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Caselaw is a weekly summary of notable civil and criminal court decisions by the Supreme Court of Canada, the Federal Court of Canada and all Ontario courts.

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Intellectual Property

Patents

Actions for infringement

This was not proper case to apportion defendants’ profits
Plaintiff patent owner owned patent which claimed drug perindopril. Federal Court held that patent was infringed by defendants through manufacture in Canada and sale of perindopril tablets. Plaintiffs elected to recover profits defendants earned by reason of their infringing activities. Federal Court determined amount of defendants’ profits which were attributable to infringing activity. This required Federal Court to consider manufacture and sale of perindopril tablets in Canada as well as their sale abroad. With respect to export sales, Federal Court rejected argument that defendants’ profits should be reduced by taking into account availability of non-infringing alternatives, and argument that their profits should be reduced on basis that portion was attributable to non-infringing services they provided. Defendants appealed. Appeal allowed in part. Federal Court erred in law by rejecting relevance at law of any available non-infringing perindopril and failed to adequately consider evidence adduced as to ability and willingness of three suppliers to provide non-infringing perindopril. Issue would be remitted to Federal Court. While Federal Court committed extricable error of law in its interpretation of contracts between defendants and certain affiliates, it did not err in its ultimate conclusion that this was not proper case to apportion defendants’ profits.
Apotex Inc. v. ADIR (2017), 2017 CarswellNat 217, 2017 FCA 23, Eleanor R. Dawson J.A., Boivin J.A., and Woods J.A. (F.C.A.); reversed (2015), 2015 CarswellNat 2838, 2015 CarswellNat 7793, 2015 FC 721, 2015 CF 721, Jocelyne Gagné J. (F.C.).

Intellectual Property

Copyright

Licences

Board erred in ignoring expert evidence

Copyright Board of Canada certified royalty rates to be collected by Canadian Copyright Licensing Agency for reproduction of works in its repertoire by school institutions during two tariff periods. Board applied “volume times value” methodology, pursuant to which volume of compensable copying was multiplied by estimated value of each page of copied work for one of four genres included in agency’s repertoire: books, periodicals, newspapers and consumables. Agency brought application for judicial review. Application granted in part. Only reviewable error concerned coding errors on repertoire; this matter was to be remitted for reconsideration. Board erred in ignoring expert evidence provided by agency to correct and clarify breadth of repertoire as described in volume study. In circumstances of this case, it was not unreasonable for board to infer that copying of one or two pages of book did not constitute reproduction of “substantial part of work” within meaning of s. 3 of Copyright Act. Board did not disregard burden of proof. Board’s purpose was to come to its own “impression” of what was fair in best manner possible considering that both parties had agreed to use aggregate data to establish volume of copying during relevant period. Board did not breach its duty to act fairly. Board used methodology that was simply practical and mathematical way of reflecting relative weight given by board to various factors used to form its “impression.” Board’s overall determination that large portion of exposures were fair was not unreasonable. Board followed previous cases where only quantitative proportion of work was considered, and there was no error in board’s reasoning in this respect. Board did not err with respect to character of dealing, in fair dealing analysis. In explaining why looking at aggregate volume of copies was not helpful to its assessment of whether copies were widely distributed, board reasonably applied Supreme Court of Canada’s teachings in particular cases. Board did not err with respect to effect of dealing. In terms of realistic alternatives, this factor did not support finding of unfairness given that agency’s evidence on this point was greatly limited in scope and detail. Agency did not establish board’s assessment of amount of exposures that should be excluded for compensability on basis of fair dealing pursuant to s. 29 of Act was unreasonable.
Canadian Copyright Licensing Agency v. British Columbia (Ministry of Education) (2017), 2017 CarswellNat 163, 2017 FCA 16, M. Nadon J.A., Eleanor R. Dawson J.A., and Johanne Gauthier J.A. (F.C.A.).

