this newsletter in PDF
In this issue:
1. News & Upcoming Events
2. Enforcement of Foreign Judgments
3. Safe Food for Canadians Act
4. FMCSA Delays ELD Rule Publication
5. Operator Waived His Right to Sue Trucking Company
6. No Extension Granted to Unruly Passenger
7. Service of Statement of Claim Upon Shipowner’s Agent Upheld
1. News & Upcoming Events
- The following members of Fernandes Hearn LLP have been listed in the 10th Edition of The Best Lawyers in Canada: Rui Fernandes for Maritime and Transportation Law, Gordon Hearn for Maritime and Transportation Law, Kim Stoll for Maritime Law, Louis Amato-Gauci for Aviation Law and Transportation Law.
- Rui Fernandes spoke at the Old Republic Insurance Company Brokers Conference on September 24th on “Legal Implications of Sleep Apnea”. He spoke on “New Developments in Maritime Law” at the WISTA (Women’s International Shipping and Trading Association) meeting also on the 24th of September.
- The 2015 Canadian Transport Lawyers Association Annual Conference will take place in Kelowna, British Columbia 1-3 October 2015. Kim Stoll, Louis Amato-Gauci, David Huard, and Jaclyne Reive will be attending representing the firm. Kim Stoll and Jaclyne Reive are speaking on the Trucking and Freight Forwarding Modal Update Panel. Louis Amato-Gauci is speaking on a panel on Trans-border Transportation Contracts.
- Mark Glynn will be speaking on “Security, Safety, Liability & Insurance” at the Trans-Pacific Aviation Law & Policy Conference on October 8th 2015 in Vancouver British Columbia.
- The 2015 Surface Transportation Summit will take place on October 14, 2015 in Mississauga Ontario.
- Gordon Hearn will be speaking on “The Enforceability of Form Contract Choice of Law and Jurisdiction Clauses in Cross-Border Transactions” as a participant on the International Law panel at the American Bar Association meeting on October 23, 2015 in Montreal, Quebec.
- The Fort Lauderdale Mariners Club 26th Annual Marine Seminar will be taking place November 3-4, 2015, in Fort Lauderdale Florida. Kim Stoll and Rui Fernandes will be attending representing the firm.
- The Canadian Passenger Vessel Association Annual Conference will be taking place in Halifax November 18-20. Rui Fernandes will be speaking at the conference.
- The CBMU Fall Conference will be in Toronto on December 1. The Transportation Club of Toronto dinner will be on December 3 in Toronto and the Grunt Club dinner will be on December 4th in Montreal.
- The Fernandes Hearn Annual Seminar will take place on January 14th, 2016 at the Advocates Society Education Centre in Toronto.
- The Marine Club Annual Dinner will take place on January 15th, 2016 at the Royal York Hotel in Toronto.
2. Supreme Court Affirms Basic Principles in the Recognition and Enforcement of Foreign Judgments in Canada
The recent decision of the Supreme Court of Canada in Chevron Corporation v. Yaiguage (*1) lists the governing principles that Canadian courts are to observe in lending aid to foreign judgment creditors seeking to enforce foreign judgments against Canadian based companies, individuals and/or assets. In this regard, subject to certain conditions noted below, Canada remains “open for business” as a member of the global community of nations, in recognizing and enforcing foreign judgments.
As noted at the outset of this decision by Canada’s Supreme Court:
In a world in which businesses, assets, and people cross borders with ease, courts are increasingly called upon to recognize and enforce judgments from other jurisdictions. Sometimes, successful recognition and enforcement in another forum is the only means by which a foreign judgment creditor can obtain its due. (*2)
The Factual Background
The dispute underlying this matter originated in the Lago Agrio region of Ecuador. The oil-rich area has long attracted the exploration and extraction activities of global oil companies, including Texaco, Inc. (“Texaco”). As a result of these activities, the region is said to have suffered extensive environmental pollution that has, in turn, disrupted the lives and jeopardized the futures of its residents. The 47 plaintiffs named in this action represented approximately 30,000 indigenous Ecuadorian villagers. For over 20 years, they have been seeking legal accountability as well as financial and environmental reparation for harms they allegedly have suffered due to Texaco’s former operations in the region. Texaco has since merged with Chevron (*3).
In 2003, the plaintiffs filed suit against Chevron in the Provincial Court of Justice of Sucumbios in Ecuador. After several years of litigation the court rendered a verdict that Chevron pay $US 8.6 billion in environmental damages, as well as $US 8.6 billion in punitive damages that were to be awarded unless Chevron apologized within 14 days of the judgment. As Chevron did not apologize, the punitive damages award remained intact. In 2013 Ecuador’s Court of Cassation reduced the total damages owing to $US 9.51 billion.
Since the original judgment, Chevron has refused to acknowledge or pay the debt as ordered by the trial court. Chevron does not hold any Ecuadorian assets. Faced with this situation, the plaintiffs turned to the Canadian courts for assistance in enforcing the Ecuadorian judgment. On May 30, 2012, they commenced an action in the Ontario Superior Court of Justice for the “recognition and enforcement” of the Ecuadorian judgment against Chevron and Chevron Canada. (*4)
The Canadian Court Proceedings
Chevron brought an application before the Ontario Superior Court of Justice to ‘stay’ or set aside the action seeking:
a) an order setting aside the ‘service’ of the Ontario court action, which had been effected on Chevron at its San Ramon, California head office,
b) an order declaring that the Ontario Superior Court of Justice had no jurisdiction to hear the action, and dismissing or permanently staying it.
The motion judge hearing the above application had to address the prerequisites for establishing that an Ontario court has jurisdiction in an action to ‘recognize and enforce’ a foreign judgment. Chevron contended that there exists a ‘real and substantial connection’ test for establishing the jurisdiction of Canadian courts (including Ontario courts) to hear such matters. Chevron was, in effect, seeking to extend the application of an established principle governing when Canadian courts can adjudicate a dispute at first instance regarding a determination on the merits (i.e. deciding the case from the very beginning) - namely, that there be a ‘real and substantial connection’ between the province where suit is brought and the facts of the case - to cases involving a request for recognition and enforcement of a foreign judgment in Canada. Arguing that there was no connection between Ontario and the underlying Ecuadorian claim, Chevron sought to ‘shut down’ the plaintiff’s enforcement action.
