Canada: Top 5 Civil Appeals From The Court Of Appeal (February 2016)

Last Updated: February 22 2016
Article by Angus T. McKinnon
1. Livent Inc. v. Deloitte & Touche, 2016 ONCA 11 (Strathy C.J.O, Blair and Lauwers JJ.A.), January 8, 2016
2. Goldsmith v. National Bank of Canada, 2016 ONCA 22 (Weiler, Pardu and Benotto JJ.A.), January 13, 2016
3. 1250264 Ontario Inc. v. Pet Valu Canada Inc., 2016 ONCA 24 (Hoy A.C.J.O., MacFarland and Lauwers JJ.A.), January 14, 2016
4. Fleming v. Massey, 2016 ONCA 70 (Feldman, Juriansz and Brown JJ.A.), January 26, 2016
5. U.S. Steel Canada Inc. (Re), 2016 ONCA 68 (Hoy A.C.J.O., Blair and Lauwers JJ.A.), January 26, 2016

1. Livent Inc. v. Deloitte & Touche, 2016 ONCA 11 (Strathy C.J.O, Blair and Lauwers JJ.A.), January 8, 2016
In April, 2014, Deloitte & Touche was found liable to Livent Inc. for almost $120 million in losses arising out of negligently performed audits of Livent's books and records due to the failure of the auditors to detect the now-notorious fraud. In an expansive, four hundred and forty paragraph decision, the Court of Appeal upheld that ruling, addressing a number of issues, including whether the losses sought to be recovered were those of Livent or its creditors and shareholders, the purpose of audits of public companies and the defence of ex turpi causa.
In the 1990s, entertainment moguls Garth Drabinsky and Myron Gottlieb created and developed a live entertainment empire known as Live Entertainment Corporation of Canada Inc., or Livent. The company, which developed stage productions such as The Phantom of the Opera, appeared to be a successful and vibrant business enterprise. It was, in fact, a "house of cards", which toppled in 1998 when new management discovered that Drabinsky and Gottlieb had been fraudulently manipulating the company's financial books and records over a number of years in order to inflate its earnings and profitability. Livent filed for insolvency protection in Canada and the United States and was placed in receivership, its assets later sold. Drabinsky and Gottlieb were convicted of fraud and forgery and sent to prison.
Deloitte & Touche, the auditor for Livent from 1989 to 1998, had issued clean audited financial statements throughout this period.
Livent – through a Special Receiver appointed in the insolvency proceedings for various purposes, including bringing this claim – sued Deloitte for damages in contract and negligence arising out of its failure to follow generally accepted auditing standards and discover material misstatements in Livent's books, records and financial reporting attributable to the Drabinsky's and Gottlieb's fraud.
After a 68 day trial, the judge found that Deloitte was not negligent in respect of the pre-1996 audits. He found Deloitte negligent, but not liable in respect of the 1996 audit; while it was negligent, that negligence caused Livent no damage. The trial judge found that Deloitte was liable, however, for damages arising from negligence in August and September of 1997 and the spring of 1998. He awarded Livent damages of $118,035,770.
Deloitte argued on appeal that it should not be held responsible for damages that were in fact suffered by Livent's creditors and shareholders for fraud committed by Livent. It sought to attribute wrongs committed by Livent officers and employees to the corporation and to rely on the defence of illegality, or ex turpi causa. Deloitte also argued that its negligence was not the factual or proximate cause of damages to Livent. While Livent became insolvent, it was in a money-losing business. Moreover, since Livent was insolvent, its creditors were injured, not the company itself. Livent meanwhile submitted that the trial judge erred in failing to hold Deloitte liable for negligence in respect of the 1996 audit and also in reducing the award of damages by 25% to account for what he called "contingencies".