Criminal Law

Offences

Breaking and entering and related offences

Trial judge’s mistakes warranted appellate intervention

Accused was convicted of break and enter with intent to commit indictable offence, two counts of break and enter and committing indictable offence, and three counts of possessing break-in instruments. Charges arose from three break-ins at fast-food restaurant. Crown’s similar fact evidence application in relation to two break-ins, in which safe was broken into and money stolen, was allowed. In respect of third break-in, no theft was committed because perpetrator was unable to access safe. DNA and witness evidence implicated accused. Accused appealed convictions. Appeal allowed. Trial judge erred with respect to use he made of accused’s criminal record and his evaluation of evidence was flawed in material respects. Trial judge concluded that several aspects of accused’s testimony strained belief, including his explanation for his DNA being on balaclava worn by perpetrator. Essentially, trial judge reasoned that if accused were truly innocent and was in wrong place at wrong time, his decision to remain in alley where suspect van was parked was undermined by his “criminal past and life experiences”. Trial judge’s use of accused’s criminal record went well beyond limited use permitted by Canada Evidence Act. Trial judge considered that accused had cast on his right arm at time of break-ins, but rejected his submission that due to his injury, he could not swing axe or use any of tools used in break-ins. Trial judge ignored relevant evidence that he was required to consider before rejecting accused’s evidence on that point. Trial judge also misapprehended evidence in saying that there were glass particles on accused’s shirt and running shoes. Trial judge’s misuse of accused’s criminal record, and cumulative effect of his mistakes in assessing evidence, warranted appellate intervention. New trial ordered.
R. v. Marini (2017), 2017 CarswellOnt 519, 2017 ONCA 46, Karen M. Weiler J.A., S.E. Pepall J.A., and G.T. Trotter J.A. (Ont. C.A.); reversed (2014), 2014 CarswellOnt 416, 2014 ONSC 86, E. Gareau J. (Ont. S.C.J.).

Criminal Law

Offences

Assault

Totality of evidence allowed trial judge to reach conclusion

Accused was convicted at judge-alone trial, on charge of aggravated assault. Accused claimed that judge did not properly analyze evidence of disreputable witnesses. Accused claimed trial judge misapprehended evidence of complainant and his witness. Accused claimed that trial judge made inconsistent findings as to complainant’s perception of incident. Accused finally claimed that trial judge’s finding that witness was not assailant, while accused was, was improper. Accused appealed from conviction. Appeal dismissed. Trial judge did not rely on disreputable witnessed to determine that stabbing took place by accused. Trial judge properly considered these witnesses’ evidence to determine that accused was one of assailants. This evidence was corroborated by complainant’s blood being found on accused’s pants. Other witnesses’ evidence was properly construed by trial judge. This evidence did not name accused as assailant, but excluded another person as one of assailants. This was corroborated by testimony of complainant. Trial judge properly accepted complainant’s testimony, to establish number and gender of assailants. Totality of evidence allowed trial judge to reach conclusion that accused was active participant in assault.
R. v. Pashazahiri (2017), 2017 CarswellOnt 570, 2017 ONCA 60, K.M. Weiler J.A., S.E. Pepall J.A., and G.T. Trotter J.A. (Ont. C.A.).

Professions and Occupations

Barristers and solicitors

Negligence

Negligence claim against lawyer was ordered to proceed to trial

Lawyer G represented plaintiffs in settlement of tort and accident benefit claims. Plaintiffs retained lawyer C with respect to issues with retainer of G. Plaintiffs brought claims against C, which were dismissed on summary judgment motion. Motion judge found that plaintiffs retained C to represent them only with respect to assessment of G’s accounts, and that they did not retain C in relation to any possible negligence action against G. Judge found that C advised plaintiffs to seek legal advice on negligence issue. Judge found that C did not owe plaintiffs duty of care to either pursue or provide them with legal advice about possible negligence action, including limitation period. Plaintiffs appealed. Appeal allowed; trial ordered. Judged erred in determining that C met burden to establish that there was no genuine issue for trial on issue of duty of care to advise as to limitation period. Where it is alleged that lawyer’s duty of care arises out of and extends beyond retainer, court must meticulously examine all relevant surrounding circumstances, including form and nature of client instructions and sophistication of client, to determine whether duty is owed beyond four corners of retainer. This was not done in present case. Judge did not explain how she was able to conclude that C did not owe plaintiffs duty to advise about existence of limitation period. There was change over course of C’s assessment retainer of his views about competency of G’s representation; C advised plaintiffs that in assessment proceeding they should allege G had been negligent; and, C advised plaintiffs that they might have negligence claim against G. Judge did not take into account all material facts.
Meehan v. Good (2017), 2017 CarswellOnt 1351, 2017 ONCA 103, Janet Simmons J.A., David Brown J.A., and L.B. Roberts J.A. (Ont. C.A.).