The plaintiffs argued in response that the ‘real and substantial connection’ test for jurisdiction does not apply to the ‘enforcing court’ in foreign judgment recognition and enforcement cases, it only having to be established that the original foreign court had such a connection with the facts of the case. Stated otherwise, the plaintiffs asserted that all that is required for a Canadian court to agree to ‘hear’ a recognition and enforcement matter, is that a ‘real and substantial connection’ is established between the subject matter of the original dispute and the original court awarding the judgment now sought to be enforced.
The initial Ontario judge hearing the recognition and enforcement claim ruled that there was jurisdiction for the Ontario court to hear the matter, but found that this was an appropriate case to exercise the court’s power to order a ‘stay’ of the proceeding under s. 106 of the Ontario Courts of Justice Act, which provides:
A court, on its own initiative or on motion by any person, whether or not a party, may stay any proceeding in the court on such terms as are considered just.
The judge ordered this stay on the basis that Chevron did not own (nor had it ever owned) any assets in Ontario, and did not conduct business in Ontario. Essentially, the judge found, there being nothing in Ontario to “fight over”, that the matter should be removed from the Ontario court docket.
The plaintiffs appealed this stay order to the Ontario of Appeal, which, in short order, disagreed that this was an appropriate case in which to impose the s. 106 discretionary stay order. The Court of Appeal ruled that, while such a stay was entirely open for a judge to impose, it should only be ordered in rare circumstances. The judge was incorrect in ordering the stay, in effect arbitrarily imposing the view that Ontario was not an appropriate or convenient forum (the question of jurisdiction, per se, being a different consideration) for the recognition and enforcement application when the parties themselves had not even raised this as an issue before the court.
As to the jurisdictional issue, the Court of Appeal agreed with the motion judge’s analysis, finding that the only criteria to be considered to find jurisdiction for a Canadian court to hear a foreign judgment recognition and enforcement matter related to whether the foreign court properly assumed jurisdiction, in the sense that it had a ‘real and substantial connection’ with the subject matter of the dispute or with the defendant. The Court of Appeal ruled that there is no inquiry into the relationship between the legal dispute in the foreign country and the domestic Canadian court being asked to recognize and enforce the foreign judgment. The Court of Appeal accordingly removed the stay order and gave the ‘go-ahead’ for the plaintiffs’ enforcement action to proceed.
Before the Supreme Court of Canada
Chevron appealed the matter to the Supreme Court of Canada. Various issues were raised, including the following issue salient to this discussion: in an action to recognize and enforce a foreign judgment, must there be a ‘real and substantial connection’ between the defendant or the dispute and Ontario in order for jurisdiction to be established?
In ruling in favour of the plaintiffs that the Ontario court did in fact have jurisdiction over this claim, the Supreme Court articulated the following important principles:
1. Canadian courts have adopted a generous and liberal approach to the recognition and enforcement of foreign judgments. To recognize and enforce such a judgment, subject only to certain defences listed at point 7 below, the only prerequisite is that the foreign court had a ‘real and substantial connection’ with the litigants or with the subject matter of the dispute.
2. The foreign judgment is evidence of a debt. All the enforcing court needs (again, subject to certain defences cited at point 7 below) is proof that the judgment was rendered by a court of competent jurisdiction and that the judgment is final, and proof of its amount. The enforcing court then lends its judicial assistance to the foreign litigant by allowing him or her to use its enforcement mechanisms.
3. The purpose of an action for recognition and enforcement is not to evaluate the underlying claim that gave rise to the original dispute, but rather to assist in enforcing an already adjudicated obligation. In other words, the enforcing court’s role is not one of substance, but is, instead, one of facilitation.
4. Accordingly, the facts underlying the original judgment are irrelevant, except insofar as they relate to the potential defences listed at point 7 below to enforcement.
5. Enforcement is limited to measures – like seizure, garnishment or execution – that can be taken only within the confines of a province’s jurisdiction, and in accordance with its rules on point. Further, enforcement is limited to the seizable assets found within the province.
6. In recognition and enforcement proceedings, the defendant judgment debtor’s legitimate rights to fairness are protected by the enforcing court ensuring that a ‘real and substantial connection’ existed between the foreign court and the underlying dispute and in the ability to plead certain limited defences, listed at point 7 below. If such a ‘real and substantial connection’ did not exist, or if the defendant was not present in or did not voluntarily submit to the foreign jurisdiction, the resulting judgment will not be recognized and enforced in Canada. The judgment debtor is free to make this argument in the recognition and enforcement proceedings.
7. Once the “real and substantial connection” test is found to apply to a foreign judgment, the enforcing court should then examine the scope of the defences available to a domestic defendant in contesting the recognition of such a judgment. As a general rule, neither foreign nor domestic judgments will be enforced if obtained by fraud. The denial of natural justice can be the basis of a challenge to a foreign judgment and, if proven, will allow the enforcing court to refuse enforcement. A condition precedent to this defence is that the party seeking to attack the foreign judgment must prove that the foreign proceedings were contrary to Canadian notions of fundamental justice. In short, minimum standards of fairness must have been afforded to the domestic judgment creditor by the foreign court. The third and final defence is that of public policy. This defence prevents the enforcement of a foreign judgment that is contrary to the Canadian concept of justice. The public policy defence turns on whether the foreign law is contrary to our view of basic morality. Essentially, are the laws of the foreign jurisdiction giving rise to the foreign judgment considered repugnant by Canadian standards? (*5)
The Supreme Court ruled that, in light of the foregoing, the recognition and enforcement action should proceed, but with one important and overarching reminder:
… when jurisdiction is found to exist, it does not necessarily follow that it will or should be exercised… Establishing jurisdiction merely means that the alleged debt merits the assistance and attention of the Ontario courts. Once the parties move past the jurisdictional phase, it may still be open to the defendant to argue any or all of the following, whether by way of preliminary motions or at trial: that the proper use of Ontario judicial resources justifies a stay under the circumstances; that the Ontario courts should decline to exercise jurisdiction on the basis of forum non conveniens; that any one of the above noted defences to recognition and enforcement (i.e. fraud, denial of natural justice, or public policy) should be accepted in the circumstances; or that a motion for summary judgment or a determination of an issue before trial of the Rules of Court should be granted. The availability of these potential arguments, however, does not oust the jurisdiction of the Ontario courts over the plaintiffs’ action for recognition and enforcement. (*6)
(*1) 2015 SCC 42 (CanLII).
(*2) At paragraph 1 of the decision. In this discussion, the reference to a “judgment creditor” refers to a person or entity who has been awarded a court order or judgment ordering that they be paid damages by a third party. The reference to a “judgment debtor” refers to such third party, who, by virtue of the order or judgment, owes money to the judgment creditor.
