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Saskatchewan Court of Appeal considers multi-pronged attack on admission and consideration of Facebook Messages 

The Saskatchewan Court of Appeal recently reviewed the legal tests to be applied for attributing authorship and authenticating Facebook Messenger messages. The accused/appellant in R v Durocher appealed his finding of guilt for sexual assault and sexual interference with a person under 16, arguing in part that the trial judge had erred in the admission and reliance on Facebook messages put forward as being exchanged between the accused and the complainant. 

As part of the prosecution’s evidence, the complainant testified and referred to a number of Facebook messages. The defence alerted the judge that there may be some objections and that there may be further evidence touching on the messages, the defence did not object and did not call for a voir dire regarding admissibility, reliability or whether the accused was the actual author of the messages attributed to him by the complainant. On appeal, the accused argued that the messages were hearsay and could not be considered unless the judge held a voir dire to determine the question. It was argued that the judge should have done so on his own motion. 

On the question of authorship, the Court of Appeal concluded that it was open to the trial judge to make the conclusion the accused had authored the messages based on the complainant’s testimony and inferences that can be drawn. 

[49] There was no suggestion at trial of tampering or that the sender used an alias. Although the prospect of tampering was discussed in the context of threshold authentication, Watt J.A., in R v C.B., 2019 ONCA 380 (CanLII), 146 OR (3d) 1 [C.B.], was of the view that an inference could be drawn about authorship in the absence of any evidence that gives an air of reality to such a claim:

[72] As a matter of principle, it seems reasonable to infer that the sender has authored a message sent from his or her phone number. This inference is available and should be drawn in the absence of evidence that gives an air of reality to a claim that this may not be so. Rank speculation is not sufficient: R. v. Ambrose, 2015 ONCJ 813 (CanLII), at para. 52.

[50] In my view, the trial judge properly applied the Evans test to determine threshold admissibility. Examining the circumstantial evidence as a whole, it was open to him to draw an inference that Mr. Durocher was the author of the Facebook messages. L.A. provided viva voce testimony and a statement to the police that Mr. Durocher was the person who had sent the Facebook messages to her. She explained the basis for her belief and briefly discussed the content of each message. L.A.’s evidence on this point went in unchallenged.

In considering the threshold of admissibility, the trial judge only needed to be satisfied on the legal standard that the accused made the statements and could rely on circumstantial evidence to do so. Furthermore, a voir dire was not required to consider the question. 

The appellant also challenged the reliability of the messages, which the Court of Appeal found to be rooted in the law related to hearsay. The appellant asserted that the trial judge should have held a voir dire to determine the question, though none was requested at the trial. An out-of-court statement made by a non-testifying declarant “tendered for the truth of its contents” is presumptively inadmissible, subject to specific common law exceptions. 

The Court of Appeal noted that at trial, defence counsel never identified hearsay as a basis for concern or suggest a voir dire was necessary. The defence did make a statement that he “may object” at some point to the Facebook messages during examination. Defence counsel also did not challenge the complaint’s testimony that attributed the messages to the defendant. 

This may have been part of a strategic decision by the defence that ultimately failed: “As commented above, the approach taken by defence counsel at trial was no doubt in furtherance of a strategy that did not succeed, but that alone does not make the trial judge’s approach erroneous.”

Defence counsel chose not to advance this argument at trial, and the trial judge was not faulted for not intervening with Mr. Durocher’s strategy during trial. In this case, Facebook evidence was presumptively admissible without a voir dire. The trial judge did not err by failing to hold a voir dire of his own motion in order to determine the admissibility of the Facebook messages because they were hearsay. 

Further, the appeal judge invoked the curative provision of s. 686(1)(b)(iii) of the Criminal Code. While the trial judge believed that Mr. Durocher sent the messages, but they did not add to the allegation of the specific sexual assault 

[73] … I say this because even though the trial judge was satisfied Mr. Durocher was the author of the messages, he did not give the messages any weight in deciding guilt or innocence. To repeat, he said, “I believe that Mr. Durocher did send messages, but they don’t add to the allegation of the specific sexual assault” (emphasis added). The trial judge’s decision came down to the credibility of L.A. He explained why he found her credible and, in the end, was satisfied beyond a reasonable doubt that Mr. Durocher had committed the offences with which he stood charged.

