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Solution Manual For Business Law in Canada, 11th Canadian Edition

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    RESOURCE MANUAL Richard A. Yates Simon Fraser University Richard Yip-Chuck BUSINESS LAW IN CANADA Eleventh Edition Richard A. Yates, Teresa Bereznicki-Korol, Trevor Clarke

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    ii Contents Preface Part 1: Introduction 1 Managing Your Legal Affairs 1 2 Introduction to the Legal System 6 3 The Resolution of Disputes: The Courts and Alternatives to Litigation 14 Part 2: Torts 4 Intentional Torts and Torts Impacting Business 24 5 Negligence, Professional Liability, and Insurance 31 Part 3: Contracts 6 The Elements of a Contract: Consensus and Consideration 39 7 The Elements of a Contract: Capacity, Legality, and Intention 49 8 Factors Affecting the Contractual Relationship 57 9 The End of the Contractual Relationship 63 Part 4: Methods of Carrying On Business 10 Agency and Partnership 69 11 Corporations 79 12 Employment 89 Part 5: Property and Information Technology 13 Intellectual Property 98 14 Real and Personal Property and Protection of the Environment 105 Part 6: Commercial Transactions 15 Priority of Creditors 113 16 Sales and Consumer Protection 125 Appendices Introductory Comments 133 1 Recommendations for Teaching Business Law in Canada 134 2 The Yates Cases 158 3 Comments with Respect to the Yates Cases 177 A Note on the Appendices The first appendix to this manual consists of a research paper by Richard A. Yates on teaching business law. It summarizes trends and focuses on a teaching approach that is modeled on the case study method of the Harvard School of Business. This research provided the impetus for the creation of the “Yates Cases,” which are included in the second appendix. The third appendix provides commentary on how they might be used in a business law course.

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    1 Chapter 1 Managing Your Legal Affairs Learning Objectives  Explain the meaning of “sophisticated client”  Describe the role of the lawyer  Identify when to hire a lawyer and when to represent yourself  Explain how to find a good lawyer  Review how lawyers bill their clients  Describe legal aid  Outline the procedure to follow to complain about your lawyer  Discuss the ethics of lawyers and of clients Discussion E XPLAIN THE MEANING OF “ SOPHISTI - CATED CLIENT ” A “sophisticated client” understands the role of the lawyer, and their own role as client. This involves knowing when and how to hire a lawyer, the costs involved and what can be done if the lawyer is not meeting your expectations. Good business decisions can only be made with consideration of appropriate laws, whether the client is able to access that information for themselves, or through the services of a lawyer. A sophisticated client also understands the importance of evidence, and may change their procedures and those of the business in order to make sure the evidence is there in the event of a dispute. D ESCRIBE THE ROLE OF THE LAWYER The client is the ultimate decision maker, but makes those decisions with the advice of a number of experts, of which the lawyer is one. If the business person deems other business factors to be of greater importance, he or she may choose to accept some legal risk, but it is an informed decision. Lawyers must follow the instructions of their clients unless they are illegal or unprofessional (although a lawyer may always resign). I DENTIFY WHEN TO HIRE A LAWYER AND WHEN TO REPRESENT YOURSELF The decision as to when to hire a lawyer starts when decisions need to be made as to how the business will be organized, whether it is to create to a new business or buy an existing one. It allows business owners to minimize their risks and make sure they are in compliance with all laws. This would also apply to decisions about the premises, financing, existing or new contracts, intellectual property and, finally, selling the business. For less significant decisions, the client may choose to inform themselves, through the internet and the resources listed throughout this textbook and in MyBusLawLab. A sophisticated client will know when to do research themselves and, if unable to obtain the information or understand the information found, to seek legal advice. Small claims court trials are often conducted by clients, due to the low monetary limits, unless the legal issues are too complex for the client to handle themselves. Criminal matters should nearly always be handled by legal counsel. E XPLAIN HOW Finding an appropriate lawyer is difficult. Referrals from trusted friends or

