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Author: Jassmine Girgis Page 5 of 8

B.A. (Calgary); JD (With Distinction) (Western); LL.M. (Cambridge). Associate Professor. Member of the Alberta Bar. Please click here for more information.

Incorporating Waivers of Liability into Contracts

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On May 11, 2020

In Contracts

By: Jassmine Girgis

PDF Version: Incorporating Waivers of Liability into Contracts

Case Commented On: Apps v Grouse Mountain Resorts Ltd., 2020 BCCA 78 (CanLII)

Standard form agreements raise unique contracting issues. They are drafted by the more powerful party, they are take-it-or-leave-it agreements with no room for negotiation, and they typically contain waivers to limit the drafting party’s liability. And yet, most providers of services and/or goods use them to transact with the public. Given the fact that consumers rarely read these agreements before signing off on them, how can the requirement of consensus ad idem – i.e. a meeting of the minds – be established? Anticipated or expected terms do not give rise to this issue, but, if a clause is particularly onerous or unexpected, such as an “own negligence” clause, the drafting party must establish that the other party was notified of the clause, either through reasonable notice or previous experience. Otherwise, the clause will not be incorporated into the agreement.

These issues were raised in the recent BCCA decision in Apps v Grouse Mountain Resorts Ltd., 2020 BCCA 78 (CanLII) (Apps), a case involving a snowboarding accident at a British Columbia resort. After a summary of the decision, this post analyses the concept of knowledge when it comes to unsigned documents.

This post also argues that the current state of the law does not require as much as it should of occupiers, given the substantial benefit they derive from these waivers at the substantial cost to plaintiffs. It discusses the public policy choices involved in providing occupiers such broad scope to limit their liability, and proposes stricter rules to govern these kinds of clauses to better protect customers.

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Bidders Do Not Owe Duties of Fairness and Honesty to Other Bidders in Tendering Competitions

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On November 27, 2019

In Corporate / Commercial

By: Jassmine Girgis

PDF Version: Bidders Do Not Owe Duties of Fairness and Honesty to Other Bidders in Tendering Competitions

Case Commented On: LaPrairie Works Inc v Ledcor Alberta Limited, 2019 ABQB 701(CanLII)

This case raises the interesting question of whether bidders in a tendering competition owe duties of fair play to other bidders. The plaintiffs asserted that a contract had been formed among the bidders, requiring the bidders to treat each other fairly in the bid preparation stage, and that this contract had been breached at their expense. In a judgment summarily dismissing this claim, Justice Michael Lema found that the plaintiffs had not discharged the onus of proving a contract existed (at para 57).

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Director Liability and the Workers’ Compensation Scheme: The Divergence Between Policy Goals and Outcomes

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On May 14, 2019

In Corporate / Commercial, Torts

By: Jassmine Girgis

PDF Version: Director Liability and the Workers’ Compensation Scheme: The Divergence Between Policy Goals and Outcomes

Case Commented On: Hall v Stewart, 2019 ABCA 98

The workers’ compensation scheme and its effect on directors’ personal liability for corporate torts is an area of law that pursues the right policy goals but fails to achieve those goals in its implementation.

This post is about directors’ personal liability, the interplay between the Workers’ Compensation Act, RSA 2000, c W-15 (Act) and common law, and the policy issues that arise from this scheme. When the workers’ compensation scheme is superimposed on the common law system, it immunizes the corporation for corporate torts while leaving directors open to suit if they do not purchase special coverage. Their liability is then determined by common law principles.

In Hall v Stewart, the director, Stewart, did not purchase additional insurance, leading the Court of Appeal to conclude he could be held personally liable for the tort of the corporation under the two-step Anns/Kamloops test (from Kamloops (City of) v Nielsen, 1984 CanLII 21 (SCC), [1984] 2 SCR 2). This post will discuss two issues arising from this decision; first, the policy issue this scheme engenders, which should have been addressed under the second step of the Anns/Kamloops test, and second, the influence of Nielsen Estate v Epton, 2006 ABCA 382 (CanLII), affm’g 2006 ABQB 21 (CanLII), on this decision, which the Court of Appeal did not apply.

