Civil Litigation - Defendant - SCC

In a property insurance appeal, insured homeowners sought full guaranteed rebuilding costs after a total-loss flood, including legal-compliance costs imposed by conservation authority requirements.

The Court interpreted the standard form policy and guaranteed rebuilding cost endorsement together, holding the compliance-cost exclusion remained operative except for the specified additional $10,000 coverage.

The majority held the exclusion’s language was unambiguous and that applying it did not nullify the endorsement’s core benefit of coverage beyond the policy limit.

Dissenting reasons would have allowed broader recovery at least for compliance costs tied to laws in force at renewal.

The appeal was dismissed with costs.

The appellant Crown appealed from a decision of the Saskatchewan Court of Appeal which quashed the respondent's convictions for firearms offences and possession of identity documents, holding that his arrest for simple possession of a controlled substance was unlawful because s. 4.1(2) of the Controlled Drugs and Substances Act — the Good Samaritan Drug Overdose Act exemption — precluded charge and conviction and, by necessary implication, arrest for that offence.

The majority held that Parliament's purpose in enacting s. 4.1(2) was to save lives by removing disincentives to calling emergency services at the scene of a drug overdose, and that immunity from arrest is necessarily implied by the immunity from charge and conviction, since arrest and the searches incident to it would otherwise substantially undermine that legislative purpose.

The majority further held that the s. 4.1(2) immunity does not affect other existing police powers at the scene of an overdose, and that the evidence discovered through a search incident to the unlawful arrest must be excluded under s. 24(2) of the Charter.

The dissent concluded that the text, context, and purpose of s. 4.1(2) limit the exemption to charge and conviction only, and that the police did not infringe ss. 8 or 9 of the Charter.

In this appeal, the Court considered whether a creditor’s unsuccessful seizure attempt still interrupts the 10-year extinctive prescription period for rights resulting from a judgment under Quebec civil law.

The Court held that filing and serving a notice of execution under the Code of Civil Procedure forms part of the judicial application for seizure and is sufficient to interrupt prescription under art. 2892 C.C.Q. even if no property is ultimately seized.

Because the seizure proceedings were suspended by a bailiff rather than dismissed by a court, art. 2894 C.C.Q. did not retroactively cancel the interruption.

The debtor’s prescription defence therefore failed.

The Supreme Court of Canada dismissed the appeal and held Ontario courts lack jurisdiction over the claims against the Italian defendants.

The majority accepted the Ontario cardmember agreement as a presumptive connecting contract but found the presumption rebutted because the real and substantial connection to Ontario was weak given the tort occurred in Italy and the foreign defendants’ relationship to Ontario was remote.

The dissent would have restored the motion judge’s ruling and allowed Ontario jurisdiction.

The appellant sought to uphold a provincial spending limit restricting third party political advertising to $600,000 in the year before a fixed-date election, while political parties faced no limits in the first six months of that period.

The majority held that the spending limit infringes s. 3 of the Charter by creating an absolute disproportionality in the political discourse, allowing political parties to drown out third party voices during a critical democratic period.

The majority further held the limit could not be saved under s. 1 as it failed the minimal impairment stage.

Two sets of dissenting judges would have allowed the appeal, finding the limit did not infringe s. 3 of the Charter on the evidentiary record, with the dissenters disagreeing on whether an expressive component exists within s. 3.

The appellant sought to strike paragraphs from the respondents' judicial review application challenging the issuance of uranium exploration permits, arguing the paragraphs constituted an abuse of process in light of two prior actions.

The Court confirmed that the abuse of process doctrine, while applicable to Indigenous litigants, must be assessed with regard to the unique context of Aboriginal rights litigation.

The status of a stayed prior action is not dispositive of whether the Crown has knowledge of an asserted Aboriginal claim sufficient to trigger the duty to consult.

Overlap between a general duty-to-consult action and a specific judicial review application does not, without more, threaten the integrity of the adjudicative process.

Case management, rather than striking pleadings, is the appropriate remedy where there is a risk of inconsistent outcomes from parallel proceedings.

The appellant seller appealed from a Court of Appeal decision that held exclusion clauses in a contract for the sale of topsoil were insufficient to oust the implied condition under s. 14 of the Sale of Goods Act that goods must correspond with their description.

The buyer had waived its right to test the topsoil before shipment, and the contract contained clauses providing that the seller would not be responsible for the quality of the material if the buyer waived those rights.

The Supreme Court held that the exclusion clauses constituted an express agreement under s. 53 of the Sale of Goods Act, applying modern contractual interpretation principles from Sattva and Tercon.

The majority restored the trial judge's judgment, finding the objective intention of the parties was for the buyer to accept the risk that the topsoil would not meet the previously supplied specifications if it failed to test the soil.

Côté J. dissented, concluding the word 'quality' in the exclusion clauses could not be expanded to cover defects in description or identity.

The appellants challenged a permanent injunction restraining a Canadian bank from honouring a letter of counter-guarantee in favour of a Greek bank.

