Yates, Bereznicki-Korol, Clarke

Business Law in Canada, Tenth Edition

Chapter 3:
The Resolution of
DisputesThe
Courts and
Alternatives to
Litigation

Learning Objectives
When you complete Chapter 3, you
should be able to:
Describe the court system in Canada
Outline the process of civil litigation
Explain the nature and function of regulatory
bodies
Describe the alternative dispute resolution
(ADR) methodsnegotiation, mediation,
arbitration
2014 Pearson Canada Inc.

3-2

The Courts

Criminal & Civil Functions

Trial & Appellate Functions
Federal Courts
Provincial Courts
Specialized Courts

2014 Pearson Canada Inc.

3-3

Civil and Criminal Proceedings

Generally, courts are open to the public to
ensure that justice is seen to be done
But publication bans and in camera
(closed) hearings are possible
One incident may result in both criminal
and civil trial proceedings - with the
accused being charged and sued

2014 Pearson Canada Inc.

3-4

Criminal Function

In a criminal case, the Crown

prosecutes the accused
The accused is convicted only when the
Crown proves the case beyond a
reasonable doubt (burden of proof)
Victims are only witnesses at the trial
continued ...

2014 Pearson Canada Inc.

3-5

Criminal Function, continued

The state assesses and enforces

penalties
Victims are usually not compensated for
their injuries or loss (but sometimes
restitution of property may be ordered)

2014 Pearson Canada Inc.

3-6

Courts of Appeal of the Provinces

Not a new trial usually
But sometimes a trial de novo prescribed
by legislation
Error of law
Total failure of evidence may be an error
of law
continued
2014 Pearson Canada Inc.

3-7

Courts of Appeal, continued

Leave (permission) to appeal may be
required (S.C.C.)
A panel of judges hears appeals
The appeal court will
Review the transcript of the trial
Review the trial judges reasons for decision
Hear verbal arguments
Review written arguments

2014 Pearson Canada Inc.

3-8

Civil Function

Individuals or organizations ask the court to

adjudicate a dispute
Court's decision is based on balance of
probabilities (burden of proof)
Court assesses liability and renders judgment
Compensation awarded to the plaintiff and
remedies for plaintiff imposed on defendant

2014 Pearson Canada Inc.

3-9

 2014 Pearson Canada Inc.

3-10

Recent Developments

Drug treatment courts

Domestic violence courts
Mental health courts
Nunavut Court of Justice
Sentencing circles

2014 Pearson Canada Inc.

3-11

 2014 Pearson Canada Inc.

3-12

Limitation Periods
A time limitation after an event occurs to
bring a court action based on the event
Six years to two years?
Discoverability principle
Ultimate Limitation Date
Extending Limitation Date?

2014 Pearson Canada Inc.

3-13

Jurisdiction
Which province or territory?
Where defendant resides or incident occurred

Internet largely borderless

Interaction with a resident of provinces court

Choice of law and court provision in a

contract
continued
2014 Pearson Canada Inc.

3-14

Jurisdiction, continued
Some courts have restrictions on the
types of cases they may hear
Monetary limit
Wills and Estates
Injunctive relief
Bankruptcy

2014 Pearson Canada Inc.

3-15

Pre-Trial Procedures

Pleadings

Some provinces: Writ of summons (plaintiff)

Some provinces: Appearance (defendant)
Statement of Claim / Statement of Defence
Counterclaim / Defence to Counterclaim

Chambers (Interlocutory) Applications

continued

2014 Pearson Canada Inc.

3-16

Pre-trial Procedures, continued

Discovery
Of documents / records
Verbal examination of witnesses

Payment into court (formal offer to settle)

continued ...

2014 Pearson Canada Inc.

3-17

Pre-trial Procedures, continued

Purposes of Pre-trial Proceedings

To focus dispute
To discover weaknesses / strengths of
opposing parties case and your own
Facilitate settlement before trial

Summary trials and expedited actions

2014 Pearson Canada Inc.

3-18

Question for Discussion

The pre-trial process is long and involved
and adds greatly to the expense of having a
matter decided by the court. Consider the
advantages and disadvantages of the
various steps and suggest how they might
be simplified.

