Male circumcision gaining ground as anti-AIDS weapon in Kenya

KISUMU, Kenya - Sitting underneath the bright murals at a clinic, 22-year-old Elijah Ochanda gestures at his shorts and explains: "When they remove this thing, it makes you safer."

He is talking about the circumcision he is about to undergo at the urging of his older brother. He has watched several friends die of AIDS, and has come to believe the science that says circumcision can prevent men from being infected.

Dr. Robert Bailey, an epidemiology professor from the University of Illinois, is helping to roll out Kenya's first free circumcision project, which offers operations at public health facilities. Such projects are already running in Swaziland, Rwanda and Zambia, other countries where a large percentage of the population traditionally do not circumcise.

Bailey's study in Kisumu, western Kenya found infection rates were cut by 60 per cent among men who were circumcised. The study, funded by the U.S. Institutes of Health and the Canadian Institutes of Health Research, was one of several that led the World Health Organization to include circumcision in its prevention policies a year ago.

It prompted the Kenyan government to form a task force to promote voluntary, medically safe operations.

But it's not that simple. Circumcision has become entangled in the violence that followed the disputed presidential election last December.

Supporters of President Mwai Kibaki, whose Kikuyu tribe circumcises its men, clashed with supporters of opposition leader Raila Odinga, who is Luo, a tribe that does not circumcise. The rite took on political significance, with Odinga's rivals publicly saying he wasn't a complete man. Many Luo were forcibly circumcised in the violence.

The violence has subsided, but Bailey says it has made the new power-sharing government, with Odinga as prime minister, wary of taking a public stance on circumcision. The disruption initially delayed the launch of the task force's program.

Still, it's noteworthy that Ochanda has overcome the tradition issue in opting for circumcision. And the Luo tribe's council of elders doesn't forbid it outright although they do say it is contrary to their traditions and worry it will promote promiscuity.

"If you want to do that on your own, no one will question you, but it is not our custom," said elder Odungi Randa.

James Morton
1100 - 5255 Yonge Street
Toronto, Ontario
M2N 6P4

OPP will make arrests: Fantino

A hastily convened Longhouse meeting took place Friday between native Confederacy chiefs and Ontario Provincial Police Commissioner Julian Fantino.

Fantino seemed to warn Confederacy leaders about the implications of the injunction the City of Brantford is trying to obtain in court this month.

"He said if an injunction comes down, the OPP will have to follow it and make arrests," said a native person who attended the meeting but asked not to be identified in print.

Two OPP lawyers also appeared at the first hearing of the injunction in Brantford court on Friday, even though the city's injunction doesn't apply to land policed by the OPP.

When Fantino left the native longhouse, he found someone had put a native Warrior sticker on his vehicle, which he stopped to remove.

In an interview earlier this week, Fantino said the OPP are looking into the fees being charged by the Haudenosaunee Development Institute, which is demanding payments from developers. Fantino said those fees are just one of a number of delicate matters the OPP is reluctantly handling.

James Morton
1100 - 5255 Yonge Street
Toronto, Ontario
M2N 6P4

Pastor says parting with McCain best for both after storm over Hitler remark

Eric Gorski, THE ASSOCIATED PRESS

A well-known Texas pastor and televangelist said Friday his life's work has been "mischaracterized and attacked" in the media storm over his endorsement of Republican presidential candidate John McCain.

McCain rejected Rev. John Hagee's endorsement on Thursday after an audio recording from the late 1990s surfaced in which the preacher suggested God sent Adolf Hitler to help Jews reach the promised land.

At a news conference Friday at the San Antonio headquarters of his TV ministry, Hagee said parting with McCain is "best for both of us and the country." Hagee had withdrawn his McCain endorsement Thursday.

Hagee's months-old endorsement had proved problematic for McCain because of earlier controversy over the preacher's views on Roman Catholicism, including what some critics interpret as the pastor's labelling of the Catholic church as "the great whore."

When those comments started getting attention, McCain said he doesn't agree with all of Hagee's views, but that wouldn't prevent from accepting his support.

Just last week, Hagee sought to put the matter to rest by issuing a letter expressing regret for "any comments that Catholics have found hurtful." McCain called the apology laudable.

But confronted with Hagee's sermons about Hitler and Israel, McCain apparently had enough. He called Hagee's comments "crazy and unacceptable" and repudiated the endorsement.

Hagee on Friday said he in no way condones the Holocaust or "that monster Adolf Hitler."

"I have devoted most of my adult life to ensuring that there will never be a second Holocaust," said Hagee, who did not take questions from reporters.

Hagee left it to Rabbi Aryeh Scheinberg of Congregation Rodfei Shalom, a modern Orthodox synagogue in San Antonio, to provide an explanation of his offending comments.

Standing with Hagee at the news conference, Scheinberg called it "ironic and absurd" that Hagee's words were twisted and labelled anti-Semitic when Hagee was lecturing on one Jewish perspective of the Holocaust.

"Pastor interpreted a Biblical verse in a way not very different from several legitimate Jewish authorities," Scheinberg said. "Viewing Hitler as acting completely outside of God's plan is to suggest that God was powerless to stop the Holocaust, a position quite unacceptable to any religious Jew or Christian."

Scheinberg called Hagee a courageous Christian and a man guided by "an unparalleled moral compass."

McCain on Thursday also rejected the endorsement of Ohio megachurch pastor Rod Parsley, who has sharply criticized Islam and called the religion inherently violent.

James Morton
1100 - 5255 Yonge Street
Toronto, Ontario
M2N 6P4

Khadr Decision Released -- Disclosure Ordered

The Supreme Court decision in Canada (Justice) v. Khadr, 2008 SCC 28 was released a few moments ago.  The short version is the Charter applies and full disclosure, subject to some limited national security restrictions must be made.  A summary follows.

           

K, a Canadian, has been detained by U.S. Forces since 2002 at Guantanamo Bay, Cuba, where he is currently facing murder and other terrorism-related charges.  He was taken prisoner in Afghanistan when he was 15 years old.  In 2003, Canadian officials, including agents of the Canadian Security and Intelligence Service, questioned K at Guantanamo Bay with respect to matters connected to the charges he is now facing, and shared the product of these interviews with U.S. authorities.  After formal charges were laid against him, K, invoking Stinchcombe, sought disclosure in Canada of all documents relevant to these charges in the possession of the Canadian Crown, including the records of the interviews.  The Federal Court refused the request, but the Federal Court of Appeal set aside the decision and ordered that unredacted copies of all relevant documents in the possession of the Crown be produced before the Federal Court for review under ss. 38 ff. of the Canada Evidence Act.

