This Week at the SCC (30/05/2014)

The Supreme Court of Canada denied leave to appeal this week from two appeals of interest to Canadian businesses and professions.

The first, Transalta Corporation v. Canada, 2013 FCA 285, held that a taxpayer who successfully appeals a tax assessment after making a failed settlement offer to the Minister of National Revenue is not automatically entitled to substantial indemnity costs in the Tax Court, even if the outcome of the appeal is more favourable than the terms of the settlement rejected by the Minister.  The Federal Court of Appeal found that the Tax Court judge retained full discretion to deny substantial indemnity costs (despite a proposed Tax Court practice direction that would purport to create an automatic costs regime), and that he exercised this discretion appropriately in not awarding such costs where the Minister rejected the settlement offer owing to a legal disability (i.e., the Minister's inability to implement compromise settlements, in which the Minister fails to assess the amount of tax payable on the facts as he or she finds them in accordance with the law as he or she understands it).

The second leave application the Court denied was from Jackson v Canadian National Railway, 2013 ABCA 440, where the Alberta Court of Appeal not only declined to certify a proposed class action claiming unjust enrichment based on allegedly excessive freight rates, but granted summary judgment dismissing it.  The Court rejected the appellant's argument that the respondent railways were under a common law duty to charge fair and reasonable rates, finding that the regulatory regime established under the Canada Transportation Act "constitute[s] a comprehensive code of regulation which displaces any common law obligations that might have existed previously".

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 and Hovsep Afarian.



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