Civil Section Minutes 2006

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UNIFORM LAW CONFERENCE OF CANADA
EDMONTON, ALBERTA
AUGUST 20 – 24, 2006
CIVIL SECTION MINUTES
RESOLUTION THAT REPORTS APPEAR IN THE PROCEEDINGS
It is the practice of the Civil Section to resolve that all written reports, and summaries of
all oral reports, appear in the annual Proceedings. The purpose of a general resolution to
this effect is to clarify the distinction between this formal resolution and the substantive
action resolutions respecting each individual report.
RESOLVED:
THAT the written reports presented to the Civil Section and the joint session of the Civil
and Criminal Sections appear in the 2006 Proceedings; and
THAT a summary of the oral reports presented to the Civil Section and to the joint
session of the Civil and Criminal Sections appear in the 2006 Proceedings.
UNIFORM TRADE SECRETS ACT - REPORT
Presenter: Clark W. Dalton, National Co-ordinator, Commercial Law Strategy
At the August 2005 ULCC meeting, Clark Dalton presented a paper prepared by Tony
Hoffman on the Uniform Trade Secrets Act (UTSA). The UTSA was initially approved
by the ULCC in 1987 and adopted in 1989, but was not subsequently enacted by any
provincial or territorial legislature. It was resolved at the 2005 ULCC meeting that a
review of the UTSA be undertaken and a report made in 2006. Mr. Dalton made that
2006 report. His conclusion was that there is no need to make significant revisions to the
UTSA, except perhaps to the notes to s.13 dealing with the limitation of actions (because
the original UTSA predated enunciation of the common law discoverability principle by
the Supreme Court of Canada).
RESOLVED:
1. THAT the recommendations in the report be adopted.
FAITH-BASED ARBITRATION – STATUS REPORT
Presenter: Gail Mildren, General Counsel, Civil Legal Services, Manitoba
Department of Justice
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At the 2005 ULCC meeting, two presenters from the Ontario Ministry of the Attorney
General (John Gregory and Anne Marie Predko) reported on the discussions in that
Province as to faith-based family arbitration under Ontario’s Arbitration Act.
Gail Mildren of Manitoba gave an update on the issue of faith-based family arbitration.
She noted that since last year’s report, Ontario has adopted legislation to deal with the
issue. The Family Statute Law Amendment Act 2006, S.O. 2006, c. 1, amended existing
legislation to create a new statutory framework for family arbitrations generally. That
Act received royal assent in February 2006, but the family arbitration parts of it are not in
force pending the making of regulations.
Ms. Mildren noted that the Family Statute Law Amendment Act 2006 does not focus on
the use of faith-based law, but rather on the exclusive use of the law of Ontario or other
Canadian jurisdictions in family arbitrations. The legislation effectively bars enforcement
of family arbitrations conducted under religious law or laws of other countries and family
law arbitrations made according to the arbitrator’s own notions of fairness. While
persons may engage in arbitrations under other laws, they will have no legal effect. The
Ontario government is currently studying submissions on the development of regulations
that will govern the training of arbitrators, the conduct of family arbitrations, and records
related to these arbitrations.
Ms. Mildren also noted that because family law in Canada is not harmonized generally,
harmonization in this particular area may be difficult.
RESOLVED:
1. THAT the Civil Section Steering Committee continue to monitor the issues
and matters addressed in the Report and continue to liaise with the
Coordinating Committee of Senior Officials, Family Law, respecting the
potential for uniform legislation in this field.
FORMS OF BUSINESS ASSOCIATIONS:
UNIFORM INCOME TRUSTS ACT – STUDY PAPER
Presenter: Wayne D. Gray, McMillan Binch LLP
Mr. Gray reported to the ULCC on behalf of the working group that was struck following
the Report on Forms of Business Associations in Canada delivered at the August 2005
meeting of the ULCC. The working group was comprised of individuals with expertise
in a wide range of legal disciplines and its members were drawn from across the country.
The 2006 Report provides a brief overview of the income trust, including when, how and
why it is used and explains why this vehicle has found favour with investors (due to both
its favourable tax attributes when compared to corporations and its high payment ratio
relative to dividend paying corporations). The Report summarizes how Canadian tax law
treats corporations, trusts and limited partnerships differently.
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The methodology followed by the working group was to use the Canada Business
Corporations Act as a basis for comparison because it serves as a de facto model
corporate statute for many provinces and because using the CBCA as a frame of
reference facilitates uniformity.
The working group takes the position in the Report that the advantages of uniform
income trust legislation at this time outweigh the marginal advantages (if any) that might
be obtained in diversity. The focus of the proposed legislation would be to achieve fair
and balanced treatment for the main actors in the income trusts sector, namely
unitholders, creditors, trustees and management, in a manner consistent with their
commercial expectations. The guiding principles underpinning the analysis contained in
the Report are as follows:
(a) Balance has to be struck between superimposing corporate rules onto
income trusts in the interest of investor protection while at the same time
preserving the flow-through tax status of the trust for the ultimate benefit
of those same investors.
(b) Some provisions in the Uniform Act would be mandatory and override
any provisions in Declarations of Trust (“DOTS”). Parties would be
unable to contract out of such mandatory rules. On the other hand, in
circumstances where a mandatory rule was not recommended in the
Report, the working group gave consideration to the adoption of an
optional or model provision. There are three types of optional provisions
discussed: opt-in; opt-out; and default.
(c) The Report focuses on mutual fund trusts that are reporting issuers (other
than mutual funds in which investors are entitled to receive, after demand,
an amount calculated by reference to a proportionate interest in the net
assets of the fund).
(d) Subsidiary trusts (inter vivos trusts that are directly or indirectly owned by
the trustees of the reporting issuer) form part of the subject-matter of
discussion.
The Report makes 40 recommendations which cover the following topics:
1 – 4 Scope of the statute (types of income trust included and types of trust not
included);
5 Statutory purpose (to clarify and modify certain laws applicable to income trusts
and subsidiary trusts and to advance the cause of harmonizing the law applicable
to these trusts with the laws in other provinces);
6 Legal status of trust (nothing in Act to be construed as making an income trust a
body corporate);
7 Unitholder immunity (adopting the immunity formulation found in the Ontario
liability shield statute);
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8 Unitholder immunity to operate retroactively;
9 Amendments to partnership legislation re: relationship among unitholders in
income trust is not a partnership;
10 Equality of units and disenfranchisement of controlled subsidiaries (units of same
class or series are equal in all respects; controlled subsidiary entity not permitted
to vote any units that it holds in its parent income trust);
11 Appointment or election of trustees (at unitholder meetings) and filling vacancies;
12 Removal of trustees (by simple majority vote);
13 Unitholder proposals (regime loosely modelled on shareholder proposal regime in
CBCA);
14 Requisitioning unitholder meetings (by not less than 5% of unitholders holding
voting units);
15 Statutory investigations (proposing a regime similar to Part XIX of the CBCA);
16 Oppression remedy (proposing a remedy modelled on s.241 of the CBCA that
would only apply on an opt-in basis);
17 Derivative actions (proposing a remedy modelled on ss.239 and 240 of the
CBCA, but on an opt-in basis only);
18 Dissent and appraisal remedy (proposing a general dissent and appraisal right
modelled on s.190 of the CBCA, which would only apply on triggering events set
out in the DOT or when ordered by a court as part of a statutory arrangement) ;
19 Trustees’ powers to manage or supervise expressed in broad terms; unitholders
would not have power to direct trustees how to act or to compel them to act;
20 Trustees’ express power to delegate to internal or external management (subject
to express exceptions);
21 Fiduciary duties of trustees (stated to be owed exclusively to unitholders as a
general body and, in the case of a subsidiary trust, to beneficiaries of the trust as a
general body);
22 Duty of care of trustees (stated to be owed to the unitholders as a general body
and, in the case of a subsidiary trust, to beneficiaries of the trust as a general
body);
23 Inability to exculpate trustees (no provision in DOT, a contract or a resolution can
relieve trustee from duties under Act or relieve trustee from liability for breach of
Act);
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24 Trustee conflicts of interest (proposing minimum conflict of interest code
modelled on s.120 of the CBCA);
25 Corporate and individual trustees (expressly permits both types of trustees, with
certain limitations on corporate trustees);
26 Trustees’ statutory and contractual liability (limited to the corpus of the trust
unless the debt instrument or other contract expressly states otherwise);
27 Trustees’ tortious liability (limited to the corpus of the trust unless circumstances
are such that a corporate director would be personally liable for the tort);
28 Trustee indemnification (giving rights of indemnification out of trust assets and
provided trustees comply with fiduciary duties);
29 Liability insurance for trustees (permitting trustees to approve the purchase of
liability insurance out of trust monies);
30 Trustee resignation (trustees free to resign at any time provided that at least one
trustee remains; provision for court approval of resignation of last trustee);
31 Claims of unsecured creditors and others against the trust corpus (unsecured
creditors have direct unsecured claim against the corpus of the trust);
32 Arrangements (proposing a statutory arrangement provision modelled on s.192 of
the CBCA);
33 Reorganizations (proposing a statutory reorganization provision modelled on
s.191 of the CBCA);
34 Compulsory acquisitions (proposing a compulsory acquisition provision to
facilitate take-over bids modelled on s.206 of the CBCA);
35 Compelled acquisitions (proposing a compelled acquisition provision modelled on
s.206.1 of the CBCA);
36 Choice of governing law (proposing including express conflict of law rules in the
Act);
37 Change of governing law (allowing unitholders to change choice of law in DOT
by not less than 2/3rds vote);
38 No registration requirement;
39 and 40 – Matters adequately covered under securities legislation or in standard
declaration of trust
The Report concludes by reiterating that any new legislation dealing with income trusts
must be sensitive to the distinctive tax treatment that led to the rise of income trusts as an
efficient vehicle for employing investment capital and operating more stable, cash6
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generating businesses. The Report does not recommend simply grafting corporate law
principles onto income trusts, but rather a more principled convergence.
Attached to the report is a Schedule which sets out the effect that the Report
recommendations are expected to have on existing declarations of trust.
RESOLVED:
1. THAT a Working Group be established to consider the relation of the
recommendations in the report and the directions of the Conference to Quebec
law, and that this Working Group report its conclusions and recommendations to
the Drafting Group described below as soon as possible, but no later than
December 31st, 2006; and
2. THAT a Drafting Group be established to prepare a Uniform Act and
commentaries based on the recommendations in the Report and in accordance
with the directions of the Conference, including any recommendations received
from the Working Group described above, for consideration at the 2007 meeting.
SUPPLEMENTAL REPORT ON MULTI-JURISDICTIONAL CLASS
PROCEEDINGS IN CANADA
Presenter: Peter J.M. Lown, Alberta Law Reform Institute
In 2004, the ULCC established a committee on National Class and Related Inter-
Jurisdictional Issues. That committee prepared a report that included a recommendation
as to legislative changes that could be introduced into the Uniform Class Proceedings Act
The key recommendations of the committee were amendments to the Uniform Act to: (a)
allow courts to certify, on an opt-out basis, a class that includes class members residing
outside the jurisdiction; (b) changing current rules governing jurisdiction to resolve
conflicts between potentially competing class actions; and (c) to develop a central class
action registry. Four areas were identified for follow-up subsequent to the 2005 ULCC
meeting. The supplemental report of the special working group presented by Mr. Lown
dealt with the following four follow-up areas:
1. The definition of “National Class”;
2. The issue of res judicata;
3. The issue of whether greater precision was needed in the criteria found in subparagraph
3(e) of the 2005 Report; and
4. The proposed Canadian Class Proceedings Registry.
The special working group deals with these follow-up areas in its 2006 supplementary
report as follows:
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1. It recommends that the 2005 Report be amended to use the term “Multi-
Jurisdictional Class” rather than “National Class” to avoid the confusion caused
by use of the latter term.
2. Res judicata does not actually apply in the context of multi-jurisdictional class
actions. Certification of a class action by one court will not in of itself preclude