Writing for the Court of Appeal, R.A. Blair J.A. rejected Deloitte's submission that Livent was not claiming for its own losses, but rather advancing a proxy claim, indirectly, for losses sustained by its creditors and shareholders that would be recoverable in the company's insolvency proceedings. Blair J.A. emphasized that the losses sustained were Livent's losses, not those of its creditors and other stakeholders. The claim for breach of contract and for negligence was accordingly that of the corporation, and no such cause of action rested with the shareholders or creditors, regardless whether they might ultimately benefit from recovery in the company's action.
Deloitte sought to use the corporate identification or attribution doctrine to attribute the frauds of Drabinksy and Gottlieb to Livent, allowing it to then rely on the ex turpi causa defence. Justice Blair noted that the policy underlying the ex turpi causa doctrine is "to maintain the integrity of the justice system by preventing a wrongdoer from profiting from his or her wrongdoing or evading a criminal sanction." In this case, there was no basis for invoking the ex turpi causa defence through attribution because it was not required to maintain the integrity of the justice system. The actual fraudsters would not profit from their wrongdoing and had not evaded criminal sanction. Nor would Livent profit from their wrongdoing. In fact, Livent suffered a loss. Moreover, applying the ex turpi causa doctrine in these circumstances would risk undermining the value of the public audit process and the integrity of the justice system.
Blair J.A. also rejected the suggestion that the U.S. bar orders obtained in the U.S. class action litigation precluded Livent from advancing its claim. He agreed with the trial judge that the U.S. litigation was entirely different from the proceeding at bar and that Deloitte's submission was contrary to Livent's plan of reorganization, which courts in Canada and the U.S. had approved and to which Deloitte was deemed to have consented.
The trial judge had disposed of the duty of care question easily, noting that in the wake of the Supreme Court's decision in Hercules Management Ltd. v. Ernst & Young, [1997] 2 S.C.R. 165, "there can be little doubt that auditors owe a duty of care to the company for the benefit of the corporate collective, the shareholders". Deloitte submitted before the Court of Appeal that the trial judge effectively extended the auditor's duty of care to its client to include economic responsibility for losses experienced by those standing behind it, raising the spectre of indeterminate liability. Blair J.A. dismissed this submission, however, emphasizing that there was no dispute that Deloitte owed a duty of care to its client, Livent, to conduct the audit in accordance with the applicable standard of care. For the purpose of the duty of care, once it was accepted that the cause of action being asserted belonged to Livent and was not being advanced on behalf of third-parties, policy concerns about imposing indeterminate liability on auditors fell away.
Turning to the matter of the standard of care, Blair J.A. noted that in the case of publicly-traded corporations, audits not only serve to ensure a fair and accurate picture of the financial affairs of the corporation and to provide shareholders with information, but have an additional, broader objective involving the responsibilities of securities regulators and the interests of investors. It is not only the corporation and its shareholders who need and rely on the auditors' reports; securities regulators and members of the investing public also rely on them for disclosure of a fair and accurate picture of the financial position of the corporation. The auditors' standard of care in such circumstances must reflect this.
The general standard of care applicable to an auditor's work has survived for more than a century. As the court held in In re Kingston Cotton Mill Co. (No. 2), [1896] 2 Chapter 279 (Eng. C.A.):
It is the duty of an auditor to bring to bear on the work he has to perform that skill, care, and caution which a reasonably competent, careful, and cautious auditor would use. What is reasonable skill, care, and caution must depend on the particular circumstances of each case.
Blair J.A. found that the record amply supported the trial judge's conclusion that Deloitte breached this standard. Deloitte was negligent in its conduct of the 1997 audit and the Q2 and Q3 1997 engagements. The evidence to that effect was "overwhelming".
After an extensive consideration of the trial judge's causation analysis, including his application of a discount for "contingencies", Justice Blair concluded that Deloitte's negligence caused Livent to continue to operate in circumstances in which it was reasonably foreseeable that the company would continue to accumulate increased liabilities through its access to the capital markets and, more significantly, that it would have no means paying down those liabilities. Deloitte's negligence created the opportunity for Livent to stay in business and for Drabinsky and Gottlieb to continue to take the company to capital markets, increasing its losses. Although the law must not expose auditors of public companies to unreasonable obligations, where the proper factual and legal connection between the breach and the losses exists, the auditor's breach can be the cause of those losses and give rise to compensable damages. Blair J.A. found no error with the trial judge's measure and quantum of damages, or with his decision not to apply the doctrine of contributory negligence.
