Canadian Appeals Monitor

Information and Commentary on Upcoming and Recent Appeal Court Decisions

The Supreme Court of Canada provides limited guidance on the constitutionality of immunity clauses for tribunals

Posted in Charter of Rights
Patrick Williams

In Ernst v. Alberta Energy Regulator, 2017 SCC 1, the Court split 4-4-1 over the constitutionality of an immunity clause in favour of the Alberta Energy Regulator (the “Board”). The case was resolved largely on procedural grounds. For example, Justice Abella—the “1” in the 4-4-1 split—held that Ms. Ernst’s failure to provide notice of her constitutional challenge to the immunity clause was fatal to her claim. Meanwhile, the remaining eight judges divided over the issue of whether to accept Ms. Ernst’s concession that the immunity clause actually barred her claim against the Board. As a result, the Court largely left the constitutionality of immunity clauses to another day and Ernst has questionable precedential value.

Background

The Board is a quasi-judicial tribunal that regulates the oil and gas industry in Alberta and has a specific process for communicating with the public and hearing public complaints. Ms. Ernst frequently criticized the Board. In response, the Board excluded Ms. Ernst from its public complaints process and instructed its staff not to communicate with her.

Ms. Ernst alleged that the Board thereby breached her Charter s. 2(b) right to freedom of expression and sought Charter damages. However, the Board is protected by an immunity clause: Energy Resources Conversation Act, R.S.A. 2000, c. E-10, s. 43.

The Board applied to strike Ms. Ernst’s claim on the basis of the immunity clause. In response, Ms. Ernst argued that the immunity clause was unconstitutional because it prevented her from bringing a claim for Charter damages. However, Ms. Ernst did not raise that argument in the courts below. Accordingly, the Court considered three issues:

  1. whether it was plain and obvious that the immunity clause barred Ms. Ernst’s claim;
  2. whether it was plain and obvious Charter damages could not be an appropriate remedy for a Charter breach by the Board; and
  3. whether Ms. Ernst’s failure to provide notice of her constitutional challenge was fatal to her claim.

The 4-4-1 split

Justice Cromwell (joined by Justices Karakatsanis, Wagner, and Gascon) only considered the first two issues. First, Cromwell J. accepted Ms. Ernst’s concession that the immunity clause, on its face, barred her claim for Charter damages. Second, Justice Cromwell held that Charter damages could never be an appropriate remedy for a Charter breach by the Board. On this issue, Justice Cromwell held that judicial review was an alternative and more effective remedy for Charter breaches by the Board and that allowing claims for Charter damages against a quasi-judicial tribunal like the Board would distract it with time-consuming litigation and result in a “chilling effect” on its decision-making. In the result, Justice Cromwell struck out Ms. Ernst’s claim.

Chief Justice McLachlin and Justices Moldaver and Brown (joined by Justice Côté) dissented. Addressing the issues in the reverse order from Cromwell J., they held that it was possible that Charter damages could be an appropriate remedy against the Board given the novelty of Ms. Ernst’s claim. In response to Cromwell J., the dissent was not satisfied that judicial review would be an effective remedy and held that there was no reason to immunize state actors from Charter damages when they were not performing adjudicative functions. The dissent also did not accept Ms. Ernst’s concession and found that the relationship between the immunity clause and the Charter was not plain and obvious given the importance and novelty of the issue. In the result, the dissent would have allowed Ms. Ernst’s claim to proceed.

Justice Abella focused on the third issue and held that Ms. Ernst’s failure to provide notice of her constitutional challenge was fatal. In doing so, Abella J. agreed with Cromwell J. that it was plain and obvious that the immunity clause barred Ms. Ernst’s claim. However, Abella J.’s conclusion was based on her interpretation of the immunity clause, not Ms. Ernst’s concession. While Abella J. decided the case on that basis, she also stated that it was unlikely that Charter damages could ever be an appropriate remedy against the Board and agreed with Cromwell J. that judicial review would have been the appropriate remedy for Ms. Ernst. Similarly, Abella J. criticized “artificial binary distinctions” between adjudicative and other administrative decisions. In the result, Abella J. joined Cromwell J. in striking Ms. Ernst’s claims.

