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MGMT 1601 BVC Understanding Essential Elements Discussion

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MGMT1601 – ASSIGNMENT
PURPOSE:
The purpose of this assignment is to demonstrate your understanding of the essential elements
of:
1 – torts;
2 – contracts;
3 – agency/employment law; and,
4 – the various forms of business organizations
by having you review and respond to all four of the following questions.
INSTRUCTIONS:
You may answer in either paragraph-form or point-form.
Your assignment must be typed, double-spaced and a maximum of six pages in length.
You must pay close attention to grammar, spelling and punctuation in your response, as those
items will count towards twenty percent of your grade on this assignment.
All files must be submitted through Dropbox in D2L and must be IN PDF FORMAT. Failure to
follow this instruction will result in a loss of a minimum of 10% of the available marks for this
assignment.
Each of your responses MUST include citations to specific legal principles FROM YOUR
TEXTBOOK AND ONLY YOUR TEXTBOOK for EVERY legal principle referred to in your answer.
Answers which do not cite your textbook (or which provide no citations at all) will receive a
grade of ‘0’. As your textbook is your only permitted resource, you do not need to provide
citations in APA format – you can simply provide the page number(s) that you referenced in
your answer (e.g. pg. 146). As an example of what I am looking for, if your answer required
you to examine whether or not someone was negligent, you would be required to identify all
elements of negligence, the tests for each of those elements, and provide specific page
citations for each of those elements and tests.
YOU ARE NOT PERMITTED TO USE ANY RESEARCH SOURCE OTHER THAN YOUR TEXTBOOK.
ANY ANSWERS WHICH APPEAR TO HAVE USED ANY OTHER SOURCE MATERIAL WILL BE
REPORTED TO THE PROGRAM CHAIR FOR SUSPECTED ACADEMIC MISCONDUCT.
Please note that even though you are required to respond to all four questions, only two of your
answers will be reviewed and graded. Every student will be graded on the same two questions.
1
ACADEMIC HONESTY:
Academic dishonesty and plagiarism are taken very seriously at Bow Valley College, even if the
dishonesty or plagiarism was unintentional. Please also be aware that taking credit for work
you did not create yourself is considered an act of academic misconduct and will be reported
to your Program Chair, which may then lead to a reprimand, suspension or expulsion – please
ensure that you have read the Course Offering Information document and the Chiu School of
Business Learner Handbook for more information about the Academic Honesty Policy.
You are not permitted to work with other students on this assignment, nor are you permitted
to share your answers. The Chiu School of Business has resources which allows it to identify
non-original work as well as work which has been shared amongst multiple learners, and those
resources will be relied upon in the review of your submission.
===================================================================
TORTS
Sally decided that she wanted to make some changes in her life, starting with her hair. She
called up her stylist and said that she wanted to have her hair dyed purple, but that she was
nervous about doing so, as she had never colored her hair and had heard some horror stories
about others who had their hair dyed and ended up with bad results. Sally’s stylist reassured
her that she was an expert who colors her clients’ hair all the time.
Sally came in and rather than her stylist testing out on a small patch of hair to see if it there
were any problems or unanticipated reactions, the stylist poured the dye over Sally’s entire
head. Sally woke up the next morning and quickly realized that all of her hair had fallen out and
that she was now completely bald. She was traumatized both physically and mentally, and was
unable to go to work for two months.
What elements/tests must Sally establish to establish a negligence claim? How should those
elements/tests be applied to the facts of Sally’s case in order to convince the Judge that Sally
should win? What categories of damages should Sally seek and on what basis?
CONTRACTS
Joe and Dave are cousins. Dave has just been accepted into medical school but is worried about
how he will pay for his tuition, books and rent. After going out for a cup of coffee and hearing
Dave’s concerns, Joe says that he will give Dave $500 per month in order to help with his
2
expenses. Halfway through the school year, Joe decides that he would like to start saving for a
new car and he tells Dave that he will no longer provide him with $500 per month. Dave feels
like Joe has breached a contract as is considering suing for breach. Specifically referencing the
required elements for a valid contract to exist, please explain whether a valid contract exists
here? If you conclude that a valid contract does not exist, what could Dave have done to ensure
that the promise became legally binding?
EMPLOYMENT
Jamie is a server in a restaurant. One day after leaving work, she was struck by a cyclist who
was not paying attention to where he was riding. As a result of the accident, she was left with
a broken wrist which would have prevented her from carrying food and drinks to patrons of the
restaurant. As her wrist never healed properly and she told her manager that she could no
longer perform the duties of a server. Her manager said that the duties of a server could not be
modified and requested a note from her doctor indicating her current capabilities to do work.
Explain, in detail, the general duty of employers to accommodate employee disabilities under
Human Rights legislation in Alberta. Explain how this duty to accommodate would apply in
Jamie’s situation. What, if anything, is her employer legally obligated to do and, if so, what
would you suggest? Discuss whether it’s possible that Jamie’s injury could spell the end of this
employment relationship.
BUSINESS ORGANIZATIONS
Juan, Ahmad and Thomas decided to partner up and open up a food truck called YUMMYs. Juan
invested $30,000 in the venture and Ahmad and Thomas invested $15,000 each. There was no
formalized agreement entered into between the three of them – they each participate in
running and managing the food truck and they take draws from the profits in proportion to their
investment.
One day a customer ate at the food truck and later claimed that she got food poisoning from
her meal. She has threatened to sue YUMMYS, Juan, Ahmad and Thomas for $200,000. If she
is successful, how would a court award damages and why – explain the business structure and
use that as the basis for your answer.
What if instead of a partnership, YUMMYs was a corporation and Juan owned 50% of the shares
and Ahmad and Thomas each owned 25% of the shares? Based on this change in business
structure, If the customer was successful in her lawsuit, how would damages be awarded in this
situation? How much would Juan, Ahmad and Thomas each have to pay?
3
FOURTH EDITION
Legal
Fundamentals
for Canadian Business
This page intentionally left blank
FOURTH EDITION
Legal
Fundamentals
for Canadian Business
R I C H A R D A . YAT E S
Simon Fraser University
Toronto
Vice-President, CMPS: Gary Bennett
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Cover Image: © marekuliasz/Shutterstock
Credits and acknowledgments for material borrowed from other sources and reproduced,
with permission, in this textbook appear on the appropriate page within the text.
Original edition published by Pearson Education, Inc., Upper Saddle River, New Jersey,
USA. Copyright © 2016, Pearson Education, Inc. This edition is authorized for sale
only in Canada.
If you purchased this book outside the United States or Canada, you should be aware
that it has been imported without the approval of the publisher or the author.
Copyright © 2016, 2013, 2010 Pearson Canada Inc. All rights reserved. Manufactured in
the United States of America. This publication is protected by copyright and permission
should be obtained from the publisher prior to any prohibited reproduction, storage in a
retrieval system, or transmission in any form or by any means, electronic, mechanical,
photocopying, recording, or likewise. To obtain permission(s) to use material from this
work, please submit a written request to Pearson Canada Inc., Permissions Department,
26 Prince Andrew Place, Don Mills, Ontario, M3C 2T8, or fax your request to
416-447-3126, or submit a request to Permissions Requests at www.pearsoncanada.ca.
10 9 8 7 6 5 4 3 2 1 EB
Library and Archives Canada Cataloguing in Publication
Yates, Richard, author
Legal fundamentals for Canadian business/Richard
A. Yates, Simon Fraser University.—Fourth edition.
Includes bibliographical references and index.
ISBN 978-0-13-337028-7 (pbk.)