The appellant also challenged the authenticity of the messages, which requires resort to the Canada Evidence Act (“CEA”) and the common law. Authenticity, to put it simply, refers to whether the document is what it purports to be. The CEA is particularly engaged because the messages are electronic documents:

Authentication of electronic documents

31.1 Any person seeking to admit an electronic document as evidence has the burden of proving its authenticity by evidence capable of supporting a finding that the electronic document is that which it is purported to be.

And under the CEA, it is merely a threshold question as the ultimate issue has to be determined at the end of the day with the benefit of all the relevant evidence:

[84] That said, authentication does not necessarily mean the document is genuine: “That is a question of weight for the fact-finder which often turns on determinations of credibility” (citations omitted, Ball at para 70). Evidence can be authenticated even where there is a contest over whether it is what it purports to be. As Professor David Paciocco (as he then was) explained in his article cited above, “Proof and Progress: Coping with the Law of Evidence in a Technological Age” (December 2013) 11 Can J L & Tech 181 [“Proof and Progress”], this is not because the law is interested in false documentation (at 197):

It is simply that the law prefers to see disputes about authenticity resolved at the end of a case, not at the admissibility stage. Disputes over authenticity tend to turn on credibility, and credibility is best judged at the end of the case in the context of all of the evidence. “Authentication” for the purposes of admissibility is therefore nothing more than a threshold test requiring that there be some basis for leaving the evidence to the fact finder for ultimate evaluation. In R. v. Butler, [2009 ABQB 97] 2009 CarswellAlta 1825, [2009] A.J. No. 1242 (Alta. Q.B.), for example, the Court recognized where there was a live issue about whether the accused generated the Facebook entries in question that would be for the jury to decide.

The Court of Appeal also noted that authentication and authorship are two different, but interconnected, questions and each must be resolved. The Court of Appeal, at paragraph 85, quoted from Graham Underwood and Jonathan Penner, Electronic Evidence in Canada, loose-leaf (Rel 1, 2016) vol 1 (Toronto: Thomson Reuters, 2010):

It is also important to note that establishing the authenticity of an electronic document is not necessarily synonymous with demonstrating its authorship. The relationship between authenticity and authorship for electronic documents is not reciprocal; demonstrating authorship is sufficient to establish authenticity, but establishing authenticity of an electronic document does not necessarily provide strong evidence of authorship.

At the end of the day, the burden for authentication is relatively light. Though neither party before the court nor the trial judge referred to the CEA, there was sufficient evidence to establish that authenticity and authorship. The Court of Appeal noted that the complainant testified to the following, all of which was largely unchallenged by the defence: 

(a) she was his Facebook friend;

(b) she described the content of Mr. Durocher’s home page as containing his name in bold and underlined lettering;

(c) the responses to her messages bore her name;

(d) she identified the messages she had sent in response and her responses bore her name;

(e) the messages from the sender contained sexual content with an invitation for sexual activity;

(f) she was able to access the messages from her smart phone;

(g) the sender used the word tatanka that, in the Dakota language, means buffalo;

(h) the messages received by L.A. were contemporaneous with the alleged assaults; and

(i) some of L.A.’s messages, in the chain of messages, were met by a further message from the sender.

Though the Court of Appeal would have preferred that the judge had held a voir dire on this question, the low barrier of section 31.1 of the CEA was easily passed. In paragraph 96, the Court of Appeal noted: 

However, bearing in mind the low bar attached to s. 31.1, the functional approach adopted by the courts with regard to its application, the presumption of integrity under the CEA and the fact the trial judge ultimately found Mr. Durocher was the author of the Facebook messages, I am satisfied that the evidence adduced by the Crown was capable of authenticating the Facebook messages.

Customers complained they could not access their funds; approximately $16M owed

On November 4, 2019, the British Columbia Securities Commission announced that it had made an application to the Supreme Court of the province for the appointment of an interim receiver to take custody of the assets, undertaking and business of a group of companies operating a cryptocurrency exchange, called the Einstein Exchange. The receiver entered and secured the premises on November 1, 2019.

According to the affidavit of the Lead Investigator with the Enforcement Division of the BCSC, the Securities Commission commenced its investigation in May 2019 after hearing complaints from several of the company’s customers indicating they were not able to access their assets on the exchange. Two other individuals, including a shareholder, also complained about possible money laundering. According to documents filed with the court, the company trades nineteen different cryptocurrencies and its customers are currently owed just over $16 million.

