4. Litigation examples in Canada
To date, the few business human rights cases litigated in Canada have not achieved positive results for human rights plaintiffs. 1 However, recent decisions have opened up possibilities for successful corporate human rights litigation 2 .
A Way to Establish Jurisdiction: The “Forum of Necessity” Doctrine
In 2010, the Ontario Court of Appeal recognized that Canadian courts may assert jurisdiction in “exceptional cases”, “despite the absence of a real and substantial connection” under the Forum of Necessity doctrine. 3 “Where there is no other forum in which the plaintiff can reasonably seek relief, there is a residual discretion to assume jurisdiction.” 4 On appeal, the Supreme Court of Canada left open the “possible application of the forum of necessity doctrine” but did not address it directly. 5
In March 2014, the Ontario Court of Appeal reviewed this “relatively new Canadian doctrine”, first incorporated in art. 3136 of the Civil Code of Québec (C.C.Q.), which was enacted in 1991 and came into force in 1994, and then included in s. 6 of the Uniform Law Conference of Canada’s (“ULCC”) model Court Jurisdiction and Proceedings Transfer Act, 1994. 6 The Court noted that “[a]ll jurisdictions in Canada that have recognized the forum of necessity have incorporated a ’reasonableness’ test.” 7 In Ontario, a plaintiff must establish that “there is no other forum in which the plaintiff can reasonably seek relief”. 8
The “reasonableness” requirement has been stringently construed. 9 To date, only one Ontario court has assumed jurisdiction based solely on the forum of necessity doctrine. In Bouzari v. Bahremani, the only Ontario case to successfully invoke forum of necessity, the motion judge found in a default judgment that the plaintiff, an Iranian citizen – although he was a Canadian citizen at the time of the suit – was tortured in Iran by the defendant (another Iranian citizen) or at his instigation. The motion judge further found that there was “no reasonable basis upon which [the plaintiffs could be] required to commence the action in a foreign jurisdiction, particularly, the state where the torture took place, Iran”. 10 The defendant later had the default judgment set aside, and challenged jurisdiction, claiming that england was a more appropriate forum: both the plaintiff and defendant agreed that the action could not be heard in Iran. The court denied the defendant’s request. Ontario had assumed jurisdiction based on the forum of necessity – which the defendant did not initially challenge – and the defendant had not met his burden of establishing that england was clearly a more appropriate forum. 11
In 2015, the defendant – Mehdi Hashemi Bahremani – appealed against this decision. 12 In its judgment, the Ontario Court of Appeal agreed with the defendant on the basis that the motion judge had made two major errors in his assessment. The first concerned Hashemi’s ability to travel to Canada and to England. The first judge had held that the fact that Canada had repeatedly denied the defendant entry into its territory was not a valid argument to argue that he could not appear in the Ontario Court and thus contested Ontario’s jurisdiction. The second concerned the treatment of the relative procedural advantages granted by each jurisdiction, the judge having considered that proceedings before the English courts could deprive the respondents of certain rights. 13 The Court overturned both arguments, considering in particular that the loss of a legal benefit to a party is a concept that "should be applied with some caution, having regard to the principle of comity and an attitude of respect for the courts and legal systems of other countries, many of which have the same fundamental values as we do" 14 The Court then considered that the English courts were more appropriate because the objectives pursued by the doctrine of forum of necessity would be better achieved through litigation in England. 15
Examples of situations in which the doctrine has relevance include, but are not limited to:
- the breakdown of diplomatic or commercial relations with a foreign State;
- the need to protect a political refugee; or
- the existence of a serious physical threat if the debate were to be undertaken before the foreign court. 16
In the case of ACCI vs. Anvil Mining Limited, the plaintiffs tried to argue forum of necessity, but the Court of Appeal rejected the argument. However, the motion judge actually found in the plaintiff’s favour: the judge found that Quebec had jurisdiction simpliciter (i.e. that jurisdiction could be asserted against an out-of-province defendant) and then rejected the defendant’s claim of forum non conveniens. On 24 January 2012 the Quebec Court of Appeals reversed and dismissed the case. 17 This case is addressed in part II of this section looking at extraterritorial criminal liability and the role of victims and the prosecution in initiating proceedings (see below).
