BarTalk June 2002
Volume 14, Number 3

by Shelley Bentley

The BC Branch sponsors 72 Sections. They play a vital role in keeping members up-to-date on changes in the law and aware of legal and political issues affecting a given area of practice. They are the main resource utilized by the BC Branch in legislative review, law reform initiatives and in responding to matters affecting the profession. What follows is a sample of the recent activities of some Sections.

Aboriginal-Vancouver and Environmental Joint Meeting
Allan Donovan and T. Murray Rankin, QC gave a presentation in a recent meeting on “BC Energy Resources Development: Aboriginal and Environmental Impacts and Issues.” Murray Rankin commented on environmental impacts and issues of energy resources development focusing on the BC offshore prospects. The estimated value of undiscovered reserves is as much as $55 billion U.S. for oil and $40 billion U.S. for gas. If accurate, these projections would make offshore oil and gas the second largest industry in BC, ahead of logging and forest products. He noted that four phases of the offshore production process carry risks of environmental damage:

1. During the preliminary seismic surveying of the potential resource;

2. During rig installation and drilling;

3. During hydrocarbon production; and

4. In the course of transportation of the oil or natural gas.

Allan Donovan focused on Aboriginal issues created by the resource development. Although such cases as the 1997 B.C.S.C. Blueberry River decision indicate there is an obligation on the part of government to consult prior to issuing seismic exploration permits, many First Nations do not have the staff or financial capacity to participate in the consultation process. Allan Donovan noted that there is a legal and equitable duty on both government and industry to consult with First Nations prior to engaging in activity impacting lands subject to treaty rights or Aboriginal title. There is also a duty to seek an accommodation with the Aboriginal people.

Banking Law
John Morrison gave a case comment on Friedmann Equity Developments Inc. v. Final Note Ltd. [2000] 1 S.C.R. 842. This Supreme Court of Canada case highlights the importance of sealed contracts, where legislation has not altered the common law rule. (Note: BC legislation alters the rule in certain situations.)

In this case a corporation was created to hold legal title to municipal property as a trustee or agent for the beneficial owners. A mortgage registered against the property was executed in the form required under the Ontario Land Registration Reform Act, 1984. This Act deems documents relating to transfers of interests in real property to be under seal. (Note: In BC we do not have such a legislative provision. See the Property Law Act, R.S.B.C. 1996, c. 37, s. 16) The mortgage agreement was signed by the corporate officer under its corporate seal. The mortgagee commenced an action for a default on the mortgage against the beneficial owners, none of whom were parties to the mortgage. The beneficial owners brought a motion to dismiss the action on the basis that they were undisclosed principals who could not be sued on an indenture executed by their agent under seal. The SCC upheld the dismissal of the action stating that as a general rule an undisclosed principal may sue or be sued on a simple contract entered into on his or her behalf by an agent. However, the sealed contract rule is a well-established exception to that general rule: when a contract is executed under seal, an undisclosed principal can neither sue nor be sued upon the contract. The exception stems from the rule that only parties to a sealed instrument may have obligations and rights under it. The sealed contract rule operates within a system of rules relating to sealed instruments, all of which are derived from the fact that a sealed instrument is enforceable by virtue of the form of the instrument itself. The sealed contract rule is part of the common law of Canada and applies equally to individual agents and corporate agents. Corporate seals, in many circumstances, are equivalent to the signature of a natural person and so may not be evidence of an interest to create a sealed instrument. Therefore, courts must examine the instrument and the circumstances surrounding its creation to determine intent except when statutory provisions render intent irrelevant, as in this case.

Criminal Justice-Okanagan
Dr. Stanley Semrau, a forensic psychiatrist, spoke on the state of mind of those who commit homicide. He sees a need for change in the law as it relates to state of mind defences in homicide cases. Dr. Semrau noted that current jurisprudence is based on Freudian psychiatry but that modern clinical psychiatry has discredited many of Freud’s concepts. He sees three problem areas with the current law:

1. some current defences, such as intoxication, non-insane automatism, sleepwalking, and provocation, have no basis in modern psychiatry. Modern psychiatry focuses on the impulse or force of will that triggers the event and not the state of mind of the actor at the time. The defence of insanity focuses on the state of mind and not the impulses that affect behaviour. It can be difficult to reconstruct state of mind at the time of the criminal act because the information gathering process is flawed. The accused and witnesses are seldom spoken to at the time of the event, giving time for reconstruction or fabrication;

2. Verdicts are all or nothing whereas the mental state of a person and the factors affecting behaviour are complex; and

3. The sentencing regime is too rigid and does not take into account the complexities of human behaviour.

In place of our current system Dr. Semrau proposed that all psychiatric defences such as provocation be abolished. Instead of 1st degree and 2nd degree murder and manslaughter, he proposed that these categories be abolished in favour of one verdict – guilty of homicide. The sentencing proceeding would then become a psychiatric hearing and allow the court the flexibility to review the complexities of each situation. The sentencing hearing should focus on the type of person the offender is and the reason the crime was committed. The sentence imposed should reflect the degree of culpability, and state of mind, such as the level of intoxication of the accused or provocation by the deceased.

Labour Law
Murray Tevlin, counsel for the plaintiff in the recent Supreme Court of Canada case McKinley v. B.C. Tel [2001] 2.S.C.R. 161, discussed this wrongful dismissal case and noted that this is a significant time for lawyers who work in this area of the law. The Supreme Court of Canada reviewed the role of work to an individual and analyzed its sociological aspects, emphasizing the vulnerability of an employee at the time of termination and the power imbalance between employer and employee. Wrongful dismissal is no longer about the strict application of contract law.

Mr. Tevlin noted three significant issues:

1. The reasonable notice cap of 24 months has been removed;

2. A breach of the Human Rights Act may be litigated as part of a wrongful dismissal action so long as the breach is included within the larger action; and

3. Dishonesty, in itself, is not always just cause for dismissal. The SCC adopted a contextual approach and decided that the test is whether the employee’s dishonesty gave rise to a breakdown in the employment relationship. Just cause exists where the dishonesty violates an essential condition of the employment contract, breaches the trust necessary in the work relationship or is fundamentally or directly inconsistent with the employee’s obligations to his or her employer.

Maritime Law
Mark Sachs, of Thomas Cooper and Stibbard, delivered an interesting presentation on piracy in Asia. He discussed the role of the International Maritime Bureau and noted the issues involved where criminal piracy occurs within territorial seas but the particular jurisdictions do little to investigate or apprehend. He also noted that at the recent Committee Maritime International Conference a model piracy law was unveiled but a number of Asian nations were not receptive to it. He discussed the recent Chinese government initiatives to crack down on piracy in the South China Sea.

Shelley Bentley is in private practice at G Davies & Company.

This article originally appeared in the June 2002 issue of BarTalk and is reproduced here with permission of both the author and the Canadian Bar Association, British Columbia Branch.