Turning finally to Livent's cross appeal, Blair J.A. found that the trial judge made no error in failing to hold Deloitte liable for its breaches of the standard of care in relation to its 1996 audit. His findings, and the conclusions he drew from them, were supported by the evidence.
2. Goldsmith v. National Bank of Canada, 2016 ONCA 22 (Weiler, Pardu and Benotto JJ.A.), January 13, 2016
Ontario's Securities Act provides a right of action against an "influential person" who "knowingly influenced" the release of a document containing a misrepresentation. In this decision, the Court of Appeal considered whether the appellant should be permitted to commence such an action against National Bank of Canada ("NBC").
Poseidon Concepts Corp. was created in 2011 through a reorganization of Open Range Energy Corp., which operated a tank rental business and an oil and natural gas exploration and production business. The company completed a successful public offering, announcing in early 2012 that it had sold common shares for gross proceeds of over $82.5 million.
Poseidon's success was fleeting. In a series of corrective disclosures beginning at the end of 2012, the company revealed that it had materially overstated revenues and accounts receivable. In April, 2013, it filed for protection under the Companies' Creditors Arrangement Act, R.S.C. 1985, chapter C-36. Poseidon was delisted in May, 2013. Its shares are now worthless.
Since the company's collapse, 13 separate class actions alleging misrepresentations in Poseidon's financial statements and corporate disclosure documents were initiated. In this action, the appellant, Joanna Goldsmith, alleged that Poseidon's revenue was materially overstated in its Circular and Prospectus, and submitted that the respondent, National Bank of Canada, was liable for these misrepresentations under the Securities Act, R.S.O. 1990, chapter S-5.
As the Supreme Court noted in Canadian Imperial Bank of Commerce v. Green, 2015 SCC 60, Part XXIII.1 of the Securities Act provides a carefully calibrated head of liability for secondary market misrepresentations.
Section 138.3 creates a statutory cause of action for the benefit of those who acquired or disposed of a responsible issuer's securities between the time a document containing a misrepresentation was released by the responsible issuer and the time of its correction. In addition to allowing suit against the responsible issuer and each director and officer who "authorized permitted or acquiesced in the release of the document" containing the misrepresentation, section 138.3(1) also provides a cause of action against each "influential person" who "knowingly influenced" the responsible issuer to release the document. The appellant claimed that the respondent was such a party, as a "promoter", defined as "a person or company who, acting alone or in conjunction with one or more other persons, companies or a combination thereof, directly or indirectly, takes the initiative in founding, organizing or substantially reorganizing the business of an issuer."
Actions under section 138.3 may only be commenced with leave. A court will only grant leave where it is satisfied that the action is being brought in good faith and that "there is a reasonable possibility that the action will be resolved at trial in favour of the plaintiff."
While the motion judge accepted that the appellant's action was being brought in good faith, he denied her leave to commence it because she failed to demonstrate a reasonable possibility of success. Specifically, he concluded that the appellant had not offered a plausible interpretation of the term "promoter" in the Securities Act. The motion judge held that in order to succeed at trial, a plaintiff must show that the defendant bank or professional advisor provided more than just conventional banking or advisory services, and "directly or indirectly took the initiative in founding, organizing or substantially reorganizing the business of the issuer." The appellant failed to do so.
