Description
These legal case assignments are to get you used to thinking and
writing legally. Questions with a legal analysis require a
statement of the legal test followed by application of the facts to
what the question is answer (considering arguments for and against
your side) followed by a conclusion.
Questions without a legal analysis require a full and thorough
explanation. Make sure you explain why. The PowerPoints are meant
to guide and assist you. It may be necessary to read or skim
through the actual case on Canlii. The link can be found on the
course outline or on the PowerPoint.
Submissions must not exceed 2 pages, tables, bullet points, and
paragraphs may be used to organize your response.
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Facts
The Plaintiffs are natives of Ecuador who have opposed the
mining, exploration and development proposed by a company in
Ecuador that is a subsidiary of Copper Mesa Mining Company.
Copper Mesa is incorporated in British Columbia that does
business through various subsidiaries, including one in the
Bahamas, which in turn owns the Ecuadorian subsidiary responsible
for exploration and development in that country.
That than having its shares registered on the Toronto Stock
Exchange (TSX), Cooper Mesa does not appear to have any connection
with Ontario.
The two Defendant Directors are residents of Ontario and are
non-managing directors.
The claim in this action is made against the two directors and
the TSX.
Cooper Mesa was not named as a Defendant.
The TSX operates a stock exchange in Toronto.
The claim in the against the TSX is that it owed a duty to the
Plaintiffs in connection with the actions of the Copper Mesa
subsidiary in Ecuador as a result of Cooper Mesa raising funds
through a public offering.
The claims do not allege that the Directors authorized or
directed the Security Forces, agents, employees or affiliates to
commit the assaults or threats, nor that they supervised them.
Cooper Mesa is traded on the TSX.
Issues
Was there a duty of care owed by the TSX or the Directors?
If so, was that duty breached?
Analysis
The Plaintiff’s claim that they were assaulted or threatened by
Ecuador by the Security forces or agents, employees, or affiliates
of the Company or its subsidiaries.
The Plaintiffs assert that the TSX is under a legal duty to take
reasonable care to avoid conduct that entails an unreasonable risk
of harm to others. The Plaintiff’s claim that Cooper Mesa being
listed on the TSX was the necessary precondition which triggered an
enabled the harms inflicted on the Plaintiff’s.
The TSX is said to have known that Copper Mesa depended on the
financing provided through the TSX for continued operations and
knew that serious allegations of violence, threats and human rights
abuse had been made against Copper Mesa and the TSX itself had been
specifically warned of the serious risk of future violence if the
TSX provided Copper Mesa with access to capital.
But for the TSX’s act of listing Copper Mesa, it is said, the
Plaintiffs would not have been subjected to these threats and
assaults.
Claim against TSX:
The duty of the TSX is not to list a corporation when there is
such reasonably foreseeable and serious risk that funds raised on
the Exchange will be used in such a way as to harm individuals such
as the Plaintiff’s
OR
Not to list a corporation on the Exchange without instituting
precautionary measures to prevent a serious risk that funds raised
through the Exchange will be used to harm individuals such as the
Plaintiff.
The Plaintiff’s assert that the directors had knowledge of the
risk of harm to the Plaintiff’s prior to the assaults and threats
that are at issue.
The pleadings state the director knew or should have known of
past violent confrontations that occurred prior to his directorship
that were perpetrated by individuals under Copper Mesa’s
control.
The director is said to have had access to, and would have
reviewed corporate documents that discuss allegations of violence
committed on behalf of Copper Mesa.
The directors approved corporate practices intended to eliminate
wide spread opposition to the proposed project, including practices
related to security forces; approved funding to security forces and
other individuals under Copper Mesa’s control who had in the past
were likely in the future to assault and threaten members of the
community opposed to the project; failed to institute proper
corporate policies and practices so as to prevent threats and
assaults from being committed by individuals under Copper Mesa’s
control; and failed to raise concerns about and investigate
reported past incidents of violence committed by individuals under
Copper Mesa’s control.
A community member from the Ecuador project area met with the
directors to make sure they were aware of the violence
Do the Defendants owe a duty of care?
Step 1. has the duty of care asserted by the plaintiffs already
been recognized by the law?
If yes a duty of care has been established
If no, the Cooper-Anns test is used to determine if there is a
duty of care.
In novel situations the courts apply the Cooper-Anns test:
1. whether the relationship between the parties justifies the
imposition of a duty of care on the defendant, involves
consideration of foreseeability, proximity, and policy.
For a duty of care to arise more than foreseeability is
required
The two parties must also be sufficiently proximate to one
another
Two parties are in proximity with one another if their
relationship is sufficiently close and direct that it is fair to
require the defendant to be mindful of the legitimate interests of
the plaintiff
Not a single unifying characteristic
Basic proposition is that everyone must take reasonable care to
avoid acts or omissions which you can reasonably foresee would be
likely to injure your neighbour
2. whether there are any policy reasons for not imposing a duty
of care?
The Court cited Syl Apps Secure Treatment Center saying
“to determine whether there is a prima facie duty of care,
we examine the factors of reasonable foreseeability and proximity.
If this examination leads to the prima facie conclusion
that there should be a duty of care imposed on this particular
relationship, it remains to determine whether there are nonetheless
additional policy reasons for not imposing the duty.”
“the basic proposition underlying ‘reasonable foreseeability’ is
that everyone ‘must take reasonable care to avoid acts or omissions
which you can reasonably foresee would be likely to injure your
neighbour’”
“the question is whether the person harmed was ‘so closely and
directly affected by my act that I ought reasonably to have in
contemplation as being so affected’”
“there must also be a relationship of sufficient proximity
between the plaintiff and defendant”
The TSX did not fall under any previously recognized duty of
care.
The TSX denied that there was any foreseeability in the harm,
and they did not owe a duty of care
The TSX believes that Plaintiff’s cannot demonstrate that they
were so closely and directly affected by the pleaded acts of the
TSX that they ought to reasonably have had them in mind as being so
affected.
Conclusion
There is no relationship between the parties, besides being
listed on the stock exchange, and therefore the court agreed that
there was no duty of care owed.
The Plaintiffs did not participate in the Canadian capital
markets and are not investors or shareholders in Copper Mesa.
Questions
Define and explain Prima Facie.
This claim was not brought against Copper Mesa the corporation.
If the Plaintiffs had made a claim against Copper Mesa use the
facts and the Cooper-Anns test to determine whether the Court could
have found a duty owed?
Regardless of whether you find there is a duty of care owed in
the previous question, apply the rest of the negligence legal test
to the facts.
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