⚖️ Paying with credit

To: Hearsay Readers

Good morning,

Thanks for giving our referral program some love on its launch yesterday. We’ve already sent out rewards and there’s more where those came from. Deets below if you missed it yesterday 👇

In other exciting news, coins with the face of King Charles are right around the corner. The Mint is showcasing the model that’ll be used for King’s minted face today. If you’re keen to reminisce on the facial history of Canadian coins, the Mint’s website has you covered.

— Dylan Gibbs


  • SCC hearings this week: enforcing letters of credit, concurrent appeals and judicial review, compensation for constructive expropriation

  • Round up: Maxime Bernier can’t challenge expired vaccine mandates

  • Down south: US Supreme Court Justices adopt a code of conduct


Hearings this week

Four people in business attire stand on street facing a building that says National Bank

The Supreme Court of Canada is hearing three appeals this week:

Issue: When can a bank refuse to comply with a letter of credit?

Why it matters: Banks are supposed to follow through on a letter of credit with pretty much no questions asked. Banks can sometimes refuse to pay if the recipient of the money engages in fraud, but it’s a narrow exception. Letters of credit are pretty critical for international trade, so we really need to know what counts as “fraud”.

What happened: Bombardier sold planes to the Greek government and agreed to pay damages if it didn’t use Greek suppliers to build the planes. The damages were secured by two letters of credit — Eurobank promised to pay Greece and National Bank promised to pay Eurobank.

Things got a little heated over Bombardier’s use of Greek suppliers, which led to arbitration. The arbitrator and a Quebec court ordered Eurobank not to pay Greece until after the arbitration. Greece said, “Don’t worry, we promise not to even ask for the money until then.”

Greece changed its mind. Not in a nice way, either — the government threatened to freeze Eurobank’s assets and potentially impose criminal sanctions if the bank refused to pay immediately. Eurobank gave in to the pressure. National Bank says that was wrong — it shouldn’t have to pay Eurobank because Eurobank shouldn’t have paid Greece.

The Court of Appeal let National Bank off the hook. The Court said Greece acted fraudulently, and Eurobank knew about that fraud when it made the payment.

Issue: If you have a right of appeal, does that mean you can’t apply for judicial review?

Why it matters: Parties want to challenge as much of an administrative tribunal’s decision as possible, but they often have a very limited right of appeal. Judicial review would provide a broader challenge, but the courts might not be willing to hear those applications in the face of a restricted right of appeal.

What happened: Ontario’s Licence Appeal Tribunal denied accident benefits to Ms. Yatar. She could only appeal legal errors in the tribunal’s decision, so she applied for judicial review so that she could also challenge errors of mixed fact and law. The Court of Appeal said Yatar is out of luck — there’s no reason to hear her judicial review application since she has a perfectly good right of appeal.

Further reading: Thoughts from the admin law wiz, Paul Daly.

Issue: What point in time should be used to value land the government has constructively expropriated?

Why it matters: Expropriated land is valued based on its potential for development right before the government expropriates the land. But sometimes the government makes land useless through zoning, and it doesn’t happen all at once. It makes a major difference to the property value if we consider the property’s potential when the government started restricting development, versus when the very last restriction takes effect.

What happened: St. John’s told the Lynches they can’t do anything with their property. It was a slow burn: the government limited development incrementally starting in 1964, leading to a complete ban on development in 2013. The Lynches want to value their property based on its potential back in 1964. The government wants to value the property as if it was already pretty useless farmland by the time the government expropriated it.

The Court of Appeal sided with the Lynches and said the property should be valued based on its 1964 potential.



💉 Maxime Bernier won’t get his day in court to challenge vaccine mandates. The Federal Court said the challenge is moot because the mandates are no longer in force. The Federal Court of Appeal upheld that decision.

The Quebec human rights tribunal found that guards at the Centre de détention de Québec discriminated against a Black man who attended the jail to serve a weekend jail sentence. The guards’ conduct included cutting the man’s clothing off with a knife, using a racial slur, applying pepper spray, and leaving the man wet and naked on the floor of a cell for hours. The tribunal concluded the treatment stemmed from racial profiling.

👑 Ontario’s Divisional Court said Ottawa police officers can’t get holiday pay for mourning Queen Elizabeth last year. Sure, their collective agreement says every day “proclaimed” by the Governor General is a holiday, but the Court said it would be absurd to take that wording literally. The Governor General goes around proclaiming all sorts of days — surely we can’t treat every single one as a holiday.

Beyond the border

😇 The justices of the US Supreme Court agreed to a Code of Conduct yesterday. Ethics have been a hot-button issue at the Court lately, after revelations that some of the Justices accepted and did not disclose lavish gifts from important people. The new Code sets guidelines for avoiding outside influence, attending events, accepting gifts, and using judicial resources or staff for personal activities. It doesn’t have any sort of enforcement mechanism — it’s more of an honour system type deal. The Justices released a statement accompanying the Code, which wasn’t defensive at all:

The absence of a Code … has led in recent years to the misunderstanding that the Justices of this Court, unlike all other jurists in this country, regard themselves as unrestricted by any ethics rules. To dispel this misunderstanding, we are issuing this Code, which largely represents a codification of principles that we have long regarded as governing our conduct.

US Supreme Court Justices, after hearing that the public doesn’t like them taking undisclosed free trips on superyachts owned by billionaires:

Oh My God Wow GIF by reactionseditor



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