(Solution Manual) Contemporary Canadian Business Law, Principles and Cases

Willes, 12

Law

Solution Manual

12th Edition

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PART 1 The Legal Environment for Business Chapters 1 – 3 Willes, Contemporary Canadian Business Law, 12e © 2020 Copyright by McGraw -Hill Limited Instructor’s Manual 1-5 CHAPTER 1. THE LAW AND THE LEGAL SYSTEM Chapter Topics Learning the Law The Legal Environment of Business The Nature of Law Rights versus Privileges The Role of Law The Early Development of Law The Rise of the Courts and the Common Law The Sources and Components of Modern Canadian Law The Constitutional Foundations of Canadian Law The Canadian Charter of Rights and Freedoms Classification of Laws Summary Key Terms Review Questions Mini-Case Problems Case Problems for Discussion Chapter Objectives The rights and obligations of businesses and business persons stem from the law and our legal system. After study of this chapter, students should be able to: • Describe the sources, role and development of Canadian law. • Distinguish between statute and Common Law, and describe the significance of stare decisis. • Recognize matters of federal versus provincial jurisdiction. • Describe the fundamental rights and freedoms set out in the Charter of Rights and Freedoms. CHAPTER COMMENTARY Chapter 1 is introductory in nature, and provides a general background concerning the nature of law, how laws developed, the general need for some rules to govern the behaviour of individuals, and the establishment of the various fundamental rights and dut ies of persons in society. In class discussion, special emphasis should be placed upon both the sources of law and the classification of laws in order that students may have a clear idea of what they are and where they may be found. Many students fail t o realize that the Common Law represents a large body of law, and the scope and application of this source of law should be emphasized in class discussion of the chapter. The text description of the development of the law and the rise of the courts is int ended to be read as a historical introduction to give students an appreciation of where our laws came from, and how they were developed. In the context of the (Contemporary Canadian Business Law, Principles and Cases, 12e John Willes) (Solution Manual all Chapters)PART 1 The Legal Environment for Business Chapters 1 – 3 Willes, Contemporary Canadian Business Law, 12e © 20 20 Copyright by McGraw -Hill Limited Instructor’s Manual 1-6 courts and the law, the doctrine of stare decisis should be noted, and its purpose and applicati on discussed with emphasis on the need for "predictability" in the application of the law to cases that come before the courts. It would be worthwhile to note as well that some judges of the Supreme Court of Canada have expressed the view that they, as ju dges of the highest court in the land, do not consider themselves bound by the doctrine, but would only change a common law rule where it had become inappropriate in a modern social setting. Chapter 1 also provides a general outline of the nature of a constitution and its function in a democratic society. Reference is made to the "constitution" of the United Kingdom and the constitution of the United States as a basis for discussion of, and comparison with, the Canadian Constitution. The role of the co urts as the chief interpreter of the constitution is also noted and should be emphasized in any class discussion of the enforcement of rights under the Charter. On this point, the doctrine of judicial review should be explained to illustrate how the rights of both governments and individuals set out in the constitution may be enforced. As an approach to teaching this part of the chapter, a systematic examination of the fundamental rights and freedoms may be m ade with the class requested to provide a fact situation related to a freedom or right, and then have the class speculate as to how the Charter might be interpreted by the court as it relates to the matter. With each fundamental right or freedom it is impo rtant to emphasize that the freedom or right must be viewed in the light of s.1 which makes the right "subject only to such reasonable limits prescribed by law as can be demonstrably justified in a free and democratic society," and not absolute. The "notwi thstanding" clause (s. 33) which permits legislatures or parliament to override the Charter rights should be noted as well. On this point, reference may be made to the Court Decision in the Chapter ( Ford v. Quebec (Attorney General), 1988 CanLII 19 (SCC) ) which held Quebec's Bill 101 unconstitutional with respect to public signs. Students should note that the province of Quebec used s. 33 to override this decision of the Supreme Court of Canada and passed Bill 178 to require "French only" signs on all Que bec businesses. Students should also examine RJR-MacDonald Inc. and Imperial Tobacco Ltd. v. Canada , 1995 CanLII 64 (SCC) in the Chapter for an additional example of the views of the Supreme Court on the Government of Canada's attempts to virtually ban ad vertising on tobacco products. The organization of the Charter itself provides an orderly approach to discussion of the nature of the rights and freedoms granted under it, as well as the method of enforcement. With respect to the latter, it is readily a pparent that most of the rights and freedoms are those which the framers of the constitution felt should be enshrined to protect them from encroachment or interference by governments. If government should do so, the individual has the right to bring the a lleged infringement before the courts to have the interference ruled upon as to its validity. A final point to note and to emphasize in class is that the constitution includes more than the Charter of Rights and Freedoms . It also includes the original British North America Act of 1867 (as amended over the years) which establishes the structure of our government, and the legislative powers and jurisdiction of the provincial governments and Parliament. Consequently, it is a lengthy and complex document whi ch sets out not only the rights and freedoms of the individual, but how Canada as a democratic society governs itself. On this point it should be emphasized that legislative bodies may not exceed the powers granted to them under the constitution, as the e xercise of jurisdiction when none exists renders such an act ultra vires and a nullity. Aboriginal and indigenous law concepts are introduced, and s tatute law is defined in the text, and the process associated with this type of law -making is described v ery briefly. Students should be informed that this process is legislative as distinct from judicial . The recording and organization of these statutes in the form of revised statutes of a province (or federal government) should also be discussed in order that students are made aware of where these laws may be found. Discussion may then lead into the topic of civil codes , and students may be asked to discuss the pros and cons of a Civil Code system vs. the Common Law/Equity system PART 1 The Legal Environment for Business Chapters 1 – 3 Willes, Contemporary Canadian Business Law, 12e © 20 20 Copyright by McGraw -Hill Limited Instructor’s Manual 1-7 From the point of view of learning about the law, the chapter contains a description of the various sources of the law, and the methods of classification. The importance of this part of the chapter should be underscored, as it provides the basis for an understanding of the part icular rules and principles covered in the remainder of the text. It also represents an important first step in the examination of the law, in that it sets out the system for classification . It is essential that the difference between substantive law and