1. Commercial law—Canada—Textbooks. I. Title.
KE919.Y38 2015
346.7107
C2015-900763-1
KF889.Y38 2015
ISBN 13: 978-0-13-337028-7
CONTENTS
Preface
Causation and Damage
Defences 54
viii
Acknowledgments xii
The Canadian Legal
CHAPTER 1
System
Product Liability
1
What Is Law? 2
Sources of Law
59
Other Business Torts
63
65
QUESTIONS FOR STUDENT REVIEW
4
The Law in Canada
57
Professional Liability
KEY TERMS
65
QUESTIONS FOR FURTHER DISCUSSION
8
CASES FOR DISCUSSION
The Constitution Act (1982) and the Charter
of Rights and Freedoms 11
The Courts 16
CHAPTER 3
Formation of Contracts 69
The Trial and Judgment 22
Alternate Dispute Resolution 25
Consideration
Administrative Law 28
Requirement of Authority 28
Procedural Fairness 29
Capacity 84
Infants 84
Insanity and Intoxication
Criminal Law
Legality
31
35
QUESTIONS FOR FURTHER DISCUSSION
CASES FOR DISCUSSION
36
36
77
79
86
87
Intention
34
QUESTIONS FOR STUDENT REVIEW
66
67
Consensus 70
Offer 72
Acceptance
The Litigation Process 18
KEY TERMS
54
89
Formal Requirements
Writing 90
KEY TERMS
89
91
QUESTIONS FOR STUDENT REVIEW
92
92
Torts and Professional
Liability 38
QUESTIONS FOR FURTHER DISCUSSION
Intentional Torts 39
Assault and Battery 40
False Imprisonment 41
Trespass 42
Nuisance 43
Defamation 44
Enforcing Contractual
Obligations 95
Mistake 96
Contract Interpretation 98
Exemption Clauses 99
Negligence 48
Duty of Care 49
Standard of Care 51
Misrepresentation 100
Innocent Misrepresentation 102
Fraudulent Misrepresentation 103
CHAPTER 2
CASES FOR DISCUSSION
93
CHAPTER 4
vi
Contents
Negligent Misrepresentation 103
Criminal Fraud 104
Duress and Undue Influence
Duress 104
Undue Influence 105
Unconscionability 106
The Agent/Principal Relationship 167
Ending the Agency Relationship 169
Employment
104
170
Termination 173
Wrongful Dismissal 176
Termination by the Employee
Privity and Assignment 106
Privity 106
Assignment 108
Negotiable Instruments 110
Collective Bargaining 182
Organization 182
Bargaining 184
Job Action 186
Discharging Contractual Obligations 112
Performance 112
Breach 114
Frustration 115
Agreement 118
Remedies for Breach 119
Equitable Remedies 121
Other Legislation
KEY TERMS
123
QUESTIONS FOR STUDENT REVIEW
123
QUESTIONS FOR FURTHER DISCUSSION
CASES FOR DISCUSSION
124
125
Legislation in
the Marketplace 128
CHAPTER 5
Consumer Protection Legislation 135
Provincial Legislation 135
Federal Legislation 142
The Federal Competition Act 142
Secured Transactions 147
Other Forms of Security 151
Bankruptcy and Insolvency 153
157
QUESTIONS FOR STUDENT REVIEW
158
QUESTIONS FOR FURTHER DISCUSSION
CASES FOR DISCUSSION
CHAPTER 6
191
197
QUESTIONS FOR STUDENT REVIEW
159
159
Agency and Employment 161
Agency 162
Principal/Third-Party Relationship 163
The Agent/Third-Party Relationship 166
197
QUESTIONS FOR FURTHER DISCUSSION
CASES FOR DISCUSSION
198
199
CHAPTER 7 Methods of Carrying
on Business 202
Common Elements
203
The Sole Proprietor
204
Partnership 206
Creation 206
Liability of Partners 209
Dissolution 212
Limited Partners 215
Limited Liability Partnership
The Sale of Goods Act 129
Goods or Services 130
Title and Risk 131
Obligations of the Seller 132
KEY TERMS
188
Supervising Employees
KEY TERMS
180
216
Corporations 217
Creation 218
Structure 218
Shareholders 219
Separate Legal Person 220
Limited Liability 221
Shareholder Duties 223
Shareholders’ Rights 224
Directors 227
Financing 231
Raising Funds 231
The Shareholders’ Agreement 233
Corporate Governance—Abuses and
Responsibilities 234
Flexibility
237
Franchise
237
KEY TERMS
239
Contents
QUESTIONS FOR STUDENT REVIEW
240
QUESTIONS FOR FURTHER DISCUSSION
CASES FOR DISCUSSION
KEY TERMS
241
311
QUESTIONS FOR STUDENT REVIEW
242
Property
244
Business and the Internet 316
Jurisdiction and the Internet 317
Domain Names 319
Torts 321
Online Contracts 323
Online Dispute Resolution 325
Regulating the Internet 326
Real Property 249
Fee Simple Estates 249
Leasehold Estate 250
Lesser Interests in Land 250
Owning Property Together 252
Requirement of Registration 256
Transferring Land 257
Mortgages 259
International Business Transactions 327
Contracts 330
Dispute Resolution 331
Litigation and Jurisdiction 333
Leasehold Estates 262
Commercial Tenancies 263
Residential Tenancies 266
Government Regulations and Treaties
International Treaties 338
Canadian Regulations 340
Extraterritorial Reach 342
Regulation of the Environment 269
The Common Law 270
Federal Legislation 271
Provincial Legislation 272
KEY TERMS
279
KEY TERMS
QUESTIONS FOR FURTHER DISCUSSION
CASES FOR DISCUSSION
Glossary
282
282
Table of Statutes
Ideas and Information 284
Intellectual Property 285
Copyright 286
Patents 292
Industrial Design and Circuit Topography 296
Trademarks 297
Remedies 302
Privacy, Security, and Confidential Information
Confidential Information 305
Privacy 307
Security 309
304
Index
344
345
347
Table of Cases
CHAPTER 9
343
QUESTIONS FOR FURTHER DISCUSSION
280
338
343
QUESTIONS FOR STUDENT REVIEW
QUESTIONS FOR STUDENT REVIEW
CASES FOR DISCUSSION
313
Electronic Commerce and
International Trade 315
Who has the Right to the Goods? 246
Bailment 247
274
313
CHAPTER 10
Personal Property 245
Insurance
312
QUESTIONS FOR FURTHER DISCUSSION
CASES FOR DISCUSSION
CHAPTER 8
vii
356
358
363
Companion Website:
APPENDIX A The Constitution Act, 1867
(formerly the British North America Act)
APPENDIX B
The Constitution Act, 1982
PREFACE
I am very pleased to have the opportunity to write a fourth edition of Legal Fundamentals
for Canadian Business but also feel some trepidation. It is difficult to resist adding a lot
more information because certainly the law is constantly changing; there are new case
decisions, new legislative enactments, and new challenges facing business people that are
not clearly elucidated in the current law. The difficulty is that adding more threatens the
primary purpose of the text—to make the information manageable in a one-semester
undergraduate course and to cover the information essential for students to enter into
the business environment with confidence. So in the process of revising, I have kept the
original focus clearly in mind. I have implemented a number of recommendations from
reviewers, modifying, increasing, and reducing content as appropriate. I have maintained
a focus on intellectual property and information technology, as they are areas where
there have been dramatic legislative changes and technological advancements in recent
years. I always keep in mind that a risk-averse businessperson is perhaps the most astute,
and so we have increased the suggestions and ideas on how legal complications can
develop and have proposed ways and means to avoid them. As usual we have replaced
many of the cases with newer decisions and commented on their impact on the laws that
affect business decision making. Recognizing that judicial decisions are the essential
guideposts to business activity, I give full recognition to their importance in this endeavour. I am grateful to students and instructors whose use of the text suggests that I am still
on the right track.
APPROACH
Although some may raise their eyebrows at yet another business law text in an already
crowded field, I have observed that most of the texts currently used are too extensive or
too detailed for some courses. In this text I have attempted to create a shorter book (only
10 chapters) without sacrificing essential content. I have also found that the text usually
drives the course; and many instructors complain that they don’t have enough time in a
14-week term to deal with all of the subjects they would like to cover. Sometimes instructors teach a course that must be delivered in an even more condensed time frame. Some
teach specialized courses in marketing, computers, finance, and the like, and find that
they have to spend so much time on a general introduction to business law that they don’t
have time to focus on the law that affects the specialized topic that is the primary objective of the course. This text gives business law instructors the flexibility to deal with all of
the topics, to customize their course by supplementing it with additional material, and/or
to concentrate on an area of specialization.
Many instructors feel a pressing need to deliver the introductory and foundation
material efficiently so that there is enough time left to cover more advanced material.
Hence, in this text there is only one introductory chapter setting out the history, institutions, and litigation processes used in Canada, only one chapter on torts, and three
chapters on basic contract law. A great deal of effort has gone into making these chapters as efficient as possible, while still covering the essential concepts and rules. The
remaining five chapters deal with more advanced and technical information—
Preface
ix
everything from the legal issues regarding agency and employment to the timely issues
of intellectual property—and have not been simplified to the same extent as the first
five. Although somewhat condensed here, these topics don’t really lend themselves to
abbreviation.
FEATURES
I’ve incorporated several features into the text to engage students. Throughout the text
there are Case Summaries designed to illustrate the legal concepts under discussion. Such
case studies are the heart of any business law course and create a dynamic, practical environment
for a subject that, without them, would
be dry and uninspiring at best.
/201/PHC00177/9780133370287_YATES/YATES_LEGAL_FUNDAMENTALS_FOR_CANADIAN_BUSINESS4 …
M01_YATE0287_04_SE_C01.indd Page 35 03/02/15 2:00 PM f-447
For some topics I have also included diagrams that illustrate the legal relationships
in the case. There are also a number of figures and tables included throughout the
text; these are designed to clarify and summarize information so that it’s easily accesChapter 1 The Canadian Legal System
35
sible to students.
The Questions
for(p.Student
Review are designed
to help
precedent
5)
special damages
(p. 23) students review the chapter
private
law
(p.
3)
specific
performance
23) content of the chapter,
material. As they respond to the questions, referring back to(p.the
privative clauses (p. 30)
standing (p. 20)
students should develop a good grasp of the concepts and principles contained in the
procedural law (p. 3)
stare decisis (p. 5)
chapter.
public law (p. 3)
statement of claim (p. 20)
damages
23)
statement
defence (p.Discussion
20)
Also at thepunitive
end of
each(p.chapter,
Questions
for ofFurther
can be used in
questions of fact (p. 17)
statute (p. 7)
class or group discussions. They raise issues with respect to the topics discussed. There are
questions of law (p. 17)
strict liability offences (p. 32)
no solutions provided,
they are intended to point
outlawthe
dilemmas often faced by those
references as
(p. 18)
substantive
(p. 3)
regulations
(p. 11)legal principles.
summary conviction offences (p. 32)
who make or enforce
these
M01_YATE0287_04_SE_C01.indd Page 36 03/02/15 2:00 PM f-447
respondent (p. 3)
/201/PHC00177/9780133370287_YATES/YATES_LEGAL_FUNDAMENTALS_FOR_CANADIAN_BUSINESS4 …
writ of summons (p. 20)
rule of law (p. 8)
36
Legal Fundamentals for Canadian Business
20. Distinguish between criminal and regulatory offences.
Questions for Student Review
21. Explain the difference between a criminal and a strict liability offence.
22. Distinguish between summary conviction and indictable offences, and explain the various
options of the parties involved.
1. Why is it important for a business student to understand the law?
2. Define law and distinguish between substantive and procedural law.
Questions for Further Discussion
3. Explain the origin and function of the Constitution
Actthe(1867),
formerly
British and
North
1. Discuss
relationship
between the
law, morality,
ethics. How does an individual deteris ethical
behaviour and what is not if one cannot use the law as the test?
America Act, and its importance with respect to mine
howwhat
Canada
is governed.
What would be the outcome if the courts tried to set a social or personal moral standard?
