Canadian Appeals Monitor

Information and Commentary on Upcoming and Recent Appeal Court Decisions

What tangled webs we weave: The BCCA provides guidance on the tort of deceit and exclusion of liability clauses

Posted in Construction and Real Estate, Contracts, Torts
Ryan MacIsaac

The British Columbia Court of Appeal’s decision in Roy v Kretschmer, 2014 BCCA 429 provides guidance on the element of reliance in the tort of deceit. It also holds that a contractual clause limiting liability is unenforceable even where the breaching party did not commit a criminal act or egregious fraud.

This decision is of interest to Canadian businesses because it suggests that where a contract has been breached, the breaching party can be sued in tort for hiding the circumstances of the breach if the non-breaching party relies on the breaching party’s fraudulent silence or misrepresentations. Further, in such circumstances, the breaching party may not be able to rely on the protection of a limitation of liability clause.

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This Week at the SCC (21/11/2014)

A Commentary on Recent Legal Developments by the Opinions Group of McCarthy Tétrault LLP

Posted in This Week at the SCC
Anthony Alexander

This was a busy week at the Court, with the release of one oral decision, and eight leave-to-appeal rulings, all likely to be of interest to Canadian businesses and professionals.

The Court granted an oral decision in British Columbia Teachers’ Federation v. British Columbia Public School Employers’ Association, 2014 SCC 70.  The SCC reversed the ruling of the BCCA on the grounds that the lower court had failed to give adequate deference to an arbitrator’s interpretation of a collective agreement, and had failed to recognize the differences between the purposes underlying pregnancy benefits and parental benefits.

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SCC Delivers Ground-Breaking Decision in Canadian Contract Law

Posted in Contracts
Brandon KainNeil Finkelstein

The Supreme Court of Canada has released a precedent-setting judgment in which it recognized, for the first time, that there is a general organizing principle of good faith in the performance of contracts throughout Canada: Bhasin v. Hrynew, 2014 SCC 71.  The Bhasin case, which was successfully argued by Neil Finkelstein and Brandon Kain of McCarthy Tétrault’s Toronto litigation group, will be very important for Canadian businesses going forward.  As a result of Bhasin, all contracts throughout Canada are now subject to a duty of, at a bare minimum, honest performance, which cannot be excluded by the terms of an agreement.  Businesses will need to carefully consider whether they are discharging this duty when performing their contracts. You can read more about the decision and its impact on McCarthy Tétrault’s website. 

The Second Opinion: “Use it or Lose it” — The BCCA Warns Parties to Act Quickly in Response to a Fundamental Breach (or Suffer the Consequences)

A Commentary on Recent Legal Developments by the Opinions Group of McCarthy Tétrault LLP

Posted in The Second Opinion
Anthony Alexander

A recent ruling of the British Columbia Court of Appeal, A & G Investments Inc. v. 0915630 B.C. Ltd., 2014 BCCA 425, provides a useful primer on the available mechanisms for bringing a contract to an end.  These include:

  1. the committing of a fundamental breach (leading to termination of the agreement if the breach is acted upon by the innocent party);
  2. the triggering of an express termination provision; and
  3. the acceptance by the innocent party of a repudiation (thereby causing the agreement to be rescinded).

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This Week at the SCC (31/10/2014)

A Commentary on Recent Legal Developments by the Opinions Group of McCarthy Tétrault LLP

Posted in This Week at the SCC
Hovsep Afarian

The Supreme Court of Canada this week issued a judgment in one case, granted leave to appeal in one case, and denied leave to appeal in one case of interest to Canadian businesses.

In Thibodeau v. Air Canada, 2014 SCC 67, the Supreme Court of Canada ruled that the claims of airline passengers arising from a breach of an airline’s obligation to provide services in French under the federal Official Languages Act was precluded by the Convention for the Unification of Certain Rules for International Carriage by Air.

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Illegal Contracts Does Not Preclude Discrimination Claims

Posted in Case Comments, Contracts
Marc-Andre Russell

In Hounga v Allen, the U.K. Supreme Court addressed an issue that has not received much attention from the courts recently: the defence of illegality, also called the “ex turpi causa” doctrine. The U.K. Supreme Court had the opportunity to shed light on this defense in the context of employment discrimination towards an illegal immigrant.

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This Week at the SCC (24/10/2014)

A Commentary on Recent Legal Developments by the Opinions Group of McCarthy Tétrault LLP

Posted in This Week at the SCC
Anthony Alexander

The Supreme Court this week issued a number of leave-to-appeal rulings likely to be of interest to Canadian businesses and professionals.  Four such leave-to-appeal requests were refused, and one was remanded.

