Forum Non Conveniens Win Proves To Be A Pyrrhic Victory In Paniccia v. MDC Partners Inc.

Matthew Stroh, H.B.A. (Distinction), J.D.Corporate Finance, Corporate Litigation, Cross-Border Litigation, Securities Litigation, Shareholder Disputes0 Comments

In my last blog post on the Paniccia v. MDC Partners Inc. case, I discussed how the plaintiff obtained an important ruling to the effect that the Ontario Securities Act, R.S.O. 1990, c. S.5, applies extra-territorially to securities traded on foreign stock exchanges (in this case the NASDAQ). It may be recalled that in Paniccia v. MDC Partners Inc., 2017 ONSC 7298, Justice Perell reconfirmed that the statutory cause of action for secondary market misrepresentation under Part XXIII.1 of the Ontario Securities Act applies extra-territorially to trades on foreign stock exchanges when Ontario has a real and substantial connection to the defendant issuer. Where a publicly traded company’s securities trade both domestically (e.g. on the TSX) and on a foreign stock exchange (e.g. on the NASDAQ), Part XXIII.1 of the Securities Act applies extra-territorially to trades on the foreign stock exchange. This is so because Canadian law accepts that where … Read More

What Does the Illegal Substances Clause Mean in OREA Agreements of Purchase and Sale?

Nick P. Poon, B.Sc. (Hons.), B.A., J.D.Agents and Brokers, Appeals, Broker and Agent Claims, Civil Litigation, Commercial, Commercial Litigation, Contract Disputes, Contract Termination, Misrepresentation, Negligence, Real Estate Agent and Broker, Real Estate Litigation0 Comments

The Court of Appeal decision in Beatty v. Wei, 2018 ONCA 479, involved the failed closing of a residential property in Toronto and the proper interpretation of an illegal substances clause that is commonly found in OREA Agreements of Purchase and Sale. Illegal Substances Clause in OREA Agreement of Purchase and Sale In this case, about a month after entering into the Agreement of Purchase and Sale, the purchaser’s real estate agent discovered the property had been previously used as a marijuana grow-op in 2004.  The purchaser sought to terminate the agreement and demanded the return of the $30,000 deposit.  The sellers refused to terminate the agreement and commenced an application for a declaration that the purchaser breached the agreement by failing to close and an order that the sellers were entitled to the deposit and related damages.  In response, the purchaser commenced a competing application for similar relief. The dispute was in respect to … Read More

The Divisional Court Reconfirms That Leave To Appeal Is Required When A Class Action Is Certified Against Some But Not All Defendants (LBP Holdings Ltd. v. Hycroft Gold Corp.)

Matthew Stroh, H.B.A. (Distinction), J.D.Appeals, Appellate Advocacy, Business Litigation, Class Action Defence, Commercial Litigation, Corporate Finance, Corporate Litigation, Cross-Border Litigation, Directors' and Officers' Liability, Securities Litigation0 Comments

In LBP Holdings Ltd. v. Hycroft Gold Corp. et al., 2018 ONSC 1794, the Divisional Court, in quashing an appeal from an order certifying a primary market securities class action against an issuer on consent, but refusing to certify it against two investment banks/underwriters, found that s. 30 of the Class Proceedings Act, 1992, S.O. 1992, c. 6, requires a plaintiff to obtain leave to appeal in these circumstances. Background This case arose out of alleged misrepresentations made in a prospectus for a $150 million, May 17 2013, cross-border secondary public offering by Hycroft Gold Corp. (then known as Allied Nevada Gold Corp. (“Hyrcroft”)), which was financed as a “bought deal” with Dundee Securities Ltd. and Cormark Securities Inc. (the “Underwriters”) acting as principals. For reasons reported at LBP Holdings Ltd. v. Hycroft Mining Corporation, 2017 ONSC 6342, Justice Perell certified the class action on consent as against Hycroft but … Read More

Business “One Step Removed” From Tort Liability: Rankin (Rankin’s Garage & Sales) v. J.J.