procedural law be understood. As well, students should learn the various sub -classes of substantive law. In this regard, the nature of public law as a type of substantive law should be clearly understood. Public laws are laws which relate to the relat ionship between the individual and the government (or its agencies), and as such, are usually laws which are enforced by the Crown. They are generally prohibitive or regulatory in nature (e.g.: the criminal law, or provincial liquor control laws), and are enforced by the Crown if they are violated by an individual. They are quite different from private laws which normally establish the rights and duties of individuals in their dealings with each other, and which must be enforced by the party whose rights have been violated. The chapter outlines the sources of law , and provides a general explanation of the common law (including equity) as a source. The nature of this body of law should also be carefully examined, as the law described in a large part of t he text is of this type. In particular, the Law of Tort in Chapters 4 - 6, the Law of Contract in Chapters 7 - 14, the Law of Agency in Chapter 15, the Law of Bailment in Chapter 20, and a number of other areas of the law are essentially part of the "Comm on Law". Chapter 1 also introduces the first of many legal terms and definitions which must not only be memorized, but understood. The various definitions of the term "law" along with definitions of "rights" and "privileges", "Common Law", "equity", the doctrine of stare decisis , "statute", and "civil code" are explained, and the material concerning these terms should be carefully reviewed, as the terms are frequently used throughout the balance of the text. The various terms used to describe the differ ent classifications of the law should also be noted. The Review Questions at the end of the chapter should provide a sufficient test of student knowledge of the essential material and are reproduced with comments. PART 1 The Legal Environment for Business Chapters 1 – 3 Willes, Contemporary Canadian Business Law, 12e © 20 20 Copyright by McGraw -Hill Limited Instructor’s Manual 1-8 Review Questions 1. What impact does the Canadian Charter of Rights and Freedoms have on rights and freedoms not mentioned specifically in the Charter? Could these "other rights and freedoms" be curtailed or extinguished by governments? Answer : The Charter recognizes the e xistence of other rights and permits them to continue except where they conflict with Charter rights and freedoms. Rights outside the Charter do not have Charter protection, and may be abolished or encroached upon by governments. 2. What is the difference between a "right" and a "privilege"? Answer : A right is an act that may be done with impunity and with the support and recognition of the state. The state recognizes a right as something which neither it nor others may deny. A privilege is something whi ch the state allows or permits under specific circumstances at the pleasure of the state. 3. Why are "rights" and "duties" often considered together when one thinks of laws? Answer : Because "rights" often permit a person to do something t hat interferes with others, laws generally include obligations or duties on the person possessing a right to exercise the right in a particular way to minimize interference with others. Laws may also include duties on those affected by the exe rcise of a right to permit the right to be exercised. 4. Could a society exist without laws? If not, why not? Answer : A complex society certainly could not exist without laws, as some means of regulating the activities of people would be necessary to maintain order. Even in a primitive society, rules regulating fairness in vengeance matters were necessary. 5. "Advanced civilizations are generally characterized by having a great many laws or statutes to control the activities of the citiz enry." Comment on the validity of this statement. Answer : This is a valid observation. Advanced civilizations are characterized by persons engaged in activities which involve a great deal of social contact and interaction. Historically, they have also involved many people living in close proximity to each other (in cities). Each type of social interaction usually requires some legislative control, hence, the more interaction, the more laws that are required. 6. On what basis are Cha rter fundamental rights and freedoms open to restriction by Parliament or the provincial legislatures? PART 1 The Legal Environment for Business Chapters 1 – 3 Willes, Contemporary Canadian Business Law, 12e © 20 20 Copyright by McGraw -Hill Limited Instructor’s Manual 1-9 Answer : Fundamental rights and freedoms may be restricted under s. 1 if the restriction can be shown to "be demonstrably justified in a free and democra tic society." Rights and freedoms may be "temporarily" overridden by the "notwithstanding" clause (s. 33) as well. 7. Why is the doctrine of stare decisis an important part of the Common Law system? Answer : The doctrine of stare decisis is the theory of precedent. Judges are expected to apply previous decisions to similar cases which come before them in order to maintain a degree of consistency in the law. By following this doctrine, the law is not only consistent, but others can predi ct how the law may be applied in similar. 8. How does the Common Law differ from the principles of equity? From statute law? Answer : Common Law and equity have different roots. The common law was the product of the common law courts. The principles of equity were originally principles or rules which the King applied in settling disputes which did not fall within the jurisdiction of the common law courts. Later, the King's Court (Chancery) used the same and other principles in order t o provide fair and just results. At present, the courts may apply both common law and equity, but where conflict exists, equity prevails. Equity differs from statute law in the sense that statute laws are written or codified laws, whereas the principles of equity are found in the recorded judgments of the courts. 9. How does a legislature establish a new law? Explain the procedure. Answer : The usual process is as follows: a. A bill (essentially a proposed law) is presented to a legislative body (Parliam ent or provincial legislature). b. A motion is made (and passed) to have the bill 'read' a first time. c. The bill is then printed and circulated to the members to study. d. The bill is later brought forward for debate (second reading) in principle. e. If the bill passes the second reading stage, it is sent to a Committee for study and amendment on a clause by clause basis. f. Once passed by the Committee, the bill is reported in final form by the Chair of the Committee for a third reading. g. The bill is then deba ted for a final time by way of a motion to have the bill read a third time. h. If passed by a majority vote, the bill at the federal level goes to the Senate where a similar process is followed. PART 1 The Legal Environment for Business Chapters 1 – 3 Willes, Contemporary Canadian Business Law, 12e © 20 20 Copyright by McGraw -Hill Limited Instructor’s Manual 1-10 i. Once a bill has been passed by the House of Commons and Senate (or a provincial legislature) it goes to the Governor -General (or Lieutenant -Governor, if provincial) for royal assent. j. The bill becomes a law on receipt of royal assent, and effective as a law when proclaimed in force. 10. Define substantive law, and explain how it differs from procedural law. Answer : Substantive law - law which sets out the rights and duties of individuals and corporations. Procedural law - law which set out the procedure whereby substantive laws are enforced. 