Supreme Court of Canada Decisions Dealing With Canadian Business Law

Business Law
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Contents Executive Summary. 3 Introduction. 5 Description and Explanation. 9 Application to a Business Legal Situation. 17 Recommendations and Lessons Learned. 22 References. 25
Executive Summary
This paper delves into three Supreme Court of Canada decisions that hold great significance in the realm of Canadian business law. The cases under scrutiny are Bhasin v. Hrynew, Montréal (City) v. Deloitte Restructuring Inc., and Canada v. Loblaw Financial Holdings Inc. These rulings address pivotal aspects of business relationships, imposing ethical considerations on parties involved and shaping legal practices.
In the first case, Bhasin v. Hrynew, the Supreme Court affirmed the duty of good faith and fair dealing in contractual arrangements.1 The dispute arose when Hrynew breached his contractual obligation to act in good faith during the renewal of a dealership agreement with Bhasin. This decision solidified the principle that all business contracts in Canada are inherently obligated to act honestly .2 Additionally, it asserted that businesses must also act transparently and fairly throughout the course of the agreement. Such a ruling emphasizes the significance of trust and credibility in business dealings. The decision also underpinned steering parties away from opportunistic behavior that may undermine the spirit of the contract .3 The ruling set a good precedence upon which businesses must act in good faith.
The second case, Montréal (City) v. Deloitte Restructuring Inc., revolved around the appointment of Deloitte Restructuring as a monitor in the restructuring of a financially distressed company. The Supreme Court highlighted the importance for professionals to act ethically. Professionals in such positions must act impartially and diligently. These professionals must also ensure a high level of transparency. The decision also highlighted the need to avoid conflicts of interest that could compromise the credibility of the restructuring process. Such conflict of interest has a high likelihood of causing harm to the interests of stakeholders. As a result, the decision places great responsibility on professionals who are involved in insolvency restructuring. These professionals must not consider any kind of selfish interests. Instead, they should consider the overall well-being of all the stakeholders. Considering the well-being of all the stakeholders would undoubtedly lead to a decision that augurs well with most of the stakeholders. Evidence has revealed that considering the interests of all stakeholders when making business decisions reduces the likelihood of conflicts.4
The third case, Canada v. Loblaw Financial Holdings Inc., dealt with a tax dispute. In this case, Loblaw Companies Limited was accused of aggressive tax planning. The meticulously planned aggressive tax planning led to a tax avoidance scheme. The Supreme Court's ruling affirmed that taxpayers must adhere to both the letter and the spirit of tax laws.
Adherence to the spirit of the law would help avoid abusive tax practices.5 The government has always had a strong stance against aggressive tax schemes. The decision of the...