Legal Feeds Blog
The official opening of the Jackman Law Building took place Sept. 29 at the University of Toronto.
In the first customs case to be heard by the Supreme Court of Canada in four decades, the high court has allowed the appeal of the Attorney General of Canada in a decision of the Federal Court of Appeal overturning a decision of the Canadian International Trade Tribunal.
"This was the first time the SCC had considered a customs classification case in almost 40 years," says Jan Brongers, lead counsel for the appellant, "and the first time it had had a chance to look at customs classification law" since Canada signed on to the International Convention on the Harmonized Commodity Description and Coding System in 1988.
The respondent in the case, Igloo Vikski Inc., imported hockey gloves. Igloo Vikski Inc. later requested refunds of duties paid, claiming the goods should be reclassified. The Canada Border Services Agency classified five models of sports gloves, designed for ice hockey goaltenders, as "gloves, mittens ands and mitts" under tariff item No. 62.16 of the Convention, rejecting the respondent's position that they be classified under tariff item No. 39.26 of the Customs Tariff as "articles of plastic." The CITT dismissed the appeal by Igloo Vikski, but the Federal Court of Appeal allowed it and referred the matter back for adjudication.
"The primary issue in this appeal was the manner in which the General Rules for Interpretation of the Harmonized System in the Customs Tariff ought to be applied in the case of a composite good (i.e., a good made up of multiple materials--like textiles and plastics)," Brongers told Legal Feeds.
In its reasons for judgment, he added, the majority of the SCC confirmed that the General Rules provide that the first step in the classification exercise is to determine whether the goods fall within the description of a heading (Rule 1). If necessary, reference is then made to the supplementary classification rules (Rule 2 and following).
"These supplementary rules include the notion that composite goods can be deemed to be included within a heading even if the heading only expressly references one of the materials the good is made from (Rule 2(b)), and the notion that composite goods can sometimes be classified on the basis of which material gives the good its essential character (Rule 3(b))," Brongers says. Classification must also be done by having regard to the Explanatory Notes to the Harmonized System. In its decision, the court described this approach to interpreting the General Rules as being "hierarchical" rather than "cascading" (a term found in earlier jurisprudence written by the Federal Court of Appeal). In particular, the court accepted that Rule 1 must still be taken into account conjunctively when Rule 2(b) is applied, Brongers explained.
"Practically speaking, this means that a composite good that can only be described under one single heading must be classified under that heading."
In concluding that the CITT had misapplied the General Rules for the Interpretation of the Harmonized System, the Federal Court of Appeal misapprehended their structure, the SCC said in its decision, penned by Justice Russell Brown. Justice Suzanne Cote dissented, finding that the CITT's decision "falls well outside the range of reasonable interpretations."
Brongers described two takeaways from the judgement.
"The first was that the Supreme Court dealt with the interpretive principles to be applied to this international Convention, describing it as being a hierarchical system rather than being a cascading system."
Second, he says, it confirmed that significant deference is supposed to be given by the Federal Court of Appeal when it conducts judicial reviews of Canadian International Trade Tribunal customs classification decisions.
"So what the Supreme Court of Canada dealt with in this case, in part, is the question of, to what extent should the Federal Court of Appeal be deferential to the Canadian International Trade Tribunal`s decisions? And [the Court] confirmed that a significant amount of deference should be given to the Tribunal`s decisions."
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A recent report by the University of Toronto’s International Human Rights Program says Canada’s failure to find other ways to detain children violates its international legal obligations.
“Canada’s immigration detention regime needs a drastic overhaul,” says Andrew Brouwer, senior counsel of refugee law at Legal Aid Ontario.
“We need to see a pivot away from the current over-reliance on detention of noncitizens. Immigration detention should be a last resort, should never extend more than 90 days and should never be in correctional facilities, as happens far too often at the moment.”
Currently, Canada houses detained children in immigration detention facilities or separates them from their detained parents, the report says.
According to a press release, over the last few years, Canada has held hundreds of children in immigration detention, including those coming from war-torn regions such as Syria.
“According to figures obtained by the IHRP through access to information requests, an average of 242 children were detained each year between 2010 and 2014. These figures are an underestimate because they do not account for all children living with their parents in detention as ‘guests,’ who were not subject to formal detention orders,” states the release.
Mario Bellissimo, of the Bellissimo Law Group, says immigration detention of children in Canada in these circumstances should not even be an option given the “profound impact on children, the alternatives and our role internationally to be a leader in the protection of fundamental human rights.”
“This report is a significant, robust and timely contribution to the advancement of immigration law and policy,” he adds.