Writing for the Court of Appeal, Pardu J.A. rejected the appellant's submission that the motion judge adopted an overly narrow interpretation of the promoter provisions. She held that, in fact, the text, context and purpose of these provisions, as well as the applicable jurisprudence, all supported the conclusion that a person or company that merely provides advice to or assists during an issuer's organization or reorganization cannot be a promoter. A promoter is not someone casually connected with the issuer, but rather is a person or company that played a driving role in founding an issuer and who wields influence comparable to that of an officer or director. Anything less is insufficient – merely being involved in organizing or reorganizing a business is not enough, even if that involvement includes providing important services or support.
Justice Pardu cautioned that the expansive definition of "promotor" proposed by the appellant would capture and impose the risk of liability on ordinary, everyday activities of many capital market participants, including lawyers providing advice about corporate restructuring. The legislature could not have intended such an outcome when enacting Part XXIII.1. This interpretation would risk doing significant harm to capital markets and would undermine the purpose of the Securities Act to provide protection to investors from unfair, improper or fraudulent practices and to foster fair and efficient capital markets and confidence in them. Such a "nebulous, indeterminate and far-reaching basis for liability" does not respect the balance struck by Part XXIII.1.
Pardu J.A. agreed with the motion judge that the evidence offered by the appellant was insufficient to establish that NBC was a promoter. "Something more" was required.
The motion judge suggested that a plausible interpretation would require a plaintiff to show that a defendant took steps, directly or indirectly, to actually found or organize the business in question, by funding the required incorporations, organizing the board of directors, actively managing the company or making key business decisions. Considering the appellant's evidence with this test in mind, Pardu J.A. found that she did not have a reasonable possibility of proving that the respondent was a promoter to justify granting leave to commence her action. Even interpreted generously, the appellant's evidence failed to demonstrate that she had a reasonable possibility of establishing that the respondent took the initiative in founding, organizing or substantially reorganizing the business of Open Range and Poseidon. Justice Pardu noted that, in any event, the appellant's motion could have been dismissed solely on the basis that she has not provided evidence showing that NBC "knowingly influenced" the release of the documents at issue.
3. 1250264 Ontario Inc. v. Pet Valu Canada Inc., 2016 ONCA 24 (Hoy A.C.J.O., MacFarland and Lauwers JJ.A.), January 14, 2016
In this decision, the Court of Appeal dismissed the Pet Valu class action, refining both the scope of the duty of fair dealing imposed on franchisors and the role of case management judges in defining common issues in class action proceedings.
The plaintiff, 1250264 Ontario Inc., commenced a class action against Pet Valu Canada Inc., a wholesaler and retailer of pet supplies. Representing a class of 150 former Pet Valu franchisees, the plaintiff alleged, among other things, that Pet Valu had not shared volume rebates it received from suppliers with its franchisees.
The action was certified as a class action in June, 2011.
The certification judge held that the only claim advanced by the plaintiff that was appropriate for certification was its claim in relation to the volume rebates. He identified the common issues arising out of this claim and, when the parties were unable to agree to appropriate language to express them, released reasons defining "Volume Rebates" and setting out seven common issues.
Pet Valu brought a motion for summary judgment on the seven common issues. By the time the motion was heard, more than three years after the proceeding was certified, a new judge had taken over the case management of the class action. This judge found in the defendant's favour, dismissing the claims regarding common issues 1 through 5. He deferred his decision on common issues 6 and 7 until the plaintiff brought a motion, that the judge himself had suggested, to amend its statement of claim to add a new common issue dealing specifically with purchasing power.
While the motion judge dismissed the plaintiff's motion to amend to add an eighth common issue on the ground of prejudice, he read language into common issue 6 and, on the basis of that language, found that Pet Valu had breached its duty of fair dealing under section 3 of the Arthur Wishart Act (Franchise Disclosure), 2000, S.O. 2000, chapter 3 ("AWA"). The motion judge answered common issues 6(i), (iii) and (iv) in favour of the plaintiff. Common issue 7, on the matter of damages, remained undetermined.
Pet Valu appealed, arguing that the motion judge erred by "unilaterally and unfairly" amending common issue 6. It also asserted that the motion judge made a number of errors in finding that it breached its duty of fair dealing. The plaintiff cross-appealed the dismissal of its motion to amend to add an eighth common issue.
