Appellate Quarterly (July 2025) – Key Takeaways

On July 23, 2025, McCarthy Tétrault’s National Appellate Litigation Group hosted its third appellate quarterly webinar of the year, featuring six recent appeals that may impact the business and legal communities across Canada. Kara Smyth, Kosta Kalogiros, Sajeda Hedaraly, Patrick Williams and Brandon Kain discussed these appellate developments and future trends to watch in each region.

Damages are presumed for privacy breaches (British Columbia)

The Court of Appeal for British Columbia in Insurance Corporation of BC v. Ari, 2025 BCCA 131 upheld a damages award for breach of privacy without proof of harm.

An ICBC employee sold private information of policy holders to criminals. Some policy holders were targeted in arson and shooting attacks. They brought a class action against ICBC. The lower court found the employee breached section 1 of BC’s Privacy Act and the ICBC was vicariously liable for creating “foreseeable risk of wrongdoing”, and awarded $25,000 in general damages per class member. The ICBC appealed the damages award, arguing that only nominal damages could be awarded without proof of specific harm. The Court of Appeal disagreed. It stated that where the breach is serious, deliberate, and for an improper purpose, more than nominal damages may be required to compensate for the intrinsic damage to the plaintiff’s privacy rights.^[1]

Takeaways:

• organizations can be found vicariously liable for the intentional acts of their employees breaching privacy rights, even where those acts are not specifically foreseeable; and
• an intentional (or reckless) privacy breach is an independent wrong and may give rise to more than nominal damages.

Regulators must exercise investigative powers with care (British Columbia)

In Lamarche v. British Columbia (Securities Commission), 2025 BCCA 146, the BC Securities Commission compelled 3 years of Mr. Lamarche’s email records as part of an unregistered trading investigation. Lamarche brought an action against the Commission alleging that it took no steps to protect solicitor-client information and claiming damages under the Privacy Act. The Court below struck Lamarche’s privacy claim based on the immunity provision in section 170(1) of the Securities Act.

On appeal, Lamarche challenged the Commission’s immunity. The Court of Appeal held that the privacy claim was not bound to fail, suggesting that the lack of a protection protocol could show reckless disregard for relevant legal standards and the importance of solicitor-client privilege.^[2]

Takeaways:

• The Commission must exercise their investigative powers with care—otherwise they could face civil exposure.
• The Commission should implement an effective protocol to protect privileged communications.
• The minimum effective protocol requires the Commission to:
  • Seal the records being examined,
  • Notify the privilege holder, and
  • Apply to assess the claim of solicitor-client privilege.
• These obligations likely extend to other regulators with broad investigative powers.

Plain and ordinary language remains a North star and corporate defamation damages must be credibly proven (Ontario)

In James Bay Resources Limited v. Mak Mera Nigeria Limited, 2025 ONCA 448, the Court of Appeal for Ontario dramatically reduced a damages award for defamation and breach of contract.

An Ontario company, James Bay, partnered with Mak Mera, a Nigerian company, to pursue oil and gas opportunities in Nigeria. The parties entered into two agreements outlining compensation for Mak Mera's services. Both agreements contemplated monetary payment for services and the issuance of shares on the acquisition of local oil and gas assets. Services were rendered and payments were made under the first agreement, but no shares were issued as no assets were acquired. The second agreement was entered into thereafter. It stated that it was replacing the first agreement and, unlike the first agreement, provided that the monetary payment contemplated therein would be made “at the same time” as an issuance of shares (which was contingent on acquisition of assets). James Bay paid Mak Mera US$405,000 over the course of the two agreements but never delivered shares to Mak Mera as asset acquisitions never occurred. The parties got into a heated dispute about an oil and gas opportunity related to Shell, prompting Mak Mera to send complaint letters to the Nigerian Department of Petroleum Resources (which approves all oil and gas contracts). As a result, James Bay failed to obtain an interest in the Shell contract.

James Bay sued Mak Mera for breach of contract and defamation. The trial judge ordered Mak Mera to return the US$405,000 payment and awarded James Bay $200,000 in damages for the defamatory letter. The Court of Appeal overturned both findings. On breach of contract, the Court held that the trial judge misinterpreted the agreements and allowed the surrounding circumstances to overwhelm the plain and ordinary meaning of the contracts. The monetary payments were earned in exchange for services and were not conditional on asset acquisition. As such, the trial judge also effectively rewrote the agreements by ordering repayment of the moneys paid. On defamation, the Court found the damages award was inordinately high and not supported by evidence of reputational harm or economic loss. The Court emphasized the different considerations at play in corporate defamation cases versus individual defamation cases. James Bay was entitled only to nominal damages ($1,000).

Takeaways:

• The surrounding circumstances should not overwhelm the plain and ordinary meaning of contracts. If there are unique features of a particular deal, ensure they’re clearly expressed.
• A business harmed by a defamatory campaign will only receive substantial damages if it presents clear and cogent evidence (not just anecdotes) that the defamation has been widespread and impactful. Conversely, in certain circumstances, a swift apology or retraction by a defaming defendant may serve to reduce exposure.