Significance

In summary, a majority of the Court (per Cromwell and Abella JJ.) found that it was plain and obvious that the immunity clause barred Ms. Ernst’s claim for Charter damages. Yet because Cromwell J. did so on the basis of Ms. Ernst’s concession, the issue arguably remains undecided.

A different majority of the Court (the dissent and Abella J.) did not rule on the constitutionality of the immunity clause or on the issue of whether Charter damages could ever be an appropriate and just remedy against the Board (even though Abella J. suggested they could not). Accordingly, these issues will likely arise again in the future. However, the Court didn’t clarify the framework that might apply in that future case. The dissent and Abella J. both indicated that a government could justify an immunity clause under Charter s. 1, but did not identify the underlying Charter right that an immunity clause might violate.

As a result, Ernst arguably has limited precedential value. On the other hand, all nine judges were supportive of immunizing at least adjudicative decisions from Charter damages claims and a majority of the Court (per Cromwell Abella JJ.) was supportive of immunizing administrative bodies and their employees from Charter damages more generally. Those conclusions may limit the prospects of success for a future constitutional challenge to immunity clauses.

Case Information

Ernst v. Alberta Energy Regulator, 2017 SCC 1

Docket: 36167

Date of Decision: January 13, 2017

The Year Ahead: Ten Top Appeals to Watch in 2017

Posted in Features
Kelli McAllisterSara D.N. Babich

2017

The coming year will see our highest court decide a host of appeals of interest to Canadian businesses and professions. The Appeals Monitor is pleased to present our annual forecast of the top ten appeals expected in 2017.

10Remedies for Breach of Modern Treaties: First Nation of Nacho Nyak Dun v Government of Yukon

This case involves a modern treaty known as the Umbrella Final Agreement (“UFA”) between First Nations in the Yukon, the Crown, and the Yukon Government. Under the UFA, the parties are to engage in a collaborate land use planning process. At issue before the SCC is the remedy for breach of modern treaties and the remedy after quashing a flawed decision.

The UFA establishes a land use planning commission (the “Commission”) for First Nations and the Yukon government with each party having decision-making authority in respect of land use plans. The Yukon government, using its decision-making authority, opted to modify the land use plan. These modifications included a number of substantive changes to the Final Recommended Plan. The Yukon Supreme Court concluded that  the Yukon government’s modifications to the Final Recommended Plan did not respect the planning process and remitted the matter for consultation: 2014 YKSC 69. The Yukon Court of Appeal allowed an appeal in part, and held that the appropriate remedy was return the parties to the point at which the failure began: 2015 YKCA 18. At issue before the SCC will be the appropriate remedy for the breach of the UFA.

This case will represent the latest effort by the SCC to address the honour of the Crown with respect to First Nations, here, in the context of modern treaty provisions. This case could have wide-ranging impacts for the ongoing reconciliation of Aboriginal and non-Aboriginal Canadians. It is scheduled to be heard on March 22, 2017. Continue Reading

Looking Back – The 10 Most Important Appeals of 2016

Posted in Features
Ryan MacIsaacDextin Zucchi

Top 10 header

 

The Appeals Monitor is pleased to present our annual review of the most significant appellate decisions of the past year. From criminal law to contracts, 2016 was full of exciting developments and we hope that you, our reader, will enjoy these summaries.

10Endean: Justice to Go

In Endean v British Columbia, 2016 SCC 42, the Supreme Court of Canada (“SCC”) addressed whether superior court judges may sit outside their home provinces to hear and decide a motion about a pan-national class action settlement. Endean was at the top of our Appeals to Watch in 2016 list from last year. The lower court decisions were previously discussed here and the SCC decision discussed here. Continue Reading

The Alberta Court of Appeal clarifies the organizing principle of good faith with style

Posted in Case Comments, Contracts
Dextin Zucchi

In Styles v Alberta Investment Management Corporation (“Styles”),[1] the Alberta Court of Appeal provided useful guidance on the application of the organizing principle of good faith in contractual performance, established by the Supreme Court of Canada in its landmark decision Bhasin v Hrynew (“Bhasin”).[2] Since Bhasin, there has been a lack of clarity on how to apply and consider the organizing principle. In Styles, the Alberta Court of Appeal (1) expressly declined to expand the organizing principle to create a “common law duty of reasonable exercise of discretionary contractual powers”, (2) recognized other key limitations to the organizing principle, and (3) confirmed the extent of an employer’s duty of good faith when terminating an employee. Styles is the latest example of an appellate court applying Bhasin with caution and restraint. Continue Reading

