Appeal Watch: Hart, Three s. 8 PM(NOC) Cases and Thamby Denied Leave to Appeal
The Court Won’t Hear Court versus Church
Earlier this week, the Supreme Court of Canada (“SCC”) refused to hear the case of Hart v. Roman Catholic Episcopal Corporation of the Diocese of Kingston, in Canada 2011 ONCA 728 [Hart]. While the church and the issue may be different, this case can be placed alongside Bentley v. Anglican Synod of the Diocese of New Westminster 2010 BCCA 506 [Bentley], which was also denied by the same Court last year. (You can read a summary of the case and the appellate court decision by our colleague, Laura Achoneftos, here.) It can be argued that the latter was a much thornier case as it involved a group of churches that planned to leave the larger Anglican Church of Canada for the reason of same-sex marriage; they sought to take property with them, but the British Court of Appeal found that to be illegal. Avoiding the debate about same-sex marriage and church doctrine, the SCC denied leave to appeal to the appellant in Bentley.
Hart is different, but the result is similar. Father Hart was ordained by the Roman Catholic Church, and served as a priest in various local churches around Ontario. There were some irregularities with parish finances, which ultimately lead to Father Hart being removed from office. Three decrees were issued to him by the Archdiocese. Under Canon Law, Father Hart was free to appeal each of the three decrees. Instead, he opted to bring an action for damages for constructive dismissal. The Archdiocese responded, stating that the court had no jurisdiction over his claim, according to section 106 of the Courts of Justice Act, RSO 1990, c C-43 and rule 21.01(3) of the Rules of Civil Procedure, RRO 1990, Reg 194. Because the relationship between the Archdiocese and Father Hart was ecclesiastical in nature, it is to be governed by Canon Law, not Civil Law.
Like in Bentley, the heart of the case is church independence: can the civil courts intervene in matters of church governance, including the management of property (Bentley) and employee relations (Hart)? Put simply, the answer is no. In the same way that the appellants in Bentley tried to argue that church property was a matter of Civil Law, namely trusts, the appellant in Hart tried to argue that civil courts have always maintained jurisdiction over employment and contractual disputes. Father Hart also argued that the nature of his employment with the Archdiocese was “multi-faceted” – that some of responsibilities were religious, while others were not. According to the trial judge and the appellate court judges, that was enough for the church to intervene. Even if he fulfilled non-religious duties in the course of his employment, the nature of Father Hart’s dispute with the church is indeed ecclesiastical; his appointment as a pastor is expressly subject to canon law. There are only two exceptions that would allow civil courts to intervene in church affairs. These narrow exceptions are explained clearly by Justice Laskin in paragraph 19 of his decision:
“The courts will interfere in the internal affairs of a self-governing organization in only two situations: where the organization’s internal processes are unfair or do not meet the requirements of natural justice; or where the aggrieved party has exhausted the organization’s internal processes.”
As we witnessed in Bentley last year, the courts have been relatively comfortable with these two narrow exceptions and with their limited role. Based on the facts of Hart, it is not clear whether he could have appealed on the grounds of natural justice. But one cannot help but imagine future cases in which the boundaries of “natural justice” are pushed and when an organization’s internal processes are so deeply unfair to the appellant. We in Canada have never decreed that the state and the church ought to be separated. We do seem more and more comfortable with that imaginary wall of separation though.
SCC is Not Hearing Any of It: Leave to Appeal for Three Section 8 PM(NOC) Cases Denied
The Supreme Court of Canada’s (“SCC”) disinclination towards section 8 of the Patented Medicines (Notice of Compliance) Regulations, SOR/93-133 [PM(NOC)] has been indicated in its 17 May 2012 denial of the leave to appeal for three intellectual property law cases. While the same section held sway in all three instances— Apotex Inc. v Eli Lilly Canada Inc., 2011 FCA 358 [Eli Lilly], Apotex Inc. v Nycomed Canada Inc., Nycomed GmbH, also 2011 FCA 358 [Nycomed], and Merck Frosst Canada & Co. v Apotex Inc., 2011 FCA 329 [Merck Frosst]— the interpretive issues ranged from the permissibility of restitutionary recovery in the first two cases, to the technical question of which version of the PM(NOC) applied in the third.
