COURT OF APPEAL FOR ONTARIO

CITATION: Sutherland Lofts Inc. v. Peck, 2017 ONCA 368

DATE: 20170508

DOCKET: C62807

Weiler, Pardu and Roberts JJ.A.

BETWEEN

Sutherland Lofts Inc.

Applicant
(Respondent in Appeal)

and

Chris Peck, Chief Building Official for the
    Corporation of the
City of St. Thomas, and The Corporation of the City of St. Thomas

Respondents
(Appellants)

Tom Halinski and David Neligan, for the appellants

Valerie MGarry, for the respondent

Heard: April 12, 2017

On appeal from the order of Justice K. Gorman of the Superior
    Court of Justice, dated September 23, 2016, with reasons reported at
2016 ONSC 6015
.

By the Court

[1]

The Corporation of the City of St. Thomas (the
    City) and Chris Peck, the Citys Chief Building Official (CBO), appeal the
    application judges order declaring the Order to Remedy Unsafe Building, issued
    on December 3, 2015 (the Order to Remedy), by the CBO, null, void and
    inoperative.

[2]

The respondent brings a cross-appeal to obtain
    an interim injunction preventing the appellants from demolishing its building
    located at 606-610 Talbot Street in St. Thomas, which was the subject of the
    Order to Remedy under appeal (the Building), and for a declaratory order that
    the Building is not unsafe as defined in the
Building Code Act
(the
    Act).  The application judge declined to deal with these claimed remedies.

[3]

For the reasons that follow, we allow the appeal,
    dismiss the cross-appeal, and remit to another application judge the questions
    of whether the Building is unsafe and whether an interim injunction should
    issue.

A.

Preliminary Issue

[4]

The parties were asked to address whether the
    appeal and cross-appeal were moot.

[5]

The City issued a second Order to Remedy Unsafe
    Building, dated October 26, 2016, which the respondent has appealed to the
    Superior Court of Justice.  As with the first Order to Remedy, the respondent
    submits that the second order is null, void and ineffective because it lacks
    specificity. That appeal is pending.

[6]

The appellant takes the position that there is
    still a live controversy between the parties as to the specificity of an Order to
    Remedy Unsafe Building under the Act, which would benefit from this courts
    guidance.  The respondent maintains that the present appeal and cross-appeal
    are moot because they are superseded by the October 26, 2016 order.

[7]

We are of the view that the present appeal and
    cross-appeal are not moot.  The issues of whether the Order to Remedy lacks
    specificity, the Building is unsafe, and the availability of an interim
    injunction to prevent demolition, do not raise a hypothetical or abstract
    question but are still live issues between the parties; this courts decision
    will therefore have a practical effect on the parties:
Borowski v.

Canada (Attorney General)
,

[1989] 1
    S.C.R. 342
, at p. 353;

Mental Health Centre Penetanguishene v.

Ontario
,

2010 ONCA
    197
,

260 O.A.C.
    125
, at para. 35.

B.

Factual Background

[8]

We shall set out a brief summary of the relevant
    factual background to put the appeal and cross-appeal into their proper
    context.

[9]

The Building is over 100 years old.  It was
    purchased by the respondent in 2003 with the plan of renovating it into a
    combination of commercial and residential apartments.  This plan has never
    progressed and the Building has sat vacant from at least the date it was
    purchased by the respondent. Since that time, the condition of the Building has
    deteriorated.

[10]

The lengthy history of the parties dispute in
    relation to the Building dates back to at least 2008 when the CBO first issued
    an Order to Remedy on March 27, 2008, which, among other things, required the
    respondent to provide an engineers structural report and undertake certain
    remedial repairs.

[11]

The respondent did not comply with the Order to
    Remedy or the subsequent orders issued by the CBO.  Instead, the respondent
    instigated injunction and other proceedings to stop the demolition of its
    Building.

[12]

The respondent was initially unsuccessful and
    the City was permitted by the July 15, 2008 order of Little J. to proceed with
    the demolition of the Building. Demolition commenced on July 21, 2008.

[13]

However, two days later, on July 23, 2008, the
    respondent obtained a stay of the demolition order pending its appeal of Little
    J.s order.  By then, the City had demolished part of the roof and removed some
    of the structural components of the Building.

[14]

The respondent and its principal, David McGee, commenced
    an action against the appellants and others in July 2010 for wrongful
    demolition of the Building.  On December 21, 2011, Leitch J. dismissed the respondents
    action because the respondent was dissolved and was without legal capacity to
    commence the action.  The motion judge struck out Mr. McGees pleadings with
    leave to amend.

[15]

The respondent took no further remedial steps to
    stabilize and preserve the Building.  The respondent made several unsuccessful
    attempts to sell the Building.  Although the respondent applied for and was
    granted a building permit for shoring on January 12, 2015, no work was
    undertaken at that time.

[16]

In June 2015, a significant section of the
    Buildings second floor collapsed and on September 11, 2015, the roof partially
    collapsed.  The City engaged an engineering firm to inspect the Building and
    provide a written report with respect to its structural condition.  The CBO
    issued and served on the respondent an Order Prohibiting Occupancy dated
    September 15, 2015.  In response to the engineering report, also dated
    September 15, 2015, the CBO issued and served on the respondent an Emergency Order
    the following day on September 16, 2015, to which the engineering report was
    attached.

[17]

The respondent engaged an engineering firm to
    prepare and deliver an inspection report which included a plan for hoarding and
    shoring to alleviate the danger posed by the instability of the Building, as
    well as waterproofing to avoid further deterioration.  The report was received
    on September 21, 2015. The respondent completed about 30% of the shoring, some
    of the hoarding, and none of the waterproofing, which were recommended by its
    own engineer.

[18]

Having determined that the immediate danger of
    collapse had been alleviated by the respondents temporary shoring and hoarding
    work, on November 5, 2015, the CBO lifted the Emergency Order and replaced it
    with an Order of the Property Standards Officer, which detailed additional work
    to be completed.  On December 3, 2015, the CBO issued the Order to Remedy
    Unsafe Building, which is the subject of this appeal.

[19]

The respondent did not comply with the orders or
    complete any additional remedial work.  It did not appeal any of the orders but
    brought an application in March 2016 to have the Order to Remedy declared
    invalid, and to obtain interim injunctive relief, as well as a declaration that
    the Building was not unsafe.  In the alternative, the respondent requested
    leave to file a late appeal of the November 5, 2015 Order of the Property
    Standards Officer and the December 3, 2015 Order to Remedy.

C.

Application Judges Decision

[20]

The application judge determined that the Order
    to Remedy was null, void and inoperative for the following reasons:

i.    It did not comply with the Act
[1]
because it was only served on the owner.  The application judge concluded that
    the Order to Remedy should have also been served on the respondents property
    manager and local supervisory agent, as such other persons affected by the
    Order.

ii.   It lacked the specificity required under the Act.

[21]

The application judge concluded that, given her
    ruling with respect to the invalidity of the Order to Remedy, it was not
    necessary for her deal with the issue of injunctive relief.  Although not
    stated, presumably also because of her ruling, the application judge did not
    determine the factual issue of the Buildings structural integrity.

D.

Analysis

[22]

We agree that the application judge made two
    errors.

(1)

Service of the Order to Remedy

[23]

First, the application judge erroneously
    declared that the Order to Remedy was null, void and inoperative based on
    allegedly defective service on the respondent.

[24]

In our view, the appellants service of the
    Order to Remedy by registered mail on the respondent as owner of the Building,
    at the respondents last known address, complied with the provisions of ss. 15.9(5)
    and 27(1) of the Act, which provide as follows:

s. 15.9(5)     The order shall be
    served on the owner and each person apparently in possession of the building
    and such other persons affected thereby as the chief building official
    determines and a copy of the order may be posted on the site of the building.

s. 27(1)        A notice or order
    required by this Act to be served may be served personally or by registered
    mail sent to the last known address of the person to whom notice is to be given
    or to that persons agent for service.

[25]

It was within the CBOs discretion as to whether
    the respondents property manager and local supervisory agent should be served
    with the Order to Remedy.  We agree with the appellants submission that the
    property manager and local supervisory agent were not in possession of the
    Building, but were at best the respondents agents for service.  The Building
    was vacant and there was an order that prohibited occupation.  Only the owner
    was in possession of the Building.  As a result, the CBO was not required to
    serve any other person.  There is no basis to suggest that the CBO acted
    unreasonably in the exercise of his discretion not to serve the respondents
    property manager and local supervisory agent.

[26]

In any event, delayed service does not
    invalidate the Order to Remedy.  Section 27(2) of the Act deals with the
    possibility of, and the remedy for, delayed service, namely, that service is
    not effective until receipt:

If a notice or order is served by
    registered mail, the service shall be deemed to have been made on the fifth day
    after the day of mailing unless the person to whom the notice or order is given
    or that persons agent for service establishes that, acting in good faith,
    through absence, accident, illness or other unintentional cause the notice was
    not received until a later date.

[27]

As a result, delayed service may only affect the
    timelines under the Order to Remedy, giving rise to an extension of time for
    compliance with the Order to Remedy under s. 27(2), or for an appeal pursuant
    to s. 25(2) of the Act.

[28]

The purpose of service was achieved in this case:
    all interested and affected parties had notice of the Order to Remedy and were
    present before the court.  As a result, we confirm that service of the Order to
    Remedy was compliant with the Act and did not invalidate the Order to Remedy.

(2)

Specificity of the Order to Remedy

[29]

We turn next to the application judges
    determination that the Order to Remedy lacked specificity contrary to the Act.
    The application judge did not provide any reasons or analysis for this
    conclusion.  She also mistakenly referred to s. 15.2(2) of the Act, which
    prescribes the contents of a Property Standards Order, rather than to s. 15.9 (4),
    which prescribes the contents of an Order to Remedy Unsafe Building.  Unfortunately,
    her lack of reasons and analysis does not permit us to conduct a meaningful
    appellate review.  As a result, no deference is owed to her decision and this
    court must consider this question afresh.

[30]

We start with the general principle that a lack
    of particulars is not fatal to the validity of an Order to Remedy Unsafe Building
    under s. 15.9(4) of the Act.

