Company and Finance News:

A Matter of Interest: the New Conflict
Rules under the Societies Act
British Columbia’s new Societies Act came into force in November 2016. In addition to requiring that approximately 27,000 BC societies transition in the next two years, the legislation has brought changes that affect their governance and operations. In this bulletin, we will focus on the conflict of interest rules for directors and senior managers under the Act.

Conflicts of Interest
Directors and senior managers owe a fiduciary duty of loyalty to their societies. This means that they must place the interests of the society above their personal self-interest in all dealings with and for the society. In particular, they must avoid situations in which their duty to the society conflicts with their personal, work, or business interests or their roles as directors, senior managers, or officers in other companies or not-for-profit organizations. Conflicts of interest arise when a director (or even a director’s family or friends) might benefit financially from the actions of the organization.

Changes to the Conflict of Interest Rules
Conflict of interest rules have applied to society boards for a long time. Many societies have also adopted additional conflict of interest bylaws or policies in line with recommended best practices. The new Act, however, has brought some significant changes that directors and senior managers need to know about.

Read the full article by Dierk Ullrich, Darrell J. Wickstrom and Clara Rozee with Fasken Martineau DuMoulin LLP. 

Proposed Canadian Prospectus Exemption Allows Restricted
Foreign Securities to be Resold on Foreign Exchanges
On June 29, 2017, the Canadian Securities Administrators (CSA) published for comment proposed amendments to National Instrument 45-102 Resale of Securities (NI 45-102) that would introduce a new prospectus exemption for the resale of securities of a foreign issuer. “The proposed amendments would facilitate access to global markets,” said Louis Morisset, CSA Chair and President and CEO of the Autorité des marchés financiers. “Canadian investors are increasingly investing abroad, and we understand that some aspects of the current resale regime may pose challenges to participation in prospectus-exempt offerings by foreign issuers.” If adopted, the proposed exemption would allow Canadian investors to resell, outside of Canada, securities of a foreign issuer acquired under a prospectus exemption where the issuer is not a reporting issuer in any jurisdiction of Canada. The proposed amendments suggest a different approach for determining minimal connection to Canada by introducing a definition of foreign issuer to replace the current 10 per cent Canadian ownership test. Read the full article by Bernard Pinsky, Q.C. of Clark Wilson LLP. 

Global Internet Takedown Orders Come to Canada: Supreme Court
Upholds International Removal of Google Search Results
The Supreme Court of Canada released its much-anticipated Google v. Equustek decision today, upholding the validity of an injunction requiring Google to remove search results on an international basis. The 7-2 decision (Justices Côté and Rowe dissented, finding that there were alternatives available, the order is ineffective, and expressing concern that the “temporary” injunction was effectively permanent) is not a surprise – last week’s Facebook’s decision suggested a willingness to side with the weaker Canadian litigant against Internet giants – but the decision will ultimately grant Google more power, not less. Read the full article by Dr. Michael Geist on his website. 

BC Securities – Policies & Instruments
The following policies and instruments were published on the BCSC website in the month of March:

• 81-328 – CSA Multilateral Staff Notice 81-328 Report by the Auditor in the Form Contained Respectively in Appendix B-1, B-2 or B-3 of National Instrument 81-102 Investment Funds
  This Notice announces that the participating jurisdictions expect a report by an auditor dated on or after June 30, 2017 to comply with the Canadian GAAS instead of the form contained respectively in Appendix B-1, B-2 or B-3 of National Instrument 81-102 Investment Funds.
• 81-518 – BC Instrument 81-518 Exemption from Prescribed Form of Mutual Fund Audit Reports in National Instrument 81-102 Investment Funds    
• 51-350 – BC Instrument 81-518 Exemption from Prescribed Form of Mutual Fund Audit Reports in National Instrument 81-102 Investment Funds
  BC Instrument 81-518 exempts certain mutual funds and their dealers from using the prescribed form of audit report required by National Instrument 81-102 Investment Funds, provided they file an assurance report in accordance with the requirements in the Handbook.
• 93-301 – CSA Staff Notice 93-301 - Derivatives Business Conduct Rule - No Overlap with Derivatives Registration Rule Comment Period
• 45-102 – CSA Notice and Request for Comment - Proposed Amendments to National Instrument 45-102 Resale of Securities, Proposed Changes to Companion Policy 45-102CP to National Instrument 45-102 Resale of Securities, Proposed Consequential Amendments to National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations and Proposed Consequential Changes to National Policy 11-206 Process for Cease to be a Reporting Issuer Applications 
  This notice is publishing for comment proposed amendments related to section 2.14 of National Instrument 45-102 Resale of Securities, the resale provisions for non-reporting issuers. The comment period expires September 27, 2017.