The following applications were refused:

  • Leave-to-appeal from the Alberta ruling in Somji v. Wilson, 2014 ABCA 35, was dismissed.  The Court of Appeal had affirmed the striking of claims against both (i) a trial judge (who had granted default judgment against the appellants), and (ii) the respondents (who were alleged to have acted deceitfully in obtaining the default judgment). Continue Reading

What’s “New” and What to Do About it? Supreme Court Sets High Bar to Appellate Courts Exercising Discretion to Raise New Issues

Posted in Case Comments, Charter of Rights, Criminal, Procedure
Lisa Jorgensen

In R. v. Mian, the Supreme Court provided extensive comment on when an “appellate court can disrupt the adversarial system and raise a ground of appeal on its own” initiative.

The Court established a new test for the exercise of appellate courts’ discretion to raise a new issue on appeal. Appellate court judges will now ask themselves three questions when deciding whether to raise a new issue: 1) is the issue actually “new”?; 2) would failing to raise the issue “risk an injustice”?; and 3) can the new issue be raised in a way that will be fair to both parties?

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This Week at the SCC (17/10/2014)

A Commentary on Recent Legal Developments by the Opinions Group of McCarthy Tétrault LLP

Posted in This Week at the SCC
Brandon Kain

The Supreme Court of Canada released one judgment this week of interest to Canadian businesses and professions.

In Imperial Oil v. Jacques, 2014 SCC 66, the Court held that a private litigant can request the disclosure of recordings of private communications from third parties to the civil action, which were intercepted by the government during a criminal investigation, without the consent of either of the communicating parties.

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The Second Opinion: “The Class Action…is Frequently Abused” — Judge Posner Provides Unvarnished Commentary on Class Proceedings

A Commentary on Recent Legal Developments by the Opinions Group of McCarthy Tétrault LLP

Posted in The Second Opinion
Anthony Alexander

For the Canadian class actions defence bar — which must occasionally feel disheartened by the unwavering enthusiasm with which our courts have championed class proceedings — the recent ruling in Eubank v. Pella Corporation (7th Cir. June 2, 2014) represents a breath of fresh air from south of the border.

Judge Richard Posner, speaking for a unanimous panel of the Seventh Circuit Court of Appeal, uses blunt and forthright language — alien to a Canadian ear — in acknowledging the risks to justice created by such proceedings.  He places particular emphasis on the inherent conflicts faced by plaintiffs’ class counsel.

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Dead Again: Court of Appeal makes Clear that Certification of Misclassification Overtime Class Actions Remains as Hard as Ever

Posted in Case Comments, Class Actions
Elder MarquesKosta Kalogiros

Last week, the Ontario Court of Appeal released its decision in Brown v. Canadian Imperial Bank of Commerce, upholding the Divisional Court’s decision affirming the dismissal of a certification motion in a proposed “misclassification” overtime class action (previously blogged about in the spring and fall of 2013). The appeal decision is of particular interest as “misclassification” overtime class actions (i.e. class actions alleging that an employer has misclassified employees and managers to avoid overtime pay obligations) were thought, by many observers, to have already been dealt a fatal blow by the Court in its prior decision in McCracken v. Canadian National Railway Company, but a recent certification decision had raised questions about whether that was right.

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This Week at the SCC (03/10/2014)

A Commentary on Recent Legal Developments by the Opinions Group of McCarthy Tétrault LLP

Posted in Case Comments, This Week at the SCC
Hovsep Afarian

The Supreme Court of Canada issued a judgment in one case and denied leave to appeal in another case of interest to Canadian businesses and professions.

In Trial Lawyers Association of British Columbia v. British Columbia (Attorney General), a majority of the Court ruled that a provincial rule requiring the payment of court hearing fees, with limited exemptions, was unconstitutional, as it infringed litigants’ right to access to justice.  The majority of the Court ruled that, in order to pass constitutional muster, such fees cannot be so high as to cause litigants to “sacrifice reasonable expenses in order to bring a claim.”

In Fédération des médecins spécialistes du Québec v. Conseil pour la protection des malades, the Court refused to grant leave to appeal a decision of the Quebec Court of Appeal which had awarded moral damages to a class comprised of patients whose surgeries had been postponed as a result of employment-related protest actions taken by the Federation of Medical Specialists of Quebec against the Minister of Health and Social Services.