11. Describe the difference between the Common Law and the Civil Code of the Province of Quebec. What are the relative merits of each system? Answer : Common Law consists of the recorded judgment of the courts. The civil code is a written body of law. Meri ts of civil code: laws are written down and may be consulted to determine what the law is. The law can be changed by statute amendment and kept up to date by the legislature if change is warranted. Merits of Common Law: flexible, as judges may change it through interpretation, or by distinguishing the case at hand from the precedent. Adaptable to changing social attitudes. 12. "The supremacy of the state was reached when it managed to exercise a sufficient degree of control over the indiv idual to compel him or her to use the state judicial system rather than vengeance to settle differences with others." Why was it necessary for the state to require this of the individual? Answer : When the state lacked the power to control its citizens, i ndividuals used their own means to resolve disputes, as it was the only method whereby a person could obtain redress. Vengeance, however, often disrupted the entire community, and affected others not involved in the dispute. Once the state had the power to compel citizens to obey its decrees, it could substitute orderly procedures for settlement which caused less disruption to the community than vengeance. 13. How does a "regulation" made under a statute differ from other "laws"? Answer : A regulation unde r a statute is a rule that is made to enable an administrative tribunal to carry out duties assigned to it under a statute. Regulations govern the activities of administrative agencies or boards, and are often administered by them. Regulations are subordi nate to statutes, but in application, have much the same effect on persons who engage in activities subject to the regulations. 14. Explain how the enforcement of a public law differs from the enforcement of rights under private law. Answer : Public laws are enforced by the Crown against the individual. Private law rights are enforced by individuals against other individuals. PART 1 The Legal Environment for Business Chapters 1 – 3 Willes, Contemporary Canadian Business Law, 12e © 20 20 Copyright by McGraw -Hill Limited Instructor’s Manual 1-11 15. The Canadian Charter of Rights and Freedoms has been described as being "supreme" law, or law which is "entr enched." Why, or in what sense is this the case? Answer : The Charter is "supreme law" in the sense that it overrides all other federal and provincial laws, and all such laws must not conflict with it, except as permitted. It is "entrenched" in the sense that it is difficult to change. 16. Explain the Common Law system, and how it relates to the function of the courts. Answer : The Common Law system is a system where the laws are not codified, but may be found in the recorded judgments of the courts. Courts maintain a degree of consistency in the law by following the doctrine of stare decisis (precedent). 17. Does the Canadian Charter of Rights and Freedoms permit the Supreme Court of Canada to override the will of Parliament or a provincial legislatur e? If so, in what way? Answer : The Supreme Court of Canada, as chief interpreter of the legislation, may override the will of Parliament or a provincial legislature where the law violates the Charter. It may not override if the law is passed pursuant t o the s. 33 "notwithstanding" clause. 18. If changing social attitudes or values dictate a change in the Canadian Charter of Rights and Freedoms , how would this be accomplished? Answer : The Charter of Rights and Freedoms may only be changed by agreement of Parliament and 2/3rds of the provinces, provided that the provinces represent at least 50% of the population of all of the provinces. 19. Why is the word "law" so difficult to define in a precise manner? Answer : Law is difficult to define because in practice it is applied indiscriminately to rights, privileges, rules, principles, and statements. 20. In what way does the Constitution Act, 1982 affect the legislative jurisdiction of the Parliament of Canada a nd the provincial legislatures? How are questions of jurisdiction decided? Answer: The Constitution Act, 1982 includes the British North America Act, 1867 , as amended, which sets out the legislative powers of the provinces and the Parliament of Canada. If legislation passed by either a province or the federal government is alleged to have exceeded the legislative authority granted to it under the Constitution, the Supreme Court of Canada has the power to decide if the body has the authority to pass such legislation, and would decide if the law was ultra vires. PART 1 The Legal Environment for Business Chapters 1 – 3 Willes, Contemporary Canadian Business Law, 12e © 20 20 Copyright by McGraw -Hill Limited Instructor’s Manual 1-12 Mini -Case Problems 1. A freight train derailed, dumping dangerous chemicals into a small stream in British Columbia, causing significant environmental damage. What jurisdictional issues are raised by this scenario? Answer: The jurisdiction of the province to regulate environmental matters may collide with the jurisdiction of the federal government in regulation of railways (transportation). 2. A coastal province passed a law prohibiting bo ats and ships from dumping waste along its shoreline. A ship’s captain was later charged with commission of such an offence. What defence may exist to such a charge? Answer: The defence may be that the provincial law is ultra vires (beyond its jurisdicti on), as regulation of shipping is a matter of federal jurisdiction. 3. Simone believes that genetically -modified foods are extremely dangerous for people to consume. What paths can she take in fighting (legally) for her belief? Which one would be the most efficient? Why? Answer: While it may be possible for Simone to sue manufacturers of genetically -modified foods for producing “something dangerous” or seek injunctions against the sale of these goods (details in later chapters), it wou ld be far more efficient for her to champion a legislative response, to see genetically modified foods regulated by government. Case Problems for Discussion Case 1 Mary applied for a job at the Millstone Restaurant. She was told her uniform would be a white blouse and black skirt, with a hem three centimetres above the knee. She agreed, but when she started work, she realized that female staff was dressed accordingly, but the men wore white shirts and black pants. At a later date, Mary appeared at work also dressed in a white shirt and black pants. The manager of the restaurant told her she was “out of uniform,” words were exchanged, and Mary was fired. Is there a Charter issue here? Discuss. Answer: While a differential in dress requirements may or may not be an example of unreasonableness, unequal treatment, discrimination, or harassment, the Charter addresses the individual and his or her treatment at the hands of government, not matters between private individuals. Mary will have to look toward aspects of common law (later chapters) or provincial labour or human rights legislation. PART 1 The Legal Environment for Business Chapters 1 – 3 Willes, Contemporary Canadian Business Law, 12e © 20 20 Copyright by McGraw -Hill Limited Instructor’s Manual 1-13 Case 2 FM 96 Tiger Radio wanted to set up a three -day live remote event in a provincial park for the Labour Day weekend. The provincial parks commission approved the plan, subject to a payment of $4,100, comprised of a park event permit ($1,000), a sanitation charge ($1,000), a broadcasting permit ($500), a beer/wine premises special occasion permit ($1,500), and a fire inspection fee for the beer/wine consumption premises ($100). How should FM 96 respond to the provinc ial commission? Answer: By requiring an application fee or fee for service, and issuing a permit to