US government to strictly enforce KYC rules for cryptocurrency exchanges

As the New York Times recently reported, at a conference hosted by a blockchain analysis company, the Director of the US Financial Crimes Enforcement Network (FinCEN) announced that the US government would be strictly enforcing the “travel rule” anti-money laundering measure over cryptocurrency exchanges. The travel rule “requires cryptocurrency exchanges to verify their customers' identities, identify the original parties and beneficiaries of transfers $3,000 or higher, and transmit that information to counterparties if they exist.” It is a standard feature of anti-money laundering law and the subject of recent recommendations by the Financial Action Task Force (FATF), which held that the rule should apply to cryptocurrency exchanges due to the large amount of theft, scams and fraud associated with them (estimated to be $4.3 billion this year). The report indicates this was something of a surprise to cryptocurrency firms, who felt that cryptocurrency was not money and that the travel rule therefore didn’t apply to them.

Test case by ACLU and EFF upholds privacy interest in e-devices

The question of when it is legal for border officials to search the electronic devices of travelers has been a contentious one for some time, both in Canada and in the United States. The dominant argument made by governments has been that privacy interests are low at the border, while national security and law enforcement interests are high, and therefore devices should be subject to search at any time. Civil society organizations and defendants have asserted that due to the intense privacy interest in the large amounts of data carried in computers and smart phones, searches are much more invasive than would be the case for other things a traveller might have with them (such as a suitcase), and have advocated for requiring the state to have reasonable grounds or reasonable suspicion before conducting a search.

In the recent case of Alasaad v. Neilsen, a U.S. District Court for Massachusetts has ruled that searches of the devices carried by 11 travellers (10 US citizens and one permanent resident) by US Customs and Border Protection (CBP) and Immigrations and Customs Enforcement (ICE) violated the US 4^th Amendment, because they were done in the absence of reasonable and individualized suspicion that contraband or evidence was present. The action was brought by the American Civil Liberties Union (ACLU) and the Electronic Frontier Foundation (EFF), and one could infer that the plaintiffs were carefully chosen due to the circumstances and effects of the searches that were done. Plaintiff Alasaad was a Muslim woman who objected to male officers searching her phone and viewing pictures of her and her daughters without their headscarves, yet was subject to search without grounds on two different occasions. Other searches saw border officials viewing privileged solicitor-client material, confidential work data belonging to an employee of NASA, and journalistic work product with lists of contacts. One plaintiff, a writer, was asked about her blog posts after the search, and when her phone was returned the Facebook app was open to her “friends” page, which had not been open when the phone was taken. The majority of the plaintiffs had their devices searched more than once. The court observed that the harm to the plaintiffs’ interests from the searches was ongoing, since the evidence indicated that data from the devices would be retained and “used to inform decisions on future searches.”

The court noted that CBP and ICE had policies under which “basic” searches (searches of devices by hand) did not require any grounds, while “advanced” searches (involving hooking the device up to another computer) required reasonable suspicion. The court rejected the government’s argument that both of these searches were “routine” and thus subject to the “border search exception” to the 4^th Amendment. Even a basic search could turn up extremely personal and private information on a device, including metadata, particularly given that even cell phones have search functions that can be used. This being so, it was clear that a standard of “reasonable suspicion” should apply to both, the standard being defined as “a showing of specific and articulable facts, considered with reasonable inferences drawn from those facts, that the electronic device contains contraband.” While granting the plaintiffs’ request for declaratory relief, the court declined their request to issue a nation-wide injunction against searches not based on reasonable suspicion.

Court applies traditional test for interlocutory third-party injunctions to require largest internet service providers to block allegedly copyright infringing site

A judge of the Federal Court of Canada has issued a precedent-setting site-blocking order at the behest of a range of Canadian IP rights holders. The application was brought by Bell Media Inc., Groupe TVA Inc., and Rogers Media Inc., three Canadian broadcasters and the third party respondents were a number of Canadian internet service providers, a number of which are affiliates of the plaintiffs.

In July 2019, the plaintiffs filed a suit against the unnamed persons operating two websites: goldtv.biz and goldtv.ca, and sought an injunction against the defendant alleging that the GoldTV services had been infringing copyright in various broadcasts owned by the plaintiffs. The injunction was granted, but the plaintiffs alleged that GoldTV continued make copyrighted materials available through its services. The plaintiffs then sought an injunction to force the Canadian internet service providers to block consumers from connecting to a range of IP addresses and websites associated with GoldTV.

