Summaries Sunday: Supreme Advocacy

One Sunday each month we bring you a summary from Supreme Advocacy LLP of recent decisions at the Supreme Court of Canada. Supreme Advocacy LLP offers a weekly electronic newsletter, Supreme Advocacy Letter, to which you may subscribe. It’s a summary of all Appeals, Oral Judgments and Leaves to Appeal granted from July 17 – August 20, 2021 inclusive.

Appeals

Bankruptcy and Insolvency: CCAA; Priorities
Canada v. Canada North Group Inc., 2019 ABCA 314, 2021 SCC 30 (38871)

The CCAA generally empowers supervising judges to order super-priority charges that have priority over all other claims, including claims protected by deemed trusts. In all cases where a supervising court is faced with a deemed trust, the court must assess the nature of the interest established by the empowering enactment, and not simply rely on the title of deemed trust. In this case, when the relevant provisions of the Income Tax Act are examined in their entirety, it is clear the ITA does not establish a proprietary interest because the claim does not attach to any specific asset. Further, there is no conflict between the CCAA order and the ITA, as the deemed trust created by the ITA has priority only over a defined set of security interests. A super-priority charge ordered under s. 11 of the CCAA does not fall within that definition. On review of a supervising judge’s order, an appellate court should be cognizant that supervising judges have been given this broad discretion in order to fulfill their difficult role of continuously balancing conflicting and changing interests. Appellate courts should also recognize that orders are generally temporary or interim in nature and that the restructuring process is constantly evolving. These considerations require not only that supervising judges be endowed with a broad discretion, but that appellate courts exercise particular caution before interfering with orders made in accordance with that discretion.

Civil Procedure; Limitation Periods
Grant Thornton LLP v. New Brunswick, 2020 NBCA 18, 2021 SCC 31 (39182)

This appeal turned on the standard to be applied in determining whether a plaintiff has the requisite degree of knowledge to discover a claim under New Brunswick’s limitation period statute, triggering a two-year limitation period in s. 5(1)(a). The Court of Appeal below adopted too high a standard. A claim is discovered when the plaintiff has knowledge, actual or constructive, of the material facts upon which a plausible inference of liability on the defendant’s part can be drawn. It follows from this standard that a plaintiff does not need knowledge of all the constituent elements of a claim to discover that claim. Here the Province discovered its claim against Grant Thornton on February 4, 2011. By then, the Province knew or ought to have known that a loss occurred and that the loss was caused in whole or in part by conduct which Grant Thornton had been retained to detect. Although the Province had this knowledge by February 4, 2011, it did not bring its claim until June 23, 2014. The claim is therefore statute-barred. 

Contracts: Releases
Corner Brook (City) v. Bailey, 2020 NLCA 3, 2021 SCC 29 (39122)

There is no special interpretive principle that applies to releases. The “Blackmore Rule” has been overtaken by the general principles of contract law in Sattva. The Blackmore Rule has outlived its usefulness and should no longer be referred to. Any judicial tendency to interpret releases narrowly is not a function of any special rule, but rather a function of releases themselves. In the instant case, the application judge interpreted the release broadly to include Mrs. Bailey’s third party claim in accordance with Sattva, and his reasons should have been reviewed on a palpable and overriding error standard. As the application judge made no reviewable error in his interpretation of the release, the appeal is allowed and the order reinstated.

Intellectual Property; Copyright
York University v. Canadian Copyright Licensing Agency (Access Copyright), 2020 FCA 77, 2021 SCC 32 (39222)

The trial judge here found the interim tariff was enforceable against York and that neither its Fair Dealing Guidelines nor its actual practices constituted fair dealing. The Federal Court of Appeal allowed York’s appeal on the tariff enforcement action but dismissed its appeal on the fair dealing counterclaim. The court held that Board approved tariffs are voluntary for users. If a user who chooses not to be licensed under a tariff makes an unauthorized use of a work, the remedy is an infringement action which Access Copyright does not have standing to assert because it does not own the copyright in any of the works and is not an exclusive licensee or an assignee. While this disposed of the dispute between the parties, the court went on to evaluate York’s appeal on the fair dealing counterclaim. It concluded that York could not establish that all copying within its Guidelines is fair and refused to issue the Declaration. The S.C.C. agreed with the Federal Court of Appeal that the tariff is not enforceable against York University, but not grant York’s requested Declaration, nor endorse the fair dealing analysis conducted by the Federal Court and the Federal Court of Appeal.