Byron Bach was a unionized employee with the BC Liquor Distribution Branch (“LDB”). Mr. Bach had  been employed with the LDB as an auxiliary employee since 1999. Since 1996, Mr. Bach was also employed with Save-On-Foods (“Save-On”). From 2005 to April 2021, Mr. Bach worked graveyard shifts at Save-On, and then auxiliary shifts at the LDB from 2:00PM until closing. Mr. Bach worked these shifts, full-time, in order to financially provide for his wife and three children, as his wife could not work for health reasons. In April 2021, the LDB attempted to convert Mr. Bach from an auxiliary employee to a regular employee, and subsequently, attempted to alter Mr. Bach’s working schedule with the LDB. Mr. Bach objected to the changes and filed a Human Rights Tribunal complaint alleging discrimination on the basis of family status.

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The LDB filed an application to dismiss Mr. Bach’s complaint on the grounds that it had “no reasonable prospect of success", citing Mr. Bach’s decision to hold a second job, which the new schedule would interfere with, was a “personal preference” that Mr. Bach did not hold a right to. In order to assess Mr. Bach’s complaint, the Tribunal analyzed the three requirements Mr. Bach would have to prove to make his case at a hearing – (1) he has a personal characteristic that is protected by the Code, (2) he was adversely impacted in employment, and (3) his personal characteristic was a factor in the adverse impact (Moore v. British Columbia (Education), 2012 SCC 61; British Columbia (Human Rights Tribunal) v. Gibraltar Mines Ltd., 2023 BCCA 168). Ultimately, the Tribunal found that Mr. Bach’s complaint passed the three elements needed to stave off dismissal and dismissed the LDB’s application. In doing so, the Tribunal noted that family status complaints typically are related to direct childcare duties or spousal or elder care responsibilities, whereas Mr. Bach’s complaint was “somewhat novel” in nature. It will be interesting to see how the Tribunal continues to apply this relatively new three-part test in future family status complaints, as this area becomes more expansive.

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To read the full case, click here.

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The Federal Court has instructed the Canada Border Services Agency (CBSA) to conduct a new workplace investigation, appointing a different investigator this time. This decision follows extensive allegations from a veteran border guard about enduring workplace harassment and violence.
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C.M., who joined the CBSA in 1994, reported experiencing various forms of mistreatment, including hate crimes, discrimination, physical assaults, and derogatory behaviour from supervisors, over a 25-year period from 1995 to 2020.
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In January 2023, a CBSA report concluded that none of these incidents constituted workplace harassment or violence under their guidelines. As a result, no preventive measures were taken, and the case was closed.
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Dissatisfied with the investigation’s findings and process, C.M. filed a judicial review, arguing that the investigation was procedurally unfair. The Federal Court sided with C.M., describing the process and final report as "fundamentally flawed" and ordering a new investigation by a different investigator.
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Concerns Over Procedural Fairness
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The court identified significant procedural failings in the CBSA's initial investigation, most importantly C.M. was not allowed to review or respond to contradictory statements or see the preliminary report as required in the CBSA’s Workplace Harassment and Violence Prevention Regulations Checklist before the final decision was made. The court ruled that this exclusion violated procedural fairness and warranted a fresh investigation.
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Questions on Harassment Definitions

The court's decision also raised concerns about the standards the CBSA used to define harassment and violence. The initial investigator’s findings that none of the reported incidents met these standards were a key factor prompting C.M. to seek judicial review.  In this case, the investigator wrongly looked at each incident separately, and did not consider that together the incidents demonstrated a pattern of activity.

