Editor’s Note: This post was written as a preview of an upcoming Supreme Court of Canada decision for the Fantasy Courts website and newsletter.

Hi, here’s what you need to know about the Supreme Court of Canada this week in 9 minutes.

  1. On Thursday, Nov. 24, 2022, the SCC is releasing its decisions in R. v. Ramelson, Jaffer, Haniffa and Dare. At issue is the test for entrapment.
  2. On Friday, Nov. 25, 2022, the SCC is releasing its decision in Transportation Safety Board of Canada v. Kathleen Carroll-Byrne, et al. At issue is the test to apply to determine whether to order production of a plane’s black box cockpit recording.
  3. Des Groseillers v. Quebec (Agence du revenu), 2022 SCC 42 was released on Nov. 17, 2022. The Court unanimously dismissed the appeal and ruled that stock options donated to charities by an employee are employment income.
  4. Nova Chemicals Corp. v. Dow Chemical Co., 2022 SCC 43 was released on Nov. 18, 2022. The Court in a 8:1 split dismissed the appeal and clarified how to calculate damages for patent infringement.

Head over to Fantasy Courts to lock in your predictions for this week’s decisions or read more about the cases below.

Test for Entrapment

Appeals as of right and by leave from R. v. Ramelson, 2021 ONCA 328, R. v. Jaffer, 2021 ONCA 325, R. v. Haniffa, 2021 ONCA 326, R. v. Dare, 2021 ONCA 327.

View the SCC webcast & read the factums

What Happened?

Before trial: These appeals all arise out of Project Raphael, an undercover investigation by York Regional Police which was intended to target buyers of sexual services from juveniles. Police posted fake advertisements in the escorts section of the online classified advertising website Backpage.com. The ads didn’t say the escort was underage, but used some coded language to hint that she was. When individuals responded to the ads, an undercover officer posing as an escort would disclose in the ensuing text chat that she was underage. Individuals who continued the chat and arranged sexual services and a price were directed to a hotel room to complete the transaction. They were then arrested and charged on their arrival.

At trial: The trial judges found the accuseds guilty. In all but the Ramelson case, the trial judges also dismissed applications for a stay of proceedings based on entrapment. The defence of entrapment is based on the notion that limits should be imposed on the ability of the police to participate in the commission of an offence. As a general rule, it’s expected in our society that the police will direct their attention towards uncovering criminal activity that occurs without their involvement. The defence is available when: (a) the authorities provide a person with an opportunity to commit an offence without acting on a reasonable suspicion that this person is already engaged in criminal activity or pursuant to a bona fide inquiry; or (b) although having such a reasonable suspicion or acting in the course of a bona fide inquiry, they go beyond providing an opportunity and induce the commission of an offence. These cases mainly engage the first branch of opportunity-based entrapment.

At the Court of Appeal: The Court of Appeal allowed the Crown’s appeal from the stay of proceedings in Ramelson. In the other matters, the Courts of Appeal dismissed the appeals. In other words, the Court of Appeal held that the police investigation in Project Raphael did not constitute entrapment This lead to Ramelson having an as of right appeal, while the others sought and obtained leave to appeal to the SCC.

What Was Argued at the SCC?

Appellant: The appellants argued that the test for entrapment needs to take into account the difference between an investigation based on a virtual space rather than a physical place (e.g. online vs street corner). Police need to have reasonable suspicion over a person or location prior to providing an opportunity to commit an offence. Targeting an entire website is too broad in scope to satisfy the particularized and individualized reasonable suspicion standard that the SCC set recently in R. v. Ahmad, 2020 SCC 11.

Respondent: The Crown argued that Court of Appeal made no error in concluding that the police had the required reasonable suspicion about the escort section of Backpage.com that enabled the police to offer the appellants an opportunity to commit a child prostitution offence. The law does not need to be modified. Police can have the requisite reasonable suspicion in either the targeted person or place.

What Else Should You Know Before Making a Prediction?

In Ahmad, the Court was split 5:4 (Wagner C.J. and Moldaver, Côté and Rowe JJ. dissenting) with the majority allowing the appeal and imposing stays based on the defence of entrapment. I could see a similar split in this one. The judges here though seemed a bit hung up on the content of the initial ad and the effect of the police using coded language in it to suggest the escort was underage. That might be enough to make the dissent in Ahmad the majority here.

