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eLaw - Business Law Update
September 2014 - No. 64
ISSN 1916-3916
In This Issue
Historical Approach to Interpretation of Contracts Abandoned: SCC
Other SCC Cases
Hotel Management Fee Dispute Reconsidered on Appeal
Supplementary Liquor Licence Fees A Valid Regulatory Charge Not a Tax: MBQB
Cell Phone Action An Abuse of Process: MBQB
Court Orders Equitable Remedy in Family Shareholder Dispute: MBQB
Legislative Update
Temporary Foreign Worker Program Update
Recommended Reading
Pitblado Lectures
Fall CPD: LSM
Upcoming Conferences
Historical Approach to Interpretation of Contracts Abandoned: SCC 
 
The Supreme Court's unanimous decision in Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, an appeal of a commercial arbitration decision involving contract interpretation, is notable both for changing the law on contractual interpretation and for clarifying the  appropriate standard of review to apply in appeals of commercial arbitration awards. The court abandoned the historical approach to interpretation of contracts as a pure question of law, concluding at para. 50 that "(c)ontractual interpretation involves issues of mixed fact and law as it is an exercise in which the principles of contractual interpretation are applied to the words of the written contract, considered in light of the factual matrix." The court went on to find that appellate intervention on contractual interpretation should be limited to those rare instances where the results can be expected to have an impact beyond the parties arguing the case. Finally, the court found at para. 106 that "(i)n the context of commercial arbitration, where appeals are restricted to questions of law, the standard of review will be reasonableness unless the question is one that would attract the correctness standard, such as constitutional questions or questions of law of central importance to the legal system as a whole and outside the adjudicator's expertise."  For comments on the decision see:
Other SCC Cases 
 
Two SCC decisions issued at the end of June may also be of interest to business lawyers. In Tsilhqot'in Nation v. British Columbia, 2014 SCC 44, the court clarifies the law on establishment of Aboriginal title and in United Food and Commercial Workers, Local 503 v. Wal-Mart Canada Corp., 2014 SCC 45, the court restored the original ruling of the arbitrator that Wal-Mart had violated Quebec labour law when it shut down its JonquiËre store during collective agreement negotiations. These articles discuss the decisions:
Hotel Management Fee Dispute Reconsidered on Appeal   

In Lake Louise Limited Partnership v. Canad Corp. of Manitoba Ltd. et al., 2014 MBCA 61, a majority of the Court of Appeal overturned the lower court ruling allowing Canad to change the way it calculated its hotel management fee to include in gross revenues the coin-in from the hotel VLT machines rather than the 20 per cent commission paid by the MLC. After finding several errors in the trial judge's decision, the majority conducted a fresh review of the parties' hotel management agreements and found it was clear that, absent an express exclusion in the agreements themselves, GAAP would apply to all calculations, including the definition of gross revenues. The court concluded that the 20 per cent MLC commission, not the coin-in, should be included as revenue for the purpose of calculating the management fee and granted declaratory relief to this effect.
Supplementary Liquor Licence Fees A Valid Regulatory Charge Not a Tax: MBQB

The court dismissed the plaintiff's action to compel the government to refund the supplementary licence fees charged to liquor licensees under what they argued was an invalid regulation in Grapes Leon's Centre Limited Partnership v. Manitoba et al., 2014 MBQB 167. The court found at para. 62 that "the pith and substance of the supplementary licence fee was to establish a regulatory charge used, in part, to defray the costs of a valid regulatory scheme over the sale and distribution of alcoholic beverages in the Province of Manitoba. The SLF and other licence fees were used to offset the costs of licensing, inspection and enforcement required pursuant to the Act. Accordingly, the Regulation was a valid regulation passed pursuant to the Act" and the fee, although at times a similar percentage to the retail sales tax, was not a tax, as argued by the plaintiff.
Cell Phone Action An Abuse of Process: MBQB  
 
In Hafichuk-Walkin et al. v. BCE Inc. et al., 2014 MBQB 175, the court stayed a dormant, ten year old statement of claim seeking certification of a national class action in Manitoba concerning cell phone system access fees alleged to have been charged improperly to cellular phone users across Canada. The claim was one of nine "carbon copy" actions filed by the Merchant Law Group across Canada and pursued primarily in Saskatchewan, which offered procedural advantages to class action litigants. The court rejected MLG's claim that Manitoba claimants would not be well served by the Saskatchewan action because they would have to opt in to that claim, and concluded that the continued existence of the action served no proper purpose.
Court Orders Equitable Remedy in Family Shareholder Dispute: MBQB   
 

After finding that there had been a complete breakdown in the relationship between two groups of shareholders in a family owned business the court ordered one group to buy the shares of the other at fair market value in Rady et al. v. Silpit Industries Co. Ltd., 2014 MBQB 145. Although the action was not premised on a claim of oppression or unfairly prejudicial treatment, this was not determinative of the issue of whether it was just and equitable for the court to exercise its broad discretion pursuant to s. 207 of The Corporations Act, according to the court at para. 45. 

Legislative Update

Federal
     
Bill C-31 (Economic Action Plan 2014 Act, No. 1), an omnibus budget implementation bill introduced last spring, received royal assent on June 19, 2014. When fully implemented the new legislation will make wide ranging changes to Canada's financial legislation, including the Bank Act, the Income Tax Act, the Proceeds of Crime Act, and the Excise Tax Act, among many others. See the legislative summary for details of the changes and the Coming Into Force section for implementation dates.


