It is an interesting correction, because it acknowledges the error of the original claims (which takes the wind out of the original commentary's sails) but does so in an oblique manner.
It is an interesting correction, because it acknowledges the error of the original claims (which takes the wind out of the original commentary's sails) but does so in an oblique manner.
In 681210 Alberta Ltd v 1335422 Alberta Ltd, Master Farrington, of the Alberta Court of Queen’s Bench tackled two issues that can arise when a creditor gets a section 38 order under the Bankruptcy and Insolvency Act (“BIA”) to pursue a bankrupt’s contractual claim against a third party:
The Court’s affirmative answer to the first question coheres with the logic of section 38 proceedings – the debtor’s contractual rights and obligations vest in the trustee, and are then assigned to the creditor. The creditor cannot sue on the basis of the debtor’s contractual rights, without also being bound by its contractual obligations, including an agreement to arbitrate. The Court’s analysis on this point is enlightening, but not surprising, and I will not discuss it in detail in this post.
Instead, I want to offer some initial reflections on the Court’s analysis of how limitation periods operate in section 38 proceedings. In the 2010 case of Indcondo Building Corporation v. Sloan, the Ontario Court of Appeal held that a creditor bringing a section 38 proceeding is a successor to the trustee, and the discoverability limitation period runs from the earlier of when either the creditor or the trustee had knowledge of the claim. Though it does not cite Indcondo, the Alberta Court’s decision is consistent with this precedent. Having regard for the type of claim at issue in the Alberta case, the Court could have gone further and found that both the creditor and the trustee were successors to the bankrupt corporation, and the discoverability period ran from the earliest of when the creditor, trustee or bankrupt corporation had knowledge of the claim; however, on the facts of this case, the outcome would likely have been the same.
This decision is the most recent judicial pronouncement in a long running dispute over competing movie theatre businesses in Southern Alberta. Starting in 1996, 681210 Alberta Ltd (“681”) operated a cinema in Okotoks, Alberta, a bedroom community south of Calgary. Mr. Hunter was a director and officer of 681, as well as one of a number of shareholders.
Unbeknownst to the other shareholders in 681, Mr. Hunter acquired a new company, Gnumedia Incorporated (“Gnumedia”), and in 2001 Gnumedia entered into a lease to operate a competing theatre in South Calgary.
In 2003, 681 sued Mr. Hunter and Gnumedia alleging breach of fiduciary duty and misappropriation of a business opportunity (the “Fiduciary Lawsuit”). 681 was successful at trial. In reasons released in May 2011, the defendants were ordered to disgorge their profits, resulting in a judgment to 681 in the amount of almost $2.8 million plus prejudgment interest of over $500,000. In reasons released on March 14, 2012, the Court of Appeal dismissed the defendants’ appeal.
In 2007, while the litigation with 681 was pending, Mr. Hunter and his wife separated. Ms. Hunter owned 1335422 Alberta Ltd (“133”). Around the same time, Gnumedia sold all of its assets to 133. The Asset Sale Agreement between Gnumedia and 133 set out that any liability arising from the Fiduciary Lawsuit would be a joint liability between Gnumedia and 133.
The key events following the asset purchase are set out in the following chronology:
THE APPLICATION BEFORE THE COURT
133 applied to stay or dismiss the Contractual Lawsuit on the basis that:
(i) 681 was bound by the mandatory arbitration clause in the Asset Purchase Agreement, and,
(ii) The limitation period for starting an arbitration expired before 681 issued the Notice to Arbitrate.
THE COURT’S DECISION
The Court found that:
(i) 681 was bound by the mandatory arbitration clause in the Asset Purchase Agreement, and
(ii) The limitation period for starting an arbitration had elapsed before 681 issued the Notice to Arbitrate.
The Court dismissed the Contractual Lawsuit.
Section 38 Orders & a Bankrupt’s Lawsuits
When a party makes an assignment or is assigned into bankruptcy, his or her property automatically vests with the bankruptcy trustee, including many (though not all) lawsuits that a bankrupt could pursue prior to bankruptcy. Trustees may choose to pursue these lawsuits; however, if they opt not to, a creditor can apply for a section 38 order. The section 38 order allows the creditor to take carriage of the litigation. The creditor does so at its own expense. If it is successful, it is entitled to retain an amount equal to (i) the value of its claim against the bankrupt’s estate, and (ii) the expenses it incurred pursuing the litigation. Any amounts the creditor recovers in excess of this value is paid into the bankruptcy estate for distribution according to the priority scheme set out in the BIA.
Arbitration Agreements & Limitation Periods
If parties have contracted to settle their disputes by arbitration, the courts will generally hold them to that contract. If a party brings court proceedings with respect to a matter subject to a mandatory arbitration agreement, the other parties to the arbitration agreement can apply under section 7 of the Arbitration Act to have the court proceeding stayed. A court must stay the court proceeding, unless one of the exceptions in section 7(2) of the Arbitration Act applies, or the party bringing the stay application has attorned to the jurisdiction of the court.
Instead of staying a court proceeding, a court will dismiss it if the limitation period for starting an arbitration has elapsed. The limitation periods in the Limitations Act apply to arbitrations, including the 2-year discoverability period and the 10-year ultimate limitation period.
The Court had to determine when the 2-year limitation period began to run against 681, and whether it had expired prior to the Notice to Arbitrate being issued on March 18, 2015.
The Court held that, at the latest, the 2-year discoverability limitation period began to run against 681 when the appeal from the Fiduciary Lawsuit was dismissed on March 14, 2012. The Notice to Arbitrate was issued more than 2 year later on March 18, 2015, and therefore 681 was out of time to start an arbitration.
681 argued that it was not able to advance its claim against 133 until it received the section 38 order. The Court rejected this position. There was evidence 681 knew about 133’s potential liability under the Asset Purchase Agreement as far back as 2010, and 681 made reference to this aspect of the Asset Purchase Agreement in pleadings filed in 2011. The Court noted that at all times 681 was the directing creditor: it had applied for the bankruptcy order, and its lawyer drafted the Statement of Claim filed by the trustee. The Court reasoned that 681 could have applied for a bankruptcy order against Gnumedia once it received a judgment in the Fiduciary Lawsuit, or at least when the appeal was dismissed. It noted that if the limitation period did not run until 681 was granted a section 38 order, 681 could “postpone the limitation period indefinitely” by waiting to apply for a bankruptcy order.
681 advanced as an alternative argument that 133’s liability was a demand obligation which was not engaged until a demand was made at some point after the judgment was issued. The Court held that the commencement of the Oppression Action in November 2011 amounted to a demand.
