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Corruption in Court?
Arbitration as a hundred thousand dollar boondoggle
Posted by Colin Alexander
Executive summary for this website
Canada’s justice system abounds with horror stories. But they seldom garner the publicity they deserve. What can anyone do when the entire system closes ranks like any other trade union?
I posted this website alleging that Ottawa lawyer Keith A. MacLaren and arbitrator William L. Neville violated Section 380 of the Criminal Code (fraudulent misrepresentation). It claims they fraudulently induced us unrepresented homeowners to submit to arbitration. This website then questions the conduct of judges who wrote, in effect, that their fellow officers of the court, alone in the world of business and commerce, have a licence to lie to make a sale.
Two of us homeowners maintained that a contractor had overcharged for replacing our common water mains. Without authorization, neighbour Michael Dagg paid the contractor the full amount of the bill. He then claimed prorated reimbursement for what he’d paid out. Instead of going to Small Claims Court with its filing fee of just $75, Dagg hired MacLaren to set arbitration in motion. They relied on an ostensible Agreement to Arbitrate signed only by the previous property owners in 1960.
Neville repeated MacLaren’s assertion that arbitration was obligatory:
Those who purchased the units of the Original Parties are assignees of the Original Parties and “stand in the shoes” of the Original Parties: they are bound, in other words, by the election [of the 1960 Agreement] that Clause 8 created.
I found out much later that the textbook Arbitration Law of Canada, by J. Brian Casey, says an enforceable Agreement to Arbitrate, like any other contract, requires consent of the present parties. The one at issue expired when the original signatories sold their properties. Many rulings dating back to the nineteenth century confirm this settled law.
During precontractual exchanges, Neville said his process would be cost-effective. After we signed on, with just three thousand dollars contested, he said he would charge at least ten grand to deliver a decision. Where just $3,000 was originally at issue, in due course litigation cost a hundred thousand dollars altogether.
Senior judges Heather Forster Smith and James McNamara, in their regulatory capacity, wrote that Neville was the arbitrator. Under similar circumstances, mistaken rather than fraudulent, the Supreme Court ruled in Nadon that an appointment lacking the necessary prerequisites is a nullity from the outset. (After being sworn in, Marc Nadon was found ineligible to be a judge on their court.)[1]
I believe the judges and regulators who endorsed their fellow court officer’s appointment as arbitrator had a duty to know and to apply the criminal case law of R v Lemire in the Supreme Court.[2] The defendant in that case wanted a raise when there was a pay freeze for Quebec’s civil servants. So Attorney General (and also Premier) Maurice Duplessis, together with Lemire’s immediate boss, told him to submit fictitious expense claims until the payments could be approved retrospectively. Later, the provincial auditor set in motion Lemire’s criminal prosecution for defrauding the provincial treasury. His defence was that he was doing what he was authorized to do. Justice Martland ridiculed the idea that retrospective ratification can exonerate a prior fraud.
Given the apparent circling of wagons to shield fellow court officers from the consequences of what I construe as fraud, I abandoned my subsequent civil case against Neville. That said, my website invites the general public to evaluate what happened.
There’s considerable anecdotal evidence that my experience with Canada’s justice system is commonplace, especially but by no means exclusively for self-representing litigants. Self-regulation by lawyers and judges is like having a police force disciplining itself. One may recall Lord Acton's famous dictum that “all power tends to corrupt and absolute power corrupts absolutely.”
Ironically, it was an Ontario judge, Michael Tulloch, who in 2017 delivered a report on policing in the province. He could have been describing the misnamed justice system when he wrote: “There is almost universal agreement that the current system for adjudicating disciplinary matters is broken and does not have the confidence of either the public or the police. … A fair and effective public complaints adjudication system demands greater independence and impartiality.” It hasn’t suited the political establishment to do anything with Justice Tulloch’s report.
Following delivery of the 2004 report by Sir David Clementi, an accountant and former deputy governor of the Bank of England, legislation ended self-regulation of lawyers and set up independent if still imperfect oversight for England and Wales. Canada urgently needs a full-fledged inquiry into all aspects of the administration of justice, to be followed by corresponding action on recommendations. Credibility requires that the head of such an inquiry not be a lawyer or a judge.
The sanctimonious pomposity of judges knows no bounds. This comes from a speech in 2018 by Ontario’s now retired former Chief Justice Heather Forster Smith—yes her again! In a September 2018 speech she said this: “Public confidence in the courts is a cornerstone of our justice system. It is fundamental to the rule of law. If lost, it would be very difficult to regain.”