Supreme Court of Canada File No. 35682 IN THE SUPREME COURT OF CANADA (ON APPEAL FROM THE COURT OF APPEAL FOR ONTARIO) BETWEEN: CHEVRON CORPORATION and CHEVRON CANADA LIMITED Appellants (Respondents/Appellants by Cross-Appeal) -and- DANIEL CARLOS LUSITANDE YAIGUAJE, BENANCIO FREDY CHIMBO GREFA, MIGUEL MARIO PAYAGUAJE PA YAGUAJE, TEODORO GONZALO PIAGUAJE PAYAGUAJE, SIMON LUSIT ANDE Y AIGUAJE, ARMANDO WILMER PIAGUAJE PAYAGUAJE, ANGEL JUSTINO PIAGUAJE LUCITANTE, JAVIER PIAGUAJE PAYAGUAJE, FERMIN PIAGUAJE, LUIS AGUSTIN PAYAGUAJE PIAGUAJE, EMILIO MARTIN LUSITANDE YAIGUAJE, REINALDO LUSITANDE YAIGUAJE, MARIA VICTORIA AGUINDA SALAZAR, CARLOS GREFA HUATATOCA, CATALINA ANTONIA AGUINDA SALAZAR, LIDIA ALEXANDRIA AGUINDA AGUINDA, CLIDE RAMIRO AGUINDA AGUINDA, LUIS ARMANDO CHIMBO YUMBO, BEATRIZ MERCEDES GREFA TANGUILA, LUCIO ENRIQUE GREFA TANGUILA, PATRICIO WILSON AGUINDA AGUINDA, PATRICIO ALBERTO CHIMBO YUMBO, SEGUNDO ANGEL AMANTA MILAN, FRANCISCO MATIAS ALVARADO YUMBO, OLGA GLORIA GREFA CERDA, NARCISA AIDA TANGUILA NARVAEZ, BERTHA ANTONIA YUMBO TANGUILA, GLORIA LUCRECIA T ANGUILA GREFA, FRANCISCO VICTOR TANGUILA GREF A, ROSA TERESA CHIMBO TANGUILA, MARIA CLELIA REASCOS REVELO, HELEODORO PATARON GUARACA, CELIA IRENE VIVEROS CUSANGUA, LORENZO JOSE ALVARADO YUMBO, FRANCISCO ALVARADO YUMBO, JOSE GABRIEL REVELO LLORE, LUISA DELIA TANGUILA NARVAEZ, JOSE MIGUEL IPIALES CHICAIZA, HUGO GERARDO CAMACHO NARANJO, MARIA MAGDALENA RODRIGUEZ BARCENES, ELIAS ROBERTO PIYAHUAJE PAYAHUAJE, LOURDES BEATRIZ CHIMBO TANGUILA, OCTAVIO ISMAEL CORDOVA HUANCA, MARIA HORTENCIA VIVEROS CUSANGUA, GUILLERMO VINCENTE PAYAGUAJE LUSITANTE, ALFREDO DONALDO PAYAGUAJE PAYAGUAJE and DELFIN LEONIDAS PAYAGUAJE PAYAGUAJE Respondents (Appellants/Respondents by Cross-Appeal) REPLY FACTUM OF THE APPELLANT, CHEVRON CANADA LIMITED TO THE FACTA OF THE INTERVENERS (Pursuant to the Order of the Honourable Justice Wagner dated August 22, 2014) GOODMANS LLP NORTON ROSE FULBRIGHT CANADA LLP Bay Adelaide Centre Suite 1500 333 Bay Street, Suite 3400 45 O'Connor Street Toronto, Ontario M5H 2S7 Ottawa, Ontario KIP 1A4 Benjamin Zarnett Sally Gomery Suzy Kauffman Tel: (613) 780-8604 Peter Kolla Fax: (613) 230-5459 Tel: (416) 979-2211 Fax: (416) 979-1234 Email: sally. [email protected] Email: [email protected] Agents for the Appellant [email protected] (Respondent/Appellant by Cross-Appeal), [email protected] Chevron Canada Limited Counsel for the Appellant (Respondent/Appellant by Cross-Appeal), Chevron Canada Limited ORIGINAL TO: THE REGISTRAR OF THE SUPREME COURT OF CANADA COPIES TO: LENCZNER SLAGHT ROYCE SMITH GOWLING LAFLEUR HENDERSON LLP GRIFFINLLP 160 Elgin Street Suite 2600, 130 Adelaide Street West Suite 2600 Toronto, Ontario M5H 3P5 Ottawa, Ontario KIP 1C3 Alan J. Lenczner, Q.C. Ed J. VanBemmel Tel: (416) 865-3090 Tel: (613) 788-3500 Fax: (416) 865-2844 Brendan Morrison Email: [email protected] Tel: (416) 865-3559 Fax: (416) 865-9010 Agents for the Respondents (Appellants/Respondents by Cross Appeal) Email: [email protected] [email protected] Counsel for the Respondents (Appellants/Respondents by Cross-Appeal) NORTON ROSE FULBRIGHT CANADA LLP