Frank Iacobucci

The trustee in bankruptcy of a wholly-owned subsidiary sued the directors of the subsidiary, alleging they breached their fiduciary duty and duty of care under the Canada Business Corporations Act by implementing a joint inventory procurement policy that favoured the parent company to the detriment of the subsidiary's creditors.

The Supreme Court of Canada held that directors owe a fiduciary duty to the corporation, not to its creditors, even when the corporation is in the vicinity of insolvency.

The Court also held that while directors owe a duty of care to creditors, the directors' actions in this case were reasonable business decisions protected by the business judgment rule.

The trustee's claim under the Bankruptcy and Insolvency Act for reviewable transactions was also dismissed.

The Court of Appeal for Ontario held that the police use of Forward Looking Infra-Red (FLIR) aerial camera technology to detect heat emanating from a home constituted a search under section 8 of the Charter.

The Court found a serious breach of the accused's privacy rights, excluded the real evidence under section 24(2), and entered an acquittal.

A note appended to the decision indicates that the Supreme Court of Canada subsequently allowed an appeal of this judgment.

The RCMP used an airplane equipped with a Forward Looking Infra-Red (FLIR) camera to overfly the accused's home without a warrant.

The FLIR image, which detected heat emanations consistent with a marijuana grow operation, was used to obtain a search warrant.

The accused argued the FLIR overflight violated his right against unreasonable search and seizure under s. 8 of the Charter.

The Supreme Court of Canada held that the use of FLIR technology did not violate s. 8, as the accused did not have a reasonable expectation of privacy in the heat distribution patterns on the external surfaces of his home.

The appeal was allowed and the conviction restored.

The respondent sought a survivor's pension under the Canada Pension Plan after her former common law partner died.

She had ended the relationship permanently prior to his death.

Her application was denied because she did not meet the definition of 'spouse', which required common law partners to be cohabiting at the time of death.

She argued this violated her equality rights under s. 15(1) of the Charter based on marital status, comparing herself to separated married spouses.

The Supreme Court of Canada allowed the Minister's appeal, holding that the correct comparator group was divorced spouses, not separated married spouses.

Since former common law spouses and former married spouses are both denied survivor's pensions, there was no discrimination.

The appellant developer purchased land to build a recreational and residential project.

After the developer's building permits expired, the newly elected municipal council amended the zoning by-law to require a comprehensive development program and construction adjacent to public roads, effectively halting the project.

The developer sued the municipality for loss of profits, alleging bad faith.

The Supreme Court of Canada dismissed the appeal, holding that a municipality enjoys relative immunity when exercising its regulatory powers and can only be held civilly liable under the Civil Code of Québec if it acts in bad faith or irrationally.

The Court found no evidence of bad faith, as the municipality's objective to protect the natural environment was legitimate.

This is a note reporting that the Supreme Court of Canada dismissed the appeal from the Court of Appeal for Ontario's decision in Monsanto Canada Inc. v. Ontario (Superintendent of Financial Services).

The case involved the distribution of an actuarial surplus upon the partial wind up of a defined benefit pension plan under the Pension Benefits Act.

The respondent, a sales manager for an insurance company, was suspended without pay after being charged with attempted extortion unrelated to his work.

He was later acquitted and reinstated.

He sued for his lost salary during the two-year suspension.

The Supreme Court of Canada held that while an employer has an implied power to suspend an employee for administrative reasons to protect legitimate business interests, such a suspension must generally be with pay.

The employer could not unilaterally withhold the employee's salary while denying him the opportunity to work.

The appeal was dismissed, and the employer was ordered to pay the agreed damages for lost salary.

The Canadian Broadcasting Corporation (CBC) broadcast a report criticizing the Chambre des notaires du Québec (CNQ).

The respondent, a communications consultant for the CNQ, wrote a letter to the CBC requesting a right of reply and pointing out errors in the broadcast.

