Canadian Appeals Monitor Information and Commentary on Upcoming and Recent Appeal Court Decisions

This Week at the SCC (14/06/2013)

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

Posted in This Week at the SCC
Kirsten Thompson

The Supreme Court of Canada released two judgments and heard one appeal likely to be of interest to Canadian business and professionals.

In Edward Sumio Nishi v. Rascal Trucking Ltd. (B.C.), 2013 SCC 33, the Supreme Court declined to depart from the long standing doctrine of purchase-money resulting trust in favour of an approach based on unjust enrichment.  The Supreme Court went on to hold that both the transferor’s and transferee’s intentions will be taken into account in determining whether a resulting trust in favour of the transferor is created.

The question before the Supreme Court was whether the doctrine of unjust enrichment is superior to the purchase-money resulting trust for resolving disputes where one party contributes money to the purchase of property but does not acquire legal title. A further question was whether the appellant was unjustly enriched by the respondent’s contribution to the purchase of the property. The law presumes that unrelated parties intend for the person who advanced the funds to hold a beneficial interest in the property in proportion to that person’s contribution.  This presumption can be rebutted if the recipient of the property proves, on a balance of probabilities, that at the time of the contribution, the person making the contribution intended to make a gift to the person taking title.  While rebutting the presumption requires evidence of the intention of the person who advanced the funds at the time of the advance, after the fact evidence can be admitted so long as the trier of fact is careful to consider the possibility of self-serving changes in intention over time.

The Supreme Court sided with the trial judge, reaffirming the doctrine of purchase-money resulting trust and holding that when making a gratuitous transfer of property, the person who makes the transfer must have intended either to pass the beneficial interest (a gift) or retain it (a trust). Because the transferor’s and transferee’s intentions will be taken into account in determining whether a resulting trust in favour of the transferor is created, parties will need to explicitly document any gratuitous transfers.

In Communications, Energy and Paperworkers Union of Canada, Local 30 v. Irving Pulp & Paper, Ltd., 2013 SCC 34, the Supreme Court in a 6-3 decision held that mandatory random alcohol testing policies in dangerous workplaces cannot be unilaterally imposed by the employer upon unionized employees occupying safety-sensitive positions absent evidence of enhanced safety risks, such as a general problem with substance abuse at the workplace.

The Court also heard arguments in Information and Privacy Commissioner, et al. v. United Food and Commercial Workers, Local 401, et al., an appeal from the Alberta Court of Appeal. Central to this appeal is the balance to be struck between the privacy rights of individuals as against the right of a union to collect personal information as part of a tactic during a lawful strike.

The respondent union took pictures and videos of individuals located near and/or crossing a picket line during a lawful strike. The union subsequently placed these images on posters displayed at the picket line and in newsletters and leaflets available to union members and the public. Complaints were filed with the appellant Information and Privacy Commissioner of Alberta pursuant to the Personal Information Protection Act, S.A. 2003, c. P 6.5 (“PIPA”). An adjudicator appointed by the Privacy Commissioner held that PIPA prohibited the union from collecting, using and disclosing such photos and recordings without the consent of the individuals in question. The union appealed, claiming that PIPA violate s. 2(b) of the Canadian Charter of Rights and Freedoms insofar as it restricts a union’s ability to collect, use or disclose personal information during the course of a lawful strike. Also at issue was the an administrative tribunal’s role when its enabling legislation is the subject of a constitutional challenge and it does not have the power to decide the constitutional question.