(*3) Case facts as cited at paragraph 4 of the decision.
(*4) The case as against Chevron Canada – being a seventh-level indirect but wholly owned subsidiary of Chevron – involved a claim that that entity was an asset of Chevron against which the Ecuadorian judgment should be enforced. One of the issues in the case was whether the Ontario courts could adjudicate the case against Chevron Canada, which involve the analysis of issues not immediately germane to the present discussion on the ‘recognition and enforcement’ of foreign judgments in Canada. This article accordingly does not delve into the case against Chevron Canada, but focuses on Chevron and the Ecuadorian judgment.
(*5) These principles are distilled from the case of Beals v. Saldanha  3 SCR 416, with the relevant discussion being at paragraphs 39-77
(*6) Forum non conveniens being a latin maxim denoting that another jurisdiction is seen to be substantially more appropriate and convenient for the adjudication of a dispute over the province where the proceeding is brought. This is a discretionary imposition of a stay of an action by a court, and is not to be confused with the question of whether the court has jurisdiction to deal with a matter.
3. Overview of the Safe Food for Canadians Act
Purpose of the Act
The Safe Food For Canadians Act (the “Act”) aims to better protect Canadians from risks relating to food safety by implementing stronger food safety rules, more effective inspection methods, registration and licensing of importers, traceability rules, and increases penalties for contraventions. (*1) The Act also aims to align inspection and enforcement powers across all food commodities. (*2)
The Act was passed in November 2012 and was initially set to come into force in early 2015; however, the Act is not yet enforceable law. (*3) Before the Act can become effective, new supporting regulations must be made. (*4) Until then, all current laws will continue to apply. The Act is part of the Food and Consumer Safety Action Plan implemented by the government in 2007. (*5)
The Act is a consolidation of and expansion upon the following existing food-related legislation: the Canada Agricultural Products Act (“CAPA”) (*6), Fish Inspection Act (“FIA”) (*7), Meat Inspection Act (“MIA”) (*8), and food related provisions of the Consumer Packaging and Labelling Act (“CPLA”) (*9). It applies to food commodities being traded inter-provincially or internationally.
The Food and Drug Act (“FDA”) is the foundation of the Canadian food system and is administered by Health Canada and the Canadian Food Inspection Agency (“CFIA”). All food that is sold must be fit for human consumption. Health Canada establishes regulations and standards with respect to safety and nutritional quality of food while the CFIA enforces these standards. (*10)
Food Tampering and Deceptive Practices
The Act implements new prohibitions as an increased deterrent against deceptive practices. These provisions were not previously part of the Canadian food safety framework.
The Act specifically states that it is “prohibited for a person to manufacture, prepare, package, label, sell, import or advertise a food commodity in a manner that is false, misleading or deceptive or is likely to create an erroneous impression regarding its character, quality, value, quantity, composition, merit, safety or origin or the method of its manufacture or preparation.” (*11) The same applies to labeling and advertising. (*12)
“Food commodity” is defined under the Act as “(a) any food as defined in section 2 of the Food and Drugs Act; (b) any animal or plant or any of its parts, from which food referred to in paragraph (a) may be derived; or (c) anything prescribed [by regulations] to be a food commodity.” (*13) Under the FDA, food includes any article manufactured, sold or represented for use as a food or drink for human beings, chewing gum, and any ingredient that may be mixed with food for any purpose whatsoever.” (*14)
The Act also prohibits a person to “tamper with any food commodity, its label or its package with intent to (a) render the food commodity injurious to human health; or (b) cause a reasonable apprehension in others that the food commodity is injurious to human health.” It also prohibits a person to “threaten to render a food commodity injurious to human health.” (*15)
Breaches of these tampering sections will result in penalties that are higher than those for breaching other sections of the Act, including: for conviction on indictment, a fine for which the court has discretion to set the maximum and/or imprisonment for a term of not more than 5 years and for summary conviction, a fine of not more than $500,000 and/or imprisonment for not more than 18 months (for a subsequent office the fine increases to $1,000,000 and/or imprisonment of not more than two years). (*16)
Registration and Licensing
The Act requires all food manufacturers to be licensed and have preventative control systems in place such as the Hazard Analysis Critical Control Point (HACCP) management system. (*17)
The Act prohibits importers/exporters and those who send foods to or receive foods from another province to engage in any activities unless they are registered and licensed under the Act. (*18) The licensing requirement is meant to hold importers accountable for the safety of the foods that they are bringing into Canada. The CFIA will have the authority to certify all food commodities intended for export. (*19) This will provide new export opportunities since Canada’s trading partners are increasingly requiring official certification of exported foods. (*20)
Traceability and Food Safety Control Plans
The Act aims to allow unsafe foods to be identified and removed from the market more rapidly by requiring manufacturers and importers to implement systems to trace products through the production and supply chains. (*21) The increased traceability requirements will be important for recall purposes. (*22)
Companies should consider creating a system and plan outlining their food tracking and recall methods. The regulations will require systems to be established that identify the food commodity, determine its places of departure and destination and its location as it moves between those places, or provide information to persons who could be affected by it. (*23)
The regulations under the Act will prescribe elements required for a safety control plan. Companies should consider having a written plan that documents all elements of their operation regarding how food is handled. This could include anything from how the equipment is used and cleaned to storage procedures to employee training.
Inspections and Compliance
The Act consolidates the inspection rules of CAPA, FIA, MIA and CPLA into a single set of rules to provide consistent, certain and clear regulatory requirements and inspection approaches. (*24) The Act aims to modernize the language to ensure that there is no ambiguity regarding the CFIA’s authority. (*25) The new Act does not distinguish between different food products as the individual statutes did. (*26) The Act focuses on a prevention approach and will involve risk-based inspections. (*27)
New commodity-based manuals will also be introduced to help companies comply with regulatory requirements. (*28) Inspectors will have more modern tools and better training. (*29) Science facilities will also be modernized and will have an increased testing capacity. (*30)
CFIA inspectors will also have increased powers due to new inspection rights, including: review of computers and devices to examine their data and to reproduce it, to take photographs or make recordings, to order a person to start or stop a regulated activity, to prohibit access to all or part of the establishment, and to remove anything from the establishment in order to examine, conduct tests or take samples. (*31)
Fines and Penalties
There are increased penalties under the Act. For summary convictions, there is an increase to a maximum of a $250,000 fine and/or imprisonment for not more than six months. For a subsequent offence, the maximum increases to a $500,000 fine and/or not more than 18 months imprisonment. (*32)
Regarding indictable offences, there is an increase to a maximum of a $5,000,000 fine and/or two years imprisonment. (*33)
There is a due diligence defence available under which the accused party will not be found guilty if they establish that they exercised due diligence to prevent the commission of an offence. (*34) Directors and/or officers of a corporation may also be found liable where they direct, authorize, assent to, acquiesce or participate in the commission of the offence. (*35) A corporation will be held liable for the acts of its employees or agents unless it can show that the offence was committed without its knowledge or consent and that it exercised all due diligence to prevent it. (*36)
For certain decisions made by the CFIA, companies may request that the decision be reviewed by an officer who was not involved in the original decision. If the parties continue to disagree with a reviewing officer’s decision, they can seek a judicial review by the Federal Court. (*37)
(*1) SC 2012, c 24.
