Four Appeals at the Supreme Court of Canada in the 2022 Winter Session

January 14, 2022

Written By Ranjan Agarwal, Ethan Schiff and Stephanie Clark

The Supreme Court of Canada winter term has begun. While the court will be hearing mostly criminal law matters, in January through March, it will consider four cases that may interest the business community or organizations facing civil litigation:

• In an appeal of Entertainment Software Association v Society of Composers, Authors and Music Publishers of Canada, 2020 FCA 100, the Court will consider whether making musical works available for download or streaming results in payable royalties. The Society of Composers, Authors and Music Publishers of Canada administers tariffs for the "communication" of musical works on behalf of copyright owners. Amendments in the Copyright Modernization Act, SC 2012 c. 20, added section 2.4(1.1) to the Copyright Act, which defines "communication" to include making a work available to the public by telecommunication. A few days after these amendments took effect, the Supreme Court of Canada released Entertainment Software Association v. Society of Composers, Authors and Music Publishers of Canada, 2012 SCC 34, in which the Court decided that the transmission of a work over the internet that results in a download is not a communication by telecommunication. In this matter, however, the Copyright Board determined that section 2.4(1.1) of the Copyright Act deems the transmission of a work over the internet that results in a download is a communication by telecommunication. Following a judicial review of that decision, the Federal Court of Appeal quashed the decision of the Board. On appeal, the Supreme Court of Canada is expected to determine whether, given section 2.4(1.1) of the Copyright Act and the Court's previous decision, making musical works available for download or streaming results in payable royalties to SOCAN.
• Petrowest Corporation v Peace River Hydro Partners, 2020 BCCA 339, addresses the intersection of insolvency principles and domestic arbitration law. Petrowest Corporation entered into a partnership agreement, forming Peace River Hydro Partners, and subcontracted some work to various Petrowest Affiliates. Petrowest Corporation and its affiliates became insolvent, and Ernst & Young Inc. was appointed as the receiver. The receiver started a civil claim on behalf of Petrowest Corporation and the Petrowest Affiliates to recover receivables owed under the partnership agreement and various purchase orders and subcontracts. These agreements include arbitration clauses. Peace River Hydro Partners applied for a stay of the claim under section 15 of the Arbitration Act, RSBC 1996, c. 55. The Supreme Court of British Columbia dismissed the application, finding that the court had jurisdiction to find that the receiver ought not to be bound by the arbitration clauses and be forced to undergo multiple arbitration proceedings that could otherwise be resolved in one litigation, which would conflict with the objectives under the Bankruptcy and Insolvency Act, RSC 1985, c B-3. The British Columbia Court of Appeal dismissed the appeal, finding that the arbitration clauses were separable from the rest of the agreements and the receiver could therefore exercise its right to disclaim agreements with respect to those arbitration clauses. The Supreme Court of Canada is expected to determine whether, and when, receivers should be bound to arbitration clauses in contracts they are not party to. Bennett Jones acts as counsel for the respondents, Petrowest Corporation, the Petrowest Affiliates and Ernst & Young Inc.
• In an appeal of Annapolis Group Inc. v Halifax Regional Municipality, 2021 NSCA 3, the Supreme Court of Canada will consider de facto expropriation by a municipality. Annapolis Group Inc. sought to develop lands that it owns within the boundary of Halifax Regional Municipality. Halifax declined to start a planning process or amend a by-law, both of which would have been required for the proposed development. Annapolis commenced a claim alleging that Halifax had encouraged the public to use the land as a public park and deliberately obstructed Annapolis' development attempts, leading to de facto expropriation. Halifax sought summary judgment dismissing the de facto expropriation claim, which was dismissed by a chambers judge. The Nova Scotia Court of Appeal granted the appeal and summarily dismissed the de facto expropriation claim. The Supreme Court is expected to consider and clarify the test of de facto expropriation and whether summary judgment is appropriate in this case.
• Canada (Transportation Safety Board) v Carroll-Byrne, 2021 NSCA 34, concerns statutory interpretation principles. The Transportation Safety Board investigated the crash of a commercial flight, which landed short of the runway in Halifax during a snowstorm. The Board's investigation and report considered the on-board cockpit voice recording (the black box), but it has not released the black box to the public, citing statutory privilege. Some of the passengers commenced a class action alleging negligence on the part of various defendants in relation to the airplane crash. As part of that action, the passengers applied for disclosure of the black box based on section 28(6) of the Canadian Transportation Accident Investigation and Safety Board Act, SC 1989, c. 3, which permits disclosure if the court "concludes in the circumstances of the case that the public interest in the administration of justice outweighs in importance the privilege attached to the on-board recording." The Board intervened, and sought the opportunity to make ex parte, in camera submissions about the disclosure. A judge of the Supreme Court of Nova Scotia denied the Board's request for ex parte submissions, and granted the disclosure subject to confidentiality restrictions. The Nova Scotia Court of Appeal dismissed the Board's appeal, confirming that the Act did not confer any right to ex parte submissions. The Supreme Court of Canada is expected to clarify the interpretation of section 28(6) of the Act, in particular whether it entitles the Board to make confidential ex parte submissions, and what threshold to apply when considering whether disclosure is required given "the public interest in the administration of justice."

Please contact any of the authors or a member of the Bennett Jones Commercial Litigation group for more information about any of the cases or issues discussed in this post.

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