranged, the Court found that there was no unfairness and the complainants were not entitled to vote.

vi Bank of Montreal v. Javed

In Bank of Montreal v. Javed,9 the Ontario Court of Appeal held that the doctrine of unconscionability in contract begins and ends with the agreement itself. The Court will not assess a party’s performance of their obligations when analysing whether or not a contract is unconscionable.

vii Shewchuk v. Blackmont Capital Inc

In Shewchuk v. Blackmont Capital Inc,10 the Ontario Court of Appeal clarified that evidence of parties’ conduct after a contract’s formation is not generally part of the factual matrix used for interpreting a contract. The factual matrix of a contract is limited to those facts existing at or before the date of contracting, and post-formation conduct should only be considered when the contract is ambiguous.

viii Novatrax International Inc v. Hagele Landtechnik GmbH

In Novatrax International Inc v. Hagele Landtechnik GmbH,11 the Ontario Court of Appeal addressed the circumstances in which forum selection clauses should be enforced. The Court affirmed the motion judge’s conclusion that the law favours the enforcement of forum selection clauses in both commercial contracts and tort claims arising from the contractual relationship. A party wishing to bring a claim contrary to a forum selection clause bears the onus of showing ‘strong cause’ that the case is exceptional and that the clause should not be enforced. Thus, the starting point for a forum non conveniens analysis is that the parties should be held to their bargain and the forum selection clause given full weight.

III COURT PROCEDURE

i Overview of court procedure

Each province and territory has enacted a distinct set of procedural rules governing practice within its courts.12 In addition, federal courts have their own rules of procedure. Practice directions are published by adjudicative bodies on an ongoing basis.

The Ontario Rules of Civil Procedure were recently revised with regard to automatic dismissal. As of 1 January 2017, matters commenced on or after 1 January 2012 will be automatically dismissed five years after they were commenced.13

Quebec introduced a new Code of Civil Procedure in December 2015.14 The new code has a strong focus on the principle of proportionality, requiring parties to ensure that each step in the proceedings is proportionate, in terms of the cost and time involved, to the nature and complexity of the matter.

In Canada, civil actions and proceedings are adversarial in nature. As such, the lawyer takes on the role of the advocate and the judge determines the case based on the evidence presented by the parties.

ii Procedures and time frames

The time within which a party must bring a claim is prescribed by each province. Several of the common law provinces, including Ontario, have adopted a basic limitation period of two years for claims in contract and tort, subject to discoverability.15 In addition to these prescribed limitation periods, a claim can be barred for delay by equitable doctrines such as laches or acquiescence in the common law provinces and territories.

In the first stage of litigation, the plaintiff initiates proceedings by delivering (i.e., serving and filing) an originating process (i.e., a notice of action, notice of civil claim (British Columbia) or statement of claim). The defendant must then respond, within a prescribed period. The prescribed period varies by province, and by the jurisdiction in which the defendant is served. If the defendant fails to deliver a statement of defence within the relevant amount of time, the claimant can obtain default judgment. Canadian pleadings are confined to a concise statement of the material facts of the case. A defendant may also file a counterclaim, cross-claim or third-party claim to join all necessary issues and parties.

Following the close of pleadings, the parties enter the ‘discovery’ stage. In this stage, the parties identify and exchange relevant documents and conduct examinations for discovery.

In all provinces and territories other than Quebec, a party can move for summary judgment at this stage. This allows for a claim to be expeditiously disposed of without a full trial. When faced with a motion for summary judgment, a judge must determine if there is a genuine issue requiring a trial. This determination is made by considering affidavit evidence, examination transcripts and, in some cases, oral testimony. As the Supreme Court of Canada recently explained, summary judgment should be used as a tool to achieve a necessary culture shift towards more efficient and affordable access to justice.16

Two types of injunction are available before trial in Canada: an interim injunction and an interlocutory injunction. An interim injunction can be obtained without prior notice to the other party and may be granted on the same day in urgent cases. This type of injunction is generally only granted for brief periods, lasting until an application for an interlocutory injunction is made. The interlocutory injunction serves to preserve the status quo or enjoin certain conduct until a final determination of the parties’ rights is rendered. Courts also have the power to order the interim preservation of property prior to a trial.