(*2) Parliament, Legislative Summary of Bill S-11: Safe Foods for Canadian Act, 41st Parliament, 1st Sess (7 August 2012).
(*3) Overview: Safe Foods for Canadians Act, online: Government of Canada <http://www.inspection.gc.ca/food/action-plan/overview/eng/1366942606753/1366942771883>
(*4) Safe Food for Canadians Act – Questions and Answers, online: Government of Canada <http://www.inspection.gc/ca/about-the-cfia/acts-and-regulations/regulatory-initiatives/sfca/q-and-a/eng/1339036598239/1339036667358>
(*5) Supra note 2.
(*6) RSC 1985, c 20 (4th Supp).
(*7) RSC 1985, c F-12.
(*8) RSC 1985, c 25 (1st Supp).
(*9) RSC 1985, c C-38.
(*10) Supra note 2.
(*11) Supra note 1, s 6(1).
(*12) Supra note 1, s 6(2)-(3).
(*13) Supra note 1, s 2.
(*14) Food and Drugs Act, RSC 1985, c F-27, s 2.
(*15) Supra note 1, ss 7-8.
(*16) Supra note 1, s 39(3).
(*17) Supra note 3.
(*18) Supra note 1, ss 13(2) & 20.
(*19) Supra note 1, s 48.
(*20) Safe Food for Canadians Act, online: Government of Canada <http://www.inspection.gc/ca/about-the-cfia/acts-and-regulations/regulatory-initiatives/sfca/eng/1338796071420/1338796152395>
(*21) Supra note 3.
(*22) Supra note 2.
(*23) Supra note 1, s 51(1)(v).
(*24) Supra note 3.
(*25) Supra note 4.
(*26) Supra note 4.
(*27) Supra note 3.
(*28) Supra note 3.
(*29) Healthy and safe food for Canadians framework, online: Government of Canada <http://www.healthycanadians.gc.ca/publications/eating-nutrition/risks-recalls-rappels-risques/surveillance/safe-food-securite-alimentaire/index-eng.php>
(*31) Supra note 1, s 24.
(*32) Supra note 1, s 39 (1).
(*34) Supra note 1, s 39 (2).
(*35) Supra note 1, s 39 (4).
(*36) Supra note 1, s 39 (5).
(*37) Supra note 4.
4. FMCSA Target Date for ELDs Rule Now October 30, 2015
On March 12, 2014, the Federal Motor Carrier Safety Administration (“FMCSA”) announced a Supplemental Notice of Proposed Rulemaking (“SNPRM”) to mandate electronic logging devices. The development of the Electronic Logging Device mandate is part of the transportation reauthorization bill MAP-21 ("Moving Ahead for Progress in the 21st Century") that was signed into law in 2012.
In its simplest form, an electronic logging device — or ELD — is used to electronically record a driver’s Record of Duty Status (“RODS”), which replaces the paper logbook some drivers currently use to record their compliance with Hours of Service (“HOS”) requirements.
“Electronic Logging Devices” sync with a truck’s engine to capture power status, motion status, miles driven and engine hours. Additionally, the FMCSA uses the term “ELD data” to mean each data element captured by an ELD that is compliant with the specified requirements and that would be available to authorized safety officials during roadside inspections and as part of on-site or other reviews. The following data elements are the specific items that makeup the ELD dataset:
Driver or authenticated user identification data
Vehicle identification data
Motor carrier identification data
The mandate will apply to all drivers who are currently required to keep paper RODS. Drivers who are required to keep RODS for eight or more days out of every 30 days must use an ELD. While drivers that fall under the HOS exemption (i.e. short haul drivers operating within a 100- mile radius or non-CDL drivers operating within a 150-mile radius) are not required to have an ELD, the mandate is estimated to affect approximately 3.1M trucks and 3.4M drivers according to the FMCSA.
The rule will take effect two years following its publication, the date by which fleets, owner-operators and drivers must be using electronic logging devices that satisfy the rule’s requirements.
The FMCSA had targeted Sept. 30 as the publication date. However, The rule was sent from the FMCSA to the White House’s Office of Management and Budget (“OMB”) on July 28 for its required approval. In its report issued this week, the DOT says it now expects the OMB to clear the rule Oct. 26, paving the way for the agency to publish the rule Oct. 30.
Certification of compliance with the new rules will be self-administered by ELD providers. Essentially, the FMCSA will be offering various test parameters for use to determine compliance and will facilitate a registry for companies to sign up with.
In writing the ELD rule, the FMCSA is aware of the possible cost burden on fleets. While it recognizes that there is a net-benefit from the paperwork savings alone, it doesn’t want to saddle drivers and fleets with trucking technology that is not affordable. To address those ELD cost concerns, the FMCSA has provided that smartphones, tablets, and rugged handhelds can be used so long as the system as a whole meets ELD requirements, including a hardwired connection to the truck’s engine.
The ELD regulation, along with a related rule penalizing carriers, shippers and third parties for coercing drivers to violate federal truck safety laws, has the potential to reshape the trucking and shipping business in a big way. In the short-term, the number of available trucks and drivers could drop as the rule is implemented over the next two years and beyond.
The Owner-Operator Independent Drivers Association has long been opposed to the mandated use of electronic logging devices. It argues that research fails to prove that the electronic devices improve highway safety or hours-of-service compliance over the use of paper logs. The devices cannot distinguish off-duty not-driving and on-duty not-driving activities, thereby rendering the devices useless in determining actual compliance with the regulations.
Some drivers applaud the rule and think ELDs should be required on every truck. They compare it to a rule requiring employers to use electronic time clocks rather than handwritten time cards to prevent payroll fraud. They argue that electronic logbooks provide accountability and compliance to the trucking industry. Many interest groups also support the initiative. The American Trucking Association supports the use of ELDs as does the Trucking Alliance, a group representing a number of carriers.