The Supreme Court of Canada (Clearly and Expressly) Affirms the Importance of Solicitor-Client and Litigation Privilege

Posted in Case Comments, Privilege
Jessica Laham

In two recent companion decisions, the Supreme Court of Canada affirmed the importance of litigation privilege and solicitor-client privilege to the Canadian legal system. In Lizotte v. Aviva Insurance Company of Canada[1] (Lizotte), the Court recognized litigation privilege as a distinct and fundamental principle of the administration of justice, while in Alberta (Information and Privacy Commissioner) v. University of Calgary[2] (Alberta (Information and Privacy Commissioner)), the Court focused on issues of solicitor-client privilege. These decisions both confirm that for the legislature to abrogate either litigation privilege or solicitor-client privilege, nothing less than clear and express statutory language will suffice. Continue Reading

Business Realities v. Narrow Legalities: The Supreme Court considers the oppression remedy in Mennillo v. Intramodal Inc., 2016 SCC 51

Posted in Case Comments, Corporate Law
Michael O'Brien

In Mennillo v. Intramodal Inc. 2016 SCC 51, the most recent consideration of the oppression remedy by the Supreme Court of Canada (released on November 18, 2016), the majority confirmed the oppression remedy’s equitable purpose, and held that a corporation’s failure to comply with the CBCA[1] does not, on its own, constitute oppression.

This decision, with particular applicability to small, closely held corporations, reiterated oppression remedy principles set out in the 2008 Supreme Court decision of BCE Inc. v. 1976 Debentureholders,[2] that the remedy is concerned with fairness and business realities, rather than narrow legalities.[3] Continue Reading

Indeterminate Liability of Auditors and the Dangers of Partial Summary Judgment

Canadian Imperial Bank of Commerce v Deloitte & Touche, 2016 ONCA 922

Posted in Case Comments, Procedure, Professions
William D. BlackEli MogilLeah Ostler

In a decision released on December 8, 2016, the Ontario Court of Appeal allowed an appeal from partial summary judgment, holding that issues of indeterminate auditor liability should proceed to trial.

Facts

In 1998, an accounting fraud was discovered at Philip Services Corp. (“Philip”), a publicly traded company. The Plaintiffs alleged that Philip’s auditors, Deloitte and Deloitte Touche Tohmatsu (“Deloitte”) gave unqualified opinions in connection with its audits of Philip’s consolidated financial statements for the financial years ending December 31, 1995 and 1996. Continue Reading

English Court of Appeal Rejects the “Organizing Principle of Good Faith”

Posted in Case Comments, Contracts
Paul Davis

The Supreme Court of Canada’s decision in Bhasin v. Hrynew[1] – on which this blog has commented – marked a sea change in Canadian contract law. In Bhasin, the Court recognized an “organizing principle of good faith” in contractual relations that underpins numerous specific doctrines, including, for example, unconscionability and the treatment of discretionary contractual powers.

Continue Reading

Key Banking Decisions of 2016: The Supreme Court of Canada releases its decision in Royal Bank of Canada v. Trang

Posted in Case Comments, Privacy
Daniel G.C. GloverCharles MorganRenee ReicheltBarry SookmanKirsten ThompsonAnna-Marie Manley

A recent article, published by McCarthy Tetrault LLP may be of interest to readers of the Canadian Appeals Monitor blog.

The Supreme Court of Canada released a landmark decision on November 17, 2016 giving important guidance on how Canada’s federal privacy law, the Personal Information Protection and Electronic Documents Act, should be interpreted in Royal Bank of Canada v. Trang, 2016 SCC 50.