Financial Institutions

Issuance of credit
Miscellaneous

Creditor’s action against bank for declaration that it had priority over funds was dismissed

Overdrafts. Creditor financed its sale of debtor with vendor take back note that was secured by general security agreement covering debtor’s assets. Debtor started using services of bank H after creditor refused to subordinate its security to bank H. Debtor opened two related chequing accounts in different currencies and obtained company credit card. Accounts did not allow overdrafts, but debtor frequently went into overdraft and provided funds to cover overdrafts before cheques were at risk of being dishonoured. After debtor went bankrupt, creditor brought action against bank H for declaration that it had priority over funds in accounts used to pay overdrafts and credit card debt and for payment of amounts alleging owing. Creditor brought motion for summary judgment, and bank brought cross-motion for summary judgment dismissing action. Motion dismissed; cross-motion granted. Creditor had not established bank H had extended credit to debtor by way of overdrafts. Overdrafts were created when bank made decision to cover cheque that put account into negative balance. Under bank H’s system, decision to create overdraft could not be made until day after cheque was posted to account. Until such time as bank H made decision to honour or return cheque, it was not providing any credit to debtor or assuming any risk on debtor’s behalf. Debtor always covered cheques with its own funds before bank H made decision to honour cheque, and interest charges were in nature of penalty rather than proof of loan.
Kari Holdings Inc. v. HSBC Bank Canada (2017), 2017 CarswellOnt 566, 2017 ONSC 437, Conway J. (Ont. S.C.J.).

Criminal Law

Prisons and prisoners

Regulation

Independent chair reasonably applied modified objective standard for applicant’s conduct

Correctional service officers found and seized four gallons of liquor in applicant’s cell. After discovery of liquor, applicant asked to be placed in administrative segregation for fear of safety. Applicant pleaded not guilty to disciplinary offence and raised defence of duress. Applicant testified that inmates used his cell to manufacture liquor, forcing him to keep it in his cell in exchange for reduction of debts he contracted while in prison and that he saw no other way out but to accept liquor. Applicant was convicted of offence. Applicant’s application for judicial review was granted. Attorney General of Canada appealed. Appeal allowed. Independent chairman did not err in failing to analyze last three criteria in modified objective standard of defence of duress. Independent chair reasonably applied modified objective standard for applicant’s conduct. Applicant knew solution but ignored it when he breached establishment rules by keeping prohibited liquid mixture in his cell. Independent chairman concluded that applicant knew and could seek protection, because that it exactly what he did once seizure was made.
Canada (Procureur général) c. L’Espérance (2016), 2016 CarswellNat 7426, 2016 CAF 306, Noël C.J., Johanne Trudel J.A., and Boivin J.A. (F.C.A.); reversed (2016), 2016 CarswellNat 12, 2016 CarswellNat 1950, 2016 FC 19, 2016 CF 19, Sylvie E. Roussel J. (F.C.).

Commercial Law

Agricultural products

Miscellaneous

Respondent did not transport cows in violation of Health of Animals Regulations (Can.)

Corporate respondent’s employee was charged with transporting cows in violation of s. 138(4) of Health of Animals Regulations. Employee attempted to raise two cows that were lying on side but without success. Inspector found that there was trampling and muscle tremors and that cow was unfit for transport. Canada Agricultural Review Tribunal found that corporate respondent did not transport cows unfit for transport. Attorney General of Canada brought application for judicial review. Application dismissed. Decision was reasonable. Regulations did not retain capacity for cow to rise independently as sole criterion for determining fitness for transportation. It was therefore up to carrier during transport and tribunal to assess whether cow was unfit given context of each case.
Canada (Procureur général) c. L. Bilodeau et Fils Ltée (2017), 2017 CarswellNat 108, 2017 CAF 5, Scott J.A., Richard Boivin J.A., and De Montigny J.A. (F.C.A.).

