10 Most Important Appeals Of 2014

The Appeals Monitor is pleased to present our annual review of the most significant appeals of the past year that can be expected to impact Canadian businesses for years to come.

In Kaynes v BP, PLC, 2014 ONCA 580 (previously discussed here), the Court of Appeal for Ontario stayed a proposed secondary market securities class action due to forum non conveniens. Although the Court held that Ontario could assume jurisdiction over claims by Canadian residents who had purchased securities on foreign exchanges, it held Ontario should nonetheless decline jurisdiction as foreign courts were "clearly more appropriate" venues. BP, headquartered in London, is listed on the London and Frankfurt stock exchanges. Until 2008, small volumes of BP shares also traded on the TSX. The Court held that Ontario could assume jurisdiction on the basis of a tort committed in Ontario: the disclosure containing the alleged misrepresentation was released to Canadian shareholders shortly after BP was delisted. Even if the initial point of release was outside Ontario, BP knew the information would find its way to Ontarian shareholders. Still, the Court stayed the claim, holding that either US or UK were preferable venues. The plaintiff purchased his shares on the NYSE and the Court found it would contravene comity for an Ontario court to adjudicate, given the prevailing international standard of tying jurisdiction to trading location. Also noting that an overwhelming majority of Canadians purchased their BP shares through foreign exchanges (due to BP's "negligible" TSX presence), the Court described Ontario jurisdiction as being both "opportunistic and a classic case of the 'tail wagging the dog'." The plaintiff has sought leave to appeal to the Supreme Court. It remains to be seen whether Kaynes will turn the tide against global securities class actions in Canadian courts, particularly in provinces that have been fairly welcoming to such class actions in recent years. Canadian National Railway v Canada: All Aboard the Deference Train In Canadian National Railway Co v. Canada (Attorney General), 2014 SCC 40 (previously discussed here), the Supreme Court of Canada upheld a decision of the Governor in Council that the Canadian Transportation Agency could entertain a complaint by a railway shipper. The Agency initially held that it did not have jurisdiction to consider the complaint, but the Governor in Council decided on appeal that the Agency did have jurisdiction to consider the complaint. The Supreme Court refused to characterize the question as one of vires or jurisdiction, which would demand correctness review, but instead characterized it as a question of statutory interpretation (i.e., which type of complaints could be considered under the relevant statutory provision), which required only reasonableness as standard of review. Because Parliament gave the Governor in Council power to overturn the decisions of many types of economic regulatory bodies, such as in the areas of telecommunications and marine transportation, there is a presumption that Parliament recognized the Governor in Council's expertise in economic regulatory matters. Accordingly, the Governor in Council's decision on a question of law was entitled to deference. The Supreme Court applied a reasonableness standard of review and allowed the Governor in Council's decision to stand. The Supreme Court's decision clarified and narrowed the definition of what constitutes a question of vires or jurisdiction The upshot for Canadian businesses is twofold. First, when challenging a government decision, if there is a right of appeal to cabinet, it should be used wisely as it may not be overturned lightly. Second, the Supreme Court's decision continues a long trend of increasing judicial deference to governmental decision-makers, making it harder to successfully challenge a government decision or regulation. Marcotte: Take That Provincial Jurisdiction to the Bank In Bank of...