A number of the ISPs (Bell Canada, Fido Solutions Inc., Rogers Communications Inc. and Videotron Ltd.) consented to the motion, while four others took no position. The only respondent to object was Teksavvy Solutions Inc. The objection is summarized by the Court:

[11] TekSavvy opposes the motion arguing that: (1) the motion relates strictly to the issue of site blocking; (2) the subject matter of the dispute falls within the specialized expertise and mandate of the Canadian Radio-television and Telecommunications Commission [CRTC] pursuant to the Telecommunications Act, SC 1993, c 38 [Telecommunications Act]; and (3) in this circumstance, and although the Court may have jurisdiction, in a narrow sense, the Court should decline to exercise that jurisdiction. TekSavvy further submits that if the Court concludes otherwise, then in the alternative the Plaintiffs have failed to satisfy the test for an interlocutory injunction.

The Court determined that the Federal Court does have jurisdiction simpliciter to issue injunctions against third parties such as the ISPs, and then turned to the question of whether it could issue this particular order.

Teksavvy argued that Parliament had been presented with the possibility of a new legal regime that included site-blocking and had declined to do so. It further argued that the CRTC had exclusive jurisdiction over site blocking by virtue of section 36 of the Telecommunications Act:

36 Except where the Commission approves otherwise, a Canadian carrier shall not control the content or influence the meaning or purpose of telecommunications carried by it for the public.

The Court noted that when a coalition of broadcasters (the “Fairplay Coalition”) had petitioned the CRTC to enable site-blocking for these purposes, the CRTC had concluded that it did not have jurisdiction over copyright and that the Copyright Act is a complete code dealing with the issue. The Court then wrote:

[37] Teksavvy seeks to characterize the issue on this motion as one of site blocking only. I am not convinced the injunction remedy sought can be so simply divorced from the essential character of the underlying copyright infringement action.

[38] Teksavvy has not argued that the CRTC erred in concluding it lacked jurisdiction in the area of copyright infringement. For the purposes of addressing the issues before me and absent argument to the contrary I accept the CRTC conclusion that Parliament intended the Copyright Act to be an exhaustive regime. Absent clear statutory language to the contrary, where the essential character of the dispute is one of copyright, remedies are to be found in the Copyright Act.

…

[42] In summary, the Court has jurisdiction to grant the relief sought. I am not convinced that any of the provisions of the Telecommunications Act, nor the fact that there is ongoing debate about the role of site blocking in Canada's telecommunications regulatory regime, support the view that the Court should decline to exercise its discretion in this case.

Once the Court determined that it had jurisdiction to issue the particular order, the analysis switched to what test should be applied. The usual test for interlocutory injunctions was accepted, though the Court sought guidance from a similar order issued in Cartier International AG & Ors v British Sky Broadcasting Ltd & Ors [2016] EWCA Civ 658 (“Cartier CA”), a trademarks decision of the England and Wales Court of Appeal:

[52] In Cartier CA the EWCA endorsed a number of principles or factors as being relevant in determining if a site-blocking order is proportional. The factors are:

A. Necessity — a consideration of the extent to which the relief is necessary to protect the plaintiff's rights. The relief need not be indispensable but the court may consider whether alternative and less onerous measures are available;

B. Effectiveness — a consideration of whether the relief sought will make infringing activities more difficult to achieve and discourage Internet users from accessing the infringing service;

C. Dissuasiveness — a consideration of whether others not currently accessing the infringing service will be dissuaded from doing so;

D. Complexity and Cost — a consideration of the complexity and cost of implementing the relief sought;

E. Barriers to legitimate use or trade — a consideration of whether the relief will create barriers to legitimate use by unduly affecting the ability of users of ISP services to access information lawfully;

F. Fairness — a consideration of whether the relief strikes a fair balance between fundamental rights of the parties, the third parties and the general public;

G. Substitution — a consideration of the extent to which blocked websites may be replaced or substituted and whether a blocked website may be substituted for another infringing website; and

H. Safeguards — a consideration of whether the relief sought includes measures that safeguard against abuse.

The Court carried out an analysis of each of the above Cartier CA factors and determined that the balance of convenience favoured the plaintiffs.