 

The Supreme Court dismissed the appeal.  The Federal Court of Appeal’s order should be varied as it relates to the scope of disclosure to which K is entitled as a remedy under s. 7 of the Canadian Charter of Rights and Freedoms.

 

K is entitled to disclosure from the appellants of the records of the interviews, and of information given to U.S. authorities as a direct consequence of conducting the interviews.  The principles of international law and comity of nations, which normally require that Canadian officials operating abroad comply with local law and which might otherwise preclude application of the Charter to Canadian officials acting abroad, do not extend to participation in processes that violate Canada’s binding international human rights obligations.  The process in place at Guantanamo Bay at the time Canadian officials interviewed K and passed on the fruits of the interviews to U.S. officials has been found by the U.S. Supreme Court, with the benefit of a full factual record, to violate U.S. domestic law and international human rights obligations to which Canada subscribes.  The comity concerns that would normally justify deference to foreign law do not apply in this case.  Consequently, the Charter applies.

 

With K’s present and future liberty at stake, Canada is bound by the principles of fundamental justice and is under a duty of disclosure pursuant to s. 7 of the Charter.  The content of this duty is defined by the nature of Canada’s participation in the process that violated its international human rights obligations.

 

In the present circumstances, this duty requires Canada to disclose to K records of the interviews conducted by Canadian officials with him, and information given to U.S. authorities as a direct consequence of conducting the interviews, subject to claims for privilege and public interest immunity.  Since unredacted copies of all documents, records and other materials in the appellants’ possession which might be relevant to the charges against K have already been produced to a designated judge of the Federal Court, the judge will now review the material, receive submissions from the parties and decide which documents fall within the scope of the disclosure obligation. 

 

 

There Are No Cold Cases When It Comes To Murder

Third arrest in 1996 Hamilton slaying

May 23, 2008 08:35 AM

THE CANADIAN PRESS

HAMILTON–Hamilton police have made a third arrest in connection with the shooting death of a man in his home 12 years ago.

A Hamilton man, 31-year-old Christian Wright, is charged with being an accessory after the fact to first-degree murder.

Gary Gatecliffe was 43 when he was shot as he slept in his bed on the evening of Oct. 3, 1996.

Lynda and Joseph Drosi, both 41, were arrested and charged on April 30 with first-degree murder plus obstruction of justice.

Lynda Drosi is Gatecliffe's ex-wife.

Gatecliffe, who ran a business called Roof Canada Plus, was the father of a girl who was four at the time of his death.

Significant Malicious Prosecution Decision

McNeil v. Brewers Retail Inc., 2008 ONCA 405, released yesterday is a remarkable decision upholding a huge award for malicious prosecution.

Legally a significant issue was the clarification of the requirement that a prosecution be initiated by the defendant for there to be a claim for malicious prosecution.

The facts are fairly straightforward. A former employee of Brewers Retail Inc. (“BRI”), Douglas McNeil, was accused of stealing about $140 from the cash register. A subsequent investigation by McNeil's union showed BRI withheld evidence that proved his innocence, and McNeil's theft convictions were quashed in 1997.

Douglas McNeil was fired in 1994 from a Niagara Falls-area franchise after being convicted of theft.

At trial two years ago, court heard that, while BRI - known publicly as The Beer Store - gave police video evidence showing McNeil taking money from the cash register, footage of him returning the cash was not shown at any point during court proceedings.

The court heard that on two occasions when McNeil removed cash from the till, his transaction was balanced by returning funds. Yesterday’s decision noted:

"By its verdict, it is apparent that the jury viewed BRI as a calculating and insensitive company that was prepared, for its own purposes, to see an innocent man convicted of a crime he knew he did not commit. … The duplicity and deception practiced by BRI was not limited to a one-time act of folly that occasioned limited harm; rather, BRI carried on the charade for the better part of 13 years."

Following a 17-day jury trial in 2006, BRI was found liable for malicious prosecution and ordered to pay damages and costs of $2,078,120.27.

The Court’s ruling on initiating the proceedings follows:

Malicious Prosecution

[44] There are four necessary elements that must be proved for a plaintiff to succeed in an action for malicious prosecution:

a) The proceedings must have been initiated by the defendant.

b) The proceedings must have been terminated in favour of the plaintiff.

c) The absence of reasonable and probable cause; and

d) Malice, or a primary purpose other than that of carrying the law into effect.

See Nelles v. Ontario, [1989] 2 S.C.R. 170 at 193.

[45] The focus of BRI’s argument is on initiation. The trial judge’s charge to the jury on the requirement of initiation was as follows:

The first question of fact for you to determine is whether the plaintiff has proven that the criminal proceedings against Doug McNeil were initiated by one or more of the defendants. The plaintiff must prove that the defendant or defendants were the persons who set the criminal proceedings in motion against the plaintiff or the person or persons who aided or encouraged the prosecution as its real instigator. It is not necessary for the plaintiff to prove that the defendant or defendants actually laid the information, as long as you are satisfied on the preponderance of evidence that the defendant or defendants were the ones who were actively instrumental in setting the criminal proceedings in motion.

If you find that the defendant or defendants fairly and truthfully disclosed to the police or to the Crown Attorney all matters within their knowledge that a reasonably prudent person would believe material to the question of the plaintiff’s guilt or innocence and that the determination to prosecute was made by the police or the Crown Attorney or some other responsible person, then the defendant or defendants are not responsible for that prosecution. If, however, you find that the defendant or defendants directed or interfered with the prosecution or insisted that the Crown Attorney or police prosecute, then you would find the defendant or defendants responsible for the prosecution. If the defendant or defendants knowingly provided the police with false information with the intention that the police would take action, this does not necessarily amount to setting the law in motion as to make the defendant or defendants responsible. You must consider the nature of the allegations, the circumstances in which they were made, and the effect it had on the eventual prosecution. In other words, you must determine whether the defendants by providing the false information were actively involved and instrumental to the prosecution. If you find that none of the defendants are responsible for initiating the prosecution, your verdict will be for the defendant and you will proceed no further.

[46] BRI made no objection to the trial judge’s charge on initiation perhaps because the instructions provided were favourable to the defence. The charge left the jury with the impression that a finding of initiation required them to accept the respondents’ position that the defendant instigated the prosecution by supplying false evidence in circumstances where the police had to wholly rely on it and did rely on it.