The Greek bank had paid the beneficiary of an underlying letter of guarantee despite an interim order of an ICC arbitral tribunal prohibiting payment, and despite knowledge that the final arbitral award was imminent.

The majority held that where a beneficiary of a counter-guarantee has knowledge of and participates in a third party's fraud under the primary letter of guarantee, that fraud becomes the beneficiary's own and the fraud exception to the autonomy of letters of credit applies.

The dissent would have allowed the appeal, finding that the Greek courts' determination that the demand for payment was valid could not be disregarded, and that the beneficiary was innocent of any fraud.

Appeal dismissed, Karakatsanis and Côté JJ. dissenting.

The appellants, who served as presidents of a group of insurance companies under an incentive pay agreement with the majority shareholders, learned that a major company was interested in acquiring the group.

Rather than disclosing this to the shareholders, the presidents purchased the shareholders' interests and resold them at a substantial profit.

The Supreme Court of Canada held that the presidents breached both an implied contractual obligation to inform arising from the nature of the Presidents' Agreement and the obligation to perform that agreement in accordance with the requirements of good faith under arts. 1434 and 1375 of the Civil Code of Québec.

Disgorgement of profits was held unavailable as a non-compensatory remedy absent an obligation of maximalist loyalty, but damages equivalent to the appellants' profits were awarded pursuant to a rebuttable presumption that the shareholders' lost gain equalled those profits, where the appellants' own disloyal conduct prevented precise proof of injury.

The appeal was dismissed with costs.

A school board trustee sued a teachers' union president for defamation arising from public statements characterizing the trustee's online posts opposing a provincial sexual orientation and gender identity educational initiative as bigoted, transphobic, and hateful.

The defendant applied to dismiss the action under British Columbia's anti-SLAPP statute, the Protection of Public Participation Act.

The chambers judge dismissed the defamation action, finding a valid fair comment defence and that the public interest in protecting the defendant's counter-speech outweighed the limited harm to the plaintiff.

The Court of Appeal reinstated the action.

The Supreme Court of Canada majority restored the chambers judge's dismissal order, holding that the plaintiff failed to adduce sufficient evidence of serious harm causally linked to the defendant's statements, and that the defendant's expression as counter-speech on a matter of public interest relating to a marginalized group was deserving of significant protection under the public interest weighing exercise in s. 4(2)(b) of the PPPA.

Côté J. dissented, concluding the plaintiff was entitled to a day in court and that the chambers judge erred in failing to consider aggravating factors to harm and the quality of the expression at issue.

An aircraft struck the ground while attempting to land at Halifax Stanfield International Airport during a snowstorm, injuring passengers who subsequently commenced a class action.

The aircraft manufacturer brought an interlocutory motion to compel the Transportation Safety Board to produce the cockpit voice recorder and transcripts, which were protected by statutory privilege under s. 28 of the Canadian Transportation Accident Investigation and Safety Board Act.

The Board sought to make submissions in the absence of the public and other parties, which the chambers judge refused.

The Supreme Court of Canada dismissed the Board's appeal, holding that s. 28(6)(b) does not confer a general right on the Board to make submissions in the absence of other parties, and that the chambers judge did not commit a reviewable error in ordering disclosure after concluding that the public interest in the proper administration of justice outweighed the statutory privilege.

The majority held the test under s. 28(6)(c) requires the moving party to establish that the recording is relevant, probative, and necessary to resolve the dispute — not merely relevant — and that disclosure should not be routine.

Côté and Brown JJ. dissented, finding the chambers judge committed multiple reviewable errors in his balancing analysis.

An insolvent consulting engineering firm became subject to CCAA proceedings, after which the appellant municipality refused to pay for post-initial order work and sought to effect compensation between amounts owed to the firm and two pre-order fraud-related claims.

The majority held that participation in Quebec's Voluntary Reimbursement Program does not in itself establish that a claim relates to fraudulent misrepresentation under s. 19(2)(d) of the CCAA.

The majority further held that a supervising judge has broad discretion under ss. 11 and 11.02 to stay a creditor's right to pre-post compensation, though the absolute prohibition from the Quebec Court of Appeal was tempered to allow for exceptional cases.

The initial stay order covered the appellant's right to effect pre-post compensation, and no basis was shown to lift the stay on either claim.

Brown J. dissented, arguing the matter should have been remanded to the supervising judge to exercise her discretion.

An insured motorcyclist died in an accident while in breach of his insurance policy due to alcohol consumption, but his insurer provided a defence for three years without knowledge of the breach.

The insurer ceased defending and denied coverage upon discovering the breach; a third-party claimant sought a declaration that the insurer was estopped from denying full coverage.

The majority held that promissory estoppel requires the promisor to have actual knowledge of the facts demonstrating the breach, as a promisor cannot intend to alter a legal relationship by promising to refrain from acting on information it does not have.

The court also rejected constructive knowledge arising from a breach of a duty to investigate as a basis for estoppel, holding that the insurer's duty to investigate fairly runs to the insured, not to third-party claimants.

The concurrence agreed the appeal should be dismissed but disagreed that actual knowledge is an absolute requirement, preferring an objective analysis of the promisor's intent.