allow a particular activity, the provincial authority is setting conditions or “regulating” that behavior. All of the activities in the park that are list ed are matters that a province can regulate, except broadcasting . The regulation of broadcasting is a federal matter, and ultra vires of provincial jurisdiction. The province has no right to demand this payment, and its “permit” is meaningless. Case 3 In the year 1619 , Maxwell was drunk, lost control of his horse and killed a child. No legal action was taken by the Crown . In the year 1859, Edward purposely drove his master’s wagon over a man in the street. He was executed for his crime. In the year 1959 , Sharon was sober, lost control of her car and killed a child. She was given a suspended sentence and ordered to pay a $100 fine , and was sued by the child’s parents for damages of $1000 in funeral costs . In the year 2019 , Karl was drunk, lost control of his car and killed a child. He was given one year imprisonment, a $1000 fine , a lifetime driver’s licence suspension and was sued for $2.5 million for emotional distress by the parents of the child . In what way is the principle of stare decisis at work he re, if at all? Answer: The principle of stare decisis is at work, despite the fact that the penalty has evolved over time. Recalling that one of the strengths of the principle is that it can respond to the norms of a changing society, the fact remains that causing death is wrong, and will attract a socially appropriate penalty. Each epoch of our society has had different conceptions of capacity, incapacity, and degrees of responsibility and liability in the operation of a mode of transport. PART 1 The Legal Environment for Business Chapters 1 – 3 Willes, Contemporary Canadian Business Law, 12e © 20 20 Copyright by McGraw -Hill Limited Instructor’s Manual 2-1 CHAPTER 2 . THE JUDICIAL SYSTEM AND ALTERNATIVE DISPUTE RESOLUTION Chapter Topics Introduction Development of the Law Courts The Structure of the Judicial System The Judicial System in Action Administrative Tribunals Alternative Dispute Resolution (ADR) The Legal Profession The Role of the Legal Profession Summary Key Terms Review Questions Mini -Case Problems Chapter Objectives Knowing where and how to enforce rights and oblig ations is a key business survival skill. After study of this chapter, students should be able to: • Describe the development, content and structure of the judicial system. • Explain the sequence of steps in court procedure, particularly civil court procedure. • Identify how and why alternative dispute resolution may be the best option for the settlement of business disputes. • Explain the role of barristers and solicitors, the range of services provided by the legal profession, and the concept and limitations of court costs. CHAPTER COMMENTARY Chapter 2 represents a continuation of the material contained in the previous chapter, but focuses upon the administration of the law. The text material includes the structure of the courts in Canada, an d as a class exercise, it might be useful to carry simple criminal and civil actions (based upon easily understood incidents) through the various steps and appeals to their final resolution at the highest appeal levels. In this fashion, the text material may be re -enforced, and the various limitations on appeal, etc., noted in the process. The distinction between criminal and civil proceedings should be emphasized, as experience has indicated that students frequently fail to realize that an incident whi ch gives rise to both civil and criminal proceedings (such as a "criminal negligence" incident) would follow two separate legal paths, one dealing with the criminal act, and the second, dealing with the civil aspect. Some time should be given to the procedure by which judg ments of lower courts may be appealed. The conditions under which a judgment may be appealed should be stressed (error of law, rejection of important evidence in reaching a decision, etc.) and the appeal routes examined for both civil and criminal cases. These are depicted on the charts which follow. PART 1 The Legal Environment for Business Chapters 1 – 3 Willes, Contemporary Canadian Business Law, 12e © 20 20 Copyright by McGraw -Hill Limited Instructor’s Manual 2-2 Since alternate dispute resolution (ADR) is considered by many business firms as a more efficient system of resolving disputes, the topic should be opened for class discussion as an alternative to the court system. Discussion should note the particular advantages of ADR over the court system (speed of resolution, lower costs, etc.) but it should also be noted that certain kinds of disputes still lend themselves to court resolution. Review Q uestions 1. Why is arbitration sometimes a more attractive means of settling contract disputes between business persons? Answer: Arbitration is a confidential process as well as a relatively low cost and efficient process for resolving disputes. Often business peop le do not wish to destroy a business relationship if a dispute arises, and arbitration will often allow them to obtain an answer or solution to their problem that will allow them to continue to do business with each other. 2. Discuss the importance of a n independent judiciary. Answer : Important because: (a) not open to manipulation by political action. (b) free to resolve differences between individuals without fear of the consequences. (c) able to determine differences between governments withou t concern that the powers of the court will be attacked. (d) permanent body to administer the law is vital in order to maintain continuity and confidence in the system. (e) "independence" generally equated to "fairness". 3. If a provincial government should pass a law which prohibits any person from expressing any criticism of any elected government official on penalty of imprisonment, how might the law itself be challenged ? Answer : A person accused may ask the court to review the law in the light of the Charter of Rights and Freedoms or the jurisdiction of the province to make such a law. The court will then determine if the law is enforceable. 4. Explain the differences between a Small Claims Court and a Magistrate's Court. Answer: A Small Claims Court deals with civil disputes between individuals where the monetary amount is small (limit varies from province to province, $3,000 - $10,000, and in some, up to $25,000). Magistrate's Court is a court which enforces by -laws, provincial statutes and the Criminal Code (except for the more serious offences). It does not deal with civil disputes. PART 1 The Legal Environment for Business Chapters 1 – 3 Willes, Contemporary Canadian Business Law, 12e © 20 20 Copyright by McGraw -Hill Limited Instructor’s Manual 2-3 5. On what basis is it possible to justify the right of the court to declare unconstitutional legislation enacted by a legislature? Answer : The right may be justified because the court represents an independent, permanent body that is made up of persons with the expertise to interpret the constitution and to oversee its application. No political body is able to do so in an unbiased or fair manner. 6. How does a criminal case differ from a civil action? Answer : Criminal : - Crown brings the charge against the accused. A two -step process in many cases: (1) preliminary he aring, (2) full hearing. - Crown obliged to prove the particular offence was committed by the accused, and that the offence is one which is set out in the criminal code. - Crown must prove act, identity, and intent to commit the offence (subject to cer tain exceptions). - must prove its case beyond any reasonable doubt in order to obtain a conviction. Civil : - the party who alleges a violation of his or her rights brings the action. - onus of proof of facts alleged rests on the plaintiff. - case is outlined through "pleadings". - plaintiff not subject to the higher standard of proof of criminal courts. 