On August 18, 2008, the Court of Appeal for Ontario affirmed the decision of the Ontario Superior Court of Justice approving a plan concerning failed asset-backed commercial paper (ABCP). Following the sub-prime mortgage crisis in the United States, the Canadian market for non-bank-sponsored ABCP fell into turmoil in early August 2007. In response, a group of institutions consisting of major investors in ABCP, issuers of ABCP and liquidity provider banks, convened a meeting in Montreal. This meeting resulted in the Montreal Accord, under which the parties agreed that all affected ABCP (worth approximately C$32 billion) would be converted to long-term floating notes. A committee of investors determined that the restructuring of ABCP would take the form of a plan of compromise and arrangement under the Companies’ Creditors Arrangement Act (CCAA). In March 2008, a bankruptcy court judge agreed to oversee the restructuring. A particularly controversial part of the plan turned out to be a set of comprehensive releases from liability of the institutions that created and sold the failed ABCP. Justice Campbell, after seeking and obtaining amendments to the releases, found that the amended releases were fair and reasonable and that the plan represented a highly complex and unique situation that could not succeed without the compromises it involved. Held: The Ontario Court of Appeal unanimously upheld Justice Campbell’s decision. The Court found that: (i) as a matter of law, a plan under the CCAA may contain a release of claims against third parties, and (ii) Justice Campbell was correct in the exercise of his discretion to sanction the plan as fair and reasonable. Leave to appeal was refused by the Supreme Court of Canada.

Notice of Appeal – 2008 BLRPleading 47975

Joint Notice of Appeal – 2008 BLRPleading 47976

Order – 2008 BLRPleadingO 991

Motion for Leave to Appeal – 2008 BLRMotion 38888

Re-amended Factum of the Appellants in Support of a Motion for Leave to Appeal and, if Granted, the Appeal – 2008 BLRFactum 14468

Factum – 2008 BLRFactum 14469

Factum of Representative Co-counsel for the Retail Holders of ABCP – 2008 BLRFactum 14470

Public; Torts; Civil Practice and Procedure; Family

Bovingdon (Legal Guardian of) v. Hergott

2008 CarswellOnt 15 (Ont. C.A.)

In this decision, the Ontario Court of Appeal ruled that a doctor owed no duty of care to future children not to cause them harm in prescribing a fertility medicine to their mother. The Respondent, Mrs. B, consulted the Appellant, Dr. H, an obstetrician, when she failed to begin ovulating after discontinuing birth control pills. The doctor prescribed the fertility drug Clomid. After taking the prescribed course of Clomid, Mrs. B conceived and gave birth to severely disabled premature twins. The Clomid was found to be the first link in a chain of causation that led to the conception of the twins, the premature birth of the twins and the damage caused to them as a result of their premature birth. The action against the Appellant was based on his failure to provide all the necessary information to allow Mrs. B to make an informed decision whether to take Clomid, the extent of the increased risk of having twins by taking the drug, the potential for premature birth when carrying twins and the consequent injury this might cause to them. The jury found the doctor negligent for failing to provide the necessary information to the mother. Following those findings, the trial judge ruled as a matter of law, that the doctor also owed a duty of care to the twins. Held: The Court of Appeal upheld the trial court’s ruling of negligence against Dr. H for failing to provide the necessary information to the mother, but reversed its decision on the issue of Wrongful Life and Duty of Care owed to the twins.

Notice of Appeal of Paul A. Hergott – 2008 CCLTPleading 46517

Factum of the Appellant – 2008 CCLTFactum 13948

Respondent’s Factum – 2008 CCELFactum 13949

Environmental; Public

Friends of the Earth - Les Ami(e)s de la Terre v. Canada (Governor in Council)

