Lexpert presents the 10 most significant judicial rulings affecting the business community annually. The top 10 are determined through a nomination process and consultation with Canada’s leading litigators. The cases must have been released between October 1, 2023, and September 30, 2024. Culminating in decisions by Canada’s appellate courts, this year’s top 10 cases set precedents or clarified nuances on issues like residency requirements under provincial class action rules, data privacy, the jurisdiction of specialized courts, and available remedies to patent holders. In no particular order, here are the cases that have made the most significant impact in 2024 so far.
Dow Chemical Canada ULC v. Canada, 2024 SCC 23 and Iris Technologies Inc. v. Canada, 2024 SCC 24
These two Supreme Court of Canada rulings clarify the jurisdictional limits between the Federal Court and the Tax Court in tax disputes, particularly concerning judicial review and tax assessment correctness.
In Dow Chemical Canada ULC v. Canada, Dow Chemical challenged the minister of national revenue’s denial of a downward adjustment to its 2006 tax assessment. While Dow argued for a review of this discretionary decision, the Supreme Court ruled that such reviews fall within the Federal Court’s jurisdiction, not the Tax Court’s, emphasizing that the Tax Court’s role is confined to determining assessment correctness.
In Iris Technologies Inc. v. Canada, Iris contested the minister’s disallowance of input tax credits under the Excise Tax Act, citing procedural fairness and improper purpose breaches. The Supreme Court upheld that the Tax Court has exclusive jurisdiction over tax assessment correctness, dismissing Iris’ claims as they fundamentally challenged assessment validity rather than procedural fairness.
“These decisions clarify which court a taxpayer should go to but also serve to highlight the hobbled jurisdiction of the Tax Court of Canada,” says Eugene Meehan, partner at Supreme Advocacy LLP. He adds, “Many were hoping the SCC would take an expansive approach to the Tax Court’s jurisdiction, but instead, we have a split that turns on whether a challenge is about an assessment or a discretionary decision of the minister.” Meehan notes that “it likely won’t always be clear which it is, so expect more litigation in this area or calls on Parliament to provide a fix.”
Together, these rulings underscore the importance of distinguishing the nature of tax disputes when deciding the appropriate court. They reinforce the Tax Court’s exclusive authority over assessment correctness and the Federal Court’s role in reviewing ministerial discretion.
CLIENTS > FIRMS > LAWYERS
Dow Chemical Canada ULC v. Canada
Dow Chemical Canada ULC > EY Law LLP > Daniel Sandler, Osnat Nemetz, Laura Jochimski
His Majesty the King > Department of Justice Canada, NCR Tax Litigation Section > Daniel Bourgeois, Christa Akey, Justine Malone
Iris Technologies Inc. v. Canada
Iris Technologies Inc. > Leigh Somerville Taylor Professional Corporation, Dahab Law > Leigh Somerville Taylor, Mireille Dahab
Attorney General of Canada > Department of Justice Canada, BCRO Tax Litigation Section > Daniel Bourgeois, Christa Akey, Justine Malone
Poonian v. British Columbia (Securities Commission), 2024 SCC 28
The British Columbia Securities Commission (BCSC) held Thalbinder Singh Poonian and Shailu Poonian liable for a scheme that inflated a public company’s share price from 2007 to 2009, resulting in substantial losses for investors. The BCSC imposed administrative penalties and disgorgement orders totalling $19 million, representing the profits the Poonians had gained unlawfully.
The Supreme Court of Canada faced a pivotal question: Could the debts from these penalties and disgorgement orders be discharged in bankruptcy under the Bankruptcy and Insolvency Act (BIA)? The Poonians argued that all related debts should be erased, pointing to BIA provisions generally supporting debt relief. However, the Supreme Court ruled that disgorgement orders tied directly to fraud were non-dischargeable under s. 178(1)(e) of the BIA, which excludes fraud-based debts. In contrast, the court allowed the administrative penalties – considered punitive but unrelated to fraud gains – to be discharged.