In addition, when it comes into force, Division 25 (ss. 317 to 368) will make significant changes to Canada's trademarks law. Those changes will be implemented once the government has revised the corresponding Trade-marks Regulations, SOR /96-195. These articles discuss how the new legislation will affect trademarks practice:       

Provincial

Several sections of The Insurance Amendment Act were recently proclaimed and came into force September 1, 2014 (the majority of the Act), or will come into force January 1, 2015 (s. 72 regarding incidental sellers of insurance) or March 1, 2015 (changes related mainly to life and health insurance contract provisions). Highlights of the many changes can be found in the explanatory note to Bill 27, in this ICM fact sheet, or in this article from the December 2013 Fillmore Riley newsletter.

The Condominium Act and Amendments Respecting Condominium Conversions (Various Acts Amended) has been proclaimed in force effective February 1, 2015.  The new act and regulations make major changes to the development, buying and selling, ownership, and operation of condominiums in Manitoba. Details of the new regime can be found in the Manitoba government's Guide to the Condominium Act (especially the highlights section), in the explanatory note to Bill 40, and in this article by Albina Moran from the February 2013 CBA National Real Property section newsletter.

Bill 73, The Budget Implementation and Tax Statutes Amendment Act, 2014, received royal assent and came into force June 12, 2014. It makes several changes to tax and financial legislation, including a new employee share purchase tax credit to support business succession planning and enhancements to the small business venture capital tax credit and the community enterprise development tax credit. Other changes are detailed in the explanatory note and government news release.
Temporary Foreign Worker Program Update 
 
The federal government announced another series of changes to the temporary foreign workers program on June 20, 2014. The changes are aimed at limiting access to the program, establishing better labour market information, and strengthening enforcement and penalties.  Reviews are mixed. For commentary on the changes see these posts:
Recommended Reading 
 
  • Practice Link bulletin - the Business and Corporate Edition of this bulletin contains articles on the temporary foreign worker program, key questions to ask before joining a board, and prohibiting Canada-US price discrimination.
  • Doing Business in Western Canada - this Lawson Lundell booklet outlines the relevant laws and regulations companies should consider when doing business in Western Canada.
Pitblado Lectures

The 2014 Isaac Pitblado Lectures, Accessing Justice: Beyond Barriers, will take place November 28-29, 2014 at the Fort Garry Hotel. Presenters will examine how access to justice demands may affect legal education, professional practice, regulation, and ethics; and make the business case for law firms to participate in access initiatives. Register by October 17 for the early bird registration rate.

Fall CPD: LSM 
 
There are many programming options to choose from this fall at the Law Society:

Intellectual Property: Protection and Enforcement - John Myers will review the most common intellectual property issues lawyers encounter and discuss effective strategies for dealing with them at this lunch hour program on October 7. 2014. Register to attend in person at the Law Society or by tele-presentation.

Canadian Competitive Bidding Law - for Lawyers! - Presenter Robert Worthington will help you to understand the mysterious and evolving competitive bidding process and bring you up-to-date on new developments in this area. The program takes place on October 30,2014, from 8:30am to 4:30pm at the Law Society Classroom. Register by September 25, 2014 to take advantage of the early bird pricing for this limited enrollment program.

Everyday Ethics Series - Register for multiple sessions in this 6 month series of lectures on ethics issues featuring Allan Fineblit, Q.C. and save money as you learn what you need to know to practise responsibly.

Making Great and Lasting First Impressions - this September 23, 2014 webinar will help you to improve the impressions you make on the people you meet professionally.

Limited Scope Retainers: Tips and Traps (Webinar) - Law Society staff will tell you what you need to know to ensure you are acting safely and ethically when using limited scope retainers in your practice in this lunch hour webinar on September 30, 2014.  Discounts apply for group registrations.

Perfecting the Twenty-First Century Law Practice - join practice management guru Jim Calloway as he provides guidance on such topical issues as the future of law practice, techno-ethics, and alternatives to the billable hour. The all-day program on October 3, 2014 will conclude with the popular 60 hot tips in 60 minutes, a fast-paced review of tips and ideas you will put to immediate use in the office.

The Approximately 11th Annual Accommodation in the Workplace - don't miss the 11th installment of this popular program co-presented by the MBA and the LSM on October 24, 2014. Presenters will review such recent developments in accommodation law as accommodating family status and choosing the right forum for complaints.

New Legislation: The Municipal By-Law Enforcement Act - courts will no longer enforce municipal by-law infractions once this new legislation is proclaimed and municipalities need to prepare now for this major change. Learn what you need to know to help your municipal clients set up new systems at this November 7, 2014 lunch program.
Upcoming Conferences

The 2014 Annual Competition Law Fall Conference will take place September 18-19, 2014 in Ottawa. The conference will focus on understanding the changing role and impact of competition policy in Canadian competition legislation since the 2009 amendments to the Competition Act.  Program and speaker details can be found in the conference agenda.

The 10th Annual Pan-Canadian Insolvency and Restructuring Law Conference will be held October 23-24, 2014 in QuÈbec City, QuÈbec. Program highlights include an ABI panel on Chapter 11 reform, the annual cross-country legal update, and panels on the latest developments in pensions and personal bankruptcy.

Mark your calendar to attend (in person or online) the 14th Annual Franchise Law Conference, which takes place November 18, 2014, in Toronto.
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