2014 Pearson Canada Inc.

3-19

The Trial
Civil trial
Rules of evidence must be followed
Plaintiff presents case

Onus of proof rests with plaintiff

Cross examination by defendant

Defendant presents case

Cross examination by plaintiff

continued ...

2014 Pearson Canada Inc.

3-20

The Trial, continued

Trier of Fact: Jury decides on the facts, if

there is a civil jury
Trier of Law: Judge determines the law
Joint Trier of Fact and Law: Judge sitting
alone

2014 Pearson Canada Inc.

3-21

Costs
Usually awarded to the victor
Always at the discretion of the court
Party and party costs

Also called taxable costs

Only a portion of actual costs
Schedule
Disbursements
continued

2014 Pearson Canada Inc.

3- 22

Costs, continued
Solicitor/client costs
Solicitor and own client costs

Contract provision

If losing party

Your own full legal bill, and

All or part of the other partys legal bill
Solicitor/client costs rare in some provinces

2014 Pearson Canada Inc.

3- 23

Remedies
Damages (monetary compensation)

Liquidated
General
Special
Punitive

Some other remedies

Accounting, injunction, specific

performance, declaration

2014 Pearson Canada Inc.

3-24

Enforcement

Examination in aid of enforcement /

execution
Seizure of personal property
Sale of real property
Garnishment of wages, accounts, debts
Equitable receiver
Prejudgment remedies / attachment

2014 Pearson Canada Inc.

3-25

 2014 Pearson Canada Inc.

3-26

Class Actions
Identifiable class of persons with a
representative plaintiff
Avoids inconsistent results
Lowers costs for parties and court system
Judgment binds every member of the
class

2014 Pearson Canada Inc.

3-27

Question for Discussion

Consider the phrase, justice delayed is

justice denied, and apply it to the
process of civil litigation in Canada.
Complex procedure of court adjudication
Expense and delay because of an
overburdened court system

Do the process and the system serve or

defeat the ends of justice?

2014 Pearson Canada Inc.

3-28

Dealing With Regulatory Bodies

Executive branch of government

delegates to public administrators and
regulators
Complaints against the actions of
regulators and administrators are usually
heard by administrative tribunals.
Administrative tribunals must function by
the rules of natural justice

2014 Pearson Canada Inc.

3-29

Administrative Law
Administrative Law governs:

The functioning of public administrators,

regulators and administrative tribunals
The rights of people facing an administrative
tribunal
Court review of the actions and decisions of
administrators, regulators and tribunals

2014 Pearson Canada Inc.

3-30

The Authority of the Decision Maker

Rule of Law

government officials must have legislation to

authorize their acts. They cannot interfere
with a persons rights by virtue of their
position
People are ruled by laws, not by the whim of
any government official or leader

continued ...

2014 Pearson Canada Inc.

3-31

The Authority of the Decision Maker, continued

Ultra vires v. Intra vires

Authority of decision maker may be challenged

Validity of statute or regulation can be
determined by the courts

Passed by appropriate level of

government

2014 Pearson Canada Inc.

3-32

Statutory Interpretation

Must comply with Charter

Determination of whether a rule has
been properly construed and applied is
based on a judicial interpretation of the
statute
continued ...

2014 Pearson Canada Inc.

3-33

Statutory Interpretation, continued

Rules of interpretation include:

Golden rule - reasonable interpretation of
ordinary meaning
Mischief rule - specific purpose of rule
identified
Strict interpretation - must be clear and
unambiguous

2014 Pearson Canada Inc.

3-34

The Fairness of the Process

Rules of Natural Justice

Fair hearing - complainant must have notice

and opportunity to be heard
Heard by decision maker - the people
making the decision must be the same ones
hearing the evidence
Impartiality - no bias, or appearance of bias
in decision makers

2014 Pearson Canada Inc.

3-35

Reviewing a Decision

Courts review - not the decision, but the

process by which it was made
Decision or remedy goes beyond power
set out in legislation (ultra or intra vires?)
Questions of natural justice
Errors of law

2014 Pearson Canada Inc.

3-36

Methods of Judicial Review

Prerogative Writs - when a public official

or tribunal has breached their duty
Certiorari - nullifies administrators
decision
Prohibition - prevents a decision being
made
Mandamus - forces a decision
continued ...