The CBC subsequently aired a second report that selectively quoted only the erroneous portions of the respondent's letter, portraying him in a misleading and negative light.

The respondent sued for defamation.

The Supreme Court of Canada upheld the lower courts' findings that the CBC committed a civil fault under article 1457 of the Civil Code of Québec by failing to adhere to professional journalistic standards.

The Court also upheld the finding that the CBC and the CNQ were liable in solidum for the damages.

Appeal concerning whether terminated members of a defined benefit pension plan are entitled to immediate distribution of a proportional share of actuarial surplus on a partial wind-up.

The Court held that the applicable standard of review of the Financial Services Tribunal’s interpretation of s. 70(6) of the Pension Benefits Act was correctness.

Applying the modern principle of statutory interpretation to the text, scheme, and purpose of the legislation, the Court concluded that s. 70(6) requires the realization and distribution of the affected members’ pro rata share of surplus as of the effective date of partial wind-up, if they are otherwise entitled.

The appeal was dismissed with costs.

Police stopped and detained a person matching the description of a recent break-and-enter suspect, conducted a protective pat-down, and then reached into his pocket and found marijuana, leading to a trafficking prosecution.

The Supreme Court recognized a limited common law power of investigative detention where police have reasonable grounds to suspect a connection to a particular crime and detention is reasonably necessary, together with a limited protective pat-down search power grounded in officer safety.

The Court held, however, that the more intrusive pocket search was not justified on the facts and violated s. 8 of the Charter.

Applying the s. 24(2) exclusion analysis, the Court excluded the non-conscriptive evidence because the unjustified search represented a serious breach and admission would bring the administration of justice into disrepute.

The appeal was allowed and the acquittal restored.

The respondent collective society sought to impose copyright liability on Internet Service Providers (ISPs) for music downloaded in Canada from foreign countries.

The Supreme Court of Canada held that ISPs acting merely as conduits for information communicated by others are protected from liability under s. 2.4(1)(b) of the Copyright Act.

The Court also ruled that the creation of temporary 'cache' copies for technical reasons of economy and efficiency falls within this protection.

Furthermore, the Court determined that the Copyright Act applies to international Internet transmissions that have a real and substantial connection to Canada, rejecting the view that a communication only occurs in Canada if it originates from a server located within the country.

The appellant challenged the constitutionality of Criminal Code provisions governing accused persons found unfit to stand trial, arguing that permanently unfit accused who do not pose a significant threat to public safety were kept indefinitely within the criminal process.

The majority held that the provisions fell within Parliament’s criminal law and criminal procedure jurisdiction, but that they infringed s. 7 of the Charter because they were overbroad as applied to permanently unfit accused who could never be tried and who were not dangerous.

The Court held the regime could not be justified under s. 1 because it failed minimal impairment.

A declaration of invalidity was granted and suspended for 12 months to permit legislative amendment.

The appellants, Orthodox Jews, set up succahs on the balconies of their co-owned property to fulfill a religious obligation during the festival of Succot.

The respondent syndicate of co-owners requested their removal, citing a declaration of co-ownership that prohibited constructions on balconies.

The Supreme Court of Canada held that the declaration infringed the appellants' freedom of religion under the Quebec Charter.

The Court established a subjective test for freedom of religion, requiring only that a claimant sincerely believe in a practice that has a nexus with religion.

The Court found that the impairment of the appellants' religious freedom was serious, while the intrusion on the respondent's property and security rights was minimal.

The Court also rejected the argument that the appellants had waived their religious rights by signing the declaration of co-ownership.

The appellants, a congregation of Jehovah's Witnesses, sought to build a place of worship in the respondent municipality.

After their initial application for a zoning amendment was refused with reasons, they made subsequent applications for a different lot, which the municipality summarily refused without providing reasons.

The appellants sought mandamus, arguing the refusal violated their freedom of religion and procedural fairness.