In both the Eli Lilly and Nycomed appeals, the Court would have been asked to consider whether the plaintiff could have been entitled to a portion of the defendant’s profits, since it was the latter’s issuance of prohibition order against the former that prevented the plaintiff from marketing its drugs generically in the market. A more complete consideration of s.8 would have allowed the SCC to address whether a restrictive interpretation of the legislation could have allowed for a disgorgement of the defendant’s profits as a remedy, especially since the PM(NOC) is generally compliant with corresponding regulation, like the Patent Act, RSC 1985, c P-4. Since the SCC’s denial, however, conflicting interpretations in lower courts will likely continue to muddy the waters around restitutionary recovery under s.8, complicating this possibility considerably.
The Merck Frosst appeal sought clarification on which version of s.8 applied in the case – the older 1993 version, or the amended 1998 one. This determination was a crucial one, since the applicability of the retroactive effects of the 1998 regulations did not absolve Merck Frosst from liability at the Federal Court (“FCA”) level. By refusing to hear the case, the SCC has implied consent with the FCA’s reasoning. Merck Frosst’s failure to recognize the inherent uncertainty in s.8 at the time it filed the prohibition order in 1993, coupled with the reasonably foreseeability of legislative changes created a “black box” of liability. For now at least, it seems that the law as it stands. As per Merck Frost specifically, there appears to be an emphasis on the greater promotion of generic drugs in the Canadian markets.
Extradition Case Denied Leave to Appeal
The Supreme Court of Canada (“SCC”) refused to hear an appeal by Ragavan Thamby (United States of America v. Thamby, 2011 ONCA 829) seeking to avoid extradition. Mr. Thamby is a Canadian citizen who is wanted to stand trial in the United States District Court of Texas. It is alleged that he participated in a fraudulent telemarketing scheme based in Canada preying on elderly Texans.
Facing charges in Canada, Mr. Thamby entered into a plead of guilty with the crown prosecutor – or what he thought to be a plea agreement. The lower court judge even approved the deal; however, there was a clerical error delaying the proceedings. But for this error, the guilty plea would have been entered on July 24, 2009, and the applicant would have faced just under two years in prison, two years probation and being subject to a restitution order of $200,000.
This clerical error is of great importance because in mid-May 2009, the United States sent a diplomatic note to Canada requesting Mr. Thamby’s extradition. In the U.S., he would face charges of conspiracy to commit fraud, mail fraud, and wire fraud. The conduct underlying the charges in the U.S. and Canada are identical. The difference lies in the sentencing provisions. While Mr. Thamby was prepared to take a plea of two years in Canada, the sentencing provisions in the United States may exceed fifteen years. Counsel for the Attorney General stayed the Canadian charges so that the extradition could proceed. Subsequently, the extradition judge ordered Mr. Thamby’s surrender.
Mr. Thamby appealed this decision successfully. The Ontario Court of Appeal (“ONCA”)found that the Minister had not sufficiently identified relevant considerations warranting surrender. Although the Minster is afforded a great deal of discretion, as outlined in United States of America v Cotroni,  1 SCR 1469, the court will only interfere with the Minster’s discretion in cases where the decision is unreasonable (United States v Lake,  1 SCR 761). The ONCA found that Mr. Thamby was entitled to have the Minster weigh all of the relevant considerations favouring a domestic prosecution, which the court found the Minister did not perform satisfactorily in allowing the extradition. Upon the Minster revisiting the case, bearing in mind the factors that the court instructed him to consider, the Minster still found that extradition was appropriate.
Despite Mr. Thamby’s further appeals, ONCA found that “The Minister engaged in a proper Cotroni analysis. He considered the unusual factual history of this case, noting that the applicant would have pleaded guilty to the Canadian charges before the United States requested his extradition. He observed that the decision of the provincial Crown to stay the Canadian charges on the eve of resolution because of the extradition request was entirely proper, as found by both the extradition judge and this court.”
The error of law that court of appeal found was in the Minister’s use of discretion in that he failed to account for several factors. The Minister, in revisiting the case for extradition. considered these factors. This decision was reasonable and free from the legal errors that weighed down upon the previous decision. According to Lake, this decision is therefore not reviewable by higher courts which is likely why the SCC denied leave to further appeal. For Mr. Thamby, a clerical error coupled with unfortunate timing may garner him an additional thirteen years in American prison. When a case is successfully appealed because a Minister fails to consider certain factors and then once the those factors are considered the decision is still not favourable, there is little more a person can do.