Issues with Transparency

A major issue highlighted by the court was the lack of transparency and communication during the investigative process. The judge emphasized that C.M. should have been given the opportunity to counter any unfavourable evidence and respond to claims by managers that their behaviour did not amount to harassment or violence.
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Mandate for a New Investigation

In its ruling, the court not only mandated a new investigation but also emphasized the importance of allowing C.M. to review and respond to all evidence and findings before the final report is issued. Emphasizing the importance of following the written policy at CBSA, the court stated, “The matter is referred back to CBSA for redetermination after a new investigation is conducted by a different investigator and after the Applicant has had the opportunity to see and make submissions on evidence gathered in his absence and to comment on the investigator’s preliminary report before it is sent to CBSA.”
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Furthermore, the court awarded C.M. $3,500 for costs, a pre-agreed sum between both parties.
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For more details, see Marentette v. Canada (Attorney General), 2024 FC 676 (CanLII).

As agreed by the Court, “the [Act] itself is a difficult one, and … the precise interpretation of section 152(4) is in the upper limits of those difficulties.”

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Limitation periods … are meant to promote certainty, avoid stale evidence, encourage diligence, and bring repose: see M(K) v M(H), [1992] 3 SCR 6.

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… The certainty rationale recognizes that, with the passage of time, an individual “should be secure in his reasonable expectation that he will not be held to account for ancient obligations”: M(K), supra. The evidentiary rational recognizes the desire to preclude claims where the evidence used to support that claim has grown stale. The diligence rational encourages claimants “to act diligently and not “sleep on their rights”“: M(K), supra.

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In order for the Minster to reassess beyond the normal reassessment period, the Minister has the burden of proving, on a balance of probabilities, that the taxpayer has committed a fraud or has made a misrepresentation attributable to neglect, carelessness, or wilful default in the filing of the return.

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The burden on the Minister when reassessing outside the normal limitation period is quite unlike where the Minister reassesses a taxpayer within the normal reassessment period, and may rely on a simple assumption of facts, with the onus being on the taxpayer to demolish the ministerial assumptions. Where the Minister is reassessing beyond the normal reassessment period, the Minister must prove:
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- that a misrepresentation has been made by the taxpayer;

- that the misrepresentation is attributable to neglect, carelessness, or wilful default.

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At the risk of redundancy, it is important to recognize that where the taxpayer has not committed fraud, a statute barred year may only be opened up for reassessment where the misrepresentation said to have been made is attributable to neglect, carelessness, or wilful default.

Moreover, the Minister must satisfy this burden of proof for each item the Minister reassessed outside the normal reassessment period, and may not rely upon its assumptions in the course of doing the same.

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Where a taxpayer’s filing position is bona fide and reasonable, to the extent a taxpayer may have made an error or mistake in the Minister’s view, the Court has agreed the taxpayer has not made the type of misrepresentation that would justify the opening up of years that are statute barred. Put another way, the Minister disagreeing with the taxpayer’s filing position is not enough to justify a reassessment beyond the normal reassessment period.

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Moreover, where an error committed by a taxpayer is one which a normally wise and cautious taxpayer could have committed, and the court is not persuaded that error involved negligence on the part of the taxpayer, the Minister may still be barred from reassessing beyond the normal reassessment period.

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Before the court can consider whether an assessment is correct it must first decide that it was validly made. … It is essential that before the court hears evidence on the correctness of the assessment it be satisfied that the Minister had the right to assess at all … Until the validity of the assessment that is otherwise statute-barred is established by the Minister … the taxpayer’s only onus is to show that the reassessment was made outside the normal reassessment period.

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Once the Minister has established that the reassessment beyond the normal reassessment period is proper, then the burden of proof shifts to the taxpayer as to whether the return was rightly filed.

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In order to address the affordability crisis and provide for more long-term rental housing, the BC provincial government has introduced new regulations targeting short-term rentals such as Airbnb’s.

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Starting May 1, 2024, the provincial government has passed new laws which will limits short-term rentals to the host’s principal residence, plus one secondary suite or accessory dwelling unit, in many BC communities.

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The Province's regulations will be the “floor”, or minimum requirements, for short-term rentals, meaning that towns and cities can add more restrictive short-term rentals bylaws depending on local needs, as some have already chosen to do.