[47] BRI’s principle submission on this issue is that initiation and malice are separate watertight compartments and that, in deciding whether a person has initiated a prosecution, no qualitative assessment may be undertaken as to whether a person has provided false information or deliberately withheld information from the police. No authorities were submitted by BRI to support this submission and in fact, the jurisprudence suggests a contrary view. The relationship between falsely and maliciously providing information and initiation of a prosecution was described in the House of Lords decision of Martin v. Watson [1996] A.C. 74 at 86:

Where an individual falsely and maliciously gives a police officer information indicating that some person is guilty of a criminal offence and states that he is willing to give evidence in court of the matters in question, it is properly to be inferred that he desires and intends that the person he names should be prosecuted. Where the circumstances are such that the facts relating to the alleged offence can be within the knowledge only of the complainant, as was the position here, then it becomes virtually impossible for the police officer to exercise any independent judgment, and if a prosecution is instituted by the police officer the proper view of the matter is that the prosecution has been procured by the complainant.

[48] This governing principle from Martin v. Watson has been followed and applied in Ontario law in the assessment of the initiation element. See Scintilore Explorations Ltd. v. Larche (1999), 90 A.C.W.S. (3d) 109 at para. 238 (S.C.J.); Wood v. Kennedy (1998), 165 D.L.R. (4th) 542 at para. 50 (Ont. Gen. Div.). Thus, BRI’s principle assumption that the truth of the information provided or the misconduct of the individual providing that information should not be considered at the initiation stage must be rejected.

[49] BRI further suggests that a private party who goes to the police with a criminal allegation initiates the prosecution only if it is “virtually impossible” for the police to independently exercise discretion or judgment as to whether to lay an information. BRI submits that this test has not been satisfied because it gave the entire tape containing the exculpatory evidence to the police and Detective Kane confirmed that an independent evaluation was conducted prior to laying charges.

[50] In contrast, the respondents argue that the law recognizes that there may be a variety of ways to satisfy the initiation requirement, apart from simply the “virtual impossibility” test. Reliance is placed on the decision in Martin v. Watson, which accepted the view that a person may be regarded as the prosecutor or the individual who initiated the action if “he puts the police in possession of information which virtually compels an officer to lay an information; if he deliberately deceives the police by supplying false information in the absence of which the police would not have proceeded; or if he withholds information in the knowledge of which the police would not prosecute.” Martin v. Watson at 84, referring to Commercial Union Assurance Co. of N.Z. Ltd. v. Lamont [1989] 3 N.Z.L.R. 187 at 207-08. See also Berman v. Jenson (1989), 77 Sask. R. 161 at 166 (Q.B.), in which the court articulates a similar view of initiation.

[51] The respondents also point out that BRI did not object to the charge on the basis that it lacked an instruction to apply the “virtual impossibility” test.

[52] In our view, this is not a case in which we must decide all the factors that could, in any particular case, satisfy the element of initiation. On the facts of this case, it was open to the jury to find that BRI knowingly withheld exculpatory information from the police which the police could not be expected to find and indeed did not find upon their review of the tapes. But for the withholding of this essential information, McNeil would not have been charged.

[53] The facts here confirm that the police and the Crown relied wholly on BRI, which actively and deliberately misled them. Only a trained operator of the video monitor could properly review the tapes. The police were unable, through their own due diligence, to uncover the exculpatory evidence available to BRI prior to laying charges.

[54] As a result, the police did not have all the information available to BRI prior to laying charges. The appellant’s November, 1993 summary of the tapes identifying the exculpatory evidence and Detective Kane’s evidence that he was never told about the exculpatory evidence until after the criminal trial is strong evidence that BRI deliberately withheld information when it went to the police.

[55] Further, contrary to the appellant’s submission, the jury had evidence that Detective Kane did not conduct an independent investigation. Kane claimed that he used MacFarlane’s witness statement as the basis for his report, only to be confronted with the fact that he used it verbatim. Furthermore, there was evidence from which the jury could find that it was virtually impossible for Kane to perform an independent investigation before laying charges. Perhaps the best evidence is the fact that neither he, nor McNeil’s counsel, nor McNeil himself could locate the exculpatory portion of the alleged US money theft on the videotape.

Military judge rejects call to delay arraignment of 9-11 Guantanamo suspects

May 22, 2008

THE ASSOCIATED PRESS

GUANTANAMO BAY NAVAL BASE, Cuba - A U.S. military judge has denied motions to delay the arraignments of five Guantanamo detainees suspected of mounting the Sept. 11 terrorist attacks.

Marine Col. Ralph Kohlmann says the military commission finds that the interests of justice will be best served by completing the arraignments on June 5.

In the ruling, Kohlmann says the case is complicated but it is "precisely because of the anticipated complexity of this case that it is important that the process get under way."

James Morton
1100 - 5255 Yonge Street
Toronto, Ontario
M2N 6P4

BCE shares plunge as court sides with bondholders

TORONTO (Reuters) - Shares of BCE Inc fell 13 percent on Thursday on fears that a Quebec court ruling could kill its C$34.8 billion ($35.2 billion) buyout by a group of investors led by the Ontario Teachers' Pension Plan.

In a ruling released late on Wednesday, the Quebec Court of Appeal backed debtholders who had complained that the transaction, the world's largest leveraged buyout, was unfair.
The court said BCE, Canada's biggest telecom company, failed to prove that a buyout could have been structured to provide a satisfactory price for the company's shares while avoiding an adverse effect on the debenture holders.

BCE shares plunged C$4.71 to C$32.41 on the Toronto Stock Exchange and were down $4.98 at $32.85 in New York.

News of the court ruling came days after reports that the banks financing BCE's buyout were trying to renegotiate terms, also raising uncertainty over whether the deal would close.

"In our view, the power in the negotiation between BCE/purchasers and the banks has just shifted significantly in favor of the banks," National Bank Financial analyst Greg MacDonald wrote in a note to clients.

"In addition, the bondholders will not be satisfied unless they are paid in full."

Wednesday's ruling sent the case back to the lower court that had rejected the bondholders' complaint in March. BCE said it and its would-be buyers would seek to appeal the decision to the Supreme Court of Canada as quickly as possible.

Mark Meland, a lawyer representing the bondholders, said the appeals court ruling essentially stops the deal from proceeding in its present form.

"The court of appeal has decided that the deal will not go through," he said. "Unless (the ruling) is overruled by a higher court, the plan of arrangement is terminated."

Meland said his clients are "ecstatic" about the result and plan to "vigorously contest any attempt by BCE to overturn the judgment."

He said the deal has led to a 20 percent decrease in the value of the bonds in question and saw their credit ratings cut significantly. At the same time, equity shareholders were receiving a premium for their stock.

BONDHOLDER NEGOTIATIONS POSSIBLE

Genuity Capital Markets analyst Dvai Ghose said BCE could try to negotiate with bondholders, given that the bonds in question carry C$2 billion in face value -- a relatively small portion of the overall deal.

"BCE could offer early redemption with penalties," he wrote in a research note. "We would not ignore this."