Preliminary Dismissal of Meritless Case: A Second Message of Encouragement from the Supreme Court

Posted in Case Comments, Procedure
Pierre-Jerome BouchardAlexandre Boulé

The Supreme Court of Canada recently released an important decision regarding the preliminary dismissal of cases, this time through the doctrine of stare decisis, which dictates that a precedent case rendered by a higher court binds a lower court’s decision.  In Attorney General of Canada v. Confédération des syndicats nationaux, 2014 SCC 49 (“CSN 2014”), Justices Lebel and Wagner, writing for a unanimous Court, confirmed that the action of the plaintiffs unions had no reasonable chance of success and should be dismissed based on stare decisis.  The Court’s decision, in a case originating from Quebec, echoes its earlier ruling in Hryniak v. Mauldin, 2014 SCC 7 (“Hryniak”)[1], promoting procedural tools which can lead to preliminary dismissal of actions.

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This Week at the SCC (26/09/2014)

A Commentary on Recent Legal Developments by the Opinions Group of McCarthy Tétrault LLP

Posted in This Week at the SCC
Anthony Alexander

The Supreme Court of Canada granted leave to appeal in one case, and refused leave in several other cases, likely to be of interest to Canadian businesses and professions.

The Court granted leave from the ruling of the Saskatchewan Court of Appeal in Lemare Lake Logging Ltd v 3L Cattle Company Ltd, 2014 SKCA 35.  That constitutional law decision had addressed the alleged operational conflict between the federal Bankruptcy and Insolvency Act and the Saskatchewan Farm Security Act, regarding the appointment of a receiver.   The Court of Appeal had found the provincial enactment to be inoperative pursuant to the doctrine of federal paramountcy.

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Insider Trading: Securities Commission to Think Twice About Excessive Sanctions and Speculation

Posted in Case Comments, Securities
Kate Findlay

In a rare appellate court decision, the Court of Appeal in Walton v. Alberta (Securities Commission), 2014 ABCA 273, has set aside a decision by the Alberta Securities Commission and has held that any monetary penalties levied must be proportionate to the circumstances of the offender and supported by reasons. The Court also held that findings cannot be based upon speculation and that the Commission had improperly interpreted the “recommending or encouraging” provisions of the Alberta Securities Act (the “Act”) in a decision that is certain to give pause to Securities Commissions across Canada.

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This Week at the SCC (19/09/2014)

A Commentary on Recent Legal Developments by the Opinions Group of McCarthy Tétrault LLP

Posted in This Week at the SCC
Brandon Kain

The Supreme Court of Canada released judgment this week in a trilogy of cases of interest to Canadian businesses and professions.

In Bank of Montreal v. Marcotte, 2014 SCC 55, Amex Bank of Canada v. Adams, 2014 SCC 56 and Marcotte v. Fédération des caisses Desjardins du Québec, 2014 SCC 57, the Court upheld class action trial judgments against several financial institutions in which consumers recovered conversion charges that the defendants imposed upon credit card purchases made in foreign currencies.  The defendants were found not to have complied with certain disclosure required in the Quebec Consumer Protection Act (the “CPA”) with respect to conversion charges assessed by them.  The Court rejected arguments that the relevant CPA provisions were constitutionally inapplicable or inoperative under the doctrines of interjurisdictional immunity and paramountcy, based on their impairment of the federal banking power or conflict with the Bank Act.  As well, the Court clarified that a class action may be authorized even where the representative plaintiff does not have a direct cause of action against each named defendant, so long as he or she is an adequate representative of the class and the actions against each defendant involve identical, similar or related questions of fact.  The Court also addressed the threshold for awarding punitive damages in the class actions context.

For more extensive discussions of the Marcotte trilogy, please see the blog post prepared by my colleague Shaun Finn (focusing on its implications for class actions law), and the legal update prepared by my colleagues James Archer, Ana Badour and Robert Metcalfe (focusing on its implications for constitutional law and financial institutions).

The McCarthy Tétrault Opinions Group consists of members of the firm’s litigation department whose practices focus on written advocacy and the provision of strategic advice and opinions in the context of complex business disputes and transactions.  The members of the Opinions Group are Anthony Alexander, Martin Boodman, Brandon Kain and Hovsep Afarian.

SCC Maintains Permissive View of Quebec Class Actions and confirms the Consumer Protection Act applies to Bank Conversion Charges

Posted in Case Comments, Class Actions
Shaun Finn

The following post of the Canadian Class Actions Monitor blog may be of interest to readers of this blog: SCC Maintains Permissive View of Quebec Class Actions and confirms the Consumer Protection Act applies to Bank Conversion Charges.

