The Divisional Court Confirms That Class Action Case Management Judges Have Broad Discretion To Curb The Use Of Foreign Subpoenas Used By Plaintiffs To Obtain Evidence Pre-Certification.

Matthew Stroh, H.B.A. (Distinction), J.D.Commercial0 Comments

In Mancinelli v. RBC, 2018 ONSC 1844, the Divisional Court confirmed that class action case management judges have broad discretion under s. 12 of the Class Proceedings Act, 1992, to prohibit plaintiffs from using subpoenas obtained in the United States under 28 U.S.C.§1782 for the purposes of obtaining merits evidence pre-certification. Facts In September of 2015, the Appellants commenced a national class action in the Ontario Superior Court of Justice against a consortium of domestic and foreign banks under the Class Proceedings Act, 1992 for an alleged conspiracy to fix prices in the foreign exchange market by, amongst other things, communicating with each other directly using electronic chatrooms hosted by Bloomberg LLP (“Bloomberg”) to coordinate their trading strategies and exchange key confidential information. On September 27, 2016, the Appellants obtained an ex parte order pursuant to 28 U.S.C.§1782 (Assistance to Foreign and International Tribunals and Litigants Before Such Tribunals) from … Read More

McDonald’s Not Served Valid Revocation of Waiver – Commercial Leasing in the Court of Appeal

David Alderson, LL.B , LL.MAppeals, Arbitration, Business Litigation, Commercial, Commercial and Contract Litigation, Commercial Arbitration, Commercial Leasing, Injunction & Specific Performance, Real Estate Litigation, Retail Litigation, Shopping Mall Lease Disputes0 Comments

The Court of Appeal for Ontario in North Elgin Centre Inc. v. McDonald’s Restaurants of Canada Limited, 2018 ONCA 71 allowed an appeal by McDonald’s from a decision on applications by both parties to determine whether  the subject lease came to an end on a described date because McDonald’s had not complied with the renewal provision in the lease. The Court of Appeal allowed the appeal of the decision of the application judge, that despite that the parties were in negotiations, and that the respondent had waived its right to insist on strict compliance with the  terms of the renewal provision (to refer the determination of the renewal rental rate to arbitration), that the respondent had effectively revoked its waiver and reverted to its strict legal rights, namely to terminate the lease in the absence of the referral of the dispute on renewal rental rate to arbitration within the permitted time. On the … Read More

UNCITRAL International Sale of Goods Convention – New Members in 2016 and 2017

David Alderson, LL.B , LL.MCommercial and Contract Litigation, Commercial Arbitration, Commercial Contracts, Commercial Litigation, Conventions & Treaties, Counterfeit Goods, Distribution Agreements, Distributors | Dealers, International Sale of Goods, International Traders, Jurisdictional Challenges, Manufacturers | Re-Sellers, Sale of Goods, UNCITRAL0 Comments

The United Nations Convention on Contracts for the International Sale of Goods (“CISG”) establishes a comprehensive code of legal rules governing the formation of contracts for the international sale of goods, the obligations of the buyer and seller in contracts for the international sale of goods, and the remedies for breach of contracts for the international sale of goods. Canada on accession to the CISG declared that, in accordance with article 93 of the Convention, the Convention would extend to Ontario (and other provinces named in the declaration). The Canadian International Sale of Goods Contracts Convention Act, S.C. 1991, c. 13, has been in effect in Ontario since 1992 because of the International Sale of Goods Act, R.S.O. 1990, c. I.10.  These two acts brought into effect in Canada the United Nations Convention on Contracts for the International Sale of Goods. The Ontario International Sale of Goods Act provides that the contracting parties “may … Read More

Lost in Cyberspace : Legal causation in the age of AI and driverless cars

R. Lee Akazaki, C.S., B.A. (Hons.), J.D.Construction Litigation, Information Technology, Insurance, Technology and Internet, Trucking and Transportation0 Comments

One day, in the immediate future, you might very well witness this scene from your office window.   A lawyer jaywalks across a Toronto street to avoid being late for a firm risk management committee meeting.  While she does so, she texts her colleague in Calgary with instructions on containing the legal liabilities arising from a northern Alberta oil plant shut-down that has already occurred in the future (a reality of simultaneity across locally-logged events across a multi-timezone world) after an eco-terrorist hacked into the plant heating system. It is at this moment that she is struck by an autonomous delivery van. The van was travelling the wrong way down a one-way street because the city transportation department had not uploaded a temporary change to traffic direction to accommodate a condo developer.  An algorithm built into the telephone service to warn the lawyer of oncoming traffic fails to alert her because the … Read More

The Court of Appeal for Ontario finds that the “multiple misrepresentations” provision contained in section 138.3(6) of the Securities Act was enacted to benefit public companies, not investors.