A fifteen paragraph order issued to require the blocking of the sites and IP addresses requested by the plaintiffs, the first of which reads:

1. Within fifteen (15) days of the issuance of this Order, the Third Party Respondents shall block or attempt to block access by at least their residential wireline Internet service customers to the websites or online services identified at Schedule 1 to this Order (the "Target Websites"), by blocking or attempting to block access to all of the Target Websites' domains, subdomains and IP addresses identified therein. For clarity, the Go1dTV.ca Service is a Target Website for the purpose of this Order. Schedule 1 to this Order is empty for the Go1dTV.ca Service as of the date of issuance of this Order, and may be supplemented by the Plaintiffs if and when appropriate in accordance with paragraph 2 of this Order.

Notably, any customer of any of the third party ISPs has the right to make an application to the Court to vary the order if it affects their ability to access or distribute non-infringing content.

Federal Court refuses to certify Voltage “reverse class action” on numerous grounds

The Federal Court of Canada appears to have brought the Voltage “reverse class action” for copyright infringement to an end (subject to appeal). On November 12, 2019 in Voltage Pictures et al. v Salna et al.the Federal Court of Canada dismissed the application for certification brought by a group of production companies (“Voltage”) that sought to sue, in a single class proceeding, hundreds of Canadians accused of unlawfully downloading and uploading movies for which the plaintiffs own the exclusive rights.

In a certification motion, the plaintiffs have the burden of satisfying the test set out in the Federal Courts Rules, which require:

Conditions

334.16 (1) Subject to subsection (3), a judge shall, by order, certify a proceeding as a class proceeding if

(a) the pleadings disclose a reasonable cause of action;

(b) there is an identifiable class of two or more persons;

(c) the claims of the class members raise common questions of law or fact, whether or not those common questions predominate over questions affecting only individual members;

(d) a class proceeding is the preferable procedure for the just and efficient resolution of the common questions of law or fact; and

(e) there is a representative plaintiff or applicant who

(i) would fairly and adequately represent the interests of the class,

(ii) has prepared a plan for the proceeding that sets out a workable method of advancing the proceeding on behalf of the class and of notifying class members as to how the proceeding is progressing,

(iii) does not have, on the common questions of law or fact, an interest that is in conflict with the interests of other class members, and

(iv) provides a summary of any agreements respecting fees and disbursements between the representative plaintiff or applicant and the solicitor of record.

Voltage argued that its amended statement of claim met the test. It is important to note that the decision is based on the pleadings, assuming the allegations to be true.

Justice Boswell determined that the Voltage pleadings did not disclose a reasonable cause of action for either primary or secondary infringement. Primary infringement refers to making a film available for upload by BitTorrent or advertising through BitTorrent that a film was available for download. Secondary infringement or authorizing infringement refers to failing to take steps, as a controller of an internet account, to prevent the two acts of primary infringement, or authorizing either of them. With respect to a primary infringement, Voltage did not identify any person who it alleged to be a primary infringer. Voltage did name an alleged secondary infringer who had an IP address that was associated with making five films available on the BitTorrent network at various times.

The Canadian Internet and Public Interest Clinic (“CIPPIC”) argued that Voltage’s own affiant admitted during cross-examination that an IP address cannot be associated with a particular individual in copyright infringement matters. The operator of the account identified by Voltage had two tenants who were also identified; however, it is unclear who (or if any of them) were the ones to allegedly infringe the plaintiffs’ copyright. Because of this, no Direct Infringer could be identified by Voltage, and it is therefore plain and obvious that its claim of primary infringement cannot succeed. From Paragraph 77: “Without an identifiable respondent the action could not appropriately go forward as a class proceeding…”.

For secondary infringement or authorizing infringement, the court similarly found that the Voltage claim as pled was doomed to fail. With BitTorrent, there is no difference between downloading and uploading files as they take place simultaneously. When files are shared on BitTorrent, they are shared by all users and not necessarily with the users’ knowledge.

The Court determined that Voltage failed to provide sufficient evidence about the actual existence of a class of two or more persons:

“The nexus between an IP address and the person responsible for copyright infringement is highly technical and difficult to assess without a consideration of the merits of individual liability issues” (para 106).

Voltage also failed to demonstrate to the court’s satisfaction that there was some basis in fact that the claims of the class members raise common questions of law or fact. The final nail in the coffin for Voltage was that its litigation plan was unmanageable for having to deal with individual issues, for relying on public resources for a private end and because it largely relies on the notice-and-notice regime of the Copyright Act to facilitate a large-scale class proceeding that could affect thousands of Canadians.