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    Instructor’s Manual for Business Law in Canada , 11 th Edition 2 TO FIND A GOOD LAWYER associates with the same type of legal problems are good. Some provincial law societies or branches of the Canadian Bar Association also have lawyer referral services that provide names of lawyers who practice in specific areas of law. You may have an initial consultation for little or no cost, and then decide if you wish to pursue the matter and hire one of them. If not going through one of those services, initial consultation costs will vary and should be confirmed with the lawyer in advance. The lawyer you choose should be someone who you think may be suitable to establish an ongoing relationship with your business. R EVIEW HOW LAWYERS BILL THEIR CLIENTS Lawyers bill their clients for services either by a fixed fee, an hourly rate or by a contingency fee based on a percentage of the money recovered on behalf of the client. Clients are also responsible for paying disbursements, the lawyer’s out-of-pocket expenses incurred, such as filing fees, long-distance telephone charges, etc. Sometimes a lawyer will require a financial retainer to start a file, which operates as a deposit against legal work performed. D ESCRIBE LEGAL AID Legal aid may be available for people with low income, but the eligibility varies from province to province, so it’s best to check with the administrators of the program in your province. What types of legal services are covered also varies, and it is generally not available for business issues. Duty counsel is often available at no charge in criminal court to provide advice, but not representation. O UTLINE THE PROCEDURE TO FOLLOW TO COMPLAIN ABOUT YOUR LAWYER Law is a self-governing profession, with provincial law societies that serve this function. Fee complaints are dealt with differently from province to province. Complaints about a lawyer’s conduct are dealt with through the law society, which will have a resolution process that could include mediation, investigation and formal hearings, with penalties for wrongdoing. Claims for compensation are subject to limitation periods, as is any other action. D ISCUSS THE ETHICS OF LAWYERS Professional and ethical obligations of lawyers are set out in rules of professional conduct established by each province’s law society. The vast majority of lawyers meet these standards, but as with any profession, there are a few that do not. If this occurs, the client needs to take appropriate action on a timely basis. D ESCRIBE A CODE OF BUSINESS CONDUCT There is no code of conduct for business people, and there have recently been a number of well publicized examples of breaches of ethical conduct by high profile business people. This affects the public’s perception of the integrity of enterprises in our country and the advisability of doing business here. Each business should make a commitment to ethical behaviour by preparing a code of conduct for their employees. It needs to include issues such as conflicts of interest, use of corporate assets and opportunities, confidentiality, fair dealing, compliance with laws and reporting of unethical or illegal behaviour within the business. It needs to reflect the business’ core ethical values and principles, in order to encourage ethical behaviour on the part of all those associated with the business. This, in turn, can enhance the long term success of the business. Answers to Questions

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    Chapter 1: Managing Your Legal Affairs 3 1. Explain the meaning of “sophisticated client”. Sophisticated clients are confident, knowledgeable, up-to-date and understand the role of a lawyer. As well, they know when to represent themselves and when to hire a lawyer, and the costs involved when a lawyer is hired. 2. Why should the owner of a small business have a lawyer on “the team”? A lawyer is an expert, providing relevant advice to the client, which allows the client to make an informed decision. 3. Distinguish the role of the client from the role of the lawyer. The client is the decision maker, who consults a number of experts, including lawyers, in order to make decisions. Lawyers are experts in their field who provide advice, and who must follow the instructions of the client. 4. “The elimination of ‘solicitor–client privilege’ would significantly undermine the integrity of the Canadian legal system.” True or false? Explain your answer. True. Solicitor-client privilege ensures full and frank disclosure between clients and their lawyers. The value of the lawyer’s advice will be greatly reduced if it is based on incomplete information. 5. What are some examples of decisions that owners of small businesses make? What role can a lawyer play with respect to the making of these decisions? The legal form of the business, whether to buy an existing business or create a new one, what are the relevant laws and regulations affecting the business and what constitutes compliance, issues with regard to purchase or lease of business premises, funding of the business, contracts with employees, suppliers and customers, intellectual property and, finally, sale of the business. 6. What role has the computer played with respect to the solicitor-client relationship? Computers allow clients to research easily accessible legal information online, rather than having to consult a lawyer for every decision. 7. “It is a good idea to hire a lawyer when you have been charged with a crime.” True or false? Explain your answer. True. The stakes are high. If convicted, you will be punished and have a criminal record. 8. When you are trying to find a lawyer to help you, what are some sources of lawyer’s names? Sources include referrals from friends or relatives, provincial law societies, lawyer referral services, provincial branches of the Canadian Bar Association, advertisements and the Yellow pages.