No official cost-benefit analysis for ELDs has been conducted in Canada. In the U.S. the FMCSA expects a net benefit of $800 million. According to the American Transportation Research Institute truck drivers in serious violation of hours of service regulations are 45% more likely to be involved in an accident than those who are in compliance. There was also a 90% greater risk of collision for drivers with patterns of non-compliance. It has been estimated that truck drivers will benefit by realizing a net gain in available driving/on duty time of 30 to 120 minutes per seven day cycle, translating into $2000 in annual earning potential. It is estimated that, for small trucking companies of fifty trucks or less, the staff costs savings will be over $3000 per month. The benefit to the government is reduced healthcare, infrastructure and other costs associated with the safer highways, as well as reduced costs of inspections. (*1)
Rui M. Fernandes
Follow Rui on Twitter @RuiMFernandes
(*1) Canadian Trucking Alliance, Briefing Note “Benefits-Costs of Electronic Logging Devices for Driver Hours of Service,” January 2014.
5. Court rules Owner/Operator Waived His Right to Sue Trucking Company in the Event of an Accident or Injury on the Job
Recently, on a summary judgment motion in Kalash v. Carrier One Express Inc., (“Kalash”), Justice Diamond of the Ontario Superior Court of Justice ruled that the Plaintiff Yehuda Kalasha, who was working as an independent owner/operator for the Defendant trucking company Carrier One Express Inc. and for Train Trailer Rentals Limited, had contractually waived his right to sue the Defendants when he executed two separate agreements with the Defendants prior to working for them (*1).
In summary, the Defendants hired the Plaintiff as an independent owner/operator on the condition that he agree to enroll in a private disability insurance plan and waive his right to sue the Defendants in the event that he sustained injuries suffered as a result of an accident.
Justice Diamond found that the waiver of his right to sue was enforceable.
The Plaintiff and representatives of the Defendants met in 2005 and discussed the Plaintiff’s potential job opportunity with the Defendants. The Plaintiff did not wish to become an employee of the Defendants, but rather preferred to maintain his independent owner/operator status. This would allow the Plaintiff to earn more income. After deciding that he would maintain his owner/operator status, the Defendants provided a series of documents for him to review and execute.
A Memorandum Agreement set out the terms of the relationship between the Plaintiff and the Defendants. As the Plaintiff did not wish to be an employee, in the event of an accident, he would not be covered under the Work Place Safety and Insurance Board (“WSIB”) regime. The Waiver Agreement and Capital Compensation Form (the “Waiver Agreement”) set up an alternative protection scheme for owner/operators working for the Defendants. The Defendants arranged for the enrollment of their owner/operators into a private disability insurance plan. In return, the Plaintiff would waive his/her right to sue the Defendants in the event of injuries suffered on the job. The Plaintiff signed these documents and returned them to the Defendants the following morning.
The Plaintiff began operating as an independent owner/operator for the Defendants and monthly premiums were withheld from his earnings. On August 8, 2006, the Plaintiff was a driver of a tractor-trailer that was involved in a rollover accident while he working for the Defendants and for which he was alleged to have suffered permanent and serious impairments.
As a result of these injuries, the Plaintiff brought a claim against the Defendant for pain and suffering as well as for loss of income.
The Defendants brought a summary judgment motion seeking an order dismissing the claim on the ground that the Plaintiff had contractually waived his right to sue them.
On motions for summary judgment, the court must first consider whether it is appropriate to determine the matter by way of summary judgment. The Court determined that it was appropriate in this case because the merits of the Defendant’s arguments could be assessed via uncontroverted documentation, as none of the material facts were in dispute.
The Court then had to decide whether the exclusion clause contained in the Waiver Agreement was enforceable by use of the three-part inquiry for the enforceability of exclusion clauses set down in the Supreme Court of Canada’s decision of Tercon Contractors Ltd. v. British Columbia (Minister of Transportation & Highways) (“Tercon”)(*2):
Part 1: As a matter of contractual interpretation, does the exclusion clause apply to the circumstances as established by the evidence in the case?
The Tercon decision mandates the court to assess the intention of the parties as expressed in the contract itself. The comments of Justice Firestone in Clarke v. Alaska Canopy Adventures LLC, provides useful guidance regarding when the clause may not be applied (*3):
... if the context of the document, in this case the agreement, is contrary to what the ordinary person would expect (for example, unusually onerous), or the circumstances are such that it should be clear that the person signing it did not know the terms (for example, it was clear the person signing it had not read the terms because they were not afforded enough time or proper conditions to do so), and the party seeking to rely on the document will have reason to know that the party signing did not intend to agree to the terms.
Justice Diamond found no inequality of bargaining power. Prior to executing the documents, the Plaintiff was an independent owner/operator with a different transport company for nearly one year, and had signed various agreements including applications for insurance coverage during that time. Moreover, Justice Diamond found that the Plaintiff clearly understood the nature of the document and that the Defendant did not pressure the Plaintiff in any way. The only evidence that the Plaintiff was possibly in a rush to execute the documents was his self-induced desire to start working for the Defendants as soon as possible. Finally, the terms of the clauses in the Waiver Agreement were clear and understandable to a reasonable person.
Based on these findings, Justice Diamond found that documents were valid and the Waiver applied.
Part 2: If the exclusion clause applies, was the clause unconscionable at the time the contract was made, as might arise from situations of unequal bargaining power between the parties?
The second part of the Tercon analysis required the Court to determine whether the contents of the Waiver Agreement were unconscionable, and, therefore, unenforceable. The difference between unconscionability and unfairness is, essentially, not very large.
The Plaintiff submitted that to enforce the terms of the Waiver Agreement would be manifestly unfair. Justice Diamond disagreed and stated that the Defendants were under no obligation to offer any disability coverage as a term of the agreement. Had the Plaintiff opted to work as an employee, he would have been subject to WSIB coverage. The Defendants offered private disability coverage to all of their truck drivers. The terms of that coverage were arguably more advantageous than WSIB coverage. In exchange, the Defendants required each truck driver to waive his/her right to sue the Defendants in the event of an accident or injury on the job.
Part 3: If the exclusion clause is held to be valid and applicable, should the Court nevertheless refuse to enforce the clause because of the existence of an overriding public policy concern?