The motion was dismissed with costs.

Court holds Internet-based dangers to children justify stricter sentencing

In R. v. Alcantara, the accused had pleaded guilty to the offence of internet luring under s. 172.1 of the Criminal Code, arising from a sting operation in which he interacted in a sexual manner with “Brayden,” an undercover officer who was playing the part of a 14-year old boy. “Brayden” had responded to an ad the accused placed on a site called “Doublelist!”, in which the accused sought sexual activity with a person emphasized as “young.” After short conversations with sexual content, the accused arranged a discreet “meeting” with “Brayden” and was apprehended thereafter.

The sentencing judge, Rolston J. of the Manitoba Provincial Court, took account of Parliament’s clear prioritization of combatting child sexual exploitation and its “growing concern for offences involving internet use,” which was reflected in turn by the creation of minimum sentences for deterrence purposes. The court remarked:

[6] As a general observation, it is worth noting that the use of social media on the internet has virtually exploded since the time that the Ontario court expressed the noted concerns in D.D. in 2002. In 2019, virtually everyone carries a phone that is capable of accessing the vast number of internet applications that cater to connecting people to one another in some form or another. Often, the children as opposed to the adults, are the experts in the use of these devices. Despite often being experts in internet navigation, children remain naïve and vulnerable to influence and predatory behaviour. Therefore, the words of Justice Moldaver (as he then was) in D.D. add perspective to his words written more recently on behalf of the Supreme Court in R. v. Morrison, [2019] S.C.J. No. 15 at paragraph 153:

Child Luring is a serious offence that targets one of the most vulnerable groups within Canadian society—our children. It requires a high level of mens rea and involves a high degree of moral blameworthiness.

The reality is that today’s technology is moving at light speed. The potential for damage to our “valued and vulnerable assets” is real. The combination of these facts logically calls for a focus on the principles of deterrence and denunciation in sentencing those who use the internet as a tool to lure and victimize our youth. These sentiments have been echoed time and time again in courts across the country (see, for example: R. v. Legare, 2009 SCC 56 (CanLII), R. v. Alicandro, 2009 ONCA 133 (CanLII), R. v. Paradee, 2013 ABCA 41 (CanLII), R. v. Jepson, [2004] O.J. 5521, R. v. Harris, 2017 ONSC 940 (CanLII), and R. v. Galatas, Unreported MBQB, May 1, 2019). The concern of Parliament to ensure that the principles of deterrence, denunciation and protection of the public are at the forefront, is reflected in the increased sentences imposed by law.

Here, the defendant had challenged the constitutionality of the 1-year mandatory minimum sentence attached to the offence, but the court found that a sentence of at least one year would be appropriate in the circumstances and thus it did not need to consider the challenge. The defendant was sentenced to one year in jail and one year of probation, along with various conditions restricting his internet use, including a ban on the use of social media.

Unilateral GPS tracking via cell phone app violates Collective Agreement

In Brick and Allied Craft Union of Canada & Brick and Allied Craft Union of Canada, Local 31 v Terrazzo, the Ontario Labour Relations Board found that unilaterally implementing a digital timesheet tracking system on employee’s personal phones was in violation of two provisions of the collective agreement and also an unreasonable exercise of management rights. Tsheets is a digital timesheet app downloaded onto employee smart phones to allow them to electronically “clock in” and out of their shifts. The employer unilaterally implemented a digital timesheet app called “Tsheets” in November 2018. In response the Union brought a grievance application, arguing that this change violated the Collective Agreement in a number of ways.

The operation of the app, and its use by the employer, was summarized by the Board:

3. Tsheets is a digital timesheet application that allows employees to electronically record the time they start and end their workday on a cellular phone. An employee “clocks in” at the beginning of his shift and “clocks out” at the end. It requires the use of cellular data from the employee’s personal cellular plan.

4. In order to use Tsheets, the employee must download the Tsheets app on his smart phone. The employer installed Tsheets software on its computer in order to receive the data from the Tsheets app. The Tsheets app sends all the recorded data, through the Tsheets servers, to the employer.

5. Once a job is set up by the employer, Mr. Emiliani assigns a job number and job site in the Tsheets software. When the employee starts work, he is expected to open the app, use the pull-down menu to find the appropriate job number, and “clock in”.

