Supreme Court of Canada issues reasons for judgment in Heller v. Uber

On June 26, 2020, the Supreme Court of Canada issued reasons for judgment in Heller v. Uber, an important case about the ability of employers in the “gig economy” to compel their employees to pursue their rights by way of expensive arbitration proceedings.  More particularly, the case concerned the doctrine of unconscionability which, in simple terms, allows a court to refuse to enforce a contract, or provisions of a contract, that are grossly unfair.

Wes McMillan and Greg Allen represented the Community Legal Assistance Society as an intervenor in the case and argued that the doctrine of unconscionability should be broadly understood and focus on the impact of the contract on the weaker party, rather than on whether the stronger party has intentionally taken advantage of the weaker party.

The majority of the Court held that Uber’s contract – which required Uber drivers to bring any complaints by way of arbitration pursuant to the law of The Netherlands, and incur fees of $14,500 just to commence the arbitration – unconscionable.

Of more general importance, the majority provided needed clarity as to how and when the doctrine of unconscionability is to be applied.  As the doctrine of unconscionability can apply to any form of contract, the Court’s decision will be of enduring interest.

A contract will be deemed unconscionable if there is an inequality of bargaining power and an improvident bargain.  The majority rejected the application of a rigid test in favour of a highly contextual analysis to be applied on a case-by-case basis.

Importantly, the majority of the Court recognized that the doctrine of freedom of contract is not sacrosanct and that where the principles underlying it are not present, it will be of less force.  This has particular application to standard form contracts of adhesion which are a practical necessity for participation in modern society. 

Allen / McMillan is pleased to have been able to represent the Community Legal Assistance Society in this important case that not only affects the rights and interests of Uber drivers, but of all Canadians.

Allen / McMillan argues at first Supreme Court of Canada hearing conducted by Zoom

On June 9, 2020, AMLC’s Wes McMillan appeared, via Zoom, in the Supreme Court of Canada to make submissions on behalf of the Condominium Home Owners’ Association of BC (“CHOA”) in the case Owners, Strata Plan LMS 3905 v. Crystal Square Parking Corporation.

This was the first time a Supreme Court of Canada hearing took place entirely by videoconference.

The case raises important issues concerning a strata corporation’s obligation to pay for property rights granted to it by way of easements and other charges registered at the Land Title Office.  It also addresses concerns that developers, through self-interested contracts, may burden strata corporations with significant financial obligations without the strata corporation ever formally agreeing to them.

CHOA argued that the common law concerning pre-incorporation contracts does not apply to strata corporations because the concern that pre-incorporation contract law was developed to address does not exist in the strata context.

Furthermore, CHOA argued that a strata corporation ought not to be required to pay for property rights granted to it by way of registered charges that pre-date the creation of the strata corporation.

AMLC is proud to represent non-profit organizations like CHOA to ensure its members and the persons it represents have a voice in our legal system.

Robin Bennett wins two petitions against the City of Richmond

On March 30, 2020, the BC Supreme Court released twin decisions in Minster Enterprises Ltd. v. City of Richmond and Yu v. City of Richmond.

Robin Bennett of Allen / McMillan Litigation Counsel acted for the petitioners in both proceedings. The issue before the court was whether the City was reasonable to conclude that the petitioners’ building permits had expired due to “construction”, as defined in the City’s Building Regulation Bylaw, not commencing within 6 months of the permits being issued. However, in both cases, the properties had been preloaded at the relevant time, a process in which a large quantity of sand is deposited in order to compress the underlying ground in advance of building. Once the ground is sufficiently compacted – which typically takes months or even years – the preload is removed and construction proceeds. Finding that the bylaw’s definition of “construction” was broad enough to include preloading, the Court set aside the City’s decision and reinstated the petitioners’ building permits.

The City of Richmond is appealing both decisions.

Liam Babbitt wins 3-day trial

On February 6, 2020 the British Columbia Provincial Court released their decision in Immiglobe Canadian Immigration Corp. v. Kashef. In the trial, the claimant sought damages for unpaid amounts under an immigration consultancy contract.  The defendant counterclaimed, seeking return of funds she had previously paid under the same contract.  Liam Babbitt represented the claimant, and ran the trial just two short weeks after his call to the bar.  Liam’s client was successful in both the claim and counterclaim.  This was due in large part to Liam’s cross-examination skills, as the trial judge concluded that she could “give little weight to [the defendants’] testimony” as a result of credibility concerns. 

Allen / McMillan congratulates Liam on his trial victory and notes that, at this pace, Liam will reach 100 trial victories in his ninth year of call.

Allen / McMillan argues at Supreme Court of Canada

On November 6, 2019, AMLC’s Wes McMillan and Greg Allen appeared in the Supreme Court of Canada to make submissions on behalf of the Community Legal Assistance Society of British Columbia (“CLAS”) who was granted leave to intervene in the case Heller v. Uber.

The appeal raises important issues concerning arbitration, particularly in the context of employment-like relationships in the modern “gig” economy. 

The online contract to which Uber drivers are required to click “I Agree” provided that any disputes between a driver and Uber must be arbitrated under the law of The Netherlands.  Mr. Heller, an Uber driver, worked exclusively in Ontario.   In order to commence an arbitration, Mr. Heller would be required to pay upfront administrative costs of $14,500 USD.

Mr. Heller commenced a class action proceeding in Ontario for an order that he, and other Uber drivers, are employees under the Ontario Employment Standards Act and for payment of amounts he would have been owed as an employee.

Uber brought an application staying the proceeding in favour of arbitration.  Uber was successful at first instance, but that decision was overturned on appeal to the Ontario Court of Appeal.  Uber appealed that decision to the Supreme Court of Canada.

One of the issues in the case is whether the mandatory arbitration provision is unconscionable and therefore invalid.

CLAS argued that the four-part test for unconscionability needs to be reformulated to reflect modern commercial and employment reality.  The four-part test requires a finding that the weaker party seeking to strike the clause as unconscionable show that the stronger party knowing took advantage of the weaker party’s disability or unique vulnerability.

CLAS argued that this requirement ignores the modern reality that online contracts are agreed to as a matter of course for a number of legitimate reasons that have nothing to do with a disability or vulnerability.  Furthermore, in this context, from the perspective of the stronger party the weaker party is nothing more than an IP address.  Thus, one could never marshal evidence to who the larger party knowingly took advantage of the weaker party.

CLAS argued that the test for unconscionability should return to its historic roots; the weaker party need only show a significant inequality of bargaining power and a grossly improvident bargain. 

AMLC is proud to undertake advocacy work on behalf of organizations like CLAS and is eagerly awaiting the Supreme Court of Canada’s decision on this important issue. We will provide a further update on this case when the decision is released.

Greg Allen and Jorie Les win 14 day trial

On October 2, 2019, the British Columbia Supreme Court released its decision in Pink et al v 0957765 BC Ltd et al. This case was heard over a 14 day period in April and May 2019, with Greg Allen and Jorie Les representing the defendants.

In the case, Allen / McMillan’s client owned a piece of real estate in downtown Vancouver which was subject to a purchase agreement in the amount of $39 million. The transaction did not close, but the real estate agents on the transaction nevertheless sought payment of $1.3 million in commission. The trial judge held that the real estate agents themselves contributed to the collapse of the transaction, and rejected the real estate agents’ claim to a commission in its entirety. Costs of the trial were awarded to Allen / McMillan’s client.

Read the decision of the trial judge here: https://www.bccourts.ca/jdb-txt/sc/19/16/2019BCSC1684.htm