Inside the Supreme Court of Canada

Supreme Court of Canada Justice Ian Binnie shares this insight on how the courtroom looks from the "other" side of the bench:

“The argument takes place and everybody gets engaged and worked up and there are questions and debates and controversy; then, the case concludes,” he said. “There is this great shifting of the load. The lawyers walk out free as a bird – they have done their thing. As far as they are concerned, the thing is in the can and they can go off for a slap-up lunch. But the judges drag themselves out of court, carrying this huge burden of how they are going to decide the case.”

See Kirk Makin's A rare look at the inner-workings of the Supreme Court of Canada from the Globe and Mail.

- Garry J. Wise, Toronto

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Schreyer v. Schreyer: Canada's Divorce-Bankruptcy Loophole

In a unanimous decision in Schreyer v. Schreyer, released Thursday, June 14, 2011, the Supreme Court of Canada ruled that that a bankrupt Manitoba man is not required to pay his former wife an equalization payment for her share of the family farm they operated together.

The couple filed for divorce in 2000 after a nineteen year cohabitation. Under their divorce agreement, the husband was to continue to live on the family farm, which he solely owned, and their assets were to be valued. At the end of the valuation, the husband was to make an equalization payment to the wife, equal to the value of the farm. Before the valuation was complete, however, the husband filed for bankruptcy. It was determined the the husband owed the wife an equalization payment of $41,063.48 after the valuation was complete.

The wife was considered to be a creditor of the husband's estate in bankruptcy. Under Manitoba law the farm was exempt from creditors by way of seizure and sale, and while the husband was allowed to keep the farm, the wife's claims against him for equalization were extinguished by his bankruptcy.

When the husband was discharged from bankruptcy he was cleared from his debts and thus could keep the farm. The wife, however, was out of luck - her entitlement to an equalization payment did not survive the bankruptcy.

In dismissing the wife's appeal, Supreme Court of Canada Justice Louis Lebel noted that at root, the entitlement to an equalization payment is not an entitlement with respect the actual property of a spouse:

[16] The Manitoba scheme is one of equalization. It is based on a principle of equal division of the value of the family assets after a process of accounting and valuation (ss. 13 and 14 FPA). The accounting process results in a value that is divided between the spouses, and any amount payable must be paid to the creditor spouse. A debtor spouse retains the property he or she owns, but must pay a sum of money, the equalization payment, if the spouses did not own assets of equal value (s. 15 FPA). The court retains a discretion to alter the equal division of the value of the assets where “the court is satisfied that equalization would be grossly unfair or unconscionable” (s. 14(1) FPA). No provision of the FPA vests title in one spouse to the other spouse’s property (s. 6(1) FPA) in the course of the accounting and valuation. At the end of the equalization process, a monetary debt is owed...

[18] Under the FPA, an equalization claim is a debt owed by one spouse to the other. The Court of Appeal did not err in treating the appellant’s claim as a debt. The characterization of the equalization claim is particularly important here — in the context of the application of the BIA — for the purpose of determining whether the appellant’s claim survived her husband’s discharge from bankruptcy.

[17] Proprietary interests are not granted until the stage of payment of the equalization claim, at which point they may be granted as a form of execution, to ensure that the payment is actually made. Section 17 FPA provides that the amount established in the accounting may be paid by means of a money payment, a transfer of assets, or both.

The Court held that bankruptcy extinguished the husband's equalization-related debt to the wife. Under Manitoba's family law regime, she had no interest in his actual property.

Unfair Loophole?

Recognizing the gross unfairness of this outcome for the wife, Justice Lebel noted that law reform on this issue has long been recommended and is urgently required:

[25] I do not doubt that an outcome like the one in this appeal looks unfair, given that the appellant’s equalization claim was based primarily on the value of an asset — the farm property — which was exempt from bankruptcy and therefore not accessible to other creditors. None of the policies underlying the BIA require that the appellant emerge from the marriage with no substantial assets. Parliament could amend the BIA in respect of the effect of a bankrupt’s discharge on equalization claims and exempt assets. But the absence of such an amendment makes the outcome of this case unavoidable. The only way Ms. Schreyer could have avoided it would have been to obtain an order from the bankruptcy court lifting the stay of proceedings imposed by operation of s. 69.3 BIA so that she could seek a proprietary remedy under s. 17 FPA. As will be discussed below, however, the circumstances were such that Ms. Schreyer did not pursue these recourses.