The third and final stage of litigation is the trial. Most Canadian civil matters are tried before a judge alone. Counsel provide the judge with an overview of the case in their opening statements, and the plaintiff then presents its evidence. This may involve calling witnesses to testify or presenting documentary evidence. Opposing counsel then has the opportunity to present its evidence. All witnesses are subject to cross-examination. The trial concludes with closing submissions from counsel.

iii Class actions

Each Canadian jurisdiction (with the exception of Prince Edward Island and the three territories) has adopted specific class proceedings legislation or amended their rules of court so as to recognise class proceedings and set out the fundamental rules governing collective relief on behalf of a class of litigants.17

The first step in commencing a class action involves filing a statement of claim or complaint, and then having the action ‘certified’ as a class proceeding. At the certification stage, the court applies the certification requirements set out under statute to assess whether the claims are suitable for a class. In making this determination, the court will consider whether:

  • a there was a common issue among the proposed class;
  • b the damages could be determined on an aggregate basis; and
  • c a class action is the preferable procedure.18

The general process for class certification is similar in Quebec, in that a representative must seek ‘authorisation’ of a class action under the Code of Civil Procedure as a first step in the proceeding.19

Recently, in Excalibur Special Opportunities LP v. Schwartz Levitsky Feldman LLP,20 the Ontario Court of Appeal clarified the test to be applied when considering whether to certify a national or global class. The court explained that an Ontario court need not approach the issue of taking jurisdiction in a restrained manner and that the test to determine whether to take jurisdiction over foreign class members begins with an inquiry into jurisdiction simpliciter.

Once the action is certified as a class proceeding, the claimant is designated as a ‘representative plaintiff’ and speaks on behalf of members of the class. Persons who fall within this defined class will be bound by the result of the class proceeding, unless they take steps to opt out of the class.21

Class actions are unique in terms of the high level of judicial supervision and case management throughout the proceeding. In addition, throughout the life of a class action, the court has the power to make any order it considers appropriate respecting the conduct of a class proceeding to ensure its fair and expeditious determination.

In the vast majority of cases, a class action will be settled before proceeding to trial. A class action that is not resolved by the parties will undergo a trial of the common issues. The same rules of procedure and evidence that apply to a regular civil trial apply to a class action proceeding. A final judgment on the merits in a class action is binding on all members of the class, other than those who have opted out.

iv Representation in proceedings

Every party has the right to be represented by a lawyer. However, individual litigants are not generally obliged to be represented by counsel, unless special circumstances render representation mandatory, such as a litigant who is under disability or who acts in a representative capacity. In most Canadian provinces, corporations must be represented by a lawyer, unless leave of the court is obtained.22

v Service out of the jurisdiction

Canadian courts have limited jurisdiction over parties who are not within the court’s territorial jurisdiction. However, expanded rules of service enable plaintiffs to serve a party outside the jurisdiction without leave of the court in certain circumstances. These circumstances involve some form of connection between the litigation and the jurisdiction where the plaintiff seeks to bring the case – for example, if the contract in dispute was made in that province or otherwise governed by the law of that province, or if a tort was committed or damages sustained within that province. In cases where these special circumstances do not exist, the court may grant leave to serve a party outside of the jurisdiction.

Normally, an originating process can be served outside Canada in the same manner as it can be served within the jurisdiction, pursuant to the rules of service in the jurisdiction where service is made, or pursuant to the Hague Convention on the Service Abroad of Extrajudicial Documents in Civil or Commercial Matters of 1965. With respect to natural persons, personal service is generally required. The rules of service will vary in cases where the party is not a natural person.

vi Enforcement of foreign judgments

Canadian courts have adopted a generous and liberal approach to the recognition and enforcement of foreign judgments.23 Enforcement of foreign judgments is a matter of provincial law. Judgments from the United Kingdom, for example, are recognised in certain provinces through a bilateral convention between Canada and the United Kingdom. If no such statutory recognition of judgments exists, the common law may serve as an alternative method for enforcing a foreign judgment.