another court from also exercising jurisdiction where there is a real and
substantial connection between the matter and the other forum. Further,
provincial class action legislation cannot operate extra-territorially so as to oblige
a court in another province to give preclusive effect to the determinations of the
certifying court. Therefore, rather than attempting to direct one universal
outcome on these issues, the 2005 Report set out criteria in sub-paragraph 3(e) to
assist the court to answer the following key issues: 1) when should the court
consider certifying a proceeding that purports to bind a claim with a real and
substantial connection with another forum? and 2) conversely, when should a
subsequent court, where the claims of a person are already included in a class
certified by another court, give preclusive effect to the certification of a class
action by the other court?
3. The special working group concludes that the criteria contained in sub-paragraph
3(e) of the 2005 Report are consistent with the principle of order and fairness.
The special working group does, however, recommend some refinements to the
specific criteria identified in sub-paragraph 3(e).
4. The special working group puts forward two options in relation to the proposed
Canadian Class Proceedings Registry. Option 1: Make the registry a requirement
of the Rules of Court in the provinces and territories. Class counsel moving for
certification would provide notice to the other class counsel with overlapping
class actions based on information in the registry. Other class counsel could then
make submissions to a court that is considering certification of a class action.
Option 2: The registry would alert the court and parties of the existence of
overlapping class actions, but it would be up to the court whether to send out
notice to other counsel and whether or not to accept submissions.
Appendix 1 to the Report sets out the revised recommendations of the special working
group.
RESOLVED:
1. THAT the recommendations in the Supplementary Report regarding a definition
of “national class action” be adopted; and
2. THAT the recommendations in the Supplementary Report respecting res judicata
be adopted; and
3. THAT the legislative recommendations in the Supplementary Report, as amended
by direction from the Civil Law Section, be adopted and amendments to the
Uniform Class Proceedings Act be drafted in accordance with the
recommendations and the directions of the Conference and circulated to the
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jurisdictional representatives. Unless two or more objections are received by the
Executive Director of the Conference by a date to be determined by the Civil
Section Steering Committee, but not later than November 30th, 2006, the
amendments to the Uniform Class Proceedings Act should be taken as adopted
and recommended to the jurisdictions for enactment.
4. THAT the Conference endorse and pursue the creation of the Canadian Class
Proceedings Registry, to be operated by an appropriate national body. The
Registry will include all class action filings and annotation of any other
subsequent material events. Counsel applying for certification of an action will
be responsible for providing the relevant information at the time the statement of
claim is filed and for updating the information at certification, and/or when other
material events occur; and
5. THAT the recommendations in the Supplementary Report relating to the
Guidelines Applicable to Court to Court Communications in Cross Border Cases
where multiple class actions are certified in relation to the same issues, be
recommended to the Class Action Committee of the Canadian Judicial Council.
CERTIFICATE OF TITLES SYSTEMS FOR MOTOR VEHICLES IN CANADA -
STUDY PAPER
Presenter: Professor Ronald C.C. Cuming, College of Law – University of
Saskatchewan
Professor Cuming prepared his Report at the request of the ULCC Commercial Law
Strategy Supervisory Committee. At this point, no jurisdiction in Canada has
implemented a certificate of title system for motor vehicles. Such systems do exist in the
United States but are not uniform. There is a Uniform Certificate of Title Act prepared by
NCCUSL.
A certificate of title system for motor vehicles can be compared to a Torrens system for
lands. A transfer without registration of a certificate would not be effective and a
security interest not filed in a registry or on title could not bind any third party. The
policy reason for such legislation would be to bring about certainty as to legal ownership
for law enforcement, buyers and creditors. Currently, because of the nemo dat quod non
habet principle, a person taking title bears the risk that the person selling the vehicle is
not the owner. However, there are some measures already in place that ameliorate that
problem even in a simple registration system like that in existence in most Canadian
jurisdictions. In a great bulk of cases, the information found in the registry is sufficient
protection: in most cases involving stolen vehicles, the theft would be reported to the
registry. Courts have recognized that determination of ownership for the purposes of
highway traffic legislation does not control the outcome of a dispute over who the owner
is from a legal prospective.
Professor Cuming raises the following points for consideration:
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1. Whether or not a certificate of title system for motor vehicles would apply to all
cars or just more high-end vehicles;
2. How the legislation would deal with vehicles already in the possession of persons
claiming to be owners;
3. A national certificate of title system would not be possible, since the legislation
would be a matter of provincial competence. This means there would need to be a
uniform set of choice of law rules regulating certain registration issues; and
4. A certificate of title system would require a great deal of administration.
Canadian jurisdictions already have sophisticated registries dealing with security interests
taken over chattels, including motor vehicles. In Professor Cuming’s view, there is no
sense to duplicating this sophisticated regime or taking away income from personal
property security registries by creating a separate motor vehicle certificate of title
registry, and he recommended taking no action at this time.
RESOLVED:
1. THAT the recommendation in the Report be adopted.
MORTGAGE FRAUD AND DISCHARGE ISSUES - STUDY PAPER
Presenter: Sidney H. Troister, Torkin Manes Cohen & Arbus LLP
The frauds committed by Martin Keith Wirick, a former member of the Law Society of
British Columbia, in relation to mortgages has focused attention on mortgage fraud
generally. Mr. Troister reviewed the factual context of the Wirick affair and considered
whether legislative reform was required. Mr. Troister concludes in his Study Paper that
failure of lenders to provide discharges in a timely fashion did not give rise to the
problem; rather, in his view, the problem arose due to conveyancing practice in British
Columbia. A vendor is obligated to provide good title free of any encumbrances before
closing, but frequently cannot do so because the vendor needs to apply the purchase
funds to clear mortgages off title. In British Columbia and other provinces, the practice
developed of a solicitor giving undertakings to discharge mortgages. The practice in
Ontario at one time was for the vendor to give the undertaking (not the solicitor), but if
the vendor became insolvent this was not of any benefit to the purchasers. Mr. Troister
cites Ontario jurisprudence for the proposition that real estate practice should not trump
the clients’ contractual agreement. Mr. Troister notes that Ontario put in place a “two
cheque” system whereby the amount required to discharge a mortgage was paid directly
to the bank rather than the vendor’s lawyer.
The standard forms of agreement have been amended in some provinces, including
British Columbia, to allow lawyers’ undertakings and to confirm that the discharge of
mortgage need not be provided on closing. Mr. Troister advised that the Law Society of
British Columbia wanted to implement the two cheque system in that province but met
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with resistance. Instead, the Law Society of British Columbia put in place rules requiring
proof of that the mortgage is paid out and requiring that a discharge be registered within
in a set number of days.
Mr. Troister concluded that on his analysis, no legislation is required to address mortgage
fraud, and so recommended.
RESOLVED:
1. THAT the recommendation in the Report be adopted.
LIMITATION PERIODS AND OTHER ISSUES IN INSURANCE STATUTES -
STATUS REPORT
Presenter: Lisa A. Peters, Canadian Bar Association – British Columbia
At the 2005 meeting of the ULCC, Peter Lown summarized the paper prepared by the
late Professor Jim Rendall on the issue of limitation periods in insurance statutes.
Professor Rendall focused on the appropriate formulation of a limitation period or periods
to apply to an insurance claim and the question of whether such limitation period or
periods should be set out in the insurance statute or the more general limitations statute.
Since the 2005 meeting, British Columbia and Alberta have embarked on the process of
reviewing their insurance statutes and obtaining input from industry and other
stakeholders through consultation sessions. The Atlantic Provinces are also engaged in
an active review of their insurance statutes with a view to harmonization.
Alberta is expected to introduce legislation in the spring of 2007, B.C. in 2008.
The limitation period issues, and the desirability of harmonization on the resolution of
such issues where possible, naturally arise in the course of these ongoing insurance
statute reviews. Other areas identified as having possible scope for harmonization
include dispute resolution mechanisms; protection of innocent co-insureds; and the
question of whether statutory conditions should continue to form an integral part of
insurance legislation.
RESOLVED:
1. THAT the Civil Section Steering Committee continue to monitor developments
respecting the issues raised in the Report and continue to work with the Canadian
Council of Insurance Regulators to address these issues.
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COLLATERAL USE OF CROWN BRIEF DISCLOSURE
(JOINT SESSION OF THE CIVIL AND CRIMINAL LAW SECTIONS)
Presenters: Crystal O’Donnell – Ontario Ministry of Attorney General, Crown Law
Office - Civil
David Marriott - Alberta Justice, Criminal Justice Division
This Study Paper examines the legal and policy issues arising out of the use of
prosecution materials in collateral proceedings In particular, the Paper highlights the
decision in D.P. v. Wagg (2004), 239 D.L.R. (4th) 501 (Ont. C.A.) in which the Court of
Appeal confirmed the Ontario Divisional Court’s decision regarding the mechanism to be
followed to determine whether Crown brief materials should be produced in a civil
proceeding. This process proposes that Crown brief materials not be produced until the
Attorney General and the appropriate police service have been notified and examine the
documents with a view to ensuring that production of those documents are determined
with due consideration of the public interest.
The Paper then provides an overview of the many relevant issues including legal rights
and interests impacted by the production of Crown brief materials in collateral
proceedings including solicitor-client privilege; litigation privilege; public interest
privilege; protection of privacy rights; Crown immunity; criminal disclosure; implied
undertakings; Charter issues; jurisdiction; and overarching concerns regarding the
administration of justice and the integrity of the prosecution (e.g. protecting the criminal
trial process, protecting informants, avoiding witness contamination and ensuring witness
safety). The authors note that practice regarding the request for prosecution materials for
use in a collateral proceeding varies depending on the jurisdiction but that jurisdictions
recognized the sensitivity of the information contained in prosecution materials and made
efforts to redact them. However, a significant difference in approach was whether the
Crown responds to such motions as a non-party to the collateral proceeding and whether
the access to prosecution materials is permitted through the courts or under the applicable
freedom of information and privacy legislation.
The authors conclude with a number of recommendations including a suggestion that
there be a consistent approach across the country in responding to the requests for
production of Crown brief materials for use in collateral proceedings. The Paper
acknowledges that difficulties may arise in addressing jurisdictional concerns regarding
which court or forum has the ability to hear any motions or applications for particular
documents and which level of government will be required to make the necessary
changes.
RESOLVED:
1. THAT a joint Working Group be established to consider the issues raised in the
Report and, in accordance with any directions of the Conference, report and make
any recommendations to the Conference in 2007 respecting the desirability and
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feasibility of legislative or non-legislative initiatives to promote uniformity in the
use of Crown Brief material in collateral proceedings.
STATUS REPORT ON COMPENSATION FOR THE WRONGFULLY
CONVICTED (INFORMAL REQUEST TO DRAFT MODEL LEGISLATION)
Presenters: Lynn Romeo, Acting Director, Civil Legal Services, Manitoba
Department of Justice
Earl Fruchtman, Acting Director, Crown Law Criminal, Ontario Ministry
of the Attorney General
Canada acceded to the United Nations International Covenant on Civil and Political
Rights in 1976. Article 14(6) of that Convention establishes the right to compensation
according to law in cases of miscarriages of justice of a person who has been convicted
and suffered punishment as a result of the conviction. There is presently no statutory
regime in Canada (federally or provincially) establishing a program of compensation for
