On July 26, 2023, McCarthy Tétrault's National Appellate Litigation Group hosted our fifth Appellate Quarterly webinar, featuring five recent appeals that may impact the Canadian business community. Partners Kosta Kalogiros, Isabelle Vendette, Patrick Williams, Richard Lizius, and Brandon Kain discussed these recent appellate developments, as well as future developments to watch in their respective jurisdictions.

Here are some of the key takeaways:

1. No presumption of damages for breach of the duty of honest performance

InBhatnagar v. Cresco Labs Inc., 2023 ONCA 401, the Court of Appeal for Ontario rejected the notion that the Supreme Court of Canada's decision in C.M. Callow Inc. v. Zollinger, 2020 SCC 45obliged courts to "presume damages" upon finding a breach of the duty of honest performance, even absent evidence of an opportunity having been lost. The Court explained that, properly interpreted, Callow did not establish an automatic presumption of loss of opportunity (and associated damages). This is because the Callow decision uses permissive rather than mandatory language. Callow also qualifies the presumption to apply only (1) where the dishonesty of the breaching party precludes the innocent party from proving what would have happened absent the breach and (2) where there is some evidentiary foundation for the lost opportunity claim. With Bhatnagar, the Court of Appeal is sending a clear signal that claimants must marshal at least some evidence to show that the breach of the duty of honest performance led to a lost opportunity and damages.

2. National class actions unlikely where Quebec residents involved

The Court of Appeal of Quebec in Nippon Yusen Kabushiki Kaisha c. Option Consommateurs, 2023 QCCA 513 dismissed an appeal and confirmed in part the decision of the Quebec Superior Court, refusing to stay a Quebec class action in favour of a parallel class action filed in British Columbia. Quebec members were not included in the certified class in British-Columbia, and the defendants had sought to suspend the case until the British Columbia Supreme Court pronounced itself on modifying the definition of the certified class to include a sub-group of Quebec claimants and creating a national group. The Court rejected the application under article 3137 of the CCQ because the action in British-Columbia could not be recognized in Quebec. The Court of Appeal found that while judicial economy favoured a single trial in British Columbia, the interests of the Quebec members outweighed any other considerations. With this decision, the Court of Appeal has affirmed that, although there is a framework for staying a class action proceeding in Quebec, the process remains highly discretionary and deferential to the interests of Quebec residents.

3. In BC, a broader test for discrimination in employment based on family status

In British Columbia (Human Rights Tribunal) v. Gibraltar Mines Ltd., 2023 BCCA 168, the Court of Appeal for British Columbia revisited its previous jurisprudence in Health Sciences Assoc. of B.C. v. Campbell River and North Island Transition Society, 2004 BCCA 260 and Envirocon Environmental Services, ULC v. Suen, 2019 BCCA 46. After the birth of their first child, the claimant in Gibraltar asked for accommodation to change her and her spouse's work schedules to facilitate childcare arrangements. No agreement was reached and the claimant alleged family status discrimination. Based on the earlier cases, the employer applied to dismiss the claim summarily because the employer did not change a term or condition of employment. But, the Court concluded that there can be a finding of family status discrimination absent a change in a term or condition of employment made by the employer. A change in an employee's circumstances or status can lead to a term or condition of employment resulting in serious interference with a substantial family duty. In this context, an employer's decision not to change a term of employment to address an employee need could result in discrimination. Claimants are still required to prove that the parental or family duty is substantial or out of the ordinary, and the interference with the protected interest is serious; ordinary interferences are not protected.

4. Guidance onCharter interpretation from the Federal Court of Appeal

The Federal Court of Appeal in R. v. Boloh, 2023 FCA 120 overturned a decision of the Federal Court, which would have required the Canadian government to collect Canadian citizens detained in Syria. The Court clarified that section 6 of the Charter prohibits "exile and banishment", but, in consideration of the text and purpose of the provision, it does not in these particular circumstances impose a positive obligation to retrieve citizens from another (dangerous) country. The decision signals the FCA's philosophical approach to Charter interpretation, which emphasizes the significance of the text. The Court first looks to the text of the provisions, then looks to the scope and purpose of the right in order to "[interpret] the text in a way that is true to the theories on which the text is based". The approach embraced by the FCA closely resembles traditional methods for statutory interpretation, and is in contrast to what the FCA described as the more recent "looser" approach to statutory interpretation where the text was more of a "jumping off point". In light of Boloh, litigants should think carefully about jurisdiction when advancing creative Charter arguments, as the Federal Courts are unlikely to be a welcoming forum for approaches that stretch the meaning of the text. On the other hand, arguments that recognize that the text of the Charter provides guard rails are more likely to succeed in the Federal Courts.

5. Provincial regulation of cannabis plant possession and cultivation is constitutionally valid

In Murray‑Hall v. Quebec (Attorney General), 2023 SCC 10, the Supreme Court of Canada considered the constitutionality of provincial legislation regulating the possession and cultivation of cannabis plants. Specifically, the Court sought to determined whether the impugned legislation was valid on division of powers grounds based on the "pith and substance" doctrine. In a unanimous decision, the Court concluded that the legislation was constitutional. The Court noted that where a validity challenge is to specific provisions of a law that are alleged to be an integral part of a regulatory scheme, the provisions must be read in the context of the entire law. This is critical to distinguishing the purpose of the law from the means chosen to achieve it. Moreover, not every law that has the features of criminal legislation falls under the federal criminal law power under the Constitution Act, 1867. Rather, a provincial law can touch on a valid criminal law purpose, like health, that is not within exclusive federal jurisdiction, but an area of overlapping jurisdiction under the Constitution Act, 1867. Finally, in considering the "paramountcy" doctrine, the Court found that there was no operational or purpose conflict in Murray-Hall, as both statutes could be complied with simultaneously, and the provincial law did not frustrate the purpose of the federal legislation.

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This Appellate Quarterly webinar is eligible for CPD credit and was recorded. For a copy of the recording, please contact clientevents@mccarthy.ca.

The next Appellate Quarterly session will take place on October 10, 2023. To receive an invitation, please e-mail clientevents@mccarthy.ca.