[31]

First, s. 15.9(4) of the Act allows for detailed
    particulars of the remedial steps to be taken to be provided following further
    investigation.  For example, in
Ottawa (City) v. Lauzon
, 2013 ONSC 2619, [2013] O.J. No. 2072, at para. 22, the court
    confirmed that
[
s
]
ection 15.9 (4) gives the City the
    authority to order the remedial steps to be taken which would include the
    authority to request further engineering reports be provided to determine what
    remedial steps are to be taken.

[32]

Further, s. 25(4) of the Act allows a judge to
    order that additional particulars be provided because it empowers a judge to
    take any action that the CBO may take:

On an
    appeal, a judge may affirm or rescind the order or decision and take any other
    action that the judge considers the chief building official, registered code
    agency or inspector ought to take in accordance with this Act and the
    regulations and, for those purposes, the judge may substitute his or her
    opinion for that of the official, agency or inspector.

[33]

Turning next to the prescribed specificity of
    the Order to Remedy, s. 15.9(4) of the Act stipulates that an Order to Remedy Unsafe
    Building should contain the following:

An
    inspector who finds that a building is unsafe may make an order setting out the
    reasons why the building is unsafe and the remedial steps necessary to render
    the building safe and may require the order to be carried out within the time
    specified in the order.

[34]

In the present case, we are of the view that the
    Order to Remedy complies with s. 15.9(4) of the Act in that it contains
    sufficient particularity to enable the respondent to know the case it had to
    meet and the deficiencies that had to be remedied.  In particular, the Order to
    Remedy specifies the areas and items in the Building that comprise the alleged serious,
    unsafe conditions requiring remediation, including the collapsed and rotten
    sections of floors and split structural beams that were also noted by the
    respondents own engineer.

[35]

Moreover, when the Order to Remedy is viewed in
    the context of the long history between the parties, the lengthy correspondence
    and the detailed engineering reports that the parties exchanged, there can be
    no doubt that the respondent knew the case it had to meet and the repairs that
    were necessary to stabilize the Building.  Moreover, the respondent applied for
    a building permit to carry out repairs and its own engineer recommended certain
    remedial measures that corresponded with those required by the Order to Remedy.
    The respondent completed some but not all of the necessary repairs.  The
    respondent did not complete all of the shoring and hoarding work required nor
    any of the waterproofing recommended by its own engineer.  This was not due to
    the respondents lack of understanding of what was required, but because of an
    admitted lack of funds to complete the repairs.

[36]

We see no basis to invalidate the Order to
    Remedy.

[37]

Before leaving the issue of specificity, we make
    the following general recommendation for the future.  Given that an Order to Remedy
    Unsafe Building under the Act is necessarily fact-specific to the particular
    building or property for which the order is issued, it is not possible to make general,
    practical suggestions about the level of specificity required for such an
    order.  However, as appellants counsel conceded, if the CBO already has an
    engineering report, it would be helpful to attach it to the order requiring
    remediation, if it has not already been delivered to the person receiving the
    order (as it was in the present case).

[38]

By this recommendation, we are not suggesting
    that the CBO must obtain an engineering report before issuing an Order to Remedy
    Unsafe Building under the Act.  Nor is it fatal to the validity of such an
    order if the CBO does not have or does not attach an engineering report.  Certainly,
    for the protection of the public, the CBO must have the flexibility to issue such
    orders to deal with all kinds of situations without first incurring the delay
    and expense of an engineering report.  Moreover, it is also within the CBOs
    discretion to require the person receiving the order to obtain an engineering
    report:
Ottawa
, at para. 22.

E.

Respondents Cross-Appeal

[39]

With respect to the respondents request for
    injunctive and declarative relief, we are not in a position to determine these
    issues on this record. In particular, we lack a current evidentiary record
    describing the present state of the Building.  Further, with respect to the
    injunctive relief requested, we have no evidence that the respondent is capable
    of providing any undertaking with respect to damages.

F.

Disposition

[40]

Accordingly, the appeal is allowed.  The
    cross-appeal is dismissed.  The issues of whether an interim injunction should
    be granted, and whether the Building is unsafe, are remitted for hearing before
    another application judge.

[41]

If the parties cannot agree on the issue of
    costs on the appeal, the appellants shall deliver a bill of costs, together
    with any brief written submissions of no more than two pages, within seven days
    of the release of this decision.  The respondents shall deliver their
    responding written submissions of no more than two pages within fourteen days
    of the release of this decision, subject to a request for further time to
    prepare the submissions.  The appellants shall deliver a brief reply within
    seventeen days of the release of this decision.

Released: G.P. May 8, 2017

K.M
    Weiler J.A.

G. Pardu J.A.

L. B. Roberts J.A.

[1]
Although not raised as an issue on this appeal, we note that t
he
    application judge mistakenly referred to s. 15.2(3) of the Act instead of s.
    15.9(5) of the Act.


COURT OF APPEAL FOR ONTARIO

CITATION: Sutherland Lofts Inc. v. Peck, 2017 ONCA 439

DATE: 20170531

DOCKET: C62807

Weiler, Pardu and Roberts JJ.A.

BETWEEN

Sutherland Lofts Inc.

Applicant
(Respondent in Appeal)

and

Chris Peck, Chief Building Official for the
    Corporation of the
City of St. Thomas, and The Corporation of the City of St. Thomas

Respondents
(Appellants)

Tom Halinski and David Neligan, for the appellants

Valerie MGarry, for the respondent

COSTS ENDORSEMENT

[1]

For reasons released on May 8, 2017, we allowed
    the appeal, dismissed the cross-appeal, and invited the parties to make written
    costs submissions, which we have now received and reviewed.

[2]

The appellants seek their partial indemnity
    costs in the amount of $38,105.67, including disbursements and applicable HST.

[3]

The respondent takes no issue with the quantum
    of the appellants costs; indeed its costs of $35,562.18 are comparable.
    However, the respondent submits that there should be no award as to costs or,
    alternatively, that costs of the appeal and cross-appeal should be left to the
    application judge hearing the remitted application or be awarded in the cause.

[4]

In our view, we see no reason to depart from the
    ordinary practice that the successful party on appeal be awarded its
    reasonable, fair and proportionate partial indemnity costs.  This appeal was
    not moot and was of considerable importance to the parties, and the
    cross-appeal was dismissed.

[5]

As a result, costs are to the appellants in the
    amount of $38,105.67, including disbursements and HST.

K.M. Weiler J.A.

G. Pardu J.A.

L.B. Roberts J.A.


COURT OF APPEAL
    FOR ONTARIO

CITATION: United States v. Lane, 2017 ONCA 396

DATE: 20170518

DOCKET: C61435

Laskin, Watt and Hourigan JJ.A.

BETWEEN

The Attorney
    General of Canada

(On Behalf of
    the United States of America)

Respondent

and

Brandon William Lane

Applicant

John Norris, for the applicant

Richard Kramer and Monika Rahman, for the respondent

Heard: April 12, 2017

On application for judicial review from the decision of
    the Minister of Justice, dated November 16, 2015, to order the applicants
    surrender to the United States of America.

Hourigan J.A.:

A.

Introduction

[1]

The applicant is a resident of Ontario who
    resists extradition to the United States on a series of child pornography
    charges.

[2]

In 2010, American authorities alerted Canadian
    authorities about the applicants alleged leadership role in a sophisticated
    international child pornography organization that operated a website called Dreamboard.
    This information led to the laying of various child pornography charges against
    the applicant in the United States and Canada. The Canadian charges were
    ultimately stayed.

[3]

While on bail
pending the hearing for his
    committal for extradition, the applicants
father turned him in
    to the police after discovering the applicants homemade computer, which
    contained thousands of images of child pornography
. The applicant was
    charged with breach of recognizance and a number of criminal offences related
    to the possession and making of child pornography under the
Criminal Code
.
    He pleaded guilty to those offences.

[4]

At his sentencing hearing, the applicant applied under s. 725(1)(c) of
    the
Criminal Code
for the court to consider evidence that he not only
    possessed and made child pornography, but also that he distributed it through
    Dreamboard, even though a distribution charge was not before the court.
With the American charges looming, this was a tactical gambit to
    engineer a double jeopardy defence to resist a possible extradition. Over the
    objection of the Crown and the American authorities, the sentencing judge
    granted the application and
took the distribution into account as an
    aggravating factor in imposing a sentence of 9.5 years imprisonment. The
    applicant subsequently consented to his committal for surrender for
    extradition.

[5]

T
he applicant
submitted to the Minister of
    Justice that his surrender should be refused because the facts of his
    distribution of child pornography through Dreamboard were taken into account in
    his Canadian sentence. He argued that extradition to face similar charges in
    the United States would expose him to double jeopardy, contrary to art. 4(1)(i)
    of the
Treaty on Extradition Between the Government of Canada and the
    Government of the United States of America
, 3 December 1971, Can. T.S.
    1976 No. 3 (entered into force 2 March 1976) (the Treaty).

[6]

The applicant also argued that his surrender would violate s. 7 of the
Canadian
    Charter of Rights and Freedoms
primarily on the basis that the severity of
    the potential sentence he would be subject to in the United States would shock
    the Canadian conscience. He further submitted that extradition would
    unjustifiably infringe his right to remain in Canada under s. 6(1) of the
Charter
.

[7]

The Minister rejected the applicants arguments and
    ordered his extradition.

On
    this application for judicial review of the Ministers surrender
decision
, the applicant renews the arguments made to the Minister and also
    submits that the Minister applied the wrong test in her double jeopardy
    analysis. For the reasons that follow, I would dismiss the application.

B.

FACTUAL BACKGROUND

[8]

Dreamboard was a password-protected online forum with about 600
    members. It was dedicated to the distribution and advertisement of child
    pornography. Members were organized in a hierarchy of levels and corresponding
    privileges that they could advance through according to the number and
    frequency of their posts.

[9]

Dreamboard contained thousands of postings and messages
    containing child pornography and links to external images and videos. An
    American company hosted it with servers located in Georgia and Nevada in the United
    States.

[10]

Following an American-led investigation, approximately 70
    individuals were charged over their alleged involvement in Dreamboard between
    January and June of 2010. The entire content of Dreamboards databases was
    seized.

