University of Toronto Law School Faculty Blog

Copthorne Holdings and the Future of the GAAR: January 6, 2012

2011-12-21T07:24:34-05:00

On December 16, 2011, the Supreme Court of Canada released its much-anticipated decision in Copthorne Holdings Ltd. v. Canada, in which the Court considered the General Anti-Avoidance Rule (GAAR) for the fourth time.

In contrast to its previous GAAR decision in Lipson, the Court arrived at a unanimous decision in Copthorne, applying the GAAR to a number of transactions designed to preserve paid-up capital and redeem shares on a tax-free basis. In order to review the decision and its implications, the University of British Columbia’s National Centre for Business Law and the University of Toronto Faculty of Law are co-sponsoring a symposium on Copthorne Holdings Ltd. and the Future of the GAAR, which will be held at the University of Toronto Faculty of Law on the afternoon of Friday, January 6, 2012.

Confirmed speakers include Ben Alarie (U of T Law), Hon. Donald G.H. Bowman (FMC Law and former Chief Justice of the Tax Court of Canada), Mark Brender (Osler), Robert Couzin (Couzin Taylor), David Duff (UBC Law), Tim Edgar (Osgoode Hall Law School), Phil Jolie (Canada Revenue Agency), and Deen Olsen (Department of Justice). Space is quite limited. Please go to http://www.copthorne.ca for registration information.

Adjunct Prof. Kenneth Jull: "The Canadian Corruption of Foreign Public Officials Act: Mandatory Risk Assessment"

2011-12-20T16:50:32-05:00

Kenneth Jull is an adjunct professor at the University of Toronto Faculty of Law, teaching the course "Financial Crimes and Corporate Compliance".

The Canadian Corruption of Foreign Public Officials Act ("CFPOA") has been in force since 1999. In June of 2011 the CFPOA streaked across the radar screens of compliance officers when Niko Resources Ltd. ("Niko"), a Canadian energy company, plead guilty and paid a fine of almost $10 million as a result of bribes paid to a Bangladeshi official. The bribes included a luxury SUV [Toyota Land Cruiser] and a trip to New York and Calgary.

The large fine is only half of the story. Niko Canada and its subsidiaries were placed on probation requiring that the companies develop compliance procedures based on risk assessment. The concepts in the prior sentence bear repeating as they are novel in Canada. The Order pierces the corporate veil to include subsidiaries, places a corporation on probation (as now authorized by the Criminal Code sentencing provisions dealing with organizations) and requires a system of risk assessment. The following paragraph from the probation Order demonstrates the extent to which risk assessment is now a mandatory element of compliance in the anti-corruption arena:

The company will develop these compliance standards and procedures, including internal controls, ethics and compliance programs on the basis of a risk assessment addressing the individual circumstances of the company, in particular foreign bribery risks facing the company, including but not limited to, its geographical organization, interactions with various types and levels of government officials, industrial sectors of operation, involvement in joint venture agreements, importance of licences and permits in the company's operations, degree of governmental oversight and inspection, and volume and importance of goods and personnel clearing through customs and immigration.[emphasis added]

Risk assessment and risk management are popular terms these days, but these skills are rarely taught in law school. I have attempted to change this trend by teaching risk management in my course on "Financial Crimes and Corporate Compliance". The type of risk assessment required in the Niko order calls for a delicate balance of competing factors. One technique to give some order to this balancing is the use of a risk management matrix to determine the relative gravity of potential harm in relation to the precautions taken to ensure compliance. The matrix will assist an organization in identifying the appropriate level of auditing and training that will be necessary in a given situation. (See Archibald, Jull and Roach, Regulatory and Corporate Liability: From Due Diligence to Risk Management (Canada Law Book), chapters 4 and 7)

The Niko case confirms that Canadian companies can be liable under the CFPOA for activities that occur elsewhere provided that there is a real and substantial connection between the offence and Canada. The Niko case also illustrates the tension between parent and subsidiary companies that may exist in foreign jurisdictions. The general rule that parents are legally separate from their subsidiaries is subject to rare exceptions where the subsidiary is a mere conduit of the parent. Niko Canada had 100% control through a holding company of Niko Bangladesh and the President of Niko Bangladesh reported to the CEO of Niko Canada. As a result, there was clearly a real and substantial connection between the activities in Bangladesh and the offence in Canada. Still, it comes as a bit of a shock to read the charges which stated that "On or between the 1st day of February, 2005 and the 30th day of June 2005, at or near the City of Calgary, in the Province of Alberta, Niko Canada did, in order to obtain or retain an advantage in the course of business provide goods and services to a person for the benefit of Foreign Public Officials to induce the officials to use their position to influence any acts or decisions of the foreign state for which the official performs duties or functions, contrary to Section 3(1)(b) of the Corruption of Foreign Public Officials Act."[emphasis added]

A good compliance programme should encourage the development of compensation schemes that reward compliance in addition to and perhaps in contrast to financial performance measurements. There is strong evidence that compensation schemes will skew choices made by managers. This was the finding of Karl Okamoto and Douglas Edwards in their ground breaking article entitled "Risk Taking" ((2010) 32 Cardozo L. Rev. 159). The mathematics of risk may be overruled by the emotional perception of risk takers as leaders compared to risk avoiders who may be viewed as worthy of a back office. We need a new paradigm that better reflects the mathematical realities of risk management. Compliance bonuses must be the mirror of performance bonuses.

