This Week at the SCC (21/03/14)

The Supreme Court of Canada released one judgment this week of significant interest to the legal profession.

In Reference re Supreme Court Act, ss. 5 and 6, 2014 SCC 21, a 6-1 majority ruled that the appointment of the Honourable Marc Nadon and his swearing-in as a judge of the Supreme Court of Canada were void ab initio, and that he remains a judge of the Federal Court of Appeal.  The Court clarified that s. 6 of the Supreme Court Act, which requires that three of its nine judges be appointed "from among the judges of the Court of Appeal or of the Superior Court of the Province of Quebec or from among the advocates of that Province", does not permit the appointment of persons who are not current members of the Quebec courts or Barreau du Québec at the time of their appointment, even if they previously occupied that position.

More importantly, the majority also held that the Supreme Court of Canada "gained constitutional status as a result of its evolution into the final general court of appeal for Canada", and that this status was confirmed by ss. 41 and 42 of the Constitution Act, 1982.  As a result, Parliament now lacks the constitutional authority to unilaterally modify the "composition" of the Court, which includes it continued existence.  Such amendments instead require the unanimous consent of Parliament and all provincial legislatures.  As well, the majority held that amendments to the "other essential features" of the Court, which encompasses its jurisdiction as the final general court of appeal for Canada (including in matters of constitutional interpretation) and its independence, require the consent of at least seven provinces representing, in the aggregate, at least half of the population of all the provinces.  Because s. 6 of the Supreme Court Act relates to the composition of the Court - and indeed, "reflects the Court’s bijural character and represents the key to the historic bargain that created the Court in the first place" - the majority held that declaratory legislation which amended s. 6 in 2013 to provide that former members of the Quebec bar are eligible for appointment is ultra vires.

The Court also granted leave to appeal from three cases of interest to Canadian businesses and professions.

The first, Power Workers' Union (Canadian Union of Public Employees, Local 1000) v. Ontario (Energy Board), 2013 ONCA 359, concerns the test that should be applied when a utilities regulator is deciding whether to approve an application for rates under its "just and reasonable" rate-setting jurisdiction, in circumstances where those rates are intended to cover fixed labour costs that a utility has assumed under collective agreements with its unions.  The issue for the Supreme Court is whether such costs should be treated as "committed" costs which the regulator should generally presume to be prudent unless challenged on reasonable grounds, or as "forecast" costs which the regulator may assess having regarding to a wider variety of economic considerations.  The Court's decision will be an important for all regulated utilities with unionized workforces.

The second new appeal is from Canada v. Guindon, 2013 FCA 153.  It involves whether an individual who is assessed a penalty under s. 163.2 of the Income Tax Act is entitled to the protections afforded by s. 11 of the Canadian Charter of Rights and Freedoms.  Additionally, the appeal raises the issue of whether the failure to serve a notice of constitutional question deprives courts of the jurisdiction to consider constitutional arguments.

The third case is Sabourin and Sun Group of Companies v. Laiken, 2013 ONCA 530, which concerns the test for civil contempt of court.  In particular, the case raises the issue of whether it is necessary to establish that violation of a court order was deliberately and wilfully disobedient in circumstances where the violating party is not one of the litigants directly bound by the order, but their lawyer.

The McCarthy Tétrault Opinions Group consists of members of the firm’s litigation department whose practices focus on written advocacy and the provision of strategic advice and opinions in the context of complex business disputes and transactions.  The members of the Opinions Group are Anthony Alexander, Martin Boodman, Brandon Kain, Hovsep Afarian and Kirsten Thompson.

Supreme Court of Canada; Federal Court of Appeal; Nadon; Ontario Energy Board; Ontario Power Generation; Section 12 of the Charter; Notice of Constitutional Question; Contempt of Court



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