Corporate/Commercial Law - SCC

A mortgage appeal addressed whether s. 8 of the Interest Act invalidates a default-triggered charge structure framed as a discounted pay-rate.

The majority held that substance governs over drafting labels and that terms producing a higher effective charge on arrears than on principal not in arrears offend s. 8.

The Court also held that a rate increase triggered solely by passage of time does not itself breach s. 8.

The impugned 25 percent effect under the second renewal arrangement was void, and the lower pay-rate formula governed.

In a property and secured-transactions appeal, the Court considered whether municipal heritage incentive payments registered in an agreement by caveat ran with land, passed in a judicial sale, or remained personal property subject to priority rules.

The Court held that s. 29 of Alberta’s Historical Resources Act allows positive covenants to run only where they are in favour of listed public entities, not in favour of a landowner claimant to payment.

The Court further held the agreement and sale documents did not transfer the payment right to the purchaser and that awarding those payments to the purchaser would create a windfall without commercial rationale.

The payment right was characterized as a chose in action assigned as security, with priorities governed by the Personal Property Security Act and any residual priority dispute remitted to a master.

In an insolvency appeal, the Court considered whether provincial farm-protection preconditions conflicted with the national receivership regime under the federal bankruptcy statute.

The majority held there was no operational conflict and no frustration of federal purpose, emphasizing a restrained paramountcy analysis and cooperative federalism.

The purpose of the federal receivership provision was read narrowly as creating a national appointment mechanism, not guaranteeing a uniformly rapid timeline free from provincial conditions.

The provincial 150-day process and mediation framework therefore remained operative when a secured creditor sought appointment of a receiver over farm-related assets.

A dissent would have found the provincial scheme frustrated federal objectives of timeliness, flexibility, and emergency responsiveness.

The Court dismissed the appeal and held that Ontario’s permit-suspension enforcement mechanism is constitutionally inoperative to the extent it enforces a bankruptcy-provable toll debt discharged under s. 178(2) of the Bankruptcy and Insolvency Act, because it creates an operational conflict and frustrates Parliament’s financial rehabilitation purpose.

The Ontario Energy Board appealed a decision that had required it to apply a mandatory prudence framework when assessing Ontario Power Generation compensation costs in rate-setting.

The majority held tribunal participation in defending its own decision was proper in this regulatory context and found no impermissible bootstrapping on appeal.

The Court held the governing statute did not require a single prudence methodology and permitted the Board to use a mixed approach for costs that were partly committed and partly subject to managerial discretion.

The Board’s disallowance of $145 million in compensation costs was found reasonable, and its original decision was reinstated.

In a utilities rate-setting appeal, the Court considered whether Alberta statutes requiring prudent costs imposed a mandatory no-hindsight methodology.

The Court held the regulator retained discretion to choose its analytical approach, provided resulting rates were just and reasonable to both consumers and utilities.

On the record, the disallowed pension cost-of-living adjustment component was reasonably treated as forecast rather than committed cost.

Limiting recoverable COLA to 50 percent of CPI, capped at 3 percent, for specified pension calculations was therefore reasonable.

The appeal was dismissed.

The Court held that under Manitoba’s Builders’ Liens Act, statutory trust and lien remedies are independent and may proceed concurrently.

Filing a lien bond to vacate a lien does not satisfy or extinguish trust obligations.

The appeal was dismissed with costs.

In a foreign judgment recognition and enforcement appeal, the Court held that an enforcing forum need not establish a real and substantial connection between itself and either the dispute or the judgment debtor.

The only jurisdictional prerequisite is that the foreign court issuing the judgment had proper jurisdiction under the real and substantial connection framework or traditional grounds.

The Court also held that traditional presence-based jurisdiction over a corporate defendant is established where the corporation carries on business in the province and is served there.

Questions about ultimate enforceability against related corporate entities were left for later procedural stages.

The Court held that no unconditional agreement to sell had been concluded under the brokerage contract because the buyer triggered the resolutory condition and submitted a new conditional offer that was never accepted.

The sellers also committed no fault and did not voluntarily prevent the free performance of the brokerage contract by refusing to decontaminate the property at their own expense.

The broker was therefore not entitled to its commission, and the appeal was allowed with costs.

The Court allowed the appeal, holding that authorization under s. 225.4 of Quebec’s Securities Act requires a realistic chance of success and that the respondent failed to show credible evidence of a material change triggering timely disclosure obligations.

This appeal concerns priority for statutory accident benefits under Ontario's no-fault automobile insurance regime after a claimant declined optional rental-counter coverage and was injured in a single-vehicle accident.

The core issue was whether the insurer had a sufficient nexus to the claimant to qualify as an insurer obliged to respond under s. 268 of the Insurance Act and the inter-insurer priority framework.

The Court accepted the appellate reasons below that the arbitrator erred in excluding the insurer from the statutory scheme.