4. Explain parliamentary supremacy and its place in What
our role
legal
system.
should
morality and ethics play in business decisions?
2. (1982),
Canada has
a tradition
of parliamentary
supremacy
inherited from Great Britain. However,
5. Indicate the importance of the Constitution Act
and
explain
why it was
important
that tradition has been modified somewhat by the passage of the Charter of Rights and
to the development of Canada.
Freedoms. Explain how the Charter has limited parliamentary supremacy, how that affects
the role of the courts, and whether these changes are advantageous or detrimental to
6. How are individual human rights protected in Canada?
Canada as a democracy.
7. Explain the significance of the Charter of Rights
andprocess
Freedoms,
threeand
limita3. The
leading toand
trial identify
is long, involved,
costly. Most jurisdictions are trying to
change the procedures to alleviate delays and costs. How successful are they, and what
tions on its application.
/201/PHC00177/9780133370287_YATES/YATES_LEGAL_FUNDAMENTALS_FOR_CANADIAN_BUSINESS4 …
other changes would be appropriate? Keep in mind the benefits of the current system; do
the disadvantages? In your discussion consider the advantages and disad8. Describe the basic rights and freedoms protectedthey
in outweigh
the Charter.
vantages of alternate dispute-resolution methods.
9. Describe the court structure in place in your province.
4. Government boards and tribunals may be considered an appropriate form of dispute reso36
lution.
Is it appropriate
for the courts
be ableinto your
exercise review powers over their deci10. Contrast the nature and function of the provincial
court
and superior
trial tocourt
sions? Are there enough safeguards in place to protect the rights of people and businesses
province, and distinguish between the roles of trial
andbycourts
of appeal,
including
whocourts
are affected
administrative
decisions?
Distinguish between criminal and regulatory
offences.Court of Canada.
the Supreme
5. Describe the essential difference between a criminal prosecution and a civil action, and dis-
Legal Fundamentals for Canadian Business
20.
21. Explain the difference between a criminal and a strict liability offence.
cuss the advantages and challenges associated with each process. Consider when a business
11. Explain the purpose of the federal court and the role
it plays in the Canadian judicial process.
person might have to choose between them and what factors would affect that decision.
22. Distinguish between summary conviction and indictable offences, and explain the various
options of the parties involved.
12. How is a civil action commenced?
13. Explain the nature and role of a statement of defence, a counterclaim, and the discovery
Cases for Discussion
Questions for Further Discussion
process.
1. Discuss the relationship between law, morality, and ethics. How does an individual deter1. Isen v. Simms, S.C.C., 2006 SCC 41; [2006] 2 S.C.R. 349
14.andContrast
process
and
requirements
of proof in a civil as opposed to a criminal
mine what is ethical behaviour
what is notthe
if one
cannot use
thethe
law as
the test?
Isen was the owner of a 17-foot pleasure boat. After a day of boating on the lake and
What would be the outcome if the action.
courts tried to set a social or personal moral standard?
loading the boat on its trailer in preparation for transporting it on the highway, Isen was
What role should morality and ethics play in business decisions?
securing
the boat with the help of Dr. Simms. Isen was stretching a bungee cord over the
15.
Compare
the
roles
played
by
a
judge
and
a
jury
in
a trial.
2. Canada has a tradition of parliamentary supremacy inherited from Great Britain. However,
engine when it slipped and hit Dr. Simms, causing an eye injury. He and his wife sued in
that tradition has been modified
the passage
of the Charter
of Rights
and
16. somewhat
Explain byhow
a judgment
can be
enforced.
the Ontario Superior Court for $2.2 million. Mr. Isen brought an application before the
Freedoms. Explain how the Charter has limited parliamentary supremacy, how that affects
federal court for a declaration that the federal maritime law applied and the Canada Shipthe role of the courts, and whether
these changesamong
are advantageous
or detrimental
to
17. Distinguish
negotiation,
mediation,
and ping
arbitration,
indicate
the on
advantages
Act imposedand
a $1 million
limitation
damages in this situation. Explain whether the
Canada as a democracy.
imposed in the federal statute should apply in this situation and why.
and disadvantages of alternate dispute resolutionlimitation
over litigation.
3. The process leading to trial is long, involved, and costly. Most jurisdictions are trying to
2.
Ramsden
v.
Peterborough
(City),
[1993]
2
S.C.R.
1094, 106 D.L.R. (4th) 233 (SCC)
18. Explain
nature
of regulations
and
their legal status.
change the procedures to alleviate
delays andthe
costs.
How successful
are they, and
what
other changes would be appropriate? Keep in mind the benefits of the current system; do
This is a classic case dealing with freedom of expression. The City of Peterborough had
19.
Explain
the
nature
of
administrative
tribunals
and
their
relationship
to
our
legal
system.
they outweigh the disadvantages? In your discussion consider the advantages and disadpassed a by-law prohibiting the posting of any material on city property. The by-law provantages of alternate dispute-resolution methods.
hibited the posting of “any bill, poster, or other advertisement of any nature,” on any
“tree . . . pole, post, stanchion or other object . . .” within the city limits. Ramsden put up
4. Government boards and tribunals may be considered an appropriate form of dispute resoadvertising posters on several hydro poles to advertise an upcoming concert for his band.
lution. Is it appropriate for the courts to be able to exercise review powers over their decisions? Are there enough safeguards in place to protect the rights of people and businesses
who are affected by administrative decisions?
5. Describe the essential difference between a criminal prosecution and a civil action, and discuss the advantages and challenges associated with each process. Consider when a business
person might have to choose between them and what factors would affect that decision.
x
Preface
Finally, the Cases for Discussion at the end of each chapter are based on actual
court reports. I have not included the decisions so that the cases can be used in assignments or for classroom discussions. Instructors have access to the actual outcomes in
the Instructor’s Manual, or students can follow the reference to discover the outcome
for themselves.
SUPPLEMENTS
Legal Fundamentals for Canadian Business, Fourth Edition, is accompanied by a new comprehensive and exciting supplements package.
Companion Website The Companion Website is an online study tool for students.
The Companion Website provides students with an assortment of tools to help enrich
the learning experience, including, glossary flashcards, student PowerPoints, self-quiz,
internet exercises, short essay exercises, cases with assessments, and hyperlinked
URLs. This comprehensive resource includes provincial supplements for British
Columbia, Alberta, Saskatchewan, Manitoba, Ontario, and the Atlantic provinces,
covering special topics for each of these areas. These topics include a brief overview
of business legislation specific to the province, along with links to relevant cases,
legislation, and additional resources.
Instructor’s Manual This manual includes a number of aids, including outlines of
how lectures might be developed, chapter summaries, answers to review questions,
and suggestions for conducting classroom discussions. The court decisions for the endof-chapter cases are also provided, and sample examination questions are included for
each chapter.
MyTest MyTest from Pearson Canada is a powerful assessment generation program
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xi
ACKNOWLEDGMENTS
I would like to acknowledge the help of all those who have assisted in making the production of this work possible. My wife, Ruth, has helped, encouraged, and supported me in
more ways than I can list. I wish to thank as well the reviewers whose suggestions and
criticisms were invaluable as the text was honed and shaped into its final form, including:
Donna Boots, SIAST
George Allen, Red River College
Mary Gibbons, George Brown College
M. Linda Chiasson, University of Guelph
Also, my thanks to the firm, guiding hands of all those at Pearson, who supported me
throughout the long gestation period of this text, including Gary Bennett, Vice-President;
Megan Farrell, Acquisitions Editor; Lila Campbell, Developmental Editor; Kimberley
Blakey, Project Manager; and Susan Adlam, Copy Editor.
Chapter 1
The Canadian Legal System
Creativa/Fotolia
Learning Objectives
LO 1 Define what law is
LO 2 Identify the sources of Canadian laws and distinguish their components
LO 3 Describe the structure of the courts in Canada and illustrate the litigation process
LO 4 Outline the processes of trial and judgment
LO 5 Explain the function and use of alternative methods for resolving disputes
LO 6 Define administrative law and explain when and how it is used
LO 7 Describe the aspects of criminal law that should be of concern to a business
person
2
Knowledge of law is vital for
business
Legal Fundamentals for Canadian Business
An understanding of law and the legal system in Canada is essential for the business person. Business activities, like other forms of human endeavour, involve significant human
interaction. Whether you are a manager, a consultant, a professional, or a consumer, you
must deal with suppliers, employees, creditors, lawyers, insurance agents, landlords,
accountants, shareholders, and senior managers, as well as government agencies. All of
these relationships carry with them important rights, responsibilities, and obligations.
These rights and obligations take the form of legal rules, and to participate in business it is
important to understand them. The objective of this text is to provide the business person
with enough information about the law so that legal problems can be avoided; to know
when he or she is involved in a situation where legal advice is needed; and to be a more
informed and effective client when those services are required. The client must give the
lawyer instruction and direction as to what to do, not the other way around. With a basic
understanding of the law, the client is better able to give those instructions. Business people
without such an understanding will often ignore the law or make the wrong decision in situations that have important legal consequences and thus make the situation much worse.