The Court’s approach to the question of whose knowledge matters for determining when the discoverability limitation period started to run is consistent with the Ontario Court of Appeal’s decision in Indcondo, and it might be worthwhile to tease out this analysis.
In Indcondo, the Ontario Court of Appeal was asked to determine which limitation period applied to a creditor, who had been granted a section 38 order to pursue a fraudulent conveyance proceeding. The question of which limitation period applied was complicated because Ontario’s Limitations Act, 2002 came into force January 1, 2004. Under the old act, there was no limitation period for fraudulent conveyance proceedings. Under the new act, there was a 2-year discoverability period. The old act applied to fraudulent conveyance claims discovered before January 1, 2004, and the new act applied to those discovered after that date.
The creditor discovered the claim before January 1, 2004. The trustee discovered the claim after that date. The creditor’s claim would be statute barred if the limitation period was determined using the trustee’s date of discovery, but would not be if the limitation period was determined using the creditor’s date of discovery.
The Court held that a creditor pursuing a section 38 claim was the assignee of the trustee’s claim, and “step[ped] into the shoes of the trustee.” The date of discovery of the claim was governed by section 12 of the Limitations Act, 2002, which provided that when a person commencing a proceeding claims through a “predecessor in right, title or interest”, the person will deemed to have knowledge of the claim from the earlier of when the person or the predecessor had knowledge. Consequently, the creditor’s claim was “discovered” when the creditor had knowledge of the claim, it was governed by the old limitations act, and was not statute barred.
The reasons in 681210 Alberta Ltd v 1335422 Alberta Ltd do not reference Indcondo, but the Court’s analysis is at least partly aligned with the Ontario Court of Appeal’s approach.
In Alberta, the discoverability of a claim brought by a successor is dealt with in section 3(2)(a) of the Limitations Act, which is similar to section 12 in the Ontario legislation. The Alberta provision reads:
3(2) The limitation period provided by subsection (1)(a) or (1.1)(a) begins:
(a) against a successor owner of a claim when either a predecessor owner or the successor owner of the claim first acquired or ought to have acquired the knowledge prescribed in subsection (1)(a) or (1.1)(a)
The Court held that, at the latest, the limitation period started to run from when the appeal of the Fiduciary Lawsuit was dismissed. The Court characterized this as the day that 681 “knew, or ought to have known, of the circumstances giving rise to the claim” in the Contractual Lawsuit. This suggests that, like in Indcondo, the Court was prepared to find the 2-year limitation period ran from the earlier of when the creditor or the trustee discovered the claim. Like in Indcondo, the creditor had discovered the claim first.
There is an important difference between Indcondo and 681210 Alberta Ltd., which relates to the types of claims being brought by each creditor. In Indcondo, the creditor was bringing a fraudulent conveyance claim. The trustee could bring the fraudulent conveyance claim, as could a creditor, but the debtor could not, even prior to its bankruptcy. A debtor cannot impeach its own transactions using the BIA or provincial legislation. In 681210 Alberta Ltd., the creditor was pursuing a contractual lawsuit. Had it not been assigned into bankruptcy, Gnumedia could have pursued the contractual claim itself. 681 could be characterized as being the assignee of the trustee and Gnumedia. Pursuant to the analysis in Indcondo, it would have been open to the Court to find that the limitation period ran from when the Gnumedia, 681 or the trustee first had knowledge of the claim. Such an approach would promote the purpose of limitation periods, which is to “eliminate harm to defendants of very belated litigation” by “preventing certain plaintiffs from suing on good causes of action.”
Starting the limitation period from when the bankrupt discovered the claim would likely not change the outcome in 681210 Alberta Ltd. The Court may have determined that Gnumedia did not discover its claim against 133 under the Asset Purchase Agreement until its liability in the Contractual Lawsuit was confirmed by the Court of Appeal, i.e., the same day that 681 knew or ought to have known about the claim. And in any event, even if Gnumedia discovered the claim at an earlier date, the result would be the same: the limitation period had expired. On a different set of facts, though, the outcome may turn on how the analysis in Indcondo should be applied when a creditor uses section 38 to pursue a claim that could have been pursued by the bankrupt.
 681210 Alberta Ltd v 1335422 Alberta Ltd, 2015 ABQB 489, Farrington Master (“681210 Alberta Ltd”).
 Bankruptcy and Insolvency Act, RSC 1985, c B-3.
 Indcondo Building Corporation v. Sloan, 2010 ONCA 890, 103 OR (3d) 445 (“Indcondo”).
 See above FN 4.
 681210 Alberta Ltd at paras 5-6.
 Some types of claims, including those resulting from a personal injury suffered by a bankrupt, do not vest in the trustee, see Roderick J Wood, Bankruptcy & Insolvency Law (Toronto: Irwin Law, 2009) at 88-91.
 Arbitration Act, RSA 2000, c A-43.
 681210 Alberta Ltd atparas 17. 33.
 Limitations Act, RSA 2000, c L-12, s 3; Arbitration Act, s 51.
 681210 Alberta Ltd at para 64.
 681210 Alberta Ltd at para 59-65.
 681210 Alberta Ltd at paras 66-67.
 Limitations Act, 2002, SO 2002, c 24.
 Indcondo at para 12.
 Indcondo at paras 22-23.
 681210 Alberta Ltd at para 62.
If you are old enough or watch old movies, you should recall the classic Karate Kid. Of course, I am referring to the 1984 'wax on wax off' version, not the remake. And if you remember that movie, you probably recall that Ralph Macchio plays a kid who gets bullied by the cool karate club jocks. And even though every now and then a revisionist view of popular movies comes along, it is usually funny but not very convincing. But then comes this:
Mike Duffy’s ongoing criminal trial has created a tremendous stir online and in the media. Unfortunately, the commentary is rife with speculation and error, much of it caused by the strange nature of the charges, and the conduct of the Crown and defence. After considering the trial and the media coverage, I decided to examine the charges brought in relation to the infamous $90,000 cheque and discuss 10 key questions arising from the trial with the objective of clarifying what might be happening in this landmark criminal trial. If you are interested in getting an in-depth discussion of the Duffy trial, click here.
In an article in the Toronto Star, titled Russell Brown doesn’t belong on the Supreme Court, a former law professor attacks Justice Brown based on two main themes:
1) He is not a liberal, so he can't be a good judge.
2) The timing is bad and he has done some unethical stuff.
With respect to number one: fine. If you don't want someone with his ideology on the bench, so be it. But with respect to the second attack, it goes as follows:
Third, while attacks on political parties and policies, and on legal decisions, are open to virtually anyone, such partisanship in judges violates judicial ethics. For two and a half years before he was named to the Supreme Court, Justice Brown was a member of Alberta’s superior court and, then, its appeal court, and was obliged to preserve his neutrality on questions of law and politics. The timing of his blogged rants against decisions, judges and lawyers is not clear — they have disappeared from the Internet — one hopes and assumes this practice stopped at the time of his initial judicial appointment.