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    Instructor’s Manual for Business Law in Canada , 11 th Edition 4 9. What is the primary purpose of an initial consultation with a lawyer? To decide whether the lawyer is suitable for you to retain. If so, then the lawyer will decide if it is agreeable to represent you. 10. Briefly explain three ways lawyers bill their clients. Which of the three is most commonly used? Fixed fees – for specific tasks such as will preparation, purchasing a house or incorporation. Hourly rate – billing for time spent on the client’s file. This is the most common method of billing a business. Contingency fee – charging a percentage of the amount the client collects. Most appropriate for personal injury or product liability cases. If the client does not collect, the lawyer does not get a fee. The types of cases covered and allowable percentages vary from province to province. 11. “Legal aid is available to anybody with a legal problem.” True or false? Explain your answer. False. There are financial limitations and limitations on the types of disputes legal aid will deal with. This also varies from province to province. 12. What can a client do if she is unhappy with the bill she received from her lawyer? Attempt to resolve the dispute directly with the lawyer. If not successful, mediation may be an option. If mediation is not available or successful, the bill could be reviewed by court officials. The method of review varies from province to province. 13. “Should a client lose money because of the carelessness of his lawyer, he will be compensated for his losses if he makes a complaint to the law society.” True or false? Explain your answer. False. The Law Society deals with disciplinary matters only in respect of the carelessness. Compensation would have to result from settlement or, if unable to reach an agreement, through a legal suit by the client against the lawyer. The Law Society will likely require the lawyer to have errors and omissions insurance which will assist with recovery of the loss after settlement or judgment. 14. When will a lawyer be disbarred? Lawyers who fail to follow the rules of conduct of the Law Society they belong to are subject to disciplinary investigations and hearings. If the conduct complained of is a serious breach, such as misuse of client funds, they may be disbarred. 15. “When a person acts unethically, she will also have broken the law.” True or false? Explain your answer. False. Ethics tells us what we should do; the law tells us what we must do. Generally speaking, every person breaking the law in Canada is acting unethically, but a breach of ethics is not necessarily breaking the law.

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    Chapter 1: Managing Your Legal Affairs 5 16. What is a code of business conduct? Should such a code be used by a small business? A code of business conduct is a statement of values and principles of ethical behaviour that establishes a code of conduct which all employees, officers and directors of the business would be expected to follow. If created when a small business is first established, it is probably the best way to ensure the long-term adoption of these principles as the business grows. Solution to the Cases 1. Ontario (Public Safety and Security) v. Criminal Lawyers’ Association , [2010] 1 S.C.R. 815, 2010 SCC 23 The Supreme Court unanimously reversed the decision of the Court of Appeal. Section 2(b) of the Charter does not guarantee access to all government documents. The documents protected by the Ontario FIPPA dealing with solicitor-client privilege were excluded from being disclosed. Lawyers required to register as lobbyists may have to disclose client names and the nature of the lobbying activity. Some banking records of lawyers regarding client names and information may be accessible under money laundering and state security legislation. 2. Wayne v. Wayne , 2012 ABQB 763 (CanLII) Relevant legislation does not expressly allow the court to pierce the solicitor-client privilege. The basis for this is for clients to have complete trust their counsel representing them. Counsel can only represent clients if clients are completely open and speak freely with counsel. The privilege is for the benefit of the client. In this case, the mental state of the trustee’s mother, the privilege does not work to her benefit. The court should grant access to the estate file. 3. University of Alberta v. Chang , 2012 ABCA 324 (CanLII) The appeals were allowed and the applications were remitted for trial. The chambers judge copied and pasted the briefs filed by the parties and simply retyped them. He signed then as reason for judgment. Briefs are often one-sided so they so they were prepared in an adversarial context. The passages from the chambers briefs did not disclose who the chambers judge arrived at his decision. There was no evidence to suggest there was inordinate delay. The appellate court must rebut the presumption that the lower court has reached its decision through its own unbiased analysis to overturn the decision of the lower court.