For more information visit the BC Securities website.

FICOM News
The Financial Institutions Commission of BC published the following recent announcements and bulletins:

• Letter to Administrators of BC Registered Pension Plans – Records Retention Guidelines for Consultation – Extension
• Letter to All CEOs/General Managers of British Columbia Credit Unions – B.C. Liquidity Coverage Ratio (LCR) Reporting Guide and Template Finalized
• Pensions Bulletin – Termination Expense Assumption
• Credit Union Bulletin – Access to Statutory Adequate Liquid Assets
• Letter to All CFOs/Finance Managers of British Columbia Authorized Credit Unions – Second IFRS 9 Readiness Self-Assessment
• Letter to All CEOs/General Managers of British Columbia Credit Unions – Residential Mortgage Loans Report Completion Guide
• Letter to All B.C. Credit Union CEOs/General Managers – 2017 Asset Groupings

Visit the FICOM website for more information.

Energy and Mines News:

Bad News for Oil is Proving to be Good News
for Gold in a Most Unexpected Way
Gold climbed as oil’s slide into a bear market may potentially retard the pace at which the U.S. Federal Reserve raises interest rates amid tumbling expectations for inflation, with the precious metal back on course for a second straight quarterly advance. Crude’s drop “is going to push down inflation expectations,” Bob Takai, chief executive officer of Sumitomo Corp. Global Research Co., said by phone. “This means the Fed is going to take time to normalize the financial policy. This is good news for the gold market. That’s why gold is edging up.” While gold traditionally benefits from a pickup in inflation with the metal seen as a hedge, crude’s slump may help by potentially restraining the pace at which the Fed tightens policy further. The central bank increased borrowing costs for a third time in six months last week, pushing gold to a five-week low. Although the Fed has maintained its outlook for one more hike in 2017, some investors aren’t so sure given the growing concern over inflation. Read the Financial Post article. 

Changes to Drilling and Production Regulation, More Fees
A reminder that the Drilling and Production Regulation was amended June 1 to allow for greater nuance when dealing with the subjects of both groundwater and injections. For instance, groundwater wells have been made exempt from a new section on well control equipment and blowout testing. They may also be exempted from plugging requirements. On the other hand, injection is now controlled in the case of induced seismicity, and injection products must also be measured. Both are covered specifically in the Reservoir Pressure Measurements section. As for restrictions, permit holders are now responsible for ensuring there is no excessive light from their facilities, in addition to old rules regarding noise limits; and signs must now containing emergency notification information, including a telephone number. Regarding analysis, oil production analysis requirements are now retroactive and must consist of physical property analysis, as well as the routine chemical analysis that is normally performed. Also, costs were added under the Fee, Levy and Security Regulation. A person who submits for a construction or operating permit for a manufacturing plant must pay a fee of $132 per hour. Similarly, a fee of $132 per hour is required for any application to amend that permit.

Three-year Deadline to Lay Charges for Mt. Polley
Dam Failure Approaching Fast
A deadline looms for provincial charges to be laid in the failure of the tailings dam at Imperial Metals’ Mount Polley mine, but the B.C. Conservation Officer Service says the investigation has not finished. There is a three-year time limit to lay charges under B.C.’s Environmental Management Act. The deadline is less than two months away, on Aug. 4. The conservation service has been leading a joint investigation with the federal Environment and Fisheries departments. Chris Doyle, deputy chief of the B.C. Conservation Officer Service, said last week that when the investigation is complete, the findings will be forwarded to Crown counsel for review and to determine what charges will be laid, if any. Doyle said he could not comment on whether the investigation would be complete before the three-year deadline. Read The Vancouver Sun article. 