NORTON ROSE FULBRIGHT CANADA LLP Suite 3 700, 400 Third A venue SW Suite 1500 Calgary, Alberta T2P 4H2 45 O'Connor Street Ottawa, Ontario KIP 1A4 Clarke Hunter, Q.C. Tel: (403) 267-8292 Sally Gomery Anne Kirker, Q.C. Tel: (613) 780-8604 Tel: (403) 267-9564 Fax: (613) 230-5459 Fax: (403) 264-5973 Email: sally. [email protected] Email: [email protected] [email protected] Agents for the Appellant (Respondent/Appellant by Cross-Appeal), NORTON ROSE FULBRIGHT CANADA LLP Chevron Corporation Suite 3800, Royal Bank Plaza, South Tower 200 Bay Street, P.O. Box 84 Toronto, Ontario M5J 2Z4 Robert Frank Tel: (416) 202-6741 Fax: (416) 360-8277 Email: [email protected] Counsel for the Appellant (Respondent/Appellant by Cross-Appeal), Chevron Corporation SISKINDS LLP SUPREME ADVOCACY LLP 680 Waterloo Street, P.O. Box 2520 340 Gilmour Street, Suite 100 London, Ontario N6A 3V8 Ottawa, Ontario K2P OR3 A. Dimitri Lacaris Marie-France Major Tel: (519) 660-7872 Tel: (613) 695-8855 Fax: (519) 672-6065 Fax: (613) 695-8580 James Yap Tel: (519) 660-7872 Email: [email protected] Fax: (519) 672-6065 Agents for the Intervener, Justice and Corporate Email: [email protected] Accountability Project [email protected] Counsel for the Intervener, Justice and Corporate Accountability Project KLIPPENSTEINS GOWLINGS LAFLEUR HENDERSON LLP 160 John Street, Suite 300 160 Elgin Street, Suite 2600 Toronto, Ontario M5V 2E5 Ottawa, Ontario KIP 1C3 Murray Klippenstein Jeffrey W. Beedell Tel: (416) 598-0288 Tel: (613) 786-0171 Fax: (416) 598-9520 Fax: (613) 788-3587 W. Cory Wanless Tel: ( 416) 598-0288 Email: [email protected] Fax: (416) 598-9520 Agent for the Intervener, International Human Email: murray [email protected] Rights Program, University of Toronto Faculty of [email protected] Law, Mining Watch Canada, and the Canadian Centre for International Justice UNIVERSITY OF TORONTO FACULTY OF LAW 84 Queen's Park Toronto, Ontario M5S 2C5 Renu Mandhane Tel: (416) 946-8730 Fax: (416) 978-3716 Email: [email protected] Counsel for the Intervener, International Human Rights Program, University of Toronto Faculty of Law, MiningWatch Canada, and the Canadian Centre for International Justice INDEX · - i - TABLE OF CONTENTS Tab No. 1. Reply Factum of the Appellant, Chevron Canada Limited, to the Facta of the Interveners, dated October 27, 2014 2. Welling, Bruce, Corporate Law in Canada: The Governing Principles, 3rd ed. (Scribblers Publishing: Mudgeeraba, Queensland, 2006) (excerpt) 3. Prest v. Petrodel Resources Ltd, [2013] UKSC 34 (excerpt) 4. Canada Business Corporations Act, R.S.C. 1985, c. C-4 (excerpt) 5. Kazemi Estate v. Islamic Republic of Iran, 2014 SCC 62 (excerpt) 6. Harvard College v. Canada, 2002 SCC 76 (excerpt) 7. 65302 British Columbia Ltd. v. Canada, [1999] 3 S.C.R. 804 (excerpt) TAB 1 - 1 - 1. Both interveners argue that there is no jurisdiction requirement for an action for recognition and enforcement of a foreign judgment. In so far as the argument is aimed at Chevron Corporation ("Chevron Corp."), Chevron Canada Limited ("Chevron Canada") relies on Chevron Corp.'s reply factum at paragraphs 6-14. But the argument has no merit in relation to Chevron Canada, which is not a party to the foreign judgment. In essence, the interveners' argument would confer universal jurisdiction on Ontario courts to hear claims on any foreign judgment against persons unconnected to the foreign judgment or to Ontario. 