[11]

As a result of data retrieved during the American investigation,
    subscriber information associated with the IP address used by a member of the
    site known under the alias BossHiaka was traced to the applicants residence
    in Kingston, Ontario. American authorities alerted the RCMP, and arrest and
    search warrants were obtained.

[12]

The Kingston Police executed the warrants on November 26, 2010.
    The applicant was arrested and his computers were seized pursuant to the
    warrants. The applicant was charged with child pornography offences under the
Criminal
    Code
. He was released on bail on December 2, 2010.

[13]

Meanwhile, an American indictment against the applicant was
    issued on January 11, 2011. The appellant is charged with three counts of contravening
    the following provisions of Title 18 of the United States Code: engaging in a
    child exploitation enterprise, contrary to 18 U.S.C. §2252A(g); conspiracy to
    advertise the distribution of child pornography, contrary to 18 U.S.C.
    §2251(d)(1) and (e); and conspiracy to distribute child pornography, contrary
    to 18 U.S.C. §2252A(a)(2)(A) and (b)(1).

[14]

In the American indictment, the applicant is alleged to have
    acted as one of four administrators for the Dreamboard site. The administrators
    are alleged to have controlled membership on the site, advised members on
    appropriate security measures and provided technical support for the operations
    of the site. The applicant allegedly had a very high degree of responsibility
    for the site and held the highest level of membership.

[15]

It is alleged that between September 2008 and June 2010, the
    applicant posted about 2,600 messages to the site, hundreds of child
    pornography images, encouraged others to share such images and offered advice
    as to how to avoid detection through the use of encryption software. The
    applicant is also alleged to have encouraged members to sexually assault
    children and post videos of their assaults on the website.

[16]

Paul Graham Fry, a former Dreamboard user operating under the
    alias Lofty, has already been extradited from Canada to the United States. He
    will testify as to the applicants involvement in Dreamboard during the
    prosecution of the American charges.

[17]

The United States, by a Diplomatic Note dated January 28, 2011,
    formally requested the applicants extradition to stand trial in the State of Louisiana.
T
he Minister gave the Attorney General of Canada
    authority to seek the applicants committal for extradition under s. 15 of the
Extradition
    Act
, S.C. 1999, c. 18 (the Act) on February 25, 2011. She provided an
    amended authority to proceed on April 26, 2011 pursuant to s. 23 of the Act.

[18]

The Minister specified the following Canadian offences
    corresponding to the alleged criminal conduct for which the applicants was
    indicted in the United States: distribution of child pornography, contrary to
    s. 163.1(3) of the
Criminal Code
; and conspiracy to distribute child
    pornography, contrary to ss. 163.1(3) and 465 of the
Criminal Code
.

[19]

The applicant was ordered to be detained in custody pending the
    extradition proceedings. The Canadian charges against the applicant were
    withdrawn on November 15, 2011 for reasons that have not been disclosed.

[20]

A committal hearing took place on November 28, 2011 before
Abrams J
. The applicant had brought an application under s. 8
    of the
Charter
to exclude evidence obtained from the applicants
    residence during the arrest in Kingston. Abrams J. took this decision under
    reserve.

[21]

Armstrong J.A., for this court, ordered the applicants release
    on a recognizance of bail on December 23, 2011 pending the decision on
    committal. The applicants parents and an aunt were to act as sureties. He was
    required not to possess a computer capable of accessing the Internet.

[22]

On August 14, 2012, the applicants father found a homemade computer
    in the applicants bedroom and reported this breach of recognizance to the
    authorities. The police found a substantial quantity of images of child
    pornography on the makeshift computer, including the applicants surreptitious
    video recording of his cousins two young daughters while they were being
    changed and toileted by their mother at the applicants residence.

[23]

On September 26, 2012, Abrams J. released his decision on the
Charter
application in the applicants committal proceeding: see 2012 ONSC 5404. He
    found a s. 8 breach and excluded the evidence at issue from the proceeding pursuant
    to s. 24(2) of the
Charter
.

[24]

On September 26, 2013, for reasons unrelated to the application
    for judicial review currently before this court, Abrams J. stayed the committal
    proceeding as an abuse of process: 2013 ONSC 6078. However, this court set
    aside the stay and ordered a new committal hearing on June 30, 2014: 2014 ONCA
    506, 121 O.R. (3d) 721. The Supreme Court of Canada denied leave to appeal:
    [2014] S.C.C.A. No. 425.

[25]

On January 6, 2014, the applicant pleaded guilty before Beaman J.
    in the Ontario Court of Justice to the following
Criminal Code
offences arising out of the homemade computer discovered by his father while he
    was on bail: breach of recognizance, contrary to s. 145(3); making child
    pornography in the form of a digital video file, contrary to s. 163.1(2); voyeurism,
    contrary to s. 163.1(2); possessing digital video of child pornography,
    contrary to s. 163.1(4); possessing digital images of child pornography,
    contrary to s. 164.1(4); and possessing digital images of a value not exceeding
    $5,000, knowing the images were obtained by the commission of an offence in
    Canada, contrary to s. 355(b).

[26]

As part of the guilty plea, an agreed statement of facts was read
    into the record. It acknowledged the applicants role in Dreamboard since 2008,
    the fact that the applicant posted thousands of images of child pornography on
    the site and the fact that he distributed such images and assisted other
    members of Dreamboard in distributing them.

[27]

At sentencing, the applicant applied under s. 725(1)(c) of the
Code
for the court to exercise its discretion to consider evidence that the
    applicant not only possessed and made child pornography, but also that he
    distributed it through Dreamboard. This provision states:

725
(1) In determining the sentence, a court

(c) may consider
    any facts forming part of the circumstances of the offence that could
    constitute the basis for a separate charge.

The Crown and the
American Department
    of Justice
opposed the application
.
Beaman J.
    granted it,
writing as follows:

[T]o not consider the fact that Mr. Lane both
    received files and distributed child pornography that he discovered through his
    own endeavors, would improperly constrain this courts decision-making process
    on sentencing. I have found that the distribution element of Mr. Lanes on-line
    activities played a key role in his ability to move up in the Dream Board
    organization, and give him access to bigger and more graphic digital
    collections.
[1]

[28]

Beaman J. considered the facts of the applicants distribution of
    child pornography in relation to his role with Dreamboard as aggravating
    factors. She imposed a total of 9.5 years incarceration, broken down as
    follows: two years for breach of recognizance; two years for each possession of
    child pornography offence, concurrent to each other but consecutive to the
    sentence for the breach offence; one year consecutive for the voyeurism
    offence; one year consecutive for possessing stolen property; and six months
    consecutive for making child pornography.

[29]

The applicant consented to committal for extradition before McMahon J.
    in the Superior Court of Justice on February 10, 2015.

C.

Reasons of the Minister

[30]

The applicant submitted to the Minister that his surrender should
    be refused three grounds.

[31]

First, he argued that his surrender would violate the protection
    against double jeopardy in art. 4(1)(i) of the Treaty, which provides that
    extradition should not be granted:

When the person whose surrender is sought is being proceeded
    against, or has been tried and discharged or punished in the territory of the
    requested State for the offense for which his extradition is requested.

According to the applicant, the similarity between the
    conduct for which he was punished in Canada and that for which he would potentially
    be punished in the United States also rendered his surrender unjust and
    oppressive, contrary to s. 44(1)(a) of the
Act
.

[32]

Second, the applicant argued that the severity of the potential
    sentence in the United States rendered his surrender contrary to the principles
    of fundamental justice under s. 7 of the
Charter
.

[33]

Third, he argued that the surrender would unjustifiably limit his
    right to remain in Canada under s. 6(1) of the
Charter
.

[34]

In a letter dated November 16, 2015 to the applicants counsel, the
    Minister provided her reasons for ordering the applicants surrender to the United
    States. She rejected each ground relied on by the applicant.

[35]

The applicant filed additional submissions with the Minster on August
    23, 2016 requesting that she reconsider her surrender decision. The Minister
    declined to consider the new submissions.

D.

Issues

[36]

The applicant submits that the Ministers decision to order his
    surrender was unreasonable. The issues he raises on this application for
    judicial review and my conclusions on each issue may be summarized as follows:

1.

Should
    this court interfere with the Ministers decision that the applicants
    surrender would not infringe the protection against double jeopardy in art.
    4(1)(i) of the Treaty?

No. The Minister
    applied the correct analytical approach to double jeopardy under art. 4(1)(i)
    by looking to the elements and objectives of the charges the applicant faced in
    Canada and the United States. The alternative conduct-based approach urged by
    the applicant is inconsistent with the language of art. 4(1)(i) and controlling
    authority from the Supreme Court of Canada. Moreover, it is better suited to
    the issue of double criminality. The Ministers conclusion regarding double
    jeopardy was reasonable and, therefore, should not be interfered with by this
    court.

2.

Should
    this court interfere with the Ministers decision that the applicants
    surrender would not infringe s. 7 of the Charter and her refusal to reconsider
    this conclusion on the basis of the applicants further submissions?

No. The Minister
    was aware of the potential lengthy prison sentence the applicant would face if
    extradited. However, she reasonably concluded that, given the applicants
    alleged role in a sophisticated international child pornography organization,
    the potential sentence he would face in the United States would not shock the
    Canadian conscience. The applicants additional submission that his sentence
    would shock the Canadian conscience because he engaged in his activities while
    in Canada and not the United States is not persuasive. It is not shocking that
    the applicant may be punished for conduct that took place partially in the
    United States and that impacted that country. The Minister also reasonably
    declined to consider the applicants additional submissions, as he did not
    raise any new issues that would impact her decision.

3.

Should
    this court interfere with the Ministers decision that the applicants
    surrender would not infringe s. 6(1) of the Charter?

No.
The Minister balanced all of the competing factors and came to a
    reasonable decision. She did not err in concluding
that the applicant
    had not already been punished for the American offences he faces.
Nor did she err in failing to
investigate why no further charges
    would be laid against the applicant in Canada, as
prosecutorial
    authorities are not required to disclose such decisions and the ability to
    prosecute in Canada is only one of the many factors to be considered. The
    Minister also gave
sufficient weight to the potential for civil
    commitment in the United States
and reasonably rejected it as
    a violation of the applicants s. 6(1)
Charter
rights.