However, his role as adviser to the Justice Centre for Constitutional Freedoms, an organization that advances conservative positions that often are inconsistent with the terms of the constitution and with decided cases, continued all the time that he was a judge in Alberta’s courts. While promotion by a judge of constitutional positions that are contrary to the Charter’s terms, and to judicial decisions made under it, is not a clear indication of how cases would be decided, suspicions of predisposition and questions of judicial decorum most certainly arise.
I have bolded the two main ethical attacks. The second one is just false. If the author has proof of this, then let him produce this. Indeed, in all the actual articles by the press (even the hostile one) has never made that claim. Indeed, for almost three years, it would have been very easy for anyone to have made that claim against Justice Brown while he was on the court, especially since his court was hearing cases brought by the JCCF.
The first attack is also worded in such a way to suggest that he may had been blogging when he was on the bench. While this by itself is not necessarily an issue, in Justice Brown's case it is false. The press stories about his blogging clearly show that his posts were in 2007 and 2008 almost 4 years before he was appointed to the bench. All the author had to do was to check the dates on these archived albeit deleted posts.
I have heard about judges taking their sweet time to issue a decision on a pending case. How long is too long? A case that been appealed from the 7th Circuit to the US Supreme Court was remanded back to the 7th Circuit with instructions that they take a look at the case in a different light. Then the waiting started. That was five years ago, and now they issued their decision (spoiler: same result). Why the delay? The case was lost in the piles of paper! At least they apologized (oh and one of the original three judges died).
You think that is bad - then how about this case that has dragged on for over 44 years, thereby giving Jarndyce v Jarndyce a run for its reputation. The kicker is that the original judge is still on the case. He is 93 and would like to be resolved soon. Amen!
Perhaps I wasn’t the only Canadian property law enthusiast who eagerly clicked on this Globe and Mail story about the ongoing saga of Vancouver’s Arbutus rail corridor. The 10-km corridor that cuts through the west side of Vancouver from Richmond to False Creek was the subject of the Supreme Court of Canada’s leading decision on constructive or de facto expropriation, also known as regulatory takings. That case been the subject of extensive commentary, by obscure academics and esteemed jurists alike.
The Arbutus corridor, which runs through some of the most expensive residential real estate in Canada, is owned by Canadian Pacific Railway Ltd. (CP). It was operated by CP as a rail corridor from the start of the 20th century until 2001, when CP discontinued service. CP then put forward proposals to develop the land in the corridor for commercial and residential purposes. It also indicated that it would be willing to sell the land to the City of Vancouver at a price determined by agreement or under the formal process for expropriation. Instead, the City preferred to keep the corridor intact for future transportation purposes without formally acquiring it. It zoned the corridor as a public thoroughfare for rail, transit, and cycling and pedestrian paths. As the Supreme Court acknowledged, the effect of this designation was to confine CP to uneconomic uses of the land in question, since use of the corridor for rail was no longer profitable.
CP brought a claim for constructive expropriation, arguing that a development plan confining it to uneconomic uses and providing Vancouverites with a de facto public park amounted to a taking of the land in question, which should require compensation. The doctrine of constructive expropriation is ultimately based on an interpretive principle – that the legislature will not be understood to authorize a taking of property without compensation unless it says so explicitly. Since municipalities are creatures of statute, they are only able to formally expropriate property based on powers explicitly set out in provincial legislation, which uniformly requires that compensation be paid to expropriated landowners. A public body should not be able to do indirectly what it cannot do directly, and so Canadian courts have long held that regulations that are so burdensome as to amount to a de facto expropriation of the property in question should also require compensation unless an uncompensated taking is explicitly authorized by the legislature. (See, e.g., R. v. Tener,  1 SCR 533, in which a refusal to grant access to a provincial park for the purposes of exploiting a mineral lease was held to amount to a constructive expropriation of the mineral interest.)
The Supreme Court of Canada ultimately rejected CP’s constructive expropriation argument, establishing a highly restrictive test for constructive expropriation in the process. The Supreme Court held that in order to make out a claim for constructive expropriation, a plaintiff has to establish that a public body has acquired a “beneficial interest” in the property in question, and that it has deprived the owner of all reasonable uses of the property. The Court held that CP had not satisfied either branch of the test, despite the fact that none of the uses left to CP was profitable and the City obtained the benefit of what was essentially a park and intact transportation corridor. The Court denied compensation, in a decision that was strongly criticized by then-Professor Russell Brown. 
This is where the Globe story picks up. As a result of the Supreme Court decision, CP and the City of Vancouver were effectively locked in a standoff. The City was not prepared to formally expropriate the land in order to designate it as a public park or use it as a transit corridor, despite the fact that many Vancouverites had taken to using the corridor as a walking path and community garden. Formal expropriation would have required the City to compensate CP. CP, for its part, technically still held title to a large swath of urban land with enormous development potential, but was unable to do anything with it – at least not anything profitable, which is a pretty significant restriction for a publicly traded company with duties to shareholders.
This state of affairs persisted for a few years following the Supreme Court decision, until last year, when CP finally made a move. In what was widely viewed as a negotiating tactic aimed at bringing the City back to the bargaining table, CP announced that it planned to resume freight rail service along the corridor. This is, of course, exactly the type of service that CP had previously argued before the Supreme Court would not be profitable. Last year, as part of its efforts to prepare the corridor for the resumption of freight rail service, CP cleared community gardens that had been established in the corridor. It now claims to be on the cusp of resuming rail service.
In response to CP’s actions, the City has initiated an application under the Canada Transportation Act. The City argues that when CP discontinued rail service in 2001, it was under an obligation to offer to sell the land to the government at its “net salvage value”, which is a term of art in transportation law that effectively provides a discount on the market value of the land. In separate litigation in the B.C. Supreme Court, the City also raises some interesting constitutional questions, arguing that when CP abandoned rail service, the Arbutus corridor ceased to fall under federal jurisdiction, and that s. 88 of the Canada Transportation Act, which declares railways under federal jurisdiction to be works for the general advantage of Canada, is not a valid invocation of s. 92(10) of the Constitution Act, 1867. The City sought an interlocutory injunction to stop the resumption of rail service, which was rejected in January.