7. In criminal proceedings, what obligation rests on the Crown in order to obtain a conviction? Answer : Crown must normall y prove beyond any reasonable doubt that the accused committed the particular offence, intended to commit it, and was the person who committed it. 8. What is the purpose of "pleadings" in a civil case? Answer : The purpose of pleadings in a civil action is to set out the facts of the case and the issues in dispute in sufficient detail to enable each party to know the matters in dispute and prepare their respective cases for the trial. They avoid surprise at trial, and minimize the time required by the court s to dispose of the case. PART 1 The Legal Environment for Business Chapters 1 – 3 Willes, Contemporary Canadian Business Law, 12e © 20 20 Copyright by McGraw -Hill Limited Instructor’s Manual 2-4 9. How does "direct" evidence differ from "opinion" evidence? How do these types of evidence differ from "hearsay" evidence? Answer : "Direct" evidence is given by ordinary witnesses who testify as to what they heard, saw, or did. "Opinion" evidence is evidence given by experts who have special knowledge about the subject matter of the evidence, and who express an opinion about the matter based upon their specialized knowledge or expertise. Hearsay evidence is neither direct nor expert evidence, but evidence given by a third party who was informed by someone else (usually a person who would normally be an ordinary witness) of the facts. Hearsay evidence is usually not admissible in a court of law. 10. Describ e the role performed by legal counsel in the administration of justice. Answer : Legal Counsel are learned in the law and advise others of their legal rights and duties. They also carry out on behalf of their clients the job of processing an action throu gh the courts or negotiating legal matters on their behalf. 11. Distinguish between a "barrister" and a "solicitor". Answer : A barrister is a lawyer who handles litigation matters on behalf of clients. A “court -room” lawyer. A solicitor advises clients of their legal rights and duties, and normally prepares contracts, deeds, wills, and other legal documents for clients. 12. On what basis might an appeal be allowed from a judgment of a court of original jurisdiction? Answer : An appeal may be allowed where the judge improperly applied the law, (improperly instructed the jury as to the law) or made an error in rendering a decision. 13. Where a judgment is reviewed by a Court of Appeal, what type of decision might the court make? Answer : A Court of Appeal may: (1) reverse the decision, if the trial judge erred. (2) affirm the decision of the trial judge, or (3) send the matter back to the lower court for a new trial. 14. What is a court of original jurisdiction? How does it differ from a c ourt of appeal? PART 1 The Legal Environment for Business Chapters 1 – 3 Willes, Contemporary Canadian Business Law, 12e © 20 20 Copyright by McGraw -Hill Limited Instructor’s Manual 2-5 Answer : A court of original jurisdiction (sometimes referred to a court of first instance) is a court where a case is heard for the first time. A court of appeal is a court which reviews the decision of the court of original jurisdict ion to make certain that the judgment was fairly and properly made. 15. How does arbitration differ from a court action? Answer: Arbitration is conducted much like a court action, but in a much less formal setting. While the rules of evidence and procedure are usually followed, the process generally does not require pleadings or discovery. The parties are usually responsible for the selection of the arbitrator, and the arbitrator’s fees. The hearing does not involve ‘court costs’. 16. Explain the nature of mediation, and how it is used in the resolution of disputes. Answer: Mediation is an attempt to resolve a dispute between parties prior to formal court or arbitration proceedings by a third party through a discussion process. A me diator has no authority to impose a dispute by suggesting ways in which the parties may reach agreement on a solution to their problem. 17. "In a free and democratic society, the courts perform the important role of guardians of the rights and freedoms of th e individual. While important, this is far from being the only part they play in society." How do the courts perform this important role? What other functions do they have in society? Answer: Courts guard the rights and freedoms of the individual by acting as the medium through which rights and duties are determined and enforced. They also act as a "check" on government action which might improperly encroach on the rights and freedoms of indiv iduals protected by the Charter. Finally, they preserve peace and order by providing an obligatory process for dispute resolution (replacing vengeance). Mini -Case Problems 1. Michael, an otherwise well -behaved boy of 11, fell in with Gavin, 13, a repe at offender as a delinquent. The boys were arrested by police while spray painting a school and breaking into a portable outside classroom. Under the provisions of the Youth Criminal Justice Act , there was no public disclosure of their names, and the Youth Court proceedings were sealed from public scrutiny now and future. Are the provisions of the law appropriate for both boys? Whether yes or no, explain why. Answer: The fact situation calls for a reasoned opinion, rather than a yes or no answer. In most instances students will provide an answer that in some measure provides a reflection of their personal values, as well as their perception of the criminal justice s ystem. PART 1 The Legal Environment for Business Chapters 1 – 3 Willes, Contemporary Canadian Business Law, 12e © 20 20 Copyright by McGraw -Hill Limited Instructor’s Manual 2-6 2. Anne is unsuccessful in her suit at trial and on appeal to the provincial appeal court. If she wishes to proceed, where must she go, and what burden will she face before her case will be heard again? What factors may prevent her case from being heard again? Answer: The only remaining route of appeal for Anne is to the Supreme Court of Canada, however this appeal is not a matter of right. She faces the burden of being successful in seeking “leave to appeal” before she can have her case present ed. The Supreme Court of Canada could give leave to hear any case it wishes, however it is doubtful that it will do so unless it is in the public interest, and/ or commonly, any of the following: errors at appeal are evident such that a denial of funda mental justice would otherwise take place, a significant Charter or other constitutional determination is at stake, or the lower ruling employs outdated Common Law in need of reform. 