The foreign judgment must be final and dispositive to be enforced in Canada. The judgment must have originated from a court that had jurisdiction under the principles of private international law as applied by Canadian courts and be for a definite and ascertainable sum of money; or if not a monetary judgment, its terms must be sufficiently clear and limited in scope. If the foreign judgment meets all of these criteria, it may nevertheless be denied enforcement if it:

  • a is based on a foreign penal, revenue or public law;
  • b was obtained by fraud;
  • c is contrary to natural justice; or
  • d violates public policy.24

Articles 3155 and following of the Civil Code govern the substantive rules applicable to the recognition and enforcement of foreign judgments by Quebec courts, and the procedural rules are governed by Articles 507 and 508 of the Code of Civil Procedure.25

In Canada, the enforcement of a judgment by one province in another province is considered to be the enforcement of a foreign judgment, although, in practice, Canadian courts will generally scrutinise the judgments of those issued in another Canadian province or territory with less rigour than they will scrutinise judgments coming from another country.

vii Assistance to foreign courts

When a litigant seeks to obtain evidence from a non-party Canadian resident for use in a proceeding outside Canada, they must do so by way of letters rogatory. In determining whether to give effect to such a request, a Canadian court will consider whether:

  • a the evidence sought is relevant;
  • b the evidence sought is necessary for trial and will be adduced at trial, if admissible;
  • c the evidence is not otherwise obtainable;
  • d the order sought is not contrary to public policy;
  • e the documents sought are identified with reasonable specificity; and
  • f the order sought is not unduly burdensome.26
viii Access to court files

Canada has an open court policy, meaning that; with certain limited exceptions, courts are open to the public. Courtroom access may be limited when it is not in the interests of justice to have a public hearing; for example, in the case of a proceeding involving trade secrets. Publication of court files and decisions are also generally made available to the public. It is possible, however, to obtain a publication ban in cases where such a ban is necessary to prevent a real and substantial risk to the fairness of the trial, and the salutary effects of the publication ban outweigh the deleterious effects to the free expression of those affected by the ban.27

ix Litigation funding

Recent Canadian case law suggests an increasing trend towards judicial acceptance of third-party litigation funding. In Fehr v. Sun Life Assurance Company of Canada,28 the Ontario Superior Court held that third-party funding agreements are not necessarily illegal on the grounds of champerty and maintenance. More recently, the Manitoba Court of Appeal confirmed the necessity of finding an improper motive when determining that an arrangement amounts to champerty or maintenance.29

IV LEGAL PRACTICE

i Conflicts of interest and ethical walls

The Canadian Bar Association defines a conflict of interest as an interest that gives rise to a substantial risk of material and adverse effect on the representation.30 The legal profession in Canada is largely self-regulated, and each provincial law society has a code of professional conduct outlining a lawyer’s duties with regard to avoiding and handling conflicts of interest.31 A court will, however, address claims of breach of fiduciary duty or conflicts if they are brought before it.

In Canadian National Railway Co v. McKercher LLP,32 the Supreme Court of Canada clarified the scope of the ‘bright-line’ rule that applies to conflicts of interest among current clients. This bright-line rule provides that a lawyer may not represent one client whose interests are directly adverse to the immediate interests of another current client – even if the two mandates are unrelated – unless both clients consent after receiving full disclosure and the lawyer reasonably believes that he or she is able to represent each client without adversely affecting the other.33 In McKercher, the Supreme Court held that the rule is engaged only where the immediate interests of clients are directly adverse in the matters on which the lawyer is acting, and that the rule does not apply in unrelated matters where it is unreasonable for a client to expect that its law firm will not act against it.

In some circumstances, ethical walls may be put in place to prevent the involved lawyer or lawyers (and staff) from being exposed to confidential information relating to a matter currently or previously handled by other lawyers or staff. Erecting ethical walls is a common practice in large Canadian law firms.