E.

ANALYSIS

(1)

Double Jeopardy

(i)

The Ministers Decision

[37]

The Minister found that the applicants surrender would not violate art.
    4(1)(i) of the Treaty. She stated that the essential character of the
    uncharged child pornography distribution offence taken into account by Beaman
    J. at sentencing is the act of distributing, sharing or transmitting child
    pornography. She compared this offence to the American offences and concluded that
    they concerned different wrongs, following
Canada v. Schmidt
, [1987] 1
    S.C.R. 500, at pp. 527-528.

[38]

The first offence charged in the United States was engaging in a child
    exploitation enterprise. The materials submitted by the American authorities in
    support of the extradition request indicated that a person engages in a child
    exploitation enterprise if the person knowingly participates, in concert with
    three or more persons, in three or more separate incidents of felonious conduct
    involving the exploitation of children, including the advertisement and
    distribution of child pornography. Furthermore, the three or more incidents
    must involve more than one victim, and, if the act of child exploitation
    involves the advertisement and distribution of child pornography, the accused
    must know that pornographic material is transported in interstate or foreign
    commerce by computer. The American authorities advised that this offence was
    enacted to target individuals who engage in large-scale unlawful conduct
    involving the exploitation of children.

[39]

The Minister inferred from this information that the essential
    character of the American child exploitation enterprise offence is taking
    part in a large-scale criminal organization dedicated to committing offences
    against children. She regarded the advertisement and distribution of child
    pornography as only a component of the offence, not its essence.

[40]

The Minister concluded that the essential character of the Canadian
    offence of distributing child pornography is distinct from that of the American
    child exploitation enterprise offence. The two offences concern distinct wrongs
    because the former contains no element of an enterprise or large-scale conduct,
    whereas the latter does. Therefore, double jeopardy was not engaged.

[41]

The second and third offences charged in the United States were
    conspiracy to advertise the distribution of child pornography and conspiracy to
    distribute child pornography. These offences were premised on the alleged
    agreement between the applicant and his co-conspirators to advertise or carry
    out the distribution of child pornography.

[42]

The Minister noted that conspiracy does not subsume the substantive
    offence and that a person may be convicted of both the conspiracy and the
    substantive offence that is the object of the conspiracy, citing
Sheppe v.
    The Queen
, [1980] 2 S.C.R. 22. Thus, the American conspiracy offences were
    distinct from the Canadian substantive distribution offences. The sentence
    imposed by Beaman J. that reflected the Canadian distribution offence did not
    address any alleged agreement between the applicant and his co-conspirators.
    Again, the Minister concluded that double jeopardy was not engaged.

(ii)

Arguments on the Application for Judicial Review

[43]

In this court, the applicant submits that the Minister applied an
    overly narrow and formalistic interpretation of the requirements of double
    jeopardy. He argues that the analysis under art. 4(1)(i) must focus on the conduct
    to which a foreign charge relates rather than the specific constituent elements
    of the charge under foreign law, which the Minister fixed on. In his submission,
    when applying the double jeopardy principle, it is not necessary for the
    Canadian offence to match the foreign offence in name or in its elements; he
    says that only the essence of the offence matters, citing
Canada
    (Justice) v. Fischbacher
, 2009 SCC 46, [2009] 3 S.C.R. 170, at para. 29.

[44]

The applicant submits that the Minister failed to follow this approach
    and erred in law in focusing her analysis on the elements of the Canadian and
    American offences and not on the conduct underlying the offences. According to
    the applicant, the Minister failed to recognize the fundamental commonality in
    the conduct underlying the offences. He further submits that she erred in
    insisting on perfect symmetry between the constituent elements of each offence.

(iii)

Standard of Review

[45]

The decision of the Minister to order surrender is reviewed on a
    reasonableness standard:
Canada (Minister of Justice) v. Lake
, 2008
    SCC 23, [2008] 1 SCR 761, at paras. 34-41. However, I accept the submission of
    the applicant that, when considering the issue of double jeopardy, the Minister
    must apply the correct test:
Lake
, at para. 41.

[46]

Consequently, in the next sections of my analysis, I will first consider
    whether the Minster applied the correct test under art. 4(1)(i) of the Treaty.
    I will then turn to the question of whether the Minister reasonably determined
    that double jeopardy was not engaged.

(iv)

The
Correct Test is
    Offence-Based

[47]

On the applicants proposed conduct-based approach to art. 4(1)(i), when
    the Minister determines whether to order a persons surrender for extradition,
    she must consider whether the charges of the foreign offence relate to conduct
    for which the person has already been punished in Canada.

[48]

In my view, it is incorrect to adopt the applicants position because
    it is contrary to the plain language and meaning of art. 4(1)(i); it is
    inconsistent with Supreme Court jurisprudence; and it wrongly imports into the
    double jeopardy analysis the conduct-based approach used in considering the
    principle of double criminality in extradition law. I will review each of these
    reasons below.

[49]

First, art. 4(1)(i) of the Treaty requires the Minister to refuse
    extradition when the person whose surrender is sought is being proceeded
    against, or has been tried and discharged or punished in the territory of the
    requested State for the
offence
which the extradition is requested (emphasis
    added). Thus, the Treaty requires the Minister examine the offence for which a
    person has been previously punished and compare that to the offence for which
    the persons extradition is sought. There is no suggestion in the Treaty that
    the Minister should undertake an analysis of the conduct engaged in by the
    person sought.

[50]

Second, the governing authority on the correct approach to double
    jeopardy in the extradition context is
Schmidt
, where the Supreme
    Court of Canada took an offence-based approach to the analysis. In
Schmidt
,
    the United States sought Ms. Schmidts extradition for the offence of child
    stealing under the laws of the State of Ohio. She had already been tried and
    acquitted on the same facts for the federal American crime of kidnapping. She
    argued that extradition would result in her being exposed to double jeopardy,
    contrary to ss. 7 and 11(h) of the
Charter
and the Treaty.

[51]

La Forest J. held that Ms. Schmidts double jeopardy concern could be
    considered under the principles of fundamental justice in s. 7 of the
Charter
(but not under s. 11(h) of the
Charter
). He stated at p. 528:

Repeated attempts by the same prosecutorial authorities to
    prosecute a person for the same offence may, in certain circumstances, well
    amount to harassment sufficiently oppressive that surrender of such a person
    would violate those principles.

[52]

However, he concluded that this standard was not met, writing as follows
    at p. 528:

The two offences involve quite different elements. The
    kidnapping offence is aimed at regulating interstate and foreign commerce, and
    maritime jurisdiction, as well as internationally-protected persons. The state
    action is aimed at public order within the state, and is designed particularly
    to protect young persons. Various other elements and defences appear in one
    provision but not the other. Different interests are involved, with different
    prosecutorial authorities following their own paths
. Similar situations may
    exist in this country. They do not generally arise in as acute a fashion here
    because criminal law is exclusively vested in Parliament, but on the other hand
    the same prosecutorial authorities are often involved. [Citations omitted and
    emphasis added.]

In this passage, La Forest J. focuses on the different
    elements and objectives of the two offences, not on the alleged conduct. Ms.
    Schmidts potential exposure to double jeopardy for the Ohio offence and for
    the federal offence was not contrary to the principles of fundamental justice
    because the two offences at issue were comprised of different elements and
    objectives: Anne W. La Forest,
La Forests Extradition to and From Canada
,
    3d ed (Aurora, ON: Canada Law Book, 1991), at p. 113.

[53]

Thus, the proper approach to double jeopardy in the extradition context
    is not conduct-based but offence-based. The Minister may look to the
    constituent elements of the foreign and Canadian offences to see if they align,
    as well as to the objectives of the two offences.

[54]

The applicant argues that
Schmidt
is distinguishable because La
    Forest J. held that art. 4(1)(i) of the Treaty had no application in that case.
    La Forest J. reasoned that art. 4(1)(i) applies only where a person whose
    extradition is sought has been already been punished in Canada and faces
    potential punishment for the same offence in the requesting state. It did not apply
    in
Schmidt
because Ms. Schmidt has already been punished in the
    requesting state, the United States, and faced extradition for the same offence
    in that state: see p. 517.

[55]

While I accept that there is a factual difference between
Schmidt
and the present case, there is no principled basis to conclude that an offence-based
    analysis should not be adopted when considering double jeopardy under art.
    4(1)(i) of the Treaty in circumstances where the provision is properly
    applicable. Indeed, after
Schmidt
, the Quebec Court of Appeal applied
    an offence-based analysis to art. 4(1)(i) in
États-Unis dAmérique v. Garz
,
    2006 QCCA 222, 215 C.C.C. (3d) 429 (cited to C.C.C.). In concluding that a
    surrender decision by the Minister did not violate art. 4(1)(i), Côté J.A. affirmed
    the Ministers statement that the Canadian and foreign offences at issue must
    have the same elements for double jeopardy to be engaged. She agreed with the
    Minister that [t]he essential elements of the offences and the evidence
    supporting the charges in the United States are different: para. 66.

[56]

Furthermore, the Supreme Courts decision in
Schmidt
is
    consistent with its later decision in
R. v. Van Rassel
, [1990] 1 SCR
    225.
Van Rassel
involved an accused who had been acquitted in the
    United Sates of three charges. The issue was whether he could be tried in
    Canada for a similar charge. The accused pleaded
autrefois acquit
,

but the Supreme Court rejected that submission. McLachlin J. (as she then
    was) stated at p. 234 that, when assessing whether the plea is made out in
    relation to double prosecution for similar domestic and foreign offences, the
    court must determine whether the offences in question are different or the same
    in nature:

It is sometimes difficult to apply the
    principle of
autrefois acquit
to
    charges arising in criminal law systems completely different from our
    own. While the laws of different countries are rarely the same, it must be
    recognized that the plea of
autrefois acquit
is based on the principle of justice and fairness and that the
Criminal Code
does not require that the charges be
    absolutely identical. Despite the technical form of the relevant sections
    of the
Criminal Code
, the substantive point is a simple one:  could
    the accused have been convicted at the first trial of the offence with which he
    is now charged? If the differences between the charges at the first and
    second trials are such that it must be concluded that the charges are different
    in nature, the plea of
autrefois acquit
is not
    appropriate. On the other hand, the plea will apply if, despite the differences
    between the earlier and the present charges, the offences are the same.
[Emphasis
    added.]

