Tag: Criminal Code
Last week, I blogged on the Supreme Court of Canada decision of Atlantic Lottery Corp. Inc. v. Babstock, 2020 SCC 19 (CanLII) and “three-card monte”. This week, I would like to discuss the bigger take-away from the decision: the rejection of the existence of the cause of action of “waiver of tort” in Canada.
In Atlantic, the claimants in a class action proceeding alleged that certain video lottery terminal games (“VLTs”) were inherently dangerous and deceptive, and contravened the Criminal Code. The defendants failed to warn the claimants. As a result, the claimants sought an order that the defendants disgorge any profits made by them. They did not allege any specific damages on the part of each claimant. The defendants moved to dismiss the claim.
The claimants pled “waiver of tort”. The term itself was criticized in the SCC decision as being a misnomer. Rather than “waiving” the tort or wrongdoing, the claimant is simply electing to pursue a different remedy: disgorgement of profits earned by the defendants without proof of any damages suffered by the claimants.
Brown J., speaking for the majority, held that disgorgement is a remedy, not a cause of action. Before disgorgement can be ordered, a recognized tort or breach of contract or claim in equity must be established.
In order to establish negligence, causation must be established. It must be shown that the defendant’s wrongful actions caused damages to the claimant. “…the conduct of a defendant in negligence is wrongful to the extent that it causes damage.” “In other words, negligence ‘in the air’ – the mere creation of risk – is not wrongful conduct.”
Citing certain scholarly articles on the topic, Brown J. went on to reject waiver of tort as an independent cause of action. “Granting disgorgement for negligence without proof of damages would result in a remedy ‘arising out of legal nothingness’ (Weber, at p. 424). It would be a radical and uncharted development, ‘[giving] birth to a new tort over night’ (Barton, Hines and Therien, at p. 147).
From an estates and trusts point of view, Brown J. acknowledged that disgorgement may be available without proof of damages for certain forms of wrongdoing, such as breach of trust. “However, it is a far leap to find that disgorgement without proof of damages is available as a general proposition in response to a defendant’s negligent conduct.”
R.I.P Waiver of Tort.
Thank you for reading.
The Supreme Court of Canada recently rejected a class proceeding seeking damages arising from “inherently deceptive” video lottery terminal games. The claimants sought the disgorgement of profits made from the operation of these devices on the basis of “waiver of tort”, breach of contract and unjust enrichment.
The decision, Atlantic Lottery Corp. Inc. v. Babstock, 2020 SCC 19 (CanLII) was released on July 24, 2020.
One of the claims advanced was that the video terminals were akin to the game of “three-card monte”, and thus unlawful.
Three-card monte is also known as “Find the Lady”. Three cards (usually two jacks and the queen of hearts) are placed face down by the dealer. The queen of hearts is shown to the player, and then placed face down again. The dealer then slides the cards around quickly. The player must then select the queen of hearts. If the player is correct, he or she wins. Betting is usually involved. The player puts up a bet. If the player wins, the player gets the bet back plus an equal amount from the dealer. If the player is incorrect, the dealer gets the player’s bet.
The game is often used as a con: a player is lured into playing, believing that the game is easy. The player often watches another player, a shill who is, unknown to the payer, working with the dealer, win lots of money. Sometimes the corner of the queen of hearts is bent, leading the player to believe that he or she has an unfair advantage. Through sleight of hand, the player usually loses.
Three-card monte and games similar to it are illegal under s. 206 of the Criminal Code. The Criminal Code defines “three-card monte”, as meaning “the game commonly known as three-card monte and includes any other game that is similar to it, whether or not the game is played with cards and notwithstanding the number of cards or other things that are used for the purpose of playing.
The Newfoundland and Labrador Court of Appeal held that expert evidence was required in order to determine the essence of three-card monte. The Supreme Court of Canada disagreed, holding that it was for the court to determine Parliament’s intention in prohibiting games similar to three-card monte. Referring to transcripts of the debate leading to the introduction of the law in 1921, they found that video lottery terminals were not similar to three-card monte. The law was directed at the “concrete attributes” of the game, and not “the abstract feature of deception”.
[Note to my kids: our weekly game of three-card monte is postponed indefinitely. You can keep your money, for now.]
Next week, I will discuss the Supreme Court of Canada’s comments on “waiver of tort” as a cause of action.
Thank you for reading.
Our blog has previously discussed the importance of original testamentary documents at length. Typically, an original will is required in order to apply for a Certificate of Appointment of Estate Trustee With a Will. If an original will cannot be located, it may be presumed that it was physically destroyed, and therefore revoked, by the testator. Alternatively, a copy of a will may be admitted to probate upon the filing of a lost will application. However, this remedy is not a fix-all that can be used in all situations in which an original will cannot be located and, even when successful, will result in additional legal fees and delays in the administration of the estate.
Certain provisions within the Criminal Code of Canada criminalize the theft and destruction of another person’s testamentary instruments in recognition of the importance of these documents. At Section 2, the Criminal Code defines a “testamentary instrument” as including “any will, codicil or other testamentary writing or appointment, during the life of the testator whose testamentary disposition it purports to be and after his death, whether it relates to real or personal property or to both”.
Typically, the theft of personal property valued at less than $5,000.00 is a summary offence and can result in up to two years of imprisonment. Where stolen property meets the definition of a testamentary instrument, the seriousness of the crime is elevated to an indictable offence, punishable by up to ten years in prison (section 334(a) of the Criminal Code). The possession of a stolen testamentary instrument is also a crime in Canada. The Criminal Code prohibits possession of property obtained by a criminal act and specifically identifies the possession of a stolen testamentary instrument as an indictable offence with a penalty of up to ten years of prison (sections 354, 355(a)).
Similarly, the destruction, concealment, cancellation, or obliteration of a testamentary instrument “for a fraudulent purpose” is an indictable offence and a conviction may result in up to ten years of imprisonment (section 340). The destruction of a testamentary instrument as a result of an act of mischief is also an indictable offence , punishable by up to ten years in prison (section 430(3)).
The provisions of the Criminal Code outlined above illustrate the significance of the original copy of a last wills and testaments, codicils, and other testamentary documents in Canada and the lengths that the law will go to in protecting the sanctity of these original documents that are typically required in order to administer an estate in the way intended by the testator.
Thank you for reading.