In Hutchinson (Re), 2018 ONSEC 40 (“Hutchinson”), the Ontario Securities Commission (“OSC”) considered the proper framework to assess a motion for severance in the context of a regulatory proceeding before the OSC. OSC Staff alleged that the respondent, David Paul George Sidders (“Sidders”), engaged in insider trading with respect to three transactions. The OSC also alleged that three other individual respondents, one of which settled, engaged in insider trading and/or insider tipping. Respondent Sidders moved before an OSC Commissioner (“Commissioner”) to request that it sever his hearing from the hearings of the other remaining respondents. The question before the Commissioner was how to assess, in the context of an OSC proceeding, whether the interests of justice require severance. The Supreme Court of Canada in R v. Last, 2009 SCC 45 (“Last”) listed several factors to consider when balancing the risk of prejudice to the accused with the public interest in … Read More
When is Oral Evidence Required to Resolve Credibility Issues in Summary Judgment Motions?
The Ontario Court of Appeal decision in 2212886 Ontario Inc. v. Obsidian Group Inc., 2018 ONCA 670, involved the appeal of a partial summary judgment decision in a dispute between the franchisor and a franchisee of Crabby Joe’s Tap and Grill. In this case, the franchisee operated a Crabby Joe’s franchise for a year and a half prior to serving a notice of rescission of the franchise agreement on the franchisor. Claims The franchisee claimed that the disclosure document provided was materially deficient and it was entitled to rescind the franchise agreement within two years of execution of the franchise agreement under section 6(2) of the Arthur Wishart Act (Franchise Disclosure), 2000 (“the Act”). The franchisee claimed for rescission damages under section 6(6) of the Act and also damages for breach of contract and breach of the fair dealing obligations under the Act. In response, the franchisor brought a counterclaim for a declaration that the franchise agreement was validly terminated and a … Read More
Popack v. Lipszyc: Recognition and Enforcement of Arbitration Awards – Clarifying the term “binding”
Popack v. Lipszyc appears to be the first Ontario Court of Appeal case on the recognition and enforcement of arbitration awards under the 2017 International Commercial Arbitration Act (“ICAA”). The ICCA includes the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“New York Convention”) and the 2006 amended version of UNCITRAL Model Law on International Commercial Arbitration (“Model Law”). The appellants used articles 35 and 36 of Model Law to apply for the recognition and enforcement of the international commercial arbitration award they received in August 2013 against the respondents. While the application judge dismissed the application, the Court of Appeal allowed the appeal. The Court of Appeal stated that “in Ontario, a strong “pro-enforcement” legal regime” exists for the recognition and enforcement of international commercial arbitration awards, as grounds for refusal are “to be construed narrowly”. Importantly, the Court, and not the tribunal, is the proper avenue to … Read More
Court Grants Interim, Interim Injunction Without Specific Evidence of Harm
In Knowmadics v. Cinnamon, 2018 ONSC 4451 (CanLII) the plaintiff company sought an urgent interim, interim injunction regarding an app sold by the defendants pending the hearing of a motion for an interlocutory injunction. The plaintiff sold specialized computer software. The individual defendant was employed by the plaintiff and signed an employment agreement, including a confidentiality and non-competition clause. The defendant also had a business, the corporate co-defendant, which did subcontracting work for the plaintiff after the defendant resigned from employment with the plaintiff. The corporate defendant signed a non-disclosure agreement with the plaintiff. The plaintiff alleged that the defendants were selling certain software that directly competed with the plaintiff’s software and infringed the plaintiff’s copyrights. The plaintiffs commenced an action against the defendants. After commencing the action, the plaintiff alleged that they learned that the defendants were also selling a certain app over which the plaintiffs asserted ownership. The … Read More
Entire Agreement Clause Upheld in Manorgate Estates Inc. v. Kirkor Architects and Planners
Entire Agreement Clauses are meant to prevent negotiations that occurred prior to the contract being formed from influencing the Court’s interpretation of the terms set out in the final contract. In other words, past discussions are to have no bearing on the understanding of the contractual terms. In theory, a fully integrated agreement of this kind supplants any earlier oral or written agreements. There is competing jurisprudence in which Entire Agreement Clauses have been both effective and ineffective. However, Manograte Estates Inc. v. Kirkor Architects and Planners is a recent Ontario Court of Appeal decision where an Entire Agreement Clause was effective. In Manograte Estates Inc. v. Kirkor Architects and Planners, the Ontario Court of Appeal upheld the Motion Judge’s decision that the Entire Agreement Clause in the relevant agreement, regarding architectural consulting for a construction project, operated as a complete defence to the appellants’ claim of alleged negligent misrepresentation. The Entire Agreement Clause … Read More
Court Considers When a Matter is in “Public Interest” in Anti-SLAPP Motion
In Paramount v. Johnston, 2018 ONSC 3711 (CanLII), the Ontario Court considered whether to dismiss a defamation claim based on the anti-SLAPP (Strategic Litigation Against Public Participation) provision of the Court of Justice Act (section 137). We have previously blogged on the new anti-SLAPP provision: see our earlier post “Court Awards Damages to Defendant in Defamation Case”. In Paramount v. Johnston, the plaintiff company operates a number of middle-eastern restaurants. The plaintiff company was owned by the individual plaintiffs. The plaintiff company was hosting a fundraiser organised for Prime Minister Justin Trudeau. A protest had been organised outside the restaurant to coincide with the fundraiser. The defendants alleged that they attended at the restaurant for the protest. The defendants allegedly defamed the plaintiffs in a total of eight videos taken on the day of the protest. One of the defendants brought a motion to dismiss the claim against him based … Read More
