November 25, 2009
The metaphorical glass ceiling has closed in again. This time, it is the Olympic aspirations of female ski jumpers that has been crushed by a male-biased system that limits the opportunities for female advancement. Last Friday, the British Columbia Court of Appeal released its written reasons in Sagen v Vancouver Organizing Committee for the 2010 Olympic and Paralympic Winter Games, 2009 BCCA 522. The case is a section 15 Charter claim that alleges that The Vancouver Organizing Committee for the 2010 Olympic and Paralympic Winter Games ("VANOC") discriminated against female ski jumpers by implementing the International Olympic Committee's ("IOC") decision not to include their event in the Vancouver 2010 Games. According to Rule 47(3) of the Olympic Charter, "[o]nly events practiced by men in at least fifty countries and on three continents, and by women in at least thirty-five countries and on three continents, may be included in the programme of the Olympic Games." Although this criteria was removed in 2006, it is still applied in practice. The alleged discrimination arises out of the inclusion of the men's event notwithstanding its failure to satisfy the criteria in Rule 47. Given the historic inclusion of the men's event in the Olympics, the IOC exercised its discretion to exempt the men's event from the criteria. The IOC has refused to exercise its discretion to include the female event.
Does the Charter Apply in these Circumstances?
At the Supreme Court of British Columbia, Fenlon J. held that the Charter did apply, but was not violated. To determine whether the Charter applied pursuant to s. 32, Fenlon J. applied the control and "ascribed activity" tests. According to Stoffman v Vancouver General Hospital, [1990] 3 SCR 483, for the Charter to apply, the government must have control over the day-to-day operations as opposed to ultimate control. Ms. Sagen and her fellow ski jumpers argued that the government had control over the day-to-day operations in regards to governance, funding and policy. Although the government did exercise significant control in all three areas, it was not enough relative to the control of the IOC and other private organizations for the Charter to apply. The latter was found to apply based on the ascribed activity test.
According to this test, a private entity that is not controlled by the government will be subject to the Charter where it is executing an activity that is governmental in nature: Eldridge v British Columbia, [1997] 3 SCR 624. Based on the Host City contract and a review of the bid process for contracts, Fenlon J. held that the staging of the Olympics was a government activity ascribed to VANOC.
The Court of Appeal unanimously overturned Fenlon J.'s finding that the Charter applied. It adopted VANOC's position that the activity in question was the selection of events. Without determining whether the obligations in the Multiparty Agreement was a matter that came within the authority of government under section 32, the Court of Appeal held that the selection of events did not. According to the Host city contract between VANOC and the IOC, only the IOC had the decision-making power to exclude the women's event. The Court of Appeal stated:
The decision of the IOC not to add women's ski jumping as an event in the 2010 Games is not a "policy" choice that could be or was made by any Canadian government and the staging by VANOC of only those events authorized by the IOC cannot be reasonable viewed as furthering any Canadian government policy or program.
Since neither VANOC nor the government had control over that decision, it could not be said that the former's implementation of authorized events was an act in furtherance of a government policy. Thus, the Charter did not apply.
This strict, yet convenient, interpretation of the contractual arrangement allows the government to contract out of the Charter, which is contrary to the Supreme Court of Canada decision in Douglas/Kwantlen Faculty Assn v Douglas College, [1990] 3 SCR 570 [Douglas College]. Without substantial backing of four governments, the IOC would have never granted Vancouver the 2010 Games. It was after these governments, the Canadian Olympic Committee, the Canadian Paralympic Committee and the Vancouver 2010 Bid Corporation had entered into the Multiparty Agreement, and won the bid, that VANOC was incorporated. Shortly afterward, the Host Contract that reserved decision-making power over the selection of events to the IOC was signed. It is through this chain of contracts and incorporation of VANOC that the government has contracted out of the Charter.
The Court of Appeal responded to this criticism when it analyzed Fenlon J.'s decision regarding the application of section 15. In response to threshold question of whether section 15 applied, Fenlon J. had determined that a contract entered into by a private entity not controlled by government can be a source of a "benefit of law" within the meaning of section 15. She came to this conclusion by extending the application of La Forest J.'s majority decision in Douglas College that the government cannot violate the Charter through its contracts. She extended that precedent by holding that the Charter should apply "to an entity that is not subject to government control but is delivering services that are truly governmental in nature under a contract." Unsettled that all the contracts of the government could be subject to the Charter, the Court of Appeal overturned Fenlon J.'s extension. It held that Douglas College stands for the precedent that only "deliberately and formally adopted policies of government may constitute 'law' notwithstanding that they are embodied in contractual documents rather in legislative acts or statutory instruments." By narrowly constructing the issue into the selection of events, a decision that the government and VANOC had no control over, the Court of Appeal made it seem as though the government did not deliberately and formally adopt that policy. However, this perspective ignores the fact that the government and the other parties to the bid must have been aware of the IOC's strict reservation of decision-making power over certain issues. They deliberately and formally adopted the IOC's policies as their own when they made the bid and incorporated VANOC. The resulting contractual arrangement denied Ms. Sagen a benefit of law within section 15 when it enabled the IOC to exclude the women's event.