Janice Perri, B.A. (Summa Cum Laude)Appeals, Appellate Advocacy, Civil Litigation, Commercial, Negligence0 Comments

The neighbour principle derived from Donoghue v. Stevenson that underlies the Anns/Cooper test continues to animate all of tort law. The pendulum continues to swing regarding who we can properly call our “neighbours” for legal purposes. While limiting who qualifies as our neighbours is necessary to prevent indeterminate liability, a balance must be struck to ensure just and fair outcomes. Rankin (Rankin’s Garage & Sales) v. J.J., in a strong 7-2 decision, represents the Court attempting to strike such a balance. In Rankin (Rankin’s Garage & Sales) v. J.J. a 15-year-old Plaintiff, J., suffered a catastrophic brain injury as a result of being the passenger in a car accident that occurred after his 16-year-old friend, C., stole a car from Rankin’s Garage & Sales (paras 1-5). Justice Karakatsanis, writing for the majority of the Supreme Court of Canada, held that there was no duty of care owed in this case by a business that stores vehicles to someone who is injured following the theft of … Read More

Real Estate Litigation – Ontario Court Decides Dispute Over House Flipping Profits

Nick P. Poon, B.Sc. (Hons.), B.A., J.D.Civil Litigation, Commercial and Contract Litigation, Contract Disputes, Real Estate Litigation0 Comments

The Ontario Superior Court of Justice decision in Ballestin v. 1304478 Ontario Inc., 2018 ONSC 2969, involved a dispute between parties that entered into an arrangement for the purposes of flipping a house during the surging real estate market in 2016. In the fall of 2016, the Plaintiffs were interested in purchasing, renovating and re-selling a property for a profit, however, they were unable to obtain financing for their house flipping venture.  During an open house, the Defendant homeowner suggested that they enter into an agreement with an extended closing date to provide the Plaintiffs with sufficient time to renovate and sell the property to a third party prior to the closing date. The terms of the agreement included: (a) a deposit of $25,000; (b) a purchase price of $600,000; (c) the balance owing to the Defendant was $605,000 less the deposit and less the difference between $5,000 and actual legal fees paid; and (d) any profit above … Read More

The Paradox of Cross-Border Securities Cases – Pretium Resources Inc.

Matthew Stroh, H.B.A. (Distinction), J.D.Civil Litigation, Class Action Defence, Commercial Litigation, Corporate Finance, Corporate Litigation, Cross-Border Litigation, Misrepresentation, Securities Litigation, Shareholder Disputes0 Comments

When a public company lists its securities on the Toronto Stock Exchange in Canada and the New York Stock Exchange, or the NASDAQ, in the United States, there is always a risk that it will be faced with securities class actions in both countries in the case of perceived or actual violations of securities laws. Such claims are often asserted in the Ontario Superior Court of Justice under Part XXIII.1 of the Ontario Securities Act, R.S.O. 1990, c. S.5 and in the United States District Courts under the U.S. Securities Exchange Act of 1934 and Securities and Exchange Commission Rule 10b-5. Although the public policy underpinning securities regulation in Canada and the United States is remarkably similar, each jurisdiction has developed its own substantive and procedural laws for adjudicating such disputes. This has often resulted in diverse outcomes in securities cases pending against the same issuer in each jurisdiction. While … Read More

Court Considers When Limitation Period Commences to Enforce Foreign Judgment

Andrew Ottaway, B.A. (Hons.), LL.B.Civil Litigation, Commercial Litigation, Cross-Border Litigation, Debt and Enforcing Judgments, Enforcement of Foreign Judgments, Injunction & Specific Performance, Of Interest to US Counsel0 Comments

In Grayson Consulting Inc. v. Lloyd, 2018 ONSC 2020 (CanLII), the plaintiff obtained a judgment in South Carolina in 2014.    The plaintiff commenced proceedings in Ontario in 2017 in respect of the South Carolina and obtained an ex parte Mareva injunction (freezing order) against the defendant.  The defendant challenged the Mareva injunction, arguing that the Ontario proceeding was commenced outside Ontario’s two-year limitation period.   The plaintiff argued, among other things, that the limitation period did not commence until the plaintiff received a report from investigators that the defendant had exigible assets in Ontario.   The plaintiff relied on the recent case of Independence Plaza 1 Associates L.L.C. v. Figliolini 2017 ONCA 44 (CanLII), in which the Court of Appeal stated that a claim based on a foreign judgment may not be “discovered” until a judgment creditor knew or ought to have known that the judgment debtor had exigible assets in … Read More

