The Supreme Court of Canada has recently dismissed two leave applications and granted leave in one case that will be of interest to our readers. These cases touch on: case management and civil procedure in class actions (including when parent companies may be joined in an action); the standard of review and standing of administrative boards and tribunals; and interpretation of the federal Interest Act in regards to mortgage incentives and penalties.

Leave To Appeal Dismissed

François Deraspe v. Canadian Electrolytic Zinc Ltd., et al. (36295)

This class action was originally commenced in 2004 against Canadian Electrolytic Zinc Ltd. (“CEZ”), which operated a zinc refinery in Quebec. The allegations concerned the alleged release of sulphur trioxide into the air in April 2004. Fearing the CEZ was judgment proof, the plaintiff tried to join CEZ’s parent companies on the basis that they had operated the refinery through CEZ and used CEZ to “dissemble fraud or contravention of a rule of public order.”

The trial judge disagreed and found that CEZ had sole custody and was the sole operator of the refinery in April 2004. The Court of Appeal dismissed the appeal and condemned the “improper and outrageous” language used in the pleadings filed by counsel for the plaintiff.

The plaintiff’s grounds of appeal included whether the Court of Appeal had the power to sanction counsel directly, whether by so doing it had undermined public confidence in the justice system, and whether there was a miscarriage of justice for members of the class.

This litigation had a long and complex history, two previous leave applications were dismissed one in September 2011 and another in September 2013. This time around there were 6 motions in the Supreme Court before the leave application was decided, including one “for permission to file a sworn notice by the applicant denouncing a fraud on the administration of justice in Canada.” The 6 motions have all been dismissed by the Supreme Court.

Health Professions Review Board v. Alan Moore et al. (36272)

In 2009, a patient made a complaint to the College of Physicians and Surgeons of British Columbia against Dr. Alan Moore. The patient, an inmate at the Kent Institution in Agassiz, B.C. had been receiving Lyrica, a pain medication, for on-going leg and back pain resulting from a motor vehicle accident.

On July 16, 2008 a national directive was issued by Correctional Service of Canada advising that Lyrica would only be available in prison pharmacies in “exceptional circumstances” due to ongoing abuse. On July 18, 2008, Dr. Moore discontinued the patient’s Lyrica prescription and prescribed alternate pain medication because Lyrica was only helping with the patient’s leg pain.

The patient’s complained that his Lyrica prescription was terminated without medical reason. The Registrar of the College reviewed the complaint found that it had “no criticism” of Dr. Moore and, therefore, did not refer the complaint to the Inquiry Committee of the College.

The patient appealed to the B.C. Health Professions Review Board, which concluded that the College’s investigation of the complaint was inadequate both jurisdictionally and substantively. Jurisdictionally, the Board held that the Registrar of the College did not have the power to find that the College had no “criticism” of a physician. Substantively, the Board held that the College should have investigated apparent conflicts between the statement of the patient and the statement of Dr. Moore.

The B.C. Supreme Court set aside the Review Board’s decision and reinstated the decision of the College. On the jurisdictional point, the Board itself had already reconsidered the same issue in a subsequent decision (Decision No. 2011-HPA-0018(a)) and held that the Registrar of the College does have the jurisdiction to make a finding of no criticism. Substantively, the Court held:

The College does not have unlimited resources available to process complaints. Thus, it must use its resources wisely when it makes its initial assessment. Some complaints will be easily categorized as serious and put into the proper “stream” to be dealt with by the Inquiry Committee or Discipline Committee. Others will fall at the opposite end of the spectrum and will require little more than a fair assessment of a registrant’s response to the complaint to dispose of it.

It does not necessarily follow that simply because a complaint is disposed of in a summary way that the process warrants intervention by the Board. This is so even where there is a conflict between the complainant’s statement and the response of the registrant. (paras 119-120)

The Supreme Court’s decision also has an extensive discussion considering whether the Board had standing in the judicial review. Ultimately, the Court concluded that the Board did have standing, primarily due to the absence of the complainant or any other party opposing the relief sought by Dr. Moore.

The Court of Appeal dismissed the appeal for the reasons given by the B.C. Supreme Court.

Leave to Appeal Granted

Krayzel Corporation et al. v. Equitable Trust Company (Alta.) (36123)

The Supreme Court granted leave to appeal on May 21. We blogged about this case last September. The Alberta Court of Appeal had split on the question of whether incentives for prompt payment in a mortgage, which would be lost on default, are contrary to prohibition against penalties for non-performance contained in s.8 of the Interest Act, RSC 1985, c I-15.

A majority had decided no but the Supreme Court will now weigh in and settle the matter for good. The decision in this case may affect the structure of mortgages across the country.