I have always found the Canadian Pacific constructive expropriation decision fascinating, featuring as it does the lingering effects of Canada’s 19th century railway history, the shifting economics of transportation, and the incentives of public officials to obtain something for nothing. It’s hard to feel sorry for a railway conglomerate, especially one that was initially given the land in question for basically nothing (other than an undertaking to establish a rail line). But at the same time, there is something disturbing about a local government’s using its zoning powers to effectively force a single landowner to absorb the entire cost of a benefit enjoyed by the citizenry as a whole. Even if you think, as many do, that large corporations like CP should pay more in taxes, it does not follow that a single corporation should be made to pay the full cost of a public amenity just because it happens to own land in the wrong place. That is just arbitrary. One cannot help but think that the ongoing standoff over the Arbutus corridor could have been averted by a more robust doctrine of constructive expropriation that would preclude governments from using their regulatory powers to create stranded assets, that is to say, assets that have no profitable uses.
As the Globe article indicates, the Arbutus corridor story is far from over. The legal terrain has simply shifted from the common law of property to the legislative framework governing railways in Canada. We’ll see if this round of litigation ultimately brings resolution.
 Sunny Dhillon, “Vancouver wants Arbutus rail corridor sold at a discounted price”, Globe and Mail (12 August 2015) <http://www.theglobeandmail.com/news/british-columbia/vancouver-wants-arbutus-rail-corridor-sold-at-a-discounted-price/article25948375/>.
 Canadian Pacific Railway Co. v. Vancouver (City), 2006 SCC 5,  1 SCR 227.
 Malcolm Lavoie, “Canadian Common Law and Civil Law Approaches to Constructive Takings: A Comparative Economic Perspective” (2011) 42(2) Ottawa L Rev 229.
 Russell Brown, “The Constructive Taking at the Supreme Court of Canada: Once More, without Feeling” (2007) 40(1) UBC L Rev 315.
 AG v De Keyser’s Royal Hotel, Limited,  AC 508 at 542,  122 LT 691 at 698 (HL), Atkinson LJ (“unless the words of the statute clearly so demand, the statute is not to be construed so as to take away the property of a subject without compensation”), applied in Manitoba Fisheries Ltd v Canada,  1 SCR 101, 88 DLR (3d) 462
 Canadian Pacific, supra note 1 at para 30.
 Brown, supra note 4.
 “Arbutus Corridor: Vancouver tries new tactic in battle with CP”, CBC News (13 August 2015) http://www.cbc.ca/news/canada/british-columbia/arbutus-corridor-vancouver-tries-new-tactic-in-battle-with-cp-1.3189834.
 SC 1996, c 10.
 Dhillon, supra note 1.
 See Vancouver (City) v. Canadian Pacific Railway Company, 2015 BCSC 76 at paras 32-33.
 Vancouver (City) v. Canadian Pacific Railway Company, 2015 BCSC 76.
 C.P.R. v. Vancouver (City), 2004 BCCA 192 at para 4.
Is it time lawyers allow the unauthorized practice of law in order to spur innovation? The founder of AVVO thinks so. Why should lawyers care about innovation? As the story points out, it is because the public is abandoning lawyers, as evidenced by the rise of the pro se litigants (on both sides of the border, I should add).
If you are interviewing for articles in Toronto (or elsewhere), here are some last minutes tips. And good luck to all of our students looking for articles.
I am not sure if this is a first, bur our super-blogger Anna Lund got cited by the Court of Queen's Bench of Alberta for a blog post she did a while back. Sadly, it was not our blog (which has received its share of national attention recently) but nonetheless we are delighted that she is blogging here.
Anna had blogged regarding disputes between landlords and tenants under Alberta's alternate dispute resolution forum, and pointed out some of the issues facing self-represented litigants. Master Schlosser agreed and cited her approvingly.
A recent news article entitled “Big Cars Kill” caught my attention with some startling conclusions from recent research. While driving a large vehicle like an SUV is usually safer for those inside the vehicle than a small vehicle would be, it has significant negative safety effects on others:
A study from the University of California, San Diego … found every life saved in a large vehicle came at the expense of 4.3 dead pedestrians, motorcyclists and car drivers.
In essence, of all the consumer choices Canadians will make in their life, buying an unnecessarily large car is the one most likely to maim or kill a stranger. 
The basic idea is that while it is usually “safer” to drive a large vehicle, at least from the point of view of passengers inside the vehicle, this increased safety is bought at the price of imposing a disproportionately large increased risk of death or injury on non-passengers of the large vehicle, ie. passengers of other cars, bicyclists, and pedestrians. This is intuitive: in a crash between a large truck and a small car or bicycle, I think we can all guess who is more likely to suffer serious injury or death. As the article points out, the result is a kind of vehicle arms race, with consumers buying larger and larger vehicles to make themselves safer, even at the cost of making society as a whole less safe. Assuming the study’s conclusions to be correct, they raise some interesting questions as to how the law should respond.
As pointed out to me by my friend Leonid Sirota (of Double Aspect blog fame), this is a classic case of an economic externality. Consumers obtain a benefit (decreased risk of injury or death) by imposing a cost on third parties (increased risk of injury or death) without their consent. How might the law work to internalize this externality? One answer might be through tort liability and the market for compulsory third party liability insurance for motor vehicles. If certain types of vehicles (like, say, Hummers) are more likely to cause significant injury or death to third parties than other vehicles (e.g. Smart Cars), and if the tort system allows the victims to recover against drivers’ insurance plans, then one would think that the insurance market would place a higher price on liability insurance for the more “dangerous” vehicles, in recognition of the increased chance that the insurance company would have to pay a damages award. This would tend to deter consumers from buying a large vehicle unless they were willing to pay extra for the risk that their vehicles impose on other drivers.
I have no idea whether car insurance markets (or government insurers in some provinces) price liability insurance in such a way as to internalize the risks posed by large vehicles. But my guess is that they do not fully internalize these risks. The most obvious reason for this (and I can think of a few) is that the most serious accidents involving large vehicles result in fatalities, and the law places strict limits on what kinds of damages can be awarded for a fatality.
The traditional position at common law was that accidents that resulted in the death of the injured party were effectively non-compensable. The mindset was that since the victim of the wrong was no longer around to bring a claim, the claim could not proceed. This position has been altered by statute in Canadian common law jurisdictions to allow for actions by the dependents of a deceased person, but only for limited heads of damages. In Alberta, damages are available to dependents for loss incurred by dependents (like lost income), as well as funeral costs, costs of care for the dying person and other out-of-pocket expenses leading up to his/her death, costs of grief counselling for survivors, as well as predetermined sums for grief and loss of guidance, care and companionship. In most Canadian common law jurisdictions, the estate of a dead person is not able to sue for lost expectation of life. The amounts likely to be awarded under the allowable heads of damages therefore do not take into account the value of the life in question to the person whose life is lost, and thus almost certainly underestimate the negative effects of a fatality. Since the tort system thus implicitly values the effect of death to the person who dies at zero dollars, the corresponding liability insurance market for vehicles will also tend not to take this effect into account in pricing insurance. The result is likely an incompletely internalized externality.