The Corporate Separateness Doctrine and the Enforcement of Foreign Judgments (Yaiguaje v. Chevron Corporation)

Matthew Stroh, H.B.A. (Distinction), J.D.Commercial Litigation, Corporate Litigation, Cross-Border Litigation, Debt and Enforcing Judgments, Enforcement of Foreign Judgments, Jurisdictional Challenges0 Comments

Background The appellants in Yaiguaje v. Chevron Corporation are indigenous peoples of the Orienté region of the Republic of Ecuador. The appellants received a $9.5 billion USD judgment against Chevron Corporation in Ecuadorian courts (the “Ecuadorian Judgment”). After failing to enforce the Ecuadorian Judgment in the United States, the appellants commenced an action in the Ontario Superior Court of Justice to determine whether the shares and assets of Chevron Canada Limited (“Chevron Canada” – a seventh-level subsidiary of Chevron Corporation) are exigible to satisfy the judgment debt of Chevron Corporation created by the Ecuadorian Judgment. Chevron Corporation and Chevron Canada were successful on the summary judgment motion of this matter, and in this case the appeal was dismissed by the Court of Appeal for Ontario. The Court of Appeal for Ontario’s Decision. In writing for the majority, Hourigan J.A. found that (1) Chevron Canada’s assets were not exigible to satisfy the Ecuadorian Judgment against … Read More

Shareholder Derivative Lawsuit Against General Motors Arising Out Of The Faulty Ignition Switch Recall Dismissed by U.S. Federal Court

Matthew Stroh, H.B.A. (Distinction), J.D.Business Litigation, Commercial Litigation, Corporate Litigation, Cross-Border Litigation, Directors' and Officers' Liability, Shareholder Disputes0 Comments

Although shareholder derivative actions against publicly traded companies are relatively uncommon in Canada, they frequently arise in the U.S. as a result of well-publicized corporate crises. However, even the most dramatic corporate disasters do not necessarily lead to a finding that the relevant board of directors did something wrong. In Carro v. Barra, et al., the United States District Court for the Eastern District of Michigan, Southern Division, granted General Motors’ (“GM”) and its individual directors and officers’ motion to dismiss a shareholder derivative lawsuit that arose out of GM’ faulty ignition switch recall. Background In February of 2014, GM announced the first of several recalls of millions of vehicles worldwide with defective ignition switches, which could shut off the engine during driving and thereby prevent the airbags from inflating in an accident. GM ultimately found that these defective ignition switches were responsible for 124 deaths. Lawsuits and Congressional investigations … Read More

Mattresses and Slogans and Interlocutory Injunctions, Oh My! (Sleep Country Canada Inc. v. Sears Canada Inc.)

Janice Perri, B.A. (Summa Cum Laude)Brand Protection, Business Law, Business Litigation, Civil Litigation, Commercial, Injunction & Specific Performance, Intellectual Property, Passing Off, Trademark Infringement0 Comments

In Sleep Country Canada Inc. v. Sears Canada Inc., Sleep Country Canada Inc. (“Sleep Country”) was granted an interlocutory injunction against Sears Canada Inc. (“Sears”) to prevent Sears from using their slogan “THERE IS NO REASON TO BUY A MATTRESS ANYWHERE ELSE” while the trade-mark infringement litigation (in which Sleep Country claims Sears’ slogan infringes on Sleep Country’s trade-marked slogan of, “WHY BUY A MATTRESS ANYWHERE ELSE”) is ongoing.   The three-part test set out in RJR-MacDonald v. Canada (Attorney General) was ultimately satisfied. The heart of the case was not on whether this was a serious issue or on the balance of convenience, but rather, on whether irreparable harm was established.   The Court found in favour of Sleep Country’s arguments that confusion, depreciation of goodwill, and loss of distinctiveness would result, as well as, a loss of sales in the minimum 18-24-month period between the time of this hearing and the determination of the … Read More