3. Carlson invented a new valve for natural gas pipelines, and sold his drawings to Pipeco, a manufacturer of such items. A dispute arose before production began, and both parties immediately agreed to ADR. What would lie behind this mutual aversion to court proceedings? Answer: The most likely reasons behind the selection of ADR in this case are (in order of importance): (a) Secrecy – the invention is new, which may have great value from a competitive standpoint. (b) Speed – production is likely set up already and any delay is expensive. (c) Cost – a cheaper proceeding producing a better result is in the interest of both parties. Case Problems for Discussion Case 1 A backhoe owned by Digger Ltd. was involved in the trenching for a water pipeline located along a city sidewalk. In moving a bucketful of rock into a waiting truck, the backhoe operator accidentally struck and cut an overhead power line. The cut power line fell to the sidewalk, injuring and electrocuting a pedestrian who had been observing the trenching. The pedestrian required extensive hospitalization and reconstructive surgery, and later commenced legal proceedings against Digger for the injuries suffered, including six month’s lost wages while hospitali zed. Outline the various steps the parties to the action would take to bring the case to trial, and briefly describe the trial process. Answer: The case is quite straightforward, and students should not be thrown off by the causal chain of backhoe, power line and passer -by. Although students have not yet been exposed to the principles of negligence law, most will recognize the duty, breach, damage elements of this incident and as something more than a simple and blameless accident. As to the substance of the question, the stages by which the case will be PART 1 The Legal Environment for Business Chapters 1 – 3 Willes, Contemporary Canadian Business Law, 12e © 20 20 Copyright by McGraw -Hill Limited Instructor’s Manual 2-7 brought to trial, and the trial process itself, are described the sections entitled “Civil Courts” and “Civil Court Procedure”. Case 2 As the Head of Information Systems at Equity Brokerage, you maintain the computer systems which support all aspects of stock trading accounts at Equity, including access for trading purposes. Your firm is being sued by a customer who alleges trading irregularities occurred on her account. When you testify at trial as to the identity of the person who conducted the transactions and the actions that affected the status of the account, what kind of witness are you, and what kind of evidence are you providing? Answer: Despite having some particular expertise, the wit ness would be considered to be only an “ordinary witness”. As an employee of the defendant firm, the witness lacks the independence of opinion that is usually one of the hallmarks of most “expert witnesses”. As the witness has direct knowledge of the eve nts (regarding the computer system itself), the witness is giving “direct” evidence rather than “hearsay”. Case 3 Farhan is personally injured and his home is badly burned by a toaster oven that, on first use, burst into flame. With Farhan successful in a n action for damages, what factors should a judge take into consideration in determining the issue of costs? Answer: The issue of an award of costs is covered in the section entitled “Court Costs”. The judge would take into account the behaviour of the p arties, especially the defendant, in forcing the case to a judicial hearing. While there may be genuine issues for trial, including the amount of damages claimed, the judge will be concerned as to whether the defendant manufacturer was simply attempting t o stall or bankrupt Farhan, thus perverting justice rather than seeking it. Such efforts will be penalized in costs, in addition to disposing the court toward generosity in the award in the first place. PART 1 The Legal Environment for Business Chapters 1 – 3 Willes, Contemporary Canadian Business Law, 12e © 20 20 Copyright by McGraw -Hill Limited Instructor’s Manual 2-8 CHAPTER CHARTS PART 1 The Legal Environment for Business Chapters 1 – 3 Willes, Contemporary Canadian Business Law, 12e © 20 20 Copyright by McGraw -Hill Limited Instructor’s Manual 2-9 Table 2–1 Trial Level Jurisdiction Designation of Court Alberta Court of Queen’s Bench of Alberta British Columbia Supreme Court of British Columbia Manitoba Court of Queen’s Bench of Manitoba New Brunswick Court of Queen’s Bench of New Brunswick Newfoundland & Labrador Supreme Court of Newfoundland & Labrador (Trial Division) Northwest Territories Supreme Court of the Northwest Territories Nova Scotia Supreme Court of Nova Scotia Nunavut Nunavut Court of Justice Ontario Superior Court of Justice Prince Edward Island Supreme Court of Prince Edward Island Quebec Superior Court of Quebec Saskatchewan Court of Queen’s Bench for Saskatchewan Yukon Territory Supreme Court of Yukon Appeal Level Designation of Court Alberta Court of Appeal of Alberta British Columbia British Columbia Court of Appeal Manitoba Manitoba Court of Appeal New Brunswick Court of Appeal of New Brunswick Newfoundland & Labrador Supreme Court of Newfoundland & Labrador (Court of Appeal) Northwest Territories Court of Appeal for the Northwest Territories Nova Scotia Court of Appeal for Nova Scotia Nunavut Nunavut Court of Appeal Ontario Court of Appeal for Ontario Prince Edward Island Court of Appeal of Prince Edward Island Quebec Court of Appeal of Quebec Saskatchewan Court of Appeal for Saskatchewan Yukon Territory Court of Appeal of Yukon PART 1 The Legal Environment for Business Chapters 1 – 3 Willes, Contemporary Canadian Business Law, 12e © 20 20 Copyright by McGraw -Hill Limited Instructor’s Manual 3-1 CHAPTER 3 . BUSINESS REGULATION Chapter Topics Introduction Government Regulation of Business The Hearing Process Broad -Policy Administrative Law The Appeal Process for Administrative Decisions Summary Key Terms Review Questions Mini -Case Problems Chapter Objectives Regulation can have more immediate impact on how we do business than either legislation or case law. After study of this chapter, students should be able to: • Describe the effect of regula tion and distinguish it from legislation. • Identify and describe the activities of administrative tribunals. • Recognize matters of federal versus provincial jurisdiction. • Describe the elements of natural justice. YOUR BUSINESS AT RISK Many businesses are tempted to gloss over or ignore seemingly burdensome administrative rules and procedures. However, government regulation and administrative tribunals have more power than most business persons realize. Failing to comply with administrative l aw provisions can result in immediate and drastic consequences for businesses and their owners. CHAPTER COMMENTARY Chapter 3 examines the regulatory process that governments use to control business activities. It differs from what students may view as a legal process in the sense that most of the ‘law’ or the rules are made by bureaucrats and enforced by them. Students should be made aware that administrative agencies and commissions play a significant role in the business scene as they represent the mea ns by which the government seeks to protect public health and safety, ensure fair competition in the marketplace , and generally protect the consumer from unfair business practices. The regulation of the professions also ensures that a level of competence is established and maintained through a licensing process. Discussion of administrative agencies or commissions should also emphasize the fact that the usual methods of regulating business and the professions is through a registration or licens ing system. The registration or license is the means by which control is maintained, since in most cases the failure of a business or professional person to comply with the rules or requirements set down for the business or profession could mean the loss of the registration or license to carry on the business or practice the profession. Students should also be made aware that the termination of a registration or the lifting of a license to practice a profession or carry on a business must be in accordance with the rules of natural justice, and a hearing process, and perhaps an appeal process must be made available to the affected party to ensure fairness in the decision. PART 1 The Legal Environment for Business Chapters 1 – 3 Willes, Contemporary Canadian Business Law, 12e © 20 20 Copyright by McGraw -Hill Limited Instructor’s Manual 3-2 Students should also be made aware that administrative tribunals set down rules and procedures to carry out the policy objective of the government, and that these ‘rules’ are usually set out in regulations made under the particular statute. These regulations have much the same effect as statutes, but are subordinate legislation in the se nse that they do not follow the enactment process for ordinary legislation. Review Questions 1. What are the rules of natural justice, and how do they apply to a board that acts quasi -judicially? Answer : The rules of natural justice require the board or agency to give the affected persons notice of the charges made against them, and to provide them with the opportunity to prepare and present their side of the issue to the decision -makers. This usually takes the form of a hearing where evidence and argume nt may be presented before the decision -makers. 