2014 Pearson Canada Inc.

3-37

Methods of Judicial Review, continued

Declaratory Judgment - declaration of

the law and send back for rehearing
After decision has been made, court may
assess damages, grant compensation

continued

2014 Pearson Canada Inc.

3-38

Methods of Judicial Review, continued

Judicial review process may be

streamlined by legislation
A parallel course of statutory appeal from
an administrative tribunal to the court
may be prescribed by legislation

2014 Pearson Canada Inc.

3-39

Privative Clauses

Statutes may contain provisions that

constrain judicial reviews:
Courts may hold they do not apply when the
board has gone beyond its jurisdiction or
authority
Court retains right to interpret statutory
provisions
Subject also to the Charter

2014 Pearson Canada Inc.

3-40

Question for Discussion

Administrators who make decisions affecting
people must follow minimum standards of
procedural fairness. Is this appropriate, or
should administrators remain unfettered by
these rules so they have discretion to do the
right thing in each individual case?

2014 Pearson Canada Inc.

3-41

Alternatives to Court Action

Alternative Dispute Resolution - ADR

Processes for resolving disputes as an
alternative to the courts
Main methods
Negotiation
Mediation
Arbitration

2014 Pearson Canada Inc.

3-42

 2014 Pearson Canada Inc.

3-43

Advantages of ADR Versus Litigation

Advantages

Parties to dispute maintain control of the solution

Parties determine and schedule resolution
processes
Lower costs than associated with court process
Matters may remain private
Preserves good will

2014 Pearson Canada Inc.

3-44

Disadvantages of ADR Versus Litigation

Disadvantages
Courts have more power to extract
information
Fair process cannot be ensured
Decisions do not follow precedent
Resolutions may not be enforceable
No public record of dispute or decision

2014 Pearson Canada Inc.

3-45

Negotiation

Parties discuss the problem with each other in

order to find a solution
Process requires cooperation and compromise
Good communication skills
May be conducted through representatives
Process may enhance relationship
Interim agreements may not be legally binding

2014 Pearson Canada Inc.

3-46

Mediation

Neutral outsider helps parties settle the dispute

Communication facilitated by mediator

Finds common ground

Encourages concessions

Mediator does not make decision

Mediation sometimes required before court will
hear case
continued ...

2014 Pearson Canada Inc.

3-47

Mediation, continued
Not the process to use when there is an
imbalance of power or where blame or liability
for injury must be determined
Parties must be willing to disclose information
Forms of mediated process include
Pretrial conferences
Judicial Dispute Resolution (JDR)

2014 Pearson Canada Inc.

3-48

Arbitration

Parties agree on an independent third

party (or panel) to make a decision that
will be binding on them
Often required by contract
Arbitrators can be specialists in the
matter under dispute
continued ...

2014 Pearson Canada Inc.

3-49

Arbitration, continued

Decision cannot be appealed but natural

justice, error of law and ultra vires
principles apply for court review
Process is faster, less costly and more
private than litigation
But more formal and more adversarial
than mediation

2014 Pearson Canada Inc.

3-50

Internet Transactions
Online dispute resolution (ODR) programs
have been developed to help resolve
disputes between parties
Using ADR for online disputes:
Overcomes geographical issues
Reduces costs on what are often small
disputes
Enables a quick resolution of disputes

2014 Pearson Canada Inc.

3-51

Question for Discussion

Consider the advantages and
disadvantages of the alternative dispute
resolution processes. Would a
businessperson benefit from using such a
process in a dispute over the delayed
delivery of material required in the
manufacturing process?

2014 Pearson Canada Inc.

3-52