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    6 Chapter 2 Introduction to the Legal System Learning Objectives  Define “law” and identify the types of law that exist in Canada  Distinguish between the civil law and common law legal systems found in Canada  Identify the sources of Canadian law  Isolate the three elements of Canada’s Constitution  Explain how legislative power is divided in the Constitution  Detail how legislation is created in the parliamentary system  Describe the rights and freedoms protected by the Charter of Rights and Freedoms  List the areas and grounds upon which human rights legislation prohibits discrimination Discussion D ETERMINE A WORKABLE DEFINITION OF “ LAW ” Although creating a comprehensive definition of the law is difficult, a workable definition for our purposes is: “Law is that body of rules which can be enforced by the courts or by other government agencies.” An essential aspect of rules being considered as law is that they can be enforced by the judicial system or through administrative process. I DENTIFY THE CATEGORIES OF LAW THAT EXIST IN C ANADA Substantive Law – rules that establish rights and place limits on individual conduct Procedural Law – rules governing how the substantive law will be enforced Public Law – rules that govern an individual’s relationship with government (e.g. the Constitution) Private Law – rules that govern personal, social and business relationships which can be enforced by one person suing another D ISTINGUISH BETWEEN COMMON LAW AND CIVIL LAW The two main legal systems in place in the western world are civil law and common law. The civil law originated with the Romans and finds its modern place in the Napoleonic Code of France and other civil codes, including the Quebec Civil Code. The Common law is used in England and other jurisdictions where the English conquered and colonized. In a civil law jurisdiction, the basic rules and general principles are embodied in a central code and the function of judges is to apply the code to the specific cases that come before them. In such a system prior cases or precedents are merely persuasive and play a much less significant role than in the common law system, which has as its main characteristic the principle of stare decisis or the application of precedent cases. In the common law system, prior cases in the same court system with similar facts are binding on subsequent decision makers. Both the civil law and common law system provide predictability, which facilitates stability in a society.

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    Chapter 2: Introduction to the Legal System 7 I DENTIFY THE SOURCES OF C ANADIAN LAW As judges created the body of laws known as the common law, they borrowed from several sources including the traditions of communities where court was conducted, including canon (Church) law, the law merchant, and the civil law of Rome. Due to the strictures of stare decisis , there was extreme difficulty modifying common law precedents. As a result the courts of equity were separately developed to provide relief from the inadequacies of the common law system. A considerable amount of conflict developed between the two courts until they were eventually merged by the Judicature Acts in 1873-1875. However the two bodies of law remain distinct, and each can be applied by a single judge in a case.. The principle of supremacy of Parliament, developed in England and brought into Canada, means acts of Parliament or of a Provincial Legislature e will override any conflicting rule developed by either the common law, rules of equity, or a prior statute. Today in Canada, in order to determine what law should be applied to a particular situation, we must look to common law, to equity, and to statutes. I DENTIFY THE THREE ELEMENTS OF C ANADA ’ S C ONSTITUTION 1. Statutes, such as the Constitution Act, 1867 BNA ACT) , and the Constitution Act, 1982 , including the Charter of Rights and Freedoms, 2. Conventions and traditions, which are unwritten customs and rules dictating how the government is to operate. They include the rule of law, the office of Prime Minister and political parties. 3. Case law on constitutional issues, such as whether the federal or provincial government has jurisdiction to create certain statutes. DESCRIBE THE CONSTITUTION A CT , 1867, AND E XPLAIN HOW LEGISLATIVE POWER IS DIVIDED IN THE C ONSTITUTION It was often necessary to turn to the U.K. Parliament to amend or change the Constitution Act, 1867 until 1982. It was then that the Canada Act was enacted in the U.K. (called the Constitution Act, 1982 in Canada). It gave Canada the power to always amend its own constitution and contained the Charter of Rights and Freedoms . Until this time the principle of supremacy of Parliament prevailed and while a court could determine which level of government had the power to pass particular legislation, the court could not say the legislation was beyond the power of both levels of government. With the Charter of Rights and Freedoms , however, that power is now given to the court. T he Constitution Act, 1867 assigned different legislative powers to the federal and provincial governments. The powers of the federal government are set out primarily in section 91 of the Constitution Act, 1867 , and those of the provincial governments in section 92. The federal government has power over matters of broader national concern such as banking, currency, the postal service, criminal law (although not its administration and enforcement), and the appointment of judges in the federal and higher-level courts of the provinces. The provinces have jurisdiction over such matters as hospitals, education, the administration of the justices, and commercial activities carried on at the provincial level. D ETAIL HOW LEGISLATION IS CREATED IN THE PARLIAMENTARY SYSTEM Legislation is created by both the federal and provincial governments. The process involves the drafting and presentation of a Bill in either the federal House of Commons or the provincial Legislative Assembly. When introduced, a Bill will be given a first reading and is normally passed with