The Court of Appeal ruled in favour of Pet Valu, dismissing common issue 6 and, with it, the class action. Writing for the Court, Associate Chief Justice Hoy clarified the scope of the duty of good faith and fair dealing imposed on franchisors under the AWA and cautioned against judicial intervention in the crafting of common issues in class action proceedings.
Hoy A.C.J.O. found that the motion judge did not err in denying the plaintiff's motion to amend its statement of claim to add an eighth common issue. As the Court held in Brown v. Canada (Attorney General), 2013 ONCA 18, in the class action context the power to amend the statement of claim and other aspects of the claim, such as the proposed common issues, "should be exercised with caution and restraint". When an amendment is sought at the conclusion of an otherwise dispositive summary judgment motion, even greater caution and restraint is required. Hoy A.C.J.O. noted that but for the motion judge's suggestion that the plaintiff move to amend its pleadings, Pet Valu was poised to obtain complete summary judgment on the existing common issues. Allowing the addition of a new common issue would have been "fundamentally unfair" to Pet Valu, causing actual prejudice to the defendant that was not compensable in costs.
Hoy A.C.J.O. found that the motion judge did err, however, in interpreting common issue 6(i) as asking if "significant volume discounts" were received by the franchisor. She noted that the precise wording of the common issue had been carefully determined by the certification judge following submissions by the parties. The motion judge's addition of the words "significant volume discounts" was material. In fact, the words mirrored the language in the plaintiff's proposed amendments to the statement of claim and the proposed common issue 8, which were soundly rejected. Reading in this language, the motion judge effectively amended common issue 6, on his own initiative, following the completion of argument on the summary judgment motion, without advising Pet Valu that he proposed to do so and without allowing it the opportunity to make submissions. In Justice Hoy's view, this was akin to giving judgment on an issue that had never been certified.
Justice Hoy found that the motion judge further erred in determining that Pet Valu was in breach of section 3 of the AWA, a conclusion which was rooted in a breach of what he deemed a representation that it received significant volume discounts. Even if the motion judge was correct in finding that Pet Valu had represented to franchisees that it received "significant volume discounts" in disclosure documents or in the franchise agreement, he cast the net of section 3 - which imposes a duty of fair dealing on the franchisor in the "performance and enforcement" of the franchise agreement - too widely. The information that the motion judge found that Pet Valu should have disclosed ought to have been disclosed to the plaintiffs before they became franchisees. This kind of pre-litigation oriented duty of disclosure goes well beyond the scope of section 3. Nor, in Hoy A.C.J.O.'s view, can a failure to include all material facts in a disclosure document be characterized as unfair dealing in the "performance" of a franchise agreement. Further, there was no indication that non-disclosure, once the plaintiffs became franchisees, adversely affected them in any way.
Having found in favour of Pet Valu on common issue 6, Hoy A.C.J.O. noted that there was no need for the Court to address common issue 7, which asked what, if any, damages Pet Valu was required to pay if it was in breach of the duties referred to in issue 6.
4. Fleming v. Massey, 2016 ONCA 70 (Feldman, Juriansz and Brown JJ.A.), January 26, 2016
Derek Fleming appealed the dismissal of his action against the respondents in connection with injuries he sustained at a go-kart event.
The respondents, Lombardy Karting and the National Capital Kart Club, held a go kart event at Lombardy Raceway Park. The regular race director was unavailable, and the National Capital Kart Club arranged for Fleming to fill in. The respondent, Andrew Massey, was driving a go kart when he crashed into the corner of the track, leaving Fleming injured. In response to Fleming's action for damages, the respondents argued that he had signed a waiver releasing them from liability for all damages associated with participation in the event due to any cause, including negligence.
The motion judge dismissed the action, finding that the appellant was not an employee but rather a volunteer who received a stipend, that he signed the waiver knowing generally what it would mean and that the wording of the waiver was broad enough to cover all eventualities.