6. The app is also capable of tracking the location of the employee (or more accurately, the location of the employee’s phone) through Global Positioning System (“GPS”) technology. By default, the GPS option on the app is enabled and transmits the location to the employer. If the employee disables the GPS on their phone, Tsheets is not capable of tracking the GPS.

7. To explain this in greater detail, if the GPS option is enabled on the employee’s phone, the phone sends GPS data to Tsheets while the employee is “clocked in”. That data is then sent, in real time, to the employer…

11. Tsheets allows the employer to determine which features it wants to use and which features should be unavailable. For example, the employer had the option of deactivating the GPS function. That is, even if the employee’s GPS function was activated on his phone, the employer could have made the settings for Tsheets to not track the employee’s GPS. It chose not to do so. The settings of Tsheets allowed GPS tracking for any employee who did not manually turn off the GPS tracking on their phone.

The employer had implemented use of the app to eliminate the time necessary to physically travel and collect time sheets in order to manage payroll. The Union objected that this change violated the Collective Agreement in five ways, only two of which the Board found it necessary to decide.

First, the Collective Agreement specifically considered the submission of timesheets, and provided that “A timesheet may be submitted by telephone, email or fax.” This language was exhaustive, and so requiring the use of Tsheets was inconsistent with the Collective Agreement.

Second, the Collective Agreement prohibited the use of personal cell phones during working hours on any project. The use of Tsheets, on the other hand, required the use of a personal cell phone during working hours, and so again was inconsistent with the Collective Agreement.

More importantly, however, the Board found that even if the use of Tsheets were not inconsistent with the Collective Agreement, it was an unreasonable exercise of management rights. First, the unilateral implementation of Tsheets forced employees to own, carry and use their personal cell phones at work. Second, employees were forced to pay for their own data in using Tsheets: the Board noted that:

45…While the employer asserted that employees can utilize Tsheets on public wifi networks (e.g. at a local restaurant), this seems impractical in the circumstances, since the employee is required to “clock out” at the end of their shift. To require an employee to relocate to an area where wifi was publicly available is not a practical response to avoid the use of personal data.

Most importantly, the Board found there to be notable privacy concerns with Tsheets:

46. Third, the storage, use and potential sharing of data by Tsheets is also of concern because the employees are not informed by the employer about how such data is protected or used. If looked at in isolation, the collection of “clocked in” and “clocked out” times might not give rise to any concerns. But, when that data is combined with GPS, including locations during breaks and lunches, a more complete picture of employee behavioural characteristics can be seen by Tsheets and any third party provider authorized by Tsheets to view the information.

47. It is unclear to me whether data such as facial recognition (a security option), passwords, Information Protocol (“IP”) addresses, online cookies, or other cell phone usage is tracked and stored by Tsheets. The Privacy Statement of Tsheets states that it collects device information, usage information, location information, content, camera and contacts, information from cookies and local storage. There was no evidence about the collection or use of this information. Thus, I am unable to draw conclusions about the privacy implications. It is obvious that there could be real privacy issues with allowing Tsheets (and possibly the employer) to having access to the data collected and controlled on personal cell phones.

48. It is also concerning that the possibility of such information being shared with third parties is not addressed in the employer’s policy or part of a detailed explanation to the union and the employees. The sharing of personal information with third parties is an issue employees would be reasonably concerned about and I would have expected the employer to thoroughly address it.

In addition, Tsheets automatically sent notifications to employees reminding them to “clock in”, but these notifications were sent to all employees, including those who were not scheduled to work or those who were off due to illness. This might have been reasonable if the employer issued cell phones to its employees, but “it is unreasonable for an employer to unilaterally maintain some control (e.g. sending notifications) over the personal cell phones of the employees” (para 51). Accordingly, the grievance was decided in favour of the union.

US court hold that “thumbs-up” emoji did not amount to consent for removal of child from country

In Bardales v. Lamothe, Judge Eli Richardson of the US District Court for the Middle District of Tennessee (Nashville) presided over an application under the Hague Convention on the Civil Aspects of Child Abduction, in which a Honduran father alleged that his child’s mother (from whom he was separated) had abducted their child from Honduras and taken him to the US, in violation of the custody arrangement in place. The father proved to the court’s satisfaction that he had been exercising his parental and custodial duties at the time the child was removed, and that his custodial rights under Honduran law had been breached by the mother’s removal of the child.