2. Explain how an administrative law differs from other laws. Answer : An administrative law establishes broad policy objectives then delegates the enforcement to an administrative body to carry out the policy objectives. An ordinary statute will normally state the policy objective(s) and require compliance under penalty for failure to comply. In the case of an ordinary statute, the courts are used to obtain compliance. 3. Explain how governments regulate the professions. What type of body is usually created for this purpose? Answer : Governments usually regulate the pro fessions by establishing a non -government body of the profession to set standards for entry into the profession and the maintenance of the standards by its members. To protect the public, the professional association is usually granted the right to licens e practitioners of the particular profession and to revoke the license of those that fail to maintain the standards of the profession. 4. What administrative controls are used to control or regulate business activities that offer services to the public? Answer : The usual control method is by registration or license to carry on the particular business activity, a nd to prohibit anyone from conducting the activity unless registered or licensed. 5. Outline the process that an administrative body must follow if it wishes to revoke an individual’s license? Answer : An administrative body must usually establish a procedure whereby a hearing is held to enable the affected party to appear and to defend against the complaint before a final decision is made. In some cases an appeal may be made to an independent tribunal where a revocation of a license takes place. PART 1 The Legal Environment for Business Chapters 1 – 3 Willes, Contemporary Canadian Business Law, 12e © 20 20 Copyright by McGraw -Hill Limited Instructor’s Manual 3-3 6. What is an administrative law? Answer : An administrative law is a law that not only establishes the broad policy objectives of the government but establ ishes an agency, board, or commission to carry out the policy objectives, and includes the rules or procedures that the agency, board or commission may make to ensure that the policy objectives are met. 7. Under what circumstances may a decision of a board or commission be appealed to the courts? Answer : As a general rule, an appeal may only be made to the courts where the administrative body has acted quasi -judicially, and either failed to follow the rules of natural justice, or made a decision that is patently unreasonable, or where the decision -maker was biased. Mini -Case Problems 1. Norman seeks a licence to operate a taxi in a major city and applies in writing to the City Taxi Commission. Two days later, he receives a letter in reply: “Dear Norman: Upon careful review of your application, your request for a licence is denied. Signed: Chair of Taxi Commission." Advise Norman of his rights. Answer: Although it may be difficult, Norman may feel that that the extremely rapid response to his application suggests that it was not reviewed at all, despite the reply stating that a careful review had been performed. While some municipalities may allow an appeal to the municipal council itself, it is likely no appeal route exists, and his only recourse would be an application for judicial review before a court. He would allege that such cursory treatment of his taxi application amounted to a denial of natural justice. 2. Janine is a herbalist, preparing certain natural tonics she believes t o be “beneficial to the human spirit.” Her activities are located in a province which does not regulate such matters. Carla is similarly occupied, as a registered herbalist, in a province which does regulate the trade. Aside from federal regulation of drug s, in what way would these two persons be differently affected if one of their preparations turns out to have adverse effects? Answer: Janine will be liable to answer to the standard of common law liability only. Carla will have the same responsibility, but other standards to meet as well. At minimum she must meet the standards set by her provincial regulators, as well as those of any professional body in which she is a member. The profession may be self -regulating (presently, herbalist are not), which replaces the provincial regulatory standards. 3. A provincial Liquor Control Agency discovers that a licensee tavern has sold liquor to minors on two occasions and orders suspension of the tavern’s licence for a period of seven days. A mo nth later, a PART 1 The Legal Environment for Business Chapters 1 – 3 Willes, Contemporary Canadian Business Law, 12e © 20 20 Copyright by McGraw -Hill Limited Instructor’s Manual 3-4 different tavern is found in violation on essentially identical facts, and the Agency suspends its licence for a period of fourteen days. Is there a ground for appeal of the harsher suspension? Answer: There is probably no ground for appeal o f the harsher suspension. The principle of stare decisis does not apply in any strict manner to administrative tribunals, and even so, at issue is the penalty, not whether the violation was committed. Assuming there is no denial of natural justice in the handling of the case at hearing, no real basis for appeal will exist. Case Problems for Discussion Case 1 A restaurant licensed to sell liquor served several bottles of wine to a couple who had visited the restaurant for dinner. Both of the patro ns had after dinner drinks, and when they were ready to leave, the restaurant owner offered to send them home in a taxi, since they were, in his opinion, unfit to drive. The patrons accepted the offer, and took a taxi home. Upon reaching home, they decided to return to the restaurant and pick up their car. They called another taxi and were taken to the restaurant parking lot. They picked up the car, and on their way home, the driver lost control of the car, and crashed through the side of a wood -frame house , killing one occupant and injuring another. Investigating police charged the driver with criminal negligence causing death (among other charges), and the provincial liquor authority revoked the licence of the restaurant. Discuss the issues raised in this case. What recourse might the restaurant have to restore its licence? Answer: The case does not suggest that a hearing preceded the revocation of the restaurant’s liquor licence. Such an administrative act without a hearing would amount to a denial of n atural justice. Had a hearing been held, the restaurant would have shown that the clients had been delivered home by the restaurant, surely answering all of its responsibilities (and more) under the regulations that govern it. The restaurant’s recourse w ould be an application to a court for judicial review of the tribunal decision. Case 2 A radio station employed a program host that repeatedly made disparaging and often sexist remarks about Canadian celebrities to the point where complaints to the Broadcast Regulator resulted in a cancellation of the station’s license to broadcast. The station objected to the Regulator’s decision on the basis that it had violated the station’s right to freedom of speech and expression. Discuss t he issues in this case. Would your answer be any different if the