ii Money laundering, proceeds of crime and funds related to terrorism

The provincial law societies enforce specific requirements for verifying clients’ identities and specific practices when receiving funds over a certain monetary threshold. These professional regulations and ethical standards seek to ensure lawyers will not unknowingly assist in or turn a blind eye to money laundering or terrorism financing. Although the Proceeds of Crime (Money Laundering) and Terrorist Financing Act34 (PCTFA) regulates these issues with respect to other institutions such as banks and accounting firms, the Supreme Court of Canada recently confirmed that lawyers, notaries and law offices are exempt from the PCTFA’s record-keeping, client-identification and disclosure obligations.35

iii Data protection

The collection, use, disclosure and management of personal information in Canada is governed by the Federal Personal Information Protection and Electronic Document Act (PIPEDA). PIPEDA governs the inter-provincial and international collection, use and disclosure of personal information, and also applies to organisations that collect, use and disclose personal information during a commercial activity that takes place within a province. Certain provinces have enacted separate privacy statutes, which apply instead of PIPEDA.36

In addition, Canada has also enacted anti-spam legislation (Canada’s Anti-Spam Law (CASL)), which prohibits numerous technology related activities, including sending commercial electronic messages (CEMs) to an electronic address without consent. Foreign entities that communicate to Canadians should be aware that CASL applies to any CEM received by a computer system located in Canada. Accordingly, communications sent from outside the country may attract liability under CASL.

V DOCUMENTS AND THE PROTECTION OF PRIVILEGE

i Privilege

Canadian law generally requires all relevant and material evidence relating to the issues before a court to be disclosed to all parties. This requirement is subject to a number of exceptions in which Canadian law recognises that the public interest in preserving and encouraging particular confidential relationships justifies a departure from the general rule that all relevant and material evidence be disclosed. Canadian law allows for such communications to remain privileged and be exempt from disclosure.

Legal privilege is one of the most well-recognised privileges. By successfully invoking legal privilege, a person is entitled to resist the disclosure of information or the production of documents to which an opposing litigant would otherwise be entitled.37 Canadian law generally recognises two main categories of legal privilege: solicitor–client privilege and litigation privilege. Solicitor–client privilege, also known as legal advice privilege, prevents disclosure of information communicated to the lawyer for the purpose of obtaining legal advice, as well as information communicated to the client by the lawyer to give legal advice. Litigation privilege protects any documents or communications created for the dominant purpose of preparing for existing or anticipated litigation.

The Supreme Court of Canada recently released two decisions on privilege, both of which further demonstrate the court’s recognition of the fundamental role that both solicitor–client and litigation privilege play in ensuring access to justice.38

In Canada, both categories of legal privilege apply equally to the advice and activities of in-house lawyers and to the advice and activities of external lawyers. In R v. Campbell,39 the Supreme Court of Canada expressly endorsed the right of in-house counsel to claim privilege. The in-house designation did not affect ‘the creation or character of the privilege’.40 With respect to solicitor–client privilege, in-house lawyers must be acting in their capacity as legal advisors. A lawyer cannot assert this privilege over non-legal advice, for example, business advice given to a client.

At present, there is uncertainty surrounding the applicability of privilege to foreign lawyers. Although some cases have protected communication with a foreign lawyer in Canada regarding Canadian law even though the lawyer is not entitled to practise law in Canada, others have not. Whether legal advice regarding foreign law is protected if given outside Canada is also unclear. Traditionally, legal privilege has been characterised as a procedural matter for conflict-of-laws analysis, meaning that its existence will be governed by the law of the place in which the litigation occurs. Thus, even if the advice is not privileged in the foreign jurisdiction, it would still be protected in Canadian proceedings. However, the Supreme Court of Canada in R v. National Post 41 stated that legal advice privilege is a matter of substantive law, which would, under traditional conflict-of-laws rules, mean that its existence would be governed by foreign law. Such a characterisation would result in the risk of foreign legal advice provided outside Canada not being recognised in Canadian proceedings as privileged, depending on the particular laws of the foreign jurisdiction and the facts of the particular case.42

ii Production of documents

In Canada, the rules for documentary production are governed by each province’s rules of civil procedure or rules of court. The obligation of documentary disclosure in civil litigation is limited by the fact that only relevant documents must be disclosed. In most provinces, the rules governing the scope of disclosure provide that parties must disclose every document relating to or relevant to a matter in issue that is in their power, possession or control.43 The determination of what qualifies as ‘relevant’ varies slightly between provinces. Under the Federal Court Rules, a document is relevant if the party intends to rely on it or if the document tends to adversely affect the party’s case or to support another party’s case.44