Meehan of Supreme Advocacy LLP says, “The Court ruled that exceptions to what debts are discharged on bankruptcy must be construed narrowly.” He adds, “To the annoyance of securities commissions, their administrative penalties don’t survive bankruptcy, which highlights the financial rehabilitation purpose of the Bankruptcy and Insolvency Act and the importance of giving a debtor a fresh start.” Meehan further notes that “the court drew the line at fraudulent conduct, meaning that disgorgement orders related to such conduct do survive.”
This ruling solidifies the distinction between penalties for fraud and other punitive measures, establishing a critical precedent in securities fraud bankruptcy cases.
CLIENTS > FIRMS > LAWYERS
Thalbinder Singh Poonian, Shailu Poonian > Reedman Law > Cody G. Reedman
British Columbia Securities Commission > Lawson Lundell > William L. Roberts, Laura L. Bevan, Sarah B. Hannigan
Attorney General of Ontario > Attorney General of Ontario > Susan Keenan, Jake Eidinger
Attorney General of British Columbia > Attorney General of British Columbia > Aaron Welch, Heather Wellman
Attorney General of Saskatchewan > Ministry of Justice Saskatchewan – Legal Services Division > Jared G. Biden
Canadian Association of Insolvency and Restructuring Professionals > Gowling WLG (Canada) LLP > C. Haddon Murray, Heather Fisher, James Aston
Superintendent of Bankruptcy > Attorney General of Canada > Zoe Oxaal, Roy Lee
Federation of Law Societies of Canada > Hunter Litigation Chambers Law Corporation > Devin Eeg, Claire Hunter, K.C.
Alberta Securities Commission > Dentons Canada LLP > Michael Beeforth, Raphael T. Eghan, Brandon Barnes Trickett
Ontario Securities Commission > Ontario Securities Commission > Erin Hoult, Khrystina McMillan
Osgoode Investor Protection Clinic > Stockwoods LLP > Stephen Aylward, Karen Bernofsky
Pacific Atlantic Pipeline Construction Ltd. v. Coastal GasLink Pipeline Ltd., 2024 ABCA 74
In a significant commercial dispute, Pacific Atlantic Pipeline Construction Ltd. (PAPC) and Bonatti S.p.A. faced off against Coastal GasLink Pipeline Ltd. (CGL) over their contract to build sections of the Coastal GasLink pipeline in British Columbia. When CGL terminated the contract in 2022, citing non-performance, PAPC responded with an arbitration claim for wrongful termination, while CGL countersued for damages. PAPC provided an irrevocable standby letter of credit valued at over $117 million as security for its obligations.
In October 2023, CGL attempted to draw the total amount from the letter of credit. PAPC and Bonatti sought an injunction from the Alberta Court of King’s Bench to prevent the draw, pending arbitration. Though interim injunctions were granted, the chambers judge ultimately denied the injunction in December 2023. The Alberta Court of Appeal upheld this decision, agreeing that only a “strong prima facie case” of fraud could justify restraining a draw on a letter of credit – a higher standard than the typical “serious question to be tried” test.
Keith Marlowe, a partner at Blake, Cassels & Graydon LLP, says, “The court reaffirmed that a high bar is required to obtain an injunction that restrains a beneficiary from drawing on a letter of credit.” He adds, “A party seeking to enjoin such a draw must show a strong prima facie case of fraud by the beneficiary.” Marlowe emphasizes that “this decision is the leading decision about draws on letters of credit in Alberta,” noting its citation with approval by the Supreme Court of Canada in Eurobank Ergasias S.A. v. Bombardier Inc., 2024 SCC 11.
The Alberta Court of Appeal’s ruling highlights Alberta’s firm stance on the commercial utility of letters of credit, affirming that injunctions to restrain draws require an exceptionally strong legal basis.