Perhaps the most important benefit to the student from the study of business law is the
knowledge of how to reduce the legal risk of doing business. Risk avoidance with respect to
physical facilities such as stores, restaurants, plants, showrooms, warehouses, and factories
is easy to understand but often difficult to implement. We often see accidents waiting to
happen. A plate-glass door polished to invisibility is an invitation for someone in a hurry to
crash through it. A step down in a restaurant that is obscured by lighting set low for effect
will likely result in a fall. Unlit stairwells, frayed carpets, improperly secured grab handles
or railings, and balconies with low railings are just a few examples of physical dangers that
should be removed or repaired. It is equally important to do everything possible to reduce
legal risk with respect to business practices. A simple example is a restaurant server using a
glass to scoop ice cubes instead of a metal or plastic scoop. The glass can chip or break and
cause a serious injury. But the same principle applies to the more complicated aspects of
doing business. Contracts must be carefully drawn to anticipate all eventualities. Intellectual property, including electronically stored data and electronic communications, should
be protected. Checking references is important with respect not only to potential employees, but also to suppliers, service providers, and important customers. Even the lawyers
providing legal advice should be carefully chosen. Risk avoidance is not simply a long list
of things to avoid. Rather, it is a state of mind, where we try to anticipate what can go
wrong and take steps to avoid that eventuality. Of course, to manage risk it is necessary to
recognize the risks and to understand them. Employment, personal injury and contract
disputes are most common in business. This text covers these and several other related
topics and, encourages the development of a risk-avoidance attitude throughout. The first
chapter examines the foundation of the legal system and some basic Canadian institutions
upon which the commercial legal environment has been built.
LO 1 WHAT IS LAW?
Law consists of rules enforceable in
court or by other government
agencies
Most people think they understand what law is, but in fact, an accurate definition is difficult to come by. There are serious problems with most definitions of law, including the
following, but from a practical standpoint and for the purposes of this book, which is primarily about business law, law consists of rules with penalties that are likely to be enforced
either by the courts or by other agents of government. While business people should avoid
Chapter 1 The Canadian Legal System
litigation as much as possible, it is hoped that understanding the rules discussed in this
text will help you to avoid and resolve legal problems.
It is especially important for business people not to confuse law and morality. The
impetus for any given legal rule can vary from economic efficiency to political expediency. It may well be that the only justification for a law is historical, as in “it has always
been that way.” Legal rules may express some moral content, but no one should assume
that because they are obeying the law, they are acting morally. Ethics has become an
important aspect of any business education. Recent high-profile incidents of corporate
abuses have made the topic of ethics a major area of discussion at both the academic and
practical levels. The law is an important consideration in this discussion, if only to stress
that law does not define ethical behaviour, and that business people should rise above the
minimal requirements of the law. For example, the huge bonuses executives of U.S. financial institutions took for themselves after the government bailout in 2008 may well be
morally reprehensible, but it is doubtful that any law was broken. This text will not deal
directly with such moral issues, but they will be raised in the Questions for Further Discussion at the end of each chapter.
While this text is most concerned with substantive law (the rules determining
behaviour, including our rights and obligations), we must also be aware of the other great
body of law, procedural law, which is concerned with how legal institutions work and the
processes involved in enforcing the law. Although there will be some examination of
public law, where the dispute involves the government (including criminal law and government regulation), the main objective of this text is to examine the rules governing
business interactions. Private law, or civil law, is composed of the rules that enable an
individual to sue a person who has injured him or her. From a business point of view, any
time a business person is dealing with a government official or regulatory body, such as a
labour relations board or human rights commission, it is a matter of public law. It is a matter
of private law when a business person is involved in a contract dispute with a supplier or
customer. We also distinguish between domestic and international law, where domestic law
refers to the rules governing interactions between persons in Canada, while international
law applies to activities between individuals in different countries or the relations between
those nations. A limited discussion of criminal law (an aspect of public law) is included, at
least as it affects business. A criminal matter is usually offensive conduct considered serious
enough for the government to get involved and punish the wrongdoer.
While only a small proportion of business disputes ever get to court, the cases that do
establish the legal rules. Knowing that the principles established in court decisions will be
enforced in subsequent judicial cases helps parties to resolve their disputes without actually going to trial. When a dispute is taken to court, the person suing is called the plaintiff
and the person being sued the defendant. Note that in some special cases the person
bringing the matter before a judge is referred to as the applicant and the opposing party
the respondent. When one party is dissatisfied with the decision and appeals it to a higher
court, the parties are then referred to as the appellant and the respondent. Be careful not
to make a mistake about these parties. The appellant may be either the plaintiff or the
defendant, depending on who lost at the trial level and is now appealing the decision, and
the respondent is the party (usually the winner at the trial level) who is responding to that
appeal. In a criminal action the prosecution is referred to as the Crown (indicated as Rex
or Regina, but usually simply by the capital letter R) and the person defending is referred
to as the accused.
3
Law and morality should not be
confused
4
Choose a lawyer carefully
Legal Fundamentals for Canadian Business
An important relationship for any business to establish is the one with a lawyer.
Whether it is to help construct corporation documents or to assist in the creation of contracts, discussions with a lawyer can prevent costly legal entanglements. But when there is
a dispute, a lawyer who is already familiar with the business, its managers, and goals, can
be a valuable asset. Lawyers, trained in universities are “called to the bar” in each province. This means they are certified to function in legal matters and represent their clients
in court. Their role is to give their clients advice rather than make decisions for them.
Lawyers often specialize in one area of the profession, and so it is important to choose one
that is skilled in business transactions and dispute resolution. Notary publics or paralegals
can also provide legal services but are much more restricted in what they can do.
LO 2 SOURCES OF LAW
Quebec uses the Civil Code
Each province was given the right to determine its own law with respect to matters falling
under its jurisdiction. Jurisdiction in this sense has two meanings. A province has a limited physical jurisdiction in that it can only make laws that have effect within its provincial boundaries, but it also has a limitation in what kinds of laws it can pass as determined
by the Constitution Act (1982) and the Charter of Rights and Freedoms discussed later in this
chapter. Since private law is primarily a provincial matter, it is not surprising that the
English-speaking provinces adopted the law used in England— or the common law—
while Quebec adopted the French legal system based on the Napoleonic Code. The
French Civil Code is a body of rules setting out general principles that are applied by the
courts to the problem before them. In this system the judge is not bound by precedent
(following prior decided cases), but must apply the provisions of the Code. For example,
when faced with the problem of determining liability in a personal injury case, the judge
would apply section 1457 of the Quebec Civil Code, which states:
Every person has a duty to abide by the rules of conduct which lie upon him, according to
the circumstances, usage or law, so as not to cause injury to another. Where he is endowed
with reason and fails in this duty, he is responsible for any injury he causes to another
person by such fault and is liable to reparation for the injury, whether it be bodily, moral
or material in nature. He is also liable, in certain cases, to reparation for injury caused to
another by the act or fault of another person or by the act of things in his custody.
When a runner carelessly bumps into another and causes injury, a Quebec judge
would apply this provision and order that the runner pay compensation. The decisions of
other judges may be persuasive, but the duty of a judge in Quebec is primarily to apply the
Code. Most other countries in the world use a variant of this codified approach to law, and
it is this codification that makes the law predictable in those countries.
Common Law The other Canadian provinces and the territories adopted a system of
law derived from England, referred to as the common law (mentioned above). As a result,
Canada is one of the few “bijural” countries in the world where the civil law and common
law work side by side. The unique aspect of the common law system is that instead of following a written code, the judge looks to prior case law. When faced with a particular
problem, such as the personal injury situation described above, a common law judge would
look at prior cases (normally brought to the judge’s attention by the lawyers arguing the
case) and choose the particular case that most closely resembles the one at hand. The
Chapter 1 The Canadian Legal System
judge will determine the obligations of the parties based on that precedent. Of course,
there is a complex body of rules to determine which precedent the judge must follow.
Essentially, a case involving the same issue decided in a court higher in the judicial hierarchy is a binding precedent and must be followed. Thus, a judge in the Provincial Court
of Saskatchewan is bound to follow the decision of the Court of Appeal of that province,
but not the decision of the Court of Appeal in New Brunswick, which is in a different
judicial hierarchy. That decision may be persuasive, but is not binding. Our judges will
often look to decisions from other, similar judicial systems, including Great Britain, the
United States, Australia, and New Zealand, but it must be emphasized that these decisions are not binding, only persuasive, on Canadian courts.
When the judge prepares a report of the case, a considerable portion of the decision is
usually an explanation of why the judge chose to follow one precedent rather than
another. This process is referred to as distinguishing cases. The system of determining law
through following precedent in our legal system is referred to as stare decisis. Following
prior decisions requires that judges and lawyers know and understand the implications of
many cases that have been heard in the courts and have ready access to reports of those
cases. Case reports are normally long and complex documents. To recall the significant
aspects of the case quickly, students of the law use case briefs to summarize these reports.
Table 1.1 describes the important elements of a case brief. Most of the cases summarized
in this text will include these components, although because the cases are used primarily
Table 1.1 Elements of a Case Brief
Parties This identifies the parties to the action and distinguishes the plaintiff from the
defendant (appellant or respondent at the appeal level). When the letter R is used to signify
one of the parties it refers to Rex or Regina, the king or queen, who symbolizes the state or
government, meaning this is a public law case in which the Crown or state is prosecuting
the defendant. When both parties are named as individuals or companies, it is a private law
case where the plaintiff is suing the defendant.
Facts This is a brief description of what happened to give rise to the dispute between the
parties. Only the facts necessary to support the decision are usually included in a brief.
History of the Action This lists the various courts that have dealt with the matter and
the decisions at each hearing, that is, at the trial level, appeal level, and Supreme Court
of Canada level.
Issues These are the legal questions that the court must consider to decide the case.
(It is at this point that the student should consider the arguments that support both
sides of the issue. This will do more than anything else to assist in the analysis of cases and
foster appreciation of the unique way that students of the law approach such problems.)
Decision This is the court’s decision, either in favour of or against the plaintiff or defendant, or in the case of an appeal, in favour of the appellant or respondent.
Reasons This is a summary of the reasons for the decision and is usually a response to the
issues raised. In this text, this is the most important part of the judgment because the case
will normally be used as an example illustrating the principle of law.
Ratio This is the legal principle established by the case and is usually only included when
it will be binding on other courts. For our purposes, students could use this heading to
summarize the legal principle the case was used to illustrate.