Family and Children News:

Children and Families Hit Hard
by Court Delays in BC
Underfunding of BC's legal aid program means families are left to fend for themselves, clogging up the system and lowering the quality of justice, according to some BC lawyers. "It's like going into a clinic and being your own doctor; it's ludicrous," criminal lawyer Richard Fowler told Michelle Eliot, host of CBC's B.C. Almanac. His comments come on the heels of a report released Monday [June 12^th] by the Senate legal and constitutional affairs committee, which made 50 recommendations to reduce backlogs in court systems across the country. Of those 50 recommendations, the committee identified 13 as priorities, including an increase in federal funding of legal aid to the provinces to reduce delays caused by unrepresented individuals navigating the courts without financial or legal supports. The report outlines in detail how self-represented individuals slow the system and how judges have to "bend over backwards" to ensure those individuals receive a fair trial. Read the CBC article. 

Can the Date of Separation be Used for Valuation
of Family Property in British Columbia?
Most often in separation and divorce, couples manage their finances in an informal way for months and sometimes even years before they venture in to see a lawyer and have a formal separation agreement drawn up. Many times, one party has moved out and the other party has stayed in the family residence, one party pays the mortgage and the other party pays their rent and their own bills and so on. It is not surprising, therefore, that the person who has been in the family home thinks they alone should be able to benefit from their payments, so when they meet with their lawyer they often expect that the value of the family home will be the date that their spouse moved out. This is not so, says the Family Law Act. Section 87 of the FLA requires, unless an agreement or order provides otherwise, that the value of family property be based on fair market value at the date of trial. Read the full post by John-Paul Boyd at JP Boyd on Family Law: the Blog. 

Employment & Assistance and
Canada Child Benefit
Effective July 1, 2017, changes with respect to the Canada child benefit were made to both the Employment and Assistance Regulation and Employment and Assistance for Persons with Disabilities Regulation. Eligible family units may now receive supplements when a Canada child benefits cheque has been lost or stolen, or when the child benefit has been delayed, suspended or cancelled, provided the funds are immediately needed for basic needs of food, clothing or shelter. In addition, set rates have been established for the BC child adjustment amounts, which are adjusted every year on July 1, beginning July 1, 2018, by any percentage increase of the consumer price index. 

Plan W Added to Drug Plans Regulation
Effective July 1st, a new drug plan was introduced to the Drug Plans Regulation: Plan W (First Nations Health Benefits). Persons eligible to enrol in Plan W must already be beneficiaries under medicare and registered as Indians under the Indian Act (Canada) or a child less than one year of age of such a person. Individuals disqualified from enrolling in this plan are those who are eligible to participate in a comprehensive reimbursement program under a treaty and land claims agreement or a written contribution agreement between a frist nations organization and a government of a province or of Canada.

Health Canada Testing Banana Boat Sunscreen
Products as Complaints Mount
A British Columbia mother says her 12-year-old son suffered burn injuries after using a Banana Boat sunscreen product. Patrizia Fitch, of Victoria, said Tuesday [July 4^th] that her son Daniel was left with severe blisters after wearing a Banana Boat sunscreen on a school trip to a beach in the city. She says he applied the sunscreen four times and the blisters kept getting worse. Fitch says she’s reported her son’s injuries to Health Canada. A Health Canada spokeswoman says the number of complaints about the company’s products has shot up to 139 in the past two months. Read The Vancouver Sun article. 

Medical Assistance in Dying: Finding a Balance
As we celebrate the 35^th anniversary of the Canadian Charter of Rights and Freedoms it seems appropriate to contemplate one of the most significant Charter challenges in recent history. It is particularly apropos as the enactment of Bill C-14, SC 2016, c 3 (An Act to amend the Criminal Code and to make related amendments to other Acts (medical assistance in dying) (“MAiD”)), approaches its first anniversary. The conclusion in Carter v. Canada (Attorney General), 2015 SCC 5 (“Carter”), without question, touches every Canadian. Bill C-14 created an exception to homicide and assisted suicide to allow for MAiD in some circumstances. The debate continues, now shifting to who should have access to MAiD, but the centre of the debate remains the balance between individual autonomy and protecting the vulnerable. Read the full article by Kimberly Jakeman and Dionne Liu of Harper Grey LLP on Bar Talk. 

