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A branch of law that deals with legal and binding documents between two parties.

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Contract law is a body of law that governs, enforces, and interprets agreements related to an exchange of goods, services, properties, or money. According to contract law, an agreement made between two or more people or business entities, in which there is a promise to do something in return for a gain or advantage, is legally binding. Contract law is the center of many business dealings, and anyone entering into a contract should that failing to abide by the contract, even by mistake, could result in serious problems. To explore this concept, consider the following contract law definition

Definition of Contract Law
Noun

The branch of civil law that deals with interpretation and enforcement of contracts between two or more parties.

What is Contract Law

Contract law governs the legality of agreements made between two or more parties when there is an exchange of some sort intended to take place. In nearly all business transactions, contracts are made. Such contracts, even if made by a verbal agreement, are legally enforceable, as an obligation to fulfill the terms of the agreement has been created. Anytime an individual, business, or other entity agrees to take action, or to make an exchange or payment for something of value, a contract has been created. Examples of such agreements in business include bills of sale, purchase orders, and employment agreements.

Laws Governing Contracts

There are laws governing contracts at the federal, state, and local levels, though most contracts are subject to the laws of the state in which it was created. Because the laws governing contracts vary a little by jurisdiction, most contracts include a governing law provision. This is a section of the contract itself in which it is specifically stated which state's laws will apply to interpreting and enforcing the contract should a dispute arise. Many contracts also specify how a dispute is to be dealt with, often stating that the parties will use arbitration, rather than go to court over a dispute.

Anticipatory Breach vs. Actual Breach

Contracts are breached in two primary ways, referred to as (1) and actual breach, and (2) an anticipatory breach. An actual breach occurs when one party to the agreement fails or refuses to honor his part of, or complete his duties under, the contract.
For example:
Josh agrees to deliver 300 pavers to Charles at his home on Monday, for $150.00. Charles pays Josh the full amount up front, but Josh fails to deliver the pavers on Monday. When the pavers still haven't been delivered on Wednesday, Charles is angry and simply wants his money refunded. Josh has committed an actual breach of his contract with Charles.

An anticipatory breach refers to an intended or anticipated failure of one party to perform his duties under the contract. Anticipatory breach occurs when one party informs the other party of his unwillingness, or inability, to perform under the contract ahead of time. In such a case, the party that will be harmed by the breach does not have to wait until all other terms, or a required date, has come and gone before taking legal action.
For example:
Mary is moving out of her rental home, into the home she recently purchased with her new husband. Mary contracts with the Happy Housekeepers service for a thorough cleaning of the rental on Thursday, a full day after she has removed all of her belongings, so that she can do a walk-through with the landlord on Friday, the 31st of the month. Mary pays the $300 fee to the cleaning company in advance. On Monday, three days before the company is to clean the house, Mary receives a phone call informing her the service will be unable to do the job on Thursday, due to other obligations.

Happy Housekeepers has committed an anticipatory breach, letting Mary know in advance that it will not be performing its duties as agreed. There are several actions Mary can take, all of which may take anywhere from a few days, to months, to wrap up. The major problem from Mary's point of view is that she must turn the clean apartment over to the landlord no later than Friday, or she will incur another month's rent.

If Mary is unable to get another service to handle the job on time, Happy Housekeepers may be held liable, not only to return Mary's $300 payment, but for the extra month's rent incurred because of the company's breach of contract.

Elements of a Legally Binding Contract

Contract law requires certain elements of a legally binding contract to be met in order for the agreement to be enforceable. Regardless of the type of contract, if any of these four elements is not met, the contract may not be enforceable:

Offer

An offer must be made in a contract. Such an offer may be to exchange goods or services for something of value, or an offer to act or refrain from acting in a certain manner. For example, a construction contractor offers to build a house in exchange for a specified amount of money. An offer may be made in person, or in writing.

Acceptance

Acceptance is the agreement of the other party to the offer presented. In most contracts, the method of signaling acceptance is left open. While in many contracts, both parties add their signatures to demonstrate their agreement to the terms, others assume an acceptance of the offer to be made when one or both parties perform their duties under the contract.

Consideration

All parties to any contract must provide the other parties something of value, which entices the other party to enter into the agreement. The "something of value" is referred to as " consideration," and it does not necessarily need to be money. For example, Paul agrees to give Nancy his above-ground swimming pool in exchange for daycare services in her home.

Competency

All parties entering into a contract must have a legal capacity, or competency, to do so. Each must be able to understand his legal liability and responsibilities under the contract. This prevents someone from taking advantage of minors and those who are mentally incapacitated, as these individuals cannot legally enter into an enforceable contract.

Mutuality

Under the doctrine of mutuality, all parties must be willing, and have an intent, to perform their obligations under the contract at the time it is made. Without mutual intent, neither party would be bound by the contract. Additionally, mutuality requires any cancellation of a contract to be agreed to by all parties involved.

Breach of Contract in Failed Surgery

George A. Hawkins had suffered a severe burn to his hand when he was 11 years old. Local doctor Edward R. B. McGee approached Hawkins' father, offering to do surgery to repair Hawkins' hand, and guaranteed the surgery would leave Hawkins with a "one-hundred percent good hand." McGee repaired the hand by grafting skin from the patient's chest to replace the horribly scarred area. The surgery was not successful, and Hawkins' hand began growing a thick mat of hair.

Hawkins filed a civil lawsuit against the doctor for breach of contract based on his failure to perform as he promised. The jury ruled in favor of Hawkins, and awarded him a large sum for pain and suffering. The judge, however, overturned the amount awarded, pointing out that Hawkins would have endured pain and suffering in any case, as that is an expected result of surgery.

Related Legal Terms and Issues

Binding - Having power to bind or oblige; imposing an obligation.

Business Entity - An organization established and existing apart from any other interest, business or personal.

Civil Lawsuit - A lawsuit brought about in court when one person claims to have suffered a loss due to the actions of another person.

Civil Liability - A lawsuit brought about in court when one person claims to have suffered a loss due to the actions of another person.

Contract - An agreement between two or more parties in which a promise is made to do or provide something in return for a valuable benefit.

Jurisdiction - The legal authority to hear legal cases and make judgments; the geographical region of authority to enforce justice.

Legally Binding - An agreement that is written and enforceable by law.

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Contract Law - Definition, Examples, Cases

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Contract law is a body of law that governs, enforces, and interprets agreements related to an exchange of goods, services, properties, or money. According to contract law, an agreement made between two or more people or business entities, in which there is a promise to do something in return for a gain or advantage, is legally binding.

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A branch of law concerned with the the punishment of those who commint crimes.

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Criminal law, in its widest sense, includes substantive criminal law, the operation of penal institutions, criminal procedure and evidence, and police investigations (see Criminal Investigation).

Criminal law, in its widest sense, includes substantive criminal law, the operation of penal institutions, criminal procedure and evidence, and police investigations ( see Criminal Investigation). More precisely, the term refers to substantive criminal law - a body of law that prohibits certain kinds of conduct and imposes sanctions for unlawful behaviour.

In general, the prohibitions contained in criminal offences are concerned with protecting the public at large and maintaining the accepted values of society. These values include the preservation of morality (through such laws as the obscenity and prostitution offences); protection of the person (eg, murder and assault offences); protection of property (eg, theft and fraud offences); preservation of the public peace (eg, incitement to riot and causing a disturbance offences); and preservation of the state (eg, treason offences).

Underlying the various theories explaining the purpose of criminal law is the basic premise that criminal law is a means by which society reaffirms its values and denounces violators. A change in values entails a change in the types of conduct society wishes to prohibit. Amendments to the Criminal Code in areas such as sexual offences, abortion, pornography and punishment for murder demonstrate that Canadian criminal laws develop, at least to some extent, in response to changing social values.

Criminal law has also changed in response to technical advances, eg, recent amendments to the Criminal Code concerning theft of telecommunications, and credit card fraud and provisions regulating the use of wiretap surveillance.

The sources of substantive criminal law in Canada are limited. Most offences are created by the Criminal Code, which prohibits conviction of an offence at common law (except for the offence of contempt of court). Criminal offences are also contained in other related federal statutes, such as the Narcotic Control Act, the Food and Drugs Act, and the Young Offenders Act.

A number of federal offences and offences under provincial statutes (eg, liquor and highway control offences) and municipal bylaws (eg, parking tickets, pet control) are not criminal offences in the true sense, but are generally processed through the courts in the same general manner as criminal offences. These offences are often called "regulatory offences."

Origin of Criminal Law

According to the Constitution Act, 1867, Parliament was granted legislative jurisdiction with respect to "the criminal law, except for the Constitution of the Courts of Criminal Jurisdiction but including the Procedure in Criminal Matters." This particular constitutional provision gives the federal government power to pass laws concerning criminal law and procedure.

The provinces can pass legislation dealing with subjects in which provinces have constitutional power and can enforce these laws (under s92 of the Constitution Act, 1867) by imposing "punishment by fine, penalty, or imprisonment." It is therefore possible to have "provincial offences" enacted by the province, but if these offences conflict with a statute passed under the federal government's criminal-law power, the federal law is generally paramount.

The provinces were also granted legislative competence concerning "the administration of justice in the Province, including the Constitution, Maintenance and Organization of Provincial Courts, both of Civil and of Criminal Jurisdiction."

Therefore, policing, appointment of prosecutors, administration of the courts and appointment of lower-court judges are provincial responsibilities. The appointment of county and supreme court judges is a federal responsibility under s96 of the Constitution Act ( see Judiciary).

Criminal law and procedures are subject to provisions of the Canadian Charter of Rights and Freedoms. The Charter is part of the Constitution of Canada. The Constitution Act, 1982, holds that "the Constitution of Canada is the Supreme Law of Canada, and any law that is inconsistent with the provisions of the Constitution is, to the extent of the inconsistency, of no force or effect."

The courts must therefore measure all legislation, including the Criminal Code and related statutes, against the Charter's provisions. The Charter may directly affect criminal-law procedure and may have an impact on the definition of certain crimes and the resulting punishment.

It is a cardinal principle of Canadian criminal law that there can be no crime or punishment except in accordance with fixed, predetermined law. To this end, the courts have concluded that a criminal prohibition must be in existence at the time of the alleged crime and that the offence created by such prohibition must be clearly ascertainable. If the provision providing for the criminal offence is ambiguous, then it will be interpreted by the courts in favour of the accused.

The application of the criminal law by police, prosecutors, judges and juries depends very much upon the facts of each case. Courts seek to apply the law consistently. Judges, when determining the law applicable to a case, are influenced greatly by previous court decisions, ie, "precedents" involving similar situations. The fact that judges tend to follow precedents creates consistency in the interpretation of the statutory law and helps to indicate how the law will be interpreted in the future.

An appeal system exists in the criminal courts not only to correct injustices but also to avoid inconsistencies in the application of the law itself. Previous legal precedents, upon which the judge hearing the case feels bound, can be overruled by higher courts if it can be demonstrated that the precedent is either wrongly decided or out of date.

There are many legal wrongs that are not crimes. They fall in the field of civil law and are the basis of private law suits. A civil action is a private legal proceeding brought to court by one person against another. A civil court can compensate the aggrieved party by providing monetary damages or, in some cases, can cause the defendant to rectify the wrong caused.

In criminal law a crime is a wrong against the community as a whole rather than against the individual victim; consequently a criminal prosecution is launched by the state and the victim is merely a voluntary (and sometimes reluctant) witness for the prosecution. However, in recent years Parliament has passed legislation substantially amending the sentencing provisions of the Criminal Code, by which more attention will be paid to victims of crime and which will provide for such measures as restitution and compensation to victims ( see Criminal Code).

Constituents of a Crime

A crime may be divided into 2 elements: the prohibited conduct or act ( actus rea) and the required mental element ( Mens Rea). Generally, before an act can become a crime it must fall precisely within the definition of the offence. It may be an act of omission as well as commission. However, in recent years Parliament has passed legislation substantially amending the sentencing provisions of the Criminal Code, by which more attention will be paid to the victims of crime and which will provide for such measures as restitution and compensation to victims ( see Criminal Code).

Mens rea ("guilty mind") is a difficult concept. It is not defined in the Criminal Code and in Canada, depending upon the particular offence, the prosecution may be required to prove a state of mind that may include either intention (the most common state of mind required to be proven in criminal cases), advertent negligence, knowledge, recklessness, wilful blindness or more specific states of mind contemplated by such words as "maliciously" or "fraudulently."

Nevertheless, there is still an overriding principle in the criminal law that there is no criminal responsibility unless the guilty mind required by the offence can be proven. The idea of "guilty mind required by an offence" has been refined in light of the Charter. For example, the Supreme Court of Canada has held that murder is so serious a crime that it would be fundamentally unjust to convict someone of murder who did not, at the time of the killing, have a murderous state of mind. The Court then struck down, as unconstitutional, those sections of the Criminal Code which permitted murder convictions where the intent to kill had not been proven. Thus, the Charter has given rise to the principle that the mens rea to be proven must "fit" the crime. Most criminal trials are in fact contested on the basis of whether the accused had the requisite state of mind rather than whether he actually performed the prohibited act. This state of mind has to be proven with the same certainty as the other ingredients of a crime, and the prosecution must therefore present a clear picture of what was in the individual's mind at the time the offence was committed.

In order to ease this difficulty, some criminal law statutes create or recognize a presumption or inference regarding the required mental element; however, many of these "reverse onus clauses" have recently been declared unconstitutional as various courts have ruled the provisions conflict with the rights of an accused as set out in the Charter. But the Charter has impacted on the mental element required for so-called "strict liability" offences. The Supreme Court has held that where an offence carries with it the potential for imprisonment, if the accused has diligently, though unsuccessfully, attempted to avoid the prohibited action then he or she cannot be convicted of it. Such a conviction would offend fundamental justice.

In regulatory offences, the law distinguishes 3 different forms of the mental element. If the legislation uses words such as "wilfully" or "intentionally," the legislature is presumed to have intended that the mental element required is an intent to commit the prohibited act. For the second class of regulatory offences, eg, those relating to public health, highway traffic, environmental law, and safety in the workplace, it is only necessary that the accused knows that his acts or omissions may result in the offence being committed. But the Charter has impacted on the mental element required for so-called "strict liability" offences. The Supreme Court has held that where an offence carries with it the potential for imprisonment, if the accused has diligently, though unsuccessfully, attempted to avoid the prohibited action then he or she cannot be convicted of it. Such a conviction would offend fundamental justice.

The final category of regulatory offences (strict liability offences) requires no mental element whatsoever and there is consequently no necessity of proving any fault on the part of the accused; the Crown need only prove that the accused was responsible for the prohibited act.

Under Canadian law, criminal responsibility may be placed on parties other than the actual perpetrator. Persons who aid, assist or counsel the commission of an offence can be found guilty of the same offence as the perpetrator. Also, attempting or conspiring to commit a crime or counselling an offence that is not actually committed are all criminal offences. However, courts have held that mere preparation to commit a crime is not sufficient to constitute an attempt.

In any criminal trial, one of the most important principles of all is the presumption of innocence. According to this principle, the Crown must prove the guilt of the accused, and it is not for the accused to establish innocence. Furthermore, the Crown must establish guilt beyond a reasonable doubt. This principle has been enshrined in the Charter and is considered by many to be one of the most important protections for the individual against the state.

Defences

Both the Criminal Code and the common law recognize a number of defences to criminal charges.

Defence of Capacity
In certain cases, individuals will be found not guilty, even though the prohibited act and the intention to commit this act are proven, because the individuals are deemed incapable by law of committing the offence in question. For example, any child under the age of 12 years cannot commit a criminal offence. As well, any boy or girl under the age of 18 must be tried in the juvenile courts under the Young Offenders Act unless he or she is ordered to stand trial in the adult court by a juvenile court judge ( see Juvenile Justice Systems).

Insane persons are also considered to be incapable of committing criminal offences. Section 16 of the Criminal Code presumes that everyone is sane but permits defendants to establish that they were insane at the time of the commission of an offence.