Court of Appeal Upholds Non-Solicitation Agreement

Andrew Ottaway, B.A. (Hons.), LL.B.Appeals, Breach of Non-Competition Agreement, Breach of Non-Solicitation Agreement, Breach of Non-Solicitation Clause, Business Litigation, Civil Litigation, Employment, Non-Solicitation Agreement, Non-Solicitation Clause0 Comments

In MD Physician Services Inc. v. Wisniewski, 2018 ONCA 440 (CanLII), the individual defendants signed a non-solicitation agreement with the plaintiff company.  The agreement provided that the individual defendants “shall not solicit during the Employee’s employment with the Employer and for the period ending two (2) years after the termination of his/her employment, regardless of how that termination should occur, within the geographic area within which s/he provided services to the Employer.” “Solicit” was defined as: “to solicit, or attempt to solicit, the business of any client, or prospective client, of the Employer who was serviced or solicited by the Employee during his/her employment with the Employee.” The individual defendants left the plaintiff to work for a competitor, the defendant company.  On their first day of work for the defendant company, the individual defendants began contacting the plaintiff’s clients. The trial judge found that the individual defendants had breached the … Read More

Gilbertson Davis LLP Enforces Liquidated Damages Clause in Settlement Agreement by Summary Judgment

Andrew Ottaway, B.A. (Hons.), LL.B.Business Litigation, Business Torts | Economic Torts, Civil Litigation, Commercial and Contract Litigation, Contract Disputes, Fraud, Fraud Recovery, Fraudulent Schemes, Shareholder Disputes, Summary Judgment0 Comments

In Haas v. Viscardi, 2018 ONSC 2883 (CanLII) the plaintiff settled a claim of $200,000 based on fraudulent misrepresentation with three defendants. The settlement agreement provided for various payments by the defendants on specified dates.  The settlement agreement required Viscardi to make payments of $30,000 in three installments. If Viscardi failed to make the payments on the dates provided, the settlement agreement provided that Viscardi would consent to judgment for $60,000 (the “Consent Judgment Clause”). Viscardi made one payment of $10,000, but failed to make the remaining two payments, in breach of the settlement agreement.  He then refused to consent to judgment. The plaintiff commenced a claim to enforce the settlement agreement, and brought a motion for summary judgment. The motion judge rejected Viscardi’s argument that the Consent Judgment Clause was an unenforceable penalty clause.  The judge considered the test for whether a liquidated damages clause is an unenforceable penalty: … Read More

Lowering the Threshold of Trademark Infringement? (United Airlines, Inc. v. Cooperstock)

Janice Perri, B.A. (Summa Cum Laude)Business Law, Business Litigation, Civil Litigation, Information Technology, Internet | Technology, Technology and Internet, Trademark Infringement, Website Copying0 Comments

Since December 17, 1998, United Airlines has been using the website www.united.com, it’s brand name and logo has been used since August 2010, and the design and artwork of the website has stayed relatively the same since 2006 (para 4). United Airlines has a variety of trademarks associated with these services. Cooperstock operated www.untied.com and in 2011 he redesigned the graphics, in a manner similar to the design of the United Website, which was adjusted in 2012 to match changes made by United on their website in 2012 (though with a sad-face added on the United logo for example) (para 10). In United Airlines, Inc. v. Cooperstock, the Court found that Cooperstock infringed United’s trademarks. Trademark infringement occurs when “a trademark or a confusingly similar mark [is used], without the consent of the trademark rights holder, in association with wares or services” (para 29). This case provides an interesting decision regarding the specific element of infringement under … Read More

Shifting The Status of Interlocutory Injunctions: Google v. Equustek Solutions

Janice Perri, B.A. (Summa Cum Laude)Business Litigation, Civil Litigation, Cross-Border Litigation, eCommerce | Online Retail, Injunction & Specific Performance, Internet | Technology, Jurisdictional Challenges, Mareva Injunction, Norwich Order, Passing Off, Technology and Internet, Trademark Infringement0 Comments

