Court Not Keen on Second-Guessing Condo Board Decision

In the recent Alberta case of  Dykun v. Cravenbrook Condominium Corporation No. 032 1893, the court of Queens Bench  demonstrated its willingness in deferring to the ultimate decision making power of a Condominium Corporation’s board of directors.

In this case, the Condominium Corporation in question had been irresponsibly managed in the past. The reserve fund, which is required by law to maintain funds necessary to pay for repair and replacement costs was greatly diminished when $31,000 dollars was siphoned off to pay for operating expenses unrelated to repairs or replacement. This was also in direct contravention to the Condo Corporation’s by-laws.

When a new management team was put in place, they realized the dire financial situation that the Condo Corporation was in. Only $238.00 remained available to pay for operating expenses and $32, 000 dollars worth of expenses was owed. Moreover, the reserve fund was $31,000 short as a result of the previous management team’s misappropriations. Read more

Quebec Lottery Commission Reaches Settlement With Addicted Gamblers: Will Other Provinces Follow Suit?

A  $500 million  dollar class action launched against  the Quebec Lottery Commission in 2001  has reportedly reached a tentative settlement agreement. An estimated 250,000 class members who have incurred therapy fees between 1994 and 2002 as a result of  becoming addicted to using Video Lottery Terminals (VLTs) are expected to settle their gambling claims for $50 million dollars, a far cry from the original amount sought.  The actual figures and terms of the agreement will be made public on January 16, 2010. In March 2010, a Quebec judge will decide on whether the settlement ought to be approved after hearing arguments from  class members unhappy with the agreement. The significance of this outcome will be likely to have an effect across Canada as similar class actions have been filed in Nova Scotia, Newfoundland, and Ontario.

According to many, this settlement is bittersweet. On the one hand, some compensation has been provided to those “victims” of addictive gambling. On the other hand, the fact that the settlement was not court ordered means that this is not seen as a legal admission of liability, and cannot be used as a precedent to help bind  similar matters in other jurisdictions. This would allow lottery corporations to maintain their operational  status quo without any concern for the need to adhere to legally set duties of care to addicted gamblers. However, although a binding legal precedent may not have been set,  the settlement  may still  have established a “moral precedent” to encourage similar settlements in other jurisdictions, but only time will tell.

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The Privatization of Our Prisons: Truth Behind Bars

The privatization of the prison industry gives rise to the concept known as the “Industrial Prison Complex”, the idea that profit drives the growth of the prison industry. This concept is rampant in the United States but Canada could be next. An example of this idea can be demonstrated by the Government outsourcing its management and control of the prison system  to private corporations which may build, operate and run  facilities for the Government in a more efficient manner than what would otherwise be possible. The prison industry is becoming one of the fastest growing industries in the United States.

In the United States, which boasts the highest prisoner incarceration rate in the world,   there are several  corporations including Correctional Corporation of America (CCA), amongst others which see opportunity in steadily growing incarceration rates, and overcrowding prisons leading to what has become  a billion dollar a year industry in the United States alone. These companies build, manage and provide services to the prison industry such as healthcare, food, psychiatric, design, and secure transportation services to name but a few.

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TRADE ASSOCIATION SURVIVAL IN A COMPETITIVE WORLD: CONSEQUENCES OF NON-COMPLIANCE AND WAYS TO MINIMIZE LEGAL SCRUTINY


INTRODUCTION

The Government of Canada has recently made some drastic amendments to the Competition Act (“the Act”) in efforts to further protect Canadians from the effects of anticompetitive market behaviour. Some of the key areas of the Act that have been overhauled include sections that relate to deceptive marketing practices, conspiracies, and the merger review process. The focus of this article will be centered on understanding why the current competition regime in Canada ought to be considered by trade associations and their members in their dealings to avoid potentially serious legal consequences.

Trade associations have been described as “individuals and corporations with common commercial interests who, under the auspices of the organization, join together to take joint actions that further their commercial or professional goals”. At first glance, this description may seem to lay the groundwork for completely legitimate activity such as discussing matters of industry importance, safety and quality standards and industry trends. In addition, because the Act lacks  provisions dealing exclusively with trade associations directly, one may think that activities involving trade associations are not on the Government’s radar. However, it must also be recognized that the risks associated with bringing market competitors together into such a tight forum creates a launching pad for trade association members to engage in anticompetitive conduct, which could very well be captured by the Act. However, this is not to downplay the legitimate roles trade associations have. As a result, the following will outline ways to maintain these legitimate purposes while being mindful of where to exercise caution.

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Turn Life’s Lemons Into Virtual Lemonade


When life throws you lemons, what can you do? A few options exist. Firstly, you can do as they say and make lemonade, but that is just way too cliché. Secondly, you can take arms against a sea of troubles and by opposing, end them; of course this Shakespearean suicidal approach (from Hamlet’s famous “To Be or Not To Be” soliloquy) is never the best option. Finally, you can start your life afresh in a 3-dimensional virtual world called “Second Life”, an online platform that mimics life in the real world. As you will find out, this final option is probably the best choice as our society cruises further into the 21st century.