Matthew Stroh, H.B.A. (Distinction), J.D.Commercial0 Comments

The Court of Appeal for Ontario in Kaynes v. BP, P.L.C., 2018 ONCA 337, confirmed that section 138.3(6) of the Securities Act, R.S.O. 1990, c. S.5, was enacted by the Ontario Legislature to benefit public companies from multiple actions arising from misrepresentations repeated on a number of occasions, and not a mechanism to relieve against the strict three-year absolute limitation period contained in s. 138.14 of the Securities Act. Background This case arose out of the April 2010 Deepwater Horizon disaster in the Gulf of Mexico. The Deepwater Horizon semi-submersible Mobile Offshore Drilling Unit was owned and operated by Transocean Ltd., one of the world’s largest offshore drilling contractors, and drilling for, BP, plc, one of the world’s largest publicly traded oil and gas companies. On April 20, 2010, the Deepwater Horizon exploded and ultimately sunk, killing 11 workers, injuring 17 others, and causing a massive offshore oil spill in … Read More

Court Considers Deemed Place of Contracting in Jurisdiction Analysis

Andrew Ottaway, B.A. (Hons.), LL.B.Business Law, Business Litigation, Civil Litigation, Contract Disputes, Contract Termination, Cross-Border Litigation, Forum Challenges, Franchise | Licensing, Franchise Law, Injunction & Specific Performance, Jurisdictional Challenges0 Comments

In We Serve Health Care LP v. Onasanya, 2018 ONSC 1758, the Applicant was a franchisor of home health care service providers.. The Applicant had its head office in Ontario and regional offices in various jurisdictions, including one in Saskatchewan.  The individual Respondent entered into a Franchise Agreement with the Applicant’s predecessor company granting her a license to operate a franchise in Saskatchewan.. She later assigned her rights under the Franchise Agreement to the corporation Respondent. The Applicant refused to renew the Franchise Agreement, resulting in a dispute.  The Applicant commenced an Application in Ontario for a declaration that the Franchise Agreement had expired and for a mandatory order that the Respondents comply with their post-expiry obligations under the Franchise Agreement. The Respondents brought a motion to stay the Application on the basis that the Ontario Court did not have jurisdiction.   The Applicant argued that the dispute was presumptively … Read More

Greater Harmonization of International Commercial Arbitration Laws

David Alderson, LL.B , LL.MArbitration, Commercial, Commercial Arbitration, Commercial List Matters, Cross-Border Litigation, Debt and Enforcing Judgments, Enforcement of Foreign Arbitral Awards, International Sale of Goods0 Comments

Legislation based on the UNCITRAL Model Law on International Commercial Arbitration (1985), with amendments as adopted in 2006 (the “Model Law”) has been adopted in 78 States of a total of 109 jurisdictions, including Canada, Alberta, British Columbia, Manitoba, New Brunswick, Newfoundland and Labrador, Northwest Territories, Nova Scotia, Nunavut, Ontario, Prince Edward Island, Quebec, Saskatchewan and Yukon. The legislation in Ontario, Canada, amends previous legislation based on the Model Law and is based on the text, with amendments as adopted in 2006, of the UNCITRAL Model Law on International Commercial Arbitration. Recent jurisdictions to enact Model Law legislation include: In 2017: Australian Capital Territory, Fiji, Jamaica, Mongolia, Qatar, and South Africa. In 2016: Myanmar, Republic of Korea, and Uganda. The continued expansion of an already substantial number of jurisdictions enacting Model Law legislation means even greater harmonization of national laws through all stages of the commercial arbitration process, from the arbitration agreement itself, to the recognition and … Read More

China Signs Hague Convention on Choice of Court Agreements

Andrew Ottaway, B.A. (Hons.), LL.B.Civil Litigation, Commercial and Contract Litigation, Commercial Law, Commercial Litigation, Cross-Border Litigation, Debt and Enforcing Judgments, Forum Challenges, Jurisdictional Challenges0 Comments

We previously wrote that Ontario had enacted the International Choice of Court Agreements Convention Act, 2017, which will give effect to the Hague Convention on Choice of Court Agreements (the “Hague Convention”) in Ontario once Canada ratifies the Hague Convention.  (Canada has not yet signed or ratified the Hague Convention.) Since our previous blog post, the People’s Republic of China signed the Hague Convention. China has not yet ratified the Hague Convention, which requires approval by the National People’s Congress. China’s signing of the Hague Convention represents an important step towards more widespread adoption of the convention. The lawyers are Gilbertson Davis have experience in international litigation and arbitration, and in interpreting international conventions.   Please contact us for an initial consultation.