persons who have been wrongfully convicted.
In 2002, the Federal/Provincial/Territorial Ministers Responsible for Justice (FPT)
released the Report of the Working Group on the Prevention of Miscarriages of Justice.
At the same time, the Coordinating Committee of Senior Officials (Criminal) established
a working group to review guidelines approved by the FPT in 1998 relating to
compensation of wrongfully convicted persons. Work on this issue is ongoing and will
be monitored.
RESOLVED:
1. See General Resolutions above.
REFORM OF THE LAW OF FRAUDULENT CONVEYANCES AND
PREFERENCES - PROJECT PROPOSAL
Presenters: Professor Tamara Buckwold, Faculty of Law, University of Alberta
In 2004, a feasibility study was presented to the ULCC by Professor Richard Dunlop.
This project proposal follows up on that study.
Professor Buckwold’s proposal sets out specifics of the process contemplated for the
project. The process would have four primary phases: 1) research, 2) preparation of a
working paper, 3) consultation and, 4) final report including a draft act.
Professor Buckwold identified three questions arising:
1. The scope of the research phase of the project. There are two options: a) devoting
an extensive effort to attempting to define what the law is in each province and
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territorial jurisdiction as represented by the judicial interpretation and application
of extant legislation, or b) identifying the issues raised by current statutory
regimes and case law in aid of the design of an appropriate and effective
legislative solution. Under the second approach, significant reliance would be
placed on research and synthesis that is already available in texts and existing
studies. The proposal sets out a research plan to be followed if the second
approach is adopted.
2. Should the project be bijural in nature?
Production of draft legislation that is relevant to Quebec as well as to common
law jurisdictions demands that Quebec law be taken into account. Given the
limitation of the project leader’s expertise and linguistic facility, the time line and
budget for this project, and the desirability of designing legislation that interfaces
with reformed judgment enforcement law legislation, Professor Buckwold makes
suggestions for incorporating input from Quebec at key points in the project
schedule.
3. How the consultation phase of the project is to be approached. Professor
Buckwold notes that a credible consultation process need not entail unduly
elaborate or expensive measures. She discusses targeted e-mailings and webbased
surveys.
In discussion it was noted that significant reform in this subject-area has already occurred
in the context of the Québec Civil Code and that input from civil lawyers would be
essential.
RESOLVED:
1. THAT a Working Group be established to prepare a working paper respecting
issues, options, and possible recommendations for consideration at the 2007
meeting.
REPORT FROM THE CHAIR OF THE DRAFTING SECTION
Presenter: Brian Greer, Chief Legislative Counsel, Ministry of Attorney General,
British Columbia
Mr. Greer directed the Conference to the section of the ULCC website that traces the
history of the Drafting Section, which was founded in 1968. The Drafting Section
prepared the Uniform Drafting Conventions and deals with matters referred to it by the
Conference, including drafting of uniform provisions for uniform statutes. He noted that
the Association of Legislative Counsel meets annually. On Mr. Greer taking leave next
year, Valerie Perry of Manitoba will chair the Drafting Section.
RESOLVED:
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1. THAT the Conference express its thanks to Brian Greer for his report and his
contribution as Chair of the Drafting Section.
REFORM OF GENERAL PARTNERSHIP LAW:
THE AGGREGATE vs. ENTITY DEBATE - STUDY PAPER
Presenter: Professor Heather D. Heavin, College of Law University of Saskatchewan
Professor Heavin’s paper reviews proposed reforms of general partnership law in both the
United States and the United Kingdom. In 1994, NCCUSL adopted the Revised Uniform
Partnership Act (RUPA), which substantially revised the 1914 Uniform Partnership Act.
Further amendments were made to RUPA in 1997, including provisions pertaining to
limited liability partnerships (RUPLA). Both RUPA and RUPLA have been adopted by
some U.S. States. In 2003, the U.K. Law Commission and the Scottish Law Commission
authored a report on partnership law, which report included a revised Partnership Act
(Draft Bill). The reforms proposed in this joint report have not yet been implemented.
Both the existing U.K. statutes and the 1914 U.S. Uniform Act take the aggregate
approach to partnership, i.e., the partnership is a mere aggregation of individual partners
and is not an entity separate and distinct from the partners. Both RUPA and the U.K. law
reform Bill take the approach of abandoning the aggregate view in favour of giving
separate legal status to partnerships (other than for tax purposes). The motivation behind
these reforms was to provide for continuity of the partnership after changes in
membership and to allow for the partnership to hold title to property (which is a
particular issue in the UK).
Professor Heavin reviews the current law in Canada, which takes the aggregate approach
to partnerships, and summarizes the tax treatment of partnerships in Canada, the U.S. and
the U.K. She notes that both the existing partnership legislation and partnership
agreements themselves deal with many of the issues or concerns that arise from the
aggregate model of partnership (i.e., the disadvantages to creditors and others). Professor
Heavin notes that if Canadian jurisdictions were to change to an entity model, the tax
policy applicable to partnerships would have to be negotiated with the federal and
provincial governments. A change to entity status also raises the question of whether
partners would automatically obtain limited liability status in the same way as
shareholders in a corporation. It also raises questions about liability of partners to
creditors.
The Report concludes that there is a good deal of uniformity between the provinces under
the current statutory regimes and that the aggregate approach to partnership also
promotes freedom of contract. Professor Heavin raises the question whether lack of
separate legal personality for partnerships has actually created any problem in Canadian
jurisdictions, and whether there were any real problems with operating partnerships that
need to be addressed. In her view, the desire to provide continuity at will does not justify
any reform in Canadian law. The only other possible reason for reform would be if there
are other problems, such as the inability of partnerships to hold real property.
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In discussion it was noted that Québec had reformed its general law of partnership in the
1990s.
RESOLVED:
1. THAT a Working Group be established to prepare, in accordance with the
directions of the Conference, a study paper examining the merits of the options set
out in the Report, and containing legislative recommendations for consideration at
the 2007 meeting.
INTER-JURISDICTIONAL ENFORCEMENT OF TAX JUDGMENTS - STATUS
REPORT
Presenter: Vincent Pelletier, Directorate of Research and Ministerial Legislation,
Ministry of Justice, Québec
This Report follows up on the Report presented by Frédérique Sabourin at the 2005
ULCC meeting. There were differing views expressed at the 2005 meeting as to whether
tax judgments given by Canadian courts are included in the definition of “Canadian
judgment” appearing in the Uniform Enforcement of Canadian Judgments and Decrees
Act (“UECJDA”). The 2006 Report notes the common law rule that “no country ever
takes notice of the revenue laws of another”, a concept rooted in sovereignty, and opines
that this principle may well have been overruled by the Supreme Court of Canada
decision in Hunt v. T&N PLC, [1993] 4 S.C.R. 289, which calls for the courts of each
province to give full faith and credit to judgments of the courts of sister provinces.
However, to remove any doubt on the issue, the Report recommends that section 1 of the
UECJDA be amended to specifically include tax judgments and that the term “tax
judgment” include certificates registered in respect of an amount payable under a tax law
that have the same effect as a judgment.
The Report discusses the impact of the proposed amendment from a Québec perspective.
The adoption of the proposed amendment to the UECJDA would be tantamount to the
adoption of reciprocity provisions and would allow other provinces and territories to
recognize and enforce tax judgments obtained in Québec and vice versa.
The Report also proposes that section 11 of the UECDJA be amended to provide that the
UECJDA applies to judgments obtained before its coming into force if the judgment is
for the recovery of an amount payable under a tax law, including a certificate registered
in respect of an amount payable under a tax law, the certificate having the same effect as
a judgment.
RESOLVED:
1. THAT the Working Group continue and that it consider the issues raised in the
Report and the directions of the Conference, and prepare a draft Act and
commentaries for consideration at the 2007 meeting.
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INTER-JURISDICTIONAL ENFORCEMENT OF EMPLOYMENT STANDARDS
ORDERS - STATUS REPORT
Presenter: Vincent Pelletier, Directorate of Research and Ministerial Legislation,
Ministry of Justice, Québec
The Canadian Association of Labour Administrators will be meeting in September to
consider the potential for harmonization in this area.
RESOLVED:
1. THAT the Civil Section Steering Committee determine, upon consultation with
the Conference of Administrators of Labour Laws, whether it is possible and
appropriate to pursue uniform legislation in this field.
NATIONAL CONFERENCE OF COMMISSIONERS ON UNIFORM STATE
LAWS AND MEXICAN UNIFORM LAW CENTRE
Presenters: Dr. Jorge Sanchez Cordero, Director, Mexican Uniform Law Centre
Howard Swibel, President, NCCUSL
King Burnett, Chair, International Legal Development Committee,
NCCUSL
In his address to the Conference, Dr. Jorge Sanchez Cordero reiterated the importance of
the ongoing cooperation among the three organizations: ULCC, NCCUSL and the
Mexican Uniform Law Centre. He outlined some of the highlights of that cooperation
over the past year. Dr. Cordero noted the progress made in relation to implementing the
Convention on International Interests in Mobile Equipment (Capetown, 2001) in his
country and elsewhere.
Howard Swibel, President of NCCUSL, also underscored the value of the cooperation
between the three organizations in his address to the Conference. As an example, Mr.
Swibel noted the meetings in relation to implementation of the UN Convention on the
Assignment of Receivables in International Trade held in Detroit and New York in the
spring. Representatives of the U.S. Department of State and the American Law Institute
also attended these meetings. He described a proposed meeting in the fall at which
representatives of the three bodies will attend, along with stakeholders from the banking
and finance communities.
Mr. Swibel noted that in the context of this cooperative project, and the cooperative
project on unincorporated associations, each of the three organizations has benefited from
the experience and input of the others. He endorsed an approach whereby all three
organizations continue to ask themselves, in relation to each project on which they were
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embarking, whether there was potential for harmonization on a North America-wide
basis.
RESOLVED:
1. THAT the Uniform Law Conference express its thanks to Mr. Howard W.
Swibel, President of the National Conference of Commissioners on Uniform State
Laws, and to Dr. Jorge Sanchez Cordero, Director of Mexican Uniform Law
Centre, for their enlightening presentations.
UN CONVENTION ON ASSIGNMENT OF RECEIVABLES IN
INTERNATIONAL TRADE - UNIFORM ACT
Presenters: Professor Catherine Walsh, McGill University
Michel Deschamps, McCarthy Tetrault
At its August 2005 meeting, the ULCC approved a pre-implementation report on the UN
Convention on the Assignment of Receivables in International Trade. A working group
was established to prepare a Uniform Act to implement the Convention and to prepare
complementary legislation. The working group was mandated to conduct its work in
collaboration with NCCUSL and the Mexican Uniform Law Centre with a view to
coordinating implementation of the convention in all three countries.
Choice of law issues gave raise to the greatest challenges for the working group. First,
work is underway in Ontario to reform the PPSA conflict of law rules, with the proposed
reforms potentially conflicting with the Convention choice of law rule in situations
involving an assignor entity that is organized under U.S. or Canadian law but which has
its chief executive office in the other country. Second, issues arose in terms of the
desirability of making the uniform implementing legislation complementary with existing
U.S. choice of law rules applicable to perfection and priority. Ultimately, the
implementation strategy being pursued by the U.S. will not result in any adjustments to
Article 9 of the Uniform Commercial Code, including its choice of law rules. As a
practical matter, this means that except for receivables transactions within the scope of
the Convention, the law of the state within the U.S. under whose laws a U.S. assignor or
secured debtor is organized will apply, even where the U.S. entity has a foreign chief
executive office.
The pre-implementation report presented to the ULCC in 2005 envisaged integrating the
Convention choice of law approach with the existing PPSA and Civil Code choice of law
rules applicable to intangible and mobile goods. The working group is now
recommending that the U.S. strategy be adopted instead, restricting the application of the
Convention choice of law rule to international assignments of receivables that fall within
the territorial and subject-matter scope of the Convention. Under this approach, the