Canadian courts generally apply a broad interpretation of the term ‘document’ to include sound recordings, videotapes, files, charts and data and information in electronic form. With respect to electronic documents, the principle of proportionality governs – the scope of electronic discovery depends on the necessity and availability of electronic evidence as balanced by the costs of retrieving, reviewing and producing that evidence.45

Only in exceptional circumstances will a person who is not party to the proceeding be ordered to produce documents for discovery. A court order is required to compel such production, and will only be granted in situations where it would be unfair to require the moving party to proceed to trial without having discovery of the documents in question. The following factors will be considered when making such a determination:

  • a the importance of the documents in the litigation;
  • b whether production at the discovery stage is necessary to avoid unfairness to the appellant; and
  • c whether the discovery of the defendants with respect to the issues to which the documents are relevant is adequate and, if not, whether responsibility for that inadequacy rests with the defendants.46

Parties are required to disclose and produce not only documents in their possession, but also those within their ‘control or power’. This includes documents that the party has the ability to obtain from others. In some jurisdictions, this production obligation extends to documents in the control of a subsidiary or parent companies of the litigant.47

VI ALTERNATIVES TO LITIGATION

i Overview of alternatives to litigation

Canada offers a wide variety of methods and procedures for arriving at a solution to a dispute other than a judicial decision. Some examples of these alternatives, each falling under the category of alternative dispute resolution, include negotiation, mediation, arbitration (and hybrid procedures like med-arb) and expert determination.

ii Arbitration

Each jurisdiction in Canada has enacted legislation regulating international and domestic arbitrations, and every province has adopted the UNCITRAL Model Law on International Commercial Arbitration 1985 (the Model Law) into its international arbitration legislation.

In addition, Canada is a signatory to the New York Convention and every Canadian jurisdiction has enacted legislation to give it effect. Outside Quebec, the Convention only applies to relationships considered ‘commercial’ under the laws of Canada.

There are many arbitral institutions present in Canada, including the ADR Chambers, the ADR Institute of Canada, the Canadian Arbitration Association, the Canadian Commercial Arbitration Centre, the International Centre for Dispute Resolution and the International Chamber of Commerce.48

For international arbitration, an award cannot be appealed on its merits to a court. A court may, however, set aside the award under Article 34 of the Model Law.49 For domestic arbitrations, there are limited rights of appeal, usually only on a question of law. Appeal rights vary by province and territory. Some provinces and territories do not provide for any right of appeal, whereas others provide a right to appeal after having obtained leave.

A party can apply to the court for an order staying a court proceeding where an agreement to arbitrate is in place. Courts must stay the proceeding if the arbitration agreement is not void, inoperative or incapable of being performed.

Canadian courts generally enforce foreign arbitral awards, pursuant to the New York Convention and the Model Law. A party must file the award, along with evidence of the arbitration agreement on which it was founded.

iii Mediation

Mediation is extremely common in Canada and is encouraged by the legal profession as well as the judiciary. In fact, in some cases, mediation is required by statute. Although mediation is not a new phenomenon in Canada, it has become much more prominent in recent years, particularly in commercial disputes.

In Ontario, the proliferation of mediation is at least in part related to the enactment of the Commercial Mediation Act (CMA).50 The CMA ensures that parties settling a commercial dispute through mediation will be able to register their settlement agreement with the court, gaining the advantage of having it treated like a judgment for enforcement purposes. Ontario was the second province, after Nova Scotia, to enact legislation of this nature.

Judicial mediation is also available in certain provinces. This type of mediation allows for a judge to preside over pretrial conferences, either on an ad hoc basis51 or on application by the parties.52 In Quebec, the Code of Civil Procedure sets out a formal legislative scheme for judicial mediation.

One of the attractive features of mediation is the confidentiality that shrouds the process. The Supreme Court of Canada has confirmed that in the context of mediation, parties can agree to a higher degree of confidentiality than is afforded under the common law. This can be done if the parties clearly stipulate in the mediation contract that they intend to override the exception to common law settlement privilege that allows a party to disclose protected communications to prove the existence or scope of a settlement.53

iv Other forms of alternative dispute resolution

Med-arb is a hybrid approach that combines the benefits of both mediation and arbitration. Parties first attempt to reach an agreement through mediation. If the issues remain unresolved, the parties move on to arbitration.