Prof. Jacob Ziegel: "Supreme Court appointments and wrong priorities"

2011-12-20T16:18:14-05:00

This commentary by Prof. emeritus Jacob Ziegel was first published in The Hill Times on Dec. 12, 2011.

On Nov. 14, former chief justice Roy McMurtry of Ontario and several current members of the Ontario Court of Appeal attended the swearing-in at the Supreme Court of Canada of the two new appointees to the court, Justices Michael Moldaver and Andromache Karakatsanis, both from Ontario. While they were in Ottawa, a reporter for The Lawyers Weekly asked McMurtry and the Appeal Court judges for their reactions to the questioning of these candidates by the House of Commons Ad Hoc Committee before their appointments were confirmed by the Prime Minister.

McMurtry said he thought the questioning of Justice Moldaver was too aggressive and he expressed concern that Canada was gravitating to the type of hostile questioning of candidates for appointment to the U.S. Supreme Court by members of the U.S. Senate Judiciary Committee. McMurtry was apparently referring to NDP MP Joe Comartin’s criticism of Justice Moldaver’s lack of bilingualism and his skepticism that the justice would ever become adequately bilingual despite his assurances to the committee that he would give this objective a top priority.

The other members of the Ontario Court of Appeal, who were interviewed in Ottawa by the journalist, had no problems with the questions addressed to Justice Moldaver, but thought they should have been directed to the Harper government because it was the government that had selected these candidates for prospective appointment to the Supreme Court.

McMurtry and his judicial colleagues had their priorities all wrong. Their focus should have been not on the procedure before the ad hoc Parliamentary committee, but on the deeply-flawed appointive system for Supreme Court of Canada judges that has persisted since the creation of the Supreme Court in 1875. It is true that Paul Martin, while Liberal prime minister, made some non-statutory changes to the appointive system in 2004 and 2005, and that Harper made another set of changes after he assumed office. However, these changes have not changed the balance of power between the Prime Minister’s Office and the selection committee. Nor have they made the selection committee less partisan in its deliberations: the incumbent government still remains firmly in control of the selection process—free of any statutory restrictions.

Harper made it clear when he was first named Prime Minister in 2006 that he wanted judges who “applied the law and did not make it.” He has made good on his commitment although many observers would question his understanding of the judicial role, especially in the context of the Canadian Charter of Rights and Freedoms.

On and off the bench, Justice Moldaver has been very critical of defence counsel who, in his view, have abused an accused person’s rights under the Canadian Charter. So, clearly, he would have met Harper’s test of the right type of judge for the Supreme Court. Justice Karakatsanis had only been on the Ontario Court of Appeal for two years before her nomination for appointment to the Supreme Court of Canada and therefore for too short a period to be able to articulate her Charter philosophy. Nevertheless, the consensus among many observers appears to be that she was selected for elevation to the Supreme Court because it was assumed her long service as a senior civil servant in the Ontario government would bias her in favour of government in contests involving individual Charter rights, particularly in the criminal law area.

There may be those who believe that, because a short list of candidates was prepared by an all-party committee of the House for submission to the Prime Minister, this guaranteed an independent assessment of the candidates’ merits. The reality was otherwise. The Conservatives had majority representation on the committee — three out of five members. Just as important, the list of candidates for review by the committee was prepared in the justice minister’s office. It would be naive to assume that the list was not heavily skewed in favour of candidates whose judicial philosophies were believed to reflect a conservative bias.

As a former attorney general of Ontario and former chief justice of the province, McMurtry must have been intimately familiar with all levels of the federal judicial appointments process. If he wishes to avoid embarrassing questions to future candidates for appointment to the Supreme Court of Canada, he should firmly nail his colours to the mast and publicly join those who, for many years, have called for radical improvements in the system of federal judicial appointments — at all levels.

Prof. Katz on Fair Dealing, Copyright, and the Haggadah

2011-12-12T10:33:45-05:00

This post is cross posted on Prof. Katz's blog.

The Supreme Court of Canada heard five copyright cases over dense two-day hearings on Dec. 6-7. One of the cases involved the application of the concept of fair dealing with copyrighted works in education. At the heart of this appeal was a key distinction made by Copyright Board between copies of works made by students or at their initiative, which could be fair dealing, and copies made by a teacher for students with instructions to read them, which could not. The distinction is summarized in para. 118 of the Board’s decision:

a copy made by a teacher with instructions to read the material, whether or not it was made at a student’s request, and a copy made for a group of students are simply not fair dealing. Their main purpose is instruction or non-private study.