station had been located off shore on a ship beyond the 12 mile limit? Using the Internet from an offshore location? Answer: PART 1 The Legal Environment for Business Chapters 1 – 3 Willes, Contemporary Canadian Business Law, 12e © 20 20 Copyright by McGraw -Hill Limited Instructor’s Manual 3-5 Students may or may not realize that a licence to broadcast is a privilege, and thus subject to conditions or particular standards of conduct. Breach of those conditions and standards and conditions may result in loss of the licence. Whether students are aware of this or not, students should grasp that Charter rights are subject to limits demonstrably justified in a free and democratic society, and as such, freedom of expression and freedom of speech do not mean freedom of defamation, freedom of oppressio n and freedom of opprobrium. (see: Genex Communication v. C.R.T.C. 2005 FCA 283, leave to appeal to SCC denied. Regarding foreign ship and Internet broadcasts, these are physically beyond the reach of the Canadian regulator. Without having a Canadian li cence to lose in the first place, nor a Canadian presence, very little leverage can be brought to bear against broadcasters located outside Canada in cases of offensive content. PART 2 The Law of Torts Chapters 4 – 6 Willes, Contemporary Canadian Business Law, 12e © 20 20 Copyright by McGraw -Hill Limited Instructor’s Manual 4-1 CHAPTER 4 . INTENTIONAL TORTS Chapter Topics Tort Law Defined The Development of Tort Law Intentional Interference with the Person Intentional Interference with Land and Chattels Business -Related Torts and Crimes Summary Key Terms Review Questions Mini -Case Problems Chapter Objectives After study of this chapter, students should be able to: • Identify intentional interference with a person that constitutes a tort. • Explain the concept o f vicarious liability. • Explain how land and chattels may be the subject of intentional torts. • Recognize business -related intentional torts and those that are crimes. YOUR BUSINESS AT RISK This chapter is about civil wrongs: people and events that cause injury, and the rights of injured parties. You and your business are capable of causing serious injury or you or your business may be injured by others. When this happens, it is vital to know what sort of injury is recognized by the law. You must know where responsibility for that injury begins and ends, and what kind of compensation is available. CHAPTER COMMENTARY Chapter 4 introduces the first area of the law of torts and some of the more important (and common) acts of intentional interference with persons or property. Since tort law represents one of the oldest areas of the law, its development is one of the best examples of laws which were established in response to the needs of society. Most of these principles were formulated long ago, and have been refined over the years as society changed. The basic intentional torts and the principles associated with them are examined in the first part of this chapter, and the concepts applied to bu siness -related activities are found in the last part of the chapter. Note that the business -related torts set out are those where the intention to injure competitors is an essential component of the tort itself. Chapter 4 also examines a number of the mo re common torts that involve intentional interference with the rights, property, or person of another. These various torts rank among the oldest and, in many cases, constitute crimes under the Criminal Code. For the purpose of re -enforcement, it might be a useful exercise to note once again that torts (and in particular the torts covered in this chapter) may be subject to both civil and criminal proceedings if they constitute crimes as well as civil wrongs. PART 2 The Law of Torts Chapters 4 – 6 Willes, Contemporary Canadian Business Law, 12e © 20 20 Copyright by McGraw -Hill Limited Instructor’s Manual 4-2 Many of the torts described in this chapter in some instances have an a defence which may constitute Many of the torts described in this chapter in some instances have an a defence which may constitute justification for the act, and may wholly or partially ab solve the actor from liability. These should be discussed, along with their limits. Ex: assault/battery and the act of self -defence. Similarly, the tort of defamation, and the defence of privilege should be examined. Most of the torts described in the chapter are generally well -known to students, and class discussion should perhaps be used to explore the various defences in detail, as well as the issue of damages or compensation for the party injured by the wrongful act. Unlike the torts covered in th e next chapter, those described in Chapter 4 are not directly concerned with the concept of foreseeability, etc., but more with the question of intent to injure. Because these torts tend to be deliberate acts, this aspect of the various torts should be em phasized. Care should be taken, however, to note the exceptions such as battery situations, where the 'touching' is without consent, but where the intention is not to injure. For example, a medical practitioner performs a surgical procedure without the pa tient's consent. The medical practitioner may have had the best of intentions, and performed the operation to improve the patient's health, but in doing so without consent would have committed a battery . The chapter also introduces a number of new legal terms that you will find described in the ext material: assault , battery , false imprisonment , defamation , slander , libel, trespass , conversion , and punitive damages . Definitions of these terms should be committed to memory and understood thoroughly by t he students. In addition to the text description, the Glossary at the back of the text might be consulted for brief definitions of the various terms. While the particular torts described in this chapter tend to be among the oldest, the very oldest are perhaps the torts of assault and battery . It is important to note with these particular torts that the assault is the threat of violence , and the battery is the touching of the victim without consent . The quote from the case of MacDonald v. Hees examines the act of assault, along with a few comments on how it is established in a tort action. Another very old tort, the tort of false imprisonment , is also described in the chapter, and it may come as a surprise to students that actual physical seizure o r restraint is not always necessary to constitute this tort. As the text indicates, the mere threat of pursuit and the embarrassment of seizure if the person should attempt to leave the premises is sufficient in certain circumstances. The law as it relates to defamation (libel or slander ) and the defences to defamation are set out in of the text. While the tort is quite straight -forward, the defences often create some difficulty. The truth of the statement, qualified privilege, absolut e privilege , and public interest are four defences outlined in the text . Persons speaking in Parliament or in court have absolute privilege in so far as statements they make are concerned, and the statements do not constitute torts, even though the state ments may seriously injure the reputation of others. Qualified privilege, on the other hand, may be somewhat more difficult to understand, because the law does permit persons under limited circumstances to make statements which they honestly believe to be true at a point in time, and which later may prove to be false. The letter of reference mentioned in the text is a good example of the type of situation where a qualified privilege may arise, as the law must "balance" two interests: the protection of the i ndividual's reputation on the one hand, with the bona -fide interest of the person who receives the communication on the other.