Assuming that the value of a human life to the person whose life is lost is greater than zero, what is the correct way to place a monetary value on a life so as to internalize the risk of hazardous activities like driving a large vehicle? As one might assume, this is a controversial and difficult topic. At first blush, it seems impossible to assign any monetary value at all to a human life. As observed by Richard Posner, if one were simply to ask people what how much they would accept in return for dying, the answer would often be an infinite amount of money . This is not a helpful answer in a world where practically every conceivable activity entails some risk of injury or death, and decisions have to be made about what activities are worthwhile, and with which precautions.
However, if one instead approaches the issue from the point of view of risk allocation (which is what the liability insurance market is all about, after all), it is possible to come up with a reasonable estimate for the value people place on their lives when making decisions about risk. Using data on things like wage premiums for dangerous occupations, economists have attempted to estimate the statistical value of a human life in the context of decision-making about risk. The going estimate based on labour markets in the United States is between $4 and 9 million per statistical life. If we take the midpoint of $6.5 million, this means that, at the margin, a worker in the US labour market is willing to accept a 0.01% increased chance of being killed in the workplace in exchange for $650 ($6,500,000 * 0.0001).
In labour markets for hazardous occupations, employers have to pay workers in order to get them to accept an increased risk of death. But when I buy a large vehicle and impose a risk of death on everyone in my community, such a market-based solution is not possible. I can’t negotiate with each person in my city or province to arrive at an amount that each is willing to accept in exchange for the miniscule risk that my decision imposes on each person individually. In instances like this, we might normally rely on the tort system (along with liability insurance markets) as a way of making people pay for the risks they impose on others. If you hurt a stranger through negligent conduct, you can be made to pay for it. But as we have seen, the tort system as presently structured does not require people to pay for the most significant cost associated with a fatality – the lost life itself. Should it? It is not clear to me that it should, because doing so would seem to violate the basic structure of tort law as we know it.
Tort law as we normally conceive of it is about a bilateral relationship between the doer and the sufferer of harm. The doer of harm is made to pay for the wrong, thus rebalancing the scales of justice. A case in which the sufferer of harm is dead falls outside this basic structure. The sufferer is no longer around to receive a benefit as compensation for the harm suffered. It seems wrong for a family member to be able to bring an action for the value of the life lost (as opposed to funeral expenses, loss of companionship, etc.), because it is not the family member who actually lost the life in question. A $6.5 million award in recognition of the statistical value of the lost life, for example, would basically be a windfall for the surviving family member. That said, maybe if a deceased person’s estate brings the action for the direct effects of the fatal accident, in the name of the deceased person, some of the conceptual difficulties are overcome. Apparently the Northwest Territories, unlike other Canadian jurisdictions, actually does allow a deceased person’s estate to sue for lost expectation of life. This seems a bit bizarre according to normal tort principles, since the sufferer of harm doesn’t ultimately get the compensation, but maybe this is justified in terms of some of the efficiency considerations set out in this blog post, along with the fact that the “windfall” received by the deceased person’s heirs may at least reflect the deceased person’s wishes as set out in a will.
Perhaps, rather than relying on actions brought by family members, one could instead imagine a new kind of system that required those who negligently cause fatal auto accidents to pay into a government fund. The amount could be based on some statistical estimate of the value of a human life. Normally, it would end up being one’s liability insurer that paid the amount into the fund. If the required sum were in the neighbourhood of $6.5 million per fatality, car insurance would likely cost a lot more, but it would also vary more widely based on the likelihood that one’s vehicle would cause a fatality. Liability insurance for larger vehicles would likely end up costing a lot more than for smaller vehicles, thus forcing people to pay more for the increased risk their vehicles impose on others. This might put a stop to a vehicle arms race that makes us all less safe, and force people to think harder about whether they really need a large vehicle.
Whatever the virtues of a system like the one I have just sketched out (and I think it may have some, though I’m not sure), one should bear in mind it would be structurally nothing like the tort system. It would not be based on a correlative relationship between the doer and sufferer of harm, but rather on a relationship between the government and citizens. It would be public law, then, not private law.
One last point: All of this may soon turn out to be moot if autonomous and networked (ie. driverless) cars become a reality, as seems likely in the near future. In addition to reducing the chances of serious accidents occurring, potentially almost to zero, such vehicles could (and probably should) be equipped with software that values all human lives equally, whether or not they belong to passengers of the vehicle in question. In other words, in the event of a possible crash, the software of all vehicles would act to save as many lives as possible, regardless of whether one is riding in a big SUV or a compact car. In a potential crash between a large vehicle with one passenger and a compact vehicle with a whole family on board, the software might opt to sacrifice the life of the lone passenger in the large vehicle, for instance by driving it off the road, rather than risk a collision with the compact car that could result in the death of the entire family. If autonomous vehicles become ubiquitous (or compulsory), it might not matter so much from a safety perspective whether one has a large or small vehicle, though the prospect of driving a car that might kill you in order to serve the greater good raises its own ethical questions, as pointed out to me on Twitter by robot law expert Kristen Thomasen.
 Tristin Hopper,“Big cars kill: ‘Monster’ vehicles may make Canadians feel safer, but they’re more likely to cause fatal collisions”, National Post (31 July 2015) http://news.nationalpost.com/news/canada/larger-vehicles-may-make-canadians-feel-safe-on-the-road-but-heavier-cars-are-proven-to-cause-more-fatal-collisions.
 Fatal Accidents Act, RSA 2000, c F-8, ss. 3(1), 7, 8.
 See, e.g., Trustee Act, RSO 1990, c T.23, s 38(1).
 Richard Posner, Economic Analysis of Law, 8th ed (New York: Aspen, 2011) at 250.
 W Kip Viscusi & Joseph E Aldy, “The Value of a Statistical Life: A Critical Review of Market Estimates throughout the World” (2003) 27 J Risk & Uncertainty 5 at 6.
 See Ernest Weinrib, “Corrective Justice in a Nutshell” (2002) 52 UTLJ 349.
 Trustee Act, RSNWT 1988, c T-8, s. 31(1), cited in Robert M Solomon et al, Cases and Materials in the Law of Torts, 8th ed (Toronto: Carswell, 2011) at 674.
So the press has decided to make an issue of my former colleague's blog posts, Two super-bloggers have come to the defense of blogging judges, thereby saving me the hassle of writing a whole post!:
1. Josh Blackman addresses the issue of blogging by potential judicial appointees from an American perspective.
2. Omar Ha-Redeye, a friend of this blog from day one, very cogently comes up with a good discussion on blogging judges,
I should point out that Justice Brown was an active blogger almost seven years ago and never blogged once appointed to the bench.
