Key Takeaways from our Appellate Quarterly Webinar

On January 17, 2023, McCarthy Tétrault's National Appellate Litigation Group hosted an Appellate Quarterly webinar, featuring five appeals of importance to the Canadian business community during the last quarter. Partners Brandon Kain, Isabelle Vendette, Katherine Booth, Jamie S.S. Holtom and Christine Wadsworth discussed these recent appellate developments, as well as future developments to watch in their respective jurisdictions.

Here are some of the key takeaways:

  1. Unjust Enrichment Claims in Product Liability Cases

The British Columbia Court of Appeal's decision in Nissan Canada Inc. v Mueller,1 provides important guidance on certifying product liability class actions, including with regards to the availability of claims for unjust enrichment and pure economic loss. The Court refused to certify a claim of unjust enrichment, where the plaintiff also advanced claims based on a contract that provided a juristic reason for the enrichment. The Court also concluded that a claim for pure economic loss may be available based on a defect that poses an "imminent risk", even where the allegedly dangerous defect may take years to manifest.

  1. Dismissal of $5 Billion Negligence Claim

In McDonald v. Toronto-Dominion Bank,2 a case concerning the second largest Ponzi scheme in history, the Court of Appeal for Ontario dismissed a $5 billion negligence claim, focusing on fundamental duty of care principles. The Court emphasized that there is no one-size-fits-all relationship between banks and their customers – banks undertake an extremely broad range of different activities for very different purposes. Broad categories based merely on the identity of the parties are insufficient to ground a relationship of proximity. The defendant's undertaking and the plaintiff's reliance is at the center of the proximity analysis. The Court found that TD Bank did not have a duty of care to protect its customers from insider abuse.

  1. Disclosure of Privileged Documents in Investigations

The Court of Appeal of Quebec ruled on the consequence of voluntary disclosure of a report protected by solicitor-client privilege, in the context of a criminal investigation, in Centre universitaire de santé McGill v. Lemay.3 The Court affirmed that, as a general rule, disclosure to a third party of privileged information results in a waiver of the privilege. However, the Court also made clear that this principle is not absolute, and that the context of the disclosure must be assessed to determine whether privilege was clearly and unequivocally waived.

  1. Judicial Review of Regulations After Vavilov

The Federal Court of Appeal's decision in Innovative Medicines Canada v. Canada (Attorney General),4 has upheld a regulation establishing a "basket" of comparator countries, which the Patented Medicines Prices Review Board is to consider in determining whether the price of a patented drug is "excessive". Significantly, in determining whether the Governor in Council exceeded its regulation-making powers, the Court applied a standard of review of reasonableness, as set out in Vavilov, finding that it had overtaken the "hyperdeferential" standard set out in a prior Supreme Court of Canada decision.

  1. Government Liability for Constructive Expropriation

In Annapolis Group Inc. v. Halifax Regional Municipality,5 the Supreme Court of Canada hclarified the test for establishing de facto expropriation—or, in the Court's preferred terminology, "constructive taking"—of private property through a public authority's exercise of regulatory powers. The Court held, in a 5-4 decision, that when assessing whether a public authority has acquired a "beneficial interest" in private property for the purposes of establishing a constructive taking, there is no requirement for it to have actually acquired a proprietary interest. Rather, the fact that an "advantage" has flowed to it from its regulation of the property will suffice, such as where the property is regulated in a manner that permits its enjoyment as a public resource. Further, the public authority's intention will play a role in the broader constructive taking analysis.

Footnotes

1 Nissan Canada Inc. v. Mueller,  2022 BCCA 338.

2 McDonald v. Toronto-Dominion Bank,  2022 ONCA 788.

3 Centre universitaire de santé McGill v. Lemay,  2022 QCCA 1394.

4 Innovative Medicines Canada v. Canada (Attorney General),  2022 FCA 210.

5 Annapolis Group Inc. v. Halifax Regional Municipality,  2022 SCC 36.

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