choice of law rules for intangibles and mobile goods in the PPSA and the Civil Code, in
their current form or as amended in the future, would continue to apply. The Convention
choice of law rule will only be triggered when the Convention as a whole applies. It was
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noted that the Convention permits federally organized countries to adopt different criteria
internally. The working group takes the position in its 2006 Report that the proposed
change in strategy would leave room for greater harmonization with U.S. conflicts
approaches and would relieve the provinces and territories from the burden of having to
undertake significant reforms to their secured transactions choice of law rules in order to
implement the Convention.
In addition to restricting the application of the Convention choice of law rule for priority
to receivables transactions within the Convention’s scope, the working group
recommends:
 That the jurisdictions implementing the Convention opt out of the independent
conflicts regime in Part V of the Convention;
 To ensure adequate time for nationally harmonized and comprehensive reform,
reform of the PPSAs and the Civil Code on the treatment of anti-assignment
clauses be pursued in its own right rather than being tied to the implementation of
the Convention; and
 That final approval of the draft Uniform Assignment of Receivables in
International Trade Act and commentaries be postponed until later in the fall, to
allow NCCUSL, with the active participation of the working group, to conduct a
planned industry consultation conference in October and to allow the three
national organizations to then meet in November.
RESOLVED:
1. THAT the Uniform Assignment of Receivables in International Trade Act and
commentaries be approved in principle; and
2. THAT following a joint meeting of the Working Group with representatives of
the National Conference of Commissioners on Uniform State Laws and the
Mexican Uniform Law Centre to consider the results of industry consultation and,
should no changes to the Uniform Act and commentaries as considered by the
Conference be required and should the Civil Section Steering Committee deem it
appropriate; that the Uniform Assignment of Receivables in International Trade
Act and commentaries be circulated to the jurisdictional representatives, together
with a supplementary report summarizing the result of the joint meeting. Unless
two or more objections are received by the Executive Director of the Conference
by a date to be determined by the Civil Section Steering Committee, but not later
than December 31st, 2006, the Uniform Assignment of Receivables in
International Trade Act and commentaries should be taken as adopted and
recommended to the jurisdictions for enactment; and
3. THAT the Civil Section Steering Committee continue to have under
consideration the reforms to secured transactions legislation contemplated in the
Report of the Working Group and that they be addressed in connection with any
project undertaken respecting secured transactions legislation.
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UN CONVENTION ON INDEPENDENT GUARANTEES AND STAND-BY
LETTERS OF CREDIT - STUDY PAPER
Presenters: Professor Marc Lacoursière, Laval University
Steven Jeffrey, Blaney McMurtry LLP
This Pre-Implementation Report considers the advisability of preparing a uniform
implementing Act for the 1995 United Nations Convention on Independent Guarantees
and Stand-by Letters of Credit. The Report examines the existing framework for the law
of independent guarantees and stand-by letters of credit, both from a common law and
civil law perspective, and considers whether there is a need in Canada for legislation
implementing the Convention. The focus of the Convention is the relationship between a
guarantor (in the case of an independent guarantee) or an issuer (in the case of a stand-by
letter of credit) and a beneficiary.
On the common law side of the existing Canadian legal framework, there is no existing
legislation that specifically deals with letters of credit or bank guarantees (whether of a
domestic or international character). Instead, the law has been developed by courts and
in international rules of practice such as the Uniform Customs and Practice for
Documentary Credits (UCP). On the civil law side, there is some difficulty in classifying
an independent bank guarantee: some civilians have attempted to associate it with certain
nominate contracts; some commercial lawyers classify it instead as an innominate or sui
generis contractual instrument.
In their Report, the authors track the gaps in the existing international rules, and the ways
in which the Convention seeks to supplement these other rules by dealing with issues
beyond their scope. Two key topics dealt with by the Convention are fraud and abuse
and judicial remedies. The authors raise the question of whether it would be desirable,
upon drafting implementing legislation, to also draft uniform domestic legislation so that
the same rule would apply to such instruments whether or not they were international in
scope.
The authors conclude that the Convention is, generally speaking, in line with Canadian
law governing stand-by letters of credit and independent bank guarantees. They
recommend that the ULCC adopt the Convention as a model law for possible adoption by
Parliament and the provincial legislatures.
RESOLVED:
1. THAT a Working Group be established to prepare, in accordance with the
directions of the Conference, a Uniform Act and commentaries to implement the
Convention for consideration at the 2007 meeting; and to report on the desirability
of any other legislative recommendations; and to work in co-operation with the
National Conference of Commissioners on Uniform State Laws and the Mexican
Uniform Law Centre, should those organizations so desire.
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TAKING THE COMMERCIAL LAW STRATEGY TO ABORIGINAL
JURISDICTION - STUDY PAPER
Presenter: Merrilee D. Rasmussen, Law Reform Commission of Saskatchewan
To date, there has been no mechanism for the extension of the Commercial Law Strategy
of the ULCC into areas of Aboriginal jurisdiction.
Aboriginal governments have or will possess a range of jurisdiction in relation to
commercial matters, whether arising from the exercise of an inherent right of selfgovernment
protected by section 35 of the Constitution Act, 1982; through Treaty-based
self-government initiatives; or through the recognition or delegation of jurisdiction via a
self-government agreement.
The Report discusses the possibility of establishing and implementing practical methods
for the development and enactment of Aboriginal laws as part of the Commercial Law
Strategy. One of the issues arising is the question of the scope of Aboriginal jurisdiction.
The Report notes the significance of Treaties with First Nations people in establishing an
inter-governmental process acknowledging that First Nations, who were self-governing at
the time Treaties were signed, would continue to be self-governing. The Report then
considers the potential scope of Aboriginal jurisdiction in the contexts of each of the
inherent right of self-government, negotiated self-government agreements, and the
delegation of powers under the Indian Act and First Nations Governance Act.
Ms. Rasmussen postulates that it is reasonable to assume that courts are likely to build on
existing constitutional concepts such as paramountcy and interjurisdictional immunity
developed in the federal/provincial context when turning their attention to Aboriginal
law. The Report suggests that it may be possible to establish a process for the
development of uniform commercial laws for adoption within Aboriginal jurisdiction
without having to find agreement about jurisdictional boundaries. The Report notes that
NCCUSL has developed a Model Tribal Secured Transaction Act. That Act is intended
to ensure a material degree of harmonization between different tribes of American
Indians and between those Tribes and State legislatures. The Report also notes that the
Law Commission of Canada is engaged in a project relating to federal security interests
on reserves. Ms. Rasmussen outlines some issues arising in terms of implementation of
Uniform Acts by Aboriginal governments that should be addressed by the committee or
working group charged with responsibility for developing a process.
After Ms. Rasmussen’s presentation, discussion ensued as to how conflicts between
provincial and aboriginal law might be resolved.
The Report concludes by recommending that a committee or working group be
established to identify and secure appropriate representation from Aboriginal
governments and to develop a process for working towards the adoption by the ULCC of
Uniform Acts within the Commercial Law Strategy for ultimate adoption by Aboriginal
governments.
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RESOLVED:
1. THAT the Civil Section Steering Committee continue to have under
consideration the development of a process for the enactment of uniform
commercial acts within Aboriginal jurisdictions.
JOINT PROJECT TO CREATE A HARMONIZED LEGAL FRAMEWORK FOR
UNINCORPORATED NON-PROFIT ASSOCIATIONS IN NORTH AMERICA -
STATUS REPORT
Presenter: Arthur Close, Executive Director, British Columbia Law Institute
At the ULCC meeting in 2005, a decision was made by ULCC, NCCUSL and the
Mexican Uniform Law Centre to pursue possible joint projects. The topic of
unincorporated associations (viz., two or more people coming together for a purpose other
than making money) was identified as a possible joint project at that time. This led to
discussions between the three organizations leading to the following three key
understandings:
1. The joint project is to proceed as a clean slate, with no pre-determined point
of departure.
2. The organizations will use the NCCUSL older Uniform Act on unincorporated
associations as a source to identify issues and solutions only.
3. The organizations will use the NCCUSL methodology in the development of
their Uniform Acts.
The first meeting of the joint drafting committee was held in Portland on March 17 – 19,
2006, at which time the joint drafting committee considered memoranda discussing the
common law and Québec law on the topic of unincorporated associations. A notable
feature of the Portland deliberations was the guidance that could be drawn from the
express provisions in the Civil Code of Québec. The President of NCCUSL, Howard
Swibel, is participating in the deliberations of the joint drafting committee as an ex officio
member.
The joint drafting committee is following a work plan, preparing a list of principles to be
distilled from the Portland meeting and thereafter will seek to have legislative drafters
assigned to the project. The goal is to have versions of the uniform statute in all three
languages for the third meeting; the drafts would be referred to the individual conferences
thereafter.
RESOLVED:
1. THAT the joint ULCC, NCCUSL, and MULC Working Group continue its work
to address the issues described in the Report, taking into consideration any
discussion at the Conference, and report on the results thereof to the 2007
meeting.
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PRIVATE INTERNATIONAL LAW – STATUS REPORT
Presenter: Kathryn Sabo, Justice Canada
Kathryn Sabo summarized the negotiation and implementation activities of the
Department of Justice in Private International Law over the past year. The written Report
provided to the Conference outlines the work of the Department of Justice in three main
subject areas: International Commercial Law; Judicial Cooperation and Enforcement of
Judgments; and Family Law. Within each of those subject areas, items are ranked as
high, medium or low priorities.
In the International Commercial Law area, high priorities include ongoing negotiations of
a Draft Legislative Guide on Secured Transactions (UNICITRAL) (which has obvious
links to the ongoing work on security interests at the ULCC) and the Project on
Harmonised Substantive Rules Regarding Indirectly Held Securities (Unidroit). Priorities
in this area in terms of implementation of existing Conventions include: the Convention
on the Settlement of Investment Disputes (World Bank); the Convention on International
Interests in Mobile Equipment and Aircraft Protocol (Unidroit); the Convention on
Securities Held by Intermediaries (Hague Convention); the Convention on the Limitation
Period in the International Sale of Goods and Protocol (UNCITRAL); and the
Convention on the Assignment of Receivables (UNCITRAL).
Ms. Sabo noted that UNCITRAL had embarked on a new project to modernize its
Arbitration Rules and on new work in the area of insolvency law.
In the Judicial Cooperation and Enforcement of Judgments area, high priorities include
implementation of: the Convention on Choice of Court Agreements (Hague Conference);
and the Convention Abolishing the Requirement of Legalisation for Foreign Public
Documents (Hague Conference).
In the Family Law area, high priorities for implementation include the Convention on the
International Protection of Adults (Hague Conference); and the Convention on
Jurisdiction, Applicable Law, Recognition and Enforcement, and Cooperation in respect
of Parental Responsibility and Measures of Protection of Children (Hague Conference).
On the negotiation front, the Draft Convention on Maintenance Obligations has not yet
been finalized, but is a high priority for Canada. Consultations with federal, provincial
and territorial partners and the private and academic sectors are planned in view of the
fifth Special Commission meetings scheduled for spring 2007.
Ms. Sabo noted that in November of 2006, a Hague Special Commission was formed to
consider the operation of the Convention on the Civil Aspects of International Child
Abduction (which has been implemented in all Canadian provinces and territories). This
Special Commission will also discuss issues of access.
RESOLVED:
1. See General Resolutions above.
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UNIFORM LAW CONFERENCE OF CANADA
EDMONTON, ALBERTA
AUGUST 20 – 24, 2006
CIVIL SECTION MINUTES

