Executive Summary: Key Legal and Evidentiary Issues

• The appeal addresses seven Federal Court decisions in contempt proceedings against Viterra Canada Inc. arising from its alleged breach of an arbitral cease-and-desist award.
   
• Enforceability of the arbitrator's award was challenged on the grounds that its filing was a nullity and that the award was merely declaratory rather than compellable.
   
• Compellability of corporate employees to testify under Rule 470(2) of the Federal Courts Rules formed a central issue in the Subpoena Appeal.
   
• Admissibility of two employees' diary entries was contested under the past recollection recorded exception to hearsay and the principled approach.
   
• Quantum of the $400,000 fine and the solicitor-client costs award were challenged as disproportionate and improperly reasoned.
   
• Ultimately, the Federal Court of Appeal dismissed six of Viterra's seven appeals and allowed the Penalty Appeal only in part.
   

Facts of the case

The dispute traces back to 2017, when the Grain Workers' Union Local 333 ILWU filed two policy grievances alleging that Viterra Canada Inc., which operates two grain terminals in the Port of Vancouver, was violating the maximum work hours provisions of the Canada Labour Code. Arbitrator Christopher Sullivan issued a decision on the merits on October 28, 2019 (the Award) — though the same judgment later refers to the Award's date as October 18, 2019 [para. 150], a discrepancy in the source document that is noted here rather than resolved — finding that Viterra had violated sections 169 to 172 of the Code and ordering it to "cease and desist from violating the Code," while leaving the parties to negotiate an averaging arrangement. After the arbitrator confirmed on May 28, 2020 that his jurisdiction was exhausted, the Union commenced contempt proceedings in the Federal Court on August 31, 2020. Those proceedings gave rise to seven separate Federal Court decisions addressing preliminary enforceability, subpoenas issued to two Viterra employees, the admissibility of certain records including employee diaries, a finding of contempt, a penalty of a $400,000 fine plus solicitor-client costs, an unsuccessful application to purge the contempt, and costs on a subsequent successful purging application. Viterra appealed all seven decisions, later abandoning several grounds, including its entire appeal of the Failure to Purge Order.

Policy and legislative provisions at issue

Central to the case was section 66 of the Canada Labour Code, which permits filing an arbitral order in the Federal Court so that it takes on the force of a judgment, and sections 169 to 172, which set maximum weekly hours of work. Viterra argued a Certificate of Filing that mistakenly cited section 251.15 rather than section 66 rendered the Award's registration a nullity. The Court also had to apply Rules 466 to 472 of the Federal Courts Rules governing contempt, particularly Rule 470(2), which provides that "a person alleged to be in contempt may not be compelled to testify," and Rule 469, requiring proof of contempt beyond a reasonable doubt. Viterra invoked subsection 35(1) of the Interpretation Act, which states that "person, or any word or expression descriptive of a person, includes a corporation," to argue Rule 470(2) shields corporations from having their employees subpoenaed. The Court also considered paragraph 11(c) of the Canadian Charter of Rights and Freedoms, the constitutional analogue protecting individuals from compelled self-incriminating testimony, and section 58 of the Code, which makes arbitral orders final and unreviewable.

Reasoning and analysis

Justice Walker, writing for a unanimous panel, organized the reasons around each of the seven underlying Federal Court decisions in chronological sequence. On the Preliminary Appeal, the Court found no error in the conclusion that the technical misdescription in the Certificate of Filing did not nullify the Award's registration, since strictissimi juris requires strict but not blind compliance with procedural steps, and Viterra suffered no prejudice from the error. The Court likewise upheld the finding that the Award was clear, precise, and enforceable rather than declaratory, noting that an order may reference legislation without reciting its text and that the absence of a compliance deadline does not automatically defeat enforceability, since a reasonable time for compliance can be read in contextually. On the Subpoena Appeal, the Court agreed that Rule 470(2) does not extend to corporations, relying on the Supreme Court's treatment of the analogous Charter protection in paragraph 11(c) in Quebec (Attorney General) v. 9147-0732 Québec inc. and on prior authority holding that employees, unlike corporate officers named in a show cause order, remain compellable witnesses. Although the Court found Viterra's abuse-of-process argument was improperly raised as a new issue on appeal, it nonetheless briefly addressed two related sub-arguments concerning document production and testimonial compulsion via documents, finding no error in either. On the Evidence Appeal, the panel found no palpable and overriding error in admitting two employees' diaries under the past recollection recorded exception, since the witnesses could no longer recall specific hours worked and the circumstances of the diaries' creation supported an inference of contemporaneous accuracy; the Court also upheld admission under the principled approach to hearsay as an alternative basis. On the Contempt Appeal, the Court found the conclusion that Viterra had a reasonable time to comply, and had intentionally failed to do so, was amply supported by the evidence, including testimony from two Viterra operations supervisors and two Union members. On the Penalty Appeal, the Court held that the $400,000 fine was not demonstrably unfit, given Viterra's ability to pay as a subsidiary of a parent company with total assets exceeding US$19 billion in 2021, the prolonged non-compliance, and the public policy interest in labour arbitration; however, the Court agreed that costs "throughout" on a solicitor-client basis were wrongly ordered, since costs on the Preliminary Order and the Second Subpoena Order had already been separately addressed or awarded on a different basis. Finally, the Court dismissed the Failure to Purge Appeal, which Viterra had abandoned, and the Application Costs Appeal, finding no error in awarding solicitor-client costs for both purging applications.

Ruling and overall outcome

The Federal Court of Appeal dismissed the Preliminary Appeal, Subpoena Appeal, Evidence Appeal, Contempt Appeal, Failure to Purge Appeal, and Application Costs Appeal in their entirety, finding Viterra's arguments on enforceability, compellability, admissibility, and the underlying contempt finding unpersuasive. The Court allowed the Penalty Appeal only in part, varying the costs award so that solicitor-client costs to the Union apply throughout except in respect of the preliminary hearing and the motion to quash the subpoenas, while leaving the $400,000 fine intact. The Grain Workers' Union Local 333 ILWU was the successful party overall, and the Court awarded it costs on a solicitor-client basis in respect of the appeals themselves.