CLIENTS > FIRMS > LAWYERS
Pacific Atlantic Pipeline Construction Ltd., Bonatti S.p.A. > Field LLP, Glaholt Bowles LLP > A. Hurley, R.P. Krushelnitzky, S.A. Matheson (no appearance), M. Valo, J. Gahtan, E. Carbonaro
Coastal GasLink Pipeline Ltd. > Blake, Cassels & Graydon LLP > K.D. Marlowe, K.C., L. Cundari (no appearance), A.J. Duke, L.M. Rowell, C.H. Sereda, Karen O’Keeffe
Loblaw Companies Limited v. Royal & Sun Alliance Insurance Company of Canada, 2024 ONCA 145
Loblaw Companies Ltd., Shoppers Drug Mart, and Sanis Health Inc. faced a sweeping series of opioid-related class actions across Canada, alleging that they negligently manufactured, marketed, and distributed opioids over two decades, fuelling the opioid crisis. Facing considerable defence costs, the companies sought coverage from their insurers – including Royal & Sun Alliance (RSA), AIG, Aviva, Liberty, and Zurich – under their commercial general liability (CGL) policies.
A key issue was whether Loblaw could designate a single insurer to cover defence costs for the entire multi-decade period. Loblaw argued for a consolidated approach, while the insurers contended that costs should be allocated proportionately, with each insurer covering only the periods during which they were “on risk.” The Ontario Court of Appeal sided with the insurers, ruling that defence costs must be shared according to each insurer’s coverage period, rejecting Loblaw’s request for full coverage from a single provider. The court also addressed self-insured retentions (SIRs), ruling that Loblaw was not entitled to relief for pre-tender defence costs and reaffirming that SIRs must be exhausted before the duty to defend is triggered.
According to Alan D’Silva and Glenn Zacher of Stikeman Elliott LLP, “the decision has been hailed a seminal insurance decision ‘of the decade.’” They add that it has “significant implications for class actions in which damages are claimed over long periods,” emphasizing the court’s recognition of the “heavy burden” associated with lengthy class actions and clarifying that insurers “should not be exposed to costs that are disproportionate to the extent of their potential liability.”
This decision establishes a critical precedent in allocating defence costs for long-tail claims, ensuring that insurers’ liabilities align strictly with their coverage periods.
CLIENTS > FIRMS > LAWYERS
Royal & Sun Alliance Insurance Company of Canada > O’Donnell, Robertson & Partners > Mark M. O’Donnell, Cameron L. Foster
AIG Insurance Company Canada > Lenczner Slaght > Nina Bombier, Sean Lewis, Mari Galloway
Aviva Insurance Company of Canada > Stikeman Elliott LLP > Alan L.W. D’Silva, Glenn Zacher
Liberty Mutual Insurance Company > Thomson Blackburn Lane Lefebvre LLP > James P. Thomson
Zurich Insurance Company Ltd. > Norton Rose Fulbright Canada LLP > Jamie Macdonald
Chubb Insurance Company of Canada > Clyde & Co LLP > John Nicholl, Heather Gray, and Julia Vizzaccaro
Certain Underwriters at Lloyd’s as represented by their coverholder Markel Canada Limited > Snowden Law P.C., Clyde & Co LLP > Marcus B. Snowden, Akash D. Brijpaul
QBE Syndicate 1886 at Lloyd’s of London > Blaney McMurtry LLP > Dominic T. Clarke, Anthony H. Gatensby
Loblaw Companies Limited, Shoppers Drug Mart Inc., Sanis Health Inc. > Theall Group LLP > Lawrence G. Theall, Jeffrey A. Brown, Dylan J. Cox
Eurobank Ergasias S.A. v. Bombardier Inc., 2024 SCC 11
Eurobank Ergasias S.A. and Bombardier Inc. became entangled in a high-profile dispute over two letters of credit tied to an offsets contract with the Hellenic Ministry of National Defense (HMOD). Bombardier was required to involve Greek subcontractors as part of the contract to supply firefighting aircraft. To secure against potential liquidated damages, Eurobank issued a letter of credit to HMOD, backed by a counter-guarantee from the National Bank of Canada.