[57]

I reject the applicants submission that the Supreme Court adopted a
    conduct-based analysis in
Van Rassel
. To the contrary, in concluding
    that
autrefois acquit
was not applicable, the court looked not to the
    accuseds conduct but to distinctions between the essential elements of the Canadian
    and American charges: p. 236. In the above excerpt from McLachlin J.s reasons,
    she held there was no necessity for perfect symmetry between the two charges.
    It would have been sufficient if the natures of two charges were the same.

[58]

The applicant also relies on the decision of the Manitoba Court of
    Appeal in
United States of America v. Andrews
(1991), 65 C.C.C. (3d)
    345 (Man. C.A.), at p. 350, as support for adopting a conduct-based approach to
    art. 4(1)(i) of the Treaty. In
Andrews
, the court commented favourably
    on such an approach in
obiter
: p. 350. However, this decision is of
    little assistance to the applicant because Philp J.A. concluded that it was
    unnecessary to decide whether a conduct-based approach should be preferred over
    an offence-based approach: p. 352.

[59]

In summary, the Supreme Court has made clear that the proper approach to
    the double jeopardy analysis is offence-based and not conduct-based.

[60]

Third, while a conduct-based approach is appropriate when applying the
    principle of double criminality in Canadian extradition law, it is
    inappropriate for considering the issue of double jeopardy. A conduct-based
    approach to double criminality is specifically mandated by ss. 3(1)(a) and (b)
    of the
Act
when an extradition judge determines whether to order a
    persons committal for extradition. This can be contrasted with the mandate in
    art. 4(1)(i) of the Treaty, which requires the Minister to examine the
    similarities between the Canadian offences that a person has been punished for
    and the foreign offence for which the persons extradition is sought.

[61]

The conduct-based approach to double criminality also must be understood
    in terms of the role of the extradition judge at a committal hearing, which is
    set out in s. 29(1)(a) of the
Act
. The judge must order committal where
    there is evidence of conduct that, had it occurred in Canada, would justify
    committal for trial in Canada on the offence set out in the authority to
    proceed. Nothing in this provision suggests that the extradition judge should
    be concerned with the constituent elements of the foreign offence.

[62]

The judges duty at a committal hearing is simply to determine whether
    there is a
prima

facie
case of a Canadian crime. It is not
    open to the judge to consider the nature of the charges in the United States
    of America. She is obliged to accept the statement of the Minister that the
    alleged conduct corresponds to the named Canadian offences:
United States
    of America v. Kucan
, [2001] O.J. No. 4162 (C.A.), at para. 5. See also
United
    States of America v. Cail
, 2009 ABCA 345, 15 Alta. L.R. (5th) 46, at para.
    15.

[63]

Further, t
he conduct-based approach to double
    criminality has two rationales that are not applicable to double jeopardy.
It
    first
ensures that the person whose extradition is sought is
    punished only for conduct that he or she had fair notice would invite
    punishment in Canada for their commission:
Washington (State of) v.
    Johnson
, [1988] 1 S.C.R. 327, at pp. 341-342.
This
    fair-notice rationale is distinct from the purpose of the protection against
    double jeopardy, which is to ensure the finality of a criminal verdict, protect
    the individual interest in repose and avoid state oppression of the individual
    by means of repeated criminal proceedings: see
George C. Thomas III, An
    Elegant Theory of Double Jeopardy, [1988] U. Ill. L. Rev. 827, at pp. 839-840
.

[64]

The conduct-based approach to double criminality also ensures
    that Canada only extradites a person to face foreign charges when it is also
    possible for Canada to reciprocally request that persons extradition from
    another nation to face those charges in Canada:
Johnson
, at pp.
    341-342.
However, there is no need for this reciprocity
    rationale to shape the correct approach to double jeopardy. It will already have
    been fully satisfied by the application of the double criminality principle by
    an extradition judge at the committal stage of the extradition process, which
    occurs before the Minister and this court consider the protection against
    double jeopardy in art. 4(1)(i) of the Treaty.

[65]

I would add the final observation that the Supreme Courts decision in
Fischbacher
relied on by the applicant is if no assistance to him. In that case, the
    Supreme Court was considering the double criminality provisions in the Act and
    not double jeopardy under the Treaty.

[66]

For the foregoing reasons, I conclude that the Minister was correct in
    applying an offence-based approach to the double jeopardy analysis.

(v)

The Ministers Decision was Reasonable

[67]

Having found that the Minister used the correct test, the analysis
    shifts to determining whether the Ministers conclusion that double jeopardy
    was not engaged was reasonable. In my view, it was.

[68]

Under the offence-based approach to art. 4(1)(i) of the Treaty applied by
    the Minister, she was obliged to determine whether the Canadian offences for
    which the applicant was punished have the same or different elements and
    objectives as the American offences for which his extradition was sought.

[69]

Beaman J. considered facts about the applicants distribution of child
    pornography through Dreamboard. To be convicted of distributing child
    pornography contrary to s. 163.1(3) of the
Criminal Code
,

the
    accused must have knowledge that the pornographic material was being made available
    or be wilfully blind to that fact. But the accused need not have knowingly and
    by some positive act facilitated the availability of the material:
R. v.
    Spencer
, 2014 SCC 43, [2014] 2 S.C.R. 212, at paras. 83-84.

[70]

It was reasonable for the Minister to conclude that the elements and
    objectives of the Canadian distribution offence and the American child
    exploitation enterprise offence are distinct. The Canadian offence contains no
    element of acting in concert with three or more persons in three or more
    incidents of exploiting children, involving three or more victims, or of
    knowing that the pornographic material is distributed inter-provincially or
    internationally by computer. Nor does it require proof of the positive act of
    organized cooperation with others to facilitate the distribution of the
    material, as the American offence does.

[71]

The distribution of child pornography is in fact ancillary to the core element
    of the American offence, which is the organized, interstate or international
    collaboration with others to exploit children. The child exploitation may involve
    the distribution of child pornography, but that is not necessary; it could also
    involve sex trafficking (18 U.S.C. §1591) or kidnapping (18 U.S.C. §1591). By
    contrast, the distribution of child pornography is at the core of the Canadian
    offence in s. 163.1(3) of the
Criminal Code
.

[72]

These distinctions underscore that the objective of the American offence
    is narrower than the Canadian offence. It is to criminalize large-scale,
    organized child exploitation operations that occur across state or national
    borders. This was the objective proposed by the American authorities to the
    Minister. The Canadian offence more broadly targets the distribution of child
    pornography even when it is committed by a single person by means other than a
    computer, without cooperating with others, in a single incident involving a
    single victim and without crossing borders.

[73]

The Ministers decision that the American charges of conspiracy to distribute
    and advertise child pornography differ from the Canadian offence of distributing
    child pornography was also reasonable. A charge of conspiracy does not subsume
    the substantive offence. The essence of conspiracy is a meeting of minds with
    regard to a common design to do something unlawful, not the actual carrying out
    of that design: see
Sheppe
;
United States of America v. Dynar
,
    [1997] 2 S.C.R. 362, at paras. 86-90; and
Lake
, at para. 44.

[74]

Although, as the appellant points out, sentences for a conspiracy and
    the substantive offence are usually ordered to be served concurrently, this
    rule is not an absolute requirement in Canadian law. The rule, therefore, does
    not suggest that consecutive punishment for the conspiracy and the substantive
    offence is contrary to the protection against double jeopardy. In any event,
    the Minister did consider that a sentencing judge in the United States could
    take into account the time the applicant spent in custody in Canada as a
    mitigating factor.

[75]

In summary, the Ministers decision that double jeopardy
    under art. 4(1)(i) of the Treaty did not apply in the circumstances of this
    case was reasonable and there is no basis for appellate interference.

(2)

Unjust or Oppressive Surrender

(i)

The Ministers Decision

[76]

The Minister rejected the applicants submission that his surrender
    would be unjust or oppressive contrary to s. 44(1)(a) of the Act. She noted
    that the applicants argument that the nexus between the conduct for which he was
    punished in Canada and that for which he would be punished in the United States
    made his surrender unjust or oppressive was similar to his double jeopardy
    argument. The double jeopardy argument having been rejected, she focused on the
    applicants submissions under s. 7 of the
Charter
that were grounded
    on the severity of the sentence he was subject to in the United States.

[77]

Section 44(1)(a) requires the Minister to refuse a surrender order if
    she is satisfied that the surrender would be unjust or

oppressive

having regard to all the relevant
    circumstances. This provision required her to consider whether a surrender
    order would be consistent with the principles of fundamental justice under s. 7
    of the
Charter
. It would not be consistent if it would shock the Canadian
    conscience:
United States v. Burns
, 2001 SCC 7, [2001] S.C.R. 283, at
    paras. 68-69. The applicant submitted that the severity of the potential
    sentence that he would receive in the United States would shock the Canadian conscience.

[78]

The Minister found that the offences the applicant was alleged to have
    committed were very serious offences against children, and the potential
    penalties in the United States are reflective of a growing concern with respect
    to the sexual exploitation of children over the Internet. She also noted that
    the courts have repeatedly held that in cases where a person faced a lengthy
    mandatory minimum sentence in the requesting state, his or her surrender did
    not violate s. 7 of the
Charter
, citing, for example, this courts decision
    in
United States v. K. (J.H.)
(2002), 165 C.C.C. (3d) 449 (Ont. C.A.),
    leave to appeal to S.C.C. refused, [2002] S.C.C.A. No. 501.

[79]

The Minister concluded that the applicants surrender would not shock
    the Canadian conscience as a consequence of the severity of the sentence he
    faced in the United States.

[80]

On August 3, 2016, the applicant made further submissions to the
    Minister asking her to reconsider her earlier decision to order his surrender. These
    submissions contained an expert opinion prepared by Betty L. Marak, Assistant
    Federal Public Defender, Middle and Western Districts of Louisiana.

