• New Good-Faith Duty of Honesty in Contractual Performance Recognized by Supreme Court of Canada
    November 25, 2014
    In a precedent setting case, the Supreme Court of Canada has: (1) recognized good faith as a "general organizing principle" of Canadian contract law; and (2) recognized a new duty of "honest performance", which requires parties to be honest with each other in relation to the performance of their contractual obligations. The decision in Bhasin v Hrynew, 2014 SCC 71, applies generally to all Canadian contracts, other than those subject to Quebec law (which also recognizes certain obligations of good faith). The notion of a general and independent doctrine of good faith performance of contracts has historically been resisted in Anglo-Canadian common law. The decision in Bhasin v Hrynew deliberately stops short of recognizing a general "duty of good faith", but takes an incremental step in that direction, with the recognition of the narrower "duty of honesty".
  • Dispute Over Landscaping Repairs Results in Personal Penalties against Condo Directors and a Fascinating Governance War Story
    November 24, 2014
    Court decisions holding corporate directors personally liable for acting in bad faith tend to be few and far between in Canadian jurisprudence. The recent Ontario Court of Appeal decision in Boily et al v Carleton Condominium Corporation 145 et al, 2014 ONCA 574, did just that. Although at first blush Boily appears to deal with condominium law, it also has some important messages for corporate directors. The decision in Boily is a reminder of the expensive personal consequences that can result from directors breaching their duties as board members – regardless of their level of compensation or the nature of the corporation on whose board they sit.
  • ISS Announces 2015 Canadian Proxy Voting Guideline Updates
    November 18, 2014
    Institutional Shareholder Services (ISS) released updates to its Canadian proxy voting guidelines for the upcoming 2015 proxy season. The ISS updates will apply to shareholder meetings of publicly traded Canadian companies occurring on or after February 1, 2015. Recommendations from proxy advisory firms such as ISS can have a significant impact on the outcome of business conducted at shareholder meetings, especially if institutional investors comprise a significant component of the shareholder base. Canadian public companies should review the updates with their legal counsel to determine the likely impact and take steps to mitigate any potential adverse voting recommendations from ISS.
  • Alberta Securities Commission Applies to SCC for Leave to Appeal Insider Trading Decision in Walton
    November 17, 2014
    The Alberta Securities Commission (ASC) has applied to the Supreme Court of Canada for leave to appeal the August 2014 decision of the Alberta Court of Appeal (Court) in Walton v Alberta (Securities Commission), 2014 ABCA 723 – a decision that has generated considerable legal and media attention. In Walton, the Court overturned various ASC rulings with respect to the insider trading, tipping and recommending/encouraging provisions of the Securities Act (Alberta). The focal points of the ASC's leave application concern the evidence necessary to prove allegations of illegal insider trading, tipping and recommending/encouraging, and the sanctions that may be imposed by the ASC on persons found to have engaged in such conduct. Commentators have suggested that, if the Court's decision in Walton stands, the ASC's ability to prosecute future insider trading cases will be adversely affected, particularly where an individual is alleged to have recommended that another person purchase or sell securities or encouraged that person to do so.
  • New Canadian Resource Revenue Transparency Rules Released
    October 28, 2014
    On October 23, 2014, the Government of Canada introduced its Extractive Sector Transparency Measures Act (the Bill), which will impose mandatory reporting requirements for each entity engaged in the "commercial development of oil, gas or minerals" (exploration, extraction, or having permits to do so) in Canada or elsewhere or that controls an entity that is so engaged. Introduced as part of the omnibus Bill C-43, the Bill represents a significant step in the Government's commitment to establish mandatory reporting standards for the extractive sector by June 2015, "with a view to enhancing transparency on the payments they make to governments". The purpose of the Bill is to implement Canada's international commitments to participate and engage in the fight against corruption in the extractive sector.
  • BC LNG Tax Regime: Rate Concessions and New Tax Credit but Uncertainty Remains
    October 24, 2014
    On October 21, 2014, the British Columbia government introduced Bill 6, the Liquefied Natural Gas Income Tax Act (LNGITA). Bill 6 is the legislative framework for the tax regime announced in the 2014 British Columbia budget. The LNGITA has important implications for the development of LNG facilities in British Columbia and its owners, operators and customers. The regime proposes a two-tier tax on income derived from liquefaction activities at liquefied natural gas (LNG) facilities in British Columbia starting in 2017. The regime applies a 1.5-percent tax on net income (as defined for LNG tax purposes) prior to the recovery of operating losses and capital investments and a 3.5-percent tax on net income (increasing to five percent in 2037) after recovery of those costs, with a credit for taxes paid in the first bracket. These rates represent a decrease from the seven-percent tax rate proposed in the 2014 British Columbia budget, which together with a new corporate income tax credit for qualifying taxpayers, appear to be a concession by the government that the originally proposed tax was too costly given the investment risks for project developers. Nonetheless, considerable uncertainty in the application of the tax remains, especially in the calculation of net income based on deemed purchase and sale rules using transfer pricing principles and careful consideration of these will be required.