Fleming's principal submission was that the waiver was void because it violated public policy, as he was an employee. The Court of Appeal agreed, finding that the motion judge erred in holding that the appellant was not an employee, and concluding that the waiver was void due to the important public policy in favour of workers' compensation.
Writing for the Court, Juriansz J.A. held that the appellant was an employee of National Capital Kart Club, noting that on discovery the club's representative admitted that Fleming was indeed an employee on the day of the accident. He then turned to the question of whether the waiver was voided by the public policy of the Workplace Safety and Insurance Act, 1997, S.O. 1997, chapter 16, Schedule A (WSIA), because the appellant signed it as an employee.
The parties agreed that the appellant was not an insured worker under the statute: go-kart tracks are classified as "non-covered" by the Workplace Safety and Insurance Board and workers at these facilities are not insured unless their employer has applied for WSIA coverage. The respondent track had not applied for coverage. Accordingly, it and the appellant were governed by Part X of the statute which provides at section 114(1) that, unlike insured employees, workers may sue their employers for workplace accidents.
Fleming submitted that public policy prevented workers from contracting out of the protection afforded by that provision. The WSIA explicitly states that purpose of the statute is to ensure that employees injured in workplace accidents receive compensation. Allowing Part X employers to require their employees to waive their right to seek compensation would frustrate this public policy goal.
Juriansz J.A. agreed. Courts must exercise great caution in interfering with the freedom to contract on the grounds of public policy. However, given workers' compensation legislation's "sweeping overriding of the common law" and "the broad protection it is designed to provide to workers in the public interest", it would be contrary to public policy to allow employers and workers to contract out of the protection afforded them by the regime, absent some legislative indication to the contrary.
While the legislature did address the subject of waiver in section 16 of the WSIA, which prohibits waiving the entitlement to benefits under a worker's insurance plan, Part X of the statute contains no equivalent provision.
Nonetheless, Juriansz J.A. held that reading the WSIA as a whole does not support the interpretation of section 16 as impliedly indicating that the legislature intended to permit the waiver of the statutory actions created by Part X. It was apparent that the objective of the statute was to ensure that injured workers have access to compensation, whether they are insured or governed by Part X. For the former, the regime provides workers with an insurance plan and eliminates workers' civil actions. Accordingly, it was necessary to prohibit the waiver of benefits under the plan. Part X, on the other hand, makes numerous changes to the common law to achieve the same statutory objective by providing workers with rights of action for damages. Applying the implied exclusion principle to section 16 to infer that a worker can waive the rights provided by Part X would fundamentally undermine the intent of the legislation.
Section 116(1) of the WSIA provides that an injured worker shall not be considered to have voluntarily incurred the risk of injury in his employment "solely" on the grounds that, before he injured, he knew about the defect or negligence that caused the injury.
Reading section 116(1) together with section 116(2) and in the overall context of the statute, Juriansz J.A. surmised that the inclusion of the word "solely" - or "only" in other versions of the legislation - was intended as "an emphatic rejection of the common law principle that the worker's knowledge could be the sole or only basis for invoking the voluntary assumption of risk doctrine." Interpreting s. 116(1) otherwise would permit a worker to contract out of an employer's negligence, but not the negligence of coworkers for which the statute makes the employer responsible. The provision must therefore be interpreted as a rejection of the common law approach to the voluntary assumption of risk, rather than as allowing workers to contract out of Part X.
With no legislative indication otherwise, it would be contrary to public policy to allow workers to contract out of the provisions of Part X of the WSIA.
5. U.S. Steel Canada Inc. (Re), 2016 ONCA 68 (Hoy A.C.J.O., Blair and Lauwers JJ.A.), January 26, 2016
The Investment Canada Act governs the review of significant investments in Canada by non-Canadians. This appeal concerned the scope of privilege in section 36 of the Investment Canada Act with respect to information obtained by the Minister of Industry or an officer or employee of the Crown in the course of the administration and enforcement of that statute.
