eLaw - Business Law Update

February 2015 - No. 66

ISSN 1916-3916

In This Issue

SCC Rules on Merger Efficiencies

Principle of Good Faith and Duty of Honesty Will Enhance Commercial Certainty: SCC

SCC Hears Stadium Construction Appeal

Court Declines to Interfere Retrospectively in "Tax Avoidance Structure Gone Wrong": MBQB

Formal Notice and Notice Regime in Force

Legislative Update

Recommended Reading

Continuing Professional Development: LSM

MBA Programs

SCC Rules on Merger Efficiencies

The Supreme Court clarifies the application of the Competition Act merger review test in Tervita Corp. v. Canada (Commissioner of Competition), 2015 SCC 3, considering in particular when efficiencies created by a merger offset quantifiable anti-competitive effects (s.96). The Supreme Court agreed that the Tervita merger was likely to substantially prevent competition, but went on to find that the Competition Tribunal and the Federal Court of Appeal had erred in rejecting the efficiencies defence put forward by Tervita. The decision confirms that the Competition Bureau has the burden of proving all quantifiable anti-competitive effects. These papers analyze the decision:

Principle of Good Faith and Duty of Honesty Will Enhance Commercial Certainty: SCC

There is a general organizing principle of good faith that underlies many facets of contract law and a duty to act honestly in the performance of contractual obligations, according to the Supreme Court of Canada in Bhasin v. Hrynew, 2014 SCC 71. The case is being hailed as a landmark decision that will enhance commercial certainty by making the common law more coherent, just, and in accord with the reasonable expectations of commercial parties. As noted in these commentaries, however, it's unclear how the duty will apply in practice:

SCC Hears Stadium Construction Appeal

The Supreme Court heard the appeal of Olson (Stuart) Dominion Construction Ltd. v. Structal Heavy Steel, 2014 MBCA 8 on January 19, 2015 and reserved judgment. The parties' factums and a webcast of the hearing can be found on the Supreme Court's website.

Court Declines to Interfere Retrospectively in "Tax Avoidance Structure Gone Wrong": MBQB

In Shinewald v. Putter et al, 2014 MBQB 254, the court agreed to prospectively vary a trust by adding the son of the settlor as an income beneficiary as of the date of the application, but declined to make its order retroactive to the date when the son's wife (an income beneficiary along with their children) died. The trust was intended to benefit the family unit, but had been structured in a tax advantageous way such that the son was not an income beneficiary. The fact that the son had been receiving unauthorized income payments from the trust since his wife's death came to light when the CRA audited his business. The court agreed that the variation was "justifiable" under s.59(7)(b), but only prospectively, since it is not the function of the court to help taxpayers "rewrite history."

Formal Notice and Notice Regime in Force

Canada's Notice and Notice regime, the final step in implementing the Copyright Modernization Act, came into force January 2, 2015. Sections 41.25, 41.26 and 41.27(3) of The Copyright Act, require intermediaries such as internet service providers or web hosts to forward notices of alleged infringement of copyright to possible infringers and to keep records pertaining to infringers for specified time periods. For further information on the implications of the new regime see the government backgrounder and the Cox & Palmer article Copyright Owners and (Downloading) Users Take Note: Canada's Formal Notice and Notice Regime is in Force.

Legislative Update

Federal

Sections 290 to 292 of the Economic Action Plan 2013 Act, No. 2 (affecting the Immigration and Refugee Protection Act) came into force January 1, 2015.

Sections 300 and 301 and Division 30 of Part 6 of the Economic Action Plan 2014 Act, No. 1 came into force in early January, affecting the Immigration and Refugee Protection Act and enacting the Apprentice Loans Act respectively.

Sections 220 -222 of the Jobs and Growth Act, 2012, amending the Canada Labour Code, will come into force March 16, 2015.

Manitoba

Further sections of The Insurance Amendment Act were proclaimed in force effective March 15, 2015. The amendments affect life and health insurance contract provisions and harmonize Parts V and VI of our Insurance Act with Alberta's legislation. For further information see the explanatory note to Bill 27 or this Cassels Brock article.

Recommended Reading

As usual, many January publications review important developments from the previous year or speculate on what's ahead. Here are some of the better business-related posts this month:

Top 10 business cases of 2014 - this Lexpert article reviews last year's most important business decisions, all decided by the Supreme Court.
Osler's insights on key developments in 2014 and their implications for Canadian business - this Osler booklet outlines 2014 changes affecting business in regulatory practice, take-over bid and early warning regimes, OTC derivatives regulation, proxy solicitation, board governance, aboriginal title and foreign corruption, among other things.
Securities Law 2014: The Year In Review And Its Legal Implications - this McMillan bulletin details significant developments in Canadian securities law.
Overhaul of Intellectual Property Legislation - 2014 was a busy year for intellectual property law, as summarised in this Slaw post on procedural changes.
Competition criminal enforcement in Canada: 2014 year in review : - this Osler article discusses criminal and private enforcement of Canada's competition and anti-corruption laws.
The Business & Corporate edition of the CBA's Practice Link bulletin contains articles on trends in business law in 2015 and on the progress on the federal government's initiative to establish a national securities regulator.
Trade matters - this Lawyers Weekly article examines the impact of bilateral investment treaties negotiated with China, South Korea, and the European Union in 2014.

Continuing Professional Development: LSM

New Legislation: The Condominium Act (DVD Replay) - The new Condominium Act and regulations come into force February 1, 2015, resulting in significant changes to condominium practice (both conveyancing and operation/management) in Manitoba. If you missed the live presentation of this program register now to attend the DVD replay, to be shown February 6, 2015 in the Law Society classroom.

Lawyers and Governing Boards: Avoiding Common Pitfalls - Presenters Bruce King, Doug Finkbeiner, Q.C., and Tana Christianson will discuss the risks and responsibilities that come with board directorships and suggest strategies to minimize potential liabilities at this lunch program on June 10, 2015. Register now to attend in person or by tele-presentation.

Everyday Ethics Series - There are two remaining sessions in this lecture series on ethics issues featuring Allan Fineblit, Q.C.: Mobility 101 on February 11, 2015 and Glass 1/2 Full (Little Things that Cause Big Problems), on March 11, 2015. Register now to attend in person or by tele-conference.

MBA Programs

Upcoming professional development programs offered by the Manitoba Bar Association include:

Leases and Other Big Real Estate: Danger Zones and Hidden Hazards - the CCCA section is hosting a dinner on March 11, 2015 with guest speaker Kenneth Beallor of Torkin Manes LLP, who will discuss the essential elements of a variety of complex real estate transactions.

City of Winnipeg Zoning and Subdivision Matters - Martin Grady, Zoning & Permits Administrator for the City of Winnipeg, is the guest speaker at the March 12, 2015 meeting of the Real Property Law section.

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