Corporate Law may Provide Some Answers
This case is reminiscent of cases involving piercing the corporate veil. Under some circumstances, such as avoidance of a legislative regime, the Court will pierce the corporate veil and target the individuals or entities that comprise the corporation for liability. Throughout its decision, the Court of Appeal emphasized VANOC's existence as a "corporation with the powers of a natural person." That sentence reflects the characterization of the corporation as a separate legal entity. A consequence of incorporation is limited liability. The more pertinent consequence is that corporations are not subject to to the Charter merely because they are a product of a statute. Although the IOC requires that the host city incorporate its Organizing Committee, this requirement does not mean that the government can rely upon it to contract of the Charter by using a corporation as a placeholder. By signing an agreement that gave the IOC untrammeled discretion notwithstanding the government's acknowledged responsibilities under the Charter, VANOC, on behalf of the government, contracted out of the Charter. This agreement, by bestowing powers onto the IOC that effectively excluded domestic legislation, entailed avoidance of legislative schemes that may interfere with the mandate of the IOC. If SCC grants leave to appeal, it should pierce the corporate veil to properly find that government authority is implicated and the Charter applies.
It is understandable that this line of reasoning seems a bit tenuous, given that neither party framed their arguments in terms of corporate law. The facts at hand elude the control and ascribed activity tests because of narrow issue framing and agreements that use incorporation to contract out of the Charter. While both the control test and piercing the corporate veil seek to target entities behind the corporation that are controlling it, the latter has the advantage of being applicable where a legislative scheme is being avoided. I am not advocating for some radical adoption of a new corporate law-based test for section 15; my suggestion is that the corporate veil should be pierced, and the contractual agreements should be analyzed in terms of governmental control of the process from the start. This approach is valid, given that the Court of Appeal stressed the separate legal rights of VANOC throughout its decision. More importantly, this wider frame of analysis will give Ms. Sagen and her fellow ski jumpers a fair shot at their Olympic dreams.
2 Comments
Thanks for this analysis of the VANOC decision. I don't think I fully comprehend your argument about peircing the corporate veil though. I feel that your analysis is not fully fleshed out.
First, you don't need to borrow the corporate veil concept to find a corporation to be governmental in nature or in a given activity. An example is municipal corporations. In other cases, if a government is exercising sufficient control of a corporation, it could be considered a governmental entity, or could be governmental within the scope of the activity it is engaged in. The Governments of BC and Canada are not in control of VANOC even if you "pierce the corporate veil." Thus you could not direct liability (or in this case a Charter violation) towards the government. In fact, if the government was exercising control over the entity you wouldn't need to borrow the corporate law concept because the control would be sufficient to find VANOC a governmental (government-like) entity.
Second, courts are very reluctant to pierce the corporate veil in commercial cases. It is usually where the corporation is set up as a sham or where the persons in control of the corporation expressly use it for wrongful purposes (fraud or acts nearing fraud). I don't see VANOC's role in this case being that of expressly perpetrating the Charter violation.
I think the Charter application questions of establishing that an entity is governmental in nature or is sufficiently influenced by the government to be considered governmental in the scope of providing certain services is possibly an easier threshold to meet than convincing the court to pierce the corporate veil, find that a governmental actor is sitting behind a sham corporation, and hold that actor directly liable. I don't see the utility of borrowing the corporate law concept here.
Thanks for the feedback. My first comment too! I admit the argument is tenuous and reaching. I proposed this sort of maneuvering because it seems as though the issues have been constructed so as to oust the Charter. I was reminded of the corporate veil argument because of the Court of Appeal emphasized how the government had no control over the matter, when the latter knew from the start what it was getting into. It knew that the IOC required that it maintain absolute discretion over certain subject areas eg. the selection of events. It also knew that it had obligations under the Charter. I considered the corporate veil argument because it would knock out VANOC as an intermediary that is shielding the government from its initial decisions. It provides a different perspective on the matter. I do agree with your comments that the current tests are more than sufficient to do the job. My purpose in bringing in corporate law was to get people thinking of the case from another angle, rather than stopping the analysis when a corporation comes into play. The corporate veil argument seemed to illuminate a dimension of the case that was being downplayed by the lower courts.
There should be serious consideration of domestic legislation when the government, in conjunction with other actors, chooses to undertake obligations with private international organizations that engages the public in such a significant way. I guess I would not have responded to the case in the way that I did if there had been at least an acknowledgment of the responsibility to uphold the Charter. I'm not saying that every private agreement between the government and a private organization will be subject to the Charter. Where the public is implicated in such a significant way, as here, there should be a point where the government should stop and assess whether it is upholding its obligations to the Charter vis-a-vis the public.