Local Government News:

Federal Abandoned Boats Funding Program
Applications and project proposals are currently being accepted for the federal government’s new $6.85 million national, five-year Abandoned Boats Program. Funding is available for the assessment and removal of small, high priority abandoned boats; as well as education, awareness and research initiatives. The first deadline for applications for education, awareness and research initiatives is September 30, 2017. The first deadline for applications for assessment and removal of small, high priority abandoned boats is October 30, 2017. There will be additional opportunities to apply for funding in 2018 and future years. Read the UBCM article. 

Miscellaneous News:

Criminal Practice Direction – Complex Criminal Cases
Associate Chief Justice Cullen has issued CPD-3 – Complex Criminal Cases. CPD-3 describes the process by which the Court will manage large or complex criminal cases that show a potential to occupy a very significant amount of court time or to risk delays in reaching and concluding the trial. The new process for complex criminal cases involves case management for each such case from a very early stage, the assignment of a case management judge who will conduct periodic case management conferences. The case management judge will also conduct application screening conferences to determine which, if any, voir dires or pre-trial applications will be heard, the timelines for notice and other procedural steps, the general form of the evidence in the hearings of the voir dires and pre-trial applications, and the schedule for those hearings and for the trial. The practice direction is the result of extensive consultations with the bar. CPD-3 will come into effect on September 1, 2017. Read the full Criminal Practice Direction. 

Saadati v. Moorhead: The Repudiation of a
Dubious Perception of Mental Illness
A unanimous decision of the Supreme Court released on June 2, 2017, filled a void in tort law when the Court stated that proof of a recognized psychiatric injury is no longer a precondition for the award of damages for mental injuries caused by negligence. Previously, it was common for courts to dismiss a claim for compensation for a mental injury caused by negligence when a party was unable to demonstrate the existence of a recognized psychiatric injury. This is no longer a hurdle that parties must face. In Saadati v. Moorhead, 2017 SCC 28, the Supreme Court ruled that to establish a mental injury, claimants must show evidence of a serious and prolonged disturbance that rises above ordinary annoyances, anxieties and fears.

Background
The case came to the Supreme Court after making its way through the Supreme Court of British Columbia and the British Columbia Court of Appeal. From 2003 to 2009, Mr. Saadati, the appellant, was involved in five motor vehicle accidents, sustaining various injuries. He was declared mentally incompetent in 2010. The matter at hand dealt with the injuries Mr. Saadati sustained after the second accident on July 5, 2005 when his tractor-truck was hit by a Hummer driven by the respondent, Mr. Moorhead. In this case, Mr. Saadati sought non-pecuniary damages and past wage loss. The respondent admitted liability for the accident, but opposed the claim for damages.

Read the full article by D. Lynne Watt of Gowling WLG. 

Teal Cedar Products Ltd. v. British Columbia: The Supreme Court of Canada Provides
Further Guidance on the Standard of Review for Contractual Interpretation
In Teal Cedar Products Ltd. v. British Columbia, the Supreme Court of Canada recently confirmed that contractual interpretation typically involves questions of mixed fact and law (at least for non-standard contracts), as it previously held in Sattva Capital Corp. v. Creston Moly Corp. In a narrow 5-4 judgment, the majority allowed the appeal in part and clarified the standard of review applicable to commercial arbitrations involving issues of statutory and contractual interpretation.

Background
Teal Cedar involved a dispute between Teal Cedar (a forestry company) and the Province of British Columbia regarding compensation issues under s. 6 of the Revitalization Act. After entering into a partial settlement agreement, Teal Cedar and the Province agreed to arbitrate the remaining points of contention. The arbitration required interpreting the provisions of both the Revitalization Act and the partial settlement agreement, the latter because it addressed the calculation of interest.

• The parties’ dispute twice reached the British Columbia Court of Appeal. Prior to the Supreme Court’s decision in Sattva, the Court of Appeal initially overturned the arbitrator’s award, holding that the statutory and contractual interpretation issues raised questions of law to which the correctness standard applied. On the latter, the Court of Appeal held that the arbitrator erred in law by allowing the factual matrix to “overwhelm” the unambiguous terms of the contract.