In March 2019, the Ontario Court of Justice issued the case of Mohammad v. Tarraf et al. 18 In that case, the Court first concluded that it did not have jurisdiction to hear the claim before it since the given reasons were not sufficient to establish its jurisdiction. The Court then used the case of WestVanInc.v.Daisleyin which it was held that a "reasonableness" test was necessary for the doctrine to be applied. In other words, it must be shown by the plaintiff, by putting forward exceptional reasons, that no other forum can be seized upon in order for him to reasonably seek relief. In the present case, the Court decided that there were indeed exceptional grounds justifying the application of the doctrine of forum of necessity, and ruled in favour of the applicant. 19
This judgment is not intended to develop the doctrine of "forum of necessity" to any greater extent in Canada. However, it does constitute a fundamental precedent in this matter since, in previous judgments on which case law has developed (in particular Van Breda v. Village Resorts Ltd and West Van Inc. v. Daisley), the Court had not declared itself competent, having declined to exercise its discretion to do so. This decision essentially demonstrates that the doctrine of “forum of necessity” is still being applied in Canada. 20
On 7 November 2016, in the case of Cook v. 1293037 Alberta Ltd., the Ontario Court of Appeal issued a judgment in which it stated that this doctrine must remain exceptional and that it cannot be invoked when necessity is the result of the appellant’s actions or mismanagement. In this case, the argument of necessity arose because the time limit for bringing an action in Alberta had expired as a result of a tactical decision by the appellants not to bring their case to the Alberta Court which was normally the appropriate forum for the case. 21
Bil’in v. Greenpark International, Inc et al.
Bil’in is an agricultural village located in the eastern portion of the 0ccupied Palestinian Territory. In order to build a settlement, in 1991, the Israeli military confiscated a portion of the land belonging to the village, which depended on farming the land for its livelihood.
In 2001, two Canadian companies, Green Park International, Inc. and Green Mount International.Inc, began to construct the settlements. In 2005, the village of Bil’in filed a civil claim with the Israeli Supreme Court against the two Canadian companies, other Israeli companies involved in the project and the Israeli military and government agencies concerned. It was alleged that both the land acquisition, building plans and permits were illegal. The motion did not mention the illegality under international humanitarian law of regulations allowing the establishment of settlements in occupied territories. The Israeli Supreme Court had already ruled that the judiciary could not decide the legality of the settlements and that the executive branch alone had jurisdiction in that matter. The village of Bil’in also filed civil suit against the two Canadian companies on 7 July 2008 in the Québec Superior Court in Montreal. After the villagers’ appeal was rejected by the Quebec Superior Court in 2011 22 , the Human Rights Committee confirmed the application of the forum non conveniens doctrine in the case Bil’in v. Greenpark. It adopted a decision under the article 5, §4, of the Optional Protocol concerning a communication filed by Bil’in’s villagers.
In February 28, 2013, the plaintiffs had filed an application against Canada before the United Nations Human Rights Committee. According to them, Canada violated its international extraterritorial human rights obligations, in particular articles 2, 7, 12, 17 and 27 of the ICCPR 23 , by failing to provide complainants with an effective remedy to hold Green Park International and Green Mount International liable. They didn’t have this opportunity because of the jurisdictional rejection raised by the Canadian courts under the doctrine of forum non conveniens. 24 Indeed, the latter had declined jurisdiction on the grounds that there was no connection between the state party and the case: the companies registered in Canada for tax purposes only but had their assets in the West Bank; the plaintiffs (who resided in Israel) turned to Canada only after having failed in front of the Israeli courts.
And, by not ensuring these two companies acted in line with the Covenant.
On 7 December 2017, the Committee hearing for the first time a matter relating to "the responsibility of a State Party in connection with acts performed by commercial enterprises under its jurisdiction in the territory of another State" declared the complaint inadmissible on several grounds:
- Complaints before the Committee may only be submitted by natural persons. However, the complainants are legal entities.
- The Committee is incompetent because the complainants are not subjects to Canadian jurisdiction.