Justice Diamond stated that there is a strong public interest supporting the enforcements of contracts, and, in particular, commercial contracts. The burden of demonstrating any abuse of the freedom of contract outweighing the public interest in the contract's enforcement lies squarely with the Plaintiff. In Justice Diamond’s view, there was no evidence of an overriding public policy concern that should influence the Court to refuse to enforce the clause.
Based on the above, Justice Diamond found that the Defendants satisfied the three-part test in Tercon and that the Plaintiff was contractually barred from commencing proceedings against the Defendants.
Implications of the Decision
This decision underscores the importance of the following aspects below for trucking and hauling companies that take steps to limit their potential liability regarding claims brought against them by their owner/operators for personal injury suffered as a result of workplace related injuries:
1. The Court will likely not allow such a structure unless the owner/operator is given the option of enrolling in some form of private disability plan as part of the deal or working for the trucking company as an employee in order to be covered under the WSIB program.
2. There must not be an inequality of bargaining power between the trucking company and the owner/operator. This can be achieved by urging the owner/operator to obtain independent legal advice.
3. Ensuring that the owner/operator clearly understands the documents that he/she is signing. This includes ensuring that the contract is drafted in a language that the owner/operator is comfortable with, drafting waiver agreements that are clear and unambiguous, and not putting any undue pressure on an owner/operator to sign the documents.
Trucking companies wishing to structure their arrangements in such a fashion should obtain legal advice with respect to drafting their agreements and setting up their disability programs so that, should an owner/operator bring a suit against them after signing a waiver agreement, the subject trucking company will be able to satisfy the Tercon three-part test and thereby enforce the exclusion of liability clause.
(*1) Kalash v. Carrier One Express Inc., 2015 ONSC 5131 (S.C.J.)
(*2) Tercon Contractors Ltd. v. British Columbia (Minister of Transportation & Highways),  1 S.C.R. 69 (S.C.C.)
(*3) Clarke v. Alaska Canopy Adventures LLC, 2014 ONSC 6816 (Ont. S.C.J.)
6. No Extension Granted to Unruly Passenger to Bring Judicial Review Application
On April 27, 2015, LeBlanc J. of the Federal Court denied a disgruntled WestJet passenger’s application to proceed with his application for judicial review of a decision of the Canadian Human Rights Commission. The issue before the Federal Court was whether to excuse the applicant’s failure to bring the judicial review application within thirty days. (*1)
The factual backdrop of the case was the removal of the passenger, Mr. Berrada, from a WestJet flight operating between Montreal and Edmonton during a scheduled stop in Toronto. The airline’s crew cited the passenger’s unruly behaviour, a growing problem for airlines, as the basis for his removal.
Not surprisingly, Mr. Berrada had a different version of events from the airline. He alleged that he politely enquired whether he might move to a window seat during the scheduled stop, and a flight attendant approved his request. Apparently, unbeknownst to the flight attendant, a passenger was boarding in Toronto, who had not flown the Montreal-Toronto sector, and had been assigned that window seat. Mr. Berrada alleged that the situation escalated primarily owing to language barriers; he being Francophone with limited English, and the airline crew being Anglophone with limited French. The outcome was Mr. Berrada’s removal from the flight, which he believed to have been motivated by religious, racial, ethnic and linguistic discrimination. Mr. Berrada is Muslim.
Mr. Berrada brought his complaint against WestJet before the Human Right Commission (the “Commission”). A mediation failed to reconcile the parties and, therefore, an investigation was conducted that resulted in the investigator making factual determination determinations aligned with the airline. Particularly, the Investigator found that: (1) Mr. Berrada became agitated when required by crew to return to his assigned seat; and (2) he had spoken of violence on board the aircraft and demonstrated himself unfit to fly, which led to his removal from the flight. The investigator found that Mr. Berrada’s was not motivated by his race, colour, religion, or national or ethnic origin.
On May 9, 2014, the Commission adopted the investigator’s recommendation to dismiss Mr. Berrada’s complaint and the matter was not referred to the Human Rights Tribunal for adjudication (*2). At the time the Commission’s decision was rendered and delivered by letter mail, Mr. Berrada was on vacation in Morocco. Mr. Berrada only learned of the Commission’s decision upon his return on July 9, 2014. On July 16, 2014, Mr. Barrada then filed a motion in Federal Court for an extension of time to bring an application for judicial review of the Commission’s decision to dismiss his complaint.
The barrier for Mr. Berrada was s. 18.1 of the Federal Courts Act, which provides that an application for judicial review must be brought within thirty days of the impugned decision being rendered. Case law of the Federal Court has, however, forged an exception to this requirement provided that four cumulative criteria are met:
(i) A continuing intention to pursue the application must be exhibited by the moving party;
(ii) The application must have some merit;
(iii) No prejudice must arise from the delay; and
(iv) A reasonable explanation must be provided for the delay. (*3)
In response to Mr. Berrada’s motion, WestJet admitted that criteria (i) and (iii) were met in the present case, but disputed the merits of the application and the reasonableness of the explanation provided.
Having noted that recent jurisprudence highlighted the need for flexibility in applying the four criteria to ensure “justice is done between the two parties” (*4), LeBlanc J. dismissed WestJet’s submissions that Mr. Berrada did not have a reasonable explanation for the delay. Mr. Berrada had explained that he had not anticipated such an expedient decision from the Commission and he spent a protracted time in Morocco owing to his mother’s poor health. As soon as he received the decision upon his return, he commenced proceedings for relief from the thirty-day deadline and, per the court, “that is what counts in the circumstances”.
The downfall of the application was, rather, its substantive merits. In Mr. Berrada’s affidavit supporting his motion, he referenced only his personal conviction that he had been the subject of discrimination by the WestJet crew. His reply to the WestJet response further illuminated that Mr. Berrada wished the court to re-examine the matter anew, challenging the factual determinations of the Commission. This proposition, however, overlooks the role of judicial review proceedings in respect of Human Rights Commission decisions, which decisions are only subject to revision where unreasonable (*5).
Nothing in Mr. Berrada’s submissions conveyed specific criticism of the Commission’s decision, much less raised any issue stretching to impugning its reasonableness. The decision had been reached following interviews with Mr. Berrada, two flight attendants and the WestJet Advisor: Security Operations & Investigations.
Faced with an intelligible and reasoned decision from the Human Rights Commission, the Federal Court had no jurisdiction to undertake a full new review of the record as invited to do by Mr. Berrada. Accordingly, absent any evidence of unreasonableness on the part of the Commission, Mr. Berrada’s application was doomed to failure. Accordingly, Mr. Berrada was denied the relief he was seeking.