In the submission filed by the Centre for Innovation Law and Policy, we argued that not only the categorical exclusion of the teacher-initiated copies lacks any basis in the language of the Act, its purpose and its legislative history, it leads to absurd results that Parliament could not have intended to create. For example, the categorical exclusion of any copying prescribed by a teacher would mean that a motivated and assertive student who knows what to request would receive better education than one who is not so informed and fortunate, because the teacher could help the former but not the latter.

The point was raised during the hearing, and that reminded me of the Four Sons from the Passover Haggadah—the text that is read in Jewish homes at the Passover seder, and that tells the story of the Exodus from Egypt and the Israelites' redemption from slavery.

The Haggada tells that the Torah speaks of four sons: one wise, one wicked, one simple, and one who does not know how to ask. There are different explanation of who the four sons are and what each one of them represents, and in effect, like many Jewish texts, the point is not the “P'shat”, namely the literal meaning of the text, but the “Drash”, the deeper meaning that is always open for interpretation and debate.

Nevertheless, a common starting point is that each of the sons represents people, or children, with different intellectual capabilities or attitudes towards learning. The sons see that the adults are busy and fussed about Passover, and each of them reacts differently, and therefore, each of the sons merits different pedagogical approach by his parents, or his educators. So here’s my take on the Four Sons, and on the relevance of the story to copyright law in Canada and to fair dealing in education.

Let’s begin with the wise son. He asks a very detailed question "What are the statutes, the testimonies, and the laws that God has commanded you to do?" Therefore, he ought to be answered by telling him the laws of Passover, including that 'one is not to eat any dessert after the Passover-lamb.'

The wicked son is rebellious and asks, "What is this drudgery to you?" The Hagaddah emphasizes that he says “to you”, and thereby excludes himself from the community. Because of his attitude he is rebuked by the explanation that "It is because God acted for my sake when I left Egypt" meaning that if he was there (in Egypt, with this attitude) he would not have been redeemed.

The simple son asks, "What is this?" and is answered with a simple answer "With a strong hand the Almighty led us out from Egypt, from the house of bondage."

And the one who does not know to ask, does not ask anything. But that does not mean that he has no questions or that there is no duty to teach him. Quite the contrary, the Hagaddah orders: “You open for him” as the Torah says: "And you should tell your son on that day, saying 'It is for the sake of this that the Almighty did for me when I left Egypt.'"

Returning to the school context, the wise son is the inquisitive and motivated student who wants to learn more and requests to learn more. Since he asks specifically about the relevant statutes, testimonies, and laws, it would be permitted, according to the Copyright Board’s decision, for his parents or teachers to make a copy of these texts without getting permission from the copyright owner because that would constitute “private study”. The copies would be made at the request of the son and without instructions to read them.

But that is not the case with the other three sons. While the simple one does ask a question, he does not request the teacher to make any copy of any specific work for him. If the teacher thinks that copying some relevant material and giving him to read is a good idea, that would not constitute fair dealing, according to the Board, because the copying was made at the teacher’s initiative. Likewise, any copy made for the one who does not know how to ask would not be fair dealing, because the son did not ask for the copy. And the wicked one, even if given a copy may not read it, unless required to do so, by emphasizing the consequences of his rebellious behavior, but because he is required to read, it is not fair dealing.

CILP’s submission alluded to the wise son and the simple one and highlighted the absurdity of having a legal rule that permits helping the former but not the latter. Yet the mentioning of the wicked son and the one who does not know how to ask reveals a deeper lesson, extending beyond the pedagogical wisdom of interacting with different students according to their capabilities or personalities. The deeper lesson is about society’s commitment to educating its members. The Haggadah commands that one who does not know how to ask should not be left alone. His educators have a duty to “open for him”. But the treatment of the wicked one is even more instructive. Even though he has excluded himself from the community with his dismissive question, this exclusion is only superficial. True, he is defiant, provocative, and dismissive, but had he truly excluded himself he would bother asking any question. But even if he did exclude himself from the community, the community cannot abdicate its duty to care for him or his education. He still deserves an answer, even if this answers means that he would learn the hard way by reminding him of the consequences of approach.

Another deeper lesson is the connection between education and freedom. A common motif in the Hagadda, not limited to the story of the four sons, it the need to tell and retell the story of liberation, by every person in every generation and by parents to their children. The message of the Haggadah is that education is not a luxury, and should not be the privilege of the gifted or the affluent. Rather, even those who are less inclined to learn should be taught because education and freedom are intertwined. The Hagggdah, of course, is not the only text making this connection. Indeed, the Ontario Education Act declares that "A strong public education system is the foundation of a prosperous, caring and civil society." Therefore, the wicked son may not only represent a rebellious child, but in fact, may represent a society that does has overlooked the importance of education. Such a society may be a wicked one who "would not have been redeemed".

Unfortunately, the Copyright Board and the Court of Appeal failed to recognize that. Hopefully, the Supreme Court will.

Prof. Lisa Austin: "Stop hiding behind the phone book, Mr. Toews"

2011-12-08T15:31:39-05:00

This commentary was first published in The Globe and Mail on Dec. 6, 2011.

