The Supreme Court of Canada Will Hear Five Civil Appeals in December

November 30, 2020

Written By Ranjan Agarwal, Ethan Schiff and Dylan Gibbs

The Supreme Court of Canada will hear five appeals in December that may interest the business community or organizations facing civil litigation.

• The Court will consider the Canada Revenue Agency's priority in bankruptcy proceedings in Canada v Canada North Group Inc., 2019 ABCA 314, a case involving proceedings under the Companies' Creditors Arrangement Act. The Alberta Court of Appeal upheld the Queen's Bench judge's decision that the CRA's statutory deemed trust for unremitted source deductions ranks below a court-ordered super-priority security interest that ensures payment of the professional fees necessary for restructuring.
• In 6362222 Canada Inc. v Prelco Inc., 2019 QCCA 1457, the Court will consider exclusion of liability clauses in civil law. The Québec Superior Court and the Court of Appeal declined to give effect to an exclusion of liability clause in a contract after the defendant failed to properly implement business management systems, harming the plaintiff. The Courts distinguished the theory of essential obligation at civil law from that of fundamental breach at common law, concluding that, even if the latter has been put to rest, the former lives on. We wait to see whether the Supreme Court of Canada will consider both theories in the appeal.
• Compagnie d'Assurances Générales Co-Operators c Coop Fédérée, 2019 QCCA 1678, will bring cybersecurity insurance policies before the Court. An insured was victim to a phishing attack causing fraudulent transfer of $4.9 million. One of the insured's two insurers, Co-operators General Insurance Company, denied coverage. The Québec Superior Court ordered Co-operators to cover the claim and to compensate the second insurer, Liberty International Underwriters, for a proportional size of coverage. The Québec Court of Appeal allowed the appeal related to compensation between the two insurers.
• The Court will consider principles of equitable compensation in the Crown-Indigenous context in Southwind v Canada, 2019 FCA 171. Canada surrendered lands near the plaintiffs’ reserve to build a dam, leading to flooding rendering much of the reserve unusable. The Federal Court, upheld by the Federal Court of Appeal, awarded the plaintiffs $30 million in equitable compensation for Canada's breach of fiduciary duty. The plaintiffs appealed, arguing that the Federal Court incorrectly based compensation on the fair market value of the flooded land, rather than including the value of a revenue-sharing agreement they allege Canada should have negotiated on their behalf.
• In Aga v Ethiopian Orthodox Tewahedo Church of Canada, 2020 ONCA 10, the Court will consider the contractual implications of by-laws for institutions with voluntary membership. The case involves allegations of improper expulsion by members of the church. The motion judge granted the defendant's motion for summary judgment, holding that there was no contract between the parties. In overturning the decision, the Court of Appeal said that the church's by-laws and constitution amounted to a contract and the contents of that contract were genuine issues to be determined at trial.

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

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