As its name suggests, Second Life provides an opportunity to live a second life in a virtual form, separate and apart from any aspect of the “physical” world. Online users who sign up for this experience become “residents” in the Second Life virtual world. These residents are then able to create their own onscreen graphic characters known as avatars. It is through these avatars that residents are able to navigate this virtual world and interact with millions of other residents while creating, designing, buying and selling any virtual objects they want along the way. Read more

Web-Based Defamation in the 21st Century: Crookes v. Newton and Future Implications

As the Internet continues to rapidly expand at the speed of “life” in the twenty first century, so too must our centuries old laws in order to keep pace with the new realities. One recent example of this legal shift towards modernism can be demonstrated in Canada’s first appeal involving the issue of whether posting hyperlinks onto one’s own website, which link to other defamatory sources can trigger liability for defamation.

This was precisely the situation in Crookes v. Newton, a British Columbia Court of Appeal decision released on September 15, 2009. In this case, the plaintiff, a Vancouver businessman, sued the defendant, the operator of a free speech website. The website, www.p2pnet.com published an article about the plaintiff who at the time was suing some other websites for defamatory content written about him.

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$12 Million Settlement Agreement Approved in Air France Landing Mishap

A  $12 million class action settlement has been approved by the Ontario Superior Court of Justice in relation to an August 2005 incident where Air France flight 358 overshot the landing strip causing the aircraft to skid into a  ravine where it burst into flames. The plane was carrying 297 passengers onboard plus a crew of 12.

The flight had originated from Paris and encountered a severe thunderstorm upon landing at Toronto’s Pearson International Airport. Of all those onboard,  184 joined the class action settlement as many  others  either settled independently with Air France, or commenced separate actions.

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Factory Farming Operations: The Smell of Mass Litigation at its Finest

Factory Farming Operations are a  real and substantial threat to the environment, human health, and the economic integrity of  communities plagued by the presence of such operations. Factory Farming Operations confine as many animals as economically possible into a fixed amount of available space essentially operating as a factory by treating animals as units of production. It is not uncommon to have  thousands or hundreds of thousands  of animals tightly cramped into cages in order to maximize production for the corporate producers. The implications of such industrialized farming practices will be discussed to shed light on the various classes of stakeholders who are impacted by these operations.

The environmental impacts of Factory Farms are no secret. Hundreds of thousands of animals cramped in limited spaces translates into thousands of pounds of waste collected in cesspools every day. This gives  off offensive odours to members of the surrounding community. It is also not uncommon for the waste to find its way into the soil leading to nutrient overloading  causing runoff and contamination of  surrounding waterways and local drinking wells.

For frontline employees of these operations, exposure to high levels of dust, ammonia,  and hydrogen sulfide can result in serious health effects. It has been reported that just 2 hours of exposure in these conditions can lead to bronchitis, and asthma.

Consumers of meat produced from these facilities are at risk of consuming meat infected with bacteria such as E-coli, Salmonella, and Listeria to name but a few. In addition, as a result of  the high level of antibiotics pumped into the animals to keep them from developing illnesses in these less than ideal conditions, antibiotic  resistant strains of bacteria may become more prominent creating more risk to the public. Further risks associated with these types of Factory Farm conditions include the incubation and spread of flu epidemics such as Swine Flu, Avian Flu, and even diseases such as Mad Cow Disease (BSE).

For those residents who are plagued with a Factory Farm in their backyards, health effects have been reported to include asthma, immune suppression, neurological symptoms, psychological impairment, gastrointestinal problems and increased infant mortality rates. In addition, the establishment of such Farming operations greatly decrease the value of local properties, and outcompete smaller family run farming operations through its monopolistic nature.

The lower costs of food that Factory Farming practices may generate  fails to consider the great costs of production associated with environmental degradation of our air, water, soil, health and economic integrity posed by such practices. It is time for the power of class action litigation to do what it does best in  circumstances such as this where the regulatory regime falls short: behaviour modification.

Arbitration Clauses as a Shield Against Class Actions?…What Will Canada’s Top Court Say?

The Supreme Court of Canada has granted leave to hear an appeal next year in the matter of Seidel v. Telus Communications Inc. This appeal will attempt to clarify the issue of whether arbitration clauses in consumer agreements may prevent consumers from launching class action proceedings. This decision should move Canadian commerce one step closer in resolving what has been a flip-flopping legal issue across Canada for years.

The use of arbitration clauses in consumer agreements is common practice employed by corporate entities in laying out the mechanisms available for their consumers to use in addressing issues that may arise from such transactions. In essence, these clauses mandate customers to engage in private dispute resolution mechanisms rather than resorting to the courts to address problems.  The advantages conferred by such clauses may include a much more expedient and cost effective method of settling matters than through the “clogged” court system.