Shareholders’ Remedies under the OBCA: An Overview (Part 2/2)
When a shareholder’s rights are breached, there are a variety of legal remedies available under the Ontario Business Corporations Act (“OBCA”). For more information on shareholders’ rights, please click here to see part 1 of this post. Oppression Remedy It is first important to note that as per the Ontario Court of Appeal decision Maurice v. Alles, the standard two-year limitation period set out in the Limitations Act applies to oppression remedy claims. The “clock starts to run” when the oppressive conduct first began, meaning that individuals must not delay if they wish to pursue an oppression remedy. The oppression remedy under s. 248 of the OBCA is broad in nature, and there is a large amount of judicial discretion afforded in its application. The oppression remedy can be an especially strong tool in protecting minority shareholders. When the Court determines that there has been oppressive conduct, unfairly prejudicial conduct, or conduct that disregards the interests of any shareholder it may make an order to resolve the matter in a variety of ways. … Read More
Shareholders’ Rights under the OBCA: An Overview (Part 1/2)
Under the Ontario Business Corporations Act (“OBCA”), shareholders of a corporation have a variety of rights. Outlined below are a few rights that all shareholders should be aware they possess. Please click here to see part 2 of this post on shareholders’ remedies. Voting Rights The board of directors, under s. 115 are ultimately responsible for managing or supervising the management of the business and affairs of a corporation. Major business decisions also involve the participation of the board of directors, though sales, leases, or exchanges of all or substantially all the property of the corporation that is not in the ordinary course of business requires the approval of shareholders (s. 184(3)). Shareholders also have voting rights that allow them to control the makeup of the board of directors (s. 119(4)), and also the ability to remove directors under s. 122(1) (though this is subject to exceptions under s. 120(f)). Shareholders have additional voting rights under … Read More
The Supreme Court of Canada On Defence Against the Tort of Conversion (Teva Canada Ltd. v. TD Canada Trust)
In Teva Canada Ltd. v. TD Canada Trust, Teva Canada Ltd. (“Teva”), a pharmaceutical company, “was the victim of a fraudulent cheque scheme implemented by one of its employees”, (para 1). Teva claimed the collecting banks were liable for the tort of conversion. Teva Canada Ltd. v. TD Canada Trust provides insight into the Bills of Exchange Act‘s (“BEA”) section 20(5) defence to the tort of conversion, by clarifying the approach used to determining whether a payee is “fictitious or non-existing”. In the event that a payee is deemed fictitious or non-existing within the meaning of section 20(5) of the BEA, the bill may be treated as payable to the bearer, and thus can be negotiated by simple “delivery” to the bank meaning endorsement is not required, and the defence will succeed (para 5). Justice Abella, writing for the majority, outlined the two-step framework a bank must satisfy to demonstrate that a payee is fictitious or … Read More
Supreme Court Considers Jurisdiction and the Appropriate Forum in International Internet Defamation Claim (Haaretz.com v. Goldhar)
In Haaretz.com v. Goldhar, 2018 SCC 28 (CanLII), the Supreme Court considered whether a defamation claim brought by the plaintiff in Ontario should be dismissed for lack of jurisdiction or, alternatively, for a more convenient forum. The the plaintiff is a prominent Canadian businessman who owns a large real-estate investment company in Ontario. He also owns a popular professional soccer teams in Israel. He is well known in Israel, maintains a residence there, and travels there every few months. The corporate defendants publish a daily newspaper in Israel in both English and Hebrew, which is distributed in print and online. The newspaper has a distribution of about 70,000 print copies in Israel. The individual defendants are the newspaper’s former sports editor and the author of the allegedly libellous article. The defendants published an article about the plaintiff’s ownership and management of the soccer teams in Israel. The article also referenced … Read More
What Does the Illegal Substances Clause Mean in OREA Agreements of Purchase and Sale?
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
Business “One Step Removed” From Tort Liability: Rankin (Rankin’s Garage & Sales) v. J.J.
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
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
Court Considers When Limitation Period Commences to Enforce Foreign Judgment
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
Selling A Home That Used To Be A Cannabis Grow-Op
The proliferation in recent years of residential homes being used as a cannabis grow-op has created confusion and uncertainty for buyers, sellers and real estate agents as to how far the obligations of a seller extend regarding information about a home’s history. In the recent Court of Appeal Decision of Beatty v. Wei, 2018 ONCA 479, the Court offered clarity in response to the question: What is the effect of an illegal substances clause in a standard form Ontario Real Estate Association/Toronto Real Estate Board Agreement of Purchase and Sale (“APS”)? The “Illegal Substance Clause” is a commonly included clause in such agreements and typically reads as follows: The Seller represents and warrants that during the time the Seller has owned the property, the use of the property and the buildings and structures thereon has not been for the growth or manufacture of any illegal substances, and that to the … Read More
Mattresses and Slogans and Interlocutory Injunctions, Oh My! (Sleep Country Canada Inc. v. Sears Canada Inc.)
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
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