The suspension of legislation is a high bar and decisions by a single appellate judge can only be reviewed in 3 situations (Québec)

In Procureur général du Québec c. Gaspé Énergies inc., 2025 QCCA 629, the Québec Court of Appeal considered the Act ending exploration for petroleum and underground reservoirs and production of petroleum and brine. The Act prohibited exploration of petroleum and production of petroleum and brine in Québec, revoking all active permits. Companies involved in the hydrocarbon industry contested the constitutionality of the Act and asked the Superior Court to suspend some of its provisions pending the final judgement on the merits. The Superior Court granted the suspension.

The Court of Appeal affirmed that the government benefits from a presumption that legislation is enacted in the public interest. The burden is on the party seeking the suspension of the legislation to rebut this presumption and unless they do so, the government will not need to otherwise establish that the public will be harmed if the suspension is granted.

The Court of Appeal also clarified an important procedural question, explaining that it can only review a decision to grant leave to appeal rendered by a single judge in 3 situations:

• When the right to appeal does not exist;
• When the judge does not have jurisdiction to grant leave; and
• When the judge dismisses an application for leave to appeal to which a party has an appeal as of right.

Reversing its 2012 precedent, the Court held that the evaluation of the criteria set out in art. 31 of the Code of Civil Procedure to decide whether to grant leave does not raise a question of jurisdiction.

The companies have requested leave to appeal to the Supreme Court of Canada.

The Prime Minister and Minister of Justice cannot be compelled to appoint judges (Federal)

In Canada (Prime Minister) v. Hameed, 2025 FCA 118, the Federal Court of Appeal emphasized the importance of maintaining reciprocal respect and deference between the branches of government. In May 2023, Chief Justice Wagner wrote to Prime Minister Trudeau expressing “deep concern” about the government’s delay in filling federal judicial vacancies. Shortly after, Yavar Hameed started an action against the Prime Minister and Minister of Justice. The Federal Court found that the vacancies were untenable and caused delay in the justice system, and recognized a constitutional convention requiring the Prime Minister and Minister of Justice to fill vacancies within a reasonable time.

By the time of the appeal hearing, the vacancies had fallen from 79 to 15. The Court of Appeal held that did not make the appeal moot—the existence of a duty was still in dispute. The Court allowed the appeal on the basis that the Federal Court lacked jurisdiction. The Federal Court would have jurisdiction only if the Prime Minister and Minister of Justice “were empowered to advise in the judicial appointment process by any Act of Parliament or by any order made under a prerogative of the Crown.”^[3] They were not so empowered. Further, the Court confirmed that courts can recognize, but cannot enforce, constitutional conventions. The Federal Court did not apply the test for recognizing new constitutional conventions.

The CRTC cannot grant telecommunications carriers access to public property to install 5G small cell antennas (Supreme Court of Canada)

The Supreme Court of Canada’s decision in Telus Communications Inc. v. Federation of Canadian Municipalities, 2025 SCC 15 has important implications for the national roll-out of 5G networks across the country.

Parliament has given telecommunications carriers a qualified right of access to public property under section 43 of the Telecommunications Act. It empowers the CRTC to authorize the construction of a “transmission line” on a highway or other public place if the responsible municipality or other public authority refuses to grant carriers the permission to do so. The regime has traditionally applied to “wireline”, rather than “wireless”, network infrastructure, although the term “transmission line” is not defined in the Act. In 2021, the CRTC held that the access regime does not apply to 5G small cell antennas, because a “transmission line” could not be interpreted to encompass wireless infrastructure. The CRTC’s interpretation was upheld by the Federal Court of Appeal and the Supreme Court.

The majority found that the text, context and purpose of section 43 indicated that Parliament did not intend the access regime to apply to wireless infrastructure like 5G small cell antennas. In its analysis, the majority confirmed that courts must give effect to the legislature’s intent at the date of enactment. But this does not prevent courts from applying statutes to new or evolving circumstances, including new technology, if the legislature intended this through the use of broad or open-textured language in the statute. This test was not met in relation to the term “transmission line” in section 43 of the Telecommunications Act, as a number of features in the statute suggested that Parliament intended the term to be limited to wireline infrastructure.

Takeaways:

• When interpreting a statute, courts can read broad language in a dynamic way, so that it applies to new matters. Whether a statute should be interpreted this way depends on the text, context and purpose of the legislation.
• Telecommunications carriers wishing to install 5G small cell antennas on public property cannot ask the CRTC for access. Instead, they must engage in good faith negotiations with the responsible public authority. However, Parliament could amend the Telecommunications Act to give the CRTC this power.

^[1] Insurance Corporation of BC v. Ari, 2025 BCCA 131 at para 60.

^[2] Lamarche v. British Columbia (Securities Commission), 2025 BCCA 146 at para 55.

^[3] Canada (Prime Minister) v. Hameed, 2025 FCA 118 at para 38.