The Supreme Court has nothing on its agenda for the weeks of June 9 and June 16, so it could in theory deal with the issue on an expedited basis before a June 30 deadline to close the takeover.
Even before the ruling, BCE's stock had been well below the C$42.75 offer price as investors worried that the deal could be repriced, delayed or scrapped, particularly given tight credit markets.

Also on Thursday, Canada Pension Plan Investment Board Chief Executive David Denison said a deal BCE's size "could not happen in today's markets." The CPPIB had bid for BCE but ultimately lost out to the Teachers' offer.

MacDonald said the latest court ruling added yet another element of doubt.
"The market will consider the real possibility that the purchasers will walk from the deal after the June 30 outside date, after which they are no longer obligated to pay the break fee," he wrote.

The buyout proposal includes an C$800 million break fee that BCE would have to pay under certain circumstances if the deal falls through, and a reverse break fee of C$1 billion that the buyers would pay if they pull the plug.

POSSIBILITY OF TELUS BID LINGERS

There has been speculation that Telus Corp, Canada's No. 2 phone company, could return to mount an offer for BCE.

Telus was in talks to acquire BCE before the Teachers' group emerged as the winner, but walked away citing "inadequacies" in the bidding process.

However, many analysts believe a Telus bid would likely meet opposition from regulators, as it would lessen competition. Also, Telus shares are down some 28 percent from a year ago, making them a less attractive acquisition currency.

Teachers' partners in the BCE bid are U.S.-based private equity firms Providence Equity Partners, Madison Dearborn Partners and Merrill Lynch Global Private Equity.

Fly In Bottled Water -- SCC Decision

This morning the Supreme Court released its decision in Mustapha v. Culligan of Canada Ltd., 2008 SCC 27. The case involved liability for a fly in bottled water and whether damages were too remote to allow recovery.



In the course of replacing an empty bottle of drinking water with a full one, M saw a dead fly and part of another dead fly in the unopened replacement bottle. Obsessed with the event and its "revolting implications" for the health of his family, he developed a major depressive disorder, phobia and anxiety. He sued C, the supplier of the bottle of water, for psychiatric injury.



The trial judge awarded him general and special damages, as well as damages for loss of business, but the Court of Appeal overturned the judgment on the basis that the injury was not reasonably foreseeable and hence did not give rise to a cause of action.



The Supreme Court agreed and the appeal and the cross-appeal were dismissed.



M's damages are too remote to allow recovery. As the manufacturer of a consumable good, C owed M, the ultimate consumer of that good, a duty of care in supplying bottled water to him, and it breached the standard of care by providing M with contaminated water.



The requirement of personal injury, which includes serious and prolonged psychological injury, is also met: M suffered a debilitating psychological injury which had a significant impact on his life. C's breach caused that injury in fact, but not in law: M failed to show that it was foreseeable that a person of ordinary fortitude would suffer serious injury from seeing the flies in the bottle of water he was about to install.



Unusual or extreme reactions to events caused by negligence are imaginable but not reasonably foreseeable. In this case, the trial judge erred in applying a subjective standard.



The claim for damages for breach of contract also fails. M's damages could not be reasonably supposed to have been within the contemplation of the parties when they entered into their agreement.

Oppression Remedy, Expectations of Stakeholders in Publicly Traded Companies During Takeovers -- An Unexpected Result from Quebec

Oppression Remedy, Expectations of Stakeholders in Publicly Traded Companies During Takeovers -- An Unexpected Result from Quebec

 

Yesterday’s Quebec Court of Appeal decision in BCE 2008 QCCA 935 has some important implications for the oppression remedy across the Country.

 

The narrow point the case seems to turn on the Court’s ruling that, once a publicly traded company is “in play” (there are bidders for the company), the directors’ duty is not merely to maximize shareholder value but to ensure all stakeholders of the company are treated fairly:

 

[99]     It is clear from the principles enunciated by the Supreme Court in Peoples that at no time do the directors have an overriding duty to act only in the best interests of the shareholders and to ignore the adverse effect on the interests of the debentureholders.

…

 

[102]   The Court agrees with this analysis and concludes that the premise advanced by BCE that, once the corporation was in play, the Board could only consider ways to maximize the value for the shareholders, is erroneous. From a reading of all the judgments under appeal, it appears that the trial judge accepted this premise. By so doing, the trial judge erred and conducted his assessment of the conduct of the SOC and the Board and the fairness of the Plan from an erroneous perspective.

 

[103]   Besides looking to the contractual rights flowing from the Trust Indentures, the Board should have considered the interests (including reasonable expectations) of the debentureholders.

 

…

 

 [106]  The interests of the debentureholders, which are wider than their contractual legal rights flowing from the Trust Indentures, should have been considered by the Board. Having regard to the finding of fact that the Plan adversely affected the interests of a class of securityholder (debentureholders), it was incumbent on the Board to look at their interests with a view to examining whether it was possible to alleviate or attenuate all or some of the adverse effects. Could this have been accomplished? The answer is unknown, because the Board did not examine the issue. They operated on the principle expressed in Revlon v. MAC Andrew & Orbes Holdings Inc.  This, indeed was the finding of fact by the trial judge:

 

In the present case, relying on the principles described by the Supreme Court of Delaware in Revlon, the Board determined that they had an overriding duty to maximize shareholder value and obtain the highest value for the shareholders, while respecting the contractual obligations of the corporation and its subsidiaries.

 

[107]   This approach by the Board was mistaken. In Canada, the directors of a corporation have a more extensive duty. This more extensive duty embodied in the statutory duty of care encompasses, depending on the circumstances of the case, giving consideration to the interests of all stakeholders, which, in this case includes the debentureholders. They must have regard, inter alia, to the reasonable expectations of the debentureholders, and those may be more extensive than merely respecting their contractual legal rights.

 

While unexpected (and contrary to a significant body of commercial caselaw, although the caselaw is mainly American with some Ontario support), this finding is relevant only in a few circumstances.  The broader analysis of the oppression remedy is of more interest generally:

 

[66]     A corporation is comprised of different stakeholders. Shareholders are stakeholders, as are creditors, in this case the debentureholders. Shareholders and debentureholders are securityholders within the terms of the CBCA.  From time to time, their interests may differ. The Supreme Court of Canada in Peoples,  stated at paragraph 47 that "[i]n resolving these competing interests, it is incumbent upon the directors to act honestly and in good faith with a view to the best interests of the corporation […] and not to favour the interests of any one group of stakeholders". If the Board fails in that task, stakeholders may invoke various statutory remedies available under the CBCA. Some are specific, as in the case of amalgamation (s. 185 CBCA), or arrangement (s. 192 CBCA), others are of broad application, such as the oppression remedy (s. 241 CBCA).