However, the downside of arbitration clauses may relate to how they are worded. The mere fact that they are unilaterally inserted into consumer contracts as a condition of service means that consumers are often forced to agree to such terms if they want to obtain such service. In addition, corporate entities may see arbitration clauses as a strategy for insulating themselves from class action claims by forcing consumers to waive their rights to participate in a class action and agreeing to the prescribed binding arbitration process instead. Concerns have also been raised about resource rich corporations compensating arbitrators for decisions in their favour.

This begs the question: can consumers resort to the courts to pursue class claims against corporate entities or must reliance on arbitration clauses be adhered to? The state of the law has been unclear in Canada.

To demonstrate the lack of clarity, I will attempt to lay out the current situation in Canada with respect to the issue of arbitration clause applicability and class actions as follows:

Seidel, a Telus customer in British Columbia launched a class action against Telus for breach of contract and deceptive and unconscionable practices. At this time, the predominant case authority was MacKinnon v. Instaloans Financial Solutions Centres (Kelowna) Ltd. which held that an arbitration clause is inoperable if a court certifies a class action. Because the court had certified Seidel’s class action against Telus, Telus simply had to live with the class action launched against it despite its arbitration clause.

The Supreme Court of Canada then subsequently rendered its decision in Dell Computers v. Union Des Consommateurs and  Rogers Wireless Inc. v. Muroff. Both these appeals came out of the Quebec lower courts and dealt with the applicability of arbitration clauses and class actions. The court agreed that in Quebec, it is the arbitrator who will determine the jurisdiction to hear the matter, not the court. The Supreme Court of Canada in both cases permitted the arbitration mechanism to prevail over the class action route.

As a result of these decisions, Telus was able to successfully appeal its case to the British Columbia Court of Appeal, which stayed the class action against it on the authority of  Dell and Rogers Wireless Inc., which seems to place arbitration clauses ahead of pursuing class actions.

It’s important to note that these Supreme Court of Canada decisions relied on by Telus were specific to Quebec, which is not a common law province and the applicability of these decisions may not necessarily clarify the issue for the other common law provinces anxious for further guidance.  This guidance shouldn’t be too far off now that Seidel has been granted leave to appeal to Canada’s top court.

I think it would be prudent for the courts to avoid taking an overly pro corporate stance on this issue. Consumers should not be denied access to the courts and forced to be bound by an arbitration clause, especially where the clause is worded unfairly. We know that corporations’ true loyalty is to their shareholders, not consumers and the Supreme Court should be mindful of this when rendering its decision next year to provide consumers with the protections they deserve.

Merry Christmas and a Happy Sue Year: Children Toys to Die For This Holiday Season

The holiday season has finally arrived! The snowflakes are falling, and the colourful glow of festivities emanates through the brisk winter air. The jingling bells of reindeers are not far off as Santa Clause makes his way to town…but with a major attitude problem this year. The question is why? Have his pet reindeers’ food supply been tainted again by another Menu Food contaminant? Have his corporate security investments plummeted in value in another frauding of the masses? Or are his little elves in the North Pole demanding compensation for overtime pay? Whatever is driving his temper, let one thing remain clear, the quality of his toys this year are cause for concern, and somebody’s going to need a good lawyer (preferably with class action experience).

Deceptive and dangerous toys are managing to make their way to a store shelf near you. It’s no surprise to most consumers that safety concerns associated with lead contaminated toy products have been quite serious given the great level of media attention the issue attracted in recent memory. However, according to the consumer watchdog group W.A.T.C.H., World Against Toys Causing Harm Inc., it is all too common for the same toy hazards to play out year after year.

Some of the common toy hazards consumers should be mindful of include those related to choking, electric shock, strangulation, falling/tripping hazards and flammability tendencies to name but a few.

The “10 Worst Toys of 2009” List has been released.  Making the list this year include the Disney Pixar Wall-E Foam Rocket Launcher. Inconsistent labeling and high air pressure release cause potential for eye and other impact injuries.

Also making the list was the Dark Knight Batman Figure, which stands at 30 inches tall, and includes two 1-inch ears made from pointed rigid plastic. This raises concern for potential blunt impact and penetration injuries. There are currently no warnings included on the package.

Another toy to die for this holiday season is the Pucci Pups Maltese. These mimic soft cute puppies as the name implies. However, the puppies come with a 35-inch leash, which poses potential for strangulation and aspiration. The warnings are only advisory in nature. It is also important to note that the industry standard in string length for cribs and playpens is 12-inches.

Speaking of cribs, they have also been a big cause for concern this year. Recently, Stork Craft Manufacturing, a baby crib manufacturer based in Canada recalled 2.1 million cribs in the United States, and nearly 1 million cribs in Canada. At least four infants have suffocated in the drop-side crib design, which consists of the crib side moving up and down to allow parents to carry the infant in and out of the crib easier. The problem arises when the drop-side malfunctions leaving extra space between the mattress and the drop-side where an infant can get caught.

A national class action in six jurisdictions on behalf of all U.S. and Canadian consumers who purchased Stork Craft Manufactured  cribs (sold under various brand names) has recently been launched.

As we enter 2010, stay tuned for more class action news on the toy and baby product front.