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Case Law is a sample selection from the weekly summaries of notable unreported civil and criminal court decisions published in Law Times newspaper.

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Business Associations

Specific matters of corporate organization

Directors and officers

Directors found personally liable for oppression

As result of private placement, proportion of common shares held by CEO of corporation were significantly reduced. Consequently, value of CEO’s A and B shares, which were convertible into common shares, was also greatly reduced. This prompted CEO to file application for oppression under s. 241 of Canada Business Corporations Act against corporation’s directors, including two members of audit committee. Trial judge found that CEO had reasonable expectation that board would consider his rights as A and B shareholder in any transaction impacting A and B shares. Trial judge held that those two directors who were also members of audit committee had personally benefitted from private placement. Trial judge concluded that those two directors were personally liable for CEO’s loss. Court of Appeal dismissed directors’ appeal, holding that imposition of personal liability was justified, given positions of directors on audit committee. Directors appealed before Supreme Court of Canada. Appeal dismissed. Determining personal liability of director required two-pronged approach. First, oppressive conduct must be properly attributable to director because of his or her implication in oppression. In this case, trial judge found that those two directors who were also members of audit committee had played lead roles in board discussions resulting in non-conversion of CEO’s A and B shares. In making that finding, trial judge held that those directors were implicated in oppressive conduct. It was therefore open to trial judge to determine that oppression was properly attributable to those two directors. Second, imposition of personal liability must be fit in all circumstances. In this case, trial judge found that, in addition to lead role he had played, one of directors had accrued personal benefit as result of oppressive conduct. Additionally, remedy went no further than necessary to rectify CEO’s loss. Finally, remedy was appropriately fashioned to vindicate CEO’s reasonable expectations. Therefore, trial judge’s decision did not reflect any errors warranting appellate intervention.
Wilson v. Alharayeri (2017), 2017 CarswellQue 5230, 2017 CarswellQue 5231, 2017 SCC 39, 2017 CSC 39, McLachlin C.J.C., Abella J., Moldaver J., Karakatsanis J., Wagner J., Gascon J., Côté J., Brown J., and Rowe J. (S.C.C.); affirmed (2015), 2015 CarswellQue 13380, 2015 CarswellQue 7661, 2015 QCCA 1350, Morissette J.C.A. (C.A. Que.).

Natural Resources


Timber licences

Court had no jurisdiction to review arbitrator’s decision in regard to timber licence valuation methodology

Parties entered into Settlement Framework Agreement, but were unable to settle issue of compensation under Forestry Revitalization Act for improvements made by T to land. Arbitration was held in accordance with Forestry Revitalization Act. Arbitrator found on statutory interpretation issue that proper valuation method was depreciation replacement cost method and on contractual interpretation issue that agreement reached by parties prior to arbitration did not exclude interest from province’s payment of compensation to T for improvements. Arbitrator also determined that T was not entitled to compensation for improvements to which it did not lose access. On appeal, application judge upheld arbitrator’s award except in connection with statutory interpretation, which was remitted to arbitrator and resulted in additional award in amount equal to value of improvements. Court of Appeal reversed application judge’s decision concluding that arbitrator erred on both statutory interpretation and contractual interpretation issues as well as subsequent ruling regarding statutory application issue. T appealed. Appeal allowed in part. Arbitrator’s initial valuation predicated on depreciation replacement cost methodology was restored. Arbitrator’s initial ruling that province must pay interest on top of improvements compensation it owed to T was restored. Arbitrator’s initial ruling denying compensation to T for improvements losses pertaining to lillooet licence was restored. Courts had no jurisdiction to review arbitrator’s decision in regard to whether arbitrator correctly applied valuation methodology to licence because it was mixed question. Courts’ jurisdiction was limited to statutory interpretation issue of identifying pool of methodologies consistent with Revitalization Act.
Teal Cedar Products Ltd. v. British Columbia (2017), 2017 CarswellBC 1648, 2017 CarswellBC 1649, 2017 SCC 32, 2017 CSC 32, McLachlin C.J.C., Abella J., Moldaver J., Karakatsanis J., Wagner J., Gascon J., Côté J., Brown J., and Rowe J. (S.C.C.); reversed (2015), 2015 CarswellBC 1550, 2015 BCCA 263, Lowry J.A., Chiasson J.A., and MacKenzie J.A. (B.C. C.A.).