5
Other provinces use common law,
which is based on cases
Judges are bound to follow prior
cases
6
Legal Fundamentals for Canadian Business
to explain a single legal principle and for interest’s sake focus on the narrative of the case,
we may not specify each of them. When you read the case summaries try to extract the
information using the elements outlined below.
Common law developed by
common law courts
Equity developed by Court of
Chancery
Law of Equity The common law evolved from case decisions made in three common
law courts set up under the king’s authority during the Middle Ages in England. These
courts were the Court of Kings Bench, the Court of the Exchequer, and the Court of
Common Pleas—together referred to as the common law courts. This body of judges’
decisions continued to develop in England, but eventually because of restrictions on the
power of the king imposed by the nobles and because of what was essentially institutional
inertia, the common law courts of England became harsh and inflexible. People seeking
unique remedies such as an injunction (an order that an offender stop the offending conduct) or relief from some restrictive common law rule had only one recourse—to petition
the king. Since, in theory, the king was the source of power for all courts, he also had the
power to make orders overcoming individual injustices caused by their shortcomings. This
task was soon assigned to others and eventually developed into a separate body known as
the Courts of Chancery. The common law courts and the Courts of Chancery were often
in conflict and were eventually merged in the 19th century, but the body of rules developed by the Courts of Chancery (known as the Law of Equity) remained separate. Today,
when we talk about judge-made law in the legal systems of the English-speaking provinces, we must differentiate between common law and equity. The name we give the system of laws used in the English speaking provinces is the Common Law, which is named
after this most significant component. This terminology sometimes causes confusion since
it is not always obvious whether the speaker is referring to the common law system or this
important component as distinguished from equity.
Case Summary 1.1 R. v. Butchko1
Provincial Supreme Court Judge Must Follow Court
of Queen’s Bench Decision
R. (The Crown) v. Butchko (the Accused and also the
Appellant) in an appeal before the Saskatchewan Court of
Queen’s Bench.
Statutes are passed by Parliament
or legislatures
Facts: Mr. Butchko was stopped by the police in Saskatch-
ewan after making an illegal U turn, and the officer
smelled liquor on his breath. Butchko was asked several
times to submit to a breathalyzer test and refused. He was
then charged and later convicted in the provincial court
with refusing to submit to a breathalyzer test under section 254(2) of the Criminal Code.
History of the Action: This is a Saskatchewan Court of
Queen’s Bench decision reversing the conviction of the
1
accused at trial in the provincial court. Note that the matter was further appealed to the Court of Appeal which
reinstated the conviction.
Issue: Was the mere smell of alcohol on the breath of the
accused sufficient to constitute reasonable grounds to
demand a breathalyzer test resulting in the section 254(2)
refusal charge? Was the judge right in choosing to follow
an Ontario decision rather than the decision of the Saskatchewan Court of Queen’s Bench?
Reasons: There was a Saskatchewan Court of Queen’s Bench
decision (R. v. Arcand unreported) stating that the mere
smell of alcohol on a person’s breath was not enough reason
2004 SKQB 140 (CanLII), appealed 2004 SKCA 159 (CanLII).
Chapter 1 The Canadian Legal System
to demand a breathalyzer test. But there was also a Court of
Appeal for Ontario case (R.v.Lindsay) holding that the smell
of alcohol by itself did constitute reasonable grounds to
demand the breathalyzer test. The provincial court judge
chose to follow the Ontario case on the basis that it better
stated the law, resulting in Mr. Butchko’s conviction.
That decision was appealed to the Court of Queen’s Bench,
where the judge held that even though the Ontario decision may be better law, under the rules of stare decisis the
inferior provincial court was required to follow the R. v.
Arcand decision made by a Saskatchewan Court of Queen’s
Bench judge. Only the Court of Appeal for Saskatchewan
7
could overturn the Arcand case. In fact the prosecutor then
appealed the matter to that court, and the Court of Appeal
reinstated the conviction of Mr. Butchko, choosing to adopt
the law as stated in the Ontario R. v. Lindsay case, overturning the Arcand decision.
Ratio: The operation of stare decisis requires that an inferior court must follow the decision of a superior court
even where the judge thinks that decision is incorrect. The
idea is that the matter can then be appealed until it gets
to a level that can overturn the questionable decision (as
happened here) and establish a new precedent case for
the province.
To illustrate the difference between common law and equity, if someone erected a
sign that encroached on your property, you could claim trespass and ask a court to have it
removed. Monetary compensation is the normal common law remedy for trespass, but
that would not solve this problem. An order to remove the sign would require an injunction, which is an equitable remedy developed by the Courts of Chancery. The common
law then is a body of rules based on cases developed in the common law courts, whereas
equity is a list of rules or principles developed by the Court of Chancery from which a
judge can draw to supplement the more restrictive provisions of the common law. Note
that while it looks like the common law developed independently, in fact those judges
borrowed from several different sources as they developed the law. Thus, canon law
(church law) influenced our law of wills and estates, Roman law influenced property law,
and the law merchant (the body of rules developed by the merchant guilds that traded
throughout Europe) that was adopted as a body into the common law gave us our law with
respect to negotiable instruments (cheques, bills of exchange, and promissory notes).
The English-speaking provinces adopted the English legal system at different times in
their history. British Columbia declared that the law of England would become the law of
that province as of 1857, and Manitoba did the same in 1870. Ontario and the eastern
provinces adopted English law prior to Confederation. Since adopting the common law of
England, the courts of each province have added their own decisions, creating a unique
body of case law particular to each province (see Figure 1.1).
Statutes The third body of law used in our courts is derived from government statutes.
As a result of the English Civil War, the principle of parliamentary supremacy was firmly
established with the consequence that any legislation passed by Parliament overrides judgemade law, whether in the form of common law or equity. Today in Canada, most new law
takes the form of statutes enacted by either the federal Parliament or the provincial legislatures. Since statutes override prior judge-made law, the judges will only follow them when
the wording is very clear and specific, which goes some way toward explaining their complicated legalistic form. In any given case today, a judge will look to case law taken from
the common law or equity for direction, but if there is a valid statute applicable to the dispute, that statute must be followed. It should be noted that Quebec also has enacted statutes to supplement the provisions of the Civil Code and so a judge in that province faced
with a case could turn to both the Civil Code and statutes as the circumstances warrant.
Statutes are passed by Parliament
or legislatures
Our law is based on statutes,
common law, and equity
8
Legal Fundamentals for Canadian Business
Judge-made law (English and Canadian)
Common law decisions
Statutes (provincial or federal)
Court of Chancery
(principles of equity)
Passage of
parliamentary bills
Approval of Queen/Governor
General
Law
Figure 1.1 Sources of Law
Law applied in courts today is derived from judge-made law (common law and equity) and from statutes,
including regulations at both federal and provincial levels.
LO 2 THE LAW IN CANADA
BNA Act creates Canada with
constitution like Britain’s
Constitution Act (1867) (BNA Act)
divides powers between federal
and provincial governments
Canada was created with the passage of the British North America Act (BNA Act), which
in 1867 united several English colonies into one confederation. The BNA Act declared
that Canada would have a constitution “similar in principle to that of the United Kingdom.” In contrast to the United States, which has one constitutional instrument, England
has an unwritten constitution in the sense that it is found in various proclamations, statutes, traditions, and judicially proclaimed principles. Thus, the rule of law (the principle
that all are subject to the law and legal process), the Magna Carta (the first royal proclamation of basic human rights), and parliamentary supremacy (the principle that everyone,
even monarchs and judges, is subject to laws made by Parliament) are all part of the constitutional tradition inherited by Canada. The BNA Act itself—now called the Constitution Act (1867) —has constitutional status in Canada. This means its provisions cannot
be changed through a simple parliamentary enactment; they can only be altered through
the more involved and onerous process of constitutional amendment.
Today the main function of the Constitution Act (1867) is to divide powers between
the federal and provincial governments. Parliament is the supreme law-making body in
Canada (parliamentary supremacy). But this constitutional principle, inherited from England, presented our founding fathers with a problem. In Canada there are now 11 sovereign governing bodies (10 provincial legislative assemblies and one federal Parliament).
Which of these bodies is supreme? The answer is that each governs in its assigned area.
Thus, the Constitution Act (1867), primarily in sections 91 and 92, assigns powers to the
federal and the provincial governments. Section 91 gives the federal government the
power to make laws with respect to such areas as money and banking, the military, criminal law, and weights and measures, whereas other areas such as health, education, and
matters of local commerce are assigned to the provinces under section 92. Because most of
the business law we deal with is concerned with local trade and commerce, we will concentrate on provincial legislation and judge-made law. Still, there are many business situations where federal statutes will govern. The various categories listed in sections 91 and
92 are sources of power rather than watertight compartments, and as a result there can be
occasional overlap. The business person may face both federal and provincial statutes that
apply. When that happens and there is a true conflict (where it is not possible to obey
Chapter 1 The Canadian Legal System
both), the federal legislation takes precedence over the provincial. This is called the
principle of paramountcy. The Lafarge case that follows illustrates what happens when
valid provincial legislation conflicts with valid federal legislation. Sections 91 and 92 of
the Constitution Act (1867) may be viewed online at www.canlii.org. Note that this website is extremely valuable to the law student as it provides access not only to provincial
and federal legislation and regulations, but also to all important recent cases in the various
provinces and in the federal courts. There are a number of other provincial websites that
are helpful, but the author has found this to be the most complete and accessible free site.
9
Federal law followed where provincial and federal laws conflict
Case Summary 1.2 British Columbia (Attorney General) v. Lafarge Canada Inc.2
Federal Law Supersedes City By-laws
A Vancouver ratepayer’s group, later joined by the Attorney General of British Columbia brought this application
opposed by the respondent Lafarge. Lafarge is the appellant at the Supreme Court of Canada level.
A group of Vancouver ratepayers filed an application
to require Lafarge to get a development permit from the
city to build a cement plant on the Vancouver waterfront.