2. The joint intervener, International Human Rights Program, University of Toronto Faculty of Law, MiningWatch Canada and The Canadian Centre for International Justice (collectively, the "Joint Intervener"), at paragraphs 5(b) and 15 of its factum, suggests that corporate separateness issues can be ignored on a jurisdiction motion. The Joint Intervener misses the point. Jurisdiction in Ontario over Chevron Corp. and Chevron Canada is, according to the plaintiffs, premised on there being a lack of corporate separateness between them. It is only its connection to Chevron Canada that links Chevron Corp. to Canada, and it is only its connection to Chevron Corp. that links Chevron Canada to the Ecuadorian judgment. Accordingly, the plaintiffs have made lack of corporate separateness an allegation essential to jurisdiction, and thus an allegation that has to be examined at the jurisdiction stage to see if the plaintiffs have a good arguable case on the point, in accordance with the approach endorsed by this Court in Van Breda and the Ontario Court of Appeal in Rothmans. Club Resorts Ltd v. Van Breda, 2012 SCC 17 at para. 72; Joint Book of Authorities ofthe Appellants ("JBA''), Vol. I, Tab 23 Ontario v. Rothmans Inc., 2013 ONCA 353 at paras. 54, 106-107, leave to appeal to S.C.C. refused, 2013 CarswellOnt 17913; JBA, Vol. II, Tab 59 3. The motion judge, applying settled principles, found no arguable case to ignore corporate separateness. The Joint Intervener asserts at paragraph 16 of its factum that "courts have lamented the lack of consistent principles governing piercing the corporate veil", but the authorities it cites do not stand for that proposition. In fact, they say the opposite. For example, Clarkson v. Zhelka, a case from 1967 cited by the Joint Intervener, articulated principles consistent with those applied by the motion judge, namely that separate corporate identity is a legislative creation that must be respected by courts: - 2- No doubt his creditors are disappointed at their inability to have access to his corporate assets and particularly where he himself is reaping some financial benefit therefrom. But that must of necessity be, so long as the Legislature provides for and encourages the formation of private corporations. Without such, of course, enterprise and business adventure would be stifled. Limited liability is one of the landmarks of incorporation. Clarkson Co. v. Zhelka, [1967] 2 O.R. 565 at para. 77 (H.C.J.); JBA, Vol. I, Tab 22 Motion Reasons, paras. 93, 101-106; Joint Appellants' Record ("JAR"), Vol. I, Tab 2, p. 43, 47-48 4. Although some legal scholars may have discussed the appropriate scope of corporate veil piercing, others have argued that courts have no basis to pierce the corporate veil because there is an absence of statutory authority to do so. The Joint Intervener incorrectly