If insanity is established, then the person is found to be not guilty by reason of insanity and is detained indeterminately for treatment until a government-appointed board of review determines that the individual may return to society. In addition, an individual cannot be found guilty of a crime if he or she is unfit to stand trial because of mental illness. These individuals are held in mental hospitals until they recover sufficiently to understand the legal proceedings against them.

Defences that Negate Proof of the Prohibited Act
To prove that someone has committed a prohibited act, it must be demonstrated that the act or omission was consciously and voluntarily committed. Defences that fall into this category include accident, duress (ie, a person has been compelled to commit an offence because his or his family's life or safety have been threatened), and automatism, which may be generally defined as involuntary, unconscious behaviour where the physical movements are performed without volition or without exercise of the will (eg, a person, as a result of an external blow to the head, commits a prohibited act while in an unconscious or semiconscious state, or a person who commits an offence while sleepwalking).

Defences that Negate Proof of Mens Rea
In most "true" criminal offences, the Crown must prove that, before committing the act, the accused actually intended to achieve the unlawful result. The law recognizes that certain factors raise a reasonable doubt that the person intended to achieve the unlawful consequence. The defences usually mentioned in this context include intoxication (which is commonly used to reduce a murder charge to the lesser offence of manslaughter), honest mistake of fact, and, in some very limited circumstances, mistake of law. However, in the vast majority of factual situations, ignorance of the law provides no defence.

Defences of Excuse or Justification
With these defences, the law recognizes human frailty and weaknesses and will hold that the accused was either justified in committing the unlawful act or is at least partially excused for the conduct. Examples of defences of justification are self-defence and defence of property. In 1990 the Supreme Court of Canada found the defence of self-defence can apply to a battered woman who kills her batterer at a time when her life is not in imminent danger. Recognition of the "battered woman syndrome" expanded the scope of evidence which could be used to prove self-defence to include the psychological effects of battering on women charged with assaulting or even killing their battering partners. Defences of excuse include obedience to authority (eg, a soldier who believes he is simply obeying lawful orders), provocation (which only applies in murder cases and involves a killing committed in the heat of passion, which has been caused suddenly by a wrongful act or insult sufficient to deprive an ordinary person of his self-control), and entrapment (in which the person has committed the offence under pressure by police authorities).

Sanctions

If an individual is convicted of a criminal offence, the presiding judge must impose a sentence. In Canada, judges have a great deal of discretion in sentencing. There are few mandatory minimum sentences and the maximum sentences given in the Criminal Code are generally set quite high. A judge may choose an absolute discharge, conditional discharge, probation, suspended sentence, fines or imprisonment.

In determining an appropriate sentence, judges must consider a multitude of factors and remind themselves that each sentencing is unique because the individual characteristics of each crime and offender are never the same. Some of the more important factors that they take into consideration when imposing sentence are the degree of premeditation, whether the accused has a previous criminal record, the gravity of the crime committed, the degree of participation of the offender in the crime, the incidence of this particular crime in the jurisdiction, past sentences imposed for the same or similar offences, and the age, lifestyle and personality of the offender.

Large-scale changes to the sentencing provisions of the Criminal Code have been made recently and more are expected shortly. These changes are a response to a growing awareness in Canadian society that the process of sentencing offenders must account for the needs and interests of victims of crime and that effective alternatives to imprisonment are a likelier route to rehabilitation of an offender.

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Criminal law, in its widest sense, includes substantive criminal law, the operation of penal institutions, criminal procedure and evidence, and police investigations (see Criminal Investigation). Criminal law, in its widest sense, includes substantive criminal law, the operation of penal institutions, criminal procedure and evidence, and police investigations ( see Criminal Investigation).

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A branch of law that sets out the structure of federal, territoral governments and the divisions of power.

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Constitutional law is a branch of public law, the body of rules regulating the functioning of the state.

Constitutional law is a branch of public law, the body of rules regulating the functioning of the state. At its heart is the Constitution-the supreme law of Canada-which comprises written, statutory rules, plus rules of the common law (a living body of law that evolves over time through decisions of the courts), and also conventions derived from British constitutional history. The conventions themselves are recognized by the courts but are not, strictly speaking, part of constitutional law.

Sources of Constitutional Law

The primary sources of Canadian constitutional law are legislative rules-in the form of documents and statutes created over time: the Constitution Acts of 1867 and 1982 (see Patriation of the Constitution), and other documents that make up the Constitution of Canada. That includes federal and provincial statutes related to constitutional matters, orders-in-council, letters patent (written orders from the Crown) and proclamations. Section 52 of the Constitution Act, 1982 provides for the Constitution of Canada to include the Canada Act of 1982 and the Constitution Act of 1982, as well as legislative texts and decrees included in Appendix I of the latter act, and the modifications to these legislative texts and decrees.

According to the preamble of the Constitution Act of 1867, the Canadian Constitution is similar in principle to the Constitution of the United Kingdom; therefore, along with their own constitutional statutes Canadians have inherited various British laws and charters such as the Bill of Rights of 1689, the Act of Settlement of 1701.

Not all constitutional law is set out in documents or statutes. Other sources include case law -for example the interpretation of the Constitution by the courts, which is just as important as the written Constitution itself. This is especially true in Canada, where statutes are subject to judicial review for their legality, or constitutionality. Section 52 of the Constitution Act of 1982 says the Constitution overrides any incompatible provision of any piece of legislation.

The Judicial Committee of the Privy Council has rendered some 120 judgments on the distribution of legislative powers alone; the Supreme Court of Canada has handed down even more. Among the more important cases that have affected the Constitution are the following: in the field of the distribution of powers, the Hodge Case, Fort Frances Case (emergency power), Aeronautics Reference (residual power), Labour Conventions Reference (treaties), Offshore Mineral Rights (resources under the sea), Jones Case (official languages), Dionne Case (cablevision), Montcalm Construction Case (labour relations), Anti-Inflation Act Reference (peacetime emergency powers) and Constitution Reference (patriation).

Constitutional Monarchy

The character of the Canadian Constitution reflects Canada's position as a constitutional monarchy ( see Crown), a parliamentary democracy and a federation. As a constitutional monarch the Queen, who is sovereign in Canada, reigns but does not rule. Executive power is effectively wielded by the prime minister and the Cabinet. The Queen, because of Canada's federal system, is represented at both levels of government, federally by the governor general and in each province by a federally appointed lieutenant-governor. In the January 1982 judgment of the British Court of Appeal on the Indians of Alberta, Lord Denning stated that although in principle the Crown is indivisible, it has become separate and divisible through practice and usage.

The conventions of the Canadian Constitution accurately reflect the actual exercise of executive power. For example, although the Crown can refuse to give assent to legislation (by either disallowing assent or reserving-delaying-assent), under constitutional law this power will not likely be exercised in future. Nowadays it is very unlikely that a governor general or a lieutenant-governor would refuse to give royal assent to a bill duly passed by Parliament or a legislature. Although possible legally, it would constitute in practice a negation of the principle of responsible government and it would be contrary to a convention of the Constitution. The Imperial Conference of 1930 ended the governor general's power to reserve assent from a federal bill that had been adopted by Parliament. It also ended the imperial power of disallowance in relation to federal bills.

The power of reserve and disallowance of provincial bills is, in the words of Chief Justice Laskin, "dormant if not entirely dead." The power of disallowance was last used in 1943; the power of reserve was last used in 1961 in Saskatchewan, but the bill was given royal assent by the governor general.

The powers of the prime minister and government officials are not unlimited, however. According to British constitutional expert A.V. Dicey, all officials, from the prime minister to a collector of taxes, are under the same responsibility for any act done without legal justification as every other citizen is, reflecting the principle of the rule of law, which is also part of Canadian constitutional law ( see Administrative Law).

Legislative, Executive and Judicial

In Canada the distinction between legislative, executive and judicial powers is not as sharp as in the United States. Judicial power is separate in Canada, but in the Canadian parliamentary system, the executive is also part of the legislative branch, and responsible to it. Parliament comprises the Queen, as head of Canada, a Senate and a House of Commons.

A well-established constitutional convention requires that the government maintain the confidence of the Commons to remain in power. If such confidence is lost, the prime minister must either resign or seek dissolution of Parliament. The government is not responsible to the Senate. On matters of constitutional amendment, the Senate only has a delaying veto of 180 days; otherwise it has the same decision-making powers as the House of Commons, although money bills must originate in the Commons.

The concept of parliamentary supremacy- that Parliament's powers are unlimited-originates in British constitutional law. Canada has inherited this concept in its Constitution, but under its federal system the federal and provincial governments are only sovereign within the legislative limits outlined by the Constitution, and their powers are also limited by the Canadian Charter of Rights and Freedoms.

The Canadian system is a parliamentary democracy in which the offices of head of government (prime minister) and chief of state (Queen of Canada) are distinct; the government is responsible to the elected Commons. The house can be dissolved before the five-year term limit of any government; usually governments with a majority of seats in the House last four years.

Distribution of Powers

Canada has been a federation since 1867. Legislative, executive and judicial powers are divided between the two levels of government, federal and provincial. The Constitution Act of 1867 lists areas of federal jurisdiction (eg, the postal system, criminal law, banking, navigation, defence, bankruptcy) and areas of provincial jurisdiction (eg, property and civil rights, municipal institutions). Other articles or sections allocate special powers (eg, education) and concurrent jurisdictions (eg, agriculture and immigration, old-age pensions, supplementary benefits).

Two important areas of federal jurisdiction are the regulation of trade and commerce (interprovincial and international trade or so-called "genera" trade and commerce, as defined by the Supreme Court of Canada) and the authority to legislate over matters relating to the peace, order and good government of Canada. The latter is concerned with matters that might otherwise fall within provincial authority and deals with national emergencies, matters of national dimensions or national concerns or matters of so-called "residue" that are not listed in the enumerated powers of Parliament and the legislatures.

Theoretically the distribution of executive power resembles that of legislative power. Judicial power is also distributed in the Constitution Act of 1867. Jurisprudence in constitutional law has established the principle that Parliament and the provincial legislatures may not delegate legislative powers to each other, but that a sovereign authority can delegate powers to a subordinate body which it has created. The classic example is the relationship of the provincial legislature to a municipality.

Power can also be delegated from a sovereign body (eg, Parliament or a provincial legislature) to a subordinate body of the other government. For example, Parliament has delegated to provincial commissions the power to issue permits or make regulations in areas of federal jurisdiction, such as extra-provincial motor transport or marketing.

Under the Constitution Act of 1867, the provinces have exclusive jurisdiction over the creation of civil and criminal courts and in the administration of civil and criminal justice, but Parliament has exclusive jurisdiction in respect of criminal law and procedure. Criminal law generally includes matters under criminal jurisprudence contained in legislation promoting public peace, order, security and the protection of health and morality (in certain aspects). The provinces, however, can legislate in regulatory and quasi-criminal matters. Provincial quasi-criminal legislation may be enacted to suppress conditions that may foster the development of crime.

For the administration of federal laws, Parliament may establish administrative tribunals. Parliament has also created a Federal Court and a Tax Court. And the Supreme Court of Canada was established by statute in 1875. All judges in federal courts are federally appointed, as are those of the higher provincial courts. The judges presiding over lower provincial courts are provincially appointed.

The role of the judiciary is of cardinal importance because the interpretation of the Constitution is as important as the Constitution itself. Courts give life to a Constitution, which must endure, as it cannot be amended as often as a statute can. Courts must favour the evolution of a Constitution. In a federation a supreme court plays a crucial role in the distribution of legislative powers. The courts also play a major role in the interpretation of the Canadian Charter of Rights and Freedoms.

External relations fall under federal jurisdiction. In the Labour Convention Reference (1937) the judiciary established that the central authority could conclude treaties in Canada's name but that such treaties would not modify internal law ( see Treaty-Making Power). If a treaty does require a change in internal law, this must be accomplished through the enactment of a statute. The implementation of a treaty must respect the distribution of legislative powers as defined by the Constitution. Parliament implements treaties relating to federal matters; if a treaty relates to provincial matters, the provincial legislatures are responsible for implementing legislation.

In addition to the 10 provinces, Canada has three federal territories: the Yukon, the Northwest Territories and Nunavut. Under the Constitution the territories fall under the legislative jurisdiction of Parliament. They have been delegated certain important powers by Parliament. The commissioners of the respective territories are Crown representatives, and the executive exercises substantial power, but the principle of responsible government does not apply in territorial legislatures, because the delegated powers can be modified, extended or withdrawn.

Prior to 17 April 1982 the territories could have gained provincial status by a simple Act of Parliament. Now, under the Constitution Act, 1982, it is necessary that both federal houses and seven provinces (with an aggregate of 50 per centof the country's population) consent to such a move.

Federalism and the Amending Formula

Federalism in Canada rests on a trilogy of factors: the distribution of powers; the interpretation of these powers by the courts, which must ensure that the distribution of powers in the Constitution is not violated and that all enacted legislation is constitutional; and the formula for constitutional amendment. The Constitution of 1867 had no general amending formula.

Since 1867 the provincial legislatures have had the right to amend their internal constitutions (except where they concerned the role of the lieutenant-governor), but Parliament did not gain the right to amend its internal constitution until 1949. For changes to the most important part of the Constitution it had to address the Parliament at Westminster, which would legislate a constitutional amendment if requested to by both federal houses.

From 1927 to 1981 the federal and provincial governments tried unsuccessfully to agree on an amending formula. The Victoria Charter of 1971 was an agreement reached by Canadian heads of government (with the exception of Québec's Premier Robert Bourassa) concerning constitutional reform. The Turner-Trudeau Formula contained in the Victoria Charter provided that the Constitution could be amended by a resolution of the House of Commons and Senate and by at least a majority of the provinces, which would have included each province with a population of at least 25 per cent of the national population, at least two Atlantic provinces, and at least two western provinces having a combined population of at least 50 per cent of all western provinces. Québec agreed with the Turner-Trudeau Formula but rejected the Victoria charter overall because it proposed paramount federal power in programs related to social security.

Only in 1982 did the British Parliament divest itself of its power of amendment to the Canadian Constitution. By s2 of the Canada Act of 1982 (UK), no Act of Parliament of the UK passed after the Constitution Act of 1982 can extend to Canada as part of its law. The British renounced any legislative role for Canada after 17 April 1982.

The Constitution Act of 1982 includes a general amending formula (the Alberta-Vancouver Formula) under which an amendment requires the agreement of the federal houses and two-thirds of the provinces comprising 50 per cent of the population. A dissenting province may opt out ( see Opting-Out) of an amendment concerning a transfer of power from a provincial to a federal jurisdiction, in which case, if the amendment is related to education, or other matters, the province will receive fair financial compensation.

If the amendment concerns the composition of the Supreme Court, the role of the monarchy, or the amending formula itself, all 11 authorities (the federal government and 10 provinces) must agree on its adoption. Some amendments need only the agreement of the federal government and the particular provinces concerned. In principle both Parliament and the provincial legislatures may still amend their internal constitutions.

Failed Attempts at Change

At Meech Lake on 30 April 1987 and in Ottawa on 3 June 1987, Prime Minister Brian Mulroney and the premiers of the 10 provinces agreed on a constitutional accord termed the Meech Lake Accord ( see Meech Lake Accord: Document) to allow Québec to give its "political" consent to the patriation of the Constitution in 1982, and the Constitution Act of 1982.

The Meech Lake Accord eventually failed. A further attempt for national reconciliation led to a national referendum in 1990 ( see Charlottetown Accord). This initiative also failed. The political aftermath of the two failed accords resulted in the second Québec referendum on separation ( see Québec Referendum (1995)). The vote was narrowly decided in favour of the federalist side of the debate. Political developments that followed the referendum result included federal legislation recognizing Québec as a distinct society, and federal non-constitutional legislation committing the government not to proceed with future amendments to the constitution without the consent of Canada's five regions (Atlantic Canada, Quebec, Ontario, the Prairie provinces and British Columbia). In 1996-98 the Supreme Court ruled on three questions relating to the secession of Québec and rendered an advisory opinion on the legality of secession.