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The principal residence requirement applies across B.C. in municipalities with a population of 10,000 and over, as well as smaller neighbouring communities.

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Certain municipalities can opt in or out of the new restrictions each year, depending on if certain criteria are met, such as the rental vacancy rate in the community over the previous 2 years.

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Some smaller communities and tourist destinations (such as municipalities with populations under 10,000 that are not within 15 kilometres of a larger community, mountain resorts, and farmland) will automatically be exempt from the new restrictive laws.

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In order to target real estate speculation and address the affordability crisis, the BC provincial government has introduced a new law taxing profits from short-term property sales.

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The government introduced the new “home-flipping” tax in its 2024 budget, stating that its aim is to discourage speculators from driving up prices.

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Under the proposed new law, the government will implement a “sliding-scale” tax on profits made from properties which are re-sold within 2 years of being purchased.

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If a property is re-sold within 1 year of being purchased, profits will be taxed at 20%. The tax rate then gradually reduces to zero for properties which are re-sold between 1 and 2 years following their purchase. For assignment purchases (such as for pre-sale condo and townhome units), the clock will begin to run on the date the assignment contract is entered into. Economists predict that this new flipping tax will lower home sales in BC by nearly 2%, but the ultimate end result remains to be seen.

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There will be exemptions for scenarios such as divorce, death, disability, and other life-altering circumstances which force a quick sale of a recently-purchased property.

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Earlier in February, the federal government announced they will extend the existing ban on foreign ownership of Canadian housing by 2 more years. The restriction, which intends to increase the amount of housing available to Canadians, will now last until early 2027.

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The ban, which prevents foreign companies and people who are not Canadian citizens or permanent residents (subject to some limited exemptions for those with temporary work permits, refugees, and international students) from buying residential property in Canada’s major population centres, was to expire on January 1, 2025, but has been extended to January 1, 2027.

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If a non-Canadian is found violating these laws, penalties could include fines and court-ordered sale of the property.

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The federal government alleges that foreign money has been flowing into Canada for years to buy up residential real estate, increasing housing affordability concerns in cities across the country, and particularly in major urban centres. The government said it wanted to extend the program because it knows Canada’s housing challenge will not be solved by the end of 2024. However, some economists have questioned whether the ban will have much effect on overall housing affordability.

We are thrilled to announce that Chris Drinovz was voted as one of the 2024 Leading Legal Practitioners across Canada based on an extensive peer survey process.  

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Chris Drinovz is an experienced employment lawyer, Firm partner and head of the Employment & Labour Group at KSW Lawyers. Chris has been assisting local businesses with workplace issues since 2010. His expertise covers the entire life cycle of the employer/employee relationship: employment contracts & policies, workplace investigations, WorkSafeBC & OHS, dismissal planning, mediation of employment disputes, injunctions to protect confidential information or enforce non-solicits or non-competes, and representation in employment standards or human rights complaints. Chris also advises employers on staying non-union and helps union clients with certification, bargaining, labour relations under the collective agreement, and grievance arbitrations. Chris enjoys being engaged in the legal and business community. He volunteers as the Chair of the Employment Law Section of the CBABC, and President of the Greater Langley Chamber of Commerce Board of Directors. Chris was recognized as 5-Star Employment Lawyers, "Best Employment Lawyer and Law Firm" across Canada in 2023. He was also a Repeatedly Recommended lawyer for Vancouver Leading Practitioners — Employers in the 2021 and 2023 Canadian Legal Lexpert Directory, and in 2022, Business Person of the Year Finalist by Surrey Board of Trade.

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The identification of leading practitioners and firms is based upon a comprehensive annual survey, ongoing since 1994. The selected lawyers have been recommended by their law firm leaders. They are acknowledged as leaders in their respective fields, lawyers prominent in their practice areas and professional organizations, and professionals worthy of significant recognition from their colleagues.