- The Committee noted that the only link between the litigation and Canada is that the companies are registered in that State. Furthermore, the Quebec Superior Court declares itself incompetent on the discretionary ground of forum non conveniens. Lastly, in view of the limited evidence provided in the communication, the authors do not sufficiently demonstrate a link between the obligations under the Covenant and the violations by the two corporations.
Thus, the communication is inadmissible under article 2 of the Optional Protocol.
Recherches Internationales Québec v. Cambior Inc. 25
In this case, the August 1995 bursting of a tailing dam holding back waste from the ore-leaching process, poisoned a river on which the life and culture of nearly 23,000 people in Guyana depended. The Omai mine which caused the damage is wholly owned by Omai Gold Mines Limited (OGML), whose main shareholder (65%) at the time was Canadian company Cambior Inc. In 2002, Cambior Inc. held a 95% stake in OGML. The 23,000 victims, assisted by Recherches Internationales Québec (RIQ), brought a class action lawsuit against Cambior Inc in Québec seeking CAD 69 million for harm suffered.
Having initially accepted the joint jurisdiction of Canadian and Guyanese courts to handle the matter, the Canadian court ultimately ruled that Guyanese courts were the most appropriate forum. Citing forum non conveniens, the Canadian court rejected jurisdiction in August 1998. The court held that the fact that the corporation was domiciled in Québec did not constitute a special link in assessing the appropriateness of the jurisdiction. The court also rejected RIQ’s argument that Guyana’s judicial system failed to guarantee the right to a fair trial. In 2002 the Guyanese court hearing the case dismissed the claim. In 2003, a new claim was brought against Cambior Inc seeking redress for the damages resulting from the bursting of the dam.
In October 2006, the Guyanese court dismissed the claim and ordered the victims to pay for the expenses Cambior Inc. incurred during the trial.
Direct negligence liability and piercing the corporate veil: Choc v. Hudbay Minerals
Mayan Q’eqchi’ from Guatemala brought three related actions against a Canadian mining company, Hudbay Minerals, and its subsidiaries, HMI Nickel (formerly Skye Resources, Inc.) and CGN, in Ontario Superior Court of Justice. They allege that security personnel working for Hudbay’s subsidiaries, who were allegedly under the control and supervision of Hudbay, committed human rights abuses, including a shooting, a killing, and gang-rapes committed in the vicinity of the former Fenix mining project, a proposed mining operation located in eastern Guatemala. Hudbay Minerals is a Canadian mining company headquartered in Toronto. During the relevant period, Hudbay Minerals owned the Fenix mining project through CGN. Since then, HMI Nickel Inc./ Skye Resources amalgamated with Hudbay, who is now legally responsible for all its legal liabilities. CGN owned and operated the Fenix mining project in Guatemala, and was wholly-controlled and 98.2% owned subsidiary of Hudbay Minerals. The defendants’ motion to strike the three actions was denied by Justice Carole J. Brown on July 22, 2013. 26 The two main issues were whether Hudbay could be found liable in negligence for actions or omissions in another country and whether the plaintiffs had pleaded facts able to lift the corporate veil and hold Hudbay liable.
