Case - Canada - Choc v. Hudbay, Chub v. Hudbay and Caal v. Hudbay

Choc v. Hudbay, Chub v. Hudbay and Caal v. Hudbay

Summary of facts

In 2010 and 2011, three cases involving Guatemalan plaintiffs were launched in the Ontario Superior Court against Canadian mining company Hudbay Minerals Inc. One of the cases also names Hudbay’s Guatemalan subsidiary as a defendant. The lawsuits allege that between 2007 and 2009, security personnel employed by Hudbay’s subsidiary at its Fenix nickel mine in Guatemala killed a local community leader, seriously wounded another local resident, and gang-raped 11 women.

In addition to the civil case in Canada, criminal proceedings were launched in Guatemala against Hudbay’s former head of mine security. The trial concluded in January 2021 when the defendant pled guilty to the murder of a local community leader and the shooting of a local resident, who was paralysed as a result. The Guatemalan case will likely have significant ramifications for the Canadian litigation, where Hudbay has argued that the head of security did not shoot either man.

Timeline

2013 Ontario Superior Court

Jurisdiction

Yes

Applicable Law

Ontario provincial law (in Canada)

Legal issues

Hudbay brought a preliminary motion to strike the cases on the grounds that they disclosed no cause of action. Hudbay argued that the plaintiffs were attempting to assign it responsibility for the acts and omissions of its Guatemalan subsidiary, a legal argument that fails to respect the principle of separate legal personality (i.e. an attempt to lift the corporate veil).

Ruling / Outcome

In 2013, the Ontario Superior Court ruled in favour of the plaintiffs and denied the company’s motion to strike. The judge determined that the plaintiffs’ claims are based on the direct negligence of the parent company. The plaintiffs did not seek to assign liability to Hudbay for the acts and omissions of its subsidiaries, but rather for the company’s own acts and omissions. For this reason, the court found the claims are consistent with the doctrine of separate legal personality and can proceed.
This ruling set an important precedent with respect to parent company liability as it marked the first time in Canada that cases involving foreign plaintiffs who allege to have suffered harm caused by a Canadian company’s overseas operations were cleared to proceed to trial.
In 2019, plaintiffs amended their lawsuit to add new details of abuse. The Ontario Superior Court judge accepted this amendment in a ruling in January 2020.

Court case