U.S. Steel Canada Inc. ("USSC") is subject to a protection order under the Companies' Creditors Arrangement Act, R.S.C., 1985, chapter C-36 ("CCAA"). Certain stakeholders in the CCAA proceedings brought a motion for disclosure of the contents of a settlement agreement entered into in December, 2011, by USSC, its American parent, United States Steel Corporation ("USS"), and the Attorney General of Canada, during litigation to enforce the Investment Canada Act, R.S.C. 1985, chapter 28 ("ICA"). The settlement agreement contained written undertakings provided by USS to the Minister of Industry for the purpose of the ICA.
Section 36 of the ICA provides:
36(1) Subject to subsections (3) to (4), all information obtained with respect to a Canadian, a non-Canadian, a business or an entity referred to in paragraph 25.1(c) by the Minister or an officer or employee of Her Majesty in the course of the administration or enforcement of this Act is privileged and no one shall knowingly communicate or allow to be communicated any such information or allow anyone to inspect or to have access to any such information.
(2) Notwithstanding any other Act or law but subject to subsections (3) and (4), no minister of the Crown and no officer or employee of Her Majesty in right of Canada or a province shall be required, in connection with any legal proceedings, to give evidence relating to any information that is privileged under subsection (1) or to produce any statement or other writing containing such information.
At issue on the motion was whether section 36 of the ICA barred the disclosure of the settlement agreement.
The CCAA judge concluded that it did, and that the settlement agreement was privileged in its entirety by virtue of section 36 of the ICA. He dismissed the motion of four key stakeholders seeking production of the settlement agreement on that basis, declining to consider whether the agreement was protected by common law settlement privilege.
The Court of Appeal allowed the stakeholders' appeal, concluding that section 36 of the ICA did not prohibit USSC and USS from disclosing the settlement agreement.
Writing for the Court, Hoy A.C.J.O. rejected the appellants' submission that the CCAA judge erred in concluding that "information" referred to in section 36 includes undertakings given in enforcement proceedings and that the undertakings were not privileged. She agreed with the CCAA judge's conclusion that the legislature intended "information" to include undertakings set out in a document given to the Minister. Hoy A.C.J.O. also agreed that "written undertaking" in section 36(4)(b) defined the location of the privileged information and did not define the scope of "information" for the purpose of section 36. That provision stipulated that section 36 does not prohibit disclosure of "information contained in any written undertaking" relating to an investment that the Minister is satisfied or is deemed to be satisfied is likely to be of net benefit to Canada. Section 36(4)(b) therefore did not make it clear that undertakings are not information for the purpose of section 36.
Justice Hoy held that the CCAA judge did err, however, in concluding that none of the exceptions to the privilege regime in the ICA applied. While she noted that the CCAA judge correctly found that the exceptions contained in sections 36(4)(a) and (d) did not apply, Hoy A.C.J.O. agreed with the appellants that the effect of section 36(4)(b) was that USSC and USS were not prohibited from disclosing the settlement agreement.
The appellants asserted that USSC and USS could be required to disclose information contained in the settlement agreement under section 36(4)(b), even though the Attorney General invoked section 36(5), because section
36(5) only protects the Minister or other government employees or officers from being forced to disclose information. Hoy A.C.J.O. agreed, holding that the "exception to the exception" in section 36(4)(b), created by section 36(5), did not apply to USSC and USS. Therefore, if not protected by common law settlement privilege, USSC and USS could be required to disclose information contained in the settlement agreement.
Hoy A.C.J.O. declined to determine whether disclosure of all or part of the settlement agreement was barred by common law settlement privilege, noting that because neither the Court of the Appeal nor the CCAA judge was provided with a copy of the settlement agreement, there could be no review or evaluation as to whether there was a competing public interest in disclosure that outweighed the public interest in settlement. The question of whether the agreement was protected by settlement privilege was therefore remitted to the CCAA judge.

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Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.