Court Considers Oppression Claim by Creditors against Directors

Andrew Ottaway, B.A. (Hons.), LL.B.Business Law, Business Litigation, Civil Litigation, Directors' and Officers' Liability, Oppression Remedies, Summary Judgment0 Comments

In The Investment Administration Solutions Inc. v. Pro-Financial Asset Management Inc., 2018 ONSC 1220 (CanLII), the Ontario Superior Court considered an oppression claim under section 248 of the Ontario Business Corporations Act by a creditor against the directors of a debtor company. The Plaintiff company provided back office services to the Defendant Pro-Financial. Pro-Financial was an Ontario Corporation which carried on business as an investment dealer.   Pro-Financial was poorly managed and did not comply with the applicable regulatory requirements.  Pro-Financial’s assets were eventually sold to another dealer at the insistence of the Ontario Securities Commission (“OSC”). As a result of the sale, there was no money left to pay the Plaintiff’s significant outstanding accounts. The Plaintiff brought an action against, among others, directors of Pro-Financial.  The Plaintiff’s claim included a claim for an oppression remedy.  The Plaintiff argued that the directors of Pro-Financial had violated Pro-Financial’s reasonable expectation that the … Read More

“Like a forest fire in this era of climate change, costs in class proceedings have gotten out of control” – The Honourable Justice Perell.

Matthew Stroh, H.B.A. (Distinction), J.D.Commercial0 Comments

One of the main policy imperatives behind class proceedings legislation in Canada, such as the Ontario Class Proceedings Act, 1992, S.O. 1992, c.6, is providing a mechanism for access to justice by distributing fixed litigation costs amongst a large number of class members with relatively modest claims. In two recent decisions, Heller v. Uber Technologies Inc., 2018 ONSC 1690, and Paniccia v. MDC Partners Inc., 2018 ONSC 1775, released by the Honourable Justice Perell of the Ontario Superior Court of Justice on March 15, 2018, His Honour found that “like a forest fire in this era of climate change, costs in class proceedings have gotten out of control”. Both of those cases involved pre-class certification motions to stay the proceedings or otherwise truncate the proposed class size. As discussed in my previous blog post on the MDC Partners Inc. case, following the dismissal of a U.S. securities class action by … Read More

Is a Burrito a Wrap? Ontario Court Decides Injunction Involving Exclusivity Clause in Commercial Lease

Nick P. Poon, B.Sc. (Hons.), B.A., J.D.Business Litigation, Civil Litigation, Commercial, Commercial and Contract Litigation, Commercial Contracts, Commercial Leasing, Contract Disputes, Injunction & Specific Performance0 Comments

In 2432714 Ontario Inc. v. Heffner Development Group Limited, 2018 ONSC 1034, the Ontario Superior Court of Justice was recently asked to decide the age old question of whether a burrito was a wrap in the context of an exclusivity clause in a commercial lease agreement. In this case, the tenant operated a Pita Pit franchise in a 13 unit plaza owned by the landlord.  The tenant had negotiated an exclusivity clause in the lease agreement that gave it the exclusive right to sell “pitas and wraps” in the plaza.  When the tenant discovered that a Mexican fast food chain, Holy Guacamole, was renovating one of the units, it brought a motion for an interlocutory injunction prohibiting the landlord from leasing a unit in the plaza to Holy Guacamole. The tenant argued that Holy Guacamole sold “wraps” because its menu of tacos, burritos and quesadillas were all prepared by wrapping up food items in a tortilla.  … Read More

Court of Appeal Considers Effect of Nude Photos on Contractual “Morals Clause”

Andrew Ottaway, B.A. (Hons.), LL.B.Appeals, Appellate Advocacy, Brand Protection, Business Litigation, Civil Litigation, Commercial and Contract Litigation, Contract Disputes, Contract Termination, Entertainment and Media, Internet | Technology, Media Litigation0 Comments

In Zigomanis v. 2156775 Ontario Inc. (D’Angelo Brands), 2018 ONCA 116 (CanLII), the Defendant entered into a promotional contract with the Plaintiff, who was at the time a professional hockey player.  The contract contained a “morals clause”, stating that the Defendant could terminate the contract if the Plaintiff “commits any act which shocks, insults, or offends the community, or which has the effect of ridiculing public morals and decency.” The Defendant terminated the contract for an alleged breach of the morals clause: specifically, unknown persons published nude photographs of the Plaintiff on the internet.  The photos had originally been sent by the Plaintiff to his girlfriend, before he entered into the contract.  The Defendant argued that sending the nude photos violated the morals clause. The Plaintiff sued the Defendant for wrongful termination of the contract.  The trial judge found, among other things, that the private transmission of nude photographs within … Read More

Court of Appeal States that Placing Oneself in Position to Close Transaction not Waiver of Deficiency