Criminal Law

Charter of Rights and Freedoms

Unreasonable denial of bail [s. 11(e)]

Legislated form of release and specific terms of release can be unreasonable and unconstitutional

Respondent accused, KA, was Ontario resident, but he spent much of his time in Michigan and had no assets in Canada. At KA’s initial bail hearing, justice of the peace denied his release. KA sought review of detention order under s. 520 of Criminal Code of Canada. Bail review judge would have released KA if he could have imposed both surety and cash deposit as release conditions in order to satisfy flight risk and safety concerns. In subsequent bail review application, KA successfully challenged constitutionality of s. 515(2)(e). Bail review judge held that only viable conditions of release for KA would be large cash deposit and surety supervision but geographical limitation in s. 515(2)(e) prevented him from granting bail on those terms. He found that s. 515(2)(e) violated right not to be denied reasonable bail without just cause under s. 11(e) of Canadian Charter of Rights and Freedoms. He concluded that geographical restriction unconstitutionally denied KA bail, severed and struck down geographical limitation in s. 515(2)(e) and ordered KA’s release with surety and cash deposit of $100,000. Crown appealed. Appeal allowed. Right not to be denied bail without just cause imposes constitutional standard that must be met for denial of bail to be valid. Right to reasonable bail relates to terms of bail, including quantum of any monetary component as well as restrictions imposed on accused for release period. Section 515(2) of Code establishes only legal forms of pre-trial release, such as surety release or release with recognizance. However, it is justice of peace or judge who ultimately decides which form of release to order in given case, and he or she also has discretion under s. 515(4) of Code to impose terms that are specific to circumstances of accused. Both legislated form of release and specific terms of release ordered by justice of peace or judge can be unreasonable and therefore unconstitutional. Bail review judge erred by requiring cash deposit with surety, one of most onerous forms of release, even though KA had offered surety with monetary pledge. If bail review judge had applied bail provisions properly, KA could have been granted reasonable bail. Given that s. 515(2)(e) of Code did not have effect of denying KA bail, it could not be concluded that it denied him bail without “just cause.” Thus, s. 11(e) right not to be denied reasonable bail without just cause was not triggered. Fact that cash bail was not option in KA’s case did not have effect of denying him bail. Because Crown had justified monetary condition of release, KA or his sureties should have been allowed to pledge money rather than being required to deposit money with court. Given Crown’s consent, it was ordered that KA’s cash-plus-surety release ordered by bail review judge be replaced with cash-only release on same terms as those that bail review judge imposed.
R. v. Antic (2017), 2017 CarswellOnt 8134, 2017 CarswellOnt 8135, 2017 SCC 27, 2017 CSC 27, McLachlin C.J.C., Abella J., Moldaver J., Karakatsanis J., Wagner J., Gascon J., Côté J., Brown J., and Rowe J. (S.C.C.).

Criminal Law

Charter of Rights and Freedoms

Right to be tried within reasonable time [s. 11(b)]

Crown appeal from stay of proceedings based on pre-charge delay dismissed.

Crown’s appeal from decision granting accused stay of proceedings based on pre-charge delay was dismissed. Crown appealed. Appeal allowed. Majority agreed substantially with dissenting reasons of appellate level.
R. v. Hunt (2017), 2017 CarswellNfld 171, 2017 CarswellNfld 172, 2017 SCC 25, 2017 CSC 25, Abella J., Moldaver J., Karakatsanis J., Wagner J., Gascon J., Côté J., and Brown J. (S.C.C.); reversed (2016), 2016 CarswellNfld 425, 2016 NLCA 61, B.G. Welsh J.A., M.H. Rowe J.A., and L.R. Hoegg J.A. (N.L. C.A.).