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About Canadian Legal Lexpert Directory:  

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The Canadian Legal Lexpert Directory (the Canadian Lexpert Directory), published since 1997, is based on an extensive peer survey process. It includes profiles of leading practitioners across Canada in 66 practice areas and leading law firms in 41 practice areas.

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The publication also features articles highlighting current legal issues and recent developments of importance written by leading practitioners across Canada.

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The federal government intends to lower the criminal interest rate from 60% effective annual rate (EAR) to 35% annual percentage rate (APR), which equals about 42% EAR, in order to combat predatory lending. “Interest” includes all charges and expenses, including fees, fines, penalties, or commissions, which are associated with advancing a loan.

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In January 2024, the government indicated certain commercial, pawn, and payday loans will be exempt from the new restrictions. Importantly for many private lenders, commercial loans over $500,000 will be entirely exempted from criminal interest rate laws. The reason being that these types of larger, sophisticated transactions should not affect vulnerable Canadians.

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Commercial loans under $10,000 will have the new interest rate limitations.

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Commercial loans between $10,000 and $500,000 will continue to have the existing criminal rates apply. This is to provide small business owners with some level of protection from loan sharks.

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Lenders and brokers should be aware of these changes and take the time to learn their responsibilities under the new laws. Violations can result in fines of up to $25,000 or imprisonment of up to 5 years.

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If you are a private lender or mortgage broker with any questions related to the new laws or require help in navigating these pending changes, reach out to Aman Bindra at abindra@kswlawyers.ca or 604-591-7321 today.

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Long-Term Disability insurers in Canada might be treading a little lighter these days, as the Ontario Court of Appeal has upheld a landmark $1.5 million punitive damages award, the largest in Canada for a Long-Term Disability claim, in the decision of Baker v. Blue Cross Life Insurance Company of Canada.

Facts

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Sara Baker was the Director of Food Services, Environment, and Porter or Transport Services at Humber River Hospital. In October of 2013, at just 38 years old, Ms. Baker suffered a stroke while exercising.

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Following her injury, Ms. Baker applied for, and was subsequently paid, short-term disability benefits through her employer’s policy with Blue Cross. In January of 2014, Blue Cross ceased Ms. Baker’s benefits, only to reinstate them just two months later after appeal.

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Following the completion of Ms. Baker’s short-term disability benefits, Ms. Baker was transitioned to Blue Cross’ long-term disability benefits (“LTD”). In order to be eligible for LTD benefits, Ms. Baker, like many insured persons under similar policies, had to demonstrate that she satisfied the definition of “total disability”.

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For the first two years, the first prong for Ms. Baker to satisfy the definition of “total disability”, was to prove that she was unable to perform the regular duties of her own occupation. Following the two-year period, in order to still qualify for benefits, Ms. Baker had to prove an inability to perform any occupation that would earn 60% or more of her previous earnings with her employer.

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Ms. Baker was paid two years of “own occupation” benefits following the conclusion of her short-term disability. During this period, Ms. Baker’s benefits were yet again cut-off by Blue Cross, only to be reinstated – again – after an appeal.

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When Ms. Baker hit the “any occupation” stage, Blue Cross cut her off again. This time, however, Blue Cross refused to reinstate Ms. Baker’s benefits after she exhausted Blue Cross’ appeal process. It was at this point that Ms. Baker elected to commence a civil action against Blue Cross, seeking her “any occupation” benefits, along with aggravated and punitive damages for Blue Cross’ conduct.

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Following a 22-day jury trial, Ms. Baker was awarded a whopping, $1.76 million dollars. Although Ms. Baker’s retroactive benefits was substantial, $1.5 million of the award was made up of punitive damages alone. On top of this award, Ms. Baker was subsequently awarded $1,083,953.50 in full indemnity costs.

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Blue Cross filed an appeal strictly against the punitive damages and costs awards.