Policyholders stay tuned: final word on the LEG 2/96 defective workmanship exclusion yet to come

Posted in Case Comments, Contracts, Insurance
Ariel DeJongLindsay Burgess

As we reported here, the BC Court of Appeal in Acciona Infrastructure Canada Inc. v. Allianz Global Risks US Insurance Company grappled with the proper interpretation of the LEG 2/96 defective workmanship exclusion common in many builder’s risk insurance policies. Applying general principles of contract interpretation the Court held that the exclusion is restricted to denying only those costs that would have been incurred to prevent the damage from happening. Having been unsuccessful on the appeal, the Insurers filed an application for leave to the Supreme Court of Canada. Continue Reading

The Supreme Court of Canada Clarifies the Test and Procedure for Joint Submissions on Sentencing

Posted in Case Comments, Criminal
David PorterAndrew MathesonTrevor Courtis

In R. v. Anthony‑Cook, 2016 SCC 43, the Supreme Court of Canada recently confirmed that trial judges should only depart from a joint submission in very limited circumstances, where the sentence proposed would bring the administration of justice into disrepute, or is otherwise not in the public interest.

Resolution negotiations are a prevalent and necessary feature of our criminal justice system. They allow the Crown and the accused to avoid the uncertainty, stress and legal costs associated with trials where the accused admits guilt and is not exercising his right to make full answer and defence. Resolutions also save the court system precious time, resources, and expenses. Indeed, without resolutions the criminal justice system would collapse under its own weight.[1] Continue Reading

Hamilton City’s Attempt to Stamp Out Community Mail Delivery Ruled Unconstitutional (Sort of)

Posted in Case Comments, Constitutional
Byron ShawHakim Kassam

In response to Canada Post’s announcement that it was restructuring its mail delivery and doing away with home delivery services, the City of Hamilton passed a by-law giving the City control over the installation of equipment on municipal roads, including Canada Post’s community mailbox (“CMB”) delivery systems. Last week, the Ontario Court of Appeal held[1] that the by-law was constitutionally inoperative to Canada Post since it conflicted with the federal Canada Post Corporation Act[2] and the Mail Receptacles Regulations.[3] The Court of Appeal’s decision highlights a tension in the pith and substance jurisprudence between the principle of colourability on the one hand and the motive and purpose of the enacting body on the other. Furthermore, the decision reveals a preference for resolving division of powers disputes through the paramountcy doctrine, which gives rise to a narrower constitutional remedy. Continue Reading

The Ontario Court of Appeal Weighs in on the Jordan Framework for Trial Within a Reasonable Time

Posted in Case Comments, Criminal
Trevor CourtisPeter BradyMichael Rosenberg

As discussed in our previous post, the Supreme Court of Canada recently dramatically altered the framework applicable to the right to a criminal trial within a reasonable time in R. v. Jordan, 2016 SCC 27. This decision has already had a significant impact on the operation of criminal courts in Ontario.

In light of this decision, the Ontario Court of Appeal requested further submissions on two s. 11(b) appeals that had already been argued before the Court under the previous framework. On September 28, 2016, the Court released its decisions in R. v. Manasseri, 2016 ONCA 703 and R. v. Coulter, 2016 ONCA 704. These decisions provide some helpful guidance on how the Courts of Ontario will apply the new framework to “transitional” cases in the system, particularly cases where 1) the delay is just below the presumptive ceilings established in Jordan, and 2) the delay is primarily caused by a co-accused. Continue Reading

Short-Term Parking vs. Long-Term Interests: Applying the Business Judgment Rule to Decisions of Condominium Boards

Posted in Case Comments, Condominium Act, Corporate Law, Securities
Jordan V. Katz

The Ontario Court of Appeal recently considered the application of the oppression remedy provision in the Ontario Condominium Act, 1998, SO 1998, c 19 (the “Act”). In doing so, it engaged in a useful – and rare – discussion of the “business judgment rule” outside of the corporate law context, while reinforcing the basic elements of the rule familiar to corporate and securities law practitioners.

Background Continue Reading

Insureds Score a Big Win at the SCC

Posted in Case Comments, Contracts, Insurance
Ariel DeJongGeoff R. HallHovsep AfarianLindsay Burgess

Policyholders recently won a key victory at the Supreme Court of Canada in Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co. as the Supreme Court clarified the interpretation of a standard form faulty workmanship exclusion clause common in builder’s risk policies.  The decision has wide-reaching significance to other insurance coverage disputes and to contract law generally.

