Canada: This Week At The SCC

Cases Decided

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

In Newfoundland and Labrador v. AbitibiBowater Inc., 2012 SCC 67, the majority of the Court held that environmental protection orders issued under provincial legislation, which required an insolvent company to undertake remediation measures but which were not expressed in monetary terms, nonetheless amounted to "claims" under the Companies' Creditors Arrangement Act ("CCAA") that could be stayed and subject to a claims procedure order in the context of CCAA proceedings. The Court observed that not all environmental protection orders will qualify as claims under the CCAA, only those which can be treated as monetary claims pursuant to the following three-part test: (1) there is a debt, liability or obligation owing to a creditor; (2) the debt or obligation is incurred before the debtor becomes bankrupt; and (3) it is possible to attach a monetary value to the debt, liability or obligation. These requirements were met on the facts before the Court, since: (1) a regulatory body had exercised its enforcement power against the debtor, thus emerging as a "creditor"; (2) the environmental damage caused by the debtor occurred before the time of the CCAA proceedings; and (3) even though the existence of a monetary claim remained contingent, since the regulatory body had not yet formally exercised its power to ask for the payment of money, there was sufficient certainty that the regulatory body would ultimately perform remediation work and assert a monetary claim against the debtor. The Court also rejected the argument that Parliament lacked the constitutional authority to subject environmental protection orders issued under provincial legislation to the federal CCAA. We discussed the AbitibiBowater case in a previous post.

Cases Heard

The Court heard arguments in two cases of interest this week, and reserved judgment in each.

The first, an appeal from Ediger v. Johnston, 2011 BCCA 253, concerns the circumstances in which the "material contribution" test for causation should be applied in preference to the "but for" causation test, and whether a trial judge may draw an inference of causation when both parties have led expert evidence on the issue. We discussed the Ediger case in a previous post. The oral arguments before the Court may be viewed here.

The second case is an appeal from Irving Pulp & Paper Ltd. v. Communications, Energy and Paperworkers Union of Canada, Local 30, 2011 NBCA 58. The appeal involves whether an employer may adopt a random alcohol testing policy for unionized employees holding safety-sensitive positions in an inherently dangerous workplace.

Leave Applications Decided

The Court did not grant leave to appeal in any cases this week, but refused leave in several cases of interest, including the following:

1) Ma v. Ma, 2012 ONCA 408, in which the Ontario Court of Appeal held that a cause of action for oppression under business corporations legislation could be assigned by a minority shareholder to another party, alongside the assignment of the shares (and the contractual rights in them) to which the oppression claim related.

2) Canada v. South Yukon Forest Corp., 2012 FCA 165, a case we discussed in a previous post, where the Federal Court of Appeal dismissed claims in negligence, negligent misrepresentation and breach of contract against the federal Crown after the Department of Indian Affairs and Northern Development promised the plaintiffs there would be an adequate long-term supply of timber for a mill, but an agreement ensuring such supply was within the discretion of the Governor in Council and was never forthcoming.

3) BAE-Newplan Group Ltd. v. Dalton, 2012 NLCA 21, where the Newfoundland and Labrador Court of Appeal struck out negligent misrepresentation, deceit and oppression claims against several corporate directors, on the basis that the plaintiff failed to plead sufficient facts to establish the personal liability of the directors apart from that of the corporations on whose behalf they were acting.

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