Canada’s federal Privacy Commissioner, along with her provincial and territorial counterparts, has serious concerns regarding the federal government’s proposed lawful access legislation. These include the fact that the government has provided no evidence for the necessity of this expansion of state surveillance powers or why it requires departures from the standards of judicial oversight we usually apply when the police want access to private information. Public Safety Minister Vic Toews has responded by throwing the phone book at them, including in a recent letter to The Globe.

Usually, if the state wants access to private information, our Constitution requires prior judicial authorization (a warrant) on a standard of reasonable and probable grounds. The point is not to prevent state access but to ensure that such access occurs within a framework of accountability and oversight. Some departures from this are tolerated, such as when the state interest goes beyond routine law enforcement or where there is a diminished expectation of privacy in the information.

What Mr. Toews seems to have in mind with his phone-book analogy is something like the following: The police can get access to the content of your telephone calls through a special warrant that receives our highest level of protection. The police can also get access to your incoming and outgoing telephone numbers by getting a warrant on a much lower standard of reasonable suspicion. Finally, the police can match people’s names and addresses to particular telephone numbers by using the phone book (ignore for a moment the fact that one can request an unlisted number).

The lawful access legislation largely replicates this: strong protection for the content of communications, weaker protection for traffic data (who communicates with your computer and whom your computer communicates with, when, for how long) and no protection for subscriber information (name, address, IP address, mobile identification number) that is really just like the phone book. Just as we tolerate departures from our standards for judicial oversight in relation to telephone numbers, we should tolerate it in relation to their Internet analogs because the privacy implications are the same.

The problem is that using the Internet is not like using a telephone.

What did I do online this week? I corresponded with colleagues, students, professional contacts, family and friends and checked out some online discussion forums. I did research for work and for personal projects, reading many Web pages, downloading articles and purchasing books. I shopped and downloaded music and movies. Other aspects of my life are stored online, including my calendar, my task list and many of my work files. I access this from work, from home, from my smartphone and from my tablet.

What did I do on the phone? I talked to my mom and some telemarketers.

Mr. Toews is welcome to know my mom’s number and even figure out how often I phone home. Heck, he can call her if he likes, although he might get an earful. But getting access to the numbers I dial or opening the phone book to match these to a particular name and address is simply not the same thing as getting access to my Internet traffic data and subscriber information. The Internet is not a specific means of communication – it is the basic platform through which I engage in many of my most important professional and personal tasks.

This is why the digital trail I leave, the one Mr. Toews wants access to, is highly revealing, even if he never reads the content of my e-mail. This is private information and deserves protection through our existing standards of oversight and accountability, not something less.

The government needs to stop hiding behind the phone book. Canadians require a reasoned response that shows us the evidence for why the new Internet surveillance powers are both necessary and minimally invasive.

In the meantime, perhaps somebody should buy Mr. Toews a smartphone.

Prof. Kent Roach: Abdullah Khadr and the Consequences of Detainee Abuse

2011-12-05T11:37:53-05:00

This commentary by Prof. Kent Roach is cross-posted from the JURIST website.

According to the Canadian courts, what happens in Pakistan does not stay in Pakistan. The Supreme Court of Canada recently refused to review a permanent stay of extradition proceedings against Abdullah Khadr. Lower courts had previously ruled that "gross misconduct" by the US in arranging and prolonging Khadr's detention in Pakistan justified the extraordinary remedy of a stay of proceedings. The Supreme Court's refusal to consider this case means that Khadr will not be extradited to the US, where he has been indicted on charges of material support of terrorism for allegedly supplying arms and explosives to be used against US forces in Afghanistan. It is possible, but not probable, that Canadian authorities will prosecute Khadr, who was released in August 2010 after four-and-a-half years of pre-extradition custody and has still not been charged in Canada.

Abdullah Khadr is part of Canada's infamous Khadr family, self-professed supporters of al Qaeda. His father was a close associate of Osama Bin Laden and one of his younger brothers, Omar Khadr, remains in Guantanamo where he pleaded guilty to various charges, including the murder of an American soldier. Abdullah Khadr was captured by the Inter-Services Intelligence Directorate in Pakistan in October 2004 after the US posted a $500,000 bounty for his capture. The fact that the US paid such a bounty was secret until it was revealed in a decision by a Canadian judge in related state secrets proceedings and only after a Canadian newspaper was initially enjoined from publishing the information. The judge stressed that while the US had not agreed to the release of information about the bounty, "[i]t is now more than three years since the information was received by Canadian officials, the general practice is in the public domain, no human source would appear to be at risk and the circumstances in Pakistan have changed since these events took place."

Khadr was held for 14 months in a secret Pakistani detention center without access to counsel or courts. He was denied consular access to Canadian officials until January 2005. In August 2010, a Canadian extradition judge found that Khadr was denied access by Pakistan and the US acting "in concert" in an attempt to facilitate interrogation by US intelligence. Khadr alleged he was tortured in Pakistan, but the judge found that these allegations were not established because of inconsistencies in his story. He did, however, find that Khadr was physically abused by Pakistani officials, but not by the FBI.