RESOLUTION THAT REPORTS APPEAR IN THE PROCEEDINGS
It is the practice of the Civil Section to resolve that all written reports, and summaries of
all oral reports, appear in the annual Proceedings. The purpose of a general resolution to
this effect is to clarify the distinction between this formal resolution and the substantive
action resolutions respecting each individual report.

RESOLVED:
THAT the written reports presented to the Civil Section and the joint session of the Civil
and Criminal Sections appear in the 2006 Proceedings; and

THAT a summary of the oral reports presented to the Civil Section and to the joint
session of the Civil and Criminal Sections appear in the 2006 Proceedings.

UNIFORM TRADE SECRETS ACT - REPORT
Presenter: Clark W. Dalton, National Co-ordinator, Commercial Law Strategy

At the August 2005 ULCC meeting, Clark Dalton presented a paper prepared by Tony
Hoffman on the Uniform Trade Secrets Act (UTSA). The UTSA was initially approved
by the ULCC in 1987 and adopted in 1989, but was not subsequently enacted by any
provincial or territorial legislature. It was resolved at the 2005 ULCC meeting that a
review of the UTSA be undertaken and a report made in 2006. Mr. Dalton made that
2006 report. His conclusion was that there is no need to make significant revisions to the
UTSA, except perhaps to the notes to s.13 dealing with the limitation of actions (because
the original UTSA predated enunciation of the common law discoverability principle by
the Supreme Court of Canada).

RESOLVED:
1. THAT the recommendations in the report be adopted.

FAITH-BASED ARBITRATION – STATUS REPORT
Presenter: Gail Mildren, General Counsel, Civil Legal Services, Manitoba
Department of Justice

At the 2005 ULCC meeting, two presenters from the Ontario Ministry of the Attorney
General (John Gregory and Anne Marie Predko) reported on the discussions in that
Province as to faith-based family arbitration under Ontario’s Arbitration Act.
Gail Mildren of Manitoba gave an update on the issue of faith-based family arbitration.
She noted that since last year’s report, Ontario has adopted legislation to deal with the
issue. The Family Statute Law Amendment Act 2006, S.O. 2006, c. 1, amended existing
legislation to create a new statutory framework for family arbitrations generally. That
Act received royal assent in February 2006, but the family arbitration parts of it are not in
force pending the making of regulations.

Ms. Mildren noted that the Family Statute Law Amendment Act 2006 does not focus on
the use of faith-based law, but rather on the exclusive use of the law of Ontario or other
Canadian jurisdictions in family arbitrations. The legislation effectively bars enforcement
of family arbitrations conducted under religious law or laws of other countries and family
law arbitrations made according to the arbitrator’s own notions of fairness. While
persons may engage in arbitrations under other laws, they will have no legal effect. The
Ontario government is currently studying submissions on the development of regulations
that will govern the training of arbitrators, the conduct of family arbitrations, and records
related to these arbitrations.

Ms. Mildren also noted that because family law in Canada is not harmonized generally,
harmonization in this particular area may be difficult.

RESOLVED:
1. THAT the Civil Section Steering Committee continue to monitor the issues
and matters addressed in the Report and continue to liaise with the
Coordinating Committee of Senior Officials, Family Law, respecting the
potential for uniform legislation in this field.

FORMS OF BUSINESS ASSOCIATIONS:

UNIFORM INCOME TRUSTS ACT – STUDY PAPER
Presenter: Wayne D. Gray, McMillan Binch LLP

Mr. Gray reported to the ULCC on behalf of the working group that was struck following
the Report on Forms of Business Associations in Canada delivered at the August 2005
meeting of the ULCC. The working group was comprised of individuals with expertise
in a wide range of legal disciplines and its members were drawn from across the country.
The 2006 Report provides a brief overview of the income trust, including when, how and
why it is used and explains why this vehicle has found favour with investors (due to both
its favourable tax attributes when compared to corporations and its high payment ratio
relative to dividend paying corporations). The Report summarizes how Canadian tax law
treats corporations, trusts and limited partnerships differently.

The methodology followed by the working group was to use the Canada Business
Corporations Act as a basis for comparison because it serves as a de facto model
corporate statute for many provinces and because using the CBCA as a frame of
reference facilitates uniformity.

The working group takes the position in the Report that the advantages of uniform
income trust legislation at this time outweigh the marginal advantages (if any) that might
be obtained in diversity. The focus of the proposed legislation would be to achieve fair
and balanced treatment for the main actors in the income trusts sector, namely
unitholders, creditors, trustees and management, in a manner consistent with their
commercial expectations. The guiding principles underpinning the analysis contained in
the Report are as follows:
(a) Balance has to be struck between superimposing corporate rules onto
income trusts in the interest of investor protection while at the same time
preserving the flow-through tax status of the trust for the ultimate benefit
of those same investors.
(b) Some provisions in the Uniform Act would be mandatory and override
any provisions in Declarations of Trust (“DOTS”). Parties would be
unable to contract out of such mandatory rules. On the other hand, in
circumstances where a mandatory rule was not recommended in the
Report, the working group gave consideration to the adoption of an
optional or model provision. There are three types of optional provisions
discussed: opt-in; opt-out; and default.
(c) The Report focuses on mutual fund trusts that are reporting issuers (other
than mutual funds in which investors are entitled to receive, after demand,
an amount calculated by reference to a proportionate interest in the net
assets of the fund).
(d) Subsidiary trusts (inter vivos trusts that are directly or indirectly owned by
the trustees of the reporting issuer) form part of the subject-matter of
discussion.

The Report makes 40 recommendations which cover the following topics:
1 – 4 Scope of the statute (types of income trust included and types of trust not
included);
5 Statutory purpose (to clarify and modify certain laws applicable to income trusts
and subsidiary trusts and to advance the cause of harmonizing the law applicable
to these trusts with the laws in other provinces);
6 Legal status of trust (nothing in Act to be construed as making an income trust a
body corporate);
7 Unitholder immunity (adopting the immunity formulation found in the Ontario
liability shield statute);
8 Unitholder immunity to operate retroactively;
9 Amendments to partnership legislation re: relationship among unitholders in
income trust is not a partnership;
10 Equality of units and disenfranchisement of controlled subsidiaries (units of same
class or series are equal in all respects; controlled subsidiary entity not permitted
to vote any units that it holds in its parent income trust);
11 Appointment or election of trustees (at unitholder meetings) and filling vacancies;
12 Removal of trustees (by simple majority vote);
13 Unitholder proposals (regime loosely modelled on shareholder proposal regime in
CBCA);
14 Requisitioning unitholder meetings (by not less than 5% of unitholders holding
voting units);
15 Statutory investigations (proposing a regime similar to Part XIX of the CBCA);
16 Oppression remedy (proposing a remedy modelled on s.241 of the CBCA that
would only apply on an opt-in basis);
17 Derivative actions (proposing a remedy modelled on ss.239 and 240 of the
CBCA, but on an opt-in basis only);
18 Dissent and appraisal remedy (proposing a general dissent and appraisal right
modelled on s.190 of the CBCA, which would only apply on triggering events set
out in the DOT or when ordered by a court as part of a statutory arrangement) ;
19 Trustees’ powers to manage or supervise expressed in broad terms; unitholders
would not have power to direct trustees how to act or to compel them to act;
20 Trustees’ express power to delegate to internal or external management (subject
to express exceptions);
21 Fiduciary duties of trustees (stated to be owed exclusively to unitholders as a
general body and, in the case of a subsidiary trust, to beneficiaries of the trust as a
general body);
22 Duty of care of trustees (stated to be owed to the unitholders as a general body
and, in the case of a subsidiary trust, to beneficiaries of the trust as a general
body);
23 Inability to exculpate trustees (no provision in DOT, a contract or a resolution can
relieve trustee from duties under Act or relieve trustee from liability for breach of
Act);
24 Trustee conflicts of interest (proposing minimum conflict of interest code
modelled on s.120 of the CBCA);
25 Corporate and individual trustees (expressly permits both types of trustees, with
certain limitations on corporate trustees);
26 Trustees’ statutory and contractual liability (limited to the corpus of the trust
unless the debt instrument or other contract expressly states otherwise);
27 Trustees’ tortious liability (limited to the corpus of the trust unless circumstances
are such that a corporate director would be personally liable for the tort);
28 Trustee indemnification (giving rights of indemnification out of trust assets and
provided trustees comply with fiduciary duties);
29 Liability insurance for trustees (permitting trustees to approve the purchase of
liability insurance out of trust monies);
30 Trustee resignation (trustees free to resign at any time provided that at least one
trustee remains; provision for court approval of resignation of last trustee);
31 Claims of unsecured creditors and others against the trust corpus (unsecured
creditors have direct unsecured claim against the corpus of the trust);
32 Arrangements (proposing a statutory arrangement provision modelled on s.192 of
the CBCA);
33 Reorganizations (proposing a statutory reorganization provision modelled on
s.191 of the CBCA);
34 Compulsory acquisitions (proposing a compulsory acquisition provision to
facilitate take-over bids modelled on s.206 of the CBCA);
35 Compelled acquisitions (proposing a compelled acquisition provision modelled on
s.206.1 of the CBCA);
36 Choice of governing law (proposing including express conflict of law rules in the
Act);
37 Change of governing law (allowing unitholders to change choice of law in DOT
by not less than 2/3rds vote);
38 No registration requirement;
39 and 40 – Matters adequately covered under securities legislation or in standard
declaration of trust

The Report concludes by reiterating that any new legislation dealing with income trusts
must be sensitive to the distinctive tax treatment that led to the rise of income trusts as an
efficient vehicle for employing investment capital and operating more stable, cash
generating businesses. The Report does not recommend simply grafting corporate law
principles onto income trusts, but rather a more principled convergence.
Attached to the report is a Schedule which sets out the effect that the Report
recommendations are expected to have on existing declarations of trust.

RESOLVED:
1. THAT a Working Group be established to consider the relation of the
recommendations in the report and the directions of the Conference to Quebec
law, and that this Working Group report its conclusions and recommendations to
the Drafting Group described below as soon as possible, but no later than
December 31st, 2006; and

2. THAT a Drafting Group be established to prepare a Uniform Act and
commentaries based on the recommendations in the Report and in accordance
with the directions of the Conference, including any recommendations received
from the Working Group described above, for consideration at the 2007 meeting.

SUPPLEMENTAL REPORT ON MULTI-JURISDICTIONAL CLASS
PROCEEDINGS IN CANADA
Presenter: Peter J.M. Lown, Alberta Law Reform Institute

In 2004, the ULCC established a committee on National Class and Related Inter-
Jurisdictional Issues. That committee prepared a report that included a recommendation
as to legislative changes that could be introduced into the Uniform Class Proceedings Act
The key recommendations of the committee were amendments to the Uniform Act to: (a)
allow courts to certify, on an opt-out basis, a class that includes class members residing
outside the jurisdiction; (b) changing current rules governing jurisdiction to resolve
conflicts between potentially competing class actions; and (c) to develop a central class
action registry. Four areas were identified for follow-up subsequent to the 2005 ULCC
meeting. The supplemental report of the special working group presented by Mr. Lown
dealt with the following four follow-up areas:
1. The definition of “National Class”;
2. The issue of res judicata;
3. The issue of whether greater precision was needed in the criteria found in subparagraph
3(e) of the 2005 Report; and
4. The proposed Canadian Class Proceedings Registry.