During arbitration proceedings with Bombardier under the ICC, HMOD agreed to hold off on drawing from the letter of credit. However, just days before the arbitration ruling, HMOD demanded payment under the credit, disregarding an ICC order. Despite court and arbitration injunctions, Eurobank complied, later seeking reimbursement from the National Bank of Canada after the arbitration voided the offsets contract and ruled in Bombardier’s favour. Bombardier opposed, arguing HMOD’s demand was fraudulent and that Eurobank knowingly participated in this fraud. Both the Quebec Superior Court and the Quebec Court of Appeal ruled in Bombardier’s favour, finding Eurobank complicit in the fraudulent demand – a decision affirmed by the Supreme Court of Canada, which held that Eurobank’s knowledge of HMOD’s fraud invoked the fraud exception to the typical independence of letters of credit.
Meehan of Supreme Advocacy LLP says, “As a matter of law, the court clarified when an issuing bank must refuse payment under a letter of credit due to fraud.” He adds that this case reflects Canada’s pro-arbitration stance, “signalling Canada’s commitment to the international commercial arbitration system.” Meehan also notes that a foreign judgment finding no fraud “does not necessarily mean there is no fraud in the Canadian context,” affirming Canadian courts’ authority to make independent findings.
CLIENTS > FIRMS > LAWYERS
Eurobank Ergasias S.A. > Renno Vathilakis Inc. > Karim Renno, Michael Vathilakis, Justine Covey, Geneviève Dickey
General Directorate for Defense Armaments and Investments of the Hellenic Ministry of National Defense > Angelopoulos Avocats > Basile Angelopoulos, Ovidiu Rosu
Bombardier Inc. > Norton Rose Fulbright Canada LLP > Michel Sylvestre, Jérémy Boulanger-Bonnelly, Sophie Melchers
National Bank of Canada > Woods LLP > Eric Bédard, Marie-Hélène Beaudoin, Arielle Reeves‑Breton
Canadian Bankers’ Association > Gowling WLG (Canada) LLP > Mathieu Lévesque
MM Fund v. Excelsior Mining Corp., 2024 BCCA 163
In a high-stakes decision on class action eligibility, MM Fund, an Ontario-based mutual fund, brought a class action against British Columbia’s Excelsior Mining Corp., claiming the company misrepresented critical information in its prospectus for the Gunnison copper project in Arizona. MM Fund alleged that Excelsior’s failure to disclose operational issues inflated its share price and filed the lawsuit under the British Columbia Securities Act.
A pivotal question arose: Could MM Fund, as a non-resident entity, bring a class action in British Columbia under the Class Proceedings Act (CPA), which requires plaintiffs to be residents? Excelsior argued that MM Fund, based in Ontario, failed to meet this requirement. MM Fund countered, asserting that its status as a reporting issuer in British Columbia and the availability of its securities to local investors should constitute sufficient ties.
The British Columbia Supreme Court sided with Excelsior, ruling that MM Fund did not meet the CPA’s residency requirement, a decision upheld by the BC Court of Appeal. Robin Reinertson, a partner at Blake, Cassels & Graydon LLP, says, “This is an important case confirming that at least one plaintiff must be resident in British Columbia in order to commence a proposed class action in BC.” Reinertson adds that “this limitation is significant for businesses that may be potential defendants in a proposed class action,” as it narrows exposure to the procedural advantages plaintiffs hold under BC’s Class Proceedings Act.
This ruling underscores that class actions in BC require a substantial connection to the province through at least one resident plaintiff, significantly influencing future class action strategies.
CLIENTS > FIRMS > LAWYERS
MM Fund > KND Complex Litigation > P.J. Bates, S. Nematollahi
Respondents > Blake, Cassels & Graydon LLP > J.M. Sullivan, K.C., R.L. Reinertson, J.A. Hutchinson
Rovi Guides, Inc. v. Videotron Ltd., 2024 FCA 125
Rovi Guides, Inc. appealed a Federal Court decision that dismissed its patent infringement claims against Videotron Ltd. and granted Videotron’s counterclaim, declaring Rovi’s patents invalid. The patents involved interactive television program guide (IPG) technology, allowing users to navigate and record television programs via a set-top box. Rovi alleged that Videotron infringed claims in several of its Canadian patents.