(*1) As required by Federal Courts Act, RSC 1985, c F-7 s. 18.1.
(*2) Canadian Human Rights Act, RSC 1985, c H-6 s. 44, 47
(*3) Canada (Attorney General) v. Hennelly  FCJ 846
(*4) Canada (Attorney General) v. Pentney 2008 FC 96
(*5) The seminal decision on judicial review is Dunsmuir v. New Brunswick 2008 SCC 9
7. Service of Statement of Claim Upon Shipowner’s Agent Upheld
Allchem Industries Industrial et al v. CMA CGM Florida (Vessel) et al., 2015 FC 558
The M.V. “CMA CGM Florida” (the “vessel”) was involved in a collision at sea. The Plaintiffs had various cargoes loaded on board the vessel in China or in Thailand and the vessel was headed for various ports in Canada and the U.S.A. Transportation had been booked through freight forwarders or common carriers. The plaintiffs sued the vessel and her owners as well as the various freight forwarders or common carriers in the Federal Court. The Plaintiffs alleged that all of the defendants carried on business in Canada; however, there was no connection between the various contracts of carriage, the voyage, the plaintiffs or the cargoes with Canada. Various motions to stay the Federal Court proceedings on the basis of forum non conveniens were filed, but adjourned on consent. (*1)
The defendant, Topocean Consolidation Service Inc. (“Topocean”) also brought a motion, which was contested, for a declaration that Statement of Claim had not been properly served.
Topocean argued the plaintiffs’ first attempt at proper service of the statement of claim was made at an address in Montreal, Quebec on April 3, 2014; however, the plaintiffs could not serve Topocean at that time as Topocean did not carry on business at that address. A second attempt at proper service upon Topocean was made, but this time “c/o Manitoulin Global Forwarding” (“Manitoulin”) located in Mississauga, Ontario. An “adult person who appeared to be in control or management of the business” (as required by Rule 130 of the Federal Court Rules, SOR/98-106, see below) at Manitoulin’s premises accepted service on April 9, 2014.
Topocean conceded it did use the services of Manitoulin “as agent” for some of its incoming or outgoing shipments, but maintained that Manitoulin had played no role regarding the cargo on board the subject vessel or with regard to any services that Topocean had ever provided to the plaintiffs or to the receivers of the subject cargo.
Topocean also gave evidence that Manitoulin then forwarded the Statement of Claim to them in a package by messenger two days later, but Topocean had never received it. The employees to whom the package was addressed were no longer employed and the package could not be located. Topocean submitted that it only received notice of the associated proceeding some five months thereafter and immediately brought the present motion to contest service.
Topocean argued that service of the Statement of Claim was improper because the addresses in Montreal and Mississauga, where service had been attempted, were not Topocean’s places of business and because Manitoulin was not a “branch or agency” of Topocean.
Rule 130(1)(a)(ii) of the Federal Courts Rules, states:
130. (1) … personal service of a document on a corporation is effected
(a) by leaving the document
(ii) with the person apparently in charge, at the time of the service, of the head office or of the branch or agency in Canada where the service is effected;…
Topocean further argued that proper service also had not been effected pursuant to Rule 135 of the Federal Court Rules because Topocean did not utilize Manitoulin’s services in connection with the transportation of the cargo at issue. This rule permits service in Canada upon a person who is not strictly an “agent”, but whose services the defendant regularly uses in the course of its business and whose services were used in connection with the transaction giving rise to the proceedings. The plaintiffs conceded that Topocean had not used Manitoulin’s services in relation to the subject cargo or the associated contract of carriage.
The plaintiffs argued in response that Manitoulin was “a branch or agency in Canada” of Topocean and that service was properly effected in accordance with Rule 130(1), as noted above. The Montreal and Mississauga addresses used by the plaintiff to serve Topocean’s were found on Topocean’s own website in the “Branch Directory” page, which stated:
The Topocean Group operates a network of owned and agent offices throughout the Asia Pacific. In those locations where Topocean has agents, they are companies that have a proven track record within their respective countries. Most Topocean agents have been within the Topocean Network for more than five years.
The page also provided a lengthy list of physical addresses throughout Asia, the United States, Canada and Mexico, including:
CANADA Topocean Canada C/O Manitoulin Global Forwarding Toronto Main Office 7035 Ordan Drive Mississauga Ontario L5T 1T1 Canada Tel: 905 283 1600 Fax: 905 677 8938 Email: email@example.com
The Court’s Decision
The Court noted that the Federal Court Rules do not define “branch or agency” as found in Section 130, above, and there was no associated case law exactly on point. (*2) The court went on to consider similar service provisions of some Canadian provinces, but went on to conclude that those provisions also contained a deeming provision, not found in the Federal Court rules, identifying which persons will be deemed to be agents of a non-resident corporation in respect of proper service. Further, the issue in those cases was more about whether a foreign defendant was sufficiently “present” in the jurisdiction through that alleged agent in order for the Court to have jurisdiction over it.
The Court went on to confirm that the jurisdiction of the Federal Court in admiralty matters is not territorially limited. Jurisdiction can be exercised on a foreigner, based on service out of the jurisdiction or by substitutional service (*3).
Given such distinctions, the Court indicated that such case law should be considered with caution, but went on to find:
… because the criteria developed in Canadian case law for a person to be an agent for the purpose of service are stringent enough to also fix that agent’s principal with residency in a province for jurisdictional purposes, I am satisfied that a person who meets these criteria would also meet the criteria for service under Rule 130(1)(a)(ii). Having found….that Manitoulin meets the criteria developed under these provincial statutes, I do not need to determine the minimal test that a person must meet to qualify as a “branch or agency” under the Federal Courts Rules.
Quoting the Ontario Court of Appeal in Murphy v Phoenix Bridge Company et al, 18 PR 495, [cited with approval by the British Columbia Court of Appeal in Central Trust Co of China et al v Dolphin Steamship Co Ltd, (*4), the Court noted the interpretation of the deeming provision was made as follows:
I think what is meant by “a person who transacts or carries on any of the business of, or any business for, a corporation,” is, at the least, some person who is an agent of the corporation, who transacts or carries on here, or controls or manages for them here, some part of the business which the corporation profess to do and for which they were incorporated.
The Court then adopted the three part test first set out in Ingersoll Packing Co Limited v New York Central and Hudson River R.R. Co., (1918) 42 OLR 330 (*5) as to what carrying on a business in the province requires:
(a) the business has been carried on for a sufficiently substantial period of time;
(b) the acts in carrying on business have been done at a fixed place of business; and
(c) the acts are carried out by a person who carries out this business for it in the jurisdiction, i.e., its agent.
