The SCC Monitor (25/02/2015)

Since our last update, the Supreme Court of Canada denied leave to appeal in nine cases, heard one of the most highly anticipated appeals of the year, and released a judgment that impacts lawyers across the country.

In Canada (Attorney General) v. Federation of Law Societies of Canada the Supreme Court ended a 15 year legal battle between the federal government and the various Canadian Law Societies. At issue was whether certain anti-money laundering legislation was unconstitutional to the extent it applied to lawyers and documents in the hands of legal counsel. The majority of the court held that ss. 62, 63, 63.1 and 64 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act infringe on s. 8 of the Charter.

Given that even asserting privilege over records could itself result in a breach of privilege, the Court held that allowing the powers in ss. 62, 63, and 63.1 to be applied to lawyers is presumptively unreasonable and would constitute a significant limitation on the right to be free of unreasonable searches and seizures. Similarly, s. 11.1 of the Regulations to the Act was found to infringe on s. 7 of the Charter; requiring a lawyer to gather significant extra information on their client undermines the lawyer’s duty of commitment and zealous representation. None of these violations were held to be justified by s. 1 as other less invasive options are available. The Court's decision reaffirms the importance of privilege and of lawyers’ duties to their clients.

On February 9, the Court heard a highly anticipated trilogy of cases in Green v. Canadian Imperial Bank of Commerce, Silver v. IMAX Corp, and Trustees of the Millwright Regional Council of Ontario Pension Trust Fund v. Celestica Inc. (blogged about in our appeals to watch in 2015). The trilogy centres on two key issues in Ontario that demand clarity in proposed securities class actions for damages for alleged secondary market misrepresentations. The first issue relates to the appropriate limitations period for commencing such a claim. There is a tension between the requirement for leave and the statutory suspension of the limitation period once a cause of action is “asserted”. The key question is whether a cause of action is “asserted” when the statement of claim is issued, or when the court grants leave under the Securities Act. In 2012, the Ontario Court of Appeal held that a claim is only “asserted” when leave is granted, only to have a five-judge panel unanimously reverse course in 2014 in the Green decision.

The second issue to be determined is what standard will be required for a court to grant a plaintiff leave to proceed with a claim for damages in a secondary market misrepresentation claim under the Securities Act. How the Court handles this issue will have a significant impact on the ability of issuers to get in front of a claim and defeat it at an early stage.

Finally, on February 19, the Court denied leave to appeal in nine cases, two of which are of interest to Canadian business:

  • Provigo Québec inc. v. Syndicat des travailleuses et travailleurs de Provigo, entrepôt Armand-Viau: the applicant was an employer that had locked out its unionized workforce and then unilaterally sent out termination notices. The applicant claimed that a grievance arbitrator had no jurisdiction as the lockout terminated the collective agreement under which the arbitration was heard. The arbitrator deemed they had jurisdiction; a ruling which was upheld on judicial review and appeal to the Quebec Court of Appeal.
  • Wood-Fired v Gas-Fired v Commercial Crematoria: a crematorium in an area zoned for “Parks and Institutional” was denied a license to operate as it was not a permitted use under that zoning code. The crematorium owners petitioned for a writ of mandamus compelling the municipality to provide the documentation. The petition was denied at the BC Supreme Court; however, that decision was overturned by the Court of Appeal and an order of mandamus was granted.

anti-money laundering securities class action Supreme Court of Canada



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