An individual complaint against Canada has been filed in February 2013 before the UN Human Rights Committee under the Optional Protocol to the International Covenant on Civil and Political Rights. 27
Torts committed in another country
The main issue in Choc v. Hudbay Minerals was whether the plaintiffs had pleaded all material facts required to establish the constituent elements of their claim of direct negligence and whether Hudbay “owed a duty of care to the plaintiffs.” 28 Because the plaintiffs did not argue that there is an established duty of care, it was necessary to apply the test for establishing a novel duty of care. the following must be proven:
- The harm complained of is a reasonably foreseeable consequence of the alleged breach;
- There is sufficient proximity between the parties that it would not be unjust or unfair to impose a duty of care on the defendants; and,
- No policy reasons exist to negatively or otherwise restrict that duty. 29
In Choc v. Hudbay Minerals, the judge concluded that the plaintiffs had pleaded all materials facts required to establish their claim of negligence. Moreover, in 2019, the Ontario Superior Court permitted the claims to proceed on the basis that it was not "plain and obvious" that Hudbay did not owe a duty of care to the plaintiff. 30
Piercing the corporate veil
In her decision in Choc v. Hudbay Minerals, the judge explained that “Ontario courts have recognized three circumstances in which separate legal personality can be disregarded and the corporate veil can be pierced: a) where the corporation is ’completely dominated and controlled and being used as a shield for fraudulent or improper conduct’ 31 ; (b) where the corporation has acted a the authorized agent of its controllers, corporate or human 32 ; and (c) where a statute or contract requires it 33 . The judge noted that “the Plaintiffs have pleaded second exception to the rule of separate legal personality” by pleading that CGN is an agent of Hudbay, and concluded that “[i]f plaintiffs can prove at trial that CGN was Hudbay’s agent at the relevant time, they may be able to lift the corporate veil and hold Hudbay liable.” 34
Because the pleadings state that Hudbay/Skye knew that violence was frequently used by personnel during forced evictions; that violence had been used at previous forced evictions it had requested; that the security personnel was in possession of illegal firearms; and that there was a general risk that violence and rape would occur, the Judge concluded that the pleadings make it reasonably foreseeable that requesting the forced eviction of a community could lead to violence and rape. 35
The judge noted that “proximity is determined by examining various factors, rather than a single unifying characteristic or test.” These include the parties’ expectations, representations, reliance, the property or other interests involved, 36 a close causal connection, and any assumed or imposed obligations. 37 The Judge concluded that “[b]ased on the plaintiffs’ pleadings, there were numerous expectations and representations on the part of Hudbay/Skye”, in particular, “Hudbay/Skye made public representations concerning its relationship with local communities and its commitment to respecting human rights, which would have led to expectations on the part of the plaintiffs. There were also a number of interests engaged, such as Hudbay/Skye’s interest in developing the Fenix project, which required a ’relationship with the broader community, whose efficient functioning and support are critical to the long-term success of the company in Guatemala’, according to Hudbay’s President and CeO.” The judge found that a prima facie duty of care may be found to exist. 38
The judge found that “it is not plain and obvious that policy reasons would negative or otherwise restrict a prima facie duty of care” because there “are clearly competing policy considerations in recognizing a duty of care in the circumstances of the case.” 39
The plaintiffs must now prove the facts alleged in their complaint at trial, but the ruling is significant in that it recognizes the possibility of holding corporations liable for their negligence in foreign countries.
In June 2015, the Court ordered HudBay to disclose extensive documentation concerning its corporate structure and control over its subsidiaries, which Hudbay did in December 2016. 40 Also, in November 2017, the plaintiffs, 11 Guatemalan Q’eqchi’ women, travelled to Canada to give testimony as part of the ongoing discovery procedure. In September 2019, they requested to add some details about the January 2007 attacks. Despite Hudbay Minerals’ attempt to block the request, the Superior Court of Justice accepted the plaintiffs’ amendments. 41 No final decision has been issued.
The Ontario Superior Court’s decision that Hudbay may owe a duty of care to the plaintiffs is significant. 42 As highlighted by Above Ground, “the court’s ruling sets a precedent with respect to parent company liability. For the first time in Canada, cases involving foreign plaintiffs who allege to have suffered harm caused by Canadian company’s overseas operations will proceed to trial.” 43
García, García Mnroy, Castillo Pérez, Castillo Herrera, Pérez Martínez, Aguilar Castillo and Martínez Sasvín v. Tahoe Resources Inc.
On June 18, 2014, seven Guatemalan men filed a civil lawsuit in a Vancouver court against Canadian mining company Tahoe Resources Inc. for injuries they suffered when Tahoe’s security personnel opened fire on them at close range. The men, residents of San Rafael Las Flores, where the company’s Escobal mine is located, allege that Tahoe is legally responsible for the violence inflicted on them as they peacefully protested against the mine 44 .