This was opposed by Lafarge and the Vancouver Port
Authority (a federally controlled organization). Lafarge lost
at that level and appealed to the Court of Appeal for British
Columbia. The Appeal Court decided in favour of Lafarge,
and the ratepayers appealed to the Supreme Court of
Canada. Note that the Attorney General of British Columbia
joined the ratepayers as appellant, and several other provinces joined the action as interveners.
Lafarge felt that it was under the jurisdiction of the
Vancouver Port Authority (a federal entity created under
the Canada Marine Act) and didn’t have to comply with
provincial or municipal regulations. The court had to
decide whether city zoning rules applied to this project
and how the federal and provincial laws interrelate.
The Supreme Court first looked at the power
granted to the province and thus to the city under the
Constitution Act (1867) and decided that the municipal
by-laws and zoning rules did apply to the Lafarge project. It is clear that under sections 92(8), 92(13), and
92(26) of the Act, the City of Vancouver’s by-laws were
constitutionally valid.
The court also found that the project was necessarily
incidental to the exercise of federal power with respect to
“debt and property” and “navigation and shipping”
under section 91(1a) and section 91(10) of the Act. The
Vancouver Port Authority was properly created under the
Canada Marine Act and the Lafarge project fell within its
mandate, so only its approval was required. There was a
clear conflict between valid federal law and valid provincial law, and under the principle of paramountcy only the
federal law applied.
This case illustrates not only how the powers of
government are divided between the federal and provincial governments under sections 91 and 92 of the
Constitution Act (1867), but also what happens when
the provincial law and the federal law are in conflict.
When both cannot be obeyed the principle of paramountcy requires that the federal laws prevail and be
followed.
Both the federal and provincial governments make law by enacting legislation (see
Figure 1.2). Elected representatives form the House of Commons, while appointed members make up the Senate. Together those bodies constitute the Parliament of Canada. The
provinces have only one level, consisting of elected members, which is referred to as the
Legislative Assembly of the Province. The prime minister or premier and the cabinet are
chosen from these members and form the federal or provincial government. The governments of the territories don’t have the status of provinces, but remain under federal control, much as a city or municipality is subject to provincial control. Still, the Yukon, the
2
[2007] 2 S.C.R. 86; (2007), 281 D.L.R. (4th) 54 (S.C.C.).
10
Legal Fundamentals for Canadian Business
Introduction of bill (1st reading)
(Normally by a cabinet minister
in the House of Commons)
1st reading in Senate
Debate (2nd reading)
2nd reading in Senate
Approval (3rd reading)
3rd reading (passage) in Senate
Royal assent by Governor General
Statute law
Figure 1.2 The Making of Statutory Law
Statute created by first, second,
and third reading, and royal assent
Statutes published in print
and online
Northwest Territories and Nunavut have been authorized by the federal government to
pass legislation much like the provinces. Note that other bodies also have the authority to
make law, including cities and towns, as well as regional districts and First Nations communities, and the laws they create can be very important for businesses operating within
their jurisdictions. But these bodies pass subordinate legislation (by-laws) and they must
act within the limited authority granted under federal or provincial legislation.
In our democracy voters choose members to represent them in the federal Parliament
and in the provincial legislative assemblies. These legislative bodies begin the law-making
process when an elected member—usually a cabinet minister—presents a bill for the consideration of the House of Commons. Note that other members from both the government side and the opposition often introduce bills as well, which are known as private
members bills. These bills are usually defeated since they don’t have the support of the
majority party, but every so often there is a groundswell of support, and a private member’s
bill is passed and becomes law. The introduction of the bill is referred to as first reading.
Then, if it survives a process of debate known as second reading, where the general principles rather than the details are debated, the bill is referred to one of the various parliamentary committees where it is goes through a clause-by-clause examination with
amendments being made. It is at this stage that witnesses may be called before the committee if appropriate. The committee then reports back to the House, reintroducing the
bill with appropriate amendments, which are then debated. This is referred to as the third
reading of the bill. A vote is then taken and, if passed, the bill becomes an enactment of
parliament. Eventually the approved bill is presented to the Queen’s representative (the
governor general at the federal level or the lieutenant governor at the provincial level) to
receive royal assent. With that assent the bill becomes law, and is then referred to as an
act or statute. At the federal level the bill must also go through the same process in the
Senate before receiving royal assent. There are variations, but this is the normal process
whereby a bill is introduced and becomes law in Canada. Government enactments are
published each year and are made available to the public in volumes referred to as the
Statutes of Canada (S.C.), Statutes of Alberta (S.A.), Statutes of Ontario (S.O.), and so on.
Chapter 1 The Canadian Legal System
Every few years the statutes are summarized and are referred to as the Revised Statutes of
Canada (R.S.C. 1985), Revised Statutes of British Columbia (R.S.B.C. 1996), and so forth.
Today, the federal government, the provinces, and the territories have made unofficial
versions of their current consolidated legislation available on the internet. You can access
these statutes at www.canlii.org or at the respective government websites.
Statutes often authorize a cabinet minister or other official to create sub-legislation or
regulations to accomplish the objectives of the statute. These regulations are published
and available to the public. If the regulations have been properly passed within the authority specified in the statute (the enabling legislation), they have the same legal standing as
the statute. Thus, the Canadian Human Rights Act3 has nine different bodies of regulations
associated with it, including equal wage guidelines, immigration guidelines, and regulations
protecting personal information. The general rules would be set out in the statute, whereas
the regulations set out the specific procedures to be followed, penalties for violations, or the
fees to be charged for different services. Both the statute and the regulations passed under
it have the force of law and can be enforced as specified in the statute and regulations.
11
Regulations have status as law
THE CONSTITUTION ACT (1982) AND THE CHARTER
OF RIGHTS AND FREEDOMS
Prior to 1982 the English Parliament in theory still had power to make law that could
directly affect Canada, but that all changed with the simultaneous passage of the Canada
Act in England and the Constitution Act (1982) in Canada. These acts cut our last ties to
England, and the English Parliament can no longer pass legislation that affects Canada.
Although our ties with the English government have been severed, our ties to the monarchy remain intact, and Queen Elizabeth II remains the Queen of Canada. The Constitution Act (1982) also included the Canadian Charter of Rights and Freedoms.
The beginning of the latter half of the 20th century saw an upsurge of interest in basic
human rights, probably in response to the atrocities associated with the Second World
War. Most jurisdictions enacted legislation prohibiting discrimination based on race, religion, ethnic origin, gender, and disability in areas such as accommodation, public services, and employment. All Canadian provinces and the federal government enacted
statutes and established regulatory bodies to ensure that these basic human rights were
protected. The Canadian Human Rights Act4 applies in those areas where the federal government has jurisdiction and prohibits discrimination on the following grounds:
3. (1) For all purposes of this Act, the prohibited grounds of discrimination are race,
national or ethnic origin, colour, religion, age, sex, sexual orientation, marital status,
family status, disability and conviction for which a pardon has been granted or in
respect of which a record suspension has been ordered.
The Act also sets out a number of prohibited discriminatory practices, including the
denial of goods, services, facilities, or accommodation that would normally be available to
the public and the denial of access to commercial premises or residential accommodation
on one of these prohibited grounds. Harassment and hate messages are also prohibited.
Prohibited discriminatory practices with respect to employment are set out in considerable
3
R.S.C. 1985, c. H-6.
R.S.C. 1985, c. H-6.
4
Constitution Act (1982) gives
Canada independence
Federal and provincial statutes
guarantee human rights
12
Legal Fundamentals for Canadian Business
detail and essentially cover all aspects of employment, including advertising, application
forms, hiring, training, wages, promotion, transfers, termination, “or any other matter
relating to employment.” Typically harassment in the workplace and the requirement to
accommodate people with special needs are also included in such legislation.
The specific laws in the provinces will vary, and some may not include the same grounds,
but all have established strong enforcement bodies (human rights tribunals or commissions)
that have been given the specific charge to enforce these provisions. They have the power to
hear complaints, gather information, hold hearings, and provide remedies. In most cases the
procedures are relatively user-friendly and encourage complainants to complete the process.
From a practical point of view, a business person is much more likely to have dealings with
provincial human rights bodies than with the Charter or other constitutional matters. They
should therefore become well acquainted with their requirements and processes and be careful to avoid any practices that can give rise to such complaints. Careful training of employees
should also be undertaken to eliminate the risk of any human rights violations. Still, an
understanding of the Charter is important for a business person since governments at all levels
regulate business through statutes and by-laws, which must comply with the Charter to be
enforceable. In addition, all government regulators and officials must conform their conduct
and decisions to the provisions of the Charter, or they can be challenged.
Case Summary 1.3 Fasken Martineau DuMoulin LLP v. British Columbia
(Human Rights Tribunal)5
Prohibition Against Gender Discrimination and Retaliation
Fasken Martineau DuMoulin LLP (Petitioner/Appellant) v.
British Columbia (Human Rights Tribunal), (Respondent/
Respondent) in an appeal before the Court of Appeal for
British Columbia.
McCormick was a lawyer working at Fasken Martineau
DuMoulin LLP and a term of the partnership agreement
required all partners to retire when they reached the age
of 65. McCormick reached that age, and when he was
required to retire, brought this complaint before the British
Columbia Human Rights Tribunal claiming discrimination in
employment on the basis of age. The problem was whether
Fasken Martineau DuMoulin LLP could be considered a separate legal entity, like a corporation, for employment purposes and whether McCormick could be an employee of
that firm for the purposes of the Human Rights Code. The
Human Rights Tribunal found that the partnership was a
separate legal entity for human rights purposes and that
McCormick was an employee who had been discriminated
against. The matter was appealed to the Supreme Court of
British Columbia, which supported the decision, whereupon it was appealed again to the Court of Appeal for
British Columbia.