Criminal Law

Post-trial procedure

Release pending appeal

Bail pending appeal for person convicted of murder was not restricted by Parliament

Accused was convicted of second degree murder of his father. Appeal judge dismissed accused’s application for release pending his appeal under public interest criterion in s. 679(3)(c) of Criminal Code. Court of Appeal review panel dismissed accused’s application for review under s. 680(1) of Code and found no material error or unreasonableness in appeal judge’s decision. Accused appealed. Appeal allowed. Appeal was heard on merits despite mootness. Guidance was given on public interest criterion and on standard of review by review panel. Detaining accused on public interest criterion was unwarranted in circumstances. Appeal judge made material legal error that affected outcome, and review panel erred in failing to intervene. Aside from seriousness of offence, accused presented as ideal candidate for bail. Parliament did not restrict availability of bail pending appeal for persons convicted of murder. Appeal judge found that there were no public safety or flight risk concerns and that grounds of appeal were arguable. Appeal judge overlooked important finding made by trial judge, that accused’s crime gravitated toward offence of manslaughter, which reduced his degree of moral blameworthiness, attenuating seriousness of crime and enforceability interest. Cumulative effect of considerations favoured release. Appeal judge erred by not applying correct test of “not frivolous” in assessing strength of accused’s appeal by wanting something more than clearly arguable grounds of appeal. 

R. v. Oland (2017), 2017 CarswellNB 115, 2017 CarswellNB 116, 2017 SCC 17, 2017 CSC 17, McLachlin C.J.C., Abella J., Moldaver J., Karakatsanis J., Wagner J., Gascon J., Côté J., Brown J., and Rowe J. (S.C.C.); reversed (2016), 2016 CarswellNB 126, 2016 CarswellNB 127, 2016 NBCA 15, J. Ernest Drapeau C.J.N.B., M.E.L. Larlee J.A., and Kathleen A. Quigg J.A. (N.B. C.A.).

Criminal Law

Charter of Rights and Freedoms

Charter remedies [s. 24]

Police entry into accused’s residence was not justified by exigent circumstances

Officers saw handguns and drugs in plain view after being invited into apartment, and obtained search warrant. Trial judge concluded that police had grounds to obtain search warrant and since it was impracticable to obtain search warrant exigent circumstances under s. 11(7) of Controlled Drugs and Substances Act existed. Accused was convicted of possession of drugs, possession for purpose of trafficking, and unlawful possession of firearms. Accused’s appeal on ground that trial judge erred in admitting evidence was dismissed. Accused appealed to Supreme Court of Canada. Appeal allowed. Police entry into the accused’s residence not justified by exigent circumstances making it impracticable to obtain warrant. Nature of Charter-infringing state conduct was sufficiently serious to favour exclusion of evidence obtained as a result. Importance of ensuring that such conduct is not condoned by court favoured exclusion. If situation was not serious enough to arrest and apply for warrant, then not serious enough to intrude into private residence without warrant. 

R. v. Paterson (2017), 2017 CarswellBC 687, 2017 CarswellBC 688, 2017 SCC 15, 2017 CSC 15, McLachlin C.J.C., Abella J., Moldaver J., Karakatsanis J., Wagner J., Gascon J., and Brown J. (S.C.C.); reversed (2015), 2015 CarswellBC 1256, 2015 BCCA 205, Lowry J.A., Frankel J.A., and Bennett J.A. (B.C. C.A.).

Motor Vehicles

Accident claims funds
Practice and procedure

Civil action against third parties barred by application of Automobile Insurance Act (Que.)

Availability of civil liability remedies. Victims, injured in automobile accidents, also suffered aggravated or separate injuries due to subsequent faults attributable to third parties. Civil action against third parties barred by application of public compensation scheme under Automobile Insurance Act (Que.). Compensation scheme limiting compensation exclusively to amounts paid pursuant to scheme in circumstances where sufficiently close link between bodily injury and automobile accident is established. In such cases, the scheme covers the whole of the injury and confers civil immunity on everyone in respect of those injuries. Fact that compensation was claimed and received pursuant to compensation scheme, however, not constituting waiver of any civil action.
Godbout c. Pagé (2017), 2017 CarswellQue 1646, 2017 CarswellQue 1647, 2017 SCC 18, 2017 CSC 18, McLachlin C.J.C., Abella J., Karakatsanis J., Wagner J., Gascon J., Côté J., and Brown J. (S.C.C.); affirmed (2015), 2015 CarswellQue 646, 2015 QCCA 225, (C.A. Que.)
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An estate trustee who took an ‘egregious' position in litigation has been ordered to personally pay more than $140,000 in costs. Will this ruling serve as an appropriate caution to executors on how they conduct themselves in litigation?
Yes, this will remind trustees of the potential exposure of significant awards being made against them personally.
No, it’s unlikely this ruling will dissuade executors from engaging in unreasonable conduct during litigation.