The plaintiffs are suing Tahoe, a company incorporated in British Columbia, for battery and negligence. The lawsuit claims that Tahoe’s manager of security ordered the shooting. It further alleges that Tahoe expressly or implicitly authorized the manager’s conduct or was negligent in its management of security personnel. The plaintiffs argue that Tahoe was aware of widespread community opposition to the mine and the manager’s conflictive relationship with the community. In addition to the civil case in Canada, criminal charges have been filed in Guatemala against Tahoe’s former security manager. 45 On November 9, 2015, the Supreme Court of British Columbia rendered a decision staying the procedure on the basis of forum non conveniens, considering that “Guatemala is clearly the more appropriate forum for the determining the matters in dispute”. 46
The plaintiffs appealed the decision on November 1, 2016 to the British Columbia Court of Appeal. The Court of Appeal overturned the decision of the Supreme Court of British Columbia, arguing that there was a risk that the appellants would not have access to a fair trial in Guatemala. Tahoe Resources appealed, but the Supreme Court of Canada declined to hear the appeal.
In February 2019, Pan American Silver Corp acquired Tahoe Resources. Following this acquisition, the company acknowledged that the shooting in 2013 at its San Rafael mine in Guatemala infringed the human rights of the plaintiffs and apologized for the lack of respect of their human rights. As a result, the company agreed to enter into an agreement with the victims to compensate them and settle the matter.
Chevron Corp. v. Yaiguaje
On 4 September 2015, the Supreme Court of Canada considered that Canadian courts have jurisdiction to decide if Ecuadorian villagers allegedly harmed by Texaco’s (now merged with Chevron) operations in their region can have the Ecuadorian judgment (U.S.$ 9.51 billion in environmental and punitive damages) recognized and enforced in Canada (against Chevron Canada). 47
“Since the initial judgment, Chevron has fought the plaintiffs in the U.S. courts and has refused to acknowledge or pay the debt. As Chevron does not hold any Ecuadorian assets, the plaintiffs commenced an action for recognition and enforcement of the Ecuadorian judgment in the Ontario Superior Court of Justice. It served Chevron at its head office in California, and served Chevron Canada, a seventh-level indirect subsidiary of Chevron, first at an extra-provincially registered office in British Columbia, and then at its place of business in Ontario. Inter alia, the plaintiffs sought the Canadian equivalent of the award resulting from the judgment of the Appellate Division of the Provincial Court of Justice of Sucumbíos. Chevron and Chevron Canada each sought orders setting aside service ex juris of the amended statement of claim, declaring that the court had no jurisdiction to hear the action, and dismissing or permanently staying the action.”
The court found that “To recognize and enforce such a (foreign) judgment, the only prerequisite is that the foreign court had a real and substantial connection with the litigants or with the subject matter of the dispute, or that the traditional bases of jurisdiction were satisfied… To conclude otherwise would undermine the important values of order and fairness that underlie all conflicts rules, and would be inconsistent with this Court’s statement that the doctrine of comity must be permitted to evolve concomitantly with international business relations, cross-border transactions, and mobility.” 48
This case gave rise to legal proceedings in the U.S., in Ecuador as well as in investment arbitration. 49
Nevsun Resources Ltd. v. Araya (2020)
In November 2014, three Eritrean workers claimed damages from Nevsun Resources, a Canadian mining company, before the Supreme Court of British Columbia for alleged human rights abuses in a mine in Eritrea. The plaintiffs alleged that the Canadian corporation had been complicit in breaches of international human rights law, including forced labor, slavery and torture, by the Eritrean government. 50
In October 2016, the Supreme Court of British Columbia rejected Nevsun’s forum non conveniens claim. 51 The court concluded that there was a real risk for the plaintiffs of not obtaining justice in Eritrea. 52
On 28 February 2020, a majority of the Supreme Court of Canada ruled that Canadian corporations can be sued in Canada for breaches of customary international law committed abroad. 53 This case law brings some significant changes. This is the first time in Canadian legal history that the Supreme Court of Canada has concluded that customary international law forms part of Canadian common law. The Court’s application of customary international law to corporations is also a significant change. Previously, customary international law was seen as applicable only to state actors and not to private actors such as corporations. The court also ruled that the act of state doctrine did not operate in Canadian law.