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    Instructor’s Manual for Business Law in Canada , 11 th Edition 8 little debate. If there is a will among the members to move the Bill forward, it will then be presented to the legislature for a second reading. There it is debated by the members of the house and either approved or rejected. If the Bill is approved it will generally go to a committee of members for review for possible amendment. When the Bill is in final form, it is presented to the legislature for Third Reading which involves a final debate and a vote. If the Bill passes all the votes, it is submitted to either the Governor General or the Lieutenant Governor for Royal Assent. Once assent is given the new legislation will either come into effect immediately or more commonly now, later upon further proclamation by Cabinet. D ESCRIBE THE RIGHTS AND FREEDOMS PROTECTED BY THE C HARTER OF R IGHTS AND F REEDOMS The Canadian Bill of Rights was a largely ineffective attempt to protect the basic rights of citizens from interference by government. However, the Charter of Rights and Freedoms , being constitutionally entrenched, is very effective. The Charter sets out certain basic rights, privileges and freedoms possessed variously by Canadians, non-Canadians in Canada, and corporations that cannot be interfered with by any level of government or government official without a constitutional amendment. The Charter is applicable to any relationships existing between individuals and governments or government agencies and covers personal freedoms (freedom of speech), democratic rights (the right to vote), mobility rights, legal rights (a fair trial), equality rights (racial discrimination) and language rights (French and English). There are three important qualifications on the operation of the Charter of Rights and Freedoms . First the operation of the charter is restricted to an individual’s dealings with governments and government agencies. The second allows the provinces or the federal government in many areas to opt out of the operation of the Charter and the third allows exceptions where “reasonable” in a free and democratic society. The effect of the Charter is to transfer the burden of protecting our basic rights and freedoms from our parliamentarians to our courts. These last two exceptions shift the burden back to a degree and restore some supremacy of Parliament. The Charter does not protect an individual’s rights from violation by other individuals or non-government institutions. Such human rights disputes between individuals are handled by human rights commissions created under comprehensive provincial and federal human rights statutes. That is, the Charter protects us from government, and human rights legislation protects us from each other. LIST THE AREAS AND GROUNDS UPON WHICH HUMAN RIGHTS LEGISLATION PROHIBITS DISCRIMINATION Not all discrimination is illegal. Human rights legislation prohibits discrimination on certain grounds, such as gender, religion, ethnic origin, race, age and disabilities. The legislation only prohibits this discrimination in certain areas, such as employment, tenancies, public facilities, services, and signs. Outside of these grounds and areas, discrimination can still legally occur. Sometimes positive action must be taken to avoid discrimination. That is there is a duty to accommodate different genders, the disabled and etc. when there is not undue hardship to do so.

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    Chapter 2: Introduction to the Legal System 9 Answers to Questions l. Why is it difficult to come up with a satisfactory definition of law? The main point that students should raise is that a definition of “law” varies with the perception and preferences of the person being asked the question. Someone committed to an empirical approach might adopt the definition of the legal positivist. That is, law is determined by the authority of the body that passed it. A pragmatist would lean toward the American legal realist’s definition. That is, law is whatever a judge is willing to enforce. The point is that the student should understand that the definition of law cannot be separated from the philosophical stance of the person responding to the question. 2. Where do we look to predict the outcome of a legal dispute? (a) In a common law system? Predictability of the law is determined by precedent-making cases. (b) In a civil law system? Predictability of the law is determined by the central civil code. 3. Explain how the use of previous decisions differs in civil law and common law jurisdictions. In a civil law jurisdiction only the code is binding on the judge. Cases decided by other judges are merely persuasive. They can be turned to for guidance but the judge is not bound by them. However, cases in a common law jurisdiction are the binding aspect of the law and, therefore, if a particular case qualifies as a precedent the judge faced with that precedent must follow it. 4. Describe what is meant by the statement, “Common law judges did not make the law, they found it.” When the common law was originally introduced in England it was the legal structure that was imposed, not the rules of law themselves. The judges merely applied the law or rules that were already in place with the “common people” in the local jurisdictions. From this arose the concept that the common law was not imposed but merely found. In reality this can only be applied to a small portion of the common law. In fact, as the common law developed, judges borrowed from many different sources, such as civil law, canon law, the law merchant, etc. As well, statutes have been passed which considerably alter judge made law. 5. Describe the advantages and disadvantages of the system of stare decisis . The main advantage to stare decisis (or the process of following precedent) is the stability and predictability that it provides for the legal system. It is not always necessary for someone to go to court to find out how the law will be applied in a given situation. Precedent cases can supply that information, and the parties may avoid the cost and difficulties associated with a court action by settling the dispute. Another advantage to the system is that where there is no precedent covering a particular situation before the court, the court then is free to make such precedent. The main disadvantage of the stare decisis process is that, as the number of precedents grows, the courts are unable to change and adapt as the attitudes of society alter. The courts often find themselves applying rules established centuries earlier

