Canada: 5 Business Cases To Watch In The Supreme Court's Winter Session

Last Updated: March 2 2018
Article by Ranjan K. Agarwal and Ethan Schiff

With the beginning of the Supreme Court of Canada's Winter Session on January 8, the Supreme Court of Canada entered a new era following the retirement of former Chief Justice Beverly McLachlin and the appointment of Chief Justice Richard Wagner. Scheduled hearings in this, the first term of the Wagner Court, that may interest the business community are described below:

  • In British Columbia v Philip Morris International, Inc., litigation over the recovery of tobacco-related health care costs goes back to the Supreme Court. British Columbia agreed to provide Philip Morris with access to health information databases pursuant to an agreement with Statistics Canada that contained provisions to protect privacy. Philip Morris did not execute the agreement and pursued an application to require the government to produce particular individual-level data from provincial health databases, subject to certain identifiers being removed. Section 2(5)(b) of the Tobacco Damages and Health Care Costs Recovery Act provides that access to particular individual health care records are not compellable "except as provided under a rule of law, practice or procedure that requires the production of documents relied on by an expert witness" and section 2(5)(e) provides that a sample may be ordered by the court, subject to identifiers being removed. The British Columbia Chambers Judge and the Court of Appeal interpreted the sections such that the right to trial fairness required the records to be produced. Bennett Jones' Jeffrey Leon is co-counsel to the province of British Columbia.
  • The Court will consider section 14.06 of the Bankruptcy and Insolvency Act in Orphan Well Association v Grant Thornton Limited. The case involves the distribution of assets of a bankrupt company, Redwater Energy Corporation. Redwater owned "end of life wells" licensed by the Alberta Energy Regulator. The trustee in bankruptcy sought to disclaim the debtor's interest in wells where the costs of remediation exceeded the wells' value, but also sought to keep and sell the valuable wells to maximize the recovery of secured creditors. Alberta Energy Regulator, however, objected, arguing that the sale proceeds needed to be set aside for the costs of remediating the end of life wells. The Alberta Court of Appeal held that, under the Bankruptcy and Insolvency Act, the Alberta Energy Regulator could not prevent the trustee's intended sale because Redwater's alleged environmental obligations did not meet the test for a "provable claim". Bennett Jones' Ken Lenz and Michael Selnes are co-counsel to the appellants.
  • In Moore v Sweet, the Supreme Court will reconsider the law of constructive trust and unjust enrichment. The appellant, Ms. Moore, was married to the deceased, Mr. Moore, in 1985 when he took out a life insurance policy for $250,000 naming Ms. Moore as the beneficiary. The two later divorced in October 2003. Before the divorce, the deceased moved in with Ms. Sweet, the respondent. The deceased executed a change of beneficiary in favour of Ms. Sweet in September 2000, but did not inform Ms. Moore. Until 2000, the deceased and the appellant paid the policy's annual premium out of a joint account. After that time, Ms. Moore paid the premiums. Ms. Moore argued that she and Mr. Moore had an agreement that if she paid the premiums, she would be entitled to receive the benefit of the policy to take care of their children. The application judge held that the proceeds of the policy were impressed with a constructive trust in favour of Ms. Moore. The Ontario Court of Appeal allowed the appeal, holding that, while the Ms. Moore was entitled to be repaid her premiums, Ms. Sweet was to receive the balance of the proceeds.
  • Lawrence v IBEW, Local 773 involves application of a limitation period in the context of the plaintiff's failure to formalise her pleadings. The case is one for wrongful dismissal against the union, which had employed the plaintiff, and the union's directors who were added on consent. The union claimed that it could not be the subject of an action without a representation order, but defended the action regardless. After the two-year limitation period expired, the union moved to dismiss the action. The motion judge and a majority of the Ontario Court of Appeal dismissed the motion, holding that it would be improper to allow the union to dismiss the claim through what amounted to a tactical ploy.
  • Attorney General of Canada v Attorney General of Québec is a constitutional reference regarding jurisdiction for securities regulation. The Government of Québec referred two questions to the Québec Court of Appeal:
  1. Does the Constitution of Canada authorize the implementation of pan-Canadian securities regulation under the authority of a single regulator, according to the model established by the most recent publication of the "Memorandum of Agreement regarding the Cooperative Capital Markets Regulatory System"?; and
  2. Does the most recent version of the draft of the federal "Capital Markets Stability Act" (CMSA) exceed the authority of the Parliament of Canada over the general branch of the trade and commerce power under subsection 91(2) of the Constitution Act, 1867?

A majority of the Québec Court of Appeal answered "no" to both questions. It held that the model was not authorized by the Constitution because the model implicated undue fettering of the provinces' authority. Nonetheless, the Court held that the CMSA was constitutional, because, in pith and substance, its purpose was to promote the stability of the Canadian economy through the management of systemic risks related to capital markets", which is within Parliament's jurisdiction.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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