The SCC Monitor (24/04/2015)

Since our last post, the Supreme Court has released a number of significant decisions, including a decision about the standard of review applicable to statutory appeals and the test for civil contempt. It also dismissed two applications for leave to appeal in cases of particular interest to Canadian businesses, regarding what constitutes sufficient proof of illegal insider trading and whether Canadian courts have jurisdiction over secondary market misrepresentation class actions when the shares were purchased on a foreign exchange. Finally, it granted leave to appeal in a class actions case dealing with a provincial court’s jurisdiction over out-of-province third party defendants.

First, the Court released its decision in Mouvement laïque québécois v. Saguenay (City), 2015 SCC 16, finding that the recitation of a prayer at city council meetings breached the state’s duty of neutrality and was thus a discriminatory interference with an individual’s freedom of conscience and religion. The decision also provides guidance on the standard of review that applies to statutory appeals from decisions of specialized administrative tribunals (the appropriate standards of review are those that apply on judicial review, determined in accordance administrative law principles, and not the standard of review that applies to appeals from a court’s decision) as well as the circumstances in which an expert may be disqualified for lack of independence (more than a simple appearance of bias is required to render the evidence inadmissible). Read our post on this decision here.

The Court also released its decision in Carey v. Laiken, 2015 SCC 17. The Court upheld the Ontario Court of Appeal’s decision that a finding civil contempt does not require intention to interfere with the administration of justice. The Court also agreed that it was not open to the motion judge to set aside her finding of contempt based on “new” evidence that ought to have been lead at the initial contempt hearing. Once a finding of contempt has been made, there are only limited circumstances in which that finding can be revisited at the second penalty phase of the proceeding.

The Court also ruled on applications for leave to appeal in three significant cases.

First, the Court dismissed the application for leave to appeal the decision of the Alberta Court of Appeal in Alberta Securities Commission, et al. v. Gayle Marie Walton, et al., 2014 ABCA 273.  The Court of Appeal had overturned the decision of the Alberta Securities Commission finding that various persons had committed illegal insider trading by “recommending or encouraging” share transactions. The Court of Appeal held that the circumstantial evidence relied upon by the Commission was not sufficient to support a finding of insider trading, and that inferences of knowledge or intention should only be drawn where there is sufficient evidence to support those  inferences. The Court of Appeal also set aside two administrative monetary penalties imposed by the Commission (including a $1.75 million penalty) on the basis that they appeared to extend beyond what the public interest required and because the Commission had not provided sufficient justification for the penalties imposed. Read our post on Walton here.

Second, the Court dismissed the application for leave to appeal from the decision of the Ontario Court of Appeal in Peter Kaynes v. BP, PLC, 2014 ONCA 580. This case involved a proposed class action for secondary market misrepresentation under the Ontario Securities Act on behalf of a proposed class consisting of Canadian residents who acquired BP securities, regardless of whether those securities were purchased on the TSX or on various foreign exchanges. The Ontario Court of Appeal stayed the proceedings on the basis of forum non conveniens. Although the Ontario court had jurisdiction simpliciter over the disputes, it ought to have declined jurisdiction because there was another “clearly more appropriate” venue for adjudication of the disputes. Read our post on Kaynes here.

Finally, the Court granted leave to appeal from the decision of the Ontario Court of Appeal in Trillium Motor World Ltd. v. General Motors of Canada Limited, 2014 ONCA 497. In this class action case, the plaintiff auto dealerships sued a law firm, Cassels Brock, alleging that it was negligent in the legal advice it provided to dealerships affected by the restructuring. The law firm commenced third party claims against 150 law firms who also provided legal advice to the plaintiffs, including 32 firms based in Quebec. The Court of Appeal held that the Ontario court had jurisdiction over the dispute; the most relevant contract for the jurisdiction analysis was the agreement on which the law firms had provided advice, not the contracts between the law firms and their clients; and, the contract was formed in Ontario, where acceptance occurred by GM.

insider trading secondary market misrepresentation standard of review statutory appeals Supreme Court of Canada



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