Granted (1)

Bankruptcy & Insolvency: Disclaimer of Arbitration Agreements 

Peace River Hydro Partners v. Petrowest Corporation, 2020 BCCA 339 (39547)
Petrowest Corporation and affiliated companies were in receivership. Their receiver and manager commenced an action against Peace River Hydro Partners et al., claiming amounts owed pursuant to agreements that contain arbitration clauses. Peace River Hydro Partners, et al., applied under s. 15 of the Arbitration Act to stay the action in favour of arbitrations. The motions judge dismissed the application. The B.C.C.A. dismissed an appeal. “The motion for leave to intervene by the Canadian Commercial Arbitration Centre is dismissed without prejudice to re-apply for leave to intervene in the appeal. The application for leave to appeal…is granted with costs in the cause.”

Dismissed (3)

Class Actions: Appealing Settlement Approval 

Hébert v. Wenham, 2020 FCA 186 (39518)
In 2018, the Fed. C.A. certified a class action for survivors of the drug Thalidomide who were left with lifelong disabilities. Shortly after certification, Canada replaced its existing Thalidomide compensation program with an enhanced version. The new program included financial support for some survivors who were previously denied compensation, amongst other changes. A settlement agreement was executed in 2019. The Class sought court approval of the settlement agreement to which Canada consented. The Fed. Court approved the settlement, finding it to be fair, reasonable and in the best interests of the class as a whole. Five class members (not including the representative member) sought leave to appeal the settlement approval to the Fed. C.A. which was denied. “The application for leave to appeal…is dismissed.”

Tax: Payroll Deductions; Priorities 

Caisse Desjardins de Limoilou v. Attorney General of Canada, 2020 QCCA 1612 (39573)
The deemed trust mechanism provided for in section 227(4.1) of the Income Tax Act gives C.R.A. a means to recover payroll deductions on a priority basis in relation to any other secured creditor. A narrow class of secured creditors is exempted from that priority by the prescribed security interest (“PSI”) exception under section 227(4.2). The effect of this exception is creditors holding a mortgage retain their priority of rank up to the amount of the PSI calculated in accordance with section 2201 of the Income Tax Regulations. The courts below had to determine the amount of the PSI of a secured creditor whose claim was to be given priority over that of the government. The Québec Superior Court did not take the value of the secured creditor’s suretyship into account in calculating PSI. It concluded a personal security is not a “righ[t] of the secured creditor securing the obligation” within the meaning of the ITA and the Regulations. The Qué. C.A. reversed; in its view, the ordinary meaning of the words “rights of the secured creditor” applies to all patrimonial rights of the secured creditor securing the obligation, including a suretyship. “The application for leave to appeal…is dismissed with costs.”

Tax: Shareholder Benefits; Gross Negligence Penalties 

Deyab v. Canada, 2020 FCA 222 (39587)
A taxpayer was reassessed under s. 152(4) (a) of the Income Tax Act in 2015 to include substantial sums in his income as shareholder benefits for the 2007 to 2011 taxation years. For the years 2007 to 2010, the notices of reassessment were issued after the expiration of the normal reassessment period.  The taxpayer’s appeal from these reassessments was dismissed by the Tax Court of Canada. Gross negligence penalties were included in the reassessments. The Fed. C.A. allowed the appeal in relation to the assessment of gross negligence penalties but dismissed the appeal in relation to the amounts included in income. “The application for leave to appeal…is dismissed with costs.”