  • Final Disclosure Rules Regarding Women on Boards and in Senior Management
    October 17, 2014
    TSX-listed companies will almost certainly need to include disclosure in their information circulars or annual information forms on the representation of women on their boards and in senior management for the 2015 proxy season. On October 15, 2014 the securities regulatory authorities in a number of Canadian jurisdictions announced final amendments to National Instrument 58-101 Disclosure of Corporate Governance Practices and Form 58-101F1 Corporate Governance Disclosure. Participating jurisdictions include Ontario and Québec. Notable by their absence were Alberta and British Columbia.
  • TSX Adopts Extension Amendments Regarding Security-Based Compensation Arrangements and Backdoor Listings
    October 14, 2014
    The Toronto Stock Exchange has adopted amendments to the TSX Company Manual, which: allow listed issuers to adopt security-based compensation arrangements for employees of a target company in the context of an acquisition without obtaining security approval; and broaden the scope of the transactions that may be considered “backdoor listings”.
  • The CSA Proceeds with Amendments to the Early Warning Reporting Regime but Abandons Two Key Proposed Changes
    October 14, 2014
    On October 10, 2014, the Canadian Securities Administrators (CSA) published CSA Staff Notice 62-307, which sets out changes to previously announced proposed amendments to Canada's early warning reporting regime.The CSA previously announced a proposal to reduce the ownership level at which an issuer must disclose its ownership to five percent from the current 10 percent and to include "equity equivalent derivative" positions (derivatives that substantially replicate the economic consequences of ownership) in determining whether a shareholder triggered the early disclosure threshold. The CSA also proposed a series of additional reforms to require the reporting of reductions in share positions and holdings of derivatives and to limit access to the alternative monthly reporting (AMR) system for security holders who actively solicit proxies.
  • New LCIA Arbitration Rules Come into Effect on October 1, 2014
    October 01, 2014
    International arbitration is often selected over traditional litigation for resolving commercial disputes, as it is typically perceived that arbitrations can be undertaken more efficiently and swiftly than litigation. In recent years, and in the face of disputes that are becoming ever-more complex, some of the world's significant arbitration rule systems have been substantially amended to preserve the efficient and speedy character of arbitration.
  • The Promise (and Limitations) of the New Canada-China Investment Treaty
    October 01, 2014
    The Canada-China bilateral investment treaty (BIT), which comes into force October 1, signals a deepening of the bilateral economic relationship. While somewhat less ambitious than recent BITs that Canada has concluded with other trading partners, the Canada-China BIT nevertheless establishes important rights for Chinese and Canadian investors, and the tools to enforce those rights.《中加双边投资协定》（BIT）于 10 月 1 日生效，标志着中加双边经济关系进一步深化。与加拿大最近和其他贸易伙伴签署的 BIT 相比，该协定所设立的目标并不高，但这确立了中国和加拿大投资者的重要权利，以及强制执行这些权利的工具。
  • National Securities Regulator Moves Forward; Draft Legislation Published
    September 15, 2014
    On September 8, 2014, the governments of Canada, British Columbia, Ontario, Saskatchewan and New Brunswick announced the signing of a memorandum of agreement formalizing the terms of the Cooperative Capital Markets Regulatory System (the Cooperative System), the proposed national securities regulator for Canada. Draft provincial and federal legislation that would implement the Cooperative System has now been released for public comment. The legislation not only seeks to harmonize securities regulation but also introduces changes to existing legislation in order to "update and modernize" securities laws.
  • The CSA Proposes a New Harmonized Take-Over Bid Approach
    September 15, 2014
    On September 11, 2014, the Canadian Securities Administrators (CSA) announced the publication of CSA Staff Notice 62-306, which contemplates a new harmonized regulatory approach to the Canadian take-over bid regime.
  • Canada and the EU Complete Trade Treaty Negotiations
    August 12, 2014
    On August 5, 2014, Canada and the European Union (EU) announced that they have completed negotiation of the Comprehensive Economic and Trade Agreement (CETA). Canadian businesses interested in entering the EU market or expanding their presence there, and EU businesses interested in doing the same in Canada, should start to plan how best to take advantage of the substantial opportunities the CETA will create.
  • Saskatchewan and New Brunswick join Cooperative Capital Markets Regulatory System
    July 14, 2014
    On July 9, 2014, Canada's Minister of Finance announced that Saskatchewan and New Brunswick have agreed to join the Cooperative Capital Markets Regulatory System that has been proposed by the governments of Canada, British Columbia and Ontario. This announcement marks the first material development towards a Canadian national securities regulator since the framework had been originally proposed in September 2013.