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    Instructor’s Manual for Business Law in Canada , 11 th Edition 10 which (other than the fact that they form a precedent) may have no justification for being applied in a modern situation. Happily statutes have altered many laws set by precedent and which no longer have a modern use. 6. Describe the problems with the common law system that led to the development of the law of equity. Because of stare decisis among other things the common law became rigid in its procedure and inflexible in the rules that were applied. Similarly, the remedies that were applied were limited. The problems were not corrected internally and, therefore, the courts of chancery developed to provide relief in those situations where it was warranted. 7. Detail what was accomplished by the Judicature Acts of l873-75. The Judicature Acts (1873-75) rationalized the various different court structures in place in England before this time into one central court system called the English High Court of Justice. Thus the separate courts of chancery and common law ceased to exist, although the separate bodies of law developed by them continued to exist. 8. Explain what is meant by the phrase, “the supremacy of Parliament.” In the English and Canadian legal system Parliament is supreme. A statute enacted by Parliament becomes the definitive law of the land overriding any other rule or law, such as common law, precedent, etc. This must be contrasted to the American system which has a system of checks and balances between the executive, legislative and judicial branches of government and under various circumstances each branch of government can override what the other does. In Canada the supremacy of Parliament is now subject to the operation of the Charter of Rights and Freedoms . 9. What effect will a properly passed statute have on inconsistent judge-made law (case law)? Because of the principle of supremacy of Parliament such a “properly passed” statute will override any inconsistent judge-made law. 10. Outline how a parliamentary bill becomes law. A new law goes through a process of introduction in the form of a bill, debate, modification, and approval referred to as first, second and third reading and then receives royal assent from the Governor General or Lieutenant Governors. 11. Using the principles of stare decisis , explain how judges determine whether or not they are bound by another judge’s decision in a similar case. Judges are bound by the precedent-making decision of other judges who are in the same judicial system at the same or a higher rank.. Thus a Supreme Court of Canada decision is binding on the Ontario Superior Court of Justice and an Alberta Court of Appeal decision is binding on a Court of Queen’s Bench of Alberta judge. However an Ontario Superior Court of Justice decision is not binding on a judge in the courts of any other province. Secondly, the judge must determine whether the case presented as a precedent covers essentially the same facts or whether it can be distinguished. If the facts can be distinguished or differentiated the case is not a binding precedent.

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    Chapter 2: Introduction to the Legal System 11 12. What is included in Canada’s Constitution? Legislation, conventions and court decisions considering the constitution form Canada’s Constitution. The British North America Act (now Constitution Act, 1867) is part of the legislation in the Canadian constitution. The legislation in the Canadian constitution also contains many subsequent important documents, such as: the Statute of Westminster (1931), the Constitution Act (1982) including the Charter of Rights and Freedoms, plus any amendments that have taken place. The various statutes having constitutional standing in Canada are now listed in an appendix to the Constitution Act (1982). In addition to these, the Canadian constitution contains all of the great provisions of England’s constitution, such as: the Magna Carta, the English Bill of Rights, and the many unwritten constitutional conventions, such as the principle of the rule of law. Court decisions considering the constitution form binding precedents that become part of the Canada’s constitution. 13. What is the effect of sections 91 and 92 of the Constitution Act, 1867 formerly the British North America Act ? Sections 91 and 92 of the Constitution Act, 1867 divide powers between the federal and provincial governments. Section 91 assigns certain areas of legislative power to the federal government and Section 92 assigns other powers to the provincial governments. It is this separation of powers between the federal and provincial governments that is the foundation of our federal system. 14. How did the Constitution Act, 1867 limit the power of the federal and provincial governments? How is it possible, given that division of powers, to have identical provisions in both federal and provincial legislation and have both be valid? The Constitution Act, 1867 originally referred to as the British North America Act , assigns certain areas of governmental control to either the federal or provincial governments for their exclusive jurisdiction. Since the Act deals with types of legislation there may be overlap between the powers of the two levels of government. For example, the provincial government can pass legislation making a particular type of activity illegal because it interferes with health and the federal government can make that same activity illegal because it is a crime. 15. Explain what is meant by the doctrine of paramountcy. When does the doctrine apply? Since it is possible to have valid federal and valid provincial legislation dealing with the same activity, it is also possible to have conflict. When it is not possible for a person to obey both laws the doctrine of paramountcy declares that the federal legislation must be obeyed and that the provincial legislation is inoperative to the extent of the conflict. 16. Describe the limitations on the federal or provincial governments’ power to delegate their authority to make laws. The federal and provincial governments cannot delegate their power to make laws. They can delegate the administration of the laws to another body, such as an administrative tribunal. 17. Identify the limitations of human rights legislation. Does it address all discrimination? It only addresses the grounds for discrimination in the areas of society which are described in the legislation. For example, in most jurisdictions a restaurant is legally able to only hire