Read the full article by Mark Gelowitz with Osler, Hoskin & Harcourt LLP. 

Motorized Skateboard Rider Plans to Fight
BC Law after Netting $600 Fine
A Vancouver man who was ticketed for riding a motorized skateboard in the street says he plans to fight back. Daniel Dahlburg is facing a fine of nearly $600 for riding his board in Kitsilano on Saturday [June 10^th]. Dahlburg, who had only had the device for a few days, said he came to a stop at Cypress St. and West 3rd Ave. when a nearby police officer told him to “pull over.” “And he said it’s because I have no insurance,” he said. “I told him I had no idea that I needed any. It wasn’t explained that I needed to buy any, I’ll buy it now, how do I go about that? And he told me that there is no insurance for this board and then he handed me a $598 ticket.” According to ICBC, motorized skateboards cannot be operated on roads or sidewalks in BC except in places where the Motor Vehicle Act doesn’t apply, such as private property. Read the Global News article. 

BC Ride-sharing Companies Slip through Cracks as Uber
Faces Pressure from Provincial Regulators
As the BC government and municipalities struggle with how, or if, to regulate ride-sharing giant Uber, several smaller companies in the Vancouver region primarily catering to the Chinese market are quietly operating under the radar of regulators. Ride-sharing services such as Uber are currently not permitted under provincial transportation laws and the company and its largest competitors so far heeded warnings from the province and cities to keep away. But several smaller companies – with their own apps, drivers and customers – have escaped the same attention from regulators. Of these smaller players, one of the most well-known is a company called Raccoon Go, which targets customers in the Chinese community. Read The Globe And Mail article.

Motor Vehicle Act Regulations Amendments
Amendments to the Motor Vehicle Act Regulations in June introduced a new sign regulating the speed of motor vehicles to a maximum of 30 km/h when approaching or passsing a neighbourhood golf cart on a designated highway. Currently, only two communities, the Town of Qualicum Beach and the Village of Chase, have been authorized through a pilot project to allow golf carts to operate on certain approved local roads. Other changes to the Regulations include the addition of constructed motor vehicles and their requirements within the defintion of "collector motor vehicle".

BC Supreme Court: Short-term Occupancy of Strata Lots under Licenses not Entitled to
Protection of Strata Property Act’s Rental Restriction Grace Period
HighStreet Accommodations Ltd v The Owners, Strata Plan BCS2478, 2017 BCSC 1039, concerned the application of rental restrictions to a strata-lot that was being used for short-term accommodation. The case came before the court as a pre-trial determination of a point of law. The court was asked to determine whether a tenant that was providing short-term accommodation to corporate clients in a residential strata-lot had the benefit of the grace period provided for in section 143 (1) of the Strata Property Act. The court, emphasizing the distinction at law between a lease and a license, held that it did not.

Facts
The case involved a strata corporation that governed a 26-floor, primarily residential tower with modern amenities. The plaintiff was described as “a hospitality management and corporate housing company.” The court explained the nature of this business as follows: HighStreet leases property and enters into contracts to provide furnished accommodation to its clients. Those contracts include bi-weekly housekeeping services, access to building amenities, and 24-hour a day on-call services. Currently, HighStreet has about 200 properties in its inventory. The average stay of its clients is between 60 and 80 days. HighStreet shares its profits from these contracts with the owners from whom it leases property. The parties agree that the arrangements between HighStreet and its clients are licenses, not leases.

Read the full article by Kevin Zakreski with the British Columbia Law Instutute. 

Strata Corporation Bylaws: Recent Issues in
Validity and Enforcement
– from CLEBC website – Practice Points
In this paper, Veronica P. Franco of Clark Wilson LLP provides an overview of the major developments over the last two years relating to the validity of strata corporation bylaws and their enforcement. Click here to view a pdf version of the paper.