  • Implications of the Supreme Court Decision on Aboriginal Title
    July 02, 2014
    On June 26, 2014, the Supreme Court of Canada delivered a unanimous decision in Tsilhqot'in Nation v British Columbia, 2014 SCC 44. The decision marks the first time that Aboriginal title has been granted – until now, the concept existed only in theory. The long anticipated decision addresses two significant issues affecting Aboriginal title and provincial jurisdiction over those lands.
  • France Provides for Consumer Class Actions
    June 26, 2014
    France, following the lead of many other European Union members, has enacted legislation providing for class actions in the consumer law field. The new law, known as the "Hamon Law", was passed in February but is still coming into effect through various decrees, which also provide further details on the mechanics of the legislation. The law covers numerous consumer issues in addition to providing for class actions.
  • U.S. Supreme Court Upholds Fraud on the Market Theory in Securities Class Actions
    June 25, 2014
    A much-anticipated decision of the U.S. Supreme Court, Halliburton Co. v. Erica P. John Fund, Inc. was released on June 23, 2014. While the Supreme Court upheld the "fraud on the market" presumption of reliance which has made the U.S. a plaintiff-friendly jurisdiction for securities class actions, it provided defendants with a potentially powerful new tool for challenging the presumption at the certification stage.
  • Class Actions Now Available in Belgium
    June 18, 2014
    Belgium has joined the ranks of other European countries that allow for the possibility to file a collective claim, more commonly known as a class action. There is clearly a global trend in favour of class actions and Belgium is no exception, testing the waters by enacting legislation that provides for consumer class actions. It is currently expected that the legislation will enter into force in September 2014.
  • Stolen Customer Data Results in Ontario's First Certified Privacy Class Action
    June 12, 2014
    Businesses that collect personal information have an added incentive to monitor employees handling customer data – Ontario's first class action arising from the new tort of "intrusion upon seclusion" was certified last week. In Evans v Bank of Nova Scotia, the plaintiffs sought to certify a class action against the bank and one of its employees, Richard Wilson, who provided private and confidential information about the bank's customers to third parties in an identity theft scam foiled by Calgary Police.
  • A Second Opinion on Fairness Opinions in Commercial Arrangements
    June 10, 2014
    Decisions on corporate plans of arrangement tend to be of two varieties. Most are fairly straightforward decisions, where the applicant proves that it complied with the interim order already issued by the court, shows that a meeting of shareholders was held and shareholders approved the plan, and the plan is fair and reasonable. Endorsements tend to be short and hearings are often done in chambers.
  • Bennett Jones Spring 2014 Economic Outlook
    June 10, 2014
    While the geo-political landscape has changed somewhat since our November 2013 Economic Outlook, the outlook for global economic growth has not changed much. We continue to project real global growth of about 3.5 percent in each of 2014 and 2015. However, the international and industrial composition of that growth will change somewhat in 2014 and 2015. Growth in 2016 is projected to be about 3.5 percent but with further changes in composition which may have important implications for Canada. In section I, we describe the most important features of the global outlook to 2016. In section II, we present the outlook for a two-speed Canada in the context of the outlook for global growth and most importantly in the context of the ongoing structural changes in the Canadian and provincial economies. In this section, we also examine possible policy responses to the structural challenges. As usual, in the final section we examine the outlook for global trade with particular attention to the challenges we face in Canada.
  • Tax Effective Use by Canadian Online Retailers of Bermuda Operations for International Expansion
    June 10, 2014
    The growth of online retail sales has globally outstripped the growth of all other retail channels, including during the last recession. For example, in England during 2012, it has been estimated that online e-tail grew by an average of 17 percent, compared to all other retail growth in England of approximately 2.1 percent during the same period. In 2012, Canadian companies sold $122 billion of goods and services over the Internet, and in 2012, 11 percent of Canadian firms sold their goods and services online, compared to only seven percent in 2011. In the U.S., there are 263 million Internet users and more than 100 million Americans regularly purchasing goods online. Forbes estimates that by 2017, U.S. online retail sales will reach $370 billion.
  • Judge Rakoff Overturned: SEC-Citigroup Settlement Sent Back for Reconsideration
    June 04, 2014
    In a long-awaited decision, the United States Court of Appeals for the Second Circuit today overturned Judge Rakoff's highly controversial decision which refused to approve a $285-million settlement between the United States Securities and Exchange Commission and Citigroup Global Markets Inc. The settlement contained no admission of liability by Citigroup to wrongdoing.
  • Streamlining Disclosure for Venture Issuers
    May 29, 2014
    On May 22, 2014, the Canadian Securities Administrators (CSA) published for comment proposed amendments to National Instrument 51-102 Continuous Disclosure Obligations (NI 51-102), National Instrument 41-101 General Prospectus Requirements (NI 41-101), National Instrument 52-110 Audit Committees (NI 52-110) and related companion policies. The proposed amendments, if adopted, would streamline and tailor disclosure for venture issuers and make the disclosure requirements for venture issuers more manageable for issuers at their stage of development.
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