There are American judges who blog regularly, such as Judge Posner (who seems to have stopped blogging a year ago). Justice Don Willett of the Texas Supreme Court regularly tweets from his Twitter account.
So what to make of blogging judges or soon to be judges? The answer is the same: you take the blogging as their personal views. How will this affect their judicial pronouncements? Easy: read their judgments. All you have to do for Justice Brown is go to Canlii and look up his work. That will tell you what you need to know. I look forward to reading many of his SCC judgments for many years to come.
I should point out, and this is for all those who commented on the story and I suspect are probably not lawyers, that just because he spent less than three years on lower courts is irrelevant one way or another to his qualifications to be on the Supreme Court. There is always at least one seat reserved for direct from the street to the bench on the SCC. Justice Cote is that current justice. No one would suggest she is unqualified. Nor would anyone suggest that Justices Binnie or Sopinka were unqualified when appointed. For that matter, CJ Earl Warren (and many others in the past) was a direct appointment. A judge may spend many years on the lower courts and be thoroughly unqualified to sit on the SCC or for that matter any Supreme Court. I won't name names, but many come to mind.
Update: Ilya Somin at Volokh has a post on Brown's appointment.
Welcome to all our readers who have been coming looking for quotes by SCC J. Brown. Look around and stick for other excellent commentary by our current authors.
You may have go far back in the archives to find his stuff, as he stopped being an active blogger back in 2008-ish. I suspect Causation and other mundane matters of tort law (ok - that was me being snarky) occupied his time after then.
In its recent decision of Iona Contractors Ltd. v Guarantee Company of North America, a divided (2:1) Court of Appeal held that a payment obligation of an owner to a bankrupt general contractor was subject to a valid trust under the provincial Builders’ Lien Act.
Under the approach adopted by the Court of Appeal, the statutory Builders’ Lien Act trust had to satisfy the three certainties of a common law trust to remain operative after the general contractor became bankrupt. The majority satisfied itself that two of the certainties (intent, object) were present by referring to the statutory language of the Builders’ Lien Act. The analysis of the third certainty (subject matter) appears to be more fact-dependent.
Iona Contractors hired a number of subcontractors to work on the project. As a condition of the contract, Iona provided the Airport with a labour and material payment bond. Under the terms of the bond, if Iona failed to pay its subcontractors, then the surety of the bond, Guarantee Company of North America [“Guarantee Co”] would be responsible for paying the subcontractors.
Iona substantially completed the project in October 2010. Iona was not paying its subcontractors. The Airport withheld further payment to Iona. Some of the withheld payment was used to rectify deficiencies in the work completed by Iona. The remaining balance of ~$998,000 [the “Funds”] was paid into Guarantee Co’s solicitor’s trust account, pending resolution of who was entitled to the Funds.
Guarantee Co paid out $1.48 million to Iona’s subcontractors.
In December 2010, Iona applied for an Initial Order under the Companies’ Creditors Arrangement Act. In December 2010, Alberta Treasury Branches - a secured lender - privately appointed Ernst & Young as receiver manager. On March 18, 2011, Iona made an assignment into bankruptcy. Ernst & Young was appointed as trustee.
The trustee and Guarantee Co each claimed the Funds.
The trustee argued that the money was owing to Iona under the contract, and was included in Iona’s property, which vested with the trustee at the time of Iona’s bankruptcy.
Guarantee Co argued that the money was owing to the subcontractors, and that it had been subrogated to the subcontractors' rights when it paid out their claims. Guarantee argued that there were two grounds upon which the subcontractors could claim the Funds:
(1) Iona breached its contract with the Airport by not paying the subcontractors, and the contract entitled the Airport to cure Iona’s breach by paying the Funds to the subcontractors.
(2) The Funds were held in trust for the benefit of the subcontractors due to the operation of the provincial Builders’ Lien Act. The trust remained valid in bankruptcy. As property held in trust, the Funds did not form part of the debtor’s divisible property for the purposes of the Bankruptcy and Insolvency Act [“BIA”],but rather should be paid to the beneficiaries of the trust, i.e., the subcontractors.
The Queen’s Bench Decision
The motions judge rejected both of Guarantee Co’s arguments and held that the money should be paid to the trustee.
The Court of Appeal’s Decision
The majority, in reasons authored by Mr. Justice Slatter, held that the money should be paid to Guarantee Co. It rejected Guarantee Co’s first (contractual) argument, but held that the funds were impressed with a valid trust under the Builders’ Lien Act.
The dissent, in reasons authored by Madam Justice Paperny, rejected both of Guarantee Co’s arguments and concluded that the money should be paid to the trustee.
The Court of Appeal’s Analysis of the Contractual Argument
The Relevant Contractual Provisions
The contract between the Airport and Iona provided that if Iona did not complete “the Work” (a defined term under the contract), the Airport could undertake the Work itself. Any amount the Airport spent on completing the Work could then be deducted from the amount it owed to Iona under the contract. The definition of “the Work” in the contract included “everything that is necessary to be done, furnished or delivered by the Contractor to perform the Contract.” Iona was contractually obliged to pay its subcontractors.
Guarantee Co’s Interpretation of the Contract
Guarantee Co argued that paying subcontractors was part of the Work. Consequently the Airport could pay the subcontractors in Iona’s stead, and set off the amount of such payments against the amount owing to Iona under the contract.
The Majority & Dissent’s Analysis
The majority and the dissent analyzed how different contractual clauses interact with the BIA:
Under the terms of the contract between the Airport and Iona, the Airport did not have an obligation to pay the subcontractors. It was unnecessary to determine whether or not the Airport had the discretion to pay the subcontractors, because such a contractual clause would be inoperative in bankruptcy.
The Court of Appeal’s Analysis of the Trust Argument
The Builders’ Lien Act Trust
The Builders’ Lien Act impresses a trust on payments made by an owner after a certificate of substantial completion is issued on a construction project, if the recipient of the payment is indebted to any persons for providing work or furnishing materials on the same project. The recipient will usually be the general contractor, and it will be indebted to its subcontractors. The general contractor will hold payments received after substantial completion in trust for the subcontractors.
Trust Property in Bankruptcy
When a person makes an assignment into bankruptcy, a trustee realizes on most of the person’s property, and distributes the proceeds amongst the person’s creditors according to the priority scheme set out in the BIA. Property that the bankrupt holds in trust for another person is excluded from the property that is divisible amongst the bankrupt’s creditors. Instead, the beneficiary under the trust is entitled to the trust property.