 

[67]     With regard to creditors, a class of stakeholders, the Supreme Court stated in Peoples:

 

[48] The Canadian legal landscape with respect to stakeholders is unique. Creditors are only one set of stakeholders, but their interests are protected in a number of ways. Some are specific, as in the case of amalgamation: s. 185 of the CBCA. Others cover a broad range of situations. The oppression remedy of s. 241(2)(c) of the CBCA and the similar provisions of provincial legislation regarding corporations grant the broadest rights to creditors of any common law jurisdiction: see D. Thomson, "Directors, Creditors and Insolvency: A Fiduciary Duty or a Duty Not to Oppress?" (2000), 58 U.T. Fac. L. Rev. 31, at p. 48. One commentator describes the oppression remedy as "the broadest, most comprehensive and most open-ended shareholder remedy in the common law world": S. M. Beck, "Minority Shareholders' Rights in the 1980s", in Corporate Law in the 80s (1982), 311, at p. 312. While Beck was concerned with shareholder remedies, his observation applies equally to those of creditors.

[Emphasis added]

 

[68]     Thus, one of the possible remedies of creditors is found in s. 241 CBCA. It authorizes a complainant who has been oppressed or whose interests have been unfairly prejudiced or unfairly disregarded by a corporation, its directors or its shareholders to apply for redress to a Superior Court. Debentureholders are a class of creditors who hold securities of a corporation, and as such they are specifically identified as complainants in s. 238(a) CBCA and have made use of the remedy from time to time.

 

[69]     The thwarted reasonable expectations of a complainant are an important element of establishing its right to a remedy. The reasonable expectations of a holder of a publicly issued debenture are derived from the trust indentures, debentures in their hands, the prospectuses, public statements of the company and the various other representations made from time to time.  Various factors can be examined, as stated by the author Kevin McGuiness:

 

[…] The identification of what were the reasonable expectations of the parties is a question of fact. In determining that fact, there is no error in principle in looking at prior statements and drawing an inference based on the respective weight of all the individual pieces of evidence. In deciding what is unfair, the history and nature of the corporation, the essential nature of the relationship between the corporation and the complainant, the type of rights affected and general corporate practice are material. Test of unfair prejudice or unfair disregard encompasses the protection of the underlying expectation of a creditor in its arrangement with the corporation, the extent to which the acts complained of were unforeseeable or the creditor could reasonably have protected itself from such acts, and the detriment to the interests of the creditor. The reasonable expectations of a shareholder or other potential complainant are not assessed in the abstract. They must be construed by reference to the context in which the complainant acquired his or her rights, and the context in which the conduct complained of transpired. […]

 

[70]     This concept was also expressed by the Alberta Court of Appeal in Westfair Foods v. Watt  as follows:

[…] one clear principle that emerges is that we regulate voluntary relationships by regard to the expectations raised in the mind of a party by the word or deed of the other and which the first party ordinarily would realize it was encouraging by its words and deeds. This is what we call reasonable expectations, or expectations deserving of protection. Regard for them is a constant theme, albeit variously expressed, running through the cases on this section or its like elsewhere. I emphasize that all the words and deeds of the parties are relevant to an assessment of reasonable expectations, not necessarily only those consigned to paper, and not necessarily only those made when the relationship first arose.

 

[71]     In other words, these reasonable expectations are not limited to the legal rights spelled out in the contractual terms of the trust indentures. However, these expectations, to remain reasonable, cannot run contrary to the express terms of the relevant contracts.

 

[72]     The concept of fairness is central to the application of s. 241 CBCA. 

 

[73]     The CBCA requires a corporation to apply for approval to a Superior Court when it wishes to carry out certain specific transactions, such as an amalgamation (s. 182 CBCA) or an arrangement (s. 192 CBCA).

 

[74]     In the present case, BCE chose to proceed by way of a plan of arrangement. It is not disputed that the contemplated Plan constitutes an arrangement within the meaning of s. 192 CBCA.

 

[75]     Amongst the securityholders affected by an arrangement, there can be shareholders as well as debentureholders. 

 

[76]     It is now settled law that the court will approve a plan of arrangement only if it is fair and reasonable. Once more, the concept of fairness is crucial.

 

[77]     Both the approval procedure under s. 192 CBCA and the oppression remedy under s. 241 CBCA are measures that Parliament designed to assure fairness in the conduct of the affairs of a corporation. In the first case, the proceedings are instituted by the corporation and in the second, they are generally taken against the corporation.

 

[78]     The relationship between these two provisions has been discussed in various judgments. In Re Canadian Pacific Ltd.,  Austin J., as he then was, writes at p. 233:

In my view, much the same tests apply in the present case. If anything, the standard is higher under s. 192. It does not specify what standard must be attained, whereas under s. 241 the conduct must be "oppressive" before it will be struck down. Although s. 192 provides no standard, the jurisprudence has established that for an arrangement to get court approval it must not only be not oppressive, it must be fair and reasonable.

 

[79]     If a plan of arrangement is found to be fair and reasonable, it could generally not be argued that the implementation of the plan as approved is oppressive to a complainant. In Re Pacifica Papers Inc.,  Lowry J. states at paragraph 156:

It becomes unnecessary to say very much about the claim of oppression made by Cerberus because, as indicated, an Arrangement that is fair cannot be oppressive.

 

[80]     In Re Canadian Airlines Corp.,  Paperny J., as she then was, in the context of a bankruptcy matter, writes at paragraph 145:

It is through the lens of insolvency legislation that the rights and interests of both shareholders and creditors must be considered. The reduction or elimination of rights of both groups is a function of the insolvency and not of oppressive conduct in the operation of the CCAA. The antithesis of oppression is fairness, the guiding test for judicial sanction. If a plan unfairly disregards or is unfairly prejudicial it will not be approved. However, the court retains the power to compromise or prejudice rights to effect a broader purpose, the restructuring of an insolvent company, provided that the plan does so in a fair manner.

[Emphasis added]

 

[81]     However, the rejection of a motion alleging oppression is not conclusive on the fairness of a plan of arrangement. In 3017970 Nova Scotia Co. v. Johnstone,  Cameron J. states at paragraph 15:

The fairness hearing is open to consideration of all relevant issues, including good faith, the availability of fairness opinions, adequacy of disclosure in the information circular, the results of the shareholder vote and the right to exercise dissenting appraisal rights. The standard of fairness and reasonability for approval of the Arrangement under CBCA s. 192 is clearly higher than merely "not oppressive" or "not unfair". If CBCA s. 241 is breached, the Arrangement cannot be approved.

[Emphasis added]

 

[82]     In Scion Capital, LLC v. Gold Fields Ltd.,  Veale J. says at paragraph 72:

The petition for oppression has been heard at the same time as the application for approval of the plan of arrangement. There is some relationship between the two proceedings in that a plan of arrangement cannot be approved if it is oppressive. However, if the oppression proceeding fails, it does not automatically result in approval of the proposed arrangement; the applicant must demonstrate that the requirements of s. 195 of the Y.B.C.A.  have been met; Re Canadian Pacific Ltd., cited above.