The appeal was allowed and costs were awarded to the appellant.

The Court allowed the appeal from the Federal Court of Appeal and set aside the divestiture order under s. 92 of the Competition Act.

A majority held the merger likely prevented competition substantially, but concluded the efficiencies defence in s. 96 succeeded because proven efficiency gains outweighed proven anti-competitive effects after the Commissioner failed to quantify quantifiable effects.

These consolidated tax-planning appeals concerned errors in transactional documents that failed to reflect the parties’ common contractual intentions under Quebec civil law.

The Court held that, where parties mutually recognize drafting or implementation errors and amend their acts to align with their true agreement, courts may interpret and recognize those amendments under art. 1425 C.C.Q. The Court emphasized the distinction between exchange of consents and written expression, and rejected any acquired right of tax authorities to benefit from contractual errors once corrected by mutual consent, subject to third-party rights.

It also clarified that civil courts in such proceedings do not adjudicate the validity of tax assessments, which remain for competent tax forums.

The appeals were dismissed with costs throughout.

Direct and indirect purchasers sought certification of a class action alleging unlawful price-fixing of high-fructose corn syrup and pass-through overcharges.

The majority held indirect purchasers may in principle sue, but certification failed for that group because there was no evidentiary basis that at least two members could self-identify as having purchased affected products during the class period.

It also held the direct purchasers’ constructive trust claim was plain and obvious to fail for lack of proprietary nexus and inadequacy of monetary remedy.

The appeal by the proposed indirect purchaser class was dismissed and the respondents’ cross-appeal was allowed.

Dissenting reasons would have found an identifiable class and certified the indirect purchaser claims.

The Court dismissed an appeal from authorization of a Quebec class action alleging international DRAM price-fixing and overcharges to direct and indirect purchasers.

It held Quebec courts had jurisdiction under art. 3148(3) C.C.Q. because economic damage was allegedly suffered in Quebec through a consumer contract concluded there.

The Court reaffirmed that authorization is a low-threshold screening stage and found an arguable case on fault, injury, and causation under art. 1457 C.C.Q. It accepted that passed-on overcharges can ground injury claims in Quebec civil liability and that aggregate loss allegations may suffice at authorization.

It also found adequate representation and no disqualifying conflict at this preliminary stage.

The appellant credit union challenged tax reassessments following an amalgamation structured to avoid statutory flow-through of tax attributes.

The Court held the amalgamation met the statutory conditions for a qualifying amalgamation under the Income Tax Act because provincial amalgamation law vested all predecessor property and liabilities in the amalgamated entity by operation of law.

As a result, the appellant could not avoid flow-through treatment for capital cost allowance and preferred rate amount calculations.

Concurring reasons agreed in result based on legal continuity at amalgamation and cautioned against broader holdings on provincial corporate law.

The appeal was dismissed with costs.

The court considered whether a single-purpose corporate purchaser seeking specific performance after a failed land transaction was exempt from the mitigation principle in contract damages.

The majority held that incorporation benefits carry corresponding burdens, including reasonable mitigation efforts where substitute opportunities are available.

It concluded the purchaser lacked a substantial and legitimate basis to avoid mitigation and that the evidentiary record supported available comparable development opportunities.

The dissent would have restored trial damages, finding no palpable and overriding error on mitigation opportunity and reasonableness.

The appeal and cross-appeal were both dismissed, leaving the appellate reduction to nominal damages in place.

The Court considered whether defendants could seek dismissal under Ontario Rule 21.01(3)(a) based on arbitration and forum selection clauses after delivering a statement of defence.

It held that a defence pleading the foreign forum clause does not itself bar a subsequent Rule 21 motion, provided the motion is brought promptly.

Applying the strong-cause framework for displacing contractual forum clauses, the Court found no basis to refuse enforcement.

The appeal was dismissed with costs.

Consumer-protection appeal concerning misleading sweepstakes advertising and civil remedies under Quebec's Consumer Protection Act.

The Court held the proper benchmark for general impression is the credulous and inexperienced average consumer, not a skeptical or especially curious consumer.

The mailing was found misleading and to omit material information, establishing prohibited practices under ss. 219 and 228 and engaging civil recourses under s. 272 where a sufficient nexus to the consumer contract was proven.

Compensatory damages of $1,000 were upheld, punitive damages were justified but reduced to $15,000, and the appeal was allowed in part.

The appellant sought to block disclosure of portions of drug submission records requested under federal access to information legislation.

The Court clarified notice obligations, severance duties, and the evidentiary burden on a third party resisting disclosure under statutory exemptions for trade secrets, confidential information, and probable harm.

The majority held that the third party had not proven that the remaining redacted material met the claimed exemptions on the record.

The Court affirmed that appellate intervention was available where the reviewing judge did not adequately apply governing legal principles to the evidence.

The appeals were dismissed and disclosure orders stood, subject to redactions already accepted.