Stay informed on the latest business and legal insights and events.
Updates
A Warning for Canadian Corporations with Foreign Subsidiaries
July 30, 2013
On July 22, 2013, the Ontario Superior Court of Justice handed down its highly anticipated decision in Choc v Hudbay Minerals Inc., 2013 ONSC 1414. Hudbay serves as a significant warning for Canadian corporations operating in foreign countries that they could potentially face civil liability in Canada for wrongs committed in foreign countries.
Protecting Canadian Companies' Trade Secrets in the Chinese Market
July 23, 2013
A company's most valuable assets are often its
proprietary and confidential business and technological information. Executives
and owners of Canadian businesses understand that they cannot ignore the
Chinese market if they wish to grow their business internationally. However,
they may, at the same time, be concerned about trade secret theft. As with any
other business risks, Canadian companies can manage and minimize risks of
trade secret theft by understanding applicable Chinese and Canadian laws,
taking proactive steps to protect valuable confidential information, and
aggressively enforcing rights that have been infringed upon.
Securities Act Allows Disclosure of Information Obtained in OSC Investigations Without Notice to Affected Persons
July 15, 2013
On June 21, 2013, amendments to the Ontario Securities Act (the Act) contained in Bill 65—the Prosperous and Fair Ontario Act (Budget Measures), 2013—were brought into force. Certain of the amendments have the potential to impair the rights of persons under investigation by Staff of the Commission to object to the disclosure of information obtained to other regulatory or law enforcement entities.
Look(s) Bad for Former Directors
July 08, 2013
In its decision in Cytrynbaum v. Look
Communications Inc. released July 4, 2013, the Ontario Court of Appeal
affirmed a lower court ruling that "advancement" by the corporation to Look's
former directors, for advance funding of the directors' legal costs to defend
against an action brought by the corporation, is subject to Court approval. The
former directors had been sued by Look (at the behest of successor directors),
and had sought advancement of consequent expenses under their indemnity
agreements with Look. Look declined to advance the expenses, and the former
directors sued for an order compelling payment. On the facts as found, the
trial Court refused to order advancement, and the Court of Appeal upheld that
decision.
Technology Licenses in the Context of a Licensor's Bankruptcy and Insolvency
June 24, 2013
Intellectual property rights are critical to various economic sectors. Many companies depend on licensed technology to operate and survive. The licensor-licensee relationship may deteriorate, especially if the licensor starts showing signs of distress or, even worse, becomes insolvent. Canadian legislation offers some clarity regarding each of the parties' rights and obligations in the event of a licensee's insolvency or bankruptcy. However, there is a significant degree of uncertainty with respect to what may happen to an intellectual property license in the event of a licensor's insolvency.
Tougher Canadian Foreign Corruption Law Raises the Stakes for Officers and Directors
June 24, 2013
Canada has significantly strengthened its Corruption of Foreign Public Officials Act (CFPOA) including by adding a new offence that will expand the grounds for criminal liability for corporations and their directors, officers and employees.
Changes to Rules for Marketing Activities during a Public Offering
June 05, 2013
The Canadian Securities Administrators (CSA) have
adopted amendments to the rules governing permissible marketing activities in
the context of a public offering. The amendments, which will come into force on
August 13, 2013, involve significant changes to the existing marketing
rules.
Departing Investment Advisors: An Update Since the Supreme Court's Decision in RBC v. Merrill Lynch
May 24, 2013
The departure of an investment advisor (IA) raises a number of serious and often conflicting considerations. For the IA, a departure could mean uncertainty in terms of earning a livelihood and risks upsetting longstanding relationships with clients. For the brokerage, a departure might mean the loss of confidential information, employees, or clients. Intertwined with these considerations are the obligations owed by both IAs and brokerages to the clients during the period of transition.
Not on the Rink in My Backyard
May 21, 2013
It is well-known that for 20 years Chevron Corp. has been engaged in litigation with residents of the Lago Agrio region of Ecuador over alleged environmental and health damage arising out of oil exploration activities by Chevron's predecessor, Texaco. The dispute has played out in numerous instalments both in the federal courts of the United States and in the courts of Ecuador and has involved issues of jurisdiction, forum conveniens, validity of a settlement agreement under investment treaty law and allegations of fraud. Ultimately, in 2011, the plaintiffs obtained an Ecuadorian trial judgment for approximately $18 billion, later upheld on appeal. On May 30, 2012, the plaintiff brought the party to Canada.
