Insights

The Personal Liability of Corporate Directors

Wilson v Alharayeri, 2017 SCC 39 ..

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Saskatchewan Court of Appeal Applies Recent Supreme Court Jurisprudence on Commercial Contract Interpretation

The Saskatchewan Court of Appeal in Directcash Management Inc. v Seven Oaks Inn Partnership applied the new guidelines for the interpretation of contracts set by the Supreme Court of Canada. In Sattva Capital Corp. v Creston Moly Corp., the Supreme Court determined that contractual interpretation involves issues of mixed fact and law, whereby the objective intentions of the parties is determined in light of the consideration of the surrounding circumstances. Further, as contractual interpretation is considered a question of mixed fact and law, the standard of review for an appellate court is one of whether a palpable and overriding error was committed at trial. ..

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Good Faith, Honest Performance and Your Deal: the Supreme Court of Canada’s New Principles of Contract Law

The Supreme Court of Canada made a significant change in the common law regarding the inherent obligations of contracting parties. In Bhasin v Hrynew, the Court recognized a general organizing principle of good faith and then created a new common law duty of honest performance in contract, both in relation to what was, generally speaking, a standard business contract that did not fall into a unique category. This unanimous judgment was written by Justice Cromwell and proceeds in a two-step process: First, the Court found that there is the general organizing principle of good faith in contract law; and Second, the Court found that this general organizing principle creates a common law duty of honest performance. ..

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Insolvent or Bankrupt Farmers not protected by Part II of The Saskatchewan Farm Security Act against Secured Creditors

In Lemare Lake Logging Ltd. v 3L Cattle Company Ltd. and The Attorney General for Saskatchewan, the Saskatchewan Court of Appeal determined that Part II of The Saskatchewan Farm Security Act (The SFSA) is inoperative by virtue of the doctrine of federal paramountcy in circumstances where an application is made to appoint a receiver pursuant to s. 243(1) of the Bankruptcy and Insolvency Act (The BIA). Part II of the SFSA provides that a mortgagee must obtain an order from a court before commencing an action against a farmer mortgagor. Part II also sets out a number of steps that a mortgagee must follow before seeking an order and time restrictions. On the other hand, section 243(1) the BIA provides that on application by a secured creditor, a court may appoint a receiver to take possession of property of the insolvent or bankrupt person. The BIA only provides the timing restriction that a receiver may not be appointed before the expiry of ten days after the day on which the secured creditor provides notice of its intention. The Court found the effectiveness, and ultimately the purpose of s. 243(1) of the BIA was undermined by Part II of the SFSA. The Court found the BIA intended a receiver to act efficiently in the context of insolvency, as proceedings are time sensitive. Those entering into a agreement as, or with a farmer, should be aware that the decision in Lemare Lake Logging Ltd. v 3L Cattle Company Ltd. and The Attorney General for Saskatchewan allows the appointment of a receiver by a secured creditor without compliance with Part II of the SFSA in the event of insolvency or bankruptcy. ..

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