Marie Deschamps

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 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 provincial government signed a Pay Equity Agreement in 1988 to address systemic gender discrimination in the health care sector.

In 1991, facing a severe financial crisis, the government enacted the Public Sector Restraint Act, which deferred the pay equity adjustments and extinguished arrears.

The appellant union grieved the legislation.

The Supreme Court of Canada held that while the legislation infringed the equality rights of female hospital workers under s. 15(1) of the Charter, the infringement was justified under s. 1 due to the exceptional financial crisis.

The Court also rejected the Court of Appeal's suggestion to add an explicit separation of powers step to the Oakes test.

The appellant brought a motion to strike certain documents from the respondents' record on appeal, including factums from the courts below, directions of the Court of Appeal, a motion to file fresh evidence, written representations on costs, correspondence, and a table of concordance.

The Supreme Court of Canada granted the motion in part.

The Court held that the factums, directions, motion, and representations on costs fell within the meaning of 'pleadings' and 'orders' under Rule 39(1)(b) and were properly included.

However, the correspondence and table of concordance constituted fresh evidence and were ordered struck from the record.

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.

The respondents refused to pay an electricity bill for a rental property they owned.

Hydro-Québec interrupted the supply of electricity to their principal residence, even though that account was not in arrears.

The respondents sued for damages.

The Supreme Court of Canada held that under the applicable bylaws, Hydro-Québec has the authority to interrupt service at any delivery point for which a defaulting customer holds a contract, not just the specific location with the unpaid bill.

The appeal was allowed.

The appellant was convicted of several offences arising from three separate gang home invasions.

The trial judge directed the jury that they could consider the evidence from one incident as similar fact evidence to identify the appellant in the other incidents.

The Supreme Court of Canada, applying its concurrent decision in R. v. Perrier, held that the trial judge erred.

The similarities between the incidents demonstrated that the same group likely committed the offences, but did not point to any individual trademark or characteristic identifying the appellant.

The appeal was allowed and a new trial ordered.

The appellant was convicted of offences arising from three separate gang home invasions.

The Crown alleged the appellant was involved in all three incidents, although membership in the gang rotated.

The trial judge instructed the jury that evidence admitted with respect to each incident was admissible in proving the guilt of the accused on the others.

The Supreme Court of Canada held that the trial judge erred.

While similar fact evidence of group activities is admissible to identify a gang responsible for a crime, it cannot be used to identify a particular member without an additional link connecting the individual to each crime.

The appeal was allowed and a new trial ordered.

The appellants sued their former criminal defence lawyer, alleging he breached his duty to advise regarding a civil claim and his duty of loyalty by allowing his law partner to represent a co-accused.

The Supreme Court of Canada dismissed the appeal, finding the lawyer met his duty to advise by recommending a civil specialist.

Regarding the conflict of interest, the Court held that while the situation should have been avoided, it did not render the contract for services absolutely null, and the appellants suffered no injury warranting a refund of fees or damages.

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.

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.

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.

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.

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 appellant purchased the assets of the Nova Scotia Power Corporation (NSPC) upon its privatization and sought to deduct capital cost allowances.

The Minister of National Revenue denied the deductions on the basis that NSPC, as a Crown agent, was immune from income tax legislation.

The Supreme Court of Canada held that NSPC was an agent of the Crown acting within its purposes, as expressly provided by the provincial Power Corporation Act, and was therefore entitled to Crown immunity under the federal Interpretation Act.

The appellant brought nearly $35,000 in cash to post bail for a client.

The police seized the money without a warrant under the Controlled Drugs and Substances Act.

When the Crown applied to extend the detention of the money under s. 490(2) of the Criminal Code, the appellant cross-applied for its return.

The Provincial Court judge ordered the money returned, finding the seizure unlawful.

The Supreme Court of Canada held that a Provincial Court judge has no jurisdiction under s. 490(2) or outside the Code to order the return of unlawfully seized property.

The proper procedure is an application for replevin or Charter review to a superior court.

The appeal was allowed and the Court of Appeal's order was set aside.

The appellants, owners of surface and non-petroleum mineral rights on 'Split Title Lands' originally granted by the Canadian Pacific Railway, appealed a decision regarding the ownership of hydrocarbons.

The CPR had reserved 'petroleum' rights when selling the lands.

The Supreme Court of Canada held that the reservation of petroleum divided ownership based on the phase of the hydrocarbons under initial conditions at the time of the contract.

The petroleum owner is entitled to all hydrocarbons in liquid phase prior to human intervention, regardless of whether they evolve into gas phase upon recovery.

The appeal was dismissed.

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 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.