The special working group deals with these follow-up areas in its 2006 supplementary
report as follows:
1. It recommends that the 2005 Report be amended to use the term “Multi-
Jurisdictional Class” rather than “National Class” to avoid the confusion caused
by use of the latter term.
2. Res judicata does not actually apply in the context of multi-jurisdictional class
actions. Certification of a class action by one court will not in of itself preclude
another court from also exercising jurisdiction where there is a real and
substantial connection between the matter and the other forum. Further,
provincial class action legislation cannot operate extra-territorially so as to oblige
a court in another province to give preclusive effect to the determinations of the
certifying court. Therefore, rather than attempting to direct one universal
outcome on these issues, the 2005 Report set out criteria in sub-paragraph 3(e) to
assist the court to answer the following key issues: 1) when should the court
consider certifying a proceeding that purports to bind a claim with a real and
substantial connection with another forum? and 2) conversely, when should a
subsequent court, where the claims of a person are already included in a class
certified by another court, give preclusive effect to the certification of a class
action by the other court?
3. The special working group concludes that the criteria contained in sub-paragraph
3(e) of the 2005 Report are consistent with the principle of order and fairness.
The special working group does, however, recommend some refinements to the
specific criteria identified in sub-paragraph 3(e).
4. The special working group puts forward two options in relation to the proposed
Canadian Class Proceedings Registry. Option 1: Make the registry a requirement
of the Rules of Court in the provinces and territories. Class counsel moving for
certification would provide notice to the other class counsel with overlapping
class actions based on information in the registry. Other class counsel could then
make submissions to a court that is considering certification of a class action.
Option 2: The registry would alert the court and parties of the existence of
overlapping class actions, but it would be up to the court whether to send out
notice to other counsel and whether or not to accept submissions.
Appendix 1 to the Report sets out the revised recommendations of the special working
group.

RESOLVED:
1. THAT the recommendations in the Supplementary Report regarding a definition
of “national class action” be adopted; and

2. THAT the recommendations in the Supplementary Report respecting res judicata
be adopted; and

3. THAT the legislative recommendations in the Supplementary Report, as amended
by direction from the Civil Law Section, be adopted and amendments to the
Uniform Class Proceedings Act be drafted in accordance with the
recommendations and the directions of the Conference and circulated to the
jurisdictional representatives. Unless two or more objections are received by the
Executive Director of the Conference by a date to be determined by the Civil
Section Steering Committee, but not later than November 30th, 2006, the
amendments to the Uniform Class Proceedings Act should be taken as adopted
and recommended to the jurisdictions for enactment.

4. THAT the Conference endorse and pursue the creation of the Canadian Class
Proceedings Registry, to be operated by an appropriate national body. The
Registry will include all class action filings and annotation of any other
subsequent material events. Counsel applying for certification of an action will
be responsible for providing the relevant information at the time the statement of
claim is filed and for updating the information at certification, and/or when other
material events occur; and

5. THAT the recommendations in the Supplementary Report relating to the
Guidelines Applicable to Court to Court Communications in Cross Border Cases
where multiple class actions are certified in relation to the same issues, be
recommended to the Class Action Committee of the Canadian Judicial Council.

CERTIFICATE OF TITLES SYSTEMS FOR MOTOR VEHICLES IN CANADA -
STUDY PAPER
Presenter: Professor Ronald C.C. Cuming, College of Law – University of
Saskatchewan

Professor Cuming prepared his Report at the request of the ULCC Commercial Law
Strategy Supervisory Committee. At this point, no jurisdiction in Canada has
implemented a certificate of title system for motor vehicles. Such systems do exist in the
United States but are not uniform. There is a Uniform Certificate of Title Act prepared by
NCCUSL.

A certificate of title system for motor vehicles can be compared to a Torrens system for
lands. A transfer without registration of a certificate would not be effective and a
security interest not filed in a registry or on title could not bind any third party. The
policy reason for such legislation would be to bring about certainty as to legal ownership
for law enforcement, buyers and creditors. Currently, because of the nemo dat quod non
habet principle, a person taking title bears the risk that the person selling the vehicle is
not the owner. However, there are some measures already in place that ameliorate that
problem even in a simple registration system like that in existence in most Canadian
jurisdictions. In a great bulk of cases, the information found in the registry is sufficient
protection: in most cases involving stolen vehicles, the theft would be reported to the
registry. Courts have recognized that determination of ownership for the purposes of
highway traffic legislation does not control the outcome of a dispute over who the owner
is from a legal prospective.

Professor Cuming raises the following points for consideration:
1. Whether or not a certificate of title system for motor vehicles would apply to all
cars or just more high-end vehicles;
2. How the legislation would deal with vehicles already in the possession of persons
claiming to be owners;
3. A national certificate of title system would not be possible, since the legislation
would be a matter of provincial competence. This means there would need to be a
uniform set of choice of law rules regulating certain registration issues; and
4. A certificate of title system would require a great deal of administration.
Canadian jurisdictions already have sophisticated registries dealing with security interests
taken over chattels, including motor vehicles. In Professor Cuming’s view, there is no
sense to duplicating this sophisticated regime or taking away income from personal
property security registries by creating a separate motor vehicle certificate of title
registry, and he recommended taking no action at this time.

RESOLVED:
1. THAT the recommendation in the Report be adopted.

MORTGAGE FRAUD AND DISCHARGE ISSUES - STUDY PAPER
Presenter: Sidney H. Troister, Torkin Manes Cohen & Arbus LLP

The frauds committed by Martin Keith Wirick, a former member of the Law Society of
British Columbia, in relation to mortgages has focused attention on mortgage fraud
generally. Mr. Troister reviewed the factual context of the Wirick affair and considered
whether legislative reform was required. Mr. Troister concludes in his Study Paper that
failure of lenders to provide discharges in a timely fashion did not give rise to the
problem; rather, in his view, the problem arose due to conveyancing practice in British
Columbia. A vendor is obligated to provide good title free of any encumbrances before
closing, but frequently cannot do so because the vendor needs to apply the purchase
funds to clear mortgages off title. In British Columbia and other provinces, the practice
developed of a solicitor giving undertakings to discharge mortgages. The practice in
Ontario at one time was for the vendor to give the undertaking (not the solicitor), but if
the vendor became insolvent this was not of any benefit to the purchasers. Mr. Troister
cites Ontario jurisprudence for the proposition that real estate practice should not trump
the clients’ contractual agreement. Mr. Troister notes that Ontario put in place a “two
cheque” system whereby the amount required to discharge a mortgage was paid directly
to the bank rather than the vendor’s lawyer.
The standard forms of agreement have been amended in some provinces, including
British Columbia, to allow lawyers’ undertakings and to confirm that the discharge of
mortgage need not be provided on closing. Mr. Troister advised that the Law Society of
British Columbia wanted to implement the two cheque system in that province but met
with resistance. Instead, the Law Society of British Columbia put in place rules requiring
proof of that the mortgage is paid out and requiring that a discharge be registered within
in a set number of days.
Mr. Troister concluded that on his analysis, no legislation is required to address mortgage
fraud, and so recommended.
RESOLVED:
1. THAT the recommendation in the Report be adopted.

LIMITATION PERIODS AND OTHER ISSUES IN INSURANCE STATUTES -
STATUS REPORT
Presenter: Lisa A. Peters, Canadian Bar Association – British Columbia
At the 2005 meeting of the ULCC, Peter Lown summarized the paper prepared by the
late Professor Jim Rendall on the issue of limitation periods in insurance statutes.
Professor Rendall focused on the appropriate formulation of a limitation period or periods
to apply to an insurance claim and the question of whether such limitation period or
periods should be set out in the insurance statute or the more general limitations statute.
Since the 2005 meeting, British Columbia and Alberta have embarked on the process of
reviewing their insurance statutes and obtaining input from industry and other
stakeholders through consultation sessions. The Atlantic Provinces are also engaged in
an active review of their insurance statutes with a view to harmonization.
Alberta is expected to introduce legislation in the spring of 2007, B.C. in 2008.
The limitation period issues, and the desirability of harmonization on the resolution of
such issues where possible, naturally arise in the course of these ongoing insurance
statute reviews. Other areas identified as having possible scope for harmonization
include dispute resolution mechanisms; protection of innocent co-insureds; and the
question of whether statutory conditions should continue to form an integral part of
insurance legislation.
RESOLVED:
1. THAT the Civil Section Steering Committee continue to monitor developments
respecting the issues raised in the Report and continue to work with the Canadian
Council of Insurance Regulators to address these issues.

COLLATERAL USE OF CROWN BRIEF DISCLOSURE
(JOINT SESSION OF THE CIVIL AND CRIMINAL LAW SECTIONS)
Presenters: Crystal O’Donnell – Ontario Ministry of Attorney General, Crown Law
Office - Civil
David Marriott - Alberta Justice, Criminal Justice Division
This Study Paper examines the legal and policy issues arising out of the use of
prosecution materials in collateral proceedings In particular, the Paper highlights the
decision in D.P. v. Wagg (2004), 239 D.L.R. (4th) 501 (Ont. C.A.) in which the Court of
Appeal confirmed the Ontario Divisional Court’s decision regarding the mechanism to be
followed to determine whether Crown brief materials should be produced in a civil
proceeding. This process proposes that Crown brief materials not be produced until the
Attorney General and the appropriate police service have been notified and examine the
documents with a view to ensuring that production of those documents are determined
with due consideration of the public interest.
The Paper then provides an overview of the many relevant issues including legal rights
and interests impacted by the production of Crown brief materials in collateral
proceedings including solicitor-client privilege; litigation privilege; public interest
privilege; protection of privacy rights; Crown immunity; criminal disclosure; implied
undertakings; Charter issues; jurisdiction; and overarching concerns regarding the
administration of justice and the integrity of the prosecution (e.g. protecting the criminal
trial process, protecting informants, avoiding witness contamination and ensuring witness
safety). The authors note that practice regarding the request for prosecution materials for
use in a collateral proceeding varies depending on the jurisdiction but that jurisdictions
recognized the sensitivity of the information contained in prosecution materials and made
efforts to redact them. However, a significant difference in approach was whether the
Crown responds to such motions as a non-party to the collateral proceeding and whether
the access to prosecution materials is permitted through the courts or under the applicable
freedom of information and privacy legislation.
The authors conclude with a number of recommendations including a suggestion that
there be a consistent approach across the country in responding to the requests for
production of Crown brief materials for use in collateral proceedings. The Paper
acknowledges that difficulties may arise in addressing jurisdictional concerns regarding
which court or forum has the ability to hear any motions or applications for particular
documents and which level of government will be required to make the necessary
changes.
RESOLVED:
1. THAT a joint Working Group be established to consider the issues raised in the
Report and, in accordance with any directions of the Conference, report and make
any recommendations to the Conference in 2007 respecting the desirability and
feasibility of legislative or non-legislative initiatives to promote uniformity in the
use of Crown Brief material in collateral proceedings.
STATUS REPORT ON COMPENSATION FOR THE WRONGFULLY
CONVICTED (INFORMAL REQUEST TO DRAFT MODEL LEGISLATION)
Presenters: Lynn Romeo, Acting Director, Civil Legal Services, Manitoba
Department of Justice
Earl Fruchtman, Acting Director, Crown Law Criminal, Ontario Ministry
of the Attorney General
Canada acceded to the United Nations International Covenant on Civil and Political
Rights in 1976. Article 14(6) of that Convention establishes the right to compensation
according to law in cases of miscarriages of justice of a person who has been convicted
and suffered punishment as a result of the conviction. There is presently no statutory
regime in Canada (federally or provincially) establishing a program of compensation for
persons who have been wrongfully convicted.
In 2002, the Federal/Provincial/Territorial Ministers Responsible for Justice (FPT)
released the Report of the Working Group on the Prevention of Miscarriages of Justice.
At the same time, the Coordinating Committee of Senior Officials (Criminal) established
a working group to review guidelines approved by the FPT in 1998 relating to
compensation of wrongfully convicted persons. Work on this issue is ongoing and will
be monitored.
RESOLVED:
1. See General Resolutions above.