Evolution of Federalism

Canadian federalism evolves by constitutional amendments, by administrative agreements and by judicial decisions. Since the patriation of the Constitution in 1982, eight constitutional amendments have been adopted: Aboriginal rights (equality of men and women) in 1983; electoral representation at the federal level in 1985; the school system in Newfoundland in 1987, 1997 and 1998; the rights of the two linguistic communities in New Brunswick in 1993; the Prince Edward Island Confederation Bridge in 1994; and the school system in Québec in 1997 (section 93).

Other changes, but not of a constitutional nature, have also taken place since the Québec referendum of 30 October 1995. They consist of two motions recognizing the distinct character of Québec, one passed by the House of Commons, the other adopted by the Senate in 1995; the act concerning constitutional amendments which provides for five regional vetos in 1996; and administrative arrangements concerning manpower training with many provinces including Québec in 1997-98.

Constitutional law has developed considerably since the 1982 adoption of the Canadian Charter of Rights and Freedoms and the great number of cases rendered by the Supreme Court of Canada on the interpretation of that Charter. The top court continues to rule on the distribution of legislative powers between the Parliament of Canada and the provincial legislatures.

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Constitutional law is a branch of public law, the body of rules regulating the functioning of the state. Constitutional law is a branch of public law, the body of rules regulating the functioning of the state.

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The branch of law that controls the operation and procedures of government agencies.

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Administrative law is one of three basic areas of public law dealing with the relationship between government and its citizens, the other two being constitutional law and criminal law. Administrative law ensures that government actions are authorized by Parliament or by provincial legislatures, and that laws are implemented and administered in a fair and reasonable manner. Administrative law is based on the principle that government actions must (strictly speaking) be legal, and that citizens who are affected by unlawful government acts must have effective remedies. A strong administrative law system helps maintain public confidence in government authority.

Delegation of Powers

In a complex modern state, elected representatives are not capable of passing laws to govern every situation. Therefore, provincial and federal governments delegate many of their law-making powers, as well as the power to administer and implement the laws, to administrative agencies. These agencies are involved in virtually every area of government activity and affect ordinary citizens in many ways. Among other things, administrative agencies oversee building permits, workers' compensation, farming regulation, interprovincial trade ( see Canadian Free Trade Agreement), and various administrative tribunals.

Administrative law controls government activity in various ways. First, according to the Constitution of Canada, elected politicians may pass any laws they please, provided such laws do not infringe upon the rights and liberties guaranteed by theCanadian Charter of Rights and Freedoms and do not attempt to regulate legislative activity reserved for another level of government ( see Peace, Order and Good Government). Administrative authorities, as inferior bodies with only the authority that has been given to them, are also subject to these constitutional limitations.

Second, delegating legislation defines the powers given to the agency (or minister) and outlines rules for exercising those powers. Where administrative action depends on resolving disputed facts or interpreting a statute, the legislation will sometimes require a hearing before a board or administrative tribunal. In some cases, the board or tribunal's decision may be reviewed by the courts if there is an error of law or an unreasonable finding of fact.

Third, certain common-law principles impose limits or obligations upon tribunals. The best example is the principle that administrative authorities must act in accordance with natural justice, which includes certain procedural rules. Common-law doctrine operates in tandem with any laws relating to the issues being considered.

If citizens feel that an administrative authority has made a decision affecting them that violates a constitutional, statutory or common-law principle, they may ask a court of law to review the actions of the authority. Canadian courts generally defer to administrative authorities' expertise. Courts only exercise oversight if the authority exceeds its jurisdiction, if it follows improper or unfair procedures, if it makes a decision on law that is incorrect, or if it makes a decision on facts that is unreasonable.

Concept of Jurisdiction

Administrative tribunals must act within the scope of the powers delegated to them by their enabling legislation. If these bodies take action without legal authority, they are said to have exceeded their jurisdiction. Courts may reverse (or quash) decisions made outside an administrative body's jurisdiction. Courts interpret the enabling legislation and determine whether it permits the tribunal's actions. However, statutes are not always clear, and where the question goes to the heart of the tribunal's function, courts will exercise caution where a challenge to jurisdiction is made.

In some cases, the enabling legislation expressly limits the power granted to an administrative authority. For example, a tribunal empowered to regulate rents in apartment buildings of 10 units or more does not have jurisdiction to regulate rents in buildings with only 4 units. Further, courts require that powers be exercised only by those to whom they are given. So, for example, members of a tribunal that grants liquor licences to restaurants may not delegate this power to a staff member or an outside person.

On the other hand, while government ​cabinet ministers may have specific powers granted by legislation, often the volume of work would be impossible for one person to perform. Thus, ministers delegate their authority to subordinate officials. For example, a government minister may have the power to issue visas to foreign visitors, but the high number of applications and the nature of the task requires subordinate officials to perform the duty in place of the minister.

Reviewing jurisdiction does not address the merits of a government official's decision. Generally, courts are not meant to intervene in government conduct ( see Distribution of Powers). However, courts may step in where an authority has abused its power or to ensure that the power has been properly exercised. A decision must be made based on relevant considerations and any discretion must be exercised within the meaning of the enabling statute. If a decision maker relies on irrelevant information or fails to consider relevant information, courts may review the decision. Further, an authority cannot exercise its power for a purpose other than the purpose for which the power was intended. For example, if a minister had the power to close a hospital only for sanitary or safety reasons, he or she could not use this power for financial reasons.

Further, a tribunal may not bind itself or limit its discretion by making general rules that apply to every case. Each case must be decided on its own merits. There must be some evidence before a tribunal to justify decisions of fact. A decision cannot be unreasonable to the extent that it is one that no reasonable person in the position of the decision maker would have made. Also, provincial governments cannot remove the courts' ability to review administrative bodies' jurisdiction.

Procedural Fairness

The third ground of judicial review of administrative action deals with procedural fairness. Administrative agencies must follow proper procedure in arriving at their decisions. In some cases, a statute or regulation will set out the basic procedures that govern the process of decision making, such as what notice must be given of a hearing and to whom, the right to have counsel, the right to call evidence and to cross-examine witnesses. Where a statute establishes no procedures, common-law principles apply to ensure that all persons subjected to government action are treated fairly. These are the previously mentioned principles of natural justice. They have two basic objectives: to ensure that every person whose interests are at risk is entitled to participate in the process before a decision is taken, whether by hearing or otherwise; and, that any decision made by tribunal is impartial and not biased. Further, the Supreme Court of Canada has held that procedural fairness incorporates the principles of fundamental justice in section 7 of the Charter.

What constitutes procedural fairness will depend upon the nature of the power being exercised, the party affected, the consequences of the intended action and the practicalities of requiring time-consuming procedures. In serious cases affecting individuals, such as revoking a doctor's licence to practise medicine, procedures similar to those found in a court of law will be imposed. In other cases, such as the decision to terminate a lease in a public-subsidized apartment building, courts have held that there is only a "duty to act fairly," which is satisfied if the tenant is informed of the complaints made against him or her and is provided with an opportunity to answer or to remedy them.

In order for the rules of procedural fairness to apply, the nature of the decision must be administrative. This means that decisions that are legislative or broadly based on policy decisions will not need to be procedurally fair. The decision under review must also be the result of an exercise of the administrative body's power given to it by its enabling statute, and that decision must affect the claimant's rights, privileges or interests. Lastly, these rules are not absolute. There may be policy reasons such as security, efficiency or emergency that will diminish the need for procedural fairness.

The amount of procedural fairness required for a given situation will therefore be contextual. The more a process resembles a court hearing the more an individual has a right to procedural fairness. If the statute sets out rights of appeal, less procedural fairness is required than if the decision is final. If the decision affects a person's Charter or human rights, or invokes the government's international obligations, courts will generally require more procedural fairness. If the subject of the process has legitimate expectations of procedural fairness, courts will also require a higher degree of fairness. Lastly, the choices of the agency itself will be relevant in determining whether the duty of fairness has been discharged. To that effect, where an agency or decision maker can produce written reasons that show consideration of formal policies and guidelines and the specific facts of a case, courts will be much more likely to find the decision was made fairly.

Courts may find that the duty of procedural fairness has been breached if the administrator's actions were not procedurally fair, if there was an unnecessary delay that prevented the affected person from participating in the process, if the decision maker has shown bias, or if there was undue interference in the decision-making process. If a court finds a breach of the duty of fairness, it may cancel the decision and send it back to be made again properly or stay the proceedings in the case of prejudicial delay.

Rights of Appeal - The Standard of Review

A citizen's ability to challenge administrative decisions in court depends upon the availability of an appeal or judicial review and the status of the individual who comes before the court. Rights of appeal to the courts are often provided by legislation. In other situations, parties may rely on the historic and constitutional ability of the "superior" courts of law to review the actions of "inferior" administrative bodies ( see Court System of Canada). In the past, judicial review involved historic "prerogative" remedies, each with its own technical legal requirements. Today, in most provinces, statutory reforms have simplified these procedures into the single remedy of "judicial review," which encompasses all of the historical remedies yet provides the courts with the discretion not to intervene in administrative activity. The superior courts in each province are responsible for granting these remedies where provincial administrative action is challenged. The decisions or actions of a federal administrative agency are reviewed by the Federal Court of Canada. Judicial review can be of any administrative decision. In 2014, for example, a lawyer sued Prime Minister Stephen Harper and the Government of Canada for appointing a judge to the Supreme Court of Canada who was not properly qualified under the Constitution.

The second factor affecting the ability of individuals to obtain judicial review of administrative action is related to the status of the individual who is suing. In many cases, the individual is directly affected by a particular decision, such as the termination of a disability pension, and this does not present a problem. In other cases, individuals challenging the constitutionality of legislation may seek to represent a broader public interest. Nevertheless, the courts have generally permitted such citizens to proceed where they can show that a serious doubt exists about the validity of the legislation and where there is no other reasonable or effective means of bringing the issue before the courts.

In most cases, a citizen's remedy is restricted to having an administrative decision quashed. The court will, in some instances, grant the relief requested (e.g., granting a licence where one is refused) or, as is more likely, will send the matter back to the administrative agency to be decided upon by a proper interpretation of a statute or of proper and relevant facts. In rare cases (e.g., when the administrative action was not only illegal but was taken in bad faith), damages will be awarded. InRoncarelli v. Duplessis the Supreme Court of Canada held the Premier of Quebec liable for $25,000 for wrongfully cancelling a liquor licence because he did not approve of the religious activity of the licence holder.

In some situations, a statute will provide that the decision of the tribunal cannot be appealed to or reviewed by the courts. Often, this occurs in fields of specialized expertise, such as labour relations, where courts may not possess the experience or understanding necessary for making final decisions. Such restrictions on appeals have not prevented the courts from reviewing the decisions of these tribunals where there is an excess of jurisdiction. However, the courts have recognized that these tribunals may make decisions that the court, if it were deciding the issue, would not make, either because of its interpretation of the relevant statute or because of its view of the facts. In such cases, the Supreme Court of Canada has stated that the tribunal has acted outside its jurisdiction only if it has reached a decision that is unreasonable. Even where administrative agencies are not protected by such clauses, the courts have tended not to interfere in areas of specialized or technical expertise, such as health professions, securities, urban planning, nuclear energy and human rights.

When courts consider how much deference they must give to an administrative decision maker, this is called the standard of review. Courts will generally consider whether a decision was reasonable or correct, depending on the circumstances. Previous cases, or the enabling legislation, may establish a standard of review. As described above, the decision does not have to match the court's decision, but it must be properly made; usually reasonableness will be the standard on questions of fact, discretion, policy, or mixed fact and law. The rationale for this is that the administrative decision makers are closer to the evidence and have more expertise than the courts. In determining the standard of review, courts will take a "pragmatic and functional approach." Courts will consider decisions on the standard of correctness - the decision of the administrative body must match the court's own findings - on matters relating to jurisdiction, on the constitutional division of powers, or on issues that are of "central importance to the legal system."

Administrative Law and Indigenous Peoples

When determining to what extent the government must consult with Indigenous peoples - i.e., the content of the duty to consult - courts will look at whether the administrative body was reasonable. However, courts may apply the standard of correctness when looking at the seriousness of the infringing behaviour.

The government may also rely on administrative bodies or processes to discharge its duty to consult. However, in doing so, administrative bodies must act both in accordance with the constitutional duty to consult Indigenous peoples and the principles of administrative law. In other words, the process must be fair and meaningful, it must consider and evaluate the impact on Indigenous rights, and it can be subject to judicial review.​

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Administrative law is one of three basic areas of public law dealing with the relationship between government and its citizens, the other two being constitutional law and criminal law. Administrative law ensures that government actions are authorized by Parliament or by provincial legislatures, and that laws are implemented and administered in a fair and reasonable manner.

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A branch of law that deals with matters involving families, such as divorce and custody of children.

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Family law is critical to most Canadians as it governs relationships between spouses, and between parents and their children. In family law, marriage and divorce fall under federal jurisdiction but most other issues, including adoption and matrimonial property disputes, fall under provincial laws that vary widely. Traditional family structures have changed significantly over time, with increasing numbers of same-sex and common law relationships, and growing divorce rates. This has led to intense debates over the future of family law, court challenges and provincial reviews of legislation.

Family Law in the Provinces and Territories (Except Québec)

Marriage

Marriage ceremonies are governed by provincial law, but Parliament has jurisdiction over marriage (e.g., the age when people can marry, laws forbidding marriage between certain people, and divorce).

Annulment

A marriage can be annulled if one party was under age, or as a result of bigamy (being married to more than one person), a defective marriage ceremony, duress, mental incapacity, or the failure to consummate the marriage because of a physical or mental disability.

Separation and Divorce

Separation is a legally recognized parting by spouses or the agreed end of cohabitation, and can be cited as grounds for divorce. Until the federal Divorce Act of 1968, divorce was governed by pre-Confederation provincial statutes and inherited English legislation. In Newfoundland and Québec, where no divorce legislation existed, divorces could only be obtained through a private Act of Parliament. The 1968 Divorce Act was the first divorce legislation for the entire country. It was repealed and replaced by the 1985 Divorce Act.

The 1985 Divorce Act states that divorce must be based on a breakdown of marriage, which can be established only with proof of cruelty or adultery, or proof the parties have been living apart for a year immediately before the divorce proceeding, and were living apart at the time the petition for divorce was filed. (It is not necessary that the parties had lived apart for a year before the petition is filed. The year, however, must elapse before the divorce judgement is granted.)

Maintenance

Spousal and child support following a divorce falls under federal law, and all other maintenance agreements come under provincial law. Spouses, parents, children (who may have to support dependent parents) and guardians of children all have a legal obligation to support dependants. The means and resources of the parties are important factors in establishing the amount of maintenance. The Divorce Act (and some pieces of provincial legislation) set out other factors relating to the right to receive support and the amount of child and spousal payments. Wives may have to support their husbands and children, and in all provinces except Québec, common-law relationships may result in support obligations.

Matrimonial Property

Under old common law, a husband had the right to own or manage his wife's property. However, wives had the right of "dower" - a life interest in the property the husband owned when he died ( see Property Law). In the 1890s, married women's property Acts introduced the concept of separation of property. This gave wives contractual and tortious rights and responsibilities, though in several provinces legal actions between husband and wife were still forbidden.

Giving women power to acquire property, however, did not alter the fact that employment opportunities for women were restricted and that most property was paid for by husbands and bought in the husband's name. A wife did not obtain ownership based on domestic work or rearing the children, although she did obtain a measure of protection by living in the matrimonial home under Dominion Lands Acts in the West and, to a lesser extent, Dower Acts in the East.

Traditional rules required that for a wife to own property, it must be bought in her name or she must have made some direct contribution to its purchase. This led to the Murdoch Case, in which the wife had no rights of ownership in things she assumed were family assets. The harshness of the old property rules led all of the provinces to amend their legislation to give married women a fairer share in the division of the family's assets ( see Human Rights). Some provincial matrimonial property legislation distinguishes between family and business assets, while in Alberta there is no distinction.

Custody

There is no law requiring that the custody of young children be granted to mothers. Where both parents are working full time, fathers are increasingly winning custody. The courts do, however, use a degree of common sense and can be unwilling to change the status quo if things are working well in a home and can be reluctant to separate siblings.