 

[83]     Finally, if an arrangement has an oppressive result, it cannot be approved as fair.            

 

[84]     The trial judge, correctly, agreed with the principles enunciated in the foregoing cases.

 

[85]     It follows that when a contemplated transaction is an arrangement under s. 192 CBCA, there would, in most cases, likely be no need for an affected securityholder to assert an oppression remedy under s. 241 CBCA to protect its interests. The affected securityholder could rather participate in the plan of arrangement proceedings and oppose the approval of the plan.

 

[86]     In the case before the Court, the appellants acknowledged that their motions for an oppression remedy were made ex abundante cautela, after BCE asserted that they had no standing to participate in the arrangement proceedings. The principal remedy sought by the appellants under their oppression motions is refusal of the approval of the plan. In fact, their contestations of the motion for the approval of the plan of arrangement and their oppression motions are similar in their content, and seek to achieve the same result.

 

[87]     Having regard to these circumstances, the Court will deal only with the plan of arrangement proceedings because if the plan is fair and reasonable, it cannot be said to be oppressive to securityholders, or unfairly prejudicial to, or unfairly disregard their interests. Therefore, the Motions for Oppression Remedy become moot and the appeals from the judgment of the Superior Court will accordingly be dismissed, but without costs, given the circumstances.

 

 

James Morton

Steinberg Morton Hope & Israel

1100-5255 Yonge Street

Toronto, Ontario

M2N 6P4

 

416 225 2777

 

Blog:  http://jmortonmusings.blogspot.com/

 

BCEs Record Buyout in Jeopardy After Court Ruling

"A most unexpected result. In effect the Quebec Court says that contractual exclusions do not override reasonable expectations. But how can an expectation contrary to a freely accepted contract term be reasonable? jcm"

By Chris Fournier

May 22 (Bloomberg) -- BCE Inc.s record C$52 billion ($52.9 billion) leveraged buyout is in jeopardy after bondholders won a surprise court ruling yesterday.

The decision by Quebecs Court of Appeal allows investors to challenge the LBO of Canadas biggest phone company because Toronto-based BCE didnt take their interests into account when it agreed to the takeover. The bondholders, among them CIBC Global Asset Management Inc., say the acquisition would load BCE with debt, increasing the risk of a default, and hurt their investments of C$1.7 billion.

Unless overruled on appeal, the ruling could lead to thee biggest-ever collapse of a leveraged buyout. It comes amid reports the banks arranging funding for the LBO are trying to renegotiate the terms of the financing. BCE dropped 4.4 percent this week in Toronto trading on speculation the deal may founder.

``The decision effectively terminates the proposed transaction, said Mark Meland, a lawyer at Montreal-based Fishman Flanz Meland Paquin, which is representing the bondholder group. ``Unless the decision is overruled, the plan of arrangement is now defeated.

A failure would top the list of 62 LBOs worth a combined $174 billion announced last year that have since been abandoned, according to data compiled by Bloomberg. Banks and buyout firms have sought to scrap or renegotiate LBOs of companies, including SLM Corp., the Reston, Virginia-based student-loan provider, and Clear Channel Communications Inc. since the credit crunch began last July.

Stock Discount

BCE agreed in June 2007 to be acquired by Toronto-based Ontario Teachers Pension Plan, along with Rhode Island-based Providence Equity Partners Inc. and Madison Dearborn Partners LLC of Chicago. The buyout unit of New York-based Merrill Lynch & Co. later joined the group. The deal was scheduled to be completed next month.

The effort by BCE to obtain the best value for shareholders ``cannot be considered in isolation from other factors, the chief justice wrote yesterday.

BCE dropped 28 cents to C$37.12 in Toronto Stock Exchange trading, 13 percent less than the C$42.75-a-share offer that investors accepted last year. The stock closed as high as C$41.74 on July 6, 2007.

A Quebec Superior Court judge had dismissed the bondholders claim in March, saying the acquisition terms were ``fair and reasonable. Yesterdays decision returns the case to that court for the determination of costs.

Plan for Appeal

The latest ruling ``rewrites Canadian law relating to the duty of Canadian boards of directors to maximize value for shareholders, said Martine Turcotte, BCEs chief legal officer, in a statement. BCE and its buyers plan to appeal the decision to Canadas supreme court.

BCEs C$150 million of 10 percent bonds due in 2054 have tumbled about 38 cents to 129.3 cents on the dollar since March 2007, when reports of a buyout emerged. The yield has risen to 7.7 percent from 5.8 percent, Bloomberg data show.

James Morton
1100 - 5255 Yonge Street
Toronto, Ontario
M2N 6P4

Father of frozen girls makes first court appearance in Sask., doesn't say a word

"Perhaps silence is the only response to such horror - jcm"

May 21, 2008

Tim Cook, THE CANADIAN PRESS

ROSE VALLEY, Sask. - A father accused of leaving his two young daughters to freeze to death in a windswept, snowy field earlier this year didn't say a word as he made his first court appearance on Wednesday.

Christopher Pauchay of the Yellow Quill First Nation arrived at a makeshift court in the Rose Valley community centre wearing a black hoodie with skulls down both sleeves and the logo of heavy metal rock band Iron Maiden on the back.

The 24-year-old, who since the deaths has only been seen by the public in a dated family photo with his two daughters on Santa Claus's knee, wore black sunglasses in court. He only removed the glasses when the judge called him forward and asked if he understood the charges against him.

He nodded yes and the case was adjourned until June 11.

After the brief appearance, Pauchay walked straight through a throng of reporters and left in a pickup truck driven by his father.

Pauchay was charged April 30 in the deaths of Kaydance, 3, and her one-year-old sister Santana. RCMP believe the two young girls got separated from their father in -50 C temperatures after the three left his home on the night of Jan. 29. Investigators said the children were found only wearing diapers and T-shirts.

Pauchay himself almost froze to death that night and was saved by a neighbour who heard him at her door. His hands were heavily bandaged as he attended court on Wednesday.

Relatives expressed disappointment when Pauchay was first charged in the deaths. The girls' mother said Pauchay had already suffered enough.

Marilyn Gilbert, justice co-ordinator at the Yellow Quill health centre, said opinion on the reserve 150 kilometres east of Saskatoon is split about whether the Crown should pursue the case.

"It's divided," Gilbert said outside court. "Half say yes and half say no, so you can't really say yes or no definitely."