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Lessons from Redwater: Discard the AbitibiBowater Test and Legislate Super Priority for the Regulator

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On March 1, 2019

In Bankruptcy and Insolvency, Constitutional, Oil & Gas

By: Jassmine Girgis

PDF Version: Lessons from Redwater: Discard the AbitibiBowater Test and Legislate Super Priority for the Regulator

Case Commented On: Orphan Well Association v Grant Thornton Ltd, 2019 SCC 5 (CanLII)

Environmental cleanup costs are a natural consequence of operating in the oil and gas industry. Provincial regulations ensure these costs are borne by the company responsible for them, and these regulations work if that company is solvent. An insolvent company, however, cannot bear the costs of outstanding environmental orders, which leaves those costs to the company’s creditors or to the public.

The goal should be, and fairness dictates, that the debtor always covers the cost, regardless of its solvency, but that requires amending the governing legislation, preferably to give the regulator (in this case, the Alberta Energy Regulator (Regulator), and the equivalent regulators in other provinces) a super priority. Knowing the Regulator has a super priority in a bankruptcy will compel the adjusting creditors to modify their agreements ex ante, ensuring, in turn, that companies comply with regulations and have enough capital to cover environmental costs as they arise. This solution is better than our current system, in which creditors must wait for a court to apply the three-part test from Newfoundland and Labrador v AbitibiBowater Inc, 2012 SCC 67 (CanLII) (AbitibiBowater test) to determine who has priority, potentially leaving them to deal with the consequences ex post.

On a matter this important and this costly, a matter that has notable public policy considerations and far-reaching implications for private parties, both sufficient environmental protection as well as certainty in adherence to the legislated priorities, must be the ultimate goals. The Bankruptcy and Insolvency Act, RSC 1985, c B-3 (“BIA”) does not currently provide enough environmental protection, which may compel courts to compensate through the AbitibiBowater test. It is hard to predict the outcome of the test and, depending on its application to a given set of facts, it undermines the BIA priority scheme. Throughout the proceedings of Orphan Well Association v Grant Thornton Ltd, 2019 SCC 5 (CanLII) (commonly known as the Redwater case), in three levels of court, there were five judgments. Eleven judges applied the same test and six of them ruled in favour of the Regulator, while five ruled in favor of the secured creditor. This much disagreement over one set of facts should indicate that these issues should not be handled by the courts through the application of the AbitibiBowater test. The required certainty in this area must come from Parliament by way of legislative amendment to clarify a super priority charge in favour of the Regulator in the BIA.

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Preservation of Human Dignity as the Justification for Excluding Personal Rights of Action in Bankruptcy

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On October 9, 2018

In Bankruptcy and Insolvency

By: Jassmine Girgis

PDF Version: Preservation of Human Dignity as the Justification for Excluding Personal Rights of Action in Bankruptcy

Case Commented On: Cooke (Re), 2018 ABQB 628

This case considers whether a contractual “critical illness” benefit forms part of the property of the bankrupt’s estate. Personal rights of action arising out of tort claims have traditionally not formed part of the bankrupt’s estate, meaning the bankrupt gets to keep the money from these claims. Prior to this case, however, courts do not appear to have addressed the bankrupt’s entitlement to personal rights arising from contract. In this case, the court drew an analogy between the two types of claims. It found that both compensate for the pain and suffering of the bankrupt and consequently concluded that a contractual critical illness claim should also be excluded from the distribution to creditors.

The bigger question raised by this case is why these types of claims are not included in the distribution to creditors. This is not a statutory exemption, but courts have been excluding personal rights of action in bankruptcy distributions for more than a century. This blog explores one possible reason for the exemption. Rather than seeing the debtor as a financial problem that must be solved without requiring state assistance, which has been the pattern of bankruptcy law, this may be the courts seeing and treating the debtor as a human being.

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