Third parties, such as aunts or uncles, can also seek custody or visiting rights. The Divorce Act of 1985 provides for increased contact between the child and both parents without expressly mandating joint custody.

Illegitimacy

Historically an illegitimate child was filius nullius, or the "son of no man." References to children in wills were usually taken as referring only to legitimate children. The "status" of illegitimacy has been repealed in several provinces, and parents now have a duty to support their illegitimate children. The procedure for establishing paternity is called filiation.

Modernizing Family Law

British Columbia undertook a major overhaul of its legislation in recent years and on 18 March 2013, the province's Family Act replaced the Family Relations Act, which was more than 30 years old. The new legislation makes many changes to family law. Notably, it clarifies how property is divided up when couples, including those in common-law relationships, break up. It states that common-law couples have the same rights and responsibilities as married couples after two years of living together, and that debts and assets acquired over that time are divided 50-50. The law was amended to reflect the fact that the number of common-law families in British Columbia is growing at a rate three times faster than the number of married couples.

Most other provinces define a couple as acquiring common law status after two or three years of living together, or after less time if there are children. Elsewhere, laws surrounding spousal support and division of assets vary widely. Most jurisdictions require that common law couples have a co-habitation or other legal agreement to deal with the division of property.

Family Law in Québec

Québec family law is largely of French origin, but because marriage and divorce are within federal jurisdiction, there is a strong common-law influence. Moreover, because Québec law has been revised drastically by legislation in the last 20 years, differences in family law between Québec and the rest of Canada are not as strong as they once were. Traditionally the Québec Civil Code consecrated a notion of "paternal authority," which made the husband the head of the family and gave him considerable powers over his wife and children. This notion was applied by the court of appeal in Cheyne v Cheyne (1977), but the decision has since been repealed and the revised Civil Code (1980) insists on absolute equality of spouses.

Other aspects of Québec family law have also changed drastically. Traditional Québec family law was heavily influenced by the Roman Catholic Church (see Catholicism). Divorce was prohibited; separation and annulment of marriage were difficult to obtain. Women could be deprived of their part of community property as punishment for adultery. Illegitimate children were subject to various discriminatory rules and even adopted children were denied full equality. All of this has now changed and has been replaced by modern, liberal provisions. One aspect of the new Québec law has been questioned, however, and that is the tendency to delegate discretion to courts instead of to individuals. For example, a minor who wishes to marry will, in the future, ask the court and not his parents for permission.

Marriage in Québec

Québec marriage law is based on principles similar to those in other provinces, i.e., marriages must be monogamous, require consent of both parties and must include a ceremony, either civil or religious. Québec stands apart regarding common law relationships, though. It is the one province that does not give common law couples financial rights or responsibilities when the relationship ends, yet it has the largest concentration of common law couples in the world (about one-third of the province's residents are in a common law relationship). On 25 January 2013, in a high profile case known as Lola vs. Eric, The Supreme Court of Canada ruled in a narrow 5-4 vote that Québec can continue to exclude common law couples from receiving spousal support. The court ruled after the law was challenged by the ex-partner of a wealthy business owner who was seeking a $50-million separation payment. The couple was not identified to protect the children.

Separation and Divorce in Québec

Separation can now be obtained in Québec with a minimum of formality. Divorce is obtained under federal law. Québec adopted its own fairly liberal divorce provisions in the 1982 Civil Code, but these articles have not been proclaimed because they are not constitutional (divorce is an area of federal not provincial jurisdiction).

Children Québec Family Law

The 1982 code abolished the concept of illegitimacy and includes adoption. It is illegal to trade in children or to accept payment for a private adoption. Parents and children owe each other support even when the child has reached majority, although both parties must strive to be as independent as possible.

The Québec Civil Code and Code of Civil Procedure have been amended in recent decades. In December 1983, a new set of rules for foreign adoptions came into effect making it very difficult to adopt foreign children.

Matrimonial Property

Québec law kept the civilian concept of matrimonial regime (i.e., sharing or separating property between spouses). Couples are free under the Marriage Act to choose one of three regimes. The most common regimes are separation of property and partnership of acquests. If no regime is chosen by marriage contract, the couple is presumed to have selected partnership of acquests. Under this system, each partner keeps the property he or she had at the time of marriage. However, when the marriage ends, the property acquired after marriage is generally divided equally between the parties.

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Family law is critical to most Canadians as it governs relationships between spouses, and between parents and their children. In family law, marriage and divorce fall under federal jurisdiction but most other issues, including adoption and matrimonial property disputes, fall under provincial laws that vary widely.

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Example of a case involving the constituional law in 2020

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Example of a case involving the constituional law in 2020

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Nova Scotia (Attorney General) v. Judges of the Provincial Court and Family Court of Nova Scotia - SCC Cases (Lexum)

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This page contains a form to search the Supreme Court of Canada case information database. You can search by the SCC 5-digit case number, by name or word in the style of cause, or by file number from the appeal court.

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This page contains a form to search the Supreme Court of Canada case information database. You can search by the SCC 5-digit case number, by name or word in the style of cause, or by file number from the appeal court.

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A branch of law that deals with civil wrong doings that cause or lead ti injuries or damages.

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What is a Tort?

The word tort comes from the Latin tortum, meaning "wrong, injustice." The purpose of tort law is not to punish wrongdoers; it is to provide damages to victims as compensation for their losses. It affects nearly every walk of life, from manufacturers and property owners to pet owners, drivers, doctors and bartenders, all of whom have a duty of care.

Although most tort law is judge-made, some originates in statutes that vary from province to province. Unlike criminal law, which involves the state, tort law is used by individuals to claim compensation. It also differs from contract law, where parties have agreed to certain terms or conditions.

Intentional Torts

Intentional torts are the most serious. They are deliberate acts intended to injure others; or to interfere with another person's rights. A common one is battery. This can involve violence with the intent to injure. It also includes acts that are not intended to injure, but still interfere with a person's autonomy and the right to security and dignity. For example, every medical treatment performed without the consent of the patient is considered battery, regardless of the doctor's intent to provide the best care possible. The law respects the absolute right of all competent persons to decide what medical treatment they will accept or refuse.

Other intentional torts include assault and false imprisonment. ( See Wrongful Convictions.) A person can also sue for acts intended to cause emotional distress. Sexual or workplace harassment can fall under this tort; in these cases, a court may award extra or punitive damages to punish the wrongdoer.

When a person is injured by a criminal act, the offender may be prosecuted under the Criminal Code; as well as sued through civil court for damages. Tort law is increasingly used by victims of sexual assaults, as some may find it helpful to seek damages whether or not there is a criminal prosecution. Often, criminals do not have the funds to pay tort judgments. Most provinces and territories make the recovery of damages available through victim compensation funds.

People who commit an intentional tort may plead that they had a valid defence, such as the victim's consent; self-defence; defence of property; necessity; or lawful authority. For example, the defence of consent can protect athletes from being sued for physical contact, as long as the contact is an ordinary part of the game. As well, numerous statutes such as the Criminal Code allow the police to detain and imprison people; or to seize their property. If any of these defences are accepted by the court, the action under tort law will be dismissed.

Torts can involve damage to property as well as injuries to people. Trespassing falls under intentional torts; as does conversion, which is interfering with another person's goods, and detinue, which is refusing to return something belonging to another person.

Another important tort action is defamation. This protects a person's reputation from false and defamatory material - either spoken, published or broadcast.

Torts of Negligence

People are more frequently injured because of the carelessness rather than the deliberate acts of others. This is the tort of negligence. It is the most important of the modern torts. The famous English case of Donoghue v. Stevenson, in which a manufacturer of a soft drink carelessly allowed a snail to crawl into a bottle (it decomposed and caused the plaintiff to become ill), established the principle that everyone is under a legal obligation to take reasonable care to ensure that others will not be injured because of careless conduct, save for a few exceptional situations.

Everyone must live up to the standards of the "reasonable person." This is an important concept of the negligence tort. Based on objective guidelines and built on precedents, the standard allows the court to adapt to the changing circumstances of what might be considered "reasonable." Similarly, if people through their own negligence cause or contribute to their own injuries, they will be held at least partly responsible for their damages under the contributory negligence defence.

Negligence expanded significantly in the 20th century. It now covers a wide range of accidents. Bar owners, for example, can be held liable if they fail to ensure that their intoxicated customers take reasonable care when going home. Drivers can be held responsible if they do not ensure that the occupants of their cars are wearing seat belts; or if they allow incompetent persons to drive their cars. Courts are reluctant, however, to hold public authorities liable for their negligent decisions, as opposed to their negligent acts. It is felt that decisions which raise core policy issues involving the exercise of political discretion be left to elected officials, and not be second-guessed by the courts.

Compensation

If found liable, wrongdoers must compensate victims in full for losses. Compensation will not only include medical bills not covered by health insurance, lost past and future income and the costs of future care; it will also include awards for pain and suffering and the loss of the enjoyment of life. If a tort causes death, the estate and dependants are entitled to seek compensation from the tortfeasor (the person guilty of tort) for their financial losses. Dependants are entitled to be compensated for the loss of support that they would have obtained from the person who was killed. Some provinces, such as Alberta, allow the recovery of damages for the sorrow and grief of survivors. Estates are limited to recovering only monetary losses caused by the death, such as funeral expenses.

Strict Liability

Certain activities are so fraught with risk that compensation to those injured is awarded without the need to establish the defendant's fault. These are strict liability torts. According to the English case of Rylands v. Fletcher, anyone who brings something onto his land which is not naturally there is strictly liable if the thing escapes and injures someone. People are strictly liable for injuries caused by wild animals they keep; or even by domestic pets if they are known to be dangerous; or by fires they have started. However, in view of the expansion of negligence law, these strict liability actions are relatively rare.

One important example of strict liability is vicarious liability. This is where an employer is liable for the torts committed by its employees during their employment. Since employers usually have liability insurance and more resources to pay judgments than their employees, vicarious liability is frequently pleaded.

Land and Product Liability

There are other important torts. A person who unreasonably interferes with another's use and enjoyment of land will be liable for a private nuisance. Under the law of occupier's liability, everyone who occupies a building owes a duty of care to those who visit and who are injured on the premises.

Manufacturers are responsible under the law of products' liability to those who are injured by products that are negligently designed, manufactured or marketed. Under the law, manufacturers are obligated to advise consumers of risks associated with the use of the product. In recent years, this law has resulted in manufacturers being held liable for failing to inform women of the side effects of birth control pills; and of the risk that breast implants can rupture, causing serious problems for the patients using them.

Economic Torts

By virtue of the economic or business torts, people will be held liable if they wrongfully interfere with the economic interests of others. There are a number of these torts, such as inducing breach of contract; intimidation; and conspiracy. Using unlawful means to prevent a third party from economically benefitting a specific person can also lead to a successful claim by the person who was harmed.

Fault-Finding

Of course, many injuries result from pure accident. If the victim cannot prove that the person who caused the accident acted wrongfully, they will not be entitled to any compensation, despite their own innocence, unless this falls under one of the strict liability torts. This has been strongly condemned by critics of negligence law. Some consider it unfair that persons who cannot prove that their injuries resulted from someone else's negligence are left to bear their losses on their own.

Many accidents occur either at work or on the road. ( See also Traffic Law in Canada.) Because of their frequency and tort law's inability to compensate adequately all those injured at work, every province has workers' compensation legislation. It allows workers to receive compensation without the need to establish fault. Those who are covered by workers' compensation are not entitled to sue in tort.

Many Canadian provinces have enacted similar legislation for highway traffic accidents and have replaced tort law with "no fault" compensation schemes. There is a lively debate about the extent to which these schemes ought to be enlarged at the expense of the traditional tort-law process.

New Torts

Recently, new torts have emerged. Invasion of privacy has gained in importance. It has been recognized as a new tort action by some courts. Older torts, such as negligence, are applied increasingly to professional groups such as lawyers, architects and engineers to force them to live up to higher standards of competence; even with regard to people who are not their clients but who can be affected by their negligence. As well, negligence law has allowed bystanders who suffer nervous shock from witnessing terrible accidents involving relatives to sue for their damages caused by the traumatic experience. Rescuers who are injured in attempting to help those in perilous situations can sue the negligent person who created the emergency. The law of negligence has even begun to relax its traditional reluctance against requiring people to assist others; or to prevent harm from being caused to them. There is a growing list of exceptions to the rule that one need not assist others in peril.

People are also held accountable not only for their negligent acts but for misleading advice that may cause loss to others. This development relates to the expanding use of tort law to deal with negligence occurring within commercial or contractual relationships.

Even government officials and agencies are being held liable in tort for damages they cause the public in carrying out their functions. Those who support tort law have applauded these developments. They argue that the civil remedy in tort has been and can continue to be valuable to citizens fighting against more powerful elements of our society.

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Tort law is a cornerstone of the Canadian legal system. It provides compensation for people who have been injured; or whose property has been damaged by the w...

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The Supreme Court of Canada ("SCC") recently heard oral arguments on the appeal between Atlantic Lottery Corporation Inc., et al. v Douglas Babstock, et al, 2018 NLCA 71. This class action provides Canada's highest court with the opportunity to clarify whether a waiver of tort claim can constitute an independent cause of action and whether, under a tort of negligence, restitutionary remedies are available. The action comes from the Newfoundland Court of Appeal ("COA"), where the court answered these questions in the affirmative. In doing so, it recognized a cause of action where a plaintiff may "waive" the tort of negligence in favour of claiming a remedy in restitution, where the focus becomes the gains acquired by the defendant rather than harm suffered by the plaintiff.

Certification as a class action was granted to the Respondents (the "Claimants") who, as a class, claim damages against the defendants, Atlantic Lottery Corporation et al ("Atlantic") based on claims of breach of contract and tortious misconduct resulting in unjust enrichment. The Claimants allege in their statement of claim that video lottery terminals (the "VLTs") operated by Atlantic are "inherently deceptive, inherently addictive and inherently dangerous where used as intended." (Newfoundland Court of Appeal Decision [COA], 95). The Claimants provide examples of such deception including loaded dice, a deceitful "stop" button that provides no control over the outcome, and three-card monte. The Claimants allege that in operating these deceptive VLTs, Atlantic breached its duty of care towards the Claimants. The claim includes many common issues but of particular interest here is unjust enrichment gained as a result of wrongdoing. The Claimants seek restitutionary remedies such as disgorgement of profits that Atlantic acquired as a result of its own tortious wrongdoing, specifically negligence to the Claimants. This particular relief sought is grounded in waiver of tort as an independent cause of action.

The trial judge found in favour of the Claimants and allowed the case to proceed to trial on several common issues, including the waiver of tort. The majority of the COA allowed the appeal in part, but dismissed the appeal with respect to the claim based on waiver of tort and allowed the matter to proceed as a class action. Atlantic appealed to the SCC and was granted leave.

On the facts of this appeal, the SCC will not rule on whether the waiver of tort claim will succeed, but rather whether this cause of action, among other issues, may advance to trial as a common issue. In the context of a class proceeding, this means that a court is only permitted to strike claims if they are found to have no chance of succeeding ( Hunt v Carey Canada Inc. [1990] 2 SCR 959).
Waiver of Tort at the Court of Appeal
The Claimants plead negligence, a breach of the duty of care owed to them by Atlantic but do not plead damages under this claim, often known as compensatory damages. Instead, they "waive" the tort of negligence, and claim "a remedy in restitution" also known as "restitutionary damages". Restitutionary damages include disgorgement, accounting and constructive trust. The focus of these types of damages is on disgorgement of benefits acquired by Atlantic, grounded in the claim of unjust enrichment gained by the commission of Atlantic's wrong. These remedies therefore would not be based on any loss of an individual claimant but rather the improperly acquired gains from the defendant.