Gilbert said she has known Pauchay almost all his life and has tried to help him deal with the deaths. She said he use to be a happy-go-lucky guy, but has become withdrawn since his daughters died.

"He's been very quiet, subdued, not his usual cheerful self," Gilbert said. "He was really very good with his children. He was always with them. They were always well fed, well kept, well looked after. Very loved."

James Morton
1100 - 5255 Yonge Street
Toronto, Ontario
M2N 6P4

Israel and Syria Talk Peace

JERUSALEM - Israel and Syria unexpectedly announced Wednesday the resumption of peace talks after an eight-year break, saying they have been speaking indirectly through Turkish mediators "in order to achieve the goal of comprehensive peace."

The longtime adversaries each have something to gain from the dialogue. Israel wants to reduce Syrian support for anti-Israel militants in Gaza and Lebanon, while Syria is eager to improve ties with the U.S. and end its international isolation.

But many obstacles, including a skeptical Israeli public opposed to ceding the strategic Golan Heights to Syria, a scandal-plagued Israeli prime minister and Syria's providing a home base for radical militant groups, will make it difficult to reach a deal.

Israeli Prime Minister Ehud Olmert and Syrian President Bashar Assad both recently confirmed their countries had exchanged messages. But Wednesday's announcement, in identical statements issued minutes apart by Israel, Syria and Turkey, was the first official confirmation peace talks were under way.

"Syria and Israel have started indirect peace talks under the auspices of Turkey," the statement said. It said the two enemies "have declared their intent to conduct these talks in good faith and with an open mind," with a goal of reaching a comprehensive peace.

Noticeably absent from the announcement was the U.S., the traditional power broker in the region. White House spokeswoman Dana Perino suggested the United States was informed in advance but was not participating.

"We were not surprised by it and we do not object to it," she said. "We hope that this is a forum to address various concerns we all have with Syria, Syria's support of terrorism, repression of its own people."

President Bush has included Syria in his "axis of evil," criticizing Damascus for its backing of Hezbollah guerrillas in Lebanon, Iraqi insurgents and Palestinian militants.

In an address Wednesday evening, Olmert said the contacts with Syria had been under way for over a year and noted that previous Israeli leaders were prepared to make "painful concessions" for peace with Syria. Those efforts, by then-prime ministers Yitzhak Rabin and Ehud Barak, failed.

"It is always better to talk than to shoot," Olmert said, "and I'm happy the two sides have decided to talk," though he predicted difficult negotiations.

An Israeli government official said Olmert's chief of staff and diplomatic adviser have been in Turkey since Monday. Israel's Channel 10 TV showed them returning home Wednesday evening.

"Their Syrian counterparts are in Turkey as well," the official said, speaking on condition of anonymity because of the sensitive nature of the contacts. He declined to discuss the substance of the talks.

Turkey's NTV television said the Israeli and Syrian delegations were in Istanbul but were not meeting directly.

Turkish Foreign Minister Ali Babacan, speaking to reporters during a visit to Bulgaria, said the start of indirect contacts was "an important development" and urged journalists not to be "impatient" concerning details of the meetings.

"These talks will continue indirectly in the period ahead," the Turkish state-run Anatolia news agency quoted him as saying, refusing to say where the talks are taking place.

Israel and Syria are bitter enemies whose attempts at reaching peace have failed in the past, most recently in 2000. The nations have fought three wars, their forces have clashed in Lebanon, and more recently, Syria has given support to Hezbollah and Palestinian militant groups in the Gaza Strip.

The sides' demands in any peace deal are well-known. Syria wants a full Israeli withdrawal from the Golan Heights, a strategic plateau captured by Israel in the 1967 Middle East War and later annexed. The last round of peace talks collapsed over disagreements over the last fraction of an Israeli withdrawal.

Israel wants Syria to end its support for anti-Israel militants and curb its ties with Iran, while demanding full peace relations.

While neither appears ready to meet those conditions right now, renewed dialogue could quickly deliver other benefits.

Israel has been battling Hamas militants in Gaza since the Islamic group seized control of the area last June. Israeli talks with Syria could ultimately weaken Hamas, whose leaders are based in Damascus.

In Gaza, Hamas spokesman Ghazi Hamad said relations with Syria were "very strong" and he didn't expect any changes.

Israel also wants to reduce the influence of Hezbollah, which battled Israel to a stalemate during a 34-day war in 2006. Israel believes Hezbollah has replenished its arsenal with Syrian help.

Syria's Assad has expressed interest in restarting peace talks for years. His deep international isolation may have pushed him to take the plunge.

Syria's relations with moderate Arab powerhouses Egypt and Saudi Arabia are at their lowest in years, and last September, Israeli warplanes destroyed a suspected nuclear installation in Syria.

By going into talks with Israel, Syria can show the West that it is moderating its policies and perhaps reap political benefits with the next U.S. administration.

Syria "is not as interested in making peace with Israel as it is in making peace with Washington," said Itamar Rabinovich, who served as an Israeli negotiator in the last round of talks with Syria,

Olmert has repeatedly signaled his willingness to pull out of the Golan, but actually doing so would not be easy. The Israeli leader, already unpopular since the Lebanon war, has seen his image further tarnished by a police investigation into his financial dealings.

Today the Golan Heights are home to 18,000 Israelis, who run thriving wine and tourism industries. Last month, Olmert spent his Passover vacation at an inn on the Golan. The area has been calm since the 1973 Mideast war, and many Israelis consider it a valuable buffer against attack.

"The people of Israel will not support such a deluded and irresponsible move, which would hand over such a vital Israeli strategic asset to the Arab axis of evil," said the Golan Residents Council, a group representing Israeli settlers there.

About 17,000 Arabs, most members of the Druse sect, an offshoot of Islam, live in the territory. A few have taken Israeli citizenship, and the rest remain loyal to Syria.

A poll last month by the Dahaf Institute, an Israeli research firm, showed 51 percent of Israelis opposed to giving up the Golan, while 32 percent said they were in favor. Roughly three-quarters of respondents said they thought Assad was not serious about peace. The poll questioned 500 Israelis and had a margin of error of 4.4 percentage points.

Don't Fight An Application To Assess Your Account

Although distasteful, when a former client, no matter how fair the account, seeks to assess, just save the hassle and consent.

Today's case in Glanc v. O'Donohue & O'Donohue, 2008 ONCA 395 is a good example of why fighting the entitlement to assess is not useful.

Despite obtaining a remarkable result, a premium of about $20,000,000 (a result three times better than initially available), former clients sought to assess a solicitor's account.

As part of an overall agreement the 'client' was a company owned by three sisters (although not set out it seems likely this arrangement was for the sisters' benefit and allowed them to have a tax advantage -- certainly counsel did not benefit). Accounts were rendered to the company and paid by the company. The work, it seems, was done for the sisters (or some of them) but only two sisters sought to assess. The company and the third sister did not seek to assess.