In June 2005, the Pakistani authorities were prepared to release Khadr, concluding that they had gained all the intelligence from him that was possible. The judgment for Khadr's extradition hearing states that, just before Khadr's planned release, a Canadian Security Intelligence Service officer "received a phone call from his American intelligence counterpart telling him the US agency disagreed with and was concerned about plans to repatriate Khadr to Canada," and that the "US believed Khadr still posed a threat and that releasing him at this point was not a wise course of action."

In July 2005, FBI agents interviewed Khadr in Pakistan. Afterwards, the US apparently attempted, without success, to persuade Pakistani officials to allow Khadr to be rendered into their custody. In November 2005, "a senior United States official" asked Canada to consent to further delay in Khadr's release so that the US officials "could 'get their act together' with respect to extradition plans." The Canadian officials, perhaps mindful of the controversies caused by delays in Maher Arar's return, refused and Khadr was released to Canadian consular officials and flown back to Canada by the end of the month.

The FBI maintained their interest in Khadr, sending the same two agents who had interviewed him in Pakistan to interview him in Toronto with representatives of the Royal Canadian Mounted Police (RCMP) present. The Canadian extradition judge excluded the results of the Toronto FBI interview because he found that they were derived from the interviews that the same FBI agents had conducted with Khadr in Pakistan. In those interviews, Khadr admitted to supplying al Qaeda with machine gun rounds, grenades, rockets and explosive material to be used against American and coalition forces.

The strong actions of the Canadian courts in staying the extradition request in the Abdullah Khadr case can be contrasted with the Supreme Court of Canada's refusal to uphold an order that Canada be required to request Omar Khadr's repatriation from Guantanamo because of concerns that such a remedy would interfere with Canada's conduct of diplomacy with the US.

The Ontario Court of Appeal upheld the stay of the extradition proceedings in part by relying on British authority that had stayed proceedings in the case of irregular extradition, a result quite different than reached by the US Supreme Court in US v. Alvarez-Machain. The Ontario court held that the alternative of excluding the statements taken by the FBI in Pakistan and Toronto would fail to disassociate the court from the "'gross misconduct' that could not be remedied by anything short of a stay of proceedings." In an unanimous and eloquent judgment by Justice Robert Sharpe, the Court of Appeal stressed that "the rule of law must prevail even in the face of the dreadful threat of terrorism" and even when it "serves in the short term to benefit those who oppose and seek to destroy" such values. In this respect, the judgment can be seen as part of Canadian repudiation of America's irregular tactics in its war on terror.

There are, however, some troubling aspects in the case. The decision to stay extradition proceedings against Abdullah Khadr led to his release after four-and-a-half years of pre-extradition custody in Canada. Two judges had denied Khadr bail because of concerns that, given his and his family's history, he might flee the jurisdiction and because of public statements made by Abdullah Khadr in February 2004 that indicated admiration for the 9/11 terrorists and dreams of becoming a martyr. In this sense, the case may again trigger concerns in the US that Canada may not take a tough enough approach to terrorist suspects.

The Ontario Court of Appeal dealt with some of these concerns in its judgment. It rejected the Canadian government's "emotive argument that because of what the extradition judge did, an admitted terrorist collaborator is allowed to walk free" as "unfounded" because of the seriousness of the abuse, and also noted that Khadr could be prosecuted in Canada under the 2001 Anti-Terrorism Act for acts of terrorism that are committed outside of Canada. This is true, but no charges have been laid against Abdullah Khadr since his release and Canadian courts have already held that his statements in Pakistan are inadmissible because of his mistreatment there. Any Canadian prosecution would also be complicated by the reluctance of both Pakistani and American officials to release information.

It is likely that the Supreme Court's decision not to review the stay in Abdullah Khadr's case will place as much, if not more, strain on Canadian-American security relations — given the seriousness of the allegations against Khadr and the apparent reluctance of Canadian officials to prosecute him — than would have a request by Canada for Omar Khadr's repatriation. Canadian courts were prepared to take a stronger remedial position in this case where Abdullah Khadr was within their jurisdiction than in the Omar Khadr case where he remained within American jurisdiction.

The Abdullah Khadr case demonstrates that extradition from Canada will not be dominated by concerns about comity towards states requesting extradition. It follows in the tradition of the Supreme Court's 2001 decisions that Canada should not extradite without assurances that the death penalty will not be applied and that it not extradite in a case where an American prosecutor hinted that a fugitive might be raped in an American prison if he contested the extradition request.

The Abdullah Khadr case also has echoes of the Maher Arar affair given the apparent attempts by American officials to have Abdullah Khadr irregularly extradited. In this case, however, the American officials wanted Khadr sent to the US for trial and not to Syria for torture. Canadian officials did not, as in the Arar case, send mixed signals about whether they wanted their citizen back and insisted with success that Khadr be returned to Canada.

The Abdullah Khadr case is a reminder of how intelligence-only operations involving harsh interrogation and incommunicado detention can irreparably taint subsequent legal proceedings and how the victims of counter-terrorism abuses can use many different forums to vindicate their rights. What happened in Pakistan did not stay in Pakistan. Indeed, it prevented the criminal prosecution of Abdullah Khadr in the US and may also prevent his criminal prosecution in Canada.