The Claimants only have access to disgorgement remedies without having to show proof of loss or harm when a) the tort of negligence can be "waived" and b) if this tortious wrongdoing is permitted as an independent cause of action. In any negligence claim, a plaintiff will first have to establish that the defendant owed them a duty of care, they breached that duty and in the course of breaching such duty, they caused the plaintiff loss or harm. In a waiver of tort cause of action, the duty of care and the breach of this duty still needs to be established, but no proof need be provided of loss or harm. In its Statement of Arguments, the Claimants borrow a quote from a ONCA judgment in explaining this proposition: "waiver of tort allows a plaintiff to claims disgorgement damages based on the tortfeaser's gain or benefit instead of compensatory damages based on the loss suffered." (2105582 Ontario Ltd. v 375445 Ontario Ltd, 2017 ONCA 980). As the Claimants point out, the principle of waiver of tort has also been recognized by the SCC in Pro-Sys Consultants Ltd. v Microsoft Corporation, 2013 SCC 57.

On appeal, the Atlantic asserts that: "waiver of tort is not a separate cause of action and that insofar as the notion is, to use the judge's words, derivative, there has to be a fully-proven tort of negligence, including damage, something that cannot be established given the claimants' concessions on the pleadings and in argument.

The question of whether the claim of waiver of tort at issue on appeal should be permitted can be broken down into three issues: 1) whether there can be restitutionary damages available for tortious wrongdoing, 2) whether waiver of tort can be an independent cause of action without proving loss and 3) whether torts of negligence can be "waived". The COA answered all of these questions in the affirmative. The latter two questions are intertwined and will be jointly discussed.
Restitution for Unjust Enrichment vs. Restitution for Wrongdoing
The COA made an important distinction between restitution for unjust enrichment and restitution for wrongdoing which clarifies the need for waiver of tort as an independent cause of action. A restitution for unjust enrichment is described as "the restitution of benefits conferred on someone who has been unjustly enriched at the claimant's expense" even if the unjust enrichment occurred through no fault of the defendant (COA, 83). The cause of action is unjust enrichment and the remedy is restitution (COA, 85).

Restitution for wrongdoing is a remedy, "that requires the defendant to give up every enrichment received - from either the plaintiff or a third party - by virtue of having breached an obligation owed to the plaintiff."[1] This underdeveloped principle rests on the existence of a wrong against the claimant which results in the defendant's acquisition of a gain. Here, the focus is on stripping the defendant of this gain, rather than reconciling the plaintiff's loss (COA, 86). The COA uses this distinction to demonstrate the need for a restitutionary remedy, rather than compensatory, in a tortious claim.
"Waiving a Tort" as an Independent Cause of Action
Atlantic argues that a restitutionary remedy based on a waiver of tort is only available when the plaintiff proves the elements of the tort, specifically the harm suffered ( Factum of the Appellant ("AF"), 50). The COA disagreed, explaining that a claim based on unjust enrichment stemming from negligence, does not depend on proof of damage to the plaintiffs, as it's sufficient to prove a breach of a duty of care (COA, 139). It can therefore be an independent cause of action and proceed without prove of injury or loss to the plaintiff.

Still, Atlantic, in its appeal to the SCC, outlines it's concerns with providing what it calls a "gains-based remedy" to a waiver of tort. It points how the COA's decision lies in stark contrast with other common law jurisdictions, including England, Australia, New Zealand and the United States (AF, 59). In Australia and New Zealand, for example, restitutionary damages are only available in a waiver of tort claim where all elements of the underlying tort are made out (AF, 50).

Atlantic also points to several policy considerations that weigh against a gains-based remedy for a waiver of tort, which it also presented to the COA. One issue identified but then dismissed by the majority was the possibility of a "multitudinous" plaintiffs and how the court may deal with a situation where multiple plaintiffs exist but only the first receives the windfall of the total profits and the rest are left with nothing (COA, 174). This does not concern the COA for a few reasons. First, one claimant receiving a windfall of all the profits is preferred over the defendant retaining the profits from its wrong. Second, it is similar to what already exists in the area of compensation claims - several plaintiffs may advance their claims independently, where one may get a judgement before the others even file a claim. The court also acknowledges that this type of issue may be resolved with joint case management. Third, the majority explains that the issue being resolved is not to ensure the plaintiffs are all individually compensated, rather that the defendant is not able to profit off of its own wrongs.

Ultimately, the COA found that a gains-based remedy can be available to a plaintiff who merely establishes a breach of a duty of care. It states:

"The time has come to jettison the terminology of waiver of tort and to recognize that a cause of action exists that, in principle, allows for the disgorgement of profits acquired as a result of the commission of a tortious wrong" (COA, 170).

In doing so, the COA provides remedies such as disgorgement against defendants that has acquired gains as a result of its own tortious wrongdoing, even in circumstances where there is no proof of loss to the claimant (COA, 177).

Categories of "Waivable" Tort Cases

The COA highlights the specific categories of tort that have been historically recognized as being capable of being waived. Looking back to the 17 th century, only torts involving proprietary interests and other particular "anti-enrichment" actions were able to be waived in order to receive disgorgement-type relief (COA, 160 -161). By relying heavily on academic work of John D. McCamus, the majority finds justification to expand the net on this principle. The rationale comes from the underlying principle that disgorgement remedies are meant to deter wrongful conduct to ensure profits are stripped when acquired from a wrongful act. The COA sees no reason why this rationale cannot be attributed to other tortious wrongdoing, specifically negligence. In justifying its position, the majority highlights the difference in principles and policies of disgorgement claims compared to compensatory damages, as demonstrated by McCamus, "two different remedies service different purposes or rationales and need not always be available in the same fact situations" (COA, 168).

The majority is satisfied that although historically, personal torts such as negligence were not recognized as causes of action that allowed for restitutionary remedies, specifically when loss to the claimants goes unproven, the time has come for this to change. COA reins in their decision by clarifying that the "normal remedial response" is compensatory damages and that disgorgement may be considered "exceptional" as described by the Claimants (AF, 120; Factum of the Respondent ("FR"), 31).

The majority sums up its decision the following way:

"...it is time to restate as a cause of action a principle that rationalizes the notion underlying waiver of tort leading to the restitution or disgorgement of profits acquired as a result of commission of a tortious wrong: provision of a disincentive or deterrence of wrongful conduct which leads to improper profit-making" (COA, 154).

The COA goes on to clarify that recognition of claims based on waiver of tort does not mean such a claim in the appeal would succeed. It would depend on factual considerations that inform whether or not the enrichment was unjust - a finding that occurs after certification (COA, 174).
Implications
In finding that waiver of tort can be an independent cause of action in negligence claims, thereby granting access to plaintiffs that do not prove loss as a result of a breach of duty to restitutionary remedies, the COA provides an expansion of opportunities for future class actions. Removing the onus of class action claimants to prove loss or injury in a negligence claim which would provide serious relief and make it easier (although, still not easy), to collect damages from defendants.

Will the SCC agree with the COA, or will they take the approach of G. Weber who wrote that, "Granting disgorgement without proof of loss (when it would otherwise be required) results in disgorgement arising out of legal nothingness"? Either way, the legal community, particularly those in class actions are sure to welcome additional guidance in this doctrine.

[1] M. McInnes, The Canadian Law of Unjust Enrichment and Restitution (Markham, ON; LexisNexis Canada Inc., 2014) at 9.

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SCC Hears Waiver of Tort Class Action | TheCourt.ca

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The SCC recently heard oral arguments on the appeal between Atlantic Lottery Corporation Inc., et al. v. Douglas Babstock, et al., 2018 NLCA 71, where it will decide whether to recognize a waiver of tort claim as an independent class action.

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A branch of law that deals with various forms of ownership in real property and in personal property.

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Property, in the legal sense, can mean real property in the form of land and buildings, or personal, movable property. Property law - whether under the common law in most of Canada, or the Civil Code in Quebec - deals with a wide range of rights and obligations owing to individuals and governments, and has evolved enormously, particularly in fairness to women, since the 19th Century.

Property, in the legal sense, can mean real property in the form of land and buildings, or personal, movable property. Property law - whether under the common law in most of Canada, or the Civil Code in Quebec - deals with a wide range of rights and obligations owing to individuals and governments, and has evolved enormously, particularly in fairness to women, since the 19th Century.

What Are Property Rights?

The popular notion of property as something owned, encourages the idea of property rights as absolute. However, property in the legal sense is more accurately regarded as the combination of the legal rights of individuals with respect to objects, and the obligations owed them by others and guaranteed and protected by government. Property is either classified as private property owned by one or more individuals, or public property owned by government.

Property law is also classified under common law as real or personal. Real property (or realty) is land, any buildings on that land, any mineral rights under the land, and anything that is attached to the land or buildings that can be considered permanent. Personal property (sometimes known as chattels) includes any property that is not real property. The difference between real and personal property comes from early English law, under which property was considered "real" if the courts could restore to the dispossessed owner the thing itself, rather than simply awarding damages as compensation for its loss.

Origin and Development

Property law, for all of Canada's common law provinces, originated in England. The laws were established at various time - in Nova Scotia and (what later became) New Brunswick in 1758, Prince Edward Island in 1763, Upper Canada (Ontario) in 1792, Newfoundland in 1832, British Columbia in 1858 and the North-West (later the three Prairie provinces) in 1870.

The Constitution Act, 1867, gave legislative power over property and civil rights to the provinces. Thus general property law, including succession law and matrimonial property law (see Family Law), may only be enacted by the provincial legislatures. However, certain kinds of property (such as bills of exchange and promissory notes, patents, copyrights and interest for the use of money) are within federal jurisdiction. Parliament may incidentally affect property rights through legislation regulating interprovincial or international trade and commerce, through its power of taxation and through its power of expropriation. Nevertheless, general property law is the preserve of the provincial legislatures.

The development of property law has generally been gradual and unspectacular. In the latter part of the 19th century, Canadian provinces and territories enacted statutes that permitted married women to hold property separate from their husbands. Prior to this time, on marriage a woman's personal property was vested in her husband. Separate property for a married woman permitted the matrimonial home to be held in joint tenancy and during the 20th century this became popular.

Evolution of Fairness

In the 19th century, the succession law of real property became the same as that for personal property. The rule of primogeniture - inheritance by the eldest son - gave way, where there was no will, to a sharing of land among the spouse and children in the same way that personal property could be shared. In 1910 Alberta and Saskatchewan, following the example of New Zealand, became the first provinces to enact legislation restricting the power to leave property by will (respectively, the Act Respecting the Rights of Married Women in the Estate of their Deceased Husbands, and the Act to Amend the Devolution of Estates Act). Gradually, all the common-law provinces enacted legislation, called testators' family maintenance or dependants' relief legislation, that empowered a judge to set aside a will if the maker of the will had failed to provide adequate maintenance for a spouse or other dependants.

In 1975, in the Murdoch Case, the Supreme Court of Canada held that an Alberta rancher's wife whose marriage had broken down was not entitled to a share in the ranch, which was registered in the husband's name, even though she had worked hard to make the ranch a success. The unfairness of the law, graphically illustrated by this case, resulted in a profound change in matrimonial property laws throughout the common-law provinces in the 10 years following the decision. Provincial legislation now permits a judge to order a division of property after a marriage has broken down to achieve fairness between spouses no matter who owns the assets.

There has also been a corresponding response by the courts, and property law concepts have been modified to achieve fairer results. In the 1978 Rathwell case in Saskatchewan, the Supreme Court of Canada, in order to prevent unjust enrichment by the title-holding husband, resorted to the constructive trust as a remedial device to prevent unjust enrichment occurring from the contributions made to the acquisition of assets by the wife. In 1980 in Pettkus v Becker, the same concepts leading to an equal division of assets were applied between an unmarried man and woman who had been living together for approximately 20 years, where the contribution of the woman enabled the man to acquire assets.

Deeds and Land-Titles

The property laws of the common-law provinces are generally similar, but one area in which the real property law does differ is in the system of recording the ownership of land. In the Atlantic provinces and in southern Ontario, there is a deed registration system and in the four western provinces and in northern Ontario there is a land titles or Torrens system. Under the deed registration system, individuals establish ownership to land derivatively through their predecessors in title. Theoretically, to establish ownership they should trace the title to the original grant of the land from the Crown. In southern Ontario, it is necessary now to show a good root of title dating back 40 years.

Under the land-titles system or Torrens system, named after Sir Robert Richard Torrens who developed the system in South Australia, the state registers all lands within its jurisdiction by listing who owns them and who has claims against them. Under this system, prospective purchasers need only be concerned with who the register says is the owner and not with whether there is a good root of title.

Changing Property Types

Types of property reflect the economic and social aspects of society. Industrialization introduced new forms of property rights in factories and machines. The growth of joint-stock companies, the forerunners of modern corporations, created new property rights in the form of bonds and shares. Recently the nature of property rights has been transformed by the tendency of modern governments to draw in revenue and power and to pour forth money, benefits, services, contracts, franchises and licences. This government largesse may replace the traditional forms of wealth and new rules will be required to protect individuals from arbitrary government action. It has been suggested that property should no longer be defined solely as the right to exclude all others from the use or benefit of something, but should also comprehend the right not to be excluded from the use or benefit of the achievements of the whole society.

Charter Rights

Although the Canadian Charter of Rights and Freedoms does not expressly protect property rights, such rights are created and are therefore protected by both common law and by statute law - although both can be changed by legislation. Any constitutional guarantee should recognize that property is a social institution that must be constantly remolded.

A great jurist has warned that an absolute right of property would result in the dissolution of society. The importance of this warning can be best illustrated by considering a person who buys a gun. The property rights this person acquires in the gun cannot extend to permission to use the gun in any way. Similarly, landowners should not be permitted to pollute the air and water because this would lessen the enjoyment and property values of adjacent owners, and because of the moral obligation to pass on to succeeding generations a habitable planet. Property rights may therefore be modified to respond to new threats to the environment. There is no preordained harmony between private rights and public welfare; society will always face the dilemma of how to combine the efficient use of resources with effective regulation in the interests of all.

Quebec

In the widest sense, the law of property in Quebec comprises the principles regulating the ways in which all kinds of property may be disposed of and acquired - all the mechanisms and transactions by which property circulates. In a narrower sense, Quebec property law is concerned with defining what constitutes property. In fact, anything with a financial value can be defined as property, and such a definition would embrace any right that is assessable in monetary terms, and not merely rights in things ("real rights") or indeed those things themselves. Traditionally, however, property law is limited to the realm of real rights.

Quebec property law is firmly rooted in the French Civil Law tradition and derives, therefore, from Roman law. Anglo-American common law has had little influence on its institutions (except for the mechanism of the trust and a number of security devices). Quebec law, like French law, has historically attached the greatest importance to land and rights in land as objects of wealth. Indeed, feudal landholding (the Seigneurial System) was only abolished in Quebec in 1854, a necessary reform before the civil law itself could be codified in a modern way (1866). Land in Quebec, whether once held in seigneurial tenure under the French regime or granted by the Crown (since 1763), is now in all cases held by individuals in a "free" tenure, ie, it is held independently of the Crown as absolutely as possible.

The Quebec Civil Code contains the fundamental principles of property law applicable to private persons. Since 1866 it has been supplemented by much ancillary legislation regulating new forms of property (such as hydraulic power) and controlling the use of property in view of contemporary concerns (such as environmental hazards and cultural heritage). The Code nonetheless enshrines two fundamental tenets of Quebec property law: the right of private property (private ownership of lands and goods) and the free circulation of such property. The Code itself regulates private property in this sense, whereas statutory legislation regulates Crown or public and municipal property to which special rules apply.

Quebec civil law views all types of property either as "immovable" (land and its appurtenances, and all rights in land) or as "movable" (physically movable objects as well as claims for money and performances under contracts and obligations in general). This distinction is the thread that runs throughout Quebec law and it is the basis for many of the different legal technicalities attached to various properties. For example, rights of all kinds in land are subject to official recording in the land titles registration system, whereas rights in movable property are not.

Rights in things (technically "real rights") can be divided into three broad categories. Individuals may have either a right of ownership, ie, the right in their own property; a right in the thing belonging to another, ie, a right less than ownership but nonetheless composed of some of the prerogatives associated with ownership; or a right in the form of claim by a creditor to seize and sell a debtor's property to satisfy an unpaid debt.