A professional comedian appealed a discrimination finding after a human rights tribunal held that his comedy routines mocking a public figure with a disability violated the right to the safeguard of dignity under the Quebec Charter.

The majority of the Supreme Court allowed the appeal, holding that the three elements of a discrimination claim under s. 10 of the Quebec Charter had not been established.

The majority found that the distinction was not based on a prohibited ground since the comedian had not targeted the complainant because of his disability but because he was a public figure.

Even if based on a prohibited ground, the majority held that the comedian's comments did not incite others to vilify the complainant or to detest his humanity, nor were they likely to lead to discriminatory treatment.

Four dissenting justices would have dismissed the appeal, finding that the comments constituted a discriminatory interference with the complainant's right to dignity as a child with a disability whose harm was broadly disseminated and deeply harmful.

A consulting firm contracted with a manufacturing company to implement an integrated management system, including a limitation of liability clause that had been freely negotiated between sophisticated commercial parties.

When the system implementation failed, the lower courts declared the non-liability clause inoperative on the basis of the doctrine of breach of a fundamental obligation in Quebec civil law.

The Supreme Court allowed the appeal, holding that neither of the two possible legal bases for the doctrine — public order or absence of an objective cause of the obligation — applied to render the clause inoperative in a contract by mutual agreement between sophisticated legal persons.

The Court confirmed that the Civil Code of Québec limits the doctrine of breach of a fundamental obligation to consumer contracts and contracts of adhesion under art. 1437 C.C.Q., and that the legislature deliberately chose not to extend such a mandatory rule to freely negotiated commercial contracts.

The clause did not deprive the debtor's obligation of its objective cause because specific performance and agreed damages remained available as sanctions for nonperformance.

The appellant auditors sought to have the respondent province's negligence claim dismissed as statute-barred under a two-year limitation period.

The province had paid out $50 million in loan guarantees in reliance on the appellants' audit report, and later received a second firm's draft report revealing material misstatements in the audited financial statements.

The Court established that a claim is discovered when the plaintiff has actual or constructive knowledge of the material facts upon which a plausible inference of liability on the defendant's part can be drawn.

Applying this standard, the Court found the province discovered its claim when it received the draft report from the second firm, more than two years before commencing its action.

The appeals were allowed and the motions judge's summary judgment dismissing the province's claim as statute-barred was restored.

The respondent struck a municipal employee while driving and later settled a separate action against the municipality by signing a broad release.

Years after executing the release, the respondent brought a third party claim for contribution or indemnity against the municipality in the action commenced by the injured employee.

The Court held there is no special interpretive rule that applies to releases; they are contracts subject to the general principles of contractual interpretation set out in Sattva.

The Blackmore Rule, which limited general words in a release to what was specially in the contemplation of the parties, has been overtaken by Sattva and should no longer be referred to.

The application judge made no reviewable error, and his order staying the third party claim was reinstated.

The estates of a prominent couple who were found dead in unexplained circumstances sought sealing orders over probate files to protect the privacy and physical safety of beneficiaries and trustees.

The application judge granted the sealing orders, finding the privacy and safety interests outweighed the open court principle, but the Court of Appeal unanimously set them aside.

The Supreme Court dismissed the appeal, holding that the appellants failed to establish a serious risk to an important public interest.

The Court clarified that privacy can constitute an important public interest for purposes of the Sierra Club test only insofar as it protects dignity — that is, information so sensitive it strikes at the biographical core of an individual — and found the probate file contents did not meet that standard.

The Court also held that the alleged risk of physical harm to beneficiaries and trustees was speculative rather than a proper inference from the record.

Five members were expelled from a religious congregation, and brought an action seeking a declaration that their expulsion was null and void for violating natural justice.

The appellant church sought summary judgment on the basis that the court lacked jurisdiction, as no underlying legal right existed.

The motion judge granted summary judgment dismissing the action, but the Court of Appeal allowed the respondents' appeal, holding that the church's written constitution and bylaws constituted a binding contract.

The Supreme Court of Canada allowed the appeal, restoring the motion judge's order, holding that membership in a voluntary association is not automatically contractual and that objective intention to create legal relations — which was absent on this record — is required before a court has jurisdiction to intervene.

Three police officers sued the Attorney General of Ontario for misfeasance in public office, alleging Crown prosecutors mishandled stay applications brought by two accused persons who claimed the officers assaulted them during an arrest.

The majority held that prosecutorial immunity bars misfeasance claims by police officers against Crown prosecutors, as allowing such claims would fundamentally undermine prosecutorial independence and objectivity and imperil the accused's right to a fair trial.

The majority found that the mutually independent relationship between police and prosecutors is incompatible with a regime of legal accountability running from prosecutor to police.

In dissent, one justice would have dismissed the appeal, finding four policy reasons why prosecutorial immunity should not apply to deliberate and unlawful prosecutorial conduct causing serious harm to police officers facing findings of brutality, and that the high liability threshold for misfeasance adequately guards prosecutorial independence.