Statutory Trusts under the BIA
The Court of Appeal considered whether there was an operational conflict between the trust provisions of the Builders’ Lien Act and the BIA, rendering the former inoperative. The majority and dissent agreed that statutory trusts will not be given effect in bankruptcy unless they would be trusts under common law trust principles. To hold otherwise, would allow provinces to reorder bankruptcy priorities by deeming some creditors to be the beneficiaries of statutory trusts.
In deciding that there was not an operational conflict between the BIA and the Builders’ Lien Act, the majority placed importance on the fact that the trust was “part of a larger statutory scheme designed to create new civil rights for unpaid subcontractors”, and not an effort by the provincial government to reorder the bankruptcy priority scheme.
Analyzing the Builders’ Lien Act Trust as a Common Law Trust
Both the majority and the dissent analyzed whether or not the Builders' Lien Act trust satisfied the common law test for a trust. For a trust to be valid at common law it must satisfy three certainties:
1. A certainty of intent. The majority and the dissent agreed the intention to establish a trust was set out in the Builders’ Lien Act.
2. A certainty of object. The majority and the dissent agreed the Builders’ Lien Act specified that the object of the trust was the group of unpaid subcontractors.
3.A certainty of subject matter. The majority and dissent disagreed on this point.
The majority’s and dissent’s analyses, read together, raise a question. Would the result have been the same if the money had been paid into an account and commingled with other funds? Recall that the Funds were being held in the trust account of Guarantee Co’s solicitor. The likelihood that commingling would have occurred was sufficient for the dissent to find that there was no certainty of subject matter. The majority did not analyze how commingling – actual or potential – would impact its holding that there was certainty of subject matter. I think it would be difficult to argue that the certainty of subject matter was retained once actual commingling had occurred, if as a result the funds were no longer identifiable or traceable. Consequently, the validity of Builders’ Lien Act trusts in bankruptcy may end up being very fact-dependent.
 Iona Contractors Ltd. v Guarantee Company of North America, 2015 ABCA 240 [the “Appeal Decision”].
 The Appeal Decision at para 2.
 The Appeal Decision at para 6; The Trial Decision at para 10.
 The Appeal Decision at para 3.
 The Trial Decision at para 2.
 The Appeal Decision at para 4.
 The Appeal Decision at para 5. The trial judge characterized Guarantee Co’s entitlement under its contractual claim as resulting from it being the subrogree of the Airport, not the subcontractors, see The Trial Decision at para 6. The dissent considered and rejected Guarantee Co’s arguments on this point, see the Appeal Decision at paras 87-88.
 The Trial Decision at paras 20, 37-38; The Appeal Decision at para 7-8.
 The Appeal Decision at para 12.
 The Appeal Decision at para 12.
 BIA, s 97(3), The Appeal Decision at paras 15, 68-69.
 The Appeal Decision at paras 17, 76.
 The Appeal Decision at paras 15-16, 76-81. Both the majority and the dissent relied on A.N. Bail Co. v Gingras,  2 SCR 475 and Greenview (Municipal District No. 16) v Bank of Nova Scotia, 2013 ABCA 302, 87 Alta LR (5th) 335 as authority for this proposition.
 The Appeal Decision at para 14.
 Builders Lien Act, s 22(1).
 BIA, s 67(1)(a).
 The Appeal Decision at paras 34-36, 95-96, Note that some statutory trusts in favour of the Crown for employee source deductions are specifically preserved in bankruptcy, see BIA, s 67(3).
 The Appeal Decision at para 33, see also para 37.
 The Appeal Decision at paras 37, 109.
 The Appeal Decision at paras 37, 110.
 The Appeal Decision at para 37.
 The Appeal Decision at para 111.
 The Appeal Decision at para 112.
 The Appeal Decision at para 115.
 The Trial Decision at para 35.
 The Appeal Decision at para 62.
 The Appeal Decision at para 116.
In this video blog, I address the question of how sexual assault can be committed between two "consenting" adults, where bodily harm is intended and caused by one of the parties. In short, the Blog suggests that the relationship between BH and consent is not as clear cut as many media reports have made it out to be. It is far from clear that intending and causing bodily harm does or should vitiate consent.
Receivers are commonly appointed to realize upon a debtor’s assets and, in many cases, to operate the debtor’s business for the benefit of one or more creditors. By comparison, an investigative receiver is granted powers to gather information about the financial affairs of a debtor to aid a creditor’s debt recovery efforts. In the recent case of Akagi v. Synergy Group (2000) Inc., the Ontario Court of Appeal endorsed the use of an investigative receiver by a judgment creditor, but only if (i) necessary to alleviate a risk to the creditor’s right of recovery, and (ii) the receivers’ powers are subject to appropriate limits.
Synergy Group (2000) Inc (“Synergy”) marketed a program to Mr. Akagi that was supposed to provide him with tax benefits. Mr. Akagi invested money into the program. The program did not operate as promised. Mr. Akagi lost his investment, and the CRA reassessed him, resulting in a significant tax liability. A number of other individuals were in a similar position, at one point the CRA estimated that 3815 individuals had lost money because of their involvement in the program.
Mr. Akagi sued Synergy and four related individuals for fraud. After some procedural wrangling, he received judgment for $182,000 against Synergy, and two of the individual defendants.
After receiving judgment, but before making any efforts to enforce it, Mr. Akagi applied to have a receiver appointed over the assets, property and undertakings of Synergy and a related company, which had not been a party to the lawsuit. The Court granted the application pursuant to section 101 of Ontario’s Courts of Justice Act.
At a number of subsequent applications, the Court expanded the receivers’ powers, and the parties subject to the receivership [the “Subject Parties”]. The subsequent orders:
After receiving notice of receivership, some of the Subject Parties applied under the come back clause to have the order set aside. They were unsuccessful at the first instance, and appealed the matter to the Ontario Court of Appeal.
The Ontario Court of Appeal’s Decision & Analysis
The Court of Appeal set aside the initial order appointing the receiver, and the subsequent orders expanding its powers. The Court based its decision on the substantive shortcomings of the receivership order, but indicated it had procedural concerns as well.
The Court of Appeal was concerned by the repeated use of ex parte applications (with borderline-insufficient disclosure of material facts), and the “relaxed” approach to normal court processes: a number of the subsequent motions were brought without a notice of motion or application, and in the absence of further evidence, other than the receiver’s reports.
The Court of Appeal held that the necessary evidentiary foundation was lacking for an investigative receivership order to be granted, and the scope of the receivership order was too broad.