Ownership, the most complete real right, is the right of using, enjoying and disposing of things in the most absolute manner, provided no use is made of them contrary to law or regulation. Ownership is an "exclusive" or individual right and, as a concept, is unitary. Thus, the law discourages two or more persons from owning the same property jointly (with certain notable exceptions such as of condominiums and aspects of property relations between married persons). Nor does the civil law admit the distinction, known to the common law, of legal and equitable ownership - for example, property shared between a trustee and the beneficiary of a trust. And, because ownership is viewed as exclusive and individual, the general policy of the law is that rights less than ownership vested in other persons are normally limited in time, so that the full integrity of the prerogatives attaching to ownership itself is preserved.

The rights in the second category - rights in things of which someone else is the owner - carry some of the prerogatives of ownership but are less complete than the right of ownership. The right of "usufruct" is the right of possessing, using and enjoying the property (movable or immovable) of another, subject to the obligation of restoring the property (or sometimes its equivalent in money) at the end of the period of enjoyment. This scheme, or variations of it, is often encountered in estate planning.

"Emphyteusis" is the right, under a long-term lease of land belonging to another, whereby the lessee agrees to make improvements in return for the right to enjoy the land as owner for the period specified. It is used principally in connection with large urban development projects. "Real servitudes" are rights of various kinds linking two lands whereby one land (or landowner) is subject to specified obligations or services in favour of the other, such as rights of view or of passage or the obligation not to build a wall above a certain height.

In the third category of rights, a creditor may have a right over the property of his debtor enabling him to seize and sell the property, under the authority of the court, if the debtor is unable to pay his debt. The property subject to seizure by the creditor may previously have been transferred into the possession of the creditor or may have remained in the possession of the debtor. These various security devices in Quebec are known either as privileges - ie, rights attaching to the property of the debtor that have been created by law to secure a varied list of creditors' claims; or as "hypothec," the right of the creditor to seize and sell the immovable property (land, buildings) of his debtor made liable to secure the debt by contract. The hypothec is the civil law equivalent of the mortgage in common-law Canada.

It is not certain in Quebec law to what extent it may be open to private persons to create, under the principle of freedom of contract, real rights or rights of property other than those already laid down in the civil code or in ancillary legislation. The most commonly used property rights are now provided for in these sources.

Fraud Threat

In recent years there has been an outbreak of mortgage title fraud in which criminals either forge or fraudulently convey or mortgage properties posing as the rightfully registered owner. This has been particularly serious in Ontario, where the provincial government was forced to make legislative changes to protect hundreds of innocent property owners from losing their legal title through no fault of their own.

In 2005 the Ontario Court of Appeal ruled in Household Realty Corp. v. Liuthat a fraudulent transfer or mortgage was valid and enforceable once registered. In addition, a forged mortgage was valid because the lenders did not participate in the fraud. As a result, the title was considered impossible to annul, or "immediately indefeasible." In a litany of Ontario cases, innocent property owners lost their title or were forced to comply with requirements of a mortgage they never applied for. The only recourse open to them was to apply for compensation to the Land Titles Assurance Fund that exists under the Ontario Land Titles Act.

Residential title insurance policies in Ontario provided the necessary coverage to property owners to protect against title fraud. But the insurers were forced to bear the costs of claims and were rarely compensated by the Land Titles Assurance Fund.

The Province responded by enacting the Ministry of Government Services Consumer Protection and Service Moderation Act, 2006, which amended sections of the act dealing with fraud. The amendments reversed the position taken in the courts in all previous cases by making it clear that fraudulent transfer or charge is invalid, or indefeasibility would be deferred. However, the subsequent transfer from an interim owner to an innocent purchaser would be indefeasible. As a result, purchasers should check property titles carefully.

In another action to protect innocent title holders, the Ontario Court of Appeal in the Lawrence v. Wright case overturned its previous position and ruled in 2007 that the finding in the Household case that fraudulent mortgages could not be voided was incorrect.

Finally, the Law Society of Upper Canada amended the Rules of Professional Conduct for Ontario lawyers. In cases where the lawyer acts for both purchaser and lender, he or she must provide both parties with all material information relevant to the transaction in writing. The Society suggested lawyers be on the lookout for things such as recent price escalation or recent transfers, even if not instructed to do so by the clients.

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Property, in the legal sense, can mean real property in the form of land and buildings, or personal, movable property. Property law - whether under the common law in most of Canada, or the Civil Code in Quebec - deals with a wide range of rights and obligations owing to individuals and governments, and has evolved enormously, particularly in fairness to women, since the 19th Century.

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A branch of law that deals with the rights and responsiblities of workers.

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Labour law governs COLLECTIVE BARGAINING and industrial relations among employers, their unionized employees and trade unions.

Labour Law

Labour law governs COLLECTIVE BARGAINING and industrial relations among employers, their unionized employees and trade unions. In Canada a distinction is commonly made between labour law narrowly defined in this way and EMPLOYMENT LAW, the law of individual employment relationships, comprising the common law of master and servant and supervening statutory enactments governing the workplace. In England, labour law describes both, and of course a close relationship exists between them. In most provinces these matters are covered in separate statutes, but the Canada Labour Code is Parliament's major enactment governing the workplace for industries within federal jurisdiction, and regulates labour standards and occupational health and safety.

As soon as there were unions in Canada, there were labour laws (see WORKING-CLASS HISTORY), and although it was long thought that these could be enacted by the federal government nationally, in 1925 the Judicial Committee of the Privy Council determined that in the Canadian federal system it was the provinces which had such jurisdiction in a general sense, the jurisdiction of Parliament to enact labour law being limited to certain discrete, albeit major industries - eg, banking, telecommunications and transportation. Prior to the advent of modern labour relations law, the process of collective bargaining was not legally enforceable. Trade unions enjoyed either no, or only limited, legal status and collective agreements were not recognized as contractually binding. The viability of collective bargaining rested solely on the economic strength of the parties and was often maintained by recourse to economic sanction. Workers used the strike for several purposes: as an instrument of persuasion to induce employers to recognize a trade union as their bargaining agent; as an instrument of negotiation to achieve desired terms and conditions of employment within a collective agreement; and as an instrument of relief to resolve disputes arising under a collective agreement once achieved. In this era, the industrial relations system was characterized by instability, labour unrest and widespread interference with production.

Modern labour law provides greater stability and ensures more orderly production by regulating the strike, replacing its use as an instrument of persuasion by the process of certification; replacing its use as an instrument of relief by the process of arbitration; and restricting its use as an instrument of negotiation to a variety of timeliness requirements.

It was not until 1944 that a full national system of collective labour-relations law was established by the federal government, exercising its wartime emergency powers to legislate in spheres ordinarily reserved for provincial legislation by promulgation of regulation PC 1003. After the war it was replaced by federal and provincial legislation ( see LABOUR RELATIONS), eg, Industrial Disputes Investigation Act of 1948 subsequently replaced by the Canada Labour Code and cognate provincial legislation each application in their respective spheres of jurisdiction. These statutes, variously called labour codes, labour or industrial-relations acts or trade-union acts, are all rooted in PC 1003 and are based on the idea, expressed in the preamble to Part V of the Canada Labour Code, that "the common well-being" is promoted "through the encouragement of free collective bargaining and the constructive settlement of disputes." At the heart of labour law lies the volatile ideological issue of how completely the state should regulate the use of economic power by both labour and management in bargaining over wages and other terms or conditions of employment. In the Canadian industrial relations system, collective bargaining generally takes place at the plant level between a single employer and its employees, although in certain sectors (construction, broad based multiemployer industry) wide bargaining takes place.

The Canada Labour Code and each cognate provincial statute protects the right of employees to join the union of their choice by making it an unfair labour practice for an employer to discriminate against employees for joining a trade union or participating in any of its lawful activities. Moreover, the employer is required by law to bargain in good faith with the union chosen as bargaining agent by a majority of his employees. To protect these rights each statute provides for the appointment of a labour relations board, to which complaints of unfair labour practices may be taken and which, upon application filed by a trade union to be certified as a bargaining agent, decides whether a majority of the employees in question wish to be represented by that union. In deciding whether to certify a union, the board must determine the "appropriate bargaining unit," - ie, the group of employees by whom and for whom the selection of the bargaining agent is to be made. Once the appropriate bargaining unit is determined, the labour relations board must ascertain the wishes of the majority by examining dues, receipts and other evidence of membership in the union or by administering a secret-ballot vote, or both. In addition to the legislation there are regulations, practices, countless decisions by labour boards and many court judgements that make up the labour law governing unfair labour practices, union certification and the duty to bargain in good faith.

Once a union has been certified it is entitled to require the employer to meet with its representatives and bargain over the terms and conditions of employment that will form the collective agreement for the employees in the bargaining unit. Either the union or the employer may apply to the minister of labour for the province (or for Canada if the industry is under federal jurisdiction) for conciliation and must do so before either party can engage in economic sanctions ( see LABOUR MEDIATION). If no collective agreement is reached by that process, and in some provinces after a STRIKE vote, the employees can lawfully strike. In some jurisdictions an employer is entitled to have its final offer presented directly to the employees and voted upon, whether before or after strike action has been taken. Legally, a strike is a concerted withdrawal of labour; at that same point in the process the employer can legally lock the employees out. Usually in a strike or lockout everybody loses something: the employer his profits and continuing costs, the employees their wages and the union its strike funds.

It is generally believed that the fear of this mutual loss is the driving force behind collective bargaining. In most cases the union and the employer sign a collective agreement without a strike. The agreements must be of at least one year's duration, and depending on the economic climate, may extend for up to 3 or more years. During that time any strike or lockout is illegal and no other trade union may seek to represent employees in the bargaining unit, nor may employees seek to terminate the trade union's bargaining rights. When the agreement expires the process of collective bargaining, conciliation and strike or lockout starts again. It is only in the interim, or "open" period between collective agreements that provision is made for employees to seek to terminate a trade union's bargaining rights, or for another trade union to apply to be certified as a bargaining agent of the employees in the bargaining unit, displacing the existing certified bargaining agent.

The ordinary CRIMINAL LAW and the law of TORTS and DELICTS determine the legal limits on picketing and other union activity in support of a strike, although in some provinces special laws limiting such activities are administered by labour-relations boards. Strikes are usually lawful and peaceful and are concluded by the signing of a collective agreement, but not necessarily. If the employer wins the strike or lockout so completely that no collective agreement is reached, the employees' jobs are protected only by the unfair labour-practice laws and individual employment law. Aside from the legal aspects of strikes, their economic, political, social and personal implications may be very important.

In public sector collective-bargaining relationships, federal or provincial law may substitute interest ARBITRATION (which is otherwise noncompulsory) for the right to strike, particularly when essential services are involved. The interest arbitrator's function is to establish the terms of the collective agreement upon which the parties have been unable to agree, usually the amount of the wage increase, but certain nonmonetary conditions of employment can be equally or even more contentious. The outcome of interest arbitration is intended to ensure terms and conditions of employment which correspond to those which are standard for employees doing comparable work.

When a collective agreement is in force, it becomes, in effect, the private law of the employer, the employees and the union. Disputes over the application, interpretation or breach of the collective agreement are settled through a grievance procedure which leads finally to grievance arbitration, a process made mandatory by Canadian labour legislation. Although courts will not determine the merits of a grievance dispute, arbitration is not always the final step because application may be made to the courts if arbitrators do not perform their functions properly. The enormous number of arbitration awards and court judgements relating to arbitration comprise the most practically important, if not the most newsworthy, component of labour law. For every strike there are tens of thousands of grievances that are settled by the people involved and hundreds of grievance arbitrations.

Labour law is also concerned with the relationships between unions and their members. Since collective agreements can legally make union membership mandatory, employees may need protection against their own unions. Although generally employers are free to hire at their discretion, once an employee is hired, many collective agreements (and in some jurisdictions the legislation) impose "dues shop" provisions requiring all employees within the bargaining unit to pay dues to the union, whether members or not, in return for its obligation to represent all employees in the bargaining unit equally (the Rand formula), may impose or "union shop" provisions requiring that all employees join the certified union. In some industries (eg, longshoring and construction) because of closed-shop provisions union membership is a prerequisite to being hired. These types of union security provisions have been upheld as reasonable limits to the rights guaranteed under the Canadian Charter of Rights and Freedoms. The common, or judge-made, law, the Canada Labour Code and the labour statutes of some provinces protect employees against unfair union disciplinary procedures and, in the case of the statutes, limit the reasons for which an employee can be expelled from a union or fired as a consequence.

The central issues of labour law are the central issues of our society. How much state regulation should exist? Can economic justice be defined and administered, or must the free market be given more play? Is there a breakdown in order as competing interests vie for public sympathy and support? Although the trend in the 1980s was towards greater regulation of all aspects of the employment relationship, including the wage bargain, the mid-1990s has seen a move towards deregulation driven by the competitive pressures inherent in globalization and the growth of free trade. Regardless, labour law continues to be a major component of labour relations and the collective bargaining system.

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Labour law governs COLLECTIVE BARGAINING and industrial relations among employers, their unionized employees and trade unions. Labour law governs COLLECTIVE BARGAINING and industrial relations among employers, their unionized employees and trade unions.

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In Yared v Karam, 2019 SCC 62 ( Yared), the Supreme Court of Canada ("SCC" or "Court") grappled with conflicting rights and obligations at the intersection of trusts and family patrimony under the Civil Code of Quebec, CQLR c CCQ-1991 (). Family patrimony determines the joint assets in a marriage, which should be divided after its dissolution or breakdown. Family patrimony provisions under the CCQ are intended to protect vulnerable spouses from the sometimes-detrimental effects of economically unequal relationships. Trusts, on the other hand, are established to protect assets held by the trust for its beneficiaries. So, what happens when a family residence is held in trust? Does it matter whether the trust was established in good faith, rather than for the express purpose of avoiding its inclusion in the family patrimony? The majority held that a family residence held in trust, where one spouse is a trustee with extensive powers, should be included in the family patrimony. As the appellants' counsel, Stewart Litvack, said following the decision's release in December 2019, "courts are [increasingly] putting family patrimonial rules above trust rules, they're widening their interpretation of family rules, and limiting their protection of trusts" ( Canadian Lawyer Mag). This somewhat muddies the waters for families seeking to establish a trust for themselves or their children as trusts are no longer as protective of assets as they have been in the past.
The Facts
Ms. Yared and Mr. Karam had been married for 12 years when they found out Ms. Yared had incurable cancer ( Yared, para 4). They decided to set up a trust to ensure their four children would be the beneficiaries of the family assets ( Yared, para 4). Accordingly, the children and Ms. Yared were the beneficiaries of the trust, Mr. Karam and his mother were the trustees, and Mr. Karam was the electeur of the trust. As electeur, Mr. Karam had the power to name new beneficiaries, including himself; destitute any beneficiaries; and determine how the revenues and capital of the trust would be distributed ( Yared, para 5). The couple used the trust to purchase a home for $2,350,000 in Montreal, intended for use as a family residence as well as an investment ( Yared, para 6). Two years after this purchase, Ms. Yared filed for divorce, and changed her will to divide her estate into four trusts, one for each child. The divorce was not finalized by the time she passed several months later. Ms. Yared's brothers were liquidators of Ms. Yared's estate upon her passing, and they sought a declaration from the Superior Court of Quebec that the value of the family residence was included in the division of the family patrimony ( Yared, para 8).
The Issue & Procedural History
Art 415 CCQ includes in the family patrimony property owned by one or the other of the spouses, including the residences of the family or the "rights which confer use" of them. That last phrase was introduced to prevent a spouse from using a corporation to purchase a home with the intention of avoiding the rules around family patrimony ( Yared, para 33). In Yared, the spouses had used a trust to purchase their family home. Importantly civil trusts are defined as a patrimony by appropriation (art. 1261 CCQ). This means that the property in the trust is not owned by anyone, whereas property in a trust under common law is owned by the trustee. The main issue before the Court, then, was whether the husband's extensive powers as trustee amounted to "rights which confer use" of the family home, which would therefore include the home in the family patrimony, requiring the husband to pay 50% of the property value into the wife's estate.

