Michael E. Barrack

The applicants sought a stay of the Court of Appeal's order, which had reversed a supervising judge's decision to remove two directors from the board of a company undergoing CCAA restructuring, pending their application for leave to appeal to the Supreme Court of Canada.

The Court of Appeal first determined it had jurisdiction under s. 65.1(1) of the Supreme Court Act to consider the stay application.

Applying the RJR-MacDonald test, the court found that while there was a serious issue to be tried, the balance of convenience and the interests of justice favoured denying the stay, as granting it would effectively implement the supervising judge's order that the court had already found was made without jurisdiction.

During a CCAA restructuring of Stelco Inc., the board of directors appointed two new directors who were associated with major shareholders.

Employee stakeholders, fearing the new directors would favour shareholder interests over employee interests in the restructuring, successfully applied to the supervising judge to have the directors removed based on a reasonable apprehension of bias.

The Court of Appeal granted leave to appeal and allowed the appeal, holding that the supervising judge lacked inherent jurisdiction or statutory authority under section 11 of the CCAA to remove duly appointed directors.

The Court further held that the administrative law concept of reasonable apprehension of bias does not apply to corporate directors, whose conduct is governed by fiduciary duties and the business judgment rule.

The defendants brought a motion for leave to appeal an order certifying a class action.

The certification judge had certified the proceeding on the basis that 'waiver of tort' constituted an independent cause of action.

The Divisional Court found good reason to doubt the correctness of this conclusion, noting conflicting decisions and academic commentary suggesting waiver of tort is merely a choice of remedy rather than a standalone cause of action.

Leave to appeal was granted.

The College of Physicians and Surgeons appealed a Divisional Court order quashing an Amended Notice of Hearing.

During an ongoing discipline hearing against the respondent physician, the College's Registrar signed an Amended Notice of Hearing to add new allegations from a different complainant without following the statutory referral process.

The Court of Appeal dismissed the appeal, holding that professional discipline legislation must be strictly construed.

The Registrar lacked statutory authority to amend the notice or join new complaints mid-hearing, and the procedure violated the physician's right to prior notice under the Statutory Powers Procedure Act.

The moving party sought leave to appeal an initial order made under the Companies' Creditors Arrangement Act that authorized the debtor to obtain debtor-in-possession financing with superpriority over existing security.

The initial order was made without notice but included a comeback clause allowing interested parties to seek variations.

The Court of Appeal dismissed the motion for leave to appeal as premature, holding that the moving party should first utilize the comeback clause to have their concerns heard by the supervising judge on a full record.

The appellant appealed a judgment regarding the integration of his pension and his entitlement to life insurance.

The Court of Appeal questioned its jurisdiction to hear the matter under section 50 of the Arbitration Act, 1991, but heard the merits as both parties submitted the proceeding below sought declarations beyond the arbitrated issues.

The Court held it had no jurisdiction over the pension integration issue because the parties' agreement required arbitration for pension disputes with no recourse to the courts.

On the life insurance issue, the appellant failed to provide material demonstrating he had not received the normal retiring benefit.

The appeal was dismissed.

The appellant appealed a trial judgment finding it had made a false representation of fact when calling on a letter of credit.

The trial judge found the appellant called the letter of credit to replace it with cash as a security deposit, rather than for arrears owing.

The Court of Appeal allowed the appeal, holding that the trial judge's finding was unreasonable and contrary to the evidence, which established the respondent bank knew the letter of credit was obtained to satisfy a security deposit requirement.

The action was dismissed.

The appellant taxpayer, a commercial real estate developer, made tenant inducement payments (TIPs) to secure tenants for a new building.

The taxpayer deducted the entire cost of the TIPs from its business income in the year the payments were made.

The Minister reassessed the taxpayer, arguing the payments should be amortized over the life of the leases.

The Supreme Court of Canada held that the taxpayer's method of computation was consistent with the Income Tax Act and well-accepted business principles.

Because the primary purpose of the TIPs was realized entirely in the year they were made, the taxpayer was entitled to deduct the payments entirely in that year.