The Supreme Court confirmed that only the cost to redo the faulty work is precluded from coverage by such an exclusion. Builder’s risk, or “course of construction” insurance policies seek to insure against certain defined risks which may occur during the construction process. Such policies generally provide coverage for the owner of the property under construction, the general contractor, and all contractors and subcontractors working on the project. The exclusion at issue in this decision excluded from coverage “the cost of making good faulty workmanship”, but provided an exception for resultant damage (the “Exclusion Clause”). Continue Reading

The Supreme Court of Canada rules that Québec’s farm income stabilization program is not an insurance contract subject to public law rules

Posted in Administrative, Case Comments, Contracts, Supreme Court of Canada
Renée Zatzman

Overview

Two companion decisions of the Supreme Court of Canada were recently released in cases included on our Appeals to Watch in 2016 list, Ferme Vi-Ber inc. v. Financière agricole du Québec, 2016 SCC 34, and Lafortune v. Financière agricole du Québec, 2016 SCC 35.

Both cases involved the interpretation of the same Québec farm producer income stabilization program (the “ASRA Program”) administered by La Financière agricole du Québec (“La Financière), a statutory authority. The appeals focused on whether the ASRA Program should be governed by public administrative law principles or the private rules of contract law. Continue Reading

Ontario Court of Appeal Implies New Prohibition Into Rules of Civil Procedure: Pre-Trial Conference Judges Cannot Decide Summary Judgment Motions in the Same Action

Posted in Case Comments, Procedure
Trevor Courtis

The purpose of a pre-trial conference is to provide parties with a forum to obtain an appraisal from a judge of their respective positions on the outstanding issues between them, and provide an opportunity to openly negotiate a resolution of these issues. The ability of the parties to speak freely without concern that their positions in the litigation will be prejudiced is protected by Rules 50.09 and 50.10 of the Rules of Civil Procedure, which provide that (i) the statements made at a pre-trial conference cannot be used in the proceedings, and (ii) the pre-trial conference judge cannot preside at the trial of the matter: Continue Reading

Procedure Trumps Substance: Alberta Court of Appeal Grants Certification in Warner v Smith & Nephew Inc, 2016 ABCA 223

Posted in Class Actions
Kelli McAllisterRenee Reichelt

A recent article, Procedure Trumps Substance: Alberta Court of Appeal Grants Certification in Warner v Smith & Nephew Inc, 2016 ABCA 223 (“Warner”), published on McCarthy Tétrault’s Canadian Class Actions Monitor blog may be of interest to readers of the Canadian Appeals Monitor blog. Kelli McAllister and Renee Reichelt explore the ongoing tension in certification motions where courts are to provide a meaningful screening device but refrain from assessing the merits of the claim.

In Warner, the Alberta Court of Appeal disagreed on whether to consider if a plaintiff can prove her claims at the certification stage. Justice Slatter, in dissent, noted at paragraph 112 that neither side could prove certain allegations relating to long-term effects of a hip-resurfacing device – neither science nor medicine had resolved the issue: “[i]f the scientists and doctors have been not been able to resolve this issue using the usual scientific methods (lab experiments, long term blind studies, etc.) how is it realistic to think that a trial judge is going to find the answer in a civil trial? A trial judge has no laboratory.” The majority was unmoved. The plaintiff did not need to establish the strength of her claim or whether expert evidence could prove it. Certification is a procedural motion only. Whether leave to appeal to the Supreme Court of Canada will be sought in Warner remains to be seen. However, in Pro-Sys Consultants Ltd v Microsoft Corporation, 2013 SCC 57 the Supreme Court of Canada reaffirmed that certification is a meaningful screening device. How a court can meaningfully screen propose class actions without some consideration of the merits remains a divisive issue in class actions and a fertile ground for further appellate consideration.

Is There a Duty to Renegotiate Contracts in Cases of Hardship?

Posted in Case Comments, Contracts
Gabriel Faure

In Churchill Falls (Labrador) Corporation Ltd c Hydro-Québec, 2016 QCCA 1229 (English translation here), the Quebec Court of Appeal seemed to contemplate that there may exist a duty to renegotiate a long-term contract where unforeseen circumstances arise which amount to hardship; however, the Court found the facts of the case did not give rise to such a situation so there could be no obligation to renegotiate the contract at issue.