Andrew Ottaway, B.A. (Hons.), LL.B.Appeals, Appellate Advocacy, Business Law, Business Litigation, Civil Litigation, Commercial and Contract Litigation, Commercial Contracts, Commercial Litigation, Contract Disputes, Real Estate Litigation, Sale of Business Disputes0 Comments

In 1418885 Ontario Ltd. v. 2193139 Ontario Limited, 2018 ONCA 54, the appellant entered into an agreement of purchase and sale to buy a property from the respondent.  The property included residential apartments.  The appellant sought confirmation from the respondent that the residential apartments were permitted use under the existing zoning by-law.  The respondent maintained that the residential apartments were “a legal non-conforming use”.  However, the planning authority indicated that there was a possible problem with the residential apartments.  The appellant’s lawyer advised the respondent’s lawyer that the purchase deposits had to be returned if the issue was not resolved. In spite of the residential apartments issue, the appellant and respondent moved towards the closing date by exchanging draft documentation and related material.  However, on closing date, the appellant’s lawyer advised the respondent’s lawyer that the appellant would not be closing because of the residential apartments issue.  The deal did … Read More

Court of Appeal Confirms Importance of Requisitions in Real Estate Transactions

Nick P. Poon, B.Sc. (Hons.), B.A., J.D.Appeals, Commercial, Commercial and Contract Litigation, Commercial Contracts, Commercial Litigation, Contract Disputes, Contract Termination, Real Estate Litigation, Summary Judgment0 Comments

The Court of Appeal of Ontario decision in 1418885 Ontario Ltd. v. 2193139 Ontario Limited, 2018 ONCA 54, recently overturned a summary judgment motion decision which confirmed the importance of requisition letters in real estate transactions. In this case, the parties had entered into an Agreement of Purchase and Sale for a property with a restaurant, golf course, 12 residential apartments, a two-storey home and a banquet hall.  The Agreement of Purchase and Sale included the following requisition clause:    8.  TITLE SEARCH:  Buyer shall be allowed until 6:00 p.m. on the 30th day of May, 2016 (Requisition Date) to examine the title to the property at his own expense and until the earlier of: (i) thirty days from the later of the Requisition Date or the date on which the conditions in this Agreement are fulfilled or otherwise waived or, (ii) five days prior to completion, to satisfy himself that there are … Read More

Court Reconfirms that the Securities Act Applies Extra-Territorially to Securities Traded on Foreign Stock Exchanges.

Matthew Stroh, H.B.A. (Distinction), J.D.Commercial0 Comments

In Paniccia v. MDC Partners Inc., 2017 ONSC 7298, the Ontario Superior Court of Justice recently reconfirmed that the Ontario Securities Act, R.S.O. 1990, c. S.5, applies extra-territorially to securities traded on foreign stock exchanges. Background MDC Partners Inc. (“MDC”) is a Canadian publicly-traded company with its registered office in Toronto, but with its head office and investor relations group in New York City. It is engaged in marketing, communications and public relations worldwide. Up until November of 2015, MDC listed its Class A subordinate voting shares (“common shares”) on both the TSX and the NASDAQ. However, 98.2% of trading in those common shares occurred on the NASDAQ. During all material times, Canadian shareholders made up less than 2.6% of MDC’s public float. In July of 2015, an institutional investor with a substantial stake in MDC’s common shares commenced a proposed securities class action against MDC and certain of its … Read More

Court of Appeal Provides Guidance on Whether Party Carrying on Business in Ontario as Basis for Jurisdiction

Andrew Ottaway, B.A. (Hons.), LL.B.Appellate Advocacy, Business Litigation, Civil Litigation, Commercial, Commercial and Contract Litigation, Commercial Litigation, Contract Disputes, Cross-Border Litigation, Jurisdictional Challenges, Of Interest to US Counsel0 Comments

In Sgromo v. Scott, 2018 ONCA 5, the Court of Appeal considered the scope of one of the presumptive grounds for jurisdiction of the Ontario Court: whether a party carried on business in Ontario.  The Defendants were incorporated in jurisdictions outside of Ontario.   The Defendants brought motions to stay or dismiss the subject actions. On the motion, the Plaintiff alleged that because the products of some of the Defendants were advertised, marketed, and distributed by third party retailers in Ontario, the Defendants were carrying on business in Ontario, such that Ontario had presumptive jurisdiction.  The motion judge rejected that argument. On appeal, the Court of Appeal agreed with the motion judge’s reasons, stating that: as set out by the Supreme Court of Canada in Club Resorts Ltd. v. Van Breda, 2012 SCC 17 (CanLII), the Courts must be cautious when considering whether an entity is carrying on business in the jurisdiction, … Read More