The Supreme Court of Canada allowed the appeal, holding that the municipality breached its duty of procedural fairness by failing to provide reasons for its subsequent refusals.

The matter was remitted to the municipality for reconsideration.

The Crown obtained an ex parte order for a judicial investigative hearing under s. 83.28 of the Criminal Code in relation to the Air India bombings.

The application judge ordered the hearing to be held in camera and kept secret.

A newspaper reporter discovered the proceedings and sought access.

The hearing judge dismissed the application for access.

The Supreme Court of Canada allowed the newspaper's appeal in part, holding that the open court principle applies to s. 83.28 hearings.

While the initial ex parte application was properly held in camera, the existence of the order and the constitutional challenge should have been public.

The investigative hearing itself must be presumptively open, subject to the Dagenais/Mentuck test for publication bans or in camera orders.

The Crown sought an ex parte order under s. 83.28 of the Criminal Code to compel a Named Person to attend a judicial investigative hearing and answer questions regarding the Air India bombings.

The Named Person challenged the constitutionality of s. 83.28, arguing it violated the right against self-incrimination under s. 7 of the Charter and compromised judicial independence.

The Supreme Court of Canada upheld the provision, finding it procedural in nature, thus applicable retrospectively.

The Court held that s. 83.28 includes adequate safeguards, such as derivative use immunity, which must be extended to extradition and deportation hearings to comply with s. 7.

The Court also found that the provision does not compromise judicial independence, as judges retain their role in protecting the witness's constitutional rights.

The complainant, while on maternity leave, was denied social assistance benefits under the APPORT program because her employment insurance benefits were not considered income from employment.

She filed a human rights complaint alleging discrimination based on sex and pregnancy.

The Supreme Court of Canada held that the Human Rights Tribunal lacked jurisdiction to hear the dispute.

The essential character of the dispute concerned eligibility for benefits under the Income Security Act, over which the Commission des affaires sociales has exclusive jurisdiction, including the authority to apply the Quebec Charter of Human Rights and Freedoms.

A forest fire caused by the negligence of Canadian Forest Products Ltd. damaged public lands in British Columbia.

The Province sued for suppression and restoration costs, which were agreed upon, as well as for lost stumpage revenue from harvestable trees and the value of non-harvestable trees in environmentally sensitive areas, including an environmental premium.

The Supreme Court of Canada held that the Province failed to prove a compensable financial loss for the harvestable trees because the Province's own Comparative Value Pricing system ensured revenue neutrality.

The Court also rejected the claim for the non-harvestable trees and the environmental premium, finding that the Crown had pleaded its case as an ordinary landowner rather than as parens patriae, and had failed to adduce sufficient evidence to quantify the environmental loss.

The teachers' unions entered into a modification of a collective agreement with the province that affected a minority group composed primarily of younger and less experienced teachers.

The younger teachers complained to the Human Rights Commission that the agreement discriminated against them, violating the equality guarantee of the Charter of Human Rights and Freedoms.

The Commission brought the matter before the Human Rights Tribunal.

The respondents filed a motion asking the Tribunal to decline jurisdiction on the ground that the labour arbitrator possessed exclusive jurisdiction over the dispute.

The Supreme Court of Canada held that the Human Rights Tribunal had jurisdiction over the dispute, as the essential character of the dispute engaged matters pertaining more to alleged discrimination in the formation and validity of the agreement than to its interpretation and application.

The appellant sought to intervene under art. 208 of the Code of Civil Procedure to represent her husband in his action for damages, arguing he was incapable of representing himself.

The Superior Court dismissed the application, holding that under art. 62 C.C.P. and s. 128 of the Act respecting the Barreau du Québec, only advocates may plead for another person.

The Court of Appeal denied leave to appeal.

The Supreme Court of Canada dismissed the appeal, confirming that the intervention procedure does not override the statutory monopoly of advocates to represent others in court, and that allowing the appellant to represent her husband would bypass the legal mechanisms for instituting protective supervision for incapable persons.