The dispute related to a power contract signed in 1969 between Hydro-Québec and the Churchill Falls (Labrador) Corporation Limited (“CFLCo”) whereby CFLCo agreed to supply, and Hydro-Québec agreed to purchase, substantially all of the power produced by the Churchill Falls Generating Station for a total term of 65 years. Following the execution of the contract, the price paid by Hydro-Québec turned out to be markedly lower than the commercial value of the power generated, as a result of increases in energy prices and the emergence of competitive energy markets in North America, although the contract remained marginally profitable for CFLCo. Continue Reading

The SCC Monitor (July 2016)

A Commentary on Recent Legal Developments by the Canadian Appeals Monitor

Posted in Charter of Rights, Civil Procedure/Evidence, Constitutional, Contracts, Insurance, Labour and Employment, The SCC Monitor
Katherine BoothRyan MacIsaac

We may be into the lazy days of midsummer, but the Supreme Court of Canada (“SCC”) has been busy, releasing a number of important decisions in the areas of insurance, contract, labour & employment, constitutional, property, evidence and administrative law.

 

Judgment

Since our last SCC Monitor post, the SCC has released the following judgments of interest: Continue Reading

The SCC Monitor (02/08/2016)

A Commentary on Recent Legal Developments by the Canadian Appeals Monitor

Posted in Intellectual Property, Oil and Gas, Professions, The SCC Monitor
Kosta KalogirosKelli McAllisterSam Rogers

Since our last post, the Supreme Court has granted and denied leave in a few significant cases that will be of interest to our readers.

Leave to Appeal Granted

Auditor Liability: Livent Inc v Deloitte & Touche

The SCC granted leave to appeal from the judgment of the Ontario Court of Appeal in Livent Inc v Deloitte & Touche, 2016 ONCA 11, which is an important decision concerning the liability of auditors for negligence. Continue Reading

Where the Charter Ends: Supreme Court Will Not Hear Appeal on International Cooperation by Securities Regulators

Posted in Case Comments, Charter of Rights, Criminal, International rights, Securities
Adam Goldenberg

If there’s one thing that most non-lawyers know about being questioned by the authorities, it’s that “anything said can and will be used against [you] in court”.[1] And, if you’re already in court, then you can “take the Fifth” and refuse to answer a question whose answer may incriminate you.

Right? Not quite.

The privilege against self-incrimination operates differently in Canada than it does in the United States. Here, there is no “Fifth” for a witness to “take”. Unlike the Fifth Amendment to the U.S. Constitution, the Canadian Charter of Rights and Freedoms does not permit a witness to answer some questions but not others. Instead, it protects the accused from being compelled to testify in a criminal proceeding and prevents a witness’ evidence in one proceeding from being used to incriminate him in another.[2] Continue Reading

Whose Courtroom Is It Anyway – The Latest Instalment of Groia v The Law Society of Upper Canada

Posted in Administrative, Case Comments, Charter of Rights, Constitutional, Professions
Ryan MacIsaac

In a decision of interest to barristers, the Ontario Court of Appeal held that the Law Society of Upper Canada is entitled to deference when regulating a lawyer’s in-court conduct in Groia v The Law Society of Upper Canada, 2016 ONCA 471 (“Groia”). The Court of Appeal affirmed the Law Society’s holding that it is professional misconduct to make allegations of prosecutorial misconduct or that impugn the integrity of opposing counsel, unless the allegations are made in good faith and with a reasonable basis.

Facts

Joseph Groia defended John Felderhof against securities charges brought by the Ontario Securities Commission (“OSC”). Felderhof had been a senior officer and director of Bre-X, a mining company that fraudulently claimed to have discovered a large gold deposit in the 1990s. At the end of his trial, Felderhof was acquitted of all charges (R v Felderhof, 2007 ONCJ 345). Continue Reading

The Supreme Court Protects Accounting Records of Lawyers from the CRA

Posted in Case Comments, Charter of Rights, Privacy, Quebec Court of Appeal, Solicitor-Client Privilege, Tax
Sam Rogers

Solicitor-client privilege is nearly sacrosanct in Canada. The circumstances in which it can be breached are limited and specific. Courts will not abide attempts by the Government to do away with privilege for expediency’s sake or overreach when limiting the application of the privilege. This was recently reinforced by the Supreme Court of Canada in two decisions that considered the CRA’s powers to compel information from lawyers and notaries: Canada (Attorney General) v. Chambre des notaires du Quebec and Canada (National Revenue) v. Thompson. Continue Reading