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Common Law

1. Development of Common Law
2. Modification of the Common Law by Statute
3. Contractual Modification of the Common Law

1. Development of the Common Law

. Inter-Leasing, Inc. v. Ontario (Revenue)

In Inter-Leasing, Inc. v. Ontario (Revenue) (Ont CA, 2014) the court noted as follows on the incremental development of the common law in the field of commerce:
[78] In Friedman Equity Developments Inc. v. Final Note Ltd., 2000 SCC 34 (CanLII), 2000 SCC 34, [2000] 1 S.C.R. 842, the Supreme Court considered the factors relevant to a decision whether to change a rule of property or contract law, at para. 46:
While our common law rules must be in step with the evolution of society as a whole, when examining a proposed change to a rule of property or contract law, we must also examine whether the rule is consistent or inconsistent with commercial reality. A rule may have a rationale which appears to be anachronistic while continuing to serve a useful commercial purpose. Our common law is replete with artificial rules which, although they may appear to have no underlying rationale, promote efficiency or security in commercial transactions. Such rules, in the circumstances where they apply, must be followed to create a legally recognized and enforceable right or obligation. Parties, therefore, structure their relations with these rules in mind and the rules themselves become part of commercial reality. Commercial relations may evolve in such a way that a particular rule may become unjust and cumbersome, and may no longer serve its original purpose. When the hardship which a rule causes becomes so acute and widespread that it outweighs any purpose that it may have once served, it is certainly open to a court to make an incremental change in the law. However, there must be evidence of a change in commercial reality which makes such a change in the common law necessary.

2. Modification of the Common Law by Statute

. Chandos Construction Ltd. v. Deloitte Restructuring Inc.

In Chandos Construction Ltd. v. Deloitte Restructuring Inc. (SCC, 2020) the Supreme Court of Canada considered the 'common law-statute relationship', in the context of the bankruptcy 'anti-deprivation' rule, which voids any effort to diminish the value of an insolvent's estate available to the creditors:
[29] Moreover, as the intervenor Attorney General of Canada submitted, Parliament’s actions are better understood as gradually codifying limited parts of the common law rather than seeking to oust all related common law. As this Court has repeatedly observed, Parliament is presumed to intend not to change the existing common law unless it does so clearly and unambiguously (Parry Sound (District) Social Services Administration Board v. O.P.S.E.U., Local 324, 2003 SCC 42, [2003] 2 S.C.R. 157, at para. 39; Heritage Capital Corp. v. Equitable Trust Co., 2016 SCC 19, [2016] 1 S.C.R. 306, at paras. 29-30).
. Canada (Attorney General) v. Thouin

In this Quebec civil procedure case, Canada (Attorney General) v. Thouin (SCC, 2017), the Supreme Court of Canada, in dealing with the development of common law crown immunity by statute, comments as follows:
[19] That being said, there is a presumption that the common law remains unchanged absent a clear and unequivocal expression of legislative intent. In Lizotte v. Aviva Insurance Company of Canada, 2016 SCC 52 (CanLII), [2016] 2 S.C.R. 521, this Court summarized the case law on this point and noted “that it must be presumed that a legislature does not intend to change existing common law rules in the absence of a clear provision to that effect” (para. 56; see also Parry Sound (District) Social Services Administration Board v. O.P.S.E.U., Local 324, 2003 SCC 42 (CanLII), [2003] 2 S.C.R. 157, at para. 39; Slaight Communications Inc. v. Davidson, 1989 CanLII 92 (SCC), [1989] 1 S.C.R. 1038, at p. 1077; and R. Sullivan, Sullivan on the Construction of Statutes (6th ed. 2014), at pp. 504‑5).

[20] In this regard, s. 17 of the Interpretation Act now serves as a starting point in each case in which the Crown might have immunity. It reads as follows: “No enactment is binding on Her Majesty or affects Her Majesty or Her Majesty’s rights or prerogatives in any manner, except as mentioned or referred to in the enactment.” In short, unless the immunity is clearly lifted, the Crown continues to have it. In Friends of the Oldman River Society v. Canada (Minister of Transport), 1992 CanLII 110 (SCC), [1992] 1 S.C.R. 3, the Court recognized that s. 17 is indeed the starting point for the analysis regarding immunity and that, as a result, where there are no express words in an Act to the effect that the Act applies to the Crown, “it . . . remains to be decided whether the Crown is bound by necessary implication” (p. 50).

[21] In the past, language similar to the words “except as mentioned or referred to” in s. 17 had been used in s. 16 of the Interpretation Act, R.S.C. 1970, c. I‑23, which provided that no enactment could bind the Crown, “except only as therein mentioned or referred to”. In Oldman River and in Alberta Government Telephones v. Canada (Canadian Radio‑television and Telecommunications Commission), 1989 CanLII 78 (SCC), [1989] 2 S.C.R. 225, the Court interpreted this wording and concluded that a legislature must use express language to lift Crown immunity unless it can be inferred that the purpose of the Act would be wholly frustrated if the Crown were not bound (see also H. Brun, G. Tremblay and E. Brouillet, Droit constitutionnel (6th ed. 2014), at para. IX. 90).

[22] With these principles in mind, it must therefore be determined whether, in the instant case, Parliament has lifted the common law Crown immunity from discovery and, if so, to what extent.

B. Limits on the Crown’s Immunity From Discovery

[23] In about 1950, Parliament, drawing on the Crown Proceedings Act, 1947 (U.K.), 10 & 11 Geo. 6, c. 44, that had been enacted in the United Kingdom, began to impose limits on the scope of the common law Crown immunity. In 1953, it passed the Crown Liability Act, S.C. 1952‑53, c. 30 (Morley, at p. 1‑41; Hogg, Monahan and Wright, at p. 9), which had the effect of expanding Crown liability and thus bringing the Crown’s legal position closer to that of ordinary litigants. That Crown Liability Act was the predecessor of the CLPA that is at issue in this appeal. Today, Crown immunity still exists at the federal level in the context of civil proceedings, but only within the limits set in the CLPA and the Federal Courts Act, R.S.C. 1985, c. F‑7, the scope of which Parliament remains free to change (Brun, Tremblay and Brouillet, at paras. IX. 72 to IX. 73). It follows that the Crown is not in exactly the same legal position as ordinary litigants, since it still retains certain residual privileges and immunities under the current legislation.
3. Contractual Modification of the Common Law. Howard v. Benson Group Inc. (The Benson Group Inc.)

In Howard v. Benson Group Inc. (The Benson Group Inc.) (Ont CA, 2020) the Court of Appeal affirmed that a contactual term that varies from the common law (such as in Bardal), must be "unequivocal":
[29] The respondent sought to use a fixed term contract either to eliminate its severance obligation entirely or to limit it to two weeks’ notice on an early termination. It was, of course, free to do this. But the courts have consistently held that the consequences to an employee of such a bargain are so significant that the employer must communicate clearly in the contract that this is what it is intending to do: Ceccol, at para. 27. If an employer does not use unequivocal, clear language and instead drafts an ambiguous or vague termination clause that is later found to be unenforceable, it cannot complain when it is held to the remaining terms of the contract.



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