Despite case law suggesting a person liable to pay only part of an account does not have standing to assess the Court of Appeal allowed the two sisters to assess saying they were the real clients.

The Court ruled:

"... The courts have held that a person who is responsible to pay a portion of the account is not a person with standing to request the referral of an account for assessment as that person is not liable to pay the bill in whole, within the meaning of the Solicitors Act. (See McGugan v. McGugan, [1892] O.J. No. 16 (C.A.) at para 6 and Kayor Energy Systems Inc. v. Davies, Ward & Beck, [2001] O.J. No. 2436 (S.C.J.) at paras 23, 24 and 28).

[31]          Here, however, Estelle is not "a person who is responsible to pay a portion of the account".  [Emphasis added.]  The evidence is that she and Krysia jointly retained the law firms.  In the absence of some indication to the contrary – there is none here – Estelle and Krysia would each be liable for the whole amount of the bill.  Moreover, I am not persuaded that either McGugan v. McGugan (1892), O.A.R. 56 (C.A.), aff'd (1892), 21 S.C.R. 267 or Kayor Energy Systems Inc. v. Davies, Ward & Beck, [2001] O.T.C. 468 (S.C.J.) support the proposition for which they are cited."
James Morton
1100 - 5255 Yonge Street
Toronto, Ontario
M2N 6P4

Stop the Palestinian ... pollution

Paul Russell
National Post -- Letters

If you were going to criticize the Palestinian government, would it be for their abysmal leadership abilities, their perplexing inability to provide for their people despite massive amounts of foreign aid, their failure to reach a peaceful settlement with Israel … or would you attack their environmental record?

If you chose the fourth option, you will find common cause with the New York Whale and Dolphin Action League. That group recently sent the Post a letter, criticizing the Palestinian government for releasing some balloons to mark a holiday. Religious strife, poverty, suicide bombing, latex pollution … I guess they are all on the same level. Here's the letter in question.

-- Paul Russell, NP letters editor

" We are outraged and deeply saddened that the Palestinian government chose to symbolize a national event with the environmentally reckless release of tens of thousands of large pieces of litter — balloons — into the atmosphere!

It is not "just OK" to have released 21,915 black balloons for this event. In fact, the release of balloons should never to be condoned or applauded, whatever the occasion, however strong, or tragic, the sentiments of the moment may be.

Latex balloons may take a year or more to deteriorate, while often the ribbons and strings, as well as Mylar balloons, never degrade in the environment. 70% of the time airborne balloons fall to the earth over the oceans, or another body of water.

The wet wriggly fragments of deflated balloons resemble jellyfish, plankton or even vegetation and are frequently eaten by ever-hungry sea birds, endangered sea turtles, marine mammals and even fish. Balloon fragments are part of the usual non-degraded synthetic contents found in the stomachs or intestines of dead whales, birds and other marine animals.

... the press should also ask how many marine mammals, sea birds or endangered turtles will become the victims of an unnecessary and thoughtless massive balloon release from afar! Wildlife are not fighting this battle, have nothing to do with the problems in the Middle East and do not deserve to become victims, no matter how impassioned is the "cause"."

Taffy Williams, Director, New York Whale and Dolphin Action League.

James Morton
1100 - 5255 Yonge Street
Toronto, Ontario
M2N 6P4

Panda Diplomacy

Giant Panda destined for Taiwan found after 5 days

Yuan Yuan, one of a pair of Giant Pandas destined to be presented to Taiwan, ran away in terror when the May 12 earthquake struck, but keepers recovered her after 5 days.

Yuan Yuan, one of a pair of giant pandas destined to be presented to Taiwan, ran away in terror when the May 12 earthquake struck, but keepers recovered her after 5 days.

Yuan Yuan and her mate Tuan Tuan were lucky to escape unhurt. A falling rock destroyed their living enclosure, but fortunately they were playing outside at the time.

Keepers managed to calm Tuan Tuan enough to get him to a safe place, said Li Desheng, the reserve's deputy admin director, but he still walks tentatively, placing each paw carefully as if expecting the ground to give way beneath him.

The Wolong Giant Panda Reserve, home to 86 pandas, was severely damaged by the earthquake and both roads and communications lines were cut.

Bamboo, the pandas' primary source of food, can no longer be gathered locally because of the devastation caused by the quake, so Sichuan Forestry Department dispatched six trucks with a police escort to deliver 6,000 kg bamboo to feed the hungry pandas. The trucks finally arrived on May 19, after a 20 hour off-road drive over 4,500 meter mountains.

The pandas were soon back to their normal playful selves after munching on the fresh bamboo. Tuan Tuan finished his bamboo and tried to snatch Yuan Yuan's, but later they both ate in peace.

Admin director Zhang Hemin said that the reserve was particularly grateful for donations they had received from Taiwan. He hoped that appointment of Ma Ying-jeou as Taiwanese leader means that Tuan Tuan and Yuan Yuan will soon be able to travel to Taiwan.

Eight pandas have been moved down the mountain where they can be cared for better; 53 remain at the reserve, of which some are slightly injured. Tuan Tuan and Yuan Yuan, however, are both fine.

The earthquake destroyed 14 out of 32 panda enclosures, and severely damaged 18 others. The pandas were moved to temporary accommodation, which is rather cramped. As soon as it is practicable they will be moved down the mountain to a more comfortable and accessible location that can be regularly supplied with food and medical supplies.

James Morton
1100 - 5255 Yonge Street
Toronto, Ontario
M2N 6P4

Negligence Accrues When Damage Suffered

Yesterday’s British Columbia Court of Appeal decision in Kruk v. Ho, 2008 BCCA 201 is a good source for the principle that a negligence claim accrues when damage is suffered and not before. This is not an issue of discoverability but rather simple cause of action accrual – the damage may be suffered but not discovered for some time.

Commencement of the Limitation Period Negligent Conduct

[13] It is apparent from a review of the legal principles and the trial judge's reasons for judgment that he misconceived the principle to be applied in determining when the limitation period begins, and therefore erred in concluding that the ultimate limitation period began in 1994.

[14] There is no dispute about the principle to be applied. The ultimate limitation period (i.e., the period after which no action may be brought) begins when the right to bring an action arises, that is, when all the elements of the cause of action come into existence. In a negligence action, the ultimate limitation period does not begin until both the negligent conduct and the consequent damage have occurred. As Quijano J. put it in Hughes v. Cooper Estate (1997), 36 C.C.L.T. (2d) 42 (B.C.S.C.), at para. 28: It is not the negligent act alone which triggers the running of the limitation period but it is the combination of the negligent act and the consequent damage.