5
2012 BCCA 313 (CanLII).
The Appeal Court reversed the decision, finding that
the law firm was a partnership, and although the Human
Rights Code had to be interpreted broadly, it could not
change the common law principle that a partnership is not
a separate legal entity apart from its members. Therefore,
the partners that make up a partnership cannot be employees of that partnership. The provision of the Human Rights
Code dealt with discrimination in employment. Since there
was no employment here, the Human Rights Tribunal did
not have jurisdiction to hear the complaint.
Partnerships and corporations will be dealt with in Chapter 7, but this case serves as an introduction to the principle
that while a corporation is treated as an individual, separate
and apart from the shareholders and officers who make it up,
the same is not true of a partnership. The case also illustrates
the operation of a Human Rights Tribunal as it applies to the
legislation protecting human rights in a particular jurisdiction.
One of the areas where the Code prohibits discrimination is
in employment. In the past the prohibition against discrimination on the basis of age was applied up to the age of 65, but
that exception was removed and now age discrimination in
employment is prohibited for anyone over 19.
Chapter 1 The Canadian Legal System
The problem was that none of these statutes had the power to remedy discrimination
when it took place at the hands of government. The doctrine of parliamentary supremacy
provides that, in Canada, the supreme law-making body is parliament. Thus, Parliament or
the legislative assemblies in the provinces could simply pass legislation overriding the rights
protected in these human rights statutes. The passage of the Canadian Bill of Rights in 1960 was
the first attempt to overcome this problem, but it was largely ineffective because it was simply
another act of parliament and was narrowly interpreted by the courts so as not to interfere with
the power of parliament. What was required was a document with constitutional standing.
The Charter of Rights and Freedoms, which is part of the constitution of Canada, overcomes this problem. All constitutional provisions, including the Charter, are declared to
be the “supreme law of Canada.” Neither the federal nor the provincial governments can
change the provisions of the Charter of Rights and Freedoms without going through the
constitutional amendment process. Any statute enacted by any level of government that
is inconsistent with the provisions of the Charter is void, and any action by a government
official violating the provisions of the Charter is actionable under the Charter.
We have to be careful here, because there are limitations built into the Charter that
give back to government some of the power that the Charter takes away. Section 1 allows
for reasonable exceptions to the rights and freedoms set out in the Charter. It is only common sense to allow a person to be held liable for fraud or defamation despite the guarantee
of free speech or to prevent prisoners in jail from claiming their mobility rights. These are
simple examples, but the problems can be quite complex. When dealing with Charter
questions today, much of the effort of the courts is directed at determining the reasonable
extent of these exceptions. Look carefully at the Alberta v. Hutterian Brethren of Wilson
Colony case (Case Summary 1.4) and Greater Vancouver Transportation Authority v. Canadian Federation of Students—British Columbia Component (Case Summary 1.5), which illustrate the application of section 1 of the Charter and the restrictions placed on its use.
Another limitation is found in section 33; it is known as the “notwithstanding
clause.” This provision allows both provincial and federal governments to pass legislation
directly in contravention of specified sections of the Charter (section 2 and sections 7–15).
While this clause seems to undo much that the Charter sets out to accomplish, a government choosing to exercise this overriding power must do so clearly, by declaring that a
particular provision will be in force “notwithstanding” the offended section of the Charter.
Note that such a declaration has to be renewed every five years. Those advocating for the
inclusion of the clause knew that its use would come at a high political cost, and as a result
section 33 would rarely be used. In fact, this has proven to be the case, and very few legislators have had the political will to use the notwithstanding provision of the Charter. The
Quebec law requiring business signs to be in French only is one notable example of its use;
that province’s proposed law banning the wearing of religious symbols may also be passed
using section 33, but the political risk of doing so is obvious. Excerpts from the Constitution Act (1982) appear on the Companion Website for this text. The Constitution Act may
be accessed at www.canlii.org or at the federal government website.
The third limitation on the power of the Charter, set out in section 32, is that it only
applies to government, including laws made by all levels of government, government institutions, and agents acting on behalf of government. Thus, the provisions of the Charter cannot
be relied on to challenge other infringements on fundamental rights such as discrimination
faced in normal nongovernmental situations, including employment, accommodation, or
services, areas that are normally protected by federal or provincial human rights legislation.
13
Charter protects from rights abuses
by government
Section 1 limitation allows for
reasonable exceptions
Section 33 limitation allows
opting out
14
Legal Fundamentals for Canadian Business
Case Summary 1.4 Alberta v. Hutterian Brethren of Wilson Colony6
Required Photos Violate Charter Rights
Alberta (Defendant/Appellant) v. Hutterian Brethren of
Wilson Colony (Plaintiff/Respondent) in an appeal before
the Supreme Court of Canada.
In 2003 the Alberta government removed the exception allowing the Hutterite people not to have a photo of
the holder included on their driver’s licences. The Hutterites had religious objection to the inclusion of such photos
and so the matter was challenged in the courts as a violation of their section 2a Charter right of freedom of religion. The Alberta government agreed that this was a
violation of their section 2a religious freedom but claimed
it was justified as a reasonable exception under section 1
of the Charter.
Both the trial court and the Court of Appeal for Alberta
found in favour of the Hutterian Brethren, holding that this
regulation could not be justified as a reasonable limit to
freedom of religion. The matter was then appealed to the
Supreme Court of Canada which reversed this decision.
The objective of the legislation was to reduce identity
theft by creating a central photo database of driver’s
Charter protects:






Fundamental freedoms
Democratic rights
Mobility rights
Legal rights
Equality rights
Language rights
licence photos. Chief Justice McLachlin found that this
goal was substantially important and pressing, and that
this legislation was an effective way to accomplish it. She
also found that the law went no further than necessary to
accomplish the goal and that the interference was proportional in that it only minimally impacted the right of
freedom of religion of the Hutterites. This satisfied the
Oakes case test requirement that “[t]he government is
entitled to justify the law . . . by establishing that the measure is rationally connected to a pressing and substantial
goal, minimally impairing of the right and proportionate in
its effects.”
Note that although there were strong dissenting
opinions, this case illustrates how careful the courts are
when asked to override one of the rights set out in the
Charter under the section 1 limitation and the stringent
tests they apply when doing so. At the appeal level there
are normally several judges deciding the case. When they
do not all agree, those not in agreement with the majority
are said to be dissenting.
The provisions of the Charter protect basic or fundamental freedoms (section 2),
such as the freedoms of speech, religion, the press, and association. The Charter also protects democratic rights (sections 3–5) at both the federal and provincial levels, such as
the right to vote, the right to run in an election, and the requirements that an election
will be held at least every five years and that the elected government will sit every year.
Mobility rights (section 6) include the right to live and work in any part of Canada, as
well as to enter and leave Canada. The most extensive provisions relate to legal rights
(sections 7–14), which include the rights to life, liberty, and the security of person; the
rights to be told why you are being arrested and to have a lawyer; the right not to incriminate yourself; the right to be tried within a reasonable time; the right to a jury trial; and
the right not to be exposed to any unreasonable search and seizure or cruel or unusual
treatment. Perhaps the best-known provisions of the Charter relate to equality rights (section 15), as stated in subsection (1) “Every individual is equal before and under the law
and has the right to the equal protection and equal benefit of the law without discrimination”; in particular, discrimination based on race, national or ethnic origin, colour, religion, sex, age, or mental or physical disability is prohibited. Note that this list does not
exhaust equality rights. It only lists some of them. Others are protected through the general provision prohibiting discrimination in the first part of section 15 set out earlier. For
example, there is no specific protection of “sexual orientation” rights, but the Supreme
Court of Canada has found that these rights are protected under this general prohibition.
6
S.C.C., 2009 SCC 37; 2009 CSC 37; [2009] 2 S.C.R. 567; 310 D.L.R. (4th) 193.
Chapter 1 The Canadian Legal System
15
Finally, minority language education rights (section 23) are protected. Both the Charter
and a separate part of the Constitution Act (1982) make it clear that aboriginal rights
inconsistent with Charter provisions are not affected by it and are preserved. These treaty
rights predate the Charter and, in many cases, predate Confederation itself. They include
rights yet to be determined in the native land claims process.
Case Summary 1.5 Greater Vancouver Transportation Authority v. Canadian Federation
of Students—British Columbia Component7
Freedom of Expression Included Buses
Canadian Federation of Students (Plaintiff/Appellant) v.
Translink (Defendant/Respondent) in an appeal before the
Supreme Court of Canada.
The Canadian Federation of Students went to the
Greater Vancouver Transportation Authority to arrange to
put an advertisement on the side of buses (a common
commercial practice in the city). The company refused to
accept the advertisement because it considered the ad
political in nature and stated it was their policy to refuse
any ads with political content. The student federation
brought this action claiming that their section 2b Charter
rights (the right to freedom of expression) had been violated. The Supreme Court of British Columbia agreed with
them, but that decision was overturned on appeal. The
students then appealed to the Supreme Court of Canada,
which held that in fact the freedom-of-expression right
guaranteed by the Charter had been violated.
After finding that this was a valid means of expression with an historical foundation in expressions of opinions and commentary, the Supreme Court determined
that BC Transit and Translink were agents of government
or controlled by government and as a result the Charter
applied to both. It held that the sides of buses are an
appropriate place for public expression and comment, and
the policies limiting such ads to commercial content and
prohibiting any political content clearly infringed on the
students’ freedom of expression.
The Supreme Court of Canada also determined that
the prohibition was not a reasonable limitation (section 1)
on the freedom-of-expression Charter protection. The
objective of the policy was to create a “safe, welcoming
public transit system.” But such advertising could not be
said to create an unsafe or unwelcoming environment to
bus users any more than commercial advertising. The
court found that in any case, the prohibitions went much
further than a minimal impairment of the right; they
amounted to a blanket exclusion from a highly valuable
form of public expression.
