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Appellate Quarterly 10/10/2023 - Key Takeaways

On October 10, 2023, McCarthy Tétrault’s National Appellate Litigation Group hosted our Appellate Quarterly webinar for the third quarter of the year, featuring five recent appeals of interest to the business community. Cassidy Bishop, Dorothy Charach, Sarah Woods, Kendra Levasseur, and Adam Goldenberg discussed these appellate developments and trends to watch across Canada.

Here are some key takeaways:

  1. Majority of class proceeding stayed because of arbitration clause in consumer contract

In Williams v Inc., 2023 BCCA 314, the Court of Appeal for British Columbia upheld a stay of the majority of a proposed class proceeding on the basis of a class action waiver clause and an arbitration clause in the contracts signed by the class members. The Court of Appeal held that, while the application judge did not apply the Supreme Court of Canada’s judgment in Uber v Heller – the chambers decision in Williams was released prior to Uber – the chambers judge was alive to the concerns that animated the Uber decision with respect to the potential unconscionably of arbitration agreements, namely, any inequality of bargaining power, any disproportionality of cost, the value of the claim, the potential for unfairness in standard form contracts, and the possibility of unjust results arising from requiring arbitration in a foreign jurisdiction. Ultimately, the Court of Appeal concluded, the chambers judge made no palpable and overriding error in determining that there was no unconscionability in the agreement as the arbitration fee was modest, would be refunded in many cases by Amazon, Amazon would not seek legal costs, and no travel was required as attendance could be virtual. Williams provides important guidance on how and why, after Uber, a class action waiver and arbitration clause may be upheld.

  1. Adverse possession of a public park denied, over a strong dissent

In a split decision, the Court of Appeal for Ontario upheld the dismissal of an adverse possession claim in Kosicki v Toronto (City), 2023 ONCA 450. The Appellants in Kosicki owned a strip of land backing onto a park, and since at least 1971 had fenced over a piece of park land for use as a backyard. They had even paid taxes on it. The appellants brought an application claiming adverse possession. The application judge found that, although the disputed land would have met the test for adverse possession, it was immune due to the common law “public benefit” test as set out in Hackett v Colchester, [1928] SCR 255. Justice Sossin, writing for the Court of Appeal majority, held that, unless land is specifically protected by legislation against claims for adverse possession, claims should be resolved through the common law public benefit test. Where land was purchased for or dedicated to public parkland, in which there is a high public interest, adverse possession will only be available where the municipality has waived its right or acknowledged or acquiesced in the possession, which had not occurred in this case. Justice Brown, in dissent, would have held that the Real Property Limitations Act had ousted the common law and thus precluded resort to the public benefit test, since it was a complete codification of the law on adverse possession. As a result, the common law did not apply and the appellants had satisfied the statutory requirements to extinguish the City's title to the land in dispute. This decision underscores the caution that should be used when relying on a seemingly “complete” statutory code, particularly if it is “archaic.” If the legislation is silent on the particular situation that applies, the common law may (depending on the circumstances) be used to fill that gap. Our prior discussion of Kosicki can be found here.

  1. Communications permitted between defendants and class members during the opt-out period

In Bernard v  Collège Charles-Lemoyne de Longueuil Inc. 2023 QCCA 854, the Court of Appeal of Quebec clarified the nature of communications that are permitted between defendants and potential class members during the opt-out period of a class action. In Bernard, the defendants had sent various communications to potential class members, who were parents whose children attended private schools in Quebec during the COVID-19 pandemic. The communications consisted of inviting parents to opt-out of a class action concerning school fees charged during the pandemic. The defendants reminded parents of the deadline to opt-out and thanked those who had opted out, among other things. In the course of the opt-out period, more than 24,000 parents did so. Class counsel brought an application to suspend the opt-out proceedings and to prohibit the defendants from continuing their communications with potential class members. At first instance, the application was denied. The Court of Appeal agreed with the application judge and found that communications between a defendant and class members should be allowed if they respect the delicate balance between the freedom of expression of the defendants and the inherent principles of the class action regime. Once the opt-out period ends, however, defendants may only communicate with the plaintiff class representative. Our prior discussion of Bernard can be found here.

  1. Rebooting the standard for computer-implemented inventions

For the first time in more than ten years, the Federal Court of Appeal directly addressed the patentability of “computer-implemented inventions” in Canada (Attorney General) v Benjamin Moore & Co., 2023 FCA 168. Benjamin Moore had attempted to patent its colour-selection system, which was rejected by the Commissioner of Patents (the “Commissioner”). Benjamin Moore appealed and the Federal Court remitted and instructed the Commissioner to reconsider its decision. The Attorney General appealed to the Federal Court of Appeal. The Court of Appeal once again remitted the question of patentability to CIPO. In doing so, the Court of Appeal commented that subject matter that uses conventional computer technology can be patentable. Ultimately, the question is often whether the subject matter falls within the definition of “invention.” Where the subject matter goes beyond an abstract idea or conventional computer elements and manifests a discernible effect or change, it will likely be patentable. In the end, the determination of patentability remains a highly fact specific exercise that has to evolve with technology.

  1. The importance of protecting “counter-speech”

In Hansman v Neufeld, 2023 SCC 14, the Supreme Court of Canada dismissed a claim in defamation under British Columbia’s anti-SLAPP legislation, and in doing so commented on the importance of protecting “counter speech”. Barry Neufeld, a school board trustee, had made public comments considered by many to be derogatory towards trans youth and other 2SLGBTQ+ people. Glen Hansman — a gay man, a teacher, and former president of a teacher’s union — made statements to the media characterizing Mr. Neufeld’s comments bigoted and transphobic. Mr. Neufeld sued Mr. Hansman for defamation, and Mr. Hansman applied to have the claim dismissed as a strategic lawsuit against public participation (“SLAPP”). The Supreme Court of Canada, over the dissent of Justice Côté, held that there was significant public interest in protecting Mr. Hansman’s expression, which served a truth‑seeking function and was aimed at countering expression that he perceived to undermine “the equal worth and dignity of marginalized groups.” The majority agreed with the application judge and dismissed the claim, concluding that there were grounds to believe that Mr. Hansman’s fair comment defence was valid, as (among other reasons) Mr. Neufeld’s public statements could constitute the factual basis for Mr. Hansman’s comments. Hansman confirms that the public interest in protecting counter-speech in defence of a vulnerable minority group may, in circumstances like those of this case, outweigh the public interest in permitting a defamation claim brought on the basis of the counter-speech to proceed. To view our prior discussion of the Hansman decision, click here.

To view the recording of this session of Appellate Quarterly, please e-mail [email protected].



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