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The Appeal Decision

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On appeal, Blue Cross argued that a contextual and fair reading of the record demonstrated that Ms. Baker’s claim was handled in a balanced and reasonable manner. The Court rejected this argument, providing Blue Cross with a wake-up call for handling of future claims.

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Early into the Court’s decision, it becomes immediately clear that this was not going to sway in Blue Cross’ favour:

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[9]         For the reasons discussed below, I would dismiss the appeal and grant leave to appeal costs but deny the costs appeal. In summary, the evidence at trial raised serious concerns regarding the manner in which several disability claim examiners and reviewers at Blue Cross processed Ms. Baker’s file. At best, it shows reckless indifference to its duty to consider the respondent’s claim in good faith and to conduct a good faith investigation, and at worst, a deliberate strategy to wrongfully deny her benefits.

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[12]      Further, there is nothing about the quantum of the award that warrants appellate interference. It was open to the jury to conclude that Blue Cross engaged in systemic and deliberate misconduct in handling Ms. Baker’s claim and that a significant punitive damages award was necessary to deter Blue Cross from conducting themselves in that fashion in the future.

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The Court of Appeal detailed a number of factors which weighed heavily on the jury’s decision to award such a precedent-setting amount. These factors included:

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• Ceasing Ms. Baker’s benefits on three separate occasions. On each occasion, rather than warning Ms. Baker first, Blue Cross chose to cut-off her benefits and then request additional documentation to support her ongoing disability;
• Relying on opinions from contracted general practitioners which it knew or ought to have known were incorrect;
• Selectively relying on evidence that supported their decision to deny Ms. Baker’s benefits, while ignoring conflicting medical evidence. Then, in the face of conflicting evidence, Blue Cross delayed obtaining an independent medical examination (or “IME”) of Ms. Baker;
• Distorting various specialist reports; and
• Misreading a Transferable Skills Analysis report in a way which supported Blue Cross’ decision to deny Ms. Baker’s benefits.

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In upholding the punitive damages award, the Court emphasized the ample evidence that this was a systemic issue within Blue Cross, not simply an issue limited to the handling of Ms. Baker’s claim. The Court confirmed that a punitive damages award of such significance was required to deter similar misconduct by Blue Cross in the future.

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With respect to the pricey full indemnity costs award against Blue Cross, to the tune of just over $1 million, the Court chose not to hold back in detailing to Blue Cross how reprehensible its conduct truly was:

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[44]      There was undoubtedly misconduct by Blue Cross that was worthy of sanction by the court by awarding full indemnity costs. Without repeating the specific instances referenced above, it is fair to conclude that Blue Cross has markedly disregarded its good faith obligations to Ms. Baker. Although some of that conduct is addressed in the awards of damages, not all of it is. In addition to wrongfully denying the respondent coverage in the manner that it did, Blue Cross engaged in a litigation strategy wherein it shielded its employees from appearing at trial to explain themselves. This is one of those rare cases where there has been bad faith conduct that warrants costs on this scale: see e.g., Clarington (Municipality) v. Blue Circle Canada Inc., 2009 ONCA 722, 100 O.R. (3d) 66, at para. 40; Hunt v. TD Securities Inc. (2003), 2003 CanLII 3649 (ON CA), 66 O.R. (3d) 481 (C.A.), at para. 131.

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Takeaways

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The Baker decision is a warning to disability insurers across the country – if you do not act in good faith in the dealing on an insured’s claim, you will be sanctioned. Following this decision, insurers will likely be acting much more carefully in adjudicating individual disability benefit claims.

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For insured individuals, the important message here is that being denied short or long-term disability is not necessarily the end of the road. There could be thousands (or millions, in this case) being left on the table. If you are cut off from your benefits, or it feels as though the insurer is doing everything possible to try and get you cut off from your benefits, speak with a disability lawyer immediately.

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Note to Readers: This is not legal advice. If you are looking for legal advice in relation to a particular matter please contact one of our group members. We communicate all these updates to our clients and readers on our Employer Resources Portal and through monthly Newsletters.

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