SCC Rules Roadblock an Abuse of Process Where Legal Remedies Not Exercised
May 16, 2013
Last week, the Supreme Court of Canada released its decision in Behn v. Moulton Contracting Ltd., 2013 SCC 26. The case sets out some important principles that may be relevant for those who engage in operations in areas where Aboriginal or First Nations concerns could give rise to a risk of roadblocks or other obstructive activities.
Bennett Jones Spring 2013 Economic Outlook
May 14, 2013
This Economic Outlook has a somewhat different structure from previous issues. The first section covers recent dynamics and short-term outlook for the world economy; the second section reviews recent international trade statistics and reports on where key trade negotiations and the Harper government`s trade agreements program stand at present; and a third, additional, section presents the evolution, past and projected, of federal and provincial government debts and deficits in Canada.
Changes to First Nations Consultation in Alberta
May 09, 2013
On April 2, 2013, Alberta released a draft of The Government of Alberta's Policy on Consultation with First Nations on Land and Natural Resource Management, 2013 (the "Draft Policy"). The Government's deadline for comments on the Draft Policy is May 17, 2013.
Intra-class Debate Permissible During Opt-Out Period: 1250264 Ontario Inc v Pet Valu Canada Inc
May 07, 2013
On May 3, 2013, the Ontario Court of Appeal released its decision in 1250264 Ontario Inc v Pet Valu Canada Inc, which addresses the propriety of communications among class members during the “opt-out” period when class members may remove themselves from a class proceeding. The Court of Appeal held that the communications at issue “amounted to the type of intra-class debate that is acceptable during the opt-out period”, notwithstanding that the purpose of the communications was explicitly to persuade class members to opt out.
Canada's Internet Law in a Nutshell
May 2013
The internet provides the
most effective means of communication known to man and so confronts
organizations with tremendous opportunities and also considerable challenges.
Providing a concise and well-referenced resource to many of key issues involved
on the internet, Canada's Internet Law in a Nutshell explores the inherent
tensions between freedom of expression and other values such as the protection
of reputation, and commercial speech. The text also examines the tensions
between the ease of copying of digital files and the concerns of copyright
owners. The text covers many key legal issues confronting conduct occurring on
the internet including a deeper focus on issues pertaining to matters such as
copyright, privacy, defamation and internet marketing, trademark and domain
names, electronic commerce, the Anti-Spam legislation, and introduces key issues
concerning other topics such as social media and cloud computing. (2013)
Carswell Legal Publications, Toronto, Canada.
The Legal Issues of Cloud-based Computing Services
April 24, 2013
Business leaders are under tremendous pressure to maximize the value of their company's IT and data. Staying on top of the ever-changing technology and tools available today can be daunting and give rise to complex legal issues and risks. Done well, cloud computing has the power to transform organizations, giving businesses greater competitive advantage, increasing their bottom line and shareholder value. At the very least, the use of cloud services may provide an opportunity to reduce capital costs and conceive of IT services as a variable cost or expense, in particular for new or replacement IT functionalities. Done poorly and without proper analysis and mitigation of the risks, cloud computing can be disastrous, including data corruption or unauthorized access, violations of the law, serious harm to the organization's reputation, and (although rare) potentially fines and imprisonment for directors and officers.
Amendments to the Regulations Designating Physical Activities
April 17, 2013
On April 12, 2013, the Canadian Environmental Assessment Agency released its Draft Regulations Amending the Regulations Designating Physical Activities (the Amended Regulations). According to the Regulatory Impact Analysis Statement published concurrently, the Amended Regulations are proposed in an effort to ensure that major projects with the greatest potential for significant adverse environmental effects in areas of federal jurisdiction are designated physical activities. Significant changes to the former Schedule of Physical Activities in the Regulations Designating Physical Activities are summarized below.
Service of Alberta Process Outside of Canada Now More Complicated
April 08, 2013
The Ontario Court of Appeal has confirmed the proper reading of the latest Alberta Court of Appeal decision on service ex juris under Alberta law, which greatly complicates serving legal documents outside of Canada. In our August 2012 Bennett Jones Update, “Recent Alberta Court of Appeal Decision on Service Ex Juris and the Hague Convention,” we discussed the Alberta Court of Appeal's decision in Metcalfe Estate v Yamaha Motor Powered Products Co Ltd, 2012 ABCA 240, noting important implications for the service of documents from Alberta into international jurisdictions that are signatories to the Hague Convention on the Service Abroad of Judicial and Extra-judicial Documents in Civil or Commercial Matters. In Metcalfe, the Court held that service under the Alberta Rules of Court in Hague Convention signatory states must comply with the requirements of the Hague Convention. In our August 2012 update, we noted that the ruling brought Alberta in line with current Ontario law on this issue and made international service more complicated. Published on the Bennett Jones Thought Network.