CRT Roundup—Limited Common Property, Rental Restrictions, Responsibility to
Repair, Unauthorized Expenditures, Chargebacks, and Tribunal Jurisdiction
This post is part of a monthly series summarizing the Civil Resolution Tribunal’s strata-property decisions. There have been 11 new decisions since the last post.  Wong v Section 1 of The Owners, Strata Plan N.W. 2320, 2017 BCCRT 25 (PDF), was a wide-ranging decision that canvassed six issues concerning “rental permission and related strata fines and loss of rental income, replacement of balcony doors and adjacent windows, replacement of a second handrail for limited common property balcony stairs, cigarette smoke from a strata lot (SL27) directly below, and expenses and fees associated with this application.” The tribunal described the strata property at issue as follows:

The strata corporation was created in 1985. There are two sections of the strata created by bylaw amendments under the SPA. SL45 [the applicant owner’s strata lot] is part of section 1, which is made up of 54 residential strata lots. Of those 54 lots, 18 of them, strata lots 37 to 54, have limited common property stairs and balconies for the exclusive use of the adjacent strata lot. All strata lots with balconies, including SL45, are located on the third or top floor of the building. The applicant owner bought SL45 in 2005. SL45 is an end unit and shares a common wall with one other strata lot. SL27 is directly below SL45. Otherwise, SL45 does not connect to any other strata lots. The limited common property balcony and attached exterior stairs designated to SL45 are on the west side of the strata lot.

Read the full article by Kevin Zakreski with the British Columbia Law Institute. 

BC Law Institute Calls for Reforms to
Strata Sections, Types, and Phases
In the Report on Complex Stratas, published [June 20^th], the British Columbia Law Institute’s Strata Property Law Project Committee is calling for reforms to the Strata Property Act and the Strata Property Regulation to improve sections, types, and phases – the three tools used to manage legal issues arising from complex stratas. “Stratas have become more complex since the first appearance of sections, types, and phases in the 1970s,” explained committee chair Patrick Williams. “More and more stratas are developed in multiple phases, consist of different styles of buildings, or contain mixed uses. Unfortunately, the law hasn’t kept pace with these developments. The time is ripe to bring the law up to date.” The report recommends 68 reforms, including:

• 29 recommendations on sections, which propose clarifying the procedures for creating and cancelling sections, spelling out section powers and duties, and strengthening section governance, budgets, and finances;
• 14 recommendations on types, which propose clarifying the procedures for creating and cancelling types and fine-tuning the operation of types; and
• 25 recommendations on phases, which propose enhancing the oversight of the phasing process, simplifying governance in a phased strata corporation, and providing additional protections for the financial interests of owners in a phased strata.

Read the full article on the VISOA website

Wills and Estates News:

Is a Child Born out of Wedlock Entitled to Inherit
under British Columbia Succession Law?
Since 1927, legislation in British Columbia had provided that in cases of intestacy, children born out of wedlock would inherit on the same basis as children born in a marriage. The British Columbia Courts have also long adopted the approach that where there is nothing in the language of a Will to signify a different intention, the use of the word “child” or similar terminology will mean that the Will-maker intends to benefit children born out of wedlock as well as children born to married parents. The sensible approach of the British Columbia Courts is consistent with the contemporary value and expectations of most Canadians because a child born out of wedlock is just as much the child of his or her parents as a child born to married parents. However, the same approach has not been adopted by the courts across Canada. In a recent Ontario case, Koziarski Estate v. Sullivan, 2017 ONSC 2704 [Koziarski Estate], the Ontario Superior Court of Justice denied a man, who was born out of wedlock, a share of his grandmother’s estate after the Court found the law at the time the grandmother’s Will was made excluded children born outside of a marriage. Read the full article by Lauren Liang of Clark Wilson LLP. 

Property Partition and Sale Ordered for Joint Tenants
Bindley Estate v Quartermaine Holding Ltd., 2017 BCSC 672, ordered partition and sale of a property 50% owned by two parties where one party wished to sell and the other refused. They were unable to agree on a price for the respondent to buy out the petitioner’s interest. The petitioner estate wished to sell in order to wind up the estate of a deceased owner in a residential apartment. The Court ordered a sale of the property pursuant to section 6 of the Partition of Property Act. Read the full post by Trevor Todd on his blog Disinherited – Estate Disputes And Contested Wills.