The case nicely illustrates not only what constitutes
freedom of expression, but also the extension of that right
even to individuals and organizations that are agents of
government or controlled by government. It is also instructive in that it shows that to qualify as a section 1 limitation, a policy must be necessary to accomplish a reasonable
objective and go no further than is necessary in reaching
that objective.
The provisions set out in the Charter are general principles: what specific rights they
actually convey in a practical sense has been the subject of a great number of judicial pronouncements since 1982. Thus, to understand just what “freedom of expression” means,
for example, it is necessary to carefully examine the decisions of the courts, and especially
those of the Supreme Court of Canada.
It must be emphasized that the Charter and its provisions only apply to our relations
with government. Thus, legislation passed by all levels of government and the conduct of
government officials must comply with the provisions of the Charter. As explained above,
in other situations where discrimination is experienced, for example, in employment,
7
S.C.C., 2009 SCC 31; 2009 [2009] 2 S.C.R. 295; 309 D.L.R. (4th) 277.
Charter limited to government
actions
16
Legal Fundamentals for Canadian Business
housing, or public services, individuals can make a claim to a human rights tribunal rather
than the courts. Such tribunals act under separate provincial or federal human rights legislation, which in turn must be in harmony with the provisions of the Charter.
LO 3 THE COURTS
Court structure varies between
provinces




Provincial court
Small claims
Family
Criminal
The traditional means of resolving disputes in our culture is in a court of law. Under the
Constitution Act (1867), the actual structure of the courts is left to the provinces, resulting
in some variation from province to province, although they are generally similar in nature
and function. (See Figure 1.3 below.) Note that these provincial courts deal with both
criminal and civil matters. The lower-level courts (provincial courts) are divided into
various functions. The small-claims court deals with civil actions in which one person sues
another for relatively small amounts of money (up to $50 000 depending on the province).
Other specialized divisions of the lower-level provincial courts include youth courts dealing with juveniles; criminal courts dealing with the less serious criminal offences; and
family courts that deal with family law matters, including the division of assets, awarding
maintenance, and custody of children (but not the divorce itself, unless a specialized court
has been established for that purpose presided over by a superior court judge; otherwise
divorce must be handled by the superior trial court of the province). Note that Ontario’s
Supreme Court of Canada
Provincial Court of Appeal
Federal Court
(Trial Division,
Appeal Division)
Provincial superior trial court
(Supreme Court, Court of Queen’s
Bench, Superior Court of Justice)
Various federal regulatory
bodies and administrative
tribunals
Tax Court
Various provincial regulatory
bodies and administrative
tribunals
Figure 1.3 Court Structure*
*
Provincial structure will vary.
Provincial Court (Criminal,
Small Claims, Family and
Youth Court)
Chapter 1 The Canadian Legal System
small-claims courts and family courts are a division of the Superior Court of Justice, leaving the Ontario Court of Justice to deal primarily with criminal matters. Since 2002, the
provinces of British Columbia, Alberta, Ontario, Quebec, and Nova Scotia have established specialized courts that deal with such matters as drug-related offences, domestic
violence, and mental health–related problems. Other provinces, including Saskatchewan,
Manitoba, and New Brunswick, have also considered establishing specialized courts for
these types of cases. British Columbia created a Community Court in 2008, which deals
with certain offenders who plead guilty and agree to terms of community service and/or
rehabilitation in specified substance-abuse recovery programs. The goal is to reduce recidivism and increase opportunities to improve the health and well-being of repeat offenders.
First Nations, in some areas, have established restorative justice courts concentrating on
the restoration of the victim and accountability of the offender rather than crime and
punishment.
The superior trial courts of the provinces are variously referred to as the Supreme
Court, Court of Queen’s Bench, or in Ontario, Superior Court of Justice. They are the
highest-level trial courts of the provinces and deal with all serious civil and criminal matters. In the case of Ontario, the Superior Court of Justice is divided into a divisional
branch, a small-claims branch, and a family branch. The Ontario Divisional Court is
unique in that it hears appeals from Small Claims and Family Court trials and from various statutory administrative tribunals. Note that some jurisdictions still retain a separate
probate or surrogate court to handle estate matters. These are special function courts presided over by a superior court judge.
In all provinces the highest court is a court of appeal which deals with appeals from
lower courts and some government regulatory bodies, such as human rights tribunals,
labour relations boards, and worker’s compensation boards. In Ontario appeals from regulatory bodies are generally heard in the Divisional Court but can be appealed further to
the Court of Appeal for Ontario.
A matter tried in the lower courts can be taken to the appeal court of that province,
which may be the final appeal for the case. Whereas at the trial level there is a single
judge who is sometimes assisted by a jury, at the appeal level usually at least three judges
hear the case. Juries are limited to the trial level and are rare in civil cases, with the exception being personal-injury cases under tort law. But in criminal matters, where the potential penalty is over five years, trial by jury is guaranteed if wanted under the Charter of
Rights and Freedoms. Where a jury is involved, its function is to hear the evidence and
decide questions of fact (what happened that gave rise to the action), whereas the questions of law (what are the legal obligations of the parties or what legal rules are to be
applied to the case) are left to the judge, who instructs the jury on such matters before
they retire to make their decision. Where no jury is involved, the judge deals with questions of both law and fact. Courts established in the territories have a similar structure.
Note that P.E.I. and Nunavut have only two levels; a superior court and a court of appeal.
The federal government has established the Supreme Court of Canada, located in
Ottawa, as a court of last resort for Canadians. Nine judges, appointed by the governor
general upon recommendation by the prime minister and cabinet, are chosen from the
various regions of the country. The Supreme Court hears appeals from all of the provincial
appeal courts, including Quebec’s. There is no longer a right to appeal to the Supreme
Court of Canada. The Supreme Court selects the cases to hear based on what it thinks is
most important for the country. If it refuses to hear a particular case, it is not a comment
17
Superior trial courts in each
province
Superior appeal court in each
province
Supreme Court of Canada highest
court
18
Federal court, trial and appeal
divisions handle federal matters
Legal Fundamentals for Canadian Business
on the validity of the arguments or the lower court’s decision. It means only that it has
other more important cases to deal with. Usually seven or nine judges will sit to hear a
case. The Supreme Court of Canada will also on rare occasions hear references (questions
involving serious legal issues normally involving some urgency), directed to the court by
the prime minister. A significant example was put to the court in 2004 on the question of
same-sex marriage, which led to such unions being legalized in all provinces.8 The federal
government has also established a federal court with a trial division and an appeal division. These courts handle matters that fall within the federal jurisdiction, such as copyrights, patents, and trademarks, as well as matters brought from the federal tax court,
military courts, and other federal government regulatory bodies such as the Immigration
and Refugee Board and the Competition Tribunal. The Tax Court and military tribunals
also have the status of federal courts with specialized functions.
At the present time the courts are basically paper based but the Supreme Court of
Canada has recently permitted the tweeting of messages from the court during the hearing, and the Chief Justice has observed that it would be beneficial for the justices to have
dedicated tablet computers so they could limit their paper load. Some lawyers are experimenting with paperless offices, and courts are becoming more inclined to accept electronic documentation and digital evidence. As the courts convert to electronic filing of
documents, the use of paper will be considerably reduced.
LO 3 THE LITIGATION PROCESS
A civil action involves one person (the plaintiff) suing another (the defendant). The
process is complex and time-consuming, but each step is designed to uncover more information, so that the parties will be encouraged to settle without going to trial. In fact, the
vast majority of cases never make it to trial. But if a trial cannot be avoided, this pre-trial
process also ensures that the actual issues to be decided on by the court are narrowed and
refined. The following describes the traditional process used in a civil action in a superior
court. Note that in small-claims courts, many of these steps have been eliminated altogether. There is also considerable provincial variation, and many provinces have introduced changes to increase efficiency and reduce delay. See Figure 1.4 for an outline of the
initial stages of the litigation process. Provincial trial courts normally hear only matters
that have taken place in or are closely connected to their area of jurisdiction. This connection can refer to a geographical limitation, as with various provincial courts, or to a
subject matter limitation, as with different level courts or federal versus provincial courts.
The matter of jurisdiction particularly the exceptions to this policy, will be addressed
more specifically in other chapters.
In both the civil and criminal systems, people have the right to represent themselves.
This is often the case in small-claims court, but where more serious matters are involved,
professionals usually represent the parties. In Canada we call these professionals lawyers.
In the United States they are sometimes referred to as attorneys. In England the trial lawyers are called barristers, and those looking after commercial contracts, estates, and other
legal transactions are called solicitors When lawyers receive their official status (i.e.,
“called to the bar”) in the English-speaking provinces of Canada, they are designated as
both barristers and solicitors. Others who may provide legal services are notary publics
8
Reference re Same-Sex Marriage, [2004] 3 S.C.R. 698; (2004), 246 D.L.R. (4th) 193; (S.C.C.).
Chapter 1 The Canadian Legal System
19
Pleadings (Ontario)
Plaintiff issues
Notice of action/
Statement of claim
Filed with court
Delivered to plaintiff
Filed with court
Served on defendant
Defendant files
– Notice of intent to defend/Statement of defense
– Counterclaim if appropriate
Figure 1.4 Pre-Trial Litigation Process (Usually After Negotiation)
and paralegals. These are not lawyers, but, depending on the situation, they may be able
to provide some limited legal services especially where estates and the transfer of land are
involved. One of the reforms taking place in British Columbia and Ontario is the expansion of the services that notaries and paralegals can provide to facilitate access to justice
and to lower costs.
In all provinces where a civil action is involved, that action must be commenced
within a time limit specified in statute, known as a limitation period. The limitation period
traditionally varies with the type of action being brought. For example, in most jurisdictions where personal injury is involved, the action must begin within two years of the
accident. A failure to start the action within that period ends the plaintiff’s right to sue.
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