Sometimes parties will insert an expert determination clause rather than an arbitration clause in their agreement – the main difference being that the dispute will be determined by a third-party ‘expert’ rather than an arbitrator. This generally occurs when the agreement involves some specialised or technical field. It is important to note that, in certain provinces, expert determination clauses will not attract the same legal regulation as they would if structured as an arbitration clause.54

VII OUTLOOK AND CONCLUSIONS

Cases currently under reserve or appeal will likely lead to developments in the areas of intellectual property, contract law, fraud and corporate responsibility with respect to customary international law.

In Google Inc v. Equustek Solutions Inc et al.,55 the Supreme Court heard an appeal from the British Columbia Court of Appeal on whether or not a court may order a search engine to block search results. The Supreme Court reserved judgment and will decide whether Canadian courts have the authority to block search results outside the country and under what circumstances a litigant is entitled to an interlocutory injunction against a non-party that is not alleged to have done anything wrong.

In Deloitte & Touche v. Livent Inc,56 the Supreme Court will consider an auditor’s duty of care to a corporate client when fraud is being perpetrated by the directing mind of that corporation, and whether such misconduct disentitles a company to damages.

In Uniprix Inc v. Gestion Gosselin et Bérubé Inc et al.,57 the Supreme Court will consider whether contracts that create perpetual obligations via automatic renewal clauses and unilateral renewal rights for one party are valid under Quebec civil law. This case will have implications with respect to termination rights, given the previous uncertainty as to whether perpetually renewable contracts should be considered fixed-term contracts or contracts with an indeterminate term for purposes of Quebec civil law.

In Araya v. Nevsun Resources Ltd,58 the British Columbia Supreme Court will consider the claims of three Eritreans against a British Columbia mining company for alleged breaches of customary international law, including slavery and torture, during the operations of the company’s subsidiary in Eritrea. This is the first case in which claims against a Canadian corporation for alleged breaches of customary international law have been allowed to proceed and may have significant consequences for Canadian mining companies in the future.

Footnotes

1 Robert W Staley and Jonathan G Bell are partners at Bennett Jones LLP.

2 CQLR c CCQ-1991.

3 2016 SCC 56. See also the companion case from Québec, Jean Coutu Group (PJC) Inc v. AG (Canada), 2016 SCC 55.

4 2016 SCC 51.

5 2016 SCC 29.

6 2016 SCC 52.

7 2016 ONCA 332.

8 2016 ABCA 360.

9 2016 ONCA 49.

10 2016 ONCA 912.

11 2016 ONCA 771.

12 Alberta, Rules of Court, Alta Reg 124/2010 [Alberta Rules]; British Columbia, Supreme Court Civil Rules, BC Reg 168/2009 [BC Rules]; Manitoba, Court of Queen’s Bench Rules, Man Reg 553/88 [MB Rules]; New Brunswick, Rules of Court, NB Reg 82-73 [NB Rules]; Newfoundland and Labrador, Rules of the Supreme Court, SNL 1986, c 42, Sched D [NL Rules]; Nova Scotia, Civil Procedure Rules, NS Civ Pro Rules 2008 [NS Rules]; Ontario, Rules of Civil Procedure, RRO 1990, Reg 194 [ON Rules]; Prince Edward Island, Rules of Civil Procedure [PEI Rules]; Québec, Code of Civil Procedure, CQLR c C-25.01 [QC Rules]; Saskatchewan, The Queen’s Bench Rules, Sask. Gaz. 21 June 2013, 1370 [SK Rules]; Yukon Territory, Rules of Court, YOIC 2009/65 [YK Rules]; and Northwest Territories and Nunavut, Rules of the Supreme Court of the Northwest Territories, NWT Reg 010-96 [NWT Rules].

13 Rule 48, ON Rules; See also Daniels v. Grizzell, 2016 ONSC 7351.

14 Code of Civil Procedure, CQLR c C-25.01.

15 Limitations Act, 2002, SO 2002, c 24, Sched B, Section 4.

16 Hryniak v. Mauldin, 2014 SCC 7.

17 For an in-depth discussion of class actions in Canada, see Michael A Eizenga et al., Class Actions Law and Practice (Toronto: Butterworths) (loose-leaf).