The Federal Court found that the patents were invalid for anticipation and obviousness, holding that the patented technology was well known to someone skilled in the art at the time. The court also ruled that, even if the patents were valid, Rovi would not be entitled to an accounting of profits, limiting its remedy to a reasonable royalty. Rovi appealed the invalidity findings regarding some of the patents, arguing that the Federal Court erred in its obviousness analysis and in finding that Videotron did not infringe one patent.
The Federal Court of Appeal upheld the lower court’s ruling, agreeing that the patents were obvious considering prior art and the common general knowledge of a skilled person. The appellate court found no errors in the Federal Court’s obviousness analysis regarding both patents. The court also reversed the finding that, had the claims been valid, Rovi would not have been entitled to an accounting of profits.
This decision reinforces the significance of obviousness and prior art in patent litigation and clarifies that there are very few limitations on the presumptive remedies available to patent holders, including an accounting of profits.
Editor’s Note: this write-up has been corrected from the version that appeared in print to clarify that the court said patentees should presumptively have all available remedies available (with very few exceptions), reversing the trial judge.
CLIENTS > FIRMS > LAWYERS
Rovi Guides, Inc. > Goodmans LLP > Andrew Brodkin, Harry Radomski, Jordan Scopa, Daniel Cappe, Sarah Stothart
Videotron Ltd. > DLA Piper (Canada) LLP > Bruce Stratton, Alan Macek, Michal Kasprowicz
Earthco Soil Mixtures Inc. v. Pine Valley Enterprises Inc., 2024 SCC 20
The dispute between Earthco Soil Mixtures Inc. and Pine Valley Enterprises Inc. stems from a Toronto flood remediation project, where Pine Valley required topsoil to meet specific drainage standards. Earthco contracted to supply the topsoil and provided soil test results but cautioned that the soil’s composition could shift by the time of delivery. Pressed by deadlines and potential penalties, Pine Valley waived further testing before accepting the shipment. When the soil proved to have a higher clay content than expected, which caused drainage issues and project delays, Pine Valley sued, claiming the soil didn’t meet contract specifications.
Earthco defended itself by pointing to exclusion clauses in the contract, which limited its liability, and argued that Pine Valley had knowingly waived its right to additional testing. The trial court ruled in favour of Earthco, finding the exclusion clauses clear and binding. However, the Court of Appeal reversed this, deeming the clauses insufficiently explicit to release Earthco from liability under the Sale of Goods Act. The Supreme Court of Canada ultimately reinstated the trial court’s ruling, holding that the exclusion clauses were valid and enforceable and that Pine Valley’s waiver was made with full knowledge of the risks.
Meehan of Supreme Advocacy LLP calls the ruling “a major commercial law update,” adding that it is a “must-read for the analysis of any contract for the sale of goods by description and the implied condition that goods correspond with their description.” This decision reinforces the enforceability of exclusion clauses in commercial contracts, particularly where parties knowingly assume risks via waivers.
CLIENTS > FIRMS > LAWYERS
Earthco Soil Mixtures Inc. > Lipman, Zener & Waxman PC > Mark Klaiman, Ian Klaiman
Pine Valley Enterprises Inc. > Scalisi Barristers > Vito S. Scalisi, Dylan A.S. Bal
Canadian Chamber of Commerce > Torys LLP > Jeremy Opolsky, Lauren Nickerson
Canada (Privacy Commissioner) v. Facebook, Inc., 2024 FCA 140
The Privacy Commissioner of Canada’s high-stakes case against Facebook Inc. (now Meta Platforms) sets a powerful precedent in Canadian privacy law, spotlighting the issue of meaningful user consent in data sharing. The case arose from Facebook’s involvement in the Cambridge Analytica scandal, where the app “thisisyourdigitallife” (TYDL) harvested data from users and their friends from 2013 to 2015, ultimately using it for political profiling, including in the 2016 US presidential election.
Initially, the Federal Court ruled in Facebook’s favour, finding it compliant with the Personal Information Protection and Electronic Documents Act (PIPEDA). However, the Federal Court of Appeal overturned this decision, criticizing Facebook’s failure to secure meaningful consent, particularly from friends of users unaware their data was shared. The appellate court also found that Facebook’s dense, complex privacy policies undermined users’ ability to give informed consent.