Brouwer says children and other vulnerable persons, such as the mentally ill, should never be detained for immigration purposes. The practice of separating families for immigration detention purposes should be a last resort in the “most extreme situations” and even then only for short periods of time, he says. Alternatives to detention must be implemented, he adds.
Despite signing and ratifying the 1990 Convention on the Rights of the Child, the report alleges Canada has not “adequately incorporated” the best interests of children into the Immigration and Refugee Protections Act.
The report notes the Supreme Court of Canada has ruled on the CRC’s application in Canada a few times. In Baker v. Canada (Minister of Citizenship and Immigration), a landmark decision, the court said “the values reflected in international human rights law may help inform the contextual approach to statutory interpretation and judicial review,” and more recently, in De Guzman v. Canada (Minister of Citizenship and Immigration), the court stated “a legally binding international human rights instrument to which Canada is signatory is determinative of how IRPA must be interpreted and applied, in the absence of a contrary legislative intention.”
Brouwer agrees Canada’s immigration detention practices are below international standards, calling them disturbing. He points out they have been the subject of “repeated criticism by UN bodies.”
“Housing or detaining children in detention facilities is always contrary to their best interests, and is inconsistent with our obligations under international law, not to mention our shared values as Canadians,” Brouwer says. “But the report shows that jailing their parents — who have committed no crime — and separating them from their children is equally harmful.”
Some of the children held in detention centres or separated from their detained parents were born here and have Canadian citizenship, which Brouwer says, “in some ways is the most shocking part of the story.”
The 70-page report explores what it calls the “deficient legal underpinnings and detrimental practical implications” of Canadian immigration detention for children.
It also makes 11 recommendations that would bring Canada in line with its international human rights obligations, including suggesting alternative models to detention and family separation.
Children and families with children should be accommodated in less harmful ways, says the report, suggesting more “community-based” alternatives such as giving the families reporting obligations, having them make a financial deposit, requiring a guarantor or even electronic monitoring.
The report calls for policy and legislative reforms, referring to recommendations made in another IHRP report from 2015.
Cassels Brock & Blackwell LLP is partnering with the Ontario College of Art and Design to develop a legal clinic for Imagination Catalyst, its entrepreneur hub at the art and design school in Toronto.
|Cassels Brock & Blackwell lawyer Jamie Firsten says the firm's involvement with OCAD will help increase the number of OCAD related companies likely to get VC funding.|
Cassels Brock connected with OCAD through a venture capital firm it acts for called Relay Ventures and started meeting with Katherine Roos, executive director of Imagination Catalyst.
"We thought this accelerator needed a corporate business law firm because they are strong on the art product side and we thought because we are mid-market and entrepreneurial it was a good fit," says Jamie Firsten, partner at Cassels Brock who focuses on early stage financing for emerging tech companies.
The OCAD Imagination Catalyst incubator accepts startup applications from its alumni and creative sector entrepreneurs.
"From the moment an entrepreneur registers a business there are potential legal implications and I think it was important for us to find a partner to work with us to support them," says Roos. "We're trying to accelerate and ensure the long-term success of businesses so if we can offer a suite of services to help them overcome barriers earlier they will build successful companies faster."
Sometimes an entrepreneur with no budget will attempt to prepare seed funding documents by pulling them off legal tech websites and in future rounds Roos says investors often find they have some "messes that need to be cleaned up."
"This makes everyone's lives easier if they learn how to do it right from the beginning," she says.
Firsten says Cassels' involvement will help increase the the number of OCAD related companies likely to get funded.
"When someone starts a business they are just full-steam ahead on their idea. They don't usually spend the time or money to ensure the IP is protected properly. We're putting on our legal and business hat for them and saying, 'What is the least cost you can incur to get the necessary protection to keep you rolling to get you to series A financing?'"
Most of Firsten's work is acting for venture capital firms as well as mid-large sized tech companies. He says often when venture capital firms come calling the entrepreneurs with the great idea aren't always ready for the conversation.
"What we've noticed is to really provide value you have to get in and meet with these founders on a constant basis so the location of our office to OCAD is going to be really valuable," he says. "We're going to have legal clinic hours so people can come and speak to me or an associate and have a conversation about something that happened with their business that day."
Over the last few years several Bay Street law firms such as Osler Hoskin & Harcourt LLP, Dentons, Fasken Martineau DuMoulin LLP and others have been looking at how they can be a part of the startup field. By setting up shop at OCAD Cassels is hoping to provide on-site advice but also get first crack at the next Shopify or HootSuite.