The trial judge decided the full value of the family residence should be included in the family patrimony because Mr. Karam's extensive powers as trustee and electeur gave him the "rights which [conferred] use" over the property ( Yared, para 10). He also gave other reasons which were rejected by both the Court of Appeal and the Supreme Court. The Court of Appeal overturned his decision based primarily on their concern for spouses' contractual freedom, concluding that no part of the family residence should be included in the family patrimony ( Yared, para 15).
The Analyses and Decisions
The Court decided the appeal in a 5-2 split. Justice Rowe wrote the majority opinion, signed on by Chief Justice Wagner and Justices Abella, Brown, and Martin. The majority decision was chiefly concerned with the purpose of the family patrimony provisions-to protect the public order ( Yared, paras 22-24). The dissenting judges, Justices Côté and Karakatsanis, were more concerned about spouses' ability to contract freely regardless of the consequences to public order ( Yared, paras 84-87).
"Rights Which Confer Use"
Art. 415 CCQ reads: "The family patrimony is composed of the following property owned by one or the other of the spouses: the residences of the family or the rights which confer use of them..." Justice Rowe read the words "rights which confer use" as indicating the legislator's intention to include in the family patrimony living arrangements where neither spouse has title to their family residence but they do have control over it ( Yared, para 33). Indeed, the provision was created to prevent spouses from using corporations to purchase homes in order to shield themselves from family patrimony laws. Jurisprudence in Quebec already addressed the possibility of a property in trust creating rights which confer use of that property for one spouse. The case history showed that simply occupying a residence would not be enough to demonstrate a right which confers use; a requisite level of control over the residence is also required ( Yared, paras 36-37). The trial judge found that Mr. Karam's powers established that control over the residence, as Ms. Yared was not a trustee nor an electeur, and thus he did hold rights conferring use of the residence. Justice Rowe agreed.

Justice Côté, writing for the dissent, conceded that there may be situations where it is necessary to include a trust-owned property in a family patrimony because it would amount to rights which confer use, per art. 415 CCQ ( Yared, para 88). However, she disagreed that this was such a case, highlighting the difference between power and rights. While she agreed that Mr. Karam had substantial power according to the trust deed, he also had significant duties and obligations that arose in conjunction with that power. He could not act in his own self-interest unless he was himself a beneficiary and, even then, he could not exercise his authority arbitrarily, according to art. 1283 CCQ ( Yared, para 95). A right, by contrast, is exercised in one's own interest ( Yared, para 98). Therefore, his ability to control the residence only existed within the established parameters of the trust and he therefore did not have the right which conferred use.

Again, the Court split on the significance of the parties' intentions in establishing and administering the trust. The rules around family patrimony exist to protect vulnerable parties in the institution of marriage and, according to Justice Rowe the parties' intentions are not relevant in pursuing this objective ( Yared, para 47). If a spouse's ability to access the protections offered by art. 415 CCQ to ensure equity in their marriage, they would be unduly burdened by the requirement to prove their spouse's bad-faith intention to evade the rules ( Yared, para 49).

Justices Côté and Karakatsanis, on the other hand, believed the intention of the parties was crucial in art. 415 CCQ. Firstly, a trust deed is a contract, which means its interpretation relies on consideration of the parties' intentions in establishing the trust, among other things ( Yared, para 100). Where a trust has no legitimate purpose beyond evading the family patrimony rules, this demonstrates a bad faith intention and the trustee may have a right which confers use ( Yared, para 101). This was consistent with jurisprudence in which courts have included property held in trust in a family patrimony in the past, demonstrating the importance of intention in deciding these cases ( Yared, paras 103-105).

Justice Côté pointed out that if Mr. Karam is found to hold rights conferring use of the property as trustee and electeur, then the property will be both held by the trust and part of the family patrimony. In effect, Mr. Karam could end up owing his children 150 per cent of the value of the property ( Yared, para 134). If he is required to pay have of the property value into Ms. Yared's estate, that money is coming out of a trust that is operated for the benefit of his children. In other words, it is his children's money that is being used to pay out their mother's half of the family patrimony into her estate, which will eventually be paid to them. As beneficiaries of the trust, they could still be owed the full amount of the property value even after half has already been given to them through the liquidation of their mother's estate. This clearly leaves Mr. Karam in a very vulnerable position ( Yared, para 138).

The majority opinion did not believe this concern will come to fruition. Justice Rowe suggested that it is open to the courts to modify a trust deed under art. 1294 CCQ, and it should be expected that the courts would do this in a situation as patently unfair as the one suggested by the dissent ( Yared, para 68). Justice Côté argues that this is not a satisfactory answer, since the Court is not in a position to predict how other courts should respond to this conundrum and trust deeds can only be amended insofar as the amendments promote the purpose of the trust more than if the trust remained unchanged ( Yared, para 135).
Conclusion
In considering how the majority's decision might impact the lives of the parties in this case, I am more inclined to agree with the dissent's opinion. For instance, consider if the facts in this case were the same except that instead of Ms. Yared passing away, the couple did simply divorce. Based on the majority's decision, the family residence, held by the trust, would still be included in the family patrimony. In effect, Mr. Karam would still have to pay Ms. Yared half of the property value, however I believe that money would go directly to her, while "his" half of the property value would remain in the trust for the benefit of the children. The concern that he may still owe the children 100% of the value of the property remains, meaning Mr. Karam loses a lot of money, which was not really his in the first place. The fact that Mr. Karam demonstrated no ill will or bad faith in the establishment nor in the administration of the trust, that Ms. Yared and Mr. Karam had established the trust together, and that Mr. Karam simply wanted to protect their collective assets for the benefit of their children would make such a situation unconscionable. While there are of course ways of mitigating this kind of situation, as Justice Rowe raised, this does seem to create the very situation the law is trying to avoid: a situation where one spouse is clearly economically disadvantaged.

In any case, the impact of this decision on the way families manage their assets is significant. It demonstrates the Court's chief concern for equality in the institution and dissolution of marriage. In Yared, that concern was paramount over legal vehicles which simply could be used to protect property from inclusion in a patrimony, even if that was not the intention.

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Yared v Karam: Equality in Family Patrimony Triumphs - TheCourt.ca

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In Yared v Karam, 2019 SCC 62 ( Yared), the Supreme Court of Canada ("SCC" or "Court") grappled with conflicting rights and obligations at the intersection of trusts and family patrimony under the Civil Code of Quebec, CQLR c CCQ-1991 (). Family patrimony determines the joint assets in a marriage, which should be divided after its dissolution or breakdown.

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David Matthews was a skilled food scientist who, the courts have found, was forced out of his job at Ocean Nutrition and entitled to 15-months notice. During that notice period, Matthews' million-dollar-plus incentive vested. Is Matthews entitled to that bonus amount? That's a question the Supreme Court of Canada ("SCC") will answer soon following an October 2019 hearing. In the meantime, we have the Nova Scotia Court of Appeal's ("NSCA" or "the Court") 2-1 finding against Matthews in Ocean Nutrition Canada Ltd v Matthews, 2018 NSCA 44 [ Matthews], to reflect on from which to project possible outcomes.
Factual and Procedural Background
Matthews started work as a food scientist and senior executive at Ocean Nutrition's predecessor company in 1997, and his work in developing methods for processing Omega-3 oils made Ocean Nutrition ("the Company" or "ONC") a leader in that industry. In 2005, a new investor acquired a minority stake in the company, with an eye to eventually selling the company. In 2007, under the influence of the new investor, Ocean Nutrition hired a new Chief Operating Officer ("COO") to whom Matthews eventually became a direct report.

Under the new COO and over the following five years, Matthews' job description and duties were changed five different times. Matthews' job duties were progressively reduced over that time, and he was gradually sidelined from significant involvement in projects that were relevant to his job descriptions and expertise, in some cases to the detriment of the Company.

Also in 2007, the Company put in place a Long Term Incentive Program ("LTIP") for the senior management team, Matthews included, that would grant the recipients a specified share of the proceeds if the company were to be sold during their tenure with the Company. In June 2011, Matthews left the Company and filed suit alleging wrongful dismissal. In July 2012, Ocean Nutrition was sold to a competitor which would have triggered a $1,086,893.36 payout to Matthews under the terms of the LTIP were he to be deemed an employee at the time.

In a series of rulings - Matthews v Ocean Nutrition Canada Ltd, 2017 NSSC 16 and Matthews v Ocean Nutrition Canada Ltd, 2017 NSSC 123 - LeBlanc J of the Nova Scotia Superior Court ("the Trial Judge" and "the Trial Court" respectively) found that the ongoing diminishment of Matthews' role within the company constituted constructive, and therefore wrongful dismissal, awarding Matthews 15-months notice of termination - a period overlapping with the sale of the Company. The Trial Court further found that the COO had repeatedly lied to Matthews about Matthews' status with the company and repeatedly lied to the Company's senior management and Board about Matthews' job performance. Finally, the Trial Judge awarded Matthews the $1,086,893.36 based on the LTIP amount.

On appeal, the Court unanimously concurred with the Trial Court that Matthews had been constructively and wrongfully dismissed and that he was entitled to the 15-months notice. The Court, however, split on the question of whether Matthews was entitled to the million-dollar payout. It is this question that the Supreme Court is currently contemplating.
Legal Background
Ocean Nutrition's LTIP was subject to a contractual limitation that the "Agreement shall be of no force and effect if the employee ceases to be an employee of ONC, regardless of whether the Employee resigns or is terminated, with or without cause." ( Matthews para 67).

In Kieran v Ingram Micro Inc, 2004 CanLII 4852 (ONCA) [ Ingram Micro], the Ontario appeals court ruled that an employee who was wrongfully dismissed was nonetheless ineligible for stock options pursuant to an employment contract that said that the employee would cease to be eligible if their employment was "terminated for any reason" (emphasis added). Meanwhile, in Alberta the appellate court ruled in Styles v Alberta Investment Management Corp, 2017 ABCA 1 [ Styles], that an LTIP that was potentially payable to "employees" meant "active employees" and that a paid notice period in lieu of working notice did not entitle the employee to the LTIP payment during that notice period.

In Honda Canada Inc v Keays, 2008 SCC 39 [ Keays] Canada's highest court ruled that a duty of good faith is an implicit term of employment contracts. Later, the SCC in Bhasin v Hrynew, 2014 SCC 71 [ Bhasin], quoted from Keays and found that not only is there a general duty of good faith in performance of a contract but that there is a specific duty of honesty in that performance. Bhasin was not, however, an employment law case.

Finally, going all the way back to Hadley v Baxendale, [1854] EWHC J70, it has been established law in common law jurisdictions that damages arising from a breach of contract are limited both by the earlier doctrine of expectation damages - the value that would accrue to a plaintiff but for the breach - and by the damages that are reasonably foreseeable or explicitly contemplated by the parties.
The Majority's Position
Writing for the majority, Farrar JA (with Bryson JA concurring) focussed almost entirely on the plain language of the contract itself, concentrating on the meaning of the phrase "the Agreement shall be of no force and effect if the employee ceases to be an employee of ONC, regardless of whether the Employee resigns or is terminated, with or without cause." The Majority, here, relied on the Alberta court's ruling in Styles to determine that an employee is someone who is actively engaged in the employment activity and that it does not include a person who is receiving pay in lieu of working notice. They further looked to both Ingram Micro and Styles in determining that the clause stipulating termination "with or without cause" would give rise to LTIP ineligibility fully captured the circumstances of Matthews' termination.

The majority also relied heavily on the Trial Court's finding that there was no specific intention on the part of the employer to deprive Matthews of the LTIP payment in their decision to terminate Matthews' employment. It was on these three bases that they found Matthews ineligible for the million-dollar payout, either as a direct contractual entitlement or in damages for the breach, reasoning that where there was no direct entitlement there could be no damages.

The majority did not give consideration to the notion that there may have been implicit contract terms that were breached by the employer.
The Dissent
Writing in dissent, Scanlan JA side-stepped the issue of the text of the LTIP agreement entirely. Instead, he focussed exclusively on the employer's implicit duties of good faith and honesty coming from Keays and Bhasin in performance of the contract. Scanlan JA reasoned that the constructive dismissal of Matthews was in itself an act of bad faith in breach of the contract. He went further, however, in saying that the SCC in Bhasin, by quoting approvingly from Keays, intended for the duty of honesty to apply to employment contracts as well as other sorts of agreements. From there, he reasoned that the COO's ongoing dishonest conduct breached this duty as well.

From that platform, Scanlan JA went on to reason that, but for the bad faith and dishonesty of the employer - or at least the COO - Matthews would have continued to be an employee at the time that the LTIP vested, and that a sale and a consequent payout were reasonably foreseeable by the parties.

Scanlan JA then turned to the question of whether the employer should be found liable for the bad faith and dishonesty that was grounded exclusively in the conduct of the COO. On this issue he found that either a) the COO was acting in the course of his employment, which would make the employer vicariously liable as a matter of black letter law; and b) that if the COO was "on a frolic of his own" the employer should not be entitled to benefit from that misconduct by retaining the $1 million.

Pursuant to the rule in Hadley v Baxendale, then, the dissenting Justice would have awarded the $1,086,893.36 to Matthews as damages.
Analysis
The Supreme Court of Canada has been asked to weigh in on five issues related to the LTIP payments: 1) Did the Court of Appeal err in failing to provide a remedy on the basis of a breach of the organizing principle of good faith and duty of honesty in contractual performance? 2) Did the Court of Appeal err in treating the employee as suing for the Long Term Incentive Plan (LTIP), rather than for damages? 3) Did the Court of Appeal err in treating the employee as suing for the LTIP rather than for damages? 4) Would equity entitle the employee to the LTIP? and 5) What standard of review is applicable under the circumstances?

The Court's majority reasoning, to this writer's mind, has two significant and potentially fatal omissions. The majority's failure to even address the notion of breach based on the duties of good faith and honesty is problematic - it suggests that there is an argument that they simply preferred not to confront. Further, the majority's conflation of reasonably foreseeable damages with a specific contractual entitlement seemed, to their minds, to merit little discussion, again giving rise to a possible inference that the underlying arguments are not especially strong.

At the same time, it is not established law in Canada that there is a duty of honesty in employment contracts. It does seem plausible, however, that the SCC will be willing to apply Bhasin to cases of employment contracts, especially given that in Bhasin the SCC overruled the Alberta Court of Appeal on which the majority in this case relied so heavily.

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David Matthews v Ocean Nutrition Canada Ltd: Can terminated employees reel in big bonuses during their notice period? - TheCourt.ca

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David Matthews was a skilled food scientist who, the courts have found, was forced out of his job at Ocean Nutrition and entitled to 15-months notice. During that notice period, Matthews' million-dollar-plus incentive vested. Is Matthews entitled to that bonus amount? That's a question the Supreme Court of Canada ("SCC") will answer soon following an October 2019 hearing.

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Example of a case involving administrative law in 2020

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Example of a case involving administrative law in 2020

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The question of overlapping jurisdiction between a human rights tribunal and a labour arbitrator on a complaint of discrimination is set to reach the Supreme Court of Canada ("SCC"), following the granting of a leave to appeal for Northern Regional Health Authority v Manitoba Human Rights Commission, 2017 MBCA 98 [ Northern Regional], last month.
Background
Linda Horrocks was a health care aid at the Northern Lights Manor, a personal care home run by the Northern Regional Health Authority ("NRHA"). As she was a member of the Canadian Union of Public Employees, Local 8600, a collective agreement governed the employment relationship between Horrocks and Northern Lights. The collective agreement prohibited discrimination on the basis of the employee's physical or mental disability, which is also a statutory protection under the Manitoba Human Rights Code, CCSM c H175 [the Code]. Horrocks struggled with an alcohol addiction. The NRHA conceded that this addiction constituted a disability protected under the collective agreement and the Code. During meetings held with her to discuss her chronic absenteeism, Horrocks failed to disclose her disability and the counselling she was receiving at the time to her employer ( Northern Regional, para 9).