In Bank of Montreal v. Marcotte, 2014 SCC 55, the Supreme Court dismissed appeals brought by various banks contesting the applicability of the Quebec Consumer Protection Act (“CPA”) to conversion charges charged by banks of foreign currency transactions. The Court concluded that certain disclosure provisions of the CPA did apply to the conversion charges in issue.  The Court rejected the applicability of the doctrines of inter-jurisdictional immunity and paramountcy invoked by the banks.  The Court concluded that section 12 CPA had been breached (giving rise to a reduction in obligations and punitive damages). The Court also held that a representative plaintiff need not have a cause of action against each of the named defendants, that collective recovery and punitive damages are both available, and that punitive damages may be awarded if the impugned behaviour was “lax, passive or ignorant with respect to consumers’ rights.” Read more

Die Another Day: SCC Adjourns Appeal of National Class Actions Decision Sine Die

Posted in Case Comments, Class Actions, Conflict of Laws, Constitutional
Katherine Booth

Followers of Canadian class actions law will have longer to wait for a decision in the much anticipated appeal from the Manitoba Court of Appeal’s decision in Meeking v. Cash Store Inc. et al., 2013 MBCA 81. The appeal, which was scheduled to be heard on January 12, 2015 and expected to bring clarity on the issue of “national” class actions in Canada, was recently adjourned sine die.

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The Crucial Distinction Between Carrots and Sticks: Incentives and Penalties in the Interpretation of the Interest Act

Posted in Real Property
Timothy Froese

Do incentives for prompt payment in a mortgage, which would be lost on default, run afoul of the prohibition against penalties for non-performance contained in s.8 of the Interest Act? The Alberta Court of Appeal recently split over this question, with the majority saying no. This case could affect the structure of mortgages in Alberta, encouraging the use of “non-penal” devices to ensure performance that may be difficult to distinguish, in operation, from penalties.

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Ontario Court of Appeal Turns Against Cross-Border Securities Class Actions

Posted in Case Comments, Class Actions, Securities
Michael RosenbergSapna Thakker

The following post on the Canadian Class Actions Monitor blog may be of interest to readers of this blog: Ontario Court of Appeal Turns Against Cross-Border Securities Class Actions.

In the recent decision of Kaynes v. BP, PLC, 2014 ONCA 580, the Ontario Court of Appeal stayed a proposed secondary market securities class action on the basis of forum non conveniens.  Writing for a unanimous Court of Appeal, Sharpe J.A. found that Ontario could assume jurisdiction over claims by Canadian residents who purchased their shares on foreign exchanges.  Nevertheless, he held that Ontario should decline jurisdiction on the basis that foreign courts were better positioned to decide claims arising from transactions on foreign exchanges. Read more

 

Time to Leave: Supreme Court to Determine Securities Class Action Limitation Period

Posted in Case Comments, Class Actions, Securities
Elder MarquesMichael O'Brien

The Supreme Court of Canada has granted leave to appeal in a case that will determine how to apply the statutory limitation period for investors in Ontario who decide to sue public issuers and their executives under the Securities  Act.  Given similar legislation in other provinces, the case will be significant for investors and public issuers across Canada.

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A Costly Choice (of law): Determining the damages available for an extra-territorial tort

Posted in Case Comments, Conflict of Laws
Brooke MacKenzie

The recent UK Supreme Court decision in Cox v Ergo Versicherung AG, [2014] UKSC 22, provides helpful commentary and a potentially persuasive precedent for Canadian courts on issues of choice of law, the distinction between substance and procedure in the conflict of laws, and legislative extraterritoriality in circumstances where a cause of action is governed by a foreign law.

Consistent with Canadian law, the UK Supreme Court held in Cox that issues of substance are governed by the law of the place where the injury was sustained, but issues of procedure must be determined by the law of the forum where the case is tried.

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A blockbuster decision in contractual interpretation

Posted in Case Comments, Contracts
Geoff R. Hall

In the world of contractual interpretation, the decision of the Supreme Court of Canada in Sattva Capital Corp. v. Creston Moly Corp. is a blockbuster. Sattva does three significant things. First, it determines that contractual interpretation generally involves a mixed question of fact and law, not a question of law alone. That holding has major implications for appellate review of decisions involving issues of contractual interpretation, and represents the resolution of an issue that had previously divided provincial appellate courts. Second, Sattva emphasizes the importance to contractual interpretation of evidence of the surrounding circumstances or the factual matrix in which a contract is formed. In doing so, Sattva implicitly overrules a 1998 Supreme Court of Canada precedent to the extent that it had downplayed the importance of the factual matrix. Third, Sattva reaffirms a number of principles of contractual interpretation which are well established in Canadian jurisprudence.

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