18 Pro-Sys Consultants Ltd v. Microsoft Corporation, 2013 SCC 57; Sun-Rype Products Ltd v. Archer Daniels Midland Company, 2013 SCC 58.

19 QC Rules, supra note 12, Article 574.

20 2016 ONCA 916.

21 British Columbia, Newfoundland and New Brunswick have adopted a hybrid opt-in/out model that depends on the residence of the class member.

22 Halsbury’s Laws of Canada, ‘Civil Procedure’ (Markham, Ont: Lexis Nexis Canada, 2012) at 324.

23 Chevron Corp v. Yaiguaje, 2015 SCC 42 at para. 27.

24 Pro Swing Inc v. ELTA Golf Inc, 2006 SCC 52 at para. 31.

25 CQLR c C-25.01.

26 Friction Division Products Inc v. EI Du Pont de Nemours & Co (No. 2) (1986), 56 OR (2d) 722 at para. 25.

27 Dagenais v. Canadian Broadcasting Corp [1994] 3 SCR 835 at para. 77.

28 2012 ONSC 2715.

29 Bjornsson et al. v. Smith et al., 2016 MBCA 91 at paras 20–23.

31 See for example, Law Society of Upper Canada, Rules of Professional Conduct, Section 3.4.

32 2013 SCC 39 at para. 32.

33 R v. Neil [2002] 3 SCR 631 at para. 29.

34 SC 2000, c 17.

35 Canada (Attorney General) v. Federation of Law Societies of Canada, 2015 SCC 7 at para. 79.

36 British Columbia’s Personal Information Protection Act, SBC 2003, c 63; Alberta’s Personal Information Protection Act, SA 2003, c P-6.5; Quebec’s ‘An act respecting the protection of personal information in the private sector’, CQLR c P-39.1.

37 Blood Tribe Department of Health v. Canada (Privacy Commissioner), 2008 SCC 44.

38 Lizotte v. Aviva Insurance Company of Canada, 2016 SCC 52; Alberta (Information Privacy Commissioner) v. University of Calgary, 2016 SCC 53.

39 [1999] 1 SCR 565.

40 This position was confirmed in Pritchard v. Ontario (Human Rights Commission), 2004 SCC 31 at para. 21.

41 2010 SCC 16.

42 For further discussion on this topic, see Brandon Kain, ‘Solicitor–Client Privilege and the Conflict of Laws’ (2011) 50 The Canadian Bar Review 243.

43 MB Rules, supra note 12, r. 30.02; NB Rules, supra note 12, r.31.02, NWT Rules, supra note 12, rr. 219 and 222; ON Rules, supra note 12, r. 30.02; PEI Rules, supra note 12, r. 30.02.

44 Federal Court Rules, SOR/98-106, Rule 222(2).

45 Siemens Canada Limited v. Sapient Canada Inc, 2014 ONSC 2314. See also: ‘The Sedona Canada Principles Addressing Electronic Discovery’.

46 Ontario (Attorney General) v. Stavro (1995), 26 OR (3d) 39 (CA).

47 ON Rules, r, 30.02(4) and MB Rules, supra note 12, r. 30.02(4).

48 For a full list, see Department of Justice, ‘Dispute Prevention and Resolution’, online: www.justice.gc.ca/eng/abt-apd/dprs-sprd/index.html.

49 Article 34 states that an arbitral award may be set aside only if: (1) the party was legally incapable; (2) the party was not given proper notice of the appointment of the arbitrator; (3) the party was not given proper notice of the proceeding; (4) the party was denied the opportunity to present its case; or (5) the tribunal’s decision went beyond the scope of what the parties agreed was arbitrable.

50 2010, SO 2010, c 16, Sch 3.

51 As is the case in Alberta.

52 As is the case in Ontario.

53 Bombardier Inc v. Union Carbide Canada Inc, 2014 SCC 35.

54 Sport Maska Inc v. Zittrer [1988] 1 SCR 564.

55 SCC File No 36602.

56 SCC File No 36875.

57 SCC File No 36718.

58 2016 BCSC 1856.