On June 3, 2001, Horrocks was intoxicated at work and the NRHA suspended her work without pay pending an investigation. At a meeting to discuss her suspension, she disclosed her addiction and was enrolled in a program offered by the Addictions Foundation of Manitoba ("AFM"). She had signed a three-month abstinence agreement the day prior (para 10). On June 21, Horrocks refused to sign an agreement proposed by the NRHA, which including terms that required her complete abstinence from alcohol, participation in weekly AFM counselling, mental health counselling, and a residential rehabilitation treatment program, and permanent submission to random alcohol and drug testing by the employer. Following advice from the union, Horrocks refused to sign the proposed agreement, claiming that the terms were discriminatory on the basis of her disability. The union told the NRHA that "if [the complainant] signs it then she would be setting herself up to fail" (para 12).

Nearly a month later, Horrocks's employment was terminated and the NRHA's reasoning included the incident of her intoxication at work and a lack of "reasonable assurance" that her addiction was being treated and controlled. The NRHA cited the proposed agreement that Horrocks had refused to sign as a reasonable effort to accommodate her disability. The union grieved this first termination on the basis that it occurred without just cause. NRHA denied the grievance and the union requested arbitration. A settlement agreement just prior to an arbitration hearing, between the union, the NRHA and Horrocks, included terms very similar to the earlier proposed agreement. Under this agreement, a breach of these conditions - abstinence or random testing, among others - would constitute just cause for termination. Following this settlement agreement, Horrocks's employment was terminated a second time for her intoxication at work, which constituted just cause under the above conditions.

Rather than filing a grievance under the collective agreement, Horrocks brought a complaint under the Code. This gave rise to a jurisdictional objection by the NRHA, which argued that the dispute's essential character was within the exclusive jurisdiction of the collective agreement and, therefore, a labour arbitrator. The Chief Adjudicator argued that she had jurisdiction to decide the claim under the Code, thereby holding that Horrocks's addiction fell under the protection of the Code and was a factor upon which Horrocks was treated adversely. The main test for discrimination in the employment context is whether the employer met the standard of reasonable accommodation to the point of undue hardship and/or whether such a discriminatory condition is a bona fide occupational requirement. The adjudicator found that the NRHA did not meet this test.

The NRHA applied for judicial review of the Chief Adjudicator's decision. Specifically on the matter of jurisdiction, the NRHA argued that the adjudicator erred in her decision and the matter was for a labour arbitrator under the terms of the collective agreement and The Labour Relations Act, CCSM c L10 [the Act]. The reviewing judge set aside the Chief Adjudicator's jurisdictional decision on judicial review and found that the dispute was essentially about whether there was just cause to terminate employment, which fell exclusively under the purview of the collective agreement.
The Manitoba Court of Appeal Decision
The Court of Appeal (MBCA) allowed the appeal. While it found that the reviewing judge erred in overturning the Chief Adjudicator's decision on the matter of jurisdiction, it also found that the Chief Adjudicator's view of her jurisdiction was too broad ( Northern Regional, para 43). By reviewing the NRHA's objection to her jurisdiction over the dispute, "the Chief Adjudicator was doing much more than simply evaluating the evidence and interpreting or applying a home statute, the Code [...] the Chief Adjudicator's jurisdictional decision has implications well beyond the instant case" (para 43).

The Court first found that the jurisdictional question between labour arbitration and human rights adjudication is to be decided on a standard of review of correctness (para 44). It decided this on the basis of several SCC decisions in which questions of jurisdiction between two administrative bodies were at issue, including Weber v Ontario Hydro, [ 1995] 2 SCR 929, and Quebec (Commission des drouts de la personne et des drouts de la jeunesse) v Quebec (Attorney General), 2004 SCC 39.

Further, the Court also held that the provisions of the Act and the Code point towards exclusive jurisdiction of labour arbitrators when the dispute concerns the dismissal of a unionized employee. The Court also found that the essential nature of the dispute in this case is not whether the collective agreement itself is discriminatory, but whether the actions of the employer were discriminatory, a kind of dispute that is often decided through labour arbitration. It stated that "the interplay of the Act and the Code leads to the conclusion that an alleged breach of the Code [...] is a matter within the exclusive jurisdiction of a labour arbitrator appointed pursuant to the relevant collective agreement to hear and decide" (para 67). Therefore, the Court set aside the Chief Adjudicator's decision regarding jurisdiction and found that the matter should be decided through the procedure outlined in the collective agreement.
The Potential Supreme Court Decision
With this central question of the jurisdictional boundaries between labour arbitration and human rights adjudication making its way to the SCC, the decision could have significant implications for employees making human rights claims involving employment relationships governed by a collective agreement.

Depending on how strongly the SCC draws the line between the exclusive jurisdiction of a labour arbitrator and that of a human rights tribunal, the decision could also have ramifications for how inclined labour arbitrators feel to incorporate and interpret human rights legislation. Jurisprudence has established the labour arbitrator's responsibility to interpret and apply human rights legislation in deciding such disputes, such as Parry Sound (District) Social Services Administration Board v OPSEU, Local 324, 2003 SCC 42, but a decision that draws black-and-white jurisdictional lines may, in practice, further separate labour arbitration from the human rights realm and the ideas that govern it.

Importantly, the SCC could shed light on a key question for those whose jobs are governed by collective agreements: what is a unionized employee's right to file complaints of discrimination under human rights legislation? And, according to law, is either the labour arbitration mechanism or the human rights mechanism more well positioned to approach questions of discrimination? The Court could provide insight into which realm can, when such issues are on the docket, more effectively balance the unequal power relationships between employee and employer, fairly assess questions of reasonable accommodation, and provide sufficient recourse to those who have been discriminated against on the basis of a disability.

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Appeal Watch: Jurisdictional Questions between Human Rights Tribunals and Labour Arbitrators - TheCourt.ca

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The question of overlapping jurisdiction between a human rights tribunal and a labour arbitrator on a complaint of discrimination is set to reach the Supreme Court of Canada ("SCC"), following the granting of a leave to appeal for Northern Regional Health Authority v Manitoba Human Rights Commission, 2017 MBCA 98 [ Northern Regional], last month.

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In one of its final acts of 2019, the Supreme Court of Canada ("SCC") granted leave to appeal to a legal dispute over the binding of a pre-incorporation agreement. In The Owners, Strata Plan LMS 3905 v Crystal Square Parking Corporation, 2019 BCCA 145, the owner of an office tower claimed it was not bound by the provisions of an agreement that it entered into before it was incorporated. Whereas the British Columbia Supreme Court ("BCSC") found for the owner of the office tower ( 2017 BCSC 71), the British Columbia Court of Appeal ("BCCA") disagreed. This year, the SCC will weigh in on pre-incorporation contracts and what makes them binding, providing necessary clarification on a legal principle widely used in corporate law.
Factual History
The Crystal is a large development in Burnaby, British Columbia. The development includes seven airspace parcels, which contain a mixed use retail complex, an office tower, a residential tower, a hotel complex and - of particular importance on appeal - a parking lot. The Crystal Square Parking Corporation ("CSPC"), the respondent to the SCC appeal, has owned the parking facility since 2002. The appellant to the SCC appeal is a strata corporation[1] for the owners of Strata Plan LMS 3905 ("Strata"), the office tower in the development.

In March 1999, the Crystal Square Development Corporation ("Developer") and the City of Burnaby entered into an agreement that contains easements for access to parking facility and covenants to pay for that access ("ASP Agreement"). The ASP Agreement was registered as an easement at the Land Title Office, shortly after the agreement was made but before Strata's incorporation. The ASP Agreement, known as a pre-incorporation agreement, is the issue in question at appeal.

The ASP Agreement contained particular provisions regarding the parking facility, including parking and access rights, parking fees, and capital costs. While the Strata did not exist when the ASP Agreement was executed, the Developer and the City of Burnaby contemplated its existence by specifically referencing it within the ASP Agreement. Moreover, the ASP Agreement included covenants by the parties to have their successors (the strata corporations) sign assumption agreements to assume ongoing obligations set out the ASP Agreement. The ASP Agreement also contained a provision that such covenants run with the land.

Conflict ensued in January 2012 when CSPC's agent who operated the parking facility demanded capital reserve payments from Strata, as was allegedly permitted under the ASP Agreement. Strata refused and continued to only pay base rent and operating costs. In response to Strata's refusal to pay the capital reserve payment, CSPC revoked its parking privileges and threatened to tow any vehicle found in the Parking Facility (BCSC, 38).
Procedural History
Strata launched a civil claim against CSPC, claiming that the Developer breached the duties owed to Strata by entering into an agreement on terms that were unfair to Strata. Strata further sought a declaration that the ASP Agreement was void on the grounds of unconscionability. Finally, Strata claimed they were not bound by the ASP Agreement because they were not parties to the ASP Agreement as it was created prior to Strata's incorporation. In the alternative, Strata maintained that positive obligations set out in the ASP Agreement including the obligation to pay various parking fees and operating costs did not run with the land, and therefore did not bind Strata.

The Trial Judge held that there was no post-incorporation contract and therefore no binding pre-incorporation contract for three reasons: a) absence of privity; b) misplaced reliance on the benefit/burden exception; and c) non-adoption of the Contract.

Like the Trial Judge, the BCCA found the test in Heinhuis v Blacksheep Charters Ltd., [1987] BCJ No. 2238 [ Heinhuis] to be applicable. However, unlike the lower court, the BCCA found that the Heinhuis test was met on the facts. The BCCA rejected Strata's argument that the Heinhuis test was inapplicable to the case, finding that the test is a general rule "applicable to all cases where a newly incorporated entity shows an intention to be bound by a new, post-incorporation contract identical to that entered into by its predecessor before it was incorporated" (BCCA, 40). In concluding that the Heinhuis test was met, the BCCA allowed the appeal and found Strata to be bound by the ASP Agreement.
Is the Pre-Incorporation Contract Binding?
A pre-incorporation contract is a contract established before a party is incorporated. A pre-incorporation contract "can be the basis for a new, and identical, contract that binds the party once it is incorporated ["post-incorporation contract"], where the party shows an intention to be so bound." (BCCA, 33). In other words, in order for a pre-incorporation contract to be enforceable, the parties' conduct must establish an intention to be bound through a new contract containing identical terms (BCSC, 63). The issue in question on all judicial levels, was whether Strata adopted the pre-incorporation agreement after incorporation and would therefore be bound by the obligations under such contract. In finding Strata to be bound by the pre-incorporation agreement, the BCCA considered privity, post-adoption of the ASP Agreement after incorporation and the intention of the parties.
Privity
The Trial Judge found no privity of contract between Strata and CSPC because Strata was not an original party to the ASP Agreement. On appeal, CSPC argued that lack of privity is indeed the exact purpose of the law surrounding pre-incorporation contracts. In its factum, CSPC stated that by definition, "a corporation cannot be a party to a pre-incorporation contract. Privity will always be absent." ( Appellant's Factum, 78). The BCCA agreed with CSPC, clarifying that the rationale behind the test set out in Heinhuis was whether the parties have adopted post-incorporation contracts because of the lack of privity between parties during the pre-incorporation.
Adoption of ASP Agreement
In finding that Strata was not bound by the ASP Agreement, the Trial Judge pointed to the fact that there was no subsequent conduct evidencing that Strata entered or wish to enter into an agreement like that of the ASP Agreement. That is, there was also no adoption (i.e. no execution of documents, no passing of resolutions) of the ASP Agreement or a contract containing identical terms after incorporation. Thus, the BCSC concluded that although the intention for Strata to eventually adopt the ASP Agreement may have been present at drafting, there was no evidence that it was actually adopted.

At the BCCA, CSPC argued that the Trial Judge erred in placing weight on this lack of formal adoption of the ASP Agreement, relying on the law from Heinhuis. The BCCA in Heinhuis placed emphasis on the conduct of the parties involved when evaluating whether each party demonstrates that they intend to be bound by the pre-incorporation contract. In Heinhuis, the court found that a party's possession of an item and "treating it as its own" constituted acceptance of the pre-incorporation agreement ( Heinhui s, 19). The BCCA agreed with CSPC, finding that CSPC's conduct demonstrated a "continuing offer to afford an easement to the Strata," and Strata's conduct in using the easement and paying the parking fees listed under the ASP Agreement constitutes acceptance of the offer and, correspondingly, acceptance of the pre-incorporation contract (BCCA, 48).
Subjective vs Objective Intentions
In order for there to be a valid pre-incorporation contract, there must be an intention by the parties' to be bound by a new, post-incorporation contract containing identical terms. The Trial Judge found there was no evidence of such intention.

While the BCCA must afford deference to the Trial Judge's finding of fact, it can and did set aside her conclusion of a mixed question of fact and law: whether the parties' conduct established an intention to be bound by the contract. The appellant court laid out CSPC's arguments in support of its final conclusion that the Trial Judge erred in considering the Strata owner's subjective understanding of their obligations. The Trial Judge relied on the subjective intentions of the Strata owners, particularly the owners' views eight years after the contract was formed. The Trial Judge concluded that the Strata owners "did not completely understand the ASP Agreement", because had they fully understood the terms, "I do not believe they would have entered into [the] agreement" (BCSC, 78, 79).

CSPC maintained that the subjective intentions of the owners were irrelevant, particularly when they arose eight years after the ASP Agreement was formed. The BCCA agreed that when assessing conduct to infer intention of being bound by the obligations under a pre-incorporation contract, the court must look to the conduct that "followed closely upon incorporation", although it did not distinguish between objective and subjective intentions (BCCA, 57). The BCCA did, however look to conduct to infer objective intentions including the fact that Strata conducted itself as if it were bound by the ASP Agreement for many years - even after the dispute arose - by paying the various parking fees and exercising its right under the ASP Agreement to demand documents and information. These actions, the BCCA explained, are important considerations when determining intention: not only had Strata exercised its benefits under the ASP Agreement, it had borne the burden as well. This principle dates back to Heinhuis, where the court stated that a party "could not take the part of the contract that benefits it, while rejecting the part that required it to pay for the benefit" ( Heinhuis, 244).

In finding that the Trial Judge erred in relying on the Strata owners' subjective understanding of the obligations under the ASP Agreement and in concluding that the owners intended to be under the ASP Agreement as evidenced by their actions, the BCCA was satisfied that both parties held the requisite intention to be bound by the obligations set out in the pre-incorporation contract.
Awaiting the SCC
Pre-incorporation contracts play a vital role in corporate law, stretching across all types of industries. The common law rules of pre-incorporation contracts have been largely replaced by the Canada Business Corporations Act, RSC 1985, c. C-44 [CBCA], with substantially similar provisions in other provincial jurisdictions, such as British Columbia and Ontario. For example, section 21(2) of the CBCA states,

(2) A corporation may, within a reasonable time after it comes into existence, by any action or conduct signifying its intention to be bound thereby, adopt an oral or written contract made before it came into existence in its name or on its behalf, and upon such adoption,

(a) the corporation is bound by the contract and is entitled to the benefits thereof as if the corporation had been in existence at the date of the contract and had been a party thereto; and

(b) a person who purported to act in the name of or on behalf of the corporation ceases, except as provided in subsection (3), to be bound by or entitled to the benefits of the contract. [ Emphasis added.]

Yet in this case, despite making brief reference to the British Columbia Business Corporations Act, S.B.C. 2002, c. 57, the BCCA put primary emphasis on the common law test in Heinhuis when interpreting terms such as "intention" and "adopt". This appeal provides the SCC with the opportunity to evaluate and comment on principles set out in Heinhuis, a judgement set out by its former Chief Justice McLachlin, when she sat on the BCCA. Clarification will be welcomed by industries across the board, but particularly the condo industry, where developers frequently wish to enter into agreements or create contractual obligation with yet-to-be-created strata corporations.

[1] A strata corporation is often used in residential and commercial developments. It is created to divide a building and/or a lot into separate and individually owned components. ( https://www2.gov.bc.ca/gov/content/housing-tenancy/strata-housing/operating-a-strata/roles-and-responsibilities/strata-corporations)

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SCC to Hear Dispute Over Pre-Incorporation Contract | TheCourt.ca

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In one of its final acts of 2019, the Supreme Court of Canada ("SCC") granted leave to appeal to a legal dispute over the binding of a pre-incorporation agreement. In The Owners, Strata Plan LMS 3905 v Crystal Square Parking Corporation, 2019 BCCA 145, the owner of an office tower claimed it was not bound by the provisions of an agreement that it entered into before it was incorporated.