[81]

Ms. Marak was very familiar with the Dreamboard prosecutions. She
    opined that the applicant would receive a sentence of 38 years incarceration
    at minimum on a guilty plea for the offence of engaging in a child exploitation
    enterprise. If convicted after trial, Ms. Marak was of the view that the
    applicant would be sentenced to life in prison. Ms. Marak also opined that the
    sentencing factors on which the Minister relied to conclude that the applicant
    would likely not be subject to a disproportionate sentence in the United States
    would not mitigate the applicants sentence and that some factors would
    actually increase it.

[82]

By letter dated October 6, 2016, the Minister declined to
    consider the new submissions on the basis that the applicant had not raised any
    new issues.

(ii)

Submissions on the Application for Judicial
    Review

[83]

The applicant submits that the Ministers decision that his surrender
    would not violate s. 7 of the
Charter
was based on a misapprehension
    of evidence. He argues that a significant discrepancy between the jeopardy
    faced by the person sought by the requesting state and that which he would face
    if convicted in Canada is a factor that tends to make a surrender unjust:
Fischbacher
,
    at para. 54. The applicant further submits that this court has recognized that
    there can be cases where the potential sentence in the requesting state will be
    so grossly disproportionate to the personal circumstances of the person sought that
    a surrender would shock the Canadian conscience: see
United States of
    America v. Leonard
, 2012 ONCA 622, 112 O.R. (3d) 496, at para. 94.

[84]

The applicant also says that the Minister further erred in not
    reconsidering her surrender decision in light of the new facts he presented in
    his additional submissions and in not concluding that those facts disclosed how
    his surrender would result in a grossly disproportionate sentence.

(iii)

Analysis

[85]

I see no basis to interfere with the Ministers decision regarding the
    applicants potential sentence. The test of whether a sentence would shock the
    conscience of Canadians is a very strict one that constitutionally limits the
    Ministers decision to surrender only in very exceptional circumstances:
France
    v. Diab
, 2014 ONCA 374, 120 O.R. (3d) 174, at para. 202, leave to appeal
    to S.C.C. refused, [2014] S.C.C.A. No. 317.

[86]

The Minister correctly applied this test in her s. 7 analysis. She was
    aware that there was a potential that the applicant could receive life in
    prison on the American child exploitation charge. However, she recognized that
    sentencing in the United States would be based on several variables, including:
    the applicants cooperation with the U.S. authorities; whether he enters a
    guilty plea; sentencing guidelines and precedent; a pre-sentence report that
    the applicant could participate in preparing; the fact that he cannot be
    sentenced on both the child exploitation enterprise offence and the lesser and
    included conspiracy offences; and his own circumstances and mitigating factors,
    particularly his time served in custody in Canada.

[87]

There is no question, and the Minister was certainly aware, that the
    applicant faces a significant sentence in the United States. However, absent a
    potential death penalty or sentence that would involve some form of torture,
    the severity of a sentence will not generally shock the conscience of
    Canadians:
United States of America v. Wilcox
, 2015 BCCA 39, 321
    C.C.C. (3d) 82, at para. 41, leave to appeal to S.C.C. refused, [2015] S.C.C.A.
    No. 124. The sentence the applicant faces in the United Sates would not meet these
    criteria. Nor would it be so grossly disproportionate to the personal
    circumstances of the applicant as to shock the Canadian conscience.

[88]

I also do not accept the applicants submission that his sentence would
    shock the Canadian conscience because he engaged in his activities while in
    Canada and not the United States. In the American indictment, the applicant is
    alleged to have been a leader of a sophisticated child pornography enterprise
    whose harmful impact reached across the Canadian border into the United States.
    It is a reasonable inference that he knew of the international nature of the
    organization and that it utilized servers located in the United States. As this
    court stated in
France v. Liang
, 2007 ONCA 741 88 O.R. (3d) 12, at
    para. 24, leave to appeal to S.C.C. refused, [2007] S.C.C.A. No. 589, criminals
    whose crimes know no borders run the risk that any of the countries harmed by
    their actions may justifiably demand that they answer for their actions in that
    country.

[89]

Finally, I see no error in the Ministers refusal to accept the late
    submissions of the applicant. The Minister was under no obligation to accept those
    submissions, which were filed nine months after she rendered her initial
    surrender decision, and her refusal is entitled to deference:
Germany v.

Schreiber
, 2007 ONCA 791, 87 O.R. (3d) 641, at para. 4, leave to
    appeal to S.C.C. refused, [2008] S.C.C.A. No. 14.

[90]

In any event, I am not satisfied that Ms. Maraks opinion would have
    made any difference in the Ministers surrender decision. The opinion suggested
    that the applicant would receive a sentence of 38 years on a guilty plea. For
    the reasons given above, this would not render the decision shocking to the
    Canadian conscience. Moreover, the opinion confirmed much of what the Minister
    understood would occur on the sentencing, including the fact that the
    sentencing judge could consider the time spent incarcerated in Canada as a
    mitigating factor.

(3)

Section 6(1) of the
Charter

(i)

The Ministers Decision

[91]

The Minister rejected the appellants submission that his surrender
    would violate s. 6(1) of the
Charter
, which provides: Every citizen
    of Canada has the right to  remain in  Canada. In assessing this submission,
    she followed the framework laid out in
United States of America
    v. Cotroni
, [1989] 1 S.C.R. 1469.

[92]

The Minister stated that the question she had to answer was whether
    surrendering the applicant to face prosecution in the United States would
    unjustifiably infringe his right to remain in Canada. She decided that it would
    not, relying on the following considerations:

·

The fact that the applicant was a Canadian citizen was not enough
    to make his extradition unjustifiable.

·

The United States had jurisdiction to prosecute the applicant for
    the offences for which his extradition was sought.

·

Whether the applicant intended to commit offences against American
    criminal law was irrelevant, as it was beyond the function of the extradition
    process to assess the sufficiency of the evidence against the applicant.

·

American authorities initiated and developed the case against the
    applicant. The key evidence against him was located in the United States as was
    the key witness, Mr. Fry, who could be compelled to testify by the American authorities.

·

The majority of the other members of Dreamboard who were arrested
    in the investigation of the website were convicted in the United States, and it
    was desirable for all of them to face prosecution in the same jurisdiction.

·

There were no Canadian charges outstanding against the applicant
    stemming from his involvement in Dreamboard. He pleaded guilty to related
    conduct but not the conduct for which the United States sought extradition.

·

The applicant could have access to the same rehabilitative
    programs in Canada and the United States.

(ii)

Analysis

[93]

The applicant concedes that the Ministers decision on this issue
    should be granted a high level of deference: see
United States of America
    v. Sriskandarajah
, 2012 SCC 70, [2012] 3 S.C.R. 609, at paras. 22-23.
However,
according to the applicant, the Minister made three
    errors in her s. 6(1)
Charter
decision.

[94]

First, the applicant submits that the
    Minister relied on the erroneous conclusion that he had not already been
    punished for the American offences he faces.
For the reasons
    given above, I am not satisfied that the applicant has been punished for the
    American offences that he is facing.

[95]

Second, the applicant submits that the Minister erred in relying
    on the fact that no charges were pending against the applicant in Canada
    because, as this court made clear in
Leonard
at para. 77, this kind of
    reasoning evades her responsibility to inquire into the reasons why no further
    charges would be laid
.

[96]

I would not accede to this argument. Absent an
    allegation of bad faith, prosecutorial authorities are not required to disclose
    their decisions, and the ability to prosecute in Canada is only one of the many
    factors to be considered in the s. 6(1)
Charter
analysis:
Sriskandarajah
, at
    paras. 27-28. In addition, this courts decision in
Leonard
is distinguishable because in that case the sole determining factor
    relied upon by the Minister to make a surrender order was the absence of
    Canadian charges. In the present case, the absence of Canadian charges was just
    one of several factors relied upon by the Minister.

[97]

Third, the applicant argues that the Minister erred in not giving
    sufficient weight to the potential for civil commitment in the United States. However,
there is no question that the Minister considered this issue.
    She noted that, according to the information provided by the United States,
    after serving his sentence it would be more likely than not that the applicant
    would be deported rather than be subject to a civil commitment order.

[98]

In addition, the Minister went on to analyze
    whether a potential civil committal may frustrate the applicants
    rehabilitation prospects and concluded that it would not. The applicant points
    out that, according to Ms. Maraks expert opinion, the threat of civil
    commitment influences many sexual offenders not to seek treatment while
    imprisoned. That opinion does not detract from the reasonable conclusion
    reached by the Minister that by participating in treatment while in prison in
    the United States, the applicant would be in a position to argue that he
    addressed any mental health issues.

[99]

In summary, the Ministers decision regarding
    the applicants s. 6(1)
Charter
rights was
    reasonable and does not warrant appellate interference. The Minister balanced
    all of the competing factors and came to a reasonable decision.

F.

DISPOSITION

[100]

For the foregoing reasons, I would dismiss the application for
    judicial review.

Released: DW MAY 18 2017

C.W. Hourigan J.A.

I agree. John Laskin
    J.A.

I agree. David Watt
    J.A.

[1]

Beaman J.s decision was not appealed. Nothing in these
    reasons should be considered an endorsement of her decision as there is good
    reason to doubt its correctness. She did not cite or apply the leading
    authorities on s. 725(1)(c)
R. v. Larche
, 2006 SCC 56, [2006] 2 S.C.R.
    762, and
R. v. Angelillo
, 2006 SCC 55, [2006] 2 S.C.R. 728. It is also
    difficult to understand why it was necessary to consider the applicants
    distribution activities when sentencing him on distinct charges that took place
    while on bail pending his committal hearing.


COURT OF APPEAL FOR ONTARIO

CITATION: Usanovic v. Penncorp Life Insurance Company (La
    Capitale Financial Security Insurance Company), 2017 ONCA 395

DATE: 20170518

DOCKET: C62558

Strathy C.J.O., Laskin and Trotter JJ.A.