Prof. Jacob Ziegel: "Unacceptable delays in Supreme Court appointments"

2011-09-27T16:18:13-04:00

This commentary was first published in The Lawyers Weekly on Sept. 23, 2011.

It is now four months since Justices Ian Binnie and Louise Charron announced their intention to retire from the Supreme Court of Canada at the end of July. Nevertheless, and disturbingly so, their successors have still not been appointed and the court remains two short of its full complement of nine judges.

When addressing the annual meeting of the Canadian Bar Association in Halifax last month Chief Justice Beverley McLachlin urged the federal government to ensure that the new justices would be appointed in sufficient time for them to take their places on the court when the court begins its 2011-12 term hearing of appeals in early October.

Her wish is unlikely to be granted. Rob Nicolson, the minister of justice, only announced on August 5 the procedure the federal government intended to follow in filling the two vacancies. The procedure involves the establishment of a five member selection panel of the House of Commons to review a list of names submitted to them by the minister and the committee's submission of a short list of six unranked candidates to the prime minister and the minister of justice.

The prime minister and minister of justice will then choose two names from the list and forward the names to an hoc committee representing the major parties in the House of Commons. The committee will then interview the candidates at a public hearing specially convened for the purpose. Following the hearings, the prime minister will announce the government's decision. (Curiously this last phase is omitted in the minister of justice's press release of August 5 but was presumably intended to be read in to make sense of the news release.)

There are several things that are wrong with this tortuous procedure. The unconscionable delay in filling the vacancies on the Supreme Court is an obvious cause of concern. Even allowing for the disruption caused by the federal election of last May, it should not have taken the federal government three months to announce the procedure it intended to follow to fill the vacancies.

An even greater concern is the fact that, as the position currently stands, no legislation prescribes the procedure to be followed. Rather, every federal government, whatever its political stripes, is free to follow its own preferences and free to ignore all previous precedents.

This unconstrained executive power is highly anomalous and is incompatible with the status and role of the Supreme Court in Canada's constitution. The Supreme Court of Canada Act covers in detail many other aspects of the court's composition, jurisdiction and modus operandi, and no reasons have been given why the most important feature affecting the court - the procedure to be followed in filling vacancies on the court and therefore the court's ability to function with a full complement of members - should be excluded from statutory regulation.

The current position is also inconsistent with the constitutionally entrenched status of the Supreme Court since adoption of the Constitution Act in 1982. Observers from all sides of the political spectrum regularly acknowledge the Supreme Court's role as the guardian of Canada's constitution and as having the final word on the meaning of the often open ended language of the Canadian Charter of Rights and Freedoms.

In a controversial 1997 decision the Supreme Court decided that the federal government is constitutionally bound to establish an independent commission at regular intervals to make recommendations with respect to desirable adjustments in the salaries, pension entitlements and other emoluments of federally appointed judges.

Given this important precedent, the time is surely ripe for the Supreme Court to be asked to declare that the Court's independence and freedom to discharge its constitutional responsibilities also requires adoption of a statutory procedure for the filling of vacancies free of the whims, caprices and delays that has dogged the procedure far too often up to now.

Prof. Ed Morgan: "The surprise factor of Palestinian sovereignty"

2011-09-21T12:29:58-04:00

This commentary was first published in the Globe and Mail on Sept. 21, 2011.

Palestinian Authority president Mahmoud Abbas is asking the United Nations to declare his country a state. If it comes, UN recognition will do little to improve lives on the ground. It won’t end the conflict with Israel any more than all the other UN pronouncements have done, and it won’t bring good governance to those who live under the Palestinian Authority. As events in Tunisia, Egypt, Libya and Syria have demonstrated, sovereign statehood is no guarantee of that.

If a statehood declaration is likely to have little impact beyond giving Mr. Abbas a rhetorical victory, why are the Palestinians and their supporters (the Arab League states, Turkey, Iran) making such a point of endorsing it, and why are the Israelis and their supporters (the U.S., Canada, Germany) opposing it so vigorously?

Well, there’s no telling which direction the political spin will take. The Palestinians calculate that Israel will feel increased heat if they’re successful, while the Israelis assume that Palestinian militancy will be harder to chill if their opposition to the move fails. But, in Middle East politics, predictions are dire and reversals the norm.

What should be more predictable is the impact of Palestinian statehood on the legal rights and wrongs flowing between the parties. In these times of worldwide lawfare, where legal claims fly like Scud missiles chasing Mideast opponents across jurisdictions, statehood has been considered a comparative advantage. Proceedings against Israel and its officials are often doomed to failure, largely because the doctrine of sovereign immunity prevents a state and its agents from being hauled into the courts of another state.

In the notorious Bouzari case, an Iranian Canadian’s claim against the country of his birth for torturing him in prison was dismissed by the Ontario courts, confirming that immunity applies regardless of how guilty or innocent a state might be. Iran can’t be sued in Canada for torturing its citizens any more than Israel can be sued for aggressively defending its citizens.