The court’s decision faulted Facebook for ignoring obvious “red flags” about TYDL’s data requests and underscored the importance of transparent data practices.
Privacy Commissioner Philippe Dufresne hailed the ruling, saying, “The issues at the heart of this matter are critically important to Canadians, and this landmark ruling is an acknowledgement that international data giants, whose business models rely on users’ data, must respect Canadian privacy law and protect individuals’ fundamental right to privacy.” He adds that the decision reinforces Canadians’ “access to important protections and remedies” for privacy rights.
CLIENTS > FIRMS > LAWYERS
Privacy Commissioner of Canada > Goldblatt Partners LLP, Office of the Privacy Commissioner of Canada > Peter Engelmann, Colleen Bauman, Louisa Garib
Facebook, Inc. > McCarthy Tétrault LLP > Michael A. Feder, K.C., Gillian P. Kerr, Barry Sookman, Daniel G.C. Glover, Connor Bildfell
Yatar v. TD Insurance Meloche Monnex, 2024 SCC 8
Ummugulsum Yatar’s fight over denied insurance benefits has led to a landmark Supreme Court decision expanding the grounds for judicial review in administrative cases. Following a 2010 car accident, Yatar received benefits from her insurer, TD Insurance Meloche Monnex, under Ontario’s Statutory Accident Benefits Schedule. In 2011, TD terminated her income replacement and housekeeping benefits. Yatar brought her claim to the Licence Appeal Tribunal (LAT) in 2018, but her application was dismissed based on Ontario’s two-year limitation period. Seeking reconsideration and judicial review, Yatar argued that she hadn’t received proper notice, meaning the limitation period shouldn’t have started. Both the Divisional Court and Ontario Court of Appeal dismissed her claims, maintaining that judicial review should be limited to “rare” or “exceptional” cases.
The Supreme Court of Canada overturned these rulings, affirming that the existence of a limited statutory appeal, restricted to questions of law, does not bar judicial review on questions of fact or mixed fact and law.
The ruling underscores judicial review as a discretionary remedy not confined to rare cases, particularly when no adequate alternative remedy exists. Christine Lonsdale, partner at McCarthy Tétrault LLP, says, “This decision is of great importance to anyone who is considering a challenge to an administrative decision. It provides clarity: you can pursue both a statutory appeal and a judicial review.”
CLIENTS > FIRMS > LAWYERS
Ummugulsum Yatar > Dewart Gleason LLP > Sean Dewart, Tim Gleason, Ian McKellar
TD Insurance Meloche Monnex > McCarthy Tétrault LLP > Christine Lonsdale, Adam Goldenberg, Erin Chesney
Licence Appeal Tribunal > Tribunals Ontario, Legal Services Unit > Valerie Crystal, Brian Blumenthal
Income Security Advocacy Centre > Income Security Advocacy Centre > Nabila F. Qureshi, Anu Bakshi, Anna Rosenbluth
Advocacy Centre for Tenants Ontario > Advocacy Centre for Tenants Ontario > Ryan Hardy
Attorney General of Ontario > Ministry of Attorney General (ON) > Michael J. Sims, Matthew Chung
Canadian Telecommunications Association > Paul Daly Law PC > Paul Daly
Insurance Bureau of Canada > Lenczner Slaght LLP > Nina Bombier, Nikolas De Stefano
Forest Appeals Commission > Arvay Finlay LLP > Robin J. Gage, Julia W. Riddle
Attorney General of British Columbia > Ministry of Attorney General (BC) > Meera Bennett, Katherine Reilly
Attorney General of Alberta > Alberta Justice – Constitutional and Aboriginal Law Team > Michael Wall, Adam Ollenberger
Attorney General of Canada > Attorney General of Canada > John Provart, Michelle Kellam
Aboriginal Council of Winnipeg Inc. and Social Planning Council of Winnipeg > Public Interest Law Centre > Allison Fenske, Natalie Copps
Attorney General of Quebec > Procureur général du Québec > Stéphane Rochette, Francesca Boucher
With editing assistance from Jessica Mach