REFORM OF THE LAW OF FRAUDULENT CONVEYANCES AND
PREFERENCES - PROJECT PROPOSAL
Presenters: Professor Tamara Buckwold, Faculty of Law, University of Alberta
In 2004, a feasibility study was presented to the ULCC by Professor Richard Dunlop.
This project proposal follows up on that study.
Professor Buckwold’s proposal sets out specifics of the process contemplated for the
project. The process would have four primary phases: 1) research, 2) preparation of a
working paper, 3) consultation and, 4) final report including a draft act.
Professor Buckwold identified three questions arising:
1. The scope of the research phase of the project. There are two options: a) devoting
an extensive effort to attempting to define what the law is in each province and
territorial jurisdiction as represented by the judicial interpretation and application
of extant legislation, or b) identifying the issues raised by current statutory
regimes and case law in aid of the design of an appropriate and effective
legislative solution. Under the second approach, significant reliance would be
placed on research and synthesis that is already available in texts and existing
studies. The proposal sets out a research plan to be followed if the second
approach is adopted.
2. Should the project be bijural in nature?
Production of draft legislation that is relevant to Quebec as well as to common
law jurisdictions demands that Quebec law be taken into account. Given the
limitation of the project leader’s expertise and linguistic facility, the time line and
budget for this project, and the desirability of designing legislation that interfaces
with reformed judgment enforcement law legislation, Professor Buckwold makes
suggestions for incorporating input from Quebec at key points in the project
schedule.
3. How the consultation phase of the project is to be approached. Professor
Buckwold notes that a credible consultation process need not entail unduly
elaborate or expensive measures. She discusses targeted e-mailings and webbased
surveys.
In discussion it was noted that significant reform in this subject-area has already occurred
in the context of the Québec Civil Code and that input from civil lawyers would be
essential.
RESOLVED:
1. THAT a Working Group be established to prepare a working paper respecting
issues, options, and possible recommendations for consideration at the 2007
meeting.

REPORT FROM THE CHAIR OF THE DRAFTING SECTION
Presenter: Brian Greer, Chief Legislative Counsel, Ministry of Attorney General,
British Columbia
Mr. Greer directed the Conference to the section of the ULCC website that traces the
history of the Drafting Section, which was founded in 1968. The Drafting Section
prepared the Uniform Drafting Conventions and deals with matters referred to it by the
Conference, including drafting of uniform provisions for uniform statutes. He noted that
the Association of Legislative Counsel meets annually. On Mr. Greer taking leave next
year, Valerie Perry of Manitoba will chair the Drafting Section.
RESOLVED:
1. THAT the Conference express its thanks to Brian Greer for his report and his
contribution as Chair of the Drafting Section.

REFORM OF GENERAL PARTNERSHIP LAW:
THE AGGREGATE vs. ENTITY DEBATE - STUDY PAPER
Presenter: Professor Heather D. Heavin, College of Law University of Saskatchewan
Professor Heavin’s paper reviews proposed reforms of general partnership law in both the
United States and the United Kingdom. In 1994, NCCUSL adopted the Revised Uniform
Partnership Act (RUPA), which substantially revised the 1914 Uniform Partnership Act.
Further amendments were made to RUPA in 1997, including provisions pertaining to
limited liability partnerships (RUPLA). Both RUPA and RUPLA have been adopted by
some U.S. States. In 2003, the U.K. Law Commission and the Scottish Law Commission
authored a report on partnership law, which report included a revised Partnership Act
(Draft Bill). The reforms proposed in this joint report have not yet been implemented.
Both the existing U.K. statutes and the 1914 U.S. Uniform Act take the aggregate
approach to partnership, i.e., the partnership is a mere aggregation of individual partners
and is not an entity separate and distinct from the partners. Both RUPA and the U.K. law
reform Bill take the approach of abandoning the aggregate view in favour of giving
separate legal status to partnerships (other than for tax purposes). The motivation behind
these reforms was to provide for continuity of the partnership after changes in
membership and to allow for the partnership to hold title to property (which is a
particular issue in the UK).
Professor Heavin reviews the current law in Canada, which takes the aggregate approach
to partnerships, and summarizes the tax treatment of partnerships in Canada, the U.S. and
the U.K. She notes that both the existing partnership legislation and partnership
agreements themselves deal with many of the issues or concerns that arise from the
aggregate model of partnership (i.e., the disadvantages to creditors and others). Professor
Heavin notes that if Canadian jurisdictions were to change to an entity model, the tax
policy applicable to partnerships would have to be negotiated with the federal and
provincial governments. A change to entity status also raises the question of whether
partners would automatically obtain limited liability status in the same way as
shareholders in a corporation. It also raises questions about liability of partners to
creditors.
The Report concludes that there is a good deal of uniformity between the provinces under
the current statutory regimes and that the aggregate approach to partnership also
promotes freedom of contract. Professor Heavin raises the question whether lack of
separate legal personality for partnerships has actually created any problem in Canadian
jurisdictions, and whether there were any real problems with operating partnerships that
need to be addressed. In her view, the desire to provide continuity at will does not justify
any reform in Canadian law. The only other possible reason for reform would be if there
are other problems, such as the inability of partnerships to hold real property.
In discussion it was noted that Québec had reformed its general law of partnership in the
1990s.
RESOLVED:
1. THAT a Working Group be established to prepare, in accordance with the
directions of the Conference, a study paper examining the merits of the options set
out in the Report, and containing legislative recommendations for consideration at
the 2007 meeting.

INTER-JURISDICTIONAL ENFORCEMENT OF TAX JUDGMENTS - STATUS
REPORT
Presenter: Vincent Pelletier, Directorate of Research and Ministerial Legislation,
Ministry of Justice, Québec
This Report follows up on the Report presented by Frédérique Sabourin at the 2005
ULCC meeting. There were differing views expressed at the 2005 meeting as to whether
tax judgments given by Canadian courts are included in the definition of “Canadian
judgment” appearing in the Uniform Enforcement of Canadian Judgments and Decrees
Act (“UECJDA”). The 2006 Report notes the common law rule that “no country ever
takes notice of the revenue laws of another”, a concept rooted in sovereignty, and opines
that this principle may well have been overruled by the Supreme Court of Canada
decision in Hunt v. T&N PLC, [1993] 4 S.C.R. 289, which calls for the courts of each
province to give full faith and credit to judgments of the courts of sister provinces.
However, to remove any doubt on the issue, the Report recommends that section 1 of the
UECJDA be amended to specifically include tax judgments and that the term “tax
judgment” include certificates registered in respect of an amount payable under a tax law
that have the same effect as a judgment.
The Report discusses the impact of the proposed amendment from a Québec perspective.
The adoption of the proposed amendment to the UECJDA would be tantamount to the
adoption of reciprocity provisions and would allow other provinces and territories to
recognize and enforce tax judgments obtained in Québec and vice versa.
The Report also proposes that section 11 of the UECDJA be amended to provide that the
UECJDA applies to judgments obtained before its coming into force if the judgment is
for the recovery of an amount payable under a tax law, including a certificate registered
in respect of an amount payable under a tax law, the certificate having the same effect as
a judgment.
RESOLVED:
1. THAT the Working Group continue and that it consider the issues raised in the
Report and the directions of the Conference, and prepare a draft Act and
commentaries for consideration at the 2007 meeting.

INTER-JURISDICTIONAL ENFORCEMENT OF EMPLOYMENT STANDARDS
ORDERS - STATUS REPORT
Presenter: Vincent Pelletier, Directorate of Research and Ministerial Legislation,
Ministry of Justice, Québec
The Canadian Association of Labour Administrators will be meeting in September to
consider the potential for harmonization in this area.
RESOLVED:
1. THAT the Civil Section Steering Committee determine, upon consultation with
the Conference of Administrators of Labour Laws, whether it is possible and
appropriate to pursue uniform legislation in this field.

NATIONAL CONFERENCE OF COMMISSIONERS ON UNIFORM STATE
LAWS AND MEXICAN UNIFORM LAW CENTRE
Presenters: Dr. Jorge Sanchez Cordero, Director, Mexican Uniform Law Centre
Howard Swibel, President, NCCUSL
King Burnett, Chair, International Legal Development Committee,
NCCUSL
In his address to the Conference, Dr. Jorge Sanchez Cordero reiterated the importance of
the ongoing cooperation among the three organizations: ULCC, NCCUSL and the
Mexican Uniform Law Centre. He outlined some of the highlights of that cooperation
over the past year. Dr. Cordero noted the progress made in relation to implementing the
Convention on International Interests in Mobile Equipment (Capetown, 2001) in his
country and elsewhere.
Howard Swibel, President of NCCUSL, also underscored the value of the cooperation
between the three organizations in his address to the Conference. As an example, Mr.
Swibel noted the meetings in relation to implementation of the UN Convention on the
Assignment of Receivables in International Trade held in Detroit and New York in the
spring. Representatives of the U.S. Department of State and the American Law Institute
also attended these meetings. He described a proposed meeting in the fall at which
representatives of the three bodies will attend, along with stakeholders from the banking
and finance communities.
Mr. Swibel noted that in the context of this cooperative project, and the cooperative
project on unincorporated associations, each of the three organizations has benefited from
the experience and input of the others. He endorsed an approach whereby all three
organizations continue to ask themselves, in relation to each project on which they were
embarking, whether there was potential for harmonization on a North America-wide
basis.
RESOLVED:
1. THAT the Uniform Law Conference express its thanks to Mr. Howard W.
Swibel, President of the National Conference of Commissioners on Uniform State
Laws, and to Dr. Jorge Sanchez Cordero, Director of Mexican Uniform Law
Centre, for their enlightening presentations.