The very interconnectedness of the Internet that drives business forward through marketing and access to broader consumer bases may result in loses that currently are not easily remedied. However, jurisprudential shifts are occurring to bridge gaps in the common law that are prevalent in the new age of technology. Google v. Equustek Solutions is a recent decision that potentially expands the scope of interlocutory injunctions in order to ensure that trademark passing-off does not continue to be facilitated, even if unintentionally, by a non-party. Equustek was entitled to an interlocutory injunction to enjoin Google from displaying Datalink’s websites on any of its search results worldwide, and despite Google’s appeal, the decision was upheld by the Supreme Court of Canada in a 7-2 decision. Justice Abella, writing for the majority, emphasized the importance of deference and discretion with regards to interlocutory injunctions, which is highly context-driven to ensure just and equitable outcomes (para 22). The Court found the three-part test in RJR – MacDonald … Read More

Grounds for Judicial Intervention on International Arbitral Awards – Key Takeaways

Janice Perri, B.A. (Summa Cum Laude)Appeals, Arbitration, Commercial, Commercial and Contract Litigation, Commercial Arbitration, Commercial Leasing, Commercial Litigation, Construction | Builders, Construction Litigation, Enforcement of Foreign Arbitral Awards, UNCITRAL0 Comments

In Consolidated Contractors Group S.A.L. (Offshore) v. Ambatovy Minerals S.A., a decision of the Court of Appeal for Ontario, a USD$258 million project for the construction of a slurry pipeline from a nickel mine in the mountains of Madagascar to the coast lead to arbitration between the appellant (the contractor) and the respondent (tendered the project). After mutually agreeing to by-pass the adjudication stage of their three-stage dispute resolution process and go straight to a Tribunal, the appellant was only awarded $7M of its $91M claim and the respondent was awarded nearly $25M on its counterclaim. These awards were challenged on appeal as being made without jurisdiction, in breach of procedural fairness, and violating public policy. However, the appeal was dismissed. Judicial intervention in international arbitral awards under the United Nations Commission on International Trade Law (UNCITRAL) Model Law (the “Model Law”) – though given the force of law by the International Commercial Arbitration Act … Read More

Ontario Appellate Court Recognizes Adjusters’ Agency Immunity

R. Lee Akazaki, C.S., B.A. (Hons.), J.D.Agents and Brokers, Appeals, Appellate Advocacy, Insurance, Professional Indemnity, Professional Liability, Professions0 Comments

Independent insurance adjusters face unprecedented professional pressures and competing demands from stakeholders.  As the front-line representatives of insurance companies in the aftermath of an accident or loss, they deal directly with accident victims, property owners and insurance service providers.  Many unnecessary disputes erupt over misunderstandings about the adjuster’s role as an intermediary.  As I explained in a 2014 article in Claims Canada, “Addressing E&O Exposures: How adjusters can avoid the squeeze of professional liability claims,” there are useful litigation-prevention strategies for training adjusters to explain their role to stakeholders. Despite the practical and principled impediments to parties suing insurance adjusters, litigants and their lawyers in insurance cases often sue them, preferring to draw their weapons first and to ask the important questions later.  What insurance adjusters have lacked in cases where parties have sued them in breach of contract cases together with insurers is a specific legal precedent barring many such actions … Read More

Court of Appeal Considers Defamation Claim against Better Business Bureau

Andrew Ottaway, B.A. (Hons.), LL.B.Appeals, Appellate Advocacy, Business Litigation, Business Torts | Economic Torts, Civil Litigation, Defamation, Internet | Technology, Online Defamation, Technology and Internet0 Comments

In Walsh Energy Inc. v. Better Business Bureau of Ottawa-Hull Incorporated, 2018 ONCA 383, the Court of Appeal considered a defamation claim against the Better Business Bureau (“BBB”). The plaintiff company had failed to respond to a customer complaint using the BBB protocol, and did not resolve the complaint independently. The BBB changed changed the plaintiff’s rating on its website from “satisfactory” to “unsatisfactory”.  About a year later, the BBB adopted a new ratings system, and assigned the plaintiff a “grade” of D-. The plaintiff brought a claim against the BBB in defamation, alleging that the D- grade caused it substantial damages. On appeal, the Court of Appeal considered (1) whether the D- grade was defamatory, and (2) whether the publication was protected by the defence of fair comment. In respect of (1), the Court stated that the trial judge was wrong to only consider whether the D- grade was … Read More