The Court went on to quote, at paragraph 19, from Canada Alliance Assurance Co v Canadian Imperial Bank of Commerce, (1974) 3 OR (2d) 70, 44 DLR (3d) 486 regarding the description of that agent, above, as follows, with emphasis:
… it seems clear that the "business" carried on by the agent must be an "integral part" of the corporation's business…it will not suffice if it is something merely "incidental" to a business carried on and transacted elsewhere: … Finally, the person served should be one "notice to whom would be notice to the corporation, or whose duties would cast it upon him to bring it to their notice…
The Court noted Topocean’s admission that it used Manitoulin as its agent for shipments with a Canadian connection, that Topocean’s business was to organize and carry shipments worldwide, that Manitoulin carried on in Canada some integral part of the business that Topocean professes to do stating at para 21,
The fact that it did not act in this capacity for the shipment giving rise to the action does not detract from the fact that Topocean otherwise carries on business in Canada through Manitoulin. On the facts of this case, Manitoulin also clearly considered that part of its duties to Topocean would be to bring to Topocean’s attention notice of the service effected on it: Its manager promptly forwarded the Statement of Claim to Topocean by messenger. Again, it does not matter that the package in this instance apparently went astray; what is relevant is that Manitoulin considered it its duty as agent to forward it.
Longstanding service by Manitoulin in this regard met the test above and this was supported by Topocean’s own website, which (1) provided a sense of permanence by stating that their agents had been with them for over five years; (2) provided Manitoulin’s address for its fixed place of business; and (3) noted Topocean as a group of “owned and agent offices” carrying on business as a “network” worldwide and then providing Manitoulin’s address. Further, Manitoulin continued to be agent for Topocean to the motion’s hearing date.
The Court stated that the impression created by the website was that a potential customer could contact Topocean and transact business at any physical place of business noted on its website. Further Manitoulin acted in such a way that supported such a conclusion given its acceptance of service of the statement of claim for Topocean and the forwarding to Topocean. The Court noted that Topocean had not led evidence to contradict the impression left by the website that Manitoulin was Topocean’s agent in Canada, where it carries out part of the business of Topocean.
The Court found that service was properly effected in April 2014 by provision of a copy of the Statement of Claim to Manitoulin at its premises and in accordance with Rule 130(1)(a)(ii), as above.
The Court also indicated that it would have extended time for service had it held that the service was not properly effected. The Court found that the plaintiffs showed a “continuing intention” to proceed with the litigation having attempted service within the proper time parameters and by seeking an extension by cross-motion in the event that the Court found that the service was not properly effected. Further, the Court found that the lawyers for the plaintiffs had reasonably relied upon the Topocean’s representations on its website (as above) supported by Manitoulin’s acceptance of service on behalf of Topocean. The Court noted that Topocean did not argue that there was no reasonable cause of action. The Court also found that there was no prejudice to Topocean because, even if service had been improper, such event did not have the effect of voiding the Statement of Claim as the claim had been issued within the appropriate limitation period.
The Court also noted that if Topocean had been correct that Manitoulin was not its agent, then under the Federal Court Rules, the plaintiffs would have had to serve Topocean in the United States, in accordance with the Hague Convention on Service Abroad (“Hague Convention”). The Court would not have ordered that service be made upon Topocean’s solicitors. This is because, where a foreign defendant successfully contests the validity of service upon it, and unless that defendant has inappropriately avoided valid service, it would be unfair, would render the defendant’s efforts to contest such inappropriate service without meaning and would also encourage plaintiffs to attempt questionable service, with the knowledge that, if challenged, they could then obtain an order that permitted the arguably less complicated substitutional service upon the successful defendant’s Canadian solicitors.
There is a dearth of case law in this area and there are two lessons to take away.
The first is that an agent for service may be more than simply an agent that is connected to a particular carriage of goods or the party who regularly services the defendant in question. This case clearly states that the status of an entity as a “branch” or “agency” in Canada for the purposes of service (under Section 130 per above) of legal proceedings will be satisfied if there are representations made to the public at large that such agency status or relationship exists. Those parties utilizing local providers for shipments in and out of Canada must take care to ensure that their websites and other promotional material reflect their relationship with their partners accurately regarding their role as agents for service. Those agents must also be properly instructed not to accept service of legal process, if there is no desire to include service of legal proceedings as part of the local agent’s mandate. In such a case, the appropriate disclaimers should be in place on the website disabusing those seeking to effect service (where the agent is not involved with the shipments in question). In the right circumstances, it would appear that service of legal process may indeed be less complicated and less time-consuming if an unrelated party (to the contract of carriage in question) may be served if it is promoted as agent of the defendant even if there is no relationship to the contract of carriage in question.
Secondly, it was confirmed that the courts will provide latitude for plaintiffs seeking to effect service so long as there is no prejudice to the defendants, where the plaintiffs have shown an intention to proceed with the litigation and there is a reasonable cause of action. Plaintiffs are to have their day in court, if possible. However in this same vein, plaintiffs will not be allowed to manipulate the rules by obtaining orders that would allow a simpler service upon a defendant’s counsel simply because those counsel are known and a defendant is not easily served locally. On the grounds of fairness, a plaintiff, where service is shown to be improper, must go through the far more lengthy service pursuant to the Hague Convention just like everyone else.
Kim E. Stoll
(*1) Forum non conveniens is a discretionary ground upon which a court may find that a court of another jurisdiction is “more convenient” and better suited to hear the case. The plaintiff in that scenario is required to commence the action in the more convenient jurisdiction.
(*2) The only case concerning the application of that expression is Iscar Ltd v Karl Hertel GmbH, (1986) 10 CPR (3d) 523, 5 FTR 292 but relating to an exclusive distributor of a foreign company that was alleged to be a “branch or agent”, but the court found that the distributor was not either and without further examination of the term.
(*3) Substitutional service is an alternative method of service of legal process ordered by a court in circumstances where the required personal service cannot be properly effected, such as when it is proved that a defendant is evading service. Substitutional service may be ordered to effect service of a Statement of Claim by, for example, provision to a related entity or at a related business address where it is thought that the said documentation will reasonably come to the notice of the defendant.
(*4)  2 WWR 516
(*5) Cited with approval in Canada Alliance Assurance Co v Canadian Imperial Bank of Commerce, (1974) 3 OR (2d) 70, 44 DLR (3d) 486
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