Public Law

Elections

Advertising

Election Act (B.C.) registration requirement should be imposed only on those paying for advertising services or receiving services

Section 239 of BC’s Election Act (Act) required everyone sponsoring election advertising during campaign to register with province’s Chief Electoral Officer (CEO), regardless of amount spent during writ period. 2010 Report of CEO did not distinguish between sponsors conducting full media campaigns and individuals engaged in such activities as putting bumper stickers on cars, posting handwritten signs in windows, or wearing T-shirts with political messages (individuals). Non-profit association brought unsuccessful application for declaration that registration requirement in respect of sponsors of election advertising spending less than $500 in given campaign period infringed s. 2(b) of Canadian Charter of Rights and Freedoms, was not saved by s. 1, was of no force and effect, and should be read down to include exception for individuals. Trial judge and majority of Court of Appeal found that s. 239 infringed s. 2(b), but that infringement was justified under s. 1. BC Attorney General (A-G) took position that s. 239 did not force individuals to register. Association appealed. Appeal dismissed. Individuals who neither paid others to advertise nor received advertising services without charge were not “sponsors” and could transmit their own points of view by posting handmade signs in windows, putting bumper stickers on their cars, or wearing T-shirts with political messages on them, without registering under Act. Act was consistent with position taken by A-G. Courts below did not determine scope and nature of limitation on free expression imposed by s. 239 but accepted CEO’s interpretation as including individuals in definition of “sponsor”. When words of s. 239 were read in entire context and in grammatical and ordinary sense harmoniously with scheme of Act, object of Act, and intention of Parliament, it was clear that provision was directed only at those undertaking organized advertising campaigns who paid for advertising services or received those services without charge as contribution. While definition of “election advertising” in s. 228 was broad enough to cover expressions by individuals, ordinary meaning of “sponsor” was not. Act defined “sponsor” as “individual or organization who pays for election advertising to be conducted”. Interpreting s. 239 as imposing registration requirement only on those who pay for advertising services or receive services from others in undertaking election advertising campaigns was consistent with purpose of Act, intention of legislature, and legislative history.
B.C. Freedom of Information and Privacy Assn. v. British Columbia (Attorney General) (2017), 2017 CarswellBC 161, 2017 CarswellBC 162, 2017 SCC 6, 2017 CSC 6, McLachlin C.J.C., Moldaver J., Karakatsanis J., Wagner J., Gascon J., Côté J., and Brown J. (S.C.C.); affirmed (2015), 2015 CarswellBC 1035, 2015 BCCA 172, Newbury J.A., Saunders J.A., and Lowry J.A. (B.C. C.A.).

Insurance

Automobile insurance

Underinsured motorist endorsement

Future CPP disability benefits did not reduce amount payable by insurer

Plaintiff’s action against defendant tortfeasor with respect to motor vehicle accident was allowed with award of damages exceeding limits of tortfeasor’s insurance policy. Plaintiff claimed shortfall from his own insurer under SEF 44 Family Protection Endorsement, but insurer took position that Endorsement’s deduction of future disability benefits from “any policy of insurance” applied to Canada Pension Plan (CPP) disability benefits. Trial judge ruled that CPP benefits were not deductible from shortfall owed to plaintiff by insurer. Insurer’s appeal was allowed. Plaintiff appealed. Appeal allowed. Ordinary meaning of words at issue was clear, reading Endorsement as whole. Average person applying for this additional insurance coverage would understand “policy of insurance” to mean optional, private insurance contract and not mandatory statutory scheme such as CPP. Insurer could not rely on its specialized knowledge of jurisprudence to advance interpretation that went beyond clear words of policy. Precedent relied on by insurer and appellate court with respect to meaning of “policy of insurance” was decided in very different interpretive context and did not support alternative reasonable interpretation. Future CPP disability benefits did not reduce amount payable by insurer.
Sabean v. Portage La Prairie Mutual Insurance Co. (2017), 2017 CarswellNS 38, 2017 CarswellNS 39, 2017 SCC 7, 2017 CSC 7, McLachlin C.J.C., Moldaver J., Karakatsanis J., Wagner J., Gascon J., Côté J., and Brown J. (S.C.C.); reversed (2015), 2015 CarswellNS 472, 2015 NSCA 53, Beveridge J.A., Hamilton J.A., and Scanlan J.A. (N.S. C.A.).
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