The Missing Evidentiary Foundation
When a judgment creditor seeks to appoint a receiver in aid of execution, it must establish that the order is “needed to protect [the creditor’s] ability to recover on the debt”, i.e., that otherwise the creditor’s ability to recover would be in “serious jeopardy.” Evidence that would establish such jeopardy could include a large disparity between the amount of the judgment and the value of a debtor’s known assets, or that less intrusive enforcement steps have been unsuccessful. There was no such evidence to show that Mr Akagi’s ability to recover was in jeopardy.
The Problem of Overreach
The Court of Appeal characterized the receivership order as overreaching in three distinct ways:
Judgment Creditors Appointing Investigative Receivers in Alberta
The Ontario Court of Appeal cited a number of cases where it had been proper for an investigative receiver to be appointed, including the Alberta case of Romspen Investment Corp. Hargate Properties Inc. In that case the investigative receiver was appointed by a secured creditor. An Alberta judgment creditor could rely on a number of different legislative provisions in an application to appoint an investigative receiver, including section 13(2) of the Judicature Act, section 99 of the Business Corporations Act, and section 85 of the Civil Enforcement Act. When making such an application, a judgment creditor should ensure that it has convincing evidence to show that it needs the receivership order, and that the receivership order is tailored to minimize unnecessary intrusions into the debtor’s affairs.
 Akagi v. Synergy Group (2000) Inc., 2015 ONCA 368 [“Akagi”]. The Court of Appeal noted that there was divided authority on whether or not an applicant must demonstrate fraud. Fraud was established in this case, and the Court did not need to consider this question, see FN2 of the decision.
 Ibid at para 35.
 Ibid at para 22. The judgment comprised ~$116,000 in compensatory damages, $30,000 in punitive damages, and $36,000 in costs. $60,000 of the judgment was satisfied by funds the defendants had paid into court earlier in the litigation.
 Courts of Justice Act, RSO 1990, c C-43.
 Akagi, supra note 1 at paras 33, 37.
 Ibid at para 43.
 Ibid at para 43.
 Ibid at para 43.
 Ibid at para 43.
 Ontario uses a template Receivership Order (available here), which includes a come back clause, enabling any interested party to apply to court to vary or amend the Order. Alberta also uses a template Receivership Order, which includes similar language (available here).
 Akagi, supra note 1 at para 114.
 Ibid at paras 94-99.
 Ibid at paras 101, 106.
 Ibid at paras 80, 107.
 Ibid at paras 80, 107.
 Ibid at para 100.
 Ibid at para 100.
 Ibid at para 100.
 Romspen Investment Corp. Hargate Properties Inc., 2011 ABQB 759.
 Judicature Act, RSA 2000, c J-2.
 Business Corporations Act, RSA 2000, c B-9.
 Civil Enforcement Act, RSA 2000, c C-15.
I've been thinking a lot lately about anti-corruption. It's a hot topic these days, and for good reason. But there's an even stronger argument for the ascension of anti-corruption that is far less trumpeted.
Some background: the first form of corruption I'm talking about is the one most of us are familiar with: bribery, money laundering, extortion. Mike Duffy-like allegations, or as Lawrence Lessig puts it, the actions of bad souls acting badly. This is the kind of corruption targeted by the federal government's anti-corruption rules applicable to companies that want to do business with the government, rules which the federal government has just "relaxed"; see the Globe and Mail's take here. More on that in a moment.
This kind of corruption, and the measures designed to combat it, are undoubtedly important. But there's an even broader, far more insidious and egregious form of corruption that warrants greater attention: namely, systemic corruption, and its close cousin, regulatory capture.
I've been thinking a lot about these broader concepts because I'm at work on a paper about what I call the root problem of Canadian environmental law - the systematic diversion of regulation away from the public interest in robust environmental protection toward the special interests of various industries. Having surveyed a large and representative swath of the diagnoses of Canada's infirm environmental laws (the weaknesses typically diagnosed include excessive discretion, absent laws, the failure to keep up with science, inadequate implementation and enforcement, insufficient opportunities for meaningful public participation, and an unduly narrow range of legal tools and policy options), regulatory capture appears to be at the root of each of these infirmities, and law reforms that do not attend to the root problem of regulatory capture are bound to fall short. Regulatory capture, in the popular parlance of governance studies, is "sticky." Once in place, it's difficult to root out.
What's more, I think most of us know this perfectly well, and are aware that this is a problem of general application and fundamental importance. As Lessig describes the U.S. Congress in his fascinating Ted Book The USA is Lesterland:
Our Congress is corrupt.
It is obvious.
Yet we ignore the obvious.
We ignore it the way we ignore death. Or taxes. Or the end of the world. We ignore it because changing it just seems impossible. The very idea of motivating a political movement to rise up and make this system different seems beyond the power of any of us. So we turn instead to the problems that seem possible....
For example, corruption of the alleged Mike Duffy variety.
Even though Lessig's remarks above pertain to the U.S. Congress, his framing of the problem could equally apply to Canada's Parliament, most of its provincial legislatures, and a great many of its administrative agencies.
Which is why today's news of the federal government's move to relax its anti-corruption rules is such a useful news story - it neatly brings together these two kinds of corruption.
As the Globe reports: "The move comes after intense lobbying from industry, which warned of spreading economic damage because of the regulations introduced just 16 months ago."
Evidence of this spreading economic damage? The Globe's report is silent on this front, perhaps because there isn't any.
According to the Globe, the Canadian Manufacturers and Exporters, the Canadian Council of Chief Executives, and the Information Technology Association of Canada (lobby groups all) jointly wrote to Public Works Minister Diane Finlay in February claiming that the newly proposed integrity in procurement rules were "significantly out of step with Canada's trading partners" (which has a kind of "race to the bottom" appeal) and "negatively affecting investment in Canada now" (which has an economic catastrophe appeal, especially when unaccompanied by hard empirical evidence of harm).
Now, if anyone doubts that federal government procurement needs to be cleaned up, read these judgments of the Federal Court and the Federal Court of Appeal (here, and here) in which an American company desirous of doing business with the federal government had to launch a time-consuming and costly application for judicial review in order to be fairly considered in the applicable government agency's (CATSA's) tendering process. Of course, judicial review is the flip side of the legislative and executive anti-corruption coin.
The Globe's anti-corruption story, then, is really two anti-corruption stories for the price of one - an examination of broad, systemic corruption via the capture and diversion of regulation in the public interest toward the special and specific industry interest in limiting the consequences of bribery, money laundering, and extortion (to name just the biggies) in the context of doing business with the federal government.
As Lessig convincingly argues, this kind of systemic corruption is the most important public policy issue around, because it's at the root of every other public interest issue that you happen to care about.
So the next time you read about the Mike Duffy trial, ask yourself whether his Senate activities and expenses related to this broader form of corruption, and then ask yourself why that isn't more of an issue.