Privilege Over Black Boxes

Appeal by leave from Canada (Transportation Safety Board) v. Carroll-Byrne, 2021 NSCA 34

View the SCC webcast & read the factums

What Happened?

At trial: An Air Canada flight from Toronto to Halifax crashed when it landed short of the runway during a snowstorm. Some of the passengers commenced a class action asserting negligence on the part of various defendants, including Air Canada, the pilot and co‑pilot. The appellant (Board) investigated the crash, taking into consideration the on-board cockpit voice recorder (CVR or black box). The Board’s report on its findings was produced to the parties. The respondent Airbus S.A.S. moved for an Order requiring the Board to produce the audio data from the CVR and any transcripts. Other respondents also sought production. The CVR and transcripts are in possession of the Board, who claims a statutory privilege over the materials under the Canadian Transportation Accident Investigation and Safety Board Act. The Board intervened to argue that the court should not exercise its discretion to order production in the face of its privilege. A judge of the Supreme Court of Nova Scotia denied a motion by the Board to make further ex parte representations after his in camera review of the CVR and ordered production of the CVR and transcripts, subject to restrictions.

At the Court of Appeal: The Nova Scotia Court of Appeal granted leave to appeal and dismissed the appeal. The Board had an opportunity to make inter partes submissions.  The Act did not grant a right to make submissions ex parte. The judge required no special assistance in understanding the contents of the recorder. His reasons were adequate to permit appellate review. He made no clear and material error in assessing the evidence.  His order contained confidentiality provisions. His balancing of interests was entitled to deference.

What Was Argued at the SCC?

Appellant: The appellant Boardargued that black boxes have a significant impact on pilots’ privacy interests. The statutory privilege on the black boxes is designed to ensure pilots speak freely despite the continuous recording of their work environment. The privilege should only be lifted where the public interest in the proper administration of justice outweighs the importance of the privilege. The court decisions here “eviscerate” the statutory privilege created by Parliament.

Respondents: The respondents argue that victims of a serious plane crash should not be deprived of key evidence captured in real time by the black box. If the appeal is granted, it would undermine the ability of the plaintiffs and triers of fact to determine responsibility for crashes and, accordingly, to ensure that justice is done.

What Else Should You Know Before Making a Prediction?

I’m leaning towards appeal dismissed. I think the SCC judges will defer to the decisions of the judges below and prefer their interpretation of the statute over the Board’s interpretation of it. It was open for the judges to rule as they did and statutory interpretation falls squarely within their domain of expertise.

Last SCC Decisions

On Nov. 17, 2022, the SCC released Des Groseillers v. Quebec (Agence du revenu), 2022 SCC 42. The Court unanimously dismissed the appeal.

Held: Stock options donated to charities by an employee are employment income under Quebec’s Taxation Act.

Key Points:

  • The case turned on sections 50 and 422 of Quebec’s Taxation Act. Pursuant to section 50 of the Act, if an employee transfers stock options received under an employee plan to another person or organization they have no relation to, they are considered to have received a taxable employment benefit equal to the monetary value of those options. Under section 422 of the Act, such donations are considered to have been made at the fair market value of the stock options at the time of the gift.

On Nov. 18, 2022, the SCC released Nova Chemicals Corp. v. Dow Chemical Co., 2022 SCC 43. The Court in a 8:1 split dismissed the appeal.

Held: When a patentee chooses an accounting of profits as a remedy for patent infringement, the infringer must disgorge all the profits they gained that are causally attributable to the invention. This may involve consideration of the hypothetical profits that an infringer could have earned by selling a non‑infringing option. Springboard profits may also be available.

Key Points:

  • An accounting of profits requires that the infringer disgorge all profits causally attributable to infringement of the invention after the grant of the patent.
  • An accounting of profits is a three‑step test. At step 1, the court should calculate the actual profits earned by selling the infringing product — i.e., revenue minus (full or differential) costs. At step 2, the court should determine whether there is a non‑infringing option that can help isolate the profits causally attributable to the invention from the portion of the infringer’s profits not causally attributable to the invention — i.e., differential profits. It is at this step that judges should apply the principles of causation. At step 3, if there is a non‑infringing option, the court should subtract the profits the infringer could have made had it used the non‑infringing option from its actual profits, to determine the amount to be disgorged.

-Tom Slade

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