... [39] Before 1997, claims for support or alimony were not expressly provable under the BIA, potentially giving spouses no access to the bankrupt’s estate. After the 1997 amendments (S.C. 1997, c. 12), s. 121(4) BIA was added to specifically provide that these claims were provable. They remained unaffected by a discharge pursuant to ss. 178(1)(b) and (c) BIA. Parliament has also shown a willingness to give spouses limited priority over unsecured creditors for support payments that accrued before the bankruptcy (s. 136(d.1) BIA). Further amendments to address the issue of the division of matrimonial property have also been considered by the Standing Senate Committee on Banking, Trade and Commerce. In its report released in November 2003 (Debtors and Creditors Sharing the Burden: A Review of the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act), the Committee took the view that inequities like the one perceived to exist in the case at bar required “prompt resolution” (p. 85). To this end, it recommended that the BIA be amended to provide that “bankruptcy does not stay or release any claim for equalization or division against exempt assets under provincial/territorial legislation regarding equalization and/or the division of marital property” (p. 86).

[40] More than seven years have elapsed since the Committee issued its report. It seems to me that this matter is ripe for legislative attention so as to ensure that the principles of bankruptcy law and family law are compatible rather than being at cross-purposes.

[41] However, until such legislative changes are made, creditor spouses should be alive not only to the pitfalls of the BIA, but also to the importance of the remedies available under it in such situations. In the case at bar, however, given the nature and the state of the proceedings now before this Court, I am of the view that the Court of Appeal made no errors and that the specific remedies sought by the appellant may not be granted.

Justice Lebel's comments on bankruptcy law reform make plain sense. Instead of permitting bankruptcy legislation to override the intent and effect of provincial family property equalization laws, there ought to be permitted exceptions to ensure that spouses are not excluded from their rightful entitlements by spousal bankruptcy two-steps.

The "Schreyer loophole" ought to be closed.

- Garry J. Wise and Alim Ramji, Toronto

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The Supreme Court's Confusing Decision on Sexual Assault and Consent: R. v. J.A.

The Supreme Court's decision on sexual assault and consent in R. v. J.A. has been a hot topic since its May 27, 2011 release. Complaints that the decision essentially criminalizes a wide range of innocent sexual activities are flourishing across Twitter (and the nation).

The facts underlying the Court's ruling in J.A. are not disputed: a man and woman engaged in consensual sexual activity, which included the man choking the woman unconscious. While she was briefly unconscious, he inserted a sex toy into her anus - something she later admitted in testimony they had done before. after removing the toy, they had vaginal intercourse which she stated was consensual. She complained to the police some time later. (She later attempted to withdraw her complaint, stating that she had made it falsely as a result of a custody threat he had made regarding their son.) He was charged with sexual assault among other crimes and convicted.

The Supreme Court's 6-3 majority decision, authored by Chief Justice McLachlin, found him guilty on the premise that an individual cannot consent to sexual acts in advance of being rendered unconscious. This writer appreciates that the Supreme Court's arguments here are not founded in obnoxious prudery or puritanism, but rather are a consideration of the nature of how sexual consent should operate in the scenario in question, while also considering the obvious issue of how far the state should intervene in the bedrooms of the nation. However, that does not change my belief that this decision is, at best, wildly off-base.

In fairness, the decision is well-written and anticipates many potential counterarguments, such as where McLachlin C.J. discusses the obvious comparison to surgery, where patients must supply advance consent to their doctors before being rendered unconscious:

Parliament has indicated that the notion of consent for sexual assault is distinct from consent in other contexts... It has also enacted special protections for medical practitioners, exempting them “from criminal responsibility for performing a surgical operation on any person for the benefit of that person”... Consequently, the fact that individuals may consent in advance to surgery does not determine if they may consent in advance to sexual activity... Surgical interventions are usually carefully planned, and appropriate consent is assured by consent forms and waivers — all to the end of limiting the risk of abuse. Such safeguards are rare, if perhaps non-existent, in the sexual arena.

Chief Justice McLachlin's disposition of this argument is logical, but it is unfortunately an excellent example of how sometimes a court can, in an effort to establish its position in judicial logic as much as is possible, can ignore the obvious normative problem of suggesting that people can consent, in advance of becoming unconscious, to being cut open with knives but not to oral sex. It also ignores the obvious fact that "such safeguards are rare" with regards to sex because most sexual activity does not involve, for a start, the invasive use of scalpels. In short, a comparison of medical activity to sexual activity that argues that surgery should have what amounts to a lower threshold of consent than simple sexual play is wrongheaded on its face. It is a comparison of apples and oranges in many ways, which perhaps makes it not the least useful argument for the defense, but for the Supreme Court to take that comparison and run with it in the wrong direction is a mistake.