UN CONVENTION ON ASSIGNMENT OF RECEIVABLES IN
INTERNATIONAL TRADE - UNIFORM ACT
Presenters: Professor Catherine Walsh, McGill University
Michel Deschamps, McCarthy Tetrault
At its August 2005 meeting, the ULCC approved a pre-implementation report on the UN
Convention on the Assignment of Receivables in International Trade. A working group
was established to prepare a Uniform Act to implement the Convention and to prepare
complementary legislation. The working group was mandated to conduct its work in
collaboration with NCCUSL and the Mexican Uniform Law Centre with a view to
coordinating implementation of the convention in all three countries.
Choice of law issues gave raise to the greatest challenges for the working group. First,
work is underway in Ontario to reform the PPSA conflict of law rules, with the proposed
reforms potentially conflicting with the Convention choice of law rule in situations
involving an assignor entity that is organized under U.S. or Canadian law but which has
its chief executive office in the other country. Second, issues arose in terms of the
desirability of making the uniform implementing legislation complementary with existing
U.S. choice of law rules applicable to perfection and priority. Ultimately, the
implementation strategy being pursued by the U.S. will not result in any adjustments to
Article 9 of the Uniform Commercial Code, including its choice of law rules. As a
practical matter, this means that except for receivables transactions within the scope of
the Convention, the law of the state within the U.S. under whose laws a U.S. assignor or
secured debtor is organized will apply, even where the U.S. entity has a foreign chief
executive office.
The pre-implementation report presented to the ULCC in 2005 envisaged integrating the
Convention choice of law approach with the existing PPSA and Civil Code choice of law
rules applicable to intangible and mobile goods. The working group is now
recommending that the U.S. strategy be adopted instead, restricting the application of the
Convention choice of law rule to international assignments of receivables that fall within
the territorial and subject-matter scope of the Convention. Under this approach, the
choice of law rules for intangibles and mobile goods in the PPSA and the Civil Code, in
their current form or as amended in the future, would continue to apply. The Convention
choice of law rule will only be triggered when the Convention as a whole applies. It was
noted that the Convention permits federally organized countries to adopt different criteria
internally. The working group takes the position in its 2006 Report that the proposed
change in strategy would leave room for greater harmonization with U.S. conflicts
approaches and would relieve the provinces and territories from the burden of having to
undertake significant reforms to their secured transactions choice of law rules in order to
implement the Convention.
In addition to restricting the application of the Convention choice of law rule for priority
to receivables transactions within the Convention’s scope, the working group
recommends:
 That the jurisdictions implementing the Convention opt out of the independent
conflicts regime in Part V of the Convention;
 To ensure adequate time for nationally harmonized and comprehensive reform,
reform of the PPSAs and the Civil Code on the treatment of anti-assignment
clauses be pursued in its own right rather than being tied to the implementation of
the Convention; and
 That final approval of the draft Uniform Assignment of Receivables in
International Trade Act and commentaries be postponed until later in the fall, to
allow NCCUSL, with the active participation of the working group, to conduct a
planned industry consultation conference in October and to allow the three
national organizations to then meet in November.
RESOLVED:
1. THAT the Uniform Assignment of Receivables in International Trade Act and
commentaries be approved in principle; and
2. THAT following a joint meeting of the Working Group with representatives of
the National Conference of Commissioners on Uniform State Laws and the
Mexican Uniform Law Centre to consider the results of industry consultation and,
should no changes to the Uniform Act and commentaries as considered by the
Conference be required and should the Civil Section Steering Committee deem it
appropriate; that the Uniform Assignment of Receivables in International Trade
Act and commentaries be circulated to the jurisdictional representatives, together
with a supplementary report summarizing the result of the joint meeting. Unless
two or more objections are received by the Executive Director of the Conference
by a date to be determined by the Civil Section Steering Committee, but not later
than December 31st, 2006, the Uniform Assignment of Receivables in
International Trade Act and commentaries should be taken as adopted and
recommended to the jurisdictions for enactment; and
3. THAT the Civil Section Steering Committee continue to have under
consideration the reforms to secured transactions legislation contemplated in the
Report of the Working Group and that they be addressed in connection with any
project undertaken respecting secured transactions legislation.

UN CONVENTION ON INDEPENDENT GUARANTEES AND STAND-BY
LETTERS OF CREDIT - STUDY PAPER
Presenters: Professor Marc Lacoursière, Laval University
Steven Jeffrey, Blaney McMurtry LLP
This Pre-Implementation Report considers the advisability of preparing a uniform
implementing Act for the 1995 United Nations Convention on Independent Guarantees
and Stand-by Letters of Credit. The Report examines the existing framework for the law
of independent guarantees and stand-by letters of credit, both from a common law and
civil law perspective, and considers whether there is a need in Canada for legislation
implementing the Convention. The focus of the Convention is the relationship between a
guarantor (in the case of an independent guarantee) or an issuer (in the case of a stand-by
letter of credit) and a beneficiary.
On the common law side of the existing Canadian legal framework, there is no existing
legislation that specifically deals with letters of credit or bank guarantees (whether of a
domestic or international character). Instead, the law has been developed by courts and
in international rules of practice such as the Uniform Customs and Practice for
Documentary Credits (UCP). On the civil law side, there is some difficulty in classifying
an independent bank guarantee: some civilians have attempted to associate it with certain
nominate contracts; some commercial lawyers classify it instead as an innominate or sui
generis contractual instrument.
In their Report, the authors track the gaps in the existing international rules, and the ways
in which the Convention seeks to supplement these other rules by dealing with issues
beyond their scope. Two key topics dealt with by the Convention are fraud and abuse
and judicial remedies. The authors raise the question of whether it would be desirable,
upon drafting implementing legislation, to also draft uniform domestic legislation so that
the same rule would apply to such instruments whether or not they were international in
scope.
The authors conclude that the Convention is, generally speaking, in line with Canadian
law governing stand-by letters of credit and independent bank guarantees. They
recommend that the ULCC adopt the Convention as a model law for possible adoption by
Parliament and the provincial legislatures.
RESOLVED:
1. THAT a Working Group be established to prepare, in accordance with the
directions of the Conference, a Uniform Act and commentaries to implement the
Convention for consideration at the 2007 meeting; and to report on the desirability
of any other legislative recommendations; and to work in co-operation with the
National Conference of Commissioners on Uniform State Laws and the Mexican
Uniform Law Centre, should those organizations so desire.

TAKING THE COMMERCIAL LAW STRATEGY TO ABORIGINAL
JURISDICTION - STUDY PAPER
Presenter: Merrilee D. Rasmussen, Law Reform Commission of Saskatchewan
To date, there has been no mechanism for the extension of the Commercial Law Strategy
of the ULCC into areas of Aboriginal jurisdiction.
Aboriginal governments have or will possess a range of jurisdiction in relation to
commercial matters, whether arising from the exercise of an inherent right of selfgovernment
protected by section 35 of the Constitution Act, 1982; through Treaty-based
self-government initiatives; or through the recognition or delegation of jurisdiction via a
self-government agreement.
The Report discusses the possibility of establishing and implementing practical methods
for the development and enactment of Aboriginal laws as part of the Commercial Law
Strategy. One of the issues arising is the question of the scope of Aboriginal jurisdiction.
The Report notes the significance of Treaties with First Nations people in establishing an
inter-governmental process acknowledging that First Nations, who were self-governing at
the time Treaties were signed, would continue to be self-governing. The Report then
considers the potential scope of Aboriginal jurisdiction in the contexts of each of the
inherent right of self-government, negotiated self-government agreements, and the
delegation of powers under the Indian Act and First Nations Governance Act.
Ms. Rasmussen postulates that it is reasonable to assume that courts are likely to build on
existing constitutional concepts such as paramountcy and interjurisdictional immunity
developed in the federal/provincial context when turning their attention to Aboriginal
law. The Report suggests that it may be possible to establish a process for the
development of uniform commercial laws for adoption within Aboriginal jurisdiction
without having to find agreement about jurisdictional boundaries. The Report notes that
NCCUSL has developed a Model Tribal Secured Transaction Act. That Act is intended
to ensure a material degree of harmonization between different tribes of American
Indians and between those Tribes and State legislatures. The Report also notes that the
Law Commission of Canada is engaged in a project relating to federal security interests
on reserves. Ms. Rasmussen outlines some issues arising in terms of implementation of
Uniform Acts by Aboriginal governments that should be addressed by the committee or
working group charged with responsibility for developing a process.
After Ms. Rasmussen’s presentation, discussion ensued as to how conflicts between
provincial and aboriginal law might be resolved.
The Report concludes by recommending that a committee or working group be
established to identify and secure appropriate representation from Aboriginal
governments and to develop a process for working towards the adoption by the ULCC of
Uniform Acts within the Commercial Law Strategy for ultimate adoption by Aboriginal
governments.
RESOLVED:
1. THAT the Civil Section Steering Committee continue to have under
consideration the development of a process for the enactment of uniform
commercial acts within Aboriginal jurisdictions.

JOINT PROJECT TO CREATE A HARMONIZED LEGAL FRAMEWORK FOR
UNINCORPORATED NON-PROFIT ASSOCIATIONS IN NORTH AMERICA -
STATUS REPORT
Presenter: Arthur Close, Executive Director, British Columbia Law Institute
At the ULCC meeting in 2005, a decision was made by ULCC, NCCUSL and the
Mexican Uniform Law Centre to pursue possible joint projects. The topic of
unincorporated associations (viz., two or more people coming together for a purpose other
than making money) was identified as a possible joint project at that time. This led to
discussions between the three organizations leading to the following three key
understandings:
1. The joint project is to proceed as a clean slate, with no pre-determined point
of departure.
2. The organizations will use the NCCUSL older Uniform Act on unincorporated
associations as a source to identify issues and solutions only.
3. The organizations will use the NCCUSL methodology in the development of
their Uniform Acts.
The first meeting of the joint drafting committee was held in Portland on March 17 – 19,
2006, at which time the joint drafting committee considered memoranda discussing the
common law and Québec law on the topic of unincorporated associations. A notable
feature of the Portland deliberations was the guidance that could be drawn from the
express provisions in the Civil Code of Québec. The President of NCCUSL, Howard
Swibel, is participating in the deliberations of the joint drafting committee as an ex officio
member.
The joint drafting committee is following a work plan, preparing a list of principles to be
distilled from the Portland meeting and thereafter will seek to have legislative drafters
assigned to the project. The goal is to have versions of the uniform statute in all three
languages for the third meeting; the drafts would be referred to the individual conferences
thereafter.
RESOLVED:
1. THAT the joint ULCC, NCCUSL, and MULC Working Group continue its work
to address the issues described in the Report, taking into consideration any
discussion at the Conference, and report on the results thereof to the 2007
meeting.

PRIVATE INTERNATIONAL LAW – STATUS REPORT
Presenter: Kathryn Sabo, Justice Canada
Kathryn Sabo summarized the negotiation and implementation activities of the
Department of Justice in Private International Law over the past year. The written Report
provided to the Conference outlines the work of the Department of Justice in three main
subject areas: International Commercial Law; Judicial Cooperation and Enforcement of
Judgments; and Family Law. Within each of those subject areas, items are ranked as
high, medium or low priorities.
In the International Commercial Law area, high priorities include ongoing negotiations of
a Draft Legislative Guide on Secured Transactions (UNICITRAL) (which has obvious
links to the ongoing work on security interests at the ULCC) and the Project on
Harmonised Substantive Rules Regarding Indirectly Held Securities (Unidroit). Priorities
in this area in terms of implementation of existing Conventions include: the Convention
on the Settlement of Investment Disputes (World Bank); the Convention on International
Interests in Mobile Equipment and Aircraft Protocol (Unidroit); the Convention on
Securities Held by Intermediaries (Hague Convention); the Convention on the Limitation
Period in the International Sale of Goods and Protocol (UNCITRAL); and the
Convention on the Assignment of Receivables (UNCITRAL).
Ms. Sabo noted that UNCITRAL had embarked on a new project to modernize its
Arbitration Rules and on new work in the area of insolvency law.
In the Judicial Cooperation and Enforcement of Judgments area, high priorities include
implementation of: the Convention on Choice of Court Agreements (Hague Conference);
and the Convention Abolishing the Requirement of Legalisation for Foreign Public
Documents (Hague Conference).
In the Family Law area, high priorities for implementation include the Convention on the
International Protection of Adults (Hague Conference); and the Convention on
Jurisdiction, Applicable Law, Recognition and Enforcement, and Cooperation in respect
of Parental Responsibility and Measures of Protection of Children (Hague Conference).
On the negotiation front, the Draft Convention on Maintenance Obligations has not yet
been finalized, but is a high priority for Canada. Consultations with federal, provincial
and territorial partners and the private and academic sectors are planned in view of the
fifth Special Commission meetings scheduled for spring 2007.
Ms. Sabo noted that in November of 2006, a Hague Special Commission was formed to
consider the operation of the Convention on the Civil Aspects of International Child
Abduction (which has been implemented in all Canadian provinces and territories). This
Special Commission will also discuss issues of access.
RESOLVED:
1. See General Resolutions above.

Next Annual Meeting

2017 Conference

Hotel Saskatchewan

Regina, SK

August 13 - 17, 2017
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