This legal quirk has the Palestinians coveting statehood. Terror victims have resorted to litigation to lash back at those who did them harm, and the Palestinian Authority has been the subject of many of those legal efforts. In the Ungar case – the leading U.S. decision on Palestinian legal status – the court determined the Palestinian Authority gets no immunity in a U.S. forum because it lacks the essential features of sovereignty that UN member states enjoy.

On the other hand, the Israelis and Palestinians may be gazing at too narrow a legal horizon.

The other legal consequence of statehood is that a state is responsible internationally not only for its own acts but for all acts from its territory – even by groups beyond its control. Israel learned this in 1949 when it was held liable by the International Court of Justice and made to pay reparations for the death of a diplomat killed by renegade Jewish extremists that the new Israeli government had yet to bring under control. Under international law, a state can’t avoid responsibility by claiming it has no authority over groups within its territory.

Although skepticism about the balance of international institutions is justified, it’s not only Israel that has been called to task by the UN’s judicial branch. Libya, Sudan, Iran and others have been subjected to justice in international forums where they can’t be touched in domestic ones.

From the international perspective, it should be the Israelis cheering for Palestinian sovereignty and the Palestinian Authority concerned about its potential liabilities. After all, Palestinians have tended to deflect responsibility for violence by pointing to groups beyond the Palestinian Authority’s reach – Hamas, Islamic Jihad, Popular Resistance Committees. While the statehood gambit may provide new arguments for domestic immunity, it will impose full international responsibility on the Palestinian Authority for anyone operating from Gaza and the West Bank.

Politically, Palestinian statehood may re-spin, but not resolve, the conflict with Israel. But, legally, it’s a potential game changer, albeit in a reverse direction from what the parties expect. It may turn out that Mideast surprises are as much the norm in law as in everything else.

Ed Morgan testified as an international law expert for the plaintiffs in U.S. federal court in Ungar v. Palestinian Authority and in Ontario Superior Court in Bouzari v. Islamic Republic of Iran.

Prof. Ed Morgan: "Who decides on land use in Port Lands and Mississauga?"

2011-09-20T14:40:07-04:00

This commentary was first published in thestar.com on Sept. 18, 2011.

Toronto’s city council is about to weigh in on Mayor Rob Ford’s intervention into the Port Lands development, and the Mississauga inquiry is about to report on Mayor Hazel McCallion’s intervention in the city centre development. Already one can see a shared question mark linking the two GTA controversies: when it comes to a city’s prominent lands, what checks and balances does the rule of law impose on mayoral power?

To be sure, there are important political and legal differences between the two episodes. The Mississauga proceedings are focused on allegations of conflict of interest and the relationship between the mayor’s office and plans endorsed by her developer son. The Toronto debate is focused on contentions about circumvention of the consultation/approval process and the relationship between the mayor’s office and plans endorsed by his councillor brother.

But while the differences are clear on the surface of the two controversies, similar policy issues lurk just underneath.

The Toronto debate has pitted a much studied, mixed use community-oriented plan for the Port Lands against a tourism-oriented plan championed in a top-down process by the mayor’s office. The Mississauga inquiry has featured a hotel development championed by the mayor’s office with allegations of conflict of interest against more process-oriented planning for the suburban city’s centre. At the heart of both stories, of course, are issues of municipal governance and the land use approval process.

Furthermore, both controversies raise the vexing question of how municipalities are to deal with proposals for new uses of highly prominent locations. While local community input in the ordinary course may give the few an effective veto power over development that impacts on, and is for the benefit of, the many, hierarchical authority exerted by the mayor’s office may give certain concentrated economic interests priority over the community most immediately impacted by the development. From a land use and democratic theory point of view, the question of waterfront or city centre development poses a difficult choice between local and centralized decision-making and design.

Lying at the threshold of all urban development is an appropriately functioning system of governance. Indeed, governance issues provide the key to efficiently implementing development and other public undertakings on behalf of the municipality’s constituency, and for ensuring that local authorities adhere to the nation’s rule of law norms. There are, generally speaking, four pillars of governance on which Canadian cities are propped, all of which must be kept in mind as Toronto and Mississauga debate their respective flare-ups of the moment.

• Our municipal officials and policies are both elected. The Toronto Port Lands raise the question of whether those councillors most prominent in the proposals gave voters the opportunity to express themselves on the plans. Moreover, in both the Toronto and the Mississauga controversies, there is a question of whether power has been delegated to unelected persons or to persons elected in wards not related to the proposals under review.

• We have public debate on issues of public importance. This is particularly acute where planning issues are at play for geographically central lands. Both the Toronto port lands and Mississauga city centre issues have raised questions of behind-the-scenes negotiations, beyond the purview of the usual municipal consultation and development review. Public, grass roots input, in other words, has potentially been displaced by a hierarchical command structure imposed by a mayor’s office. While centralized authority may be efficient and attractive to those at the very centre of authority, local government in Canada is premised not on displacing but on accommodating local democracy.

