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 May 18 – June 21, 2023 inclusive.

Oral Judgment

Criminal Law: Sexual Assault
R. v. Hay, 2022 ABCA 246; 2023 SCC 15 (40316)

The Chief Justice: “Mr. Hay appeals from the unanimous decision of the Court of Appeal of Alberta setting aside an acquittal and substituting a conviction, pursuant to s. 686(4)(b)(ii) of the Criminal Code, R.S.C. 1985, c. C-46, on one count of sexual assault. We are all of the view that the appeal should be dismissed, substantially for the reasons of the Court of Appeal. Mr. Hay’s defence of honest but mistaken belief in communicated consent had no air of reality, and the evidence of prior sexual activity was inadmissible. In the circumstances, the Court of Appeal properly substituted a conviction. Therefore, the appeal is dismissed.”


Civil Litigation: Anti-SLAPP

Hansman v. Neufeld, 2021 BCCA 222; 2023 SCC 14 (39796)

Certain provincial legislatures have targeted strategic lawsuits against public participation (SLAPPs), or actions that disproportionately suppress free expression on matters of public interest. Mr. Neufeld argued that he only criticized a policy; he never expressed hatred towards the transgender community, nor did his words create an unsafe school environment for transgender students. His right to criticize a government initiative is not in dispute. Rather, the central issue is whether Mr. Hansman had a right to respond to Mr. Neufeld in the way he chose without the threat of civil liability. He did. Even if Mr. Neufeld had discharged his burden as to the fair comment defence, the chambers judge was entitled to dismiss the defamation claim because the public interest in protecting Mr. Hansman’s expression is not outweighed by the limited harm to Mr. Neufeld. Mr. Hansman’s words were not a disproportionate or gratuitous response to Mr. Neufeld’s statements, and there is a substantial public interest in protecting his counter-speech. Not only does protecting Mr. Hansman’s expression preserve free debate on matters of public interest, it also promotes equality, another fundamental democratic value.

Criminal law: Impaired driving
R. v. Breault, 2021 QCCA 505; 2023 SCC 9 (39680)

Does the validity of a demand made by a peace officer under s. 254(2)(b) require that the officer have immediate access to an ASD (ie approved screening device) at the time the demand is made? According to the grammatical and ordinary meaning of these words, a driver detained under s. 254(2)(b) must “supply” a breath sample to the peace officer “immediately” or “without delay”. Stopped drivers “are bound by s. 254(2) to comply immediately” (Woods, at para. 45); they are not free to provide a sample when they see fit. Although a stopped driver is being detained at the first step of the detection procedure, the driver has no right to counsel; this right exists only at the second step (Woods, at para. 31). A driver who refuses or fails to comply with a demand is subject to criminal sanctions under s. 254(5). It is therefore not an offence to express an intention to refuse once the ASD arrives at the scene; refusing without reasonable excuse to provide forthwith a sample is what constitutes the offence. This suggests that compliance must actually be physically possible. Nothing in s. 254(2)(b) indicates that Parliament intended to create a presumption of validity. Peace officers who have no ASD with them when they stop a driver who is suspected of having alcohol in their body are not entirely without options: they can require the driver to perform coordination tests, as permitted by the current s. 320.27(1)(a); also have common law powers to check for sobriety; where doing so is reasonable and necessary, they can, among other things, question a driver who is lawfully stopped about prior alcohol consumption or ask the driver to perform physical tests other than those provided for in the Criminal Code. The Crown has not shown that there was any unusual circumstance that would account for the absence of an ASD at the scene herein and thereby justify a flexible interpretation of the immediacy requirement; in fact, the Crown is unable to explain why police did not have an ASD with them. The demand made was therefore invalid. Accordingly, refusal did not attract criminal liability, and the acquittal entered by the Québec Court of Appeal must be upheld.

Immigration: Safe Third Country Agreement
Canadian Council for Refugees v. Canada (Citizenship and Immigration), 2021 FCA 72; 2023 SCC 17 (39749)

There is no debate that safe third country agreements, as a general matter, may be compatible with international law; the appellants do not attack the validity of the Safe Third Country Agreement itself; and the S.C.C is not tasked with assessing the wisdom of Canadian immigration policy, a matter that courts are not institutionally designed to evaluate, much less reform. This appeal focuses on whether the Canadian legislative regime implementing the Safe Third Country Agreement — that is, the relevant provisions of the IRPA and IRPR — complies with constitutional and administrative law requirements. In sum, s. 159.3 of the IRPR is not ultra vires; does not breach s. 7; the challenge based on s. 15 is remitted to the Federal Court.

Tax: Non-Capital Losses; GAAR
Deans Knight Income Corp. v. Canada, 2021 FCA 160; 2023 SCC 16 (39869)

The parties accept that the appellant complied with the text of the Income Tax Act. In other words, the parties agree that there was no “acquisition of control” and that, therefore, the loss carryover restriction in s. 111(5) did not apply. The central issue in this appeal is whether s. 245 of the Act, known as the general anti-avoidance rule or the GAAR, applies to deny the deductions. The GAAR operates to deny tax benefits flowing from transactions that comply with the literal text of the Act but nevertheless constitute abusive tax avoidance. Three elements found in s. 245 must be met: (1) there must be a “tax benefit”; (2) the transaction must be an “avoidance transaction”, meaning one that is not undertaken primarily for a bona fide non-tax purpose; and (3) the avoidance transaction giving rise to the tax benefit must be an “abuse” of the provisions of the Act (or associated enactments). The Tax Court found that the transactions were tax avoidance transactions that resulted in a tax benefit, but concluded that they were not abusive. On appeal, the Federal Court of Appeal held that the transactions were abusive, such that the GAAR applied to deny the tax benefits. The parties and the lower courts focused on the non-capital loss deductions since the SR&ED and ITC provisions function similarly. These transactions were abusive. The object, spirit and purpose of s. 111(5) of the Act is to prevent corporations from being acquired by unrelated parties in order to deduct their unused losses against income from another business for the benefit of new shareholders. Through a complex series of transactions, the appellant underwent a fundamental transformation that achieved the outcome that Parliament sought to prevent, while narrowly circumventing the text of s. 111(5). The result of the transactions thereby frustrated the provision’s rationale. Since the GAAR applies to deny the tax benefits, the Minister’s reassessments must be restored.

Leaves to Appeal Granted

Criminal Law: Negligent Operation of a MV
Wolfe v. R., 2022 SKCA 132 (40558)

Sentencing re criminal negligent operation of a MV.

Criminal Law: Preliminary Inquiries
R. v. Archambault, et al., 2022 QCCA 1170 (40428)

Availability of preliminary inquiries.

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