However, the mother defended, in part, on the basis that while the father had not consented to her removing the child, he had subsequently acquiesced to her keeping the child in the US permanently. In support of this she produced a series of text messages, in one of which she told the father that they had arrived in the US and he responded with a “thumbs-up” emoji. The father testified that this only meant that he was indicating that she should enjoy the company of her mother (with whom she was staying), and not that he was consenting to the child remaining there. In another text exchange the father stated that he was going to “work hard, get his papers and come to the United States,” though the father testified that he meant he was intending to come to the US to retrieve his son, and not to live there. In still another, the mother texted the father that their son “would be an important man” in the US, to which the father replied, “perfect.”

Judge Richardson found that as evidence of acquiescence, these texts were “ambiguous, at best,” and any inference of acquiescence that could be drawn was rebutted by the fact that the father had consistently made efforts to get the child back, in part by enlisting the help of the Honduran authorities and, eventually, bringing the court application. The mother had not proven, on a preponderance of the evidence, that the father had acquiesced. In the result, the court ordered that the child be returned to Honduras.

Bitcoin cleared by Ontario Securities Commission to issue final prospectus

In [Re] 31Q Corp. and the Bitcoin Fund, Commissioner Lawrence P. Haber heard a review in which Bitcoin Fund and 31Q Corp. requested that he set aside a decision of the Director of the Ontario Securities Commission’s Investment Funds & Structured Products branch denying a receipt for Bitcoin Fund’s final prospectus. The effect of the decision was that Bitcoin could not distribute its securities to the public in Ontario. The Bitcoin Fund is a non-redeemable public investment fund that plans to invest substantially all of its assets in bitcoin (using blockchain to record all transactions), while 3IQ manages the fund.

Noting that the decision was not about the merits of the plan as a potential investment and that it was not the Commission’s function to inoculate potential investors against risk, Commissioner Haber made some interesting preliminary remarks:

[5] This application is not about the merits of bitcoin as an investment. As with other classes of assets or undertakings or businesses underlying an issuer, the investment potential of these underlying assets, undertakings and businesses are outside the scope of securities regulation.

[6] Bitcoin is a novel asset in an emerging and evolving market. It is a risky asset. Markets for novel asset classes and securities evolve over time. Emerging markets for securities and asset classes look and feel very different from mature markets. As markets evolve and mature, they change, either through the efforts of the market participants or through government intervention or regulation, or both.

[7] Some novel asset classes and securities products fail. They become tulip bulbs or dot.com’s. Others succeed and become gold or the next great technology.

The decision below had been based in the Commission’s “broad, but not infinite” public interest jurisdiction, under which staff had raised three operational risks relating to the project:

A) Valuation and Market Manipulation

Bitcoin is a commodity, not an equity or other security and therefore the bitcoin market should be examined like other commodity markets as opposed to the standards applicable to securities markets (para 80). Market manipulation is a risk in all commodity markets (para 80), and the IFSP staff was not successful in demonstrating that bitcoin is more susceptible to manipulation than other commodity products (and not in the public interest).

B) Safeguarding of the Fund’s Assets

Bitcoin can be stolen and lost like other valuable commodities (para 85). However, the Bitcoin Fund will use a regulating Canadian trust company as its custodian (Cidel Trust Company) as well as a New York State trust company.as a sub-custodian (Gemini Trust Company, LLC), which is regulated by New York State. The safeguards in place with these two custodians, and reputable reports indicate that they have effective internal controls and cybersecurity practices, as well as disaster recovery plans (paras 87, 88).

C) Auditability of the Fund’s Financial Statements

“Investment funds that are reporting issuers are required to file financial statements that have been audited and contain an auditor’s report. When an investment fund relies on a service organization, the controls at the service organization are relevant to the investment fund’s audit.” (para 89)

Commissioner Haber concluded that the companies had a reputable auditor in place, and one which had experience auditing with regard to crypto-currencies. The operational risks identified were concerned not with the structure or management of the Fund, but with the asset itself. There are other means of acquiring bitcoin, and a ban by the Commission would not protect investors from the “unfair, improper or fraudulent practices” from which it seeks to protect the public from. The denial of the fund would also fail to promote fair and efficient capital markets and confidence in those markets. Accordingly, he held that the Director’s decision was set aside and the receipt for the final prospectus was ordered to be issued.

(with a contribution from Ella Hantho)