"If you want to play in this space you need to jump in at the beginning of the spectrum and meet these people. If you don't meet them when they're just starting they will have established a relationship with a lawyer," he says.
Cassels isn't charging for the advice provided on-site at OCAD in the legal clinic but the hope is as they establish relationships they are the first thought when they look to decide on who will be the company counsel.
"We have a startup package which is a nominal amount of money to get the core essentials to get a business out of the gate," he says. "The hope is a couple of them turn into large Canadian businesses doing deals and raising more money."
Firsten admits it's a model that "requires patience."
"You just don't know where the next client is going to come from -- which company is going to pop, get money from a VC and turn into something bigger," he says.
But it can also become a source of deal flow for existing clients who are local venture capital firms looking for deals.
|Adrian Ishak says there is ‘an increasing fuzziness around the nature of the relationship of salaried partners’ to their firms.|
The ruling in Daniel v. Miller, Canfield, Paddock and Stone LLP, 2016 ONSC by Justice Peter Hockin relates to plaintiff Julie Daniel’s motion to receive severance after a partnership dissolved between Windsor-based Miller, Canfield, Paddock and Stone LLP and a Detroit-based international firm, Miller, Canfield, Paddock and Stone, PLC.
After the dissolution, three lawyers set up a reconstituted version of the firm with the Detroit-based international firm, and others relocated to Windsor firm Shibley, Righton LLP. However, these arrangements did not include Daniel, who argued that as an employee of the firm she was entitled to damages.
“The plaintiff in this case takes the position that at [Miller, Canfield, Paddock and Stone LLP], she was an employee and that in these circumstances the termination of her employment at [Miller, Canfield, Paddock and Stone LLP] amounted to constructive dismissal, without notice. She pleads that in these circumstances, she is entitled to damages for wrongful dismissal,” said the ruling by Hockin.
Daniel was called to the bar in 1989 and joined the Windsor firm — known formerly as Wilson, Walker, Hochberg, Slopen — in 2000 as an associate, before the Detroit-based international firm purchased a controlling interest in the Windsor firm in 2002.
As of 2006, Daniels had the job title of “salaried international principal” at the firm doing work related to corporate finance. The ruling notes she received the financial statements of Miller Canfield, Paddock and Stone, PLC and could go to the firm’s annual general meeting of principals.
However, Daniels argued she was not a partner in the firm because of her “non-involvement in the determination of compensation within the firm,” as well as other reasons.
Hockin disagreed — noting the terms of ‘principal’ and ‘partner’ are “interchangeable,” and “in the context of the practice of law, they mean the same thing.”
“The plaintiff until 2006 was an associate, but her status changed when she was admitted to [Miller, Canfield, Paddock and Stone PLC] as a salaried principal. Thereafter, she attended and participated in the regular meetings of the [Miller, Canfield, Paddock and Stone LLP] partnership. On notices, agenda and minutes, she was included and noted as a partner,” Hockin said, in his ruling.
“It could not have been lost on her that the firm’s associates were not present, nor that the subject matter of meetings was the conduct and management of the firm.
Decisions were taken on such matters as promotion, charitable donations, leases, billing and receivable problems and the firm’s reaction to [Miller, Canfield, Paddock and Stone PLC]’s criticism of staffing and overhead issues.”
Hockin ultimately finds Daniel was, indeed, a partner.
“…I do not find that the plaintiff was anything but truthful in her opinion that she was not a partner. It may have been honestly held, but based on all the evidence and the result, it was wrong,” he said, in the ruling.
Landon Young, managing partner at Stringer LLP, says the case “follows the well-established principle that if you’re a partner, you’re not an employee, and that means you don’t receive reasonable notice of termination.”
Young did not act in the case.
“It’s also consistent with other cases in human rights contexts,” he said. Young pointed to McCormick vs. Fasken Martineau Du Moulin LLP, which Hockin also cited.
“Legally, there is a significant difference between being a partner and being an employee,” said Young.
Adrian Ishak, a partner at Rubin Thomlinson LLP, says “these are issues that don’t crop up all that frequently.” Ishak did not act in the case.
“The reality is, I suspect that these issues tend not to get litigated all that frequently, because most environments where this takes place, brand is important, so it’s much better for all parties involved to settle than it is to litigate,” he says.
Ishak says law firms are generally going in one of two directions, “either in the direction of the mega-firm or in the direction of much smaller, and more local.”
“There’s an increasing fuzziness around the nature of the relationship of salaried partners to the firm,” he says.
Daniel’s lawyer, Robert Matlack, did not respond to a call for comment.
Suzanne Porter, who represented Miller, Canfield, Paddock and Stone LLP, did not provide comment.
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