2008 CarswellNat 3763 (Fed. Ct.)

In this case, the Federal Court dismissed three applications for judicial review that had been brought by Friends of the Earth against the federal government for non-compliance with the Kyoto Protocol Implementation Act (“KPIA”). In 2007, Liberal MP Pablo Rodriguez introduced a private member’s bill, the KPIA, to force the federal government to comply with its obligations under the Kyoto Protocol. On June 22, 2007, KPIA became law with the support of opposition parties and the majority of the Senate. The Minister published a climate change plan on August 22, 2007, which made very clear that the federal government had no present intention to meet its Kyoto target. The environmental organization Friends of the Earth (FOTE), represented by EcoJustice, submitted three judicial review applications to the Federal Court to compel the federal government to comply with KPIA’s provisions. FOTE argued that the language of the Act was mandatory and by refusing to carry out the duties imposed by Parliament, both the Minister and cabinet breached the law. On the other side, the Minister and cabinet argued that the applications were not justiciable, meaning that this is not a proper subject matter to be before the Courts; rather, that it was properly a matter for Parliament. Held: The Court found that the subject matter of the Act was inherently political in nature, stating that “the Court has no role to play reviewing the reasonableness of the government’s response to Canada’s Kyoto commitments within the four corners of the KPIA.” The crux of the decision is that Parliament retains the sole discretion to decide the extent to which Canada complies with its Kyoto target insofar as this international target is expressed as domestic law in KPIA.

Notice of Application – 2008 CELRPleading 51645

Applicant's Memorandum of Fact and Law – 2008 CELRPleadingF 2690

Responding Affidavit of Michael Beale – 2008 CELRPleading 51646

Respondent’s Memorandum of Fact and Law – 2008 CELRPleadingF 2691

Responding Affidavit of Michael Beale – 2008 CELRPleading 51648

Applicant's Memorandum of Fact and Law – 2008 CELRPleadingF 2692

Memorandum of Fact and Law – 2008 CELRPleadingF 2693

Labour and Employment; Public; Insurance

KRG Insurance Brokers (Western) Inc. v. Shafron

2009 CarswellBC 79 (S.C.C.)

On Friday, January 23, 2009, the Supreme Court of Canada clarified the law surrounding non-competition covenants in Shafron v. KRG Insurance Brokers (Western) Inc. In 1987, Mr. Shafron sold his insurance agency to KRG Insurance Brokers Inc. but continued working in the agency. Mr. Shafron was subject to a three-year non-compete clause covering the "Metropolitan City of Vancouver." In 2001, Mr. Shafron, unhappy with his compensation, left to join an insurance broker in Richmond. A significant number of his former customers moved their business to his new employer, and KRG sued to enforce the restrictive covenant. Mr. Shafron challenged the enforceability of the non-compete clause on the basis that there is no recognized meaning for the phrase "Metropolitan City of Vancouver." While the trial judge dismissed the action commenced by KRG Western, the British Columbia Court of Appeal enforced the terms of the restrictive covenant. Held: The Supreme Court of Canada held that the Court of Appeal was in error by rewriting the restrictive covenant to substitute for the ambiguous term “Metropolitan City of Vancouver.” This decision highlights how narrowly Canadian courts will interpret and apply restrictive covenants in employment contracts. The Court has reinforced the Canadian view that a restrictive covenant is prima facie a restraint on trade and that only restrictive covenants that are reasonable (i.e., limited and directly tied to a demonstrable economic concern) and unambiguous will be enforced.

Notice of Appeal – 2009 CCELPleading 53427

Factum of the Appellant – 2009 CCELFactum 16461

Respondent’s Factum – 2009 CCELFactum 16462

Reply of the Appellant – 2009 CCELFactum 16463

Labour and Employment; Public; Civil Practice and Procedure; Torts; Corporate and Commercial; Contracts

RBC Dominion Securities Inc. v. Merrill Lynch Canada Inc.

2008 CarswellBC 2099 (S.C.C.)

With this decision, the Supreme Court of Canada has reinforced an employee's duty to provide reasonable notice of resignation and reestablished an employee's duty of good faith towards his or her employer. The decision stems from a case where branch manager Don Delamont arranged the mass departure of virtually the entire branch staff and, as a result, a large volume of the branch's client base. Held: the Supreme Court held that: (1) Absent a contractual non-competition agreement, departing employees are free to compete against their former employer immediately upon resignation; (2) employees are under a duty to give reasonable notice of resignation and may be liable to their former employer for damages arising from a breach of that duty; and (3) managers who organize a mass departure of employees breach their implied duty of good faith, including a duty to retain employees under their supervision, and may be liable for substantial damages – in this case $1.5 million – as a result of such breach.

Third Amended Statement of Claim – 2008 CCELPleading 53188

Counterclaim of Defendant Signal Signs & Graphics Inc. – 2008 CCELPleading 53189

Further Amended Statement of Defence of Thomas Manson Stevens et al – 2008 CCELPleading 53190

Amended Statement of Defence of Troy Stevens et al – 2008 CCELPleading 53191

Page updated 6/24/09