BETWEEN

Fadil Usanovic

Plaintiff
(Appellant)

and

Penncorp Life Insurance Company also carrying on
    business as
La Capitale Financial Security Insurance Company

Defendant
(Respondent)

Daniel J. Fife and Maple Anne Cameron, for the appellant

Vincent Genova, for the respondent

Heard: February 24, 2017

On appeal from the judgment of Justice David A. Broad of
    the Superior Court of Justice, dated July 15, 2016, with reasons reported at
    2016 ONSC 4624.

Strathy C.J.O.:

[1]

The motion judge granted summary judgment dismissing the appellants action
    against his disability insurer because it was time-barred. He rejected the
    appellants allegation that the insurer breached its duty of good faith by
    failing to inform him of the limitation period when it terminated his benefits.
    The appellant re-iterates this submission on appeal.

[2]

I would dismiss the appeal. Under the
Limitations Act, 2002
, S.O.
    2002, c. 24, Sched. B, the limitation period began to run when the claim was
    discovered, as determined by s. 5. The insurers duty of good faith did not
    require it to give notice of the limitation period to its insured. While the
    legislatures of some provinces have imposed a statutory obligation to that
    effect, there is no such requirement in Ontario. Whether there should be is a
    matter I would leave to the legislature.

A.

BACKGROUND

(1)

The Facts

[3]

The appellant was a self-employed eavestrough installer. In 1999, he bought
    an insurance policy from the respondent. The policy insured him against
    disability arising from accidents. In 2004, he purchased additional coverage
    for disability arising from sickness.

[4]

In September 2007, the appellant fell from a roof and suffered serious
    injuries. He received disability benefits until November 2011, when the
    respondent terminated its payments because he no longer had a total
    disability, as defined by the policy.

[5]

On January 12, 2012, the respondents lawyer wrote to the appellant
    explaining that since benefits had been paid for 24 months, he was not entitled
    to receive further benefits unless he was unable to engage in any and every
    occupation for which he was reasonably fit by reason of his education, training
    and experience. A review of the medical information on his file did not support
    the conclusion that he had a total disability. Moreover, surveillance
    undertaken by the insurer was inconsistent with the limitations the appellant
    claimed to be suffering.

[6]

The lawyers letter added, If you disagree with this decision, please
    submit, within sixty days of receipt of this letter, medical records in support
    of your claim for total disability from any occupation for which you are
    reasonably trained and educated.

[7]

The appellant did not provide new medical records in response to the
    letter. He claimed in an affidavit that he had sent a letter to the insurer,
    dated February 3, 2011 [
sic
], protesting the termination of his
    benefits.
[1]
The insurer denied having received that letter.

[8]

In cross-examination, the appellant admitted that he knew his benefits
    had been terminated, had received the lawyers letter, had read the policy
    over, had discussed the matter with his wife many times and had considered
    hiring a lawyer, but could not afford to do so.

[9]

In early 2015, the appellant consulted counsel, who told him that there
    was a two-year limitation period on his claim. The appellant alleges that, had the
    insurance company told him about the limitation period when it denied his claim,
    he would have brought an action earlier. He commenced this action in April
    2015, more than two years after the termination of his benefits and receipt of the
    letter from the respondents lawyer.

(2)

The Policy

[10]

The disability policy issued by the respondent to the appellant covers
    total disability arising from accident or sickness. For the first 24 months,
    the insured is entitled to benefits if he or she is unable to perform any of
    the important daily duties pertaining to his occupation or profession and is
    not otherwise employed. After 24 months, as noted above, the definition changes
    to cover only the complete inability to engage in any occupation for which the
    insured is reasonably fitted.

[11]

The policy has Statutory Conditions attached. These include the
    following:

LIMITATION OF ACTIONS: An action or proceeding against the
    Insurer for the recovery of a claim under this Contract shall not be commenced
    more than one year after the date insurance money became payable or would have
    been payable if it had been a valid claim.

[12]

The respondent concedes that this provision is inapplicable as a result
    of s. 22(1) of the
Limitations Act, 2002
.

B.

DECISION IN THE COURT BELOW

[13]

Before the motion judge, the appellant argued, based on
Kassburg v.
    Sun Life Assurance Co. of Canada
, 2014 ONCA 922, 124 O.R. (3d) 171 and
Smith
    v. Co-operators General Insurance Co.
, 2002 SCC 30,
    [2002] 2 S.C.R. 129
, that the respondents denial was not sufficiently
    clear and unequivocal to trigger the limitation period. The motion judge found
    against him, holding that the limitation period began to run when the appellant
    received the lawyers letter on January 12, 2012.

[14]

The appellant did not pursue that argument before us.

[15]

The appellants alternative submission in the court below, and the one advanced
    in this court, was that the insurers duty of good faith and fair dealing
    obliged it to advise its insured of the applicable limitation period on denying
    or discontinuing insurance benefits and that the two-year limitation period did
    not begin to run until the insurer gave this notice.

[16]

The motion judge rejected this argument. He observed that, in my view,
    the extension of the law proposed by the plaintiff would represent a
    substantial shift in the boundaries of the obligation of good faith and fair
    dealing on insurers as they are presently understood (at para. 38).

[17]

His core conclusions, at paras. 40-42, were as follows:

It would appear that, at its highest, the obligation of good
    faith and fair dealing arguably carries with it a positive obligation on an
    insurer to inform its insured of the nature of the benefits available under the
    policy. There is a marked difference, however, between imposing on an insurer a
    positive obligation to advise with respect to rights and benefits internal to
    the policy and the imposition of an obligation to advise with respect to the
    application of law external to the policy, such as pursuant to the
Limitations
    Act
.

In my view the court should be circumspect in extending the
    common law to impose positive obligations of general application on parties,
    particularly where the implications of so doing are unknown. The law of insurance
    is broadly occupied by legislation and in my view it should be left to the
    legislature to regulate, if it deems it necessary and appropriate, the nature
    and extent of information which must be given by insurers to their insureds
    upon denial of benefits, including the existence and details of applicable
    limitation periods.

I find that there was no obligation in law on the defendant to
    advise the plaintiff of the applicable limitation period in the
Limitations
    Act
.

[18]

As will be apparent, I agree with these statements.

C.

THE PARTIES SUBMISSIONS

[19]

As I have noted, the appellant concedes that his claim was discovered
    under the
Limitations Act, 2002
on January 12, 2012, more than two
    years before he started his action.

[20]

The appellant submits, however, that the insurers failure to inform him
    of the limitation period precludes it from relying on the limitation period to
    defend his claim. He submits that the insurers common law duty of good faith
    and fair dealing should require it to inform the insured of the existence of
    the limitation period.

[21]

The appellant concedes that there is no statutory obligation to this
    effect in Ontario. He submits, however, that this obligation flows from the
    insurers duty to give the same consideration to the insureds interest as it
    does to its own interests and can be imposed through the development of the
    common law and need not be based on statute.

[22]

In support of this proposed development in the law, the appellant says
    that insurance law is consumer protection legislation and in applying that law the
    court should be concerned about the protection of consumers: see
Smith v.
    Co-operators
;
Esau v. Co-operators Life Insurance Co.
, 2006 BCCA 249, 55 B.C.L.R. (4th) 11, leave to appeal to S.C.C.
    refused, [2006] S.C.C.A. No. 307; and the companion case,
Pekarek v.
    Manufacturers Life Insurance Co.
, 2006 BCCA 250, 55
    B.C.L.R. (4th) 1, leave to appeal to S.C.C. refused, [2006] S.C.C.A. No. 305
.

[23]

The respondent, on the other hand, submits that there was a clear and
    unequivocal denial of the claim by the insurer, payments ceased, the appellant knew
    that his claim had been denied, and the limitation period had begun to run. The
    motion judge found that the appellant received unequivocal notice of the denial
    of benefits through the lawyers letter in January 2012.

[24]

The respondent submits that the court should not impose a duty to inform
    the insured of the limitation period when the legislature has declined to do
    so. Insurance law is broadly occupied by legislation and it is up to the
    legislature to impose such requirements, if it views them necessary.

D.

ANALYSIS

[25]

There is no doubt that parties to an insurance contract owe each other a
    duty of utmost good faith:
Bhasin v. Hrynew
, 2014 SCC 71, [2014] 3
    S.C.R. 494, at para. 55;
Whiten v. Pilot Insurance Co.
, 2002 SCC 18, [2002]
    1 S.C.R. 595, at para. 79.

[26]

This court has held that this duty requires an insurer to deal with
    claims by its insured in good faith. See
702535 Ontario Inc. v. Non-Marine
    Underwriters, Lloyds London, England
(2000), 184 D.L.R. (4th) 687 (Ont.
    C.A.), at para. 27, leave to appeal to S.C.C. refused, [2000] S.C.C.A. No. 258:

The relationship between an insurer and an insured is
    contractual in nature. The contract is one of utmost good faith. In addition to
    the express provisions in the policy and the statutorily mandated conditions,
    there is an implied obligation in every insurance contract that the insurer
    will deal with claims from its insured in good faith.

[27]

The duty of good faith is not the same as a fiduciary duty:
Plaza
    Fiberglass Manufacturing Ltd. v. Cardinal Insurance Co.
(1994), 18 O.R.
    (3d) 663 (C.A.), at p. 669. In contrast to a fiduciary duty, the insurer is not
    obliged to treat the insureds interests as paramount. However, the insurer
    must give as much consideration to the welfare of the insured as to its own
    interests:
Bullock v. Trafalgar Insurance Co. of Canada
, [1996] O.J.
    No. 2566 (Gen. Div.), at para. 101. This requirement is based on the
    recognition that the insured is typically in a vulnerable position when making
    a claim:
Bhasin
, at para. 55.

[28]

The scope of the duty of good faith has not been precisely delineated or
    definitively settled: Barbara Billingsley,
General Principles of Canadian
    Insurance Law
, 2d ed. (Markham: LexisNexis Canada, 2014), at p. 52;
Kang
    v. Sun Life Assurance Co. of Canada
, 2013 ONCA 118, 303 O.A.C. 64, at
    para. 39. Although the assessment is fact-specific and will depend on the
    particular circumstances of each case, courts have recognized some general
    requirements of the duty of good faith.