• We must manage the tension between neighbourhood and city-wide issues. The Toronto port lands and the Mississauga city centre are examples of development projects that are important to the neighbourhood in which they are situated and to the respective cities at large. Local councillors and ratepayers have complained of being eliminated from the consultation process in favor of interests that are remote from the actual locale of the developments, while the mayors and their supporters contend that centralized authority is necessary for large scale plans that impact on, and benefit, the entire municipality. This centre vs. periphery tension is endemic to planning for geographically prominent lands, and needs to be resolved in order for large scale building to proceed. We can’t do without a city’s head, but can’t undermine a city’s body politic.

• Our system requires accountability for decision-making. Both GTA controversies suggest opaque approval processes, and therefore both raise the spectre of preferential treatment that undermines the rule of law. The Toronto port lands debate has centred not so much on the competing proposals for the lands, but on the comparative openness and closure of the consultation procedures. The Mississauga city centre controversy has centred no so much on the merits of one hotel and mixed-use proposal over another, but on the allegation of conflict of interest and the prospect of backroom deal-making replacing public consultation and approvals.

These four governance criteria are, in a sense cumulative. Ultimately, the values built into Canada’s constitutional system represent an umbrella under which all other governance issues shelter. As Torontonians and Mississaugans consider the promise and controversies of their centerpiece developments, the rule of law in municipal governance needs to be kept in view from the waterfront and the city centre.

Prof. Kent Roach: The UN’s Failed Response to 9/11

2011-09-15T15:32:28-04:00

A decade ago, the world rightly stood in solidarity with the United States in the face of the 9/11 terrorist attacks. The story of how the Bush Administration squandered that solidarity through Guantanamo, torture and the invasion Iraq is well known. Less well known is how the United Nations also lost its opportunity to unite world in principled counter-terrorism.

The 9/11 attacks provided the U.N. with an unparalleled opportunity to forge international agreement on a definition of terrorism. Whatever previous disagreements there were about freedom fighting and state terrorism, it was clear that the 9/11 attacks constituted terrorism. The killing of innocent people not engaged in hostilities in an armed conflict was terrorism; it did not matter whether they were in the planes, the World Trade Centre or the Pentagon.

On September 28, 2001, the Security Council demanded that all states enact tough counter-terrorism measures under its mandatory powers to enforce international peace and security. The Security Council offered no guidance on the definition of terrorism. It failed to so, even though a 1999 Convention on the Suppression of Terrorism Financing previously included a restrained but principled definition: the intentional killing or injuring of those not engaged in armed conflict in order to intimidate a population or compel governments to act.

The Security Council's failure to encourage a definition of terrorism left states free to create their own definitions. Some defined terrorism very broadly so it could cover non-violent civil disobedience or even peaceful dissent; others selectively defined terrorism so that it would not include attacks on the civilians of an occupying power. A few countries, like Syria, managed both feats. Following an Arab Convention, it defined terrorism in an overbroad manner that included dissent while excluding "freedom fighting," so long as it was not directed at an Arab state.

Given its eagerness to promote counter-terrorism, the Security Council through its new Counter-Terrorism Committee essentially ignored human rights for three years after 9/11. This provided many countries with plenty of time to enact broad new laws. The Security Council now claims it recognizes that respect for human rights is part of a sustainable security strategy, but the stains of the first few years after 9/11 have lingered.

The Security Council's initial approach not only neglected human rights, but made strategic errors in counter-terrorism strategy. Responding to bin Laden's exaggerated reputation as a financier of terrorism and its desire to promote the 1999 Financing Convention, the Security Council focused on terrorism financing. Many countries made it a priority to enact terrorism financing and money laundering laws despite the small amounts required to finance deadly terrorism. One such country was Indonesia, which enacted a terrorism financing/money laundering law in 2002 when it should have been reforming its criminal law and policing to better deal with terrorism such as the 2003 Bali bombings that killed 202. The 9/11 commission concluded that stronger terrorism financing laws could not have stopped what was most likely the most expensive act of terrorism in history, but the UN continues to make such laws a policy priority.

The Security Council also encouraged states to focus on refugee applicants as potential terrorists, thus encouraging them to use immigration law as a shortcut anti-terrorism law. This allowed democracies to rely on secret evidence against non-citizens even as the threat of home grown terrorism grew.

Finally, the Council followed Prime Minister Blair's lead after the 2005 London bombings in focusing on extremist speech. This approach was potentially divisive and downplayed the differences between extremist beliefs and acting on such beliefs in a violent manner.

It is one thing when one country, even one as powerful as the United States, makes strategic mistakes in counter-terrorism, but it is quite another when the UN makes mistakes in its global security legislation. The U.N. has learned from some of its mistakes. The Security Council now claims to play more attention to human rights and an Ombudsperson is available for those who may be wrongly blacklisted as terrorists. The General Assembly in 2006 developed a balanced counter-terrorism strategy, but unfortunately continued to fail to agree on a definition of terrorism.

Although nothing could mitigate the evil and tragedy of 9/11, the failed and flawed counter-terrorism pursued by both the US and the UN in the years after that tragedy has squandered what little good could have come from that terrible day.

Prof. Roach is the author of The 9/11 Effect: Comparative Counter-Terrorism, published this month by Cambridge University Press.