McLachlin C.J. also addresses the defendant's argument that this law creates absurd outcomes (e.g., someone kissing their sleeping partner thereby potentially committing sexual assault) with multiple arguments. She first suggests that altering consent to allow advance consent to particular sexual acts before going to sleep would create hypothetical scenarios where a complainant did not consent to specific acts and therefore if a complainant did not expect to be kissed while asleep this would not help the defendant.

She also notes that since sexual preferences can be particular and not clearly expressed (certainly true) that any performance of sexual acts upon an unconscious partner that are not exactly in accord with the complainant's wishes would result in said person being "unintentionally violated." She further notes that, if the complainant is unconscious during the sexual activity, they cannot be certain that their partner did in fact comply with their wishes.

All of these arguments are again technically correct to some extent, but what they all have in common is that Chief Justice McLachlin here has completely failed to address the defendant's argument: this ruling will and does create absurd situations, such as the aforementioned kissing-sleeping-partner-is-sex-assault scenario. None of her arguments for the proposed no-advance-consent regime address this point; they merely justify the ruling instead.

Her argument also betrays herself. Consider her second argument, wherein she states that advance consent cannot be allowed because of the potential for a partner being "unintentionally violated" by an "innocent misunderstanding." These are not words that properly belong in any description of sexual assault: here McLachlin seems to almost be disposing with the need for mens rea in sexual assault altogether, even beyond Canada's rigorous standards of "no means no" placing a much higher demand for ascertaining consent before engaging in sexual activity.

A comparison, if you will. Consider an individual who wishes to be sexually dominated by their partner: traditionally partners engaging in this sort of play will use a safeword or code phrase to indicate when behaviour that they genuinely do not wish to engage in is taking place. However, it is entirely possible that a safeword might not be used until after an activity to which the potential complainant might not wish to consent has taken place - perhaps because they were distracted by another element of their sexual activity, or were unable to speak the safeword for whatever reason, or because the activity in question occurs too quickly for them to say it before it happens. After the activity takes place, the complainant speaks their safeword and their partner, who genuinely isn't interested in sexually assaulting the complainant or doing anything nonconsensual, stops the sexual activity.

Is this scenario sexual assault?

Possibly Chief Justice McLachlin would respond to this argument by saying that the potential complainant in this case is conscious and therefore able to rescind consent at will, but as I've just pointed out sometimes consent cannot be rescinded quickly enough to prevent unwanted sexual activity from occurring. Indeed, this scenario can qualify on two of McLachlin C.J.'s arguments: that the potential complainant did not consent to particular sexual acts beforehand, and that the complainant's wishes can be misinterpreted. It appears that, given her arguments, that entirely consensual dominance/submission performed while awake can fall into the realm of sexual assault, because her concerns are not with the giving of consent but the inability to rescind that consent.

Justice McLachlin's concern that allowing prior consent to unconscious activity "would impose on the courts the task of determining how consent to unconscious sexual activity can be proven" is not an unreasonable one, but it appears that this option is the only reasonable alternative. This is not an area where a single universal rule is particularly workable: any judge must take into account the partners' sexual practices and what would be considered normative behaviour in those partners' context, and begin their assessment from there. Would it be preferable if this was a burden we could avoid placing on the judiciary? Certainly. But in this writer's view, these scenarios do not lend themselves to any other solution.

The Court's decision in R. v. J.A. is a bad one. It is not a bad one because the Court has erred on the side of squeamishness or refused to engage the issues. Paradoxically, it is a bad ruling because, in recognizing the importance of consent, the justices clearly sought to maximize individual choice; however, in refusing to acknowledge the possibility that one can consent to a range of activities in advance - a proposition that is essentially trite anywhere else in law, but novel as regards sexual consent - they have instead lessened the opportunity for individual choice, and reduced our sexual freedom as a result.

For more viewpoints, see Rosie DiManno's spirited criticism of the ruling in The Toronto Star and Elizabeth Sheehy's support for it in the Vancouver Sun.

- Christopher Bird, Toronto

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