[29]

In
702535 Ontario Inc.
, at paras. 27-29, this court provided an
    overview of the insurers duty of good faith to act promptly and fairly when handling
    claims by the insured:

The duty of good faith requires an insurer to act both promptly
    and fairly when investigating, assessing and attempting to resolve claims made
    by its insureds.

The first part of this duty speaks to the timeliness in which a
    claim is processed by the insurer. Although an insurer may be responsible to
    pay interest on a claim paid after delay, delay in payment may nevertheless
    operate to the disadvantage of an insured. The insured, having suffered a loss,
    will frequently be under financial pressure to settle the claim as soon as
    possible in order to redress the situation that underlies the claim. The duty
    of good faith obliges the insurer to act with reasonable promptness during each
    step of the claims process. Included in this duty is the obligation to pay a
    claim in a timely manner when there is no reasonable basis to contest coverage
    or to withhold payment.

The duty of good faith also requires an insurer to deal with
    its insureds claim fairly. The duty to act fairly applies both to the manner
    in which the insurer investigates and assesses the claim and to the decision
    whether or not to pay the claim. In making a decision whether to refuse payment
    of a claim from its insured, an insurer must assess the merits of the claim in
    a balanced and reasonable manner. It must not deny coverage or delay payment in
    order to take advantage of the insureds economic vulnerability or to gain
    bargaining leverage in negotiating a settlement. A decision by an insurer to
    refuse payment should be based on a reasonable interpretation of its
    obligations under the policy. This duty of fairness, however, does not require
    that an insurer necessarily be correct in making a decision to dispute its
    obligation to pay a claim. Mere denial of a claim that ultimately succeeds is
    not, in itself, an act of bad faith. [Citations omitted.]

[30]

The motion judge observed that at its highest, the obligation of good
    faith and fair dealing arguably carries with it a positive obligation on an
    insurer to inform its insured of the nature of the benefits available under the
    policy (at para. 40). See, for example,
Atchison v. Manufacturers Life
    Insurance Co.
, 2002 ABQB 1121, 332 A.R. 72 and
Clarfield v. Crown Life
    Insurance Co.
(2000), 50 O.R. (3d) 696 (S.C.). The issue of whether an
    insurer breaches its duty of good faith when it fails to inform the insured of
    available policy benefits is not squarely before us and we need not decide it.

[31]

In this case, however, we are asked to do something
more
than impose a duty of good faith on insurers to
    disclose the contents of the insurance policy. We are asked to extend the duty
    of good faith to require an insurer to disclose information outside the policy
     namely, the existence of a limitation period.

[32]

Some commentators have suggested that it would be severe and unfair for
    the insured to be denied benefits when the insurer was aware of the limitation
    period, but the insured was not: see, for example, Roderick Winsor,
Good
    Faith in Canadian Insurance Law
(Toronto: Thomson Reuters Canada, 2016),
    at para. 2.30. The appellant adopts this argument, submitting that it would be
    preferable, and simple, for the insurer to advise the insured of the limitation
    period when it denies the claim.

[33]

The appellant acknowledges that no Canadian case has gone that
    far. Although two decisions of this court might have afforded an opportunity to
    address the issue, neither is directly on point:
International Movie
    Conversions Ltd. v. ITT Hartford Canada
(2001), 27
    C.C.L.I. (3d) 102, affd on other grounds (2002), 57 O.R. (3d) 652 (C.A.) and
LeBlanc
    & Royle Enterprises Inc. v. United States Fidelity & Guaranty Co.
(1994), 17 O.R. (3d) 704 (C.A.).

[34]

The British Columbia Court of Appeal has directly addressed
    this issue and concluded that the insurer is not obliged to advise the insured
    of the limitation period, although some members of the court suggested that it
    may be advisable to do so.

[35]

In
Balzer v. Sun Life Assurance Co. of Canada
, 2003 BCCA 306,
    227 D.L.R. (4th) 693, the British Columbia Court of Appeal suggested that in
    order to trigger the start of the limitation period the insurer must give an
    unequivocal denial and the preferred course of action may be to bring the
    limitation period to the insureds attention. The court said, at para. 45:

Any ambiguity in the communication of a refusal of benefits, as
    to whether it is a clear and unequivocal denial, should be resolved in favour
    of the insured.  To avoid any doubt, the preferred course for an insurer
    intending to deny coverage should be to include an alert in the letter drawing
    the insured's attention to the one year limitation  and informing the insured
    that the insurer will rely on the denial as starting the running of time.

See also
Dachner Investments Ltd. v. Laurentian
    Pacific Insurance Co.
(1989), 59 D.L.R. (4th) 123 (B.C.C.A.), at pp. 130-31.

[36]

In
Esau
,
Thackray J.A.

clearly rejected the argument that an insurer is obliged to notify the
    insured of the limitation period, holding, at para. 42:

While I have sympathy for the plea of the appellant, this Court
    cannot, as acknowledged by the appellant, mandate the ideal. It cannot order
    legislative changes.  Nor can it mandate that insurers must advise
    insureds as to policy or statutory limitation provisions.  It would
    clearly be advisable for insurers to advise insureds as to the existence of
    limitation periods, but even here caution must be exercised because there are
    different limitation provisions with inconsistent commencement dates. Insurers
    could not, therefore, as suggested by the appellant, advise their insureds
    that their letter of denial  commences the running of a one year limitation
    period.

[37]

Similarly, Levine J.A. held, at para. 52:

The British Columbia
Insurance Act
includes no such
    statutory obligation [to advise of limitation periods], and, as my colleague
    points out, it is not within the power of this Court to require insurers to
    provide specific information regarding limitation periods. But the judicially
    imposed requirement to provide a clear and unequivocal denial,  reflects the
    same principle: that insurers have an obligation to provide clear information
    to insured persons, who are consumers, about their claims under the policy.

See also
Falk v. Manufacturers Life Insurance Co.
,
    2008 BCSC 173, 80 B.C.L.R. (4th) 347, at para. 61.

[38]

While no court has imposed a duty on the insurer to inform the insured
    of the limitation period, some legislatures have done so. In British Columbia,
    a regulation introduced in 2012
requires the insurer to give
    written notice to the claimant of the applicable statutory limitation period when
    it denies the claim or within a short time thereafter:
Insurance
    Regulation
, B.C. Reg. 403/2012, s. 4. There are
    exceptions for claimants represented by legal counsel and those making certain
    types of claims. If the insurer fails to provide the requisite notice, the
    running of the limitation period is suspended.

[39]

Alberta has also adopted specific notice requirements. Pursuant to a
    2012 amendment to the
Fair Practices Regulation
,
    Alta. Reg. 128/2001, s. 5.3, an insurer must give written notice of the
    applicable limitation period within five business days of denying a claim. The
    notice is not required when the insurer is aware the claimant is represented by
    counsel and for certain types of claims. If the insurer fails to give that
    notice, the court may, on application of the claimant, order that the
    applicable limitation period be extended and grant any other remedy that the
    court considers appropriate: s. 5.3(7).

[40]

In
Dhillon v. Anderson
, 2014 ABQB 609, 597 A.R. 189, the
    Alberta Court of Queens Bench held that this amendment was more than
    procedural; instead, it fundamentally altered a substantial defence available
    to a defendant. Further, [i]t imposes a new obligation on insurers to provide
    advice to claimants, an obligation that did not exist previous to the
    introduction of the
Regulation
 (at para. 34).

[41]

Ontario has not gone as far as Alberta and British Columbia. However,
    the
Insurance Act
, R.S.O. 1990, c. I.8 was amended in 2012 to require life,
    disability and creditors insurers to include the following statement in the
    insurance policy and certificate:

Every action or proceeding against an insurer for the recovery
    of insurance money payable under the contract is absolutely barred unless
    commenced within the time set out in the
Limitations Act, 2002
.

[42]

This amendment came into force on July 1, 2016.

[43]

The appellant relies on
Smith v. Co-operators
in support of his
    argument for imposing a duty on an insurer to advise the insured of the
    limitation period when the claim is denied. In that case, the Ontario
    regulation pertaining to the Statutory Accident Benefits Schedule required the
    insurer to inform the insured, in writing, at the time a claim was denied, of
    the statutory procedure for the resolution of disputes. That statutory
    procedure specified a two-year limitation period. The Supreme Court held that
    the effect of the regulation was to require the insurer to inform the insured of
    the most important points of the process, such as the right to seek mediation,
    the right to arbitrate or litigate if mediation fails, that mediation must be
    attempted before resorting to arbitration or litigation
and
    the relevant time limits that govern the entire process
 (at para. 14;
    emphasis added). Without providing that information to the insured, it could
    not be said that the insurer had given a valid refusal and the time limit did
    not begin to run.

[44]

There is no statutory provision in this case similar to that considered
    by the Supreme Court in
Smith v. Co-operators
. Further, as Gonthier J.
    cautioned in
Smith v. Co-operators
, it is not the role of this Court
    to set out the specific content of insurance refusal forms. This task is better
    left to the legislature (at para. 14).

[45]

The Ontario legislature might have gone further than it has, for example,
    by adopting the approach taken in Alberta or British Columbia. It presumably
    chose not to do so and, in my respectful view, the court should not impose
    consumer protection measures on insurers, outside the terms of their policies, that
    the legislature has not seen fit to require. A properly crafted regime, such as
    those in effect in Alberta and British Columbia, would not only have to specify
    the requirement to give notice, but also the consequences of failing to do so.

[46]

The consequences of the appellants proposed expansion of the duty of
    good faith are significant. The appellants interpretation would effectively
    judicially overrule the provisions of the
Limitations Act, 2002
by
    making notice given by an insurer to an insured the trigger for the limitation
    period, rather than discoverability of the underlying claim.
This would defeat the purpose of the statute and bring
    ambiguity, rather than clarity, to the process.

E.

CONCLUSION AND ORDER

[47]

For these reasons, I would dismiss the appeal with costs to the
    respondent in the amount of $15,000, inclusive of disbursements and all
    applicable taxes.

Released: G.R.S.  May 18, 2017

George R. Strathy
    C.J.O.

I agree  John Laskin
    J.A.

I agree  G.T.
    Trotter J.A.

[1]

As the benefits had been terminated in November 2011, the date
    of the letter was obviously incorrect.