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    Instructor’s Manual for Business Law in Canada , 11 th Edition 12 attractive servers, so long as they do not discriminate against any applicants on any of the prohibited grounds such as age or physical disability.. 18. Explain how the Constitution Act, l982, including the Charter of Rights and Freedoms affects the doctrine of supremacy of Parliament. The Constitution Act, 1982 , including the Charter of Rights and Freedoms , places many areas beyond the power of either the provincial or federal governments. Many important rights and freedoms as set out in the Charter cannot be changed or modified without a constitutional amendment, so in those areas Parliament is no longer supreme. The courts now have the power to declare legislation passed by either the provincial or federal governments as unconstitutional, not because it encroaches on the other’s jurisdiction but simply because it is inconsistent with the Charter of Rights and Freedoms . 19. Explain any limitations that apply to the rights and freedoms listed in the Charter . Section 1 limits our rights when reasonable to do so in a free and democratic society. Section 33 allows government to pass legislation contrary to certain sections of the Charter as long as they state they are doing so at the time. The exemption lasts for only five years but may be renewed at the end of that period. 20. Give examples of democratic rights, mobility rights, legal rights, and equality rights as protected under the Charter . Give examples of three other types of rights protected under the Charter . Democratic rights - right to vote, that elections be held. Mobility rights - the right for citizens to live, work and travel freely in Canada. Legal rights - right to life, liberty, security. Equality rights - the right not to be discriminated against on the basis of sex, religion, race, national origin, etc. Personal freedoms - freedom of conscience, religion, belief, opinion, expression. Language rights - French and English are guaranteed as the official languages of Canada. 21. How do human rights codes differ in their application from the Charter of Rights and Freedoms. The Charter only deals with our relationships with government and government institutions. The human rights codes govern our relationships with each other and non governmental institutions such as corporations. Solutions to Cases 1. R. v. Clough , 2001 BCCA 613 (CanLII) Clough could argue the trial judge was to take in consideration the court’s judgment for Kozma to receive a conditional sentence. The trial judge was not supposed to pass his own judgment on the court’s ruling of Kozma. Clough could then argue that her circumstances were similar to Kozma and trial judge should impose the same conditional sentencing. Clough could argue on the principle of stare decisis that the judge of the BC court should be bound by the decision of the judge of the BC Appeals court since they are in the same judicial system.

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    Chapter 2: Introduction to the Legal System 13 2. R. v. Spratt , [2008] B.C.J. No. 1669 (B.C.C.A.), 2008 BCCA 340 (CanLII); application for leave to appeal to S.C.C. dismissed June 18, 2009. The British Columbia Court of Appeal held that the intent of the Access to Abortion Services Act to allow safe access to health care services justified a limitation on the freedom of expression protected under Section 2 of the Charter . The court pointed out it was only small limitation and therefore the rights of the patients were found to be paramount. 3. McKay-Panos v. Air Canada , [2006] F.C.J. No. 28; 2006 FCA 8, [2006] 4 FCR 3 (CanLII). The Federal Court of Appeal held that the seat is an “obstacle” under the Canada Transportation Act . The obese appellant was found to have a disability under the Act . This finding of a “disability” would be a precedent to be argued if an accommodation is sought under the Canada Human Rights Act .

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