The National Energy Board's New System of Administrative Monetary Penalties
April 05, 2013
On February 16, 2013, draft Administrative Monetary Penalties Regulations (AMP Regulations) were published in the Canada Gazette, Part I, setting out necessary details for a new enforcement tool in the form of administrative monetary penalties (AMPs). The National Energy Board (NEB) invited public comment on the AMP Regulations within 30 days following the date of publication. The regulations are expected to be in place by July 2013. These regulations follow the passage of the Jobs, Growth and Long-term Prosperity Act in June 2012, by which Parliament amended the National Energy Board Act (NEB Act) and gave the NEB the authority to establish a system of AMPs. AMPs are monetary sanctions similar to fines, which may be issued by a government department directly to a person who commits a violation, and in this circumstance are meant to encourage compliance with the NEB Act and its regulations, as well as orders, decisions, certificates, licenses and permits issued under the NEB Act.
The Trade in Services Agreement: Opportunities for Canadian Service Suppliers
April 03, 2013
On March 18, Canada announced publicly that it was joining 20 of its trading partners, including the United States, Mexico, the European Union, Switzerland, Japan, Korea, Hong Kong and Australia in negotiating a new international instrument to further liberalize trade in services. The instrument will be called the Trade in Services Agreement, or TISA.
There is a Border in Cross-Border Proceedings
April 02, 2013
Those who have been following the progress of the securities class
action saga of Silver v. IMAX will be interested to note that another decision
in the long-running case has been released. On March 19, Justice van Rensburg
of the Ontario Superior Court held that members of a class certified in
Ontario can be bound by a settlement in a related U.S. class action and
therefore excluded from participating in the Ontario class proceeding. This
decision is a welcome one for companies defending overlapping class actions
in two different jurisdictions as it provides a means of settling in one
jurisdiction and nonetheless achieving a final resolution of all claims of
class members, including those comprising part of a certified class in another
jurisdiction.
Canada Selectively Withdraws GPT Benefits
April 01, 2013
On December 22, 2012, the Canadian government
solicited views on the withdrawal of general preferential tariff (GPT) status
from imports of beneficiary countries. It was proposed that the withdrawal
would be discriminatory to the detriment of countries that are classified for
two consecutive years as high income or upper-middle income economies according
to the latest World Bank income classifications, or have a share of world
exports that is equal to or greater than one percent for two consecutive years
according to the latest World Trade Organization trade statistics. After a
period of consultation, Canada proposes, in its 2013 Budget that it move
forward with and withdraw GPT benefits from 72 high income or export
competitive countries, including all G-20 nations. Changes will take effect on
January 1, 2015, and will be extended for a period of 10 years. The economic
condition analysis will be applied every two years and will be applied
prospectively. Published on the Bennett Jones Thought
Network.
Supreme Court Denies Banks' Appeal in Overtime Class Actions
March 28, 2013
Last week, the Supreme Court of Canada denied CIBC
and Bank of Nova Scotia leave to appeal the decisions against them in the
overtime class actions. In June 2012, the Court of Appeal for Ontario certified
class actions against both banks by current and former employees alleging that
the banks failed to pay them for overtime work. Though the Court of Appeal
decisions were unanimous, the banks probably held out some hope for appellate
review because, in Fresco v Canadian Imperial Bank of Commerce, the
motion judge and the Divisional Court denied certification. Published on the Bennett Jones Thought Network.
Saying You're Right Isn't Enough: Default Notices and Freehold Leases
March 27, 2013
Most freehold oil and gas leases in Canada require the lessor to provide the lessee with notice of an alleged default. The lessee then has a certain amount of time to remedy the default or commence proceedings for a judicial determination of whether there was, in fact, a breach. The recent Alberta Court of Queen's Bench decision in 1301905 Alberta Ltd. v. Sword Energy Inc., 2013 ABQB 113 [Sword Energy] confirms that a lessee must challenge a default notice by strictly complying with the provisions of the default clause or be subsequently barred from arguing the substantive merits of the alleged breach. Published on the Bennett Jones Thought Network.
Canada's Federal Budget Does Not Address Cross-Border Income Trusts
March 25, 2013
The March 2013 Federal Budget did not contain any provisions aimed at cross-border income trusts (CBITs, also known as foreign asset income trusts, or FAITs). Mention was made, however, of a continued intention to implement the specified investment flow-through (SIFT) related changes announced in 2011 and committed to draft legislation last summer, including those that shut down the use of stapled stock as a means to avoid the SIFT rules. Published on the Bennett Jones Thought Network.
Bennett Jones