In Paul Wurth Inc. v. Anmar Mechanical and MAG Engineering, the Plaintiff entered into a contract with MAG Engineering. The contract contained an arbitration clause. Nevertheless, the Plaintiff brought a court action against MAG Engineering for breach of contract. The Plaintiff also claimed against Anmar Mechanical. Anmar Mechanical was not a party to the contract. But the Plaintiff alleged that the services under the contract were to be provided by both MAG Engineering and Anmar Mechanical, and that MAG Engineering was an agent, partner, or joint venturer of Anmar Mechanical. After starting its court action, the Plaintiff brought a motion to stay its action and to require MAG Engineering and Anmar Mechanical participate in binding arbitration. In the alternative, the Plaintiff sought to force only MAG Engineering to participate in arbitration, and to stay its action against against Anmar Mechical pending the outcome of that arbitration. The Judge dismissed the Plaintiff’s motion … Read More
Court Sets Out Notice Period to Terminate Franchise Agreement
The Ontario Superior Court in France v. Kumon Canada Inc. considered the appropriate notice period required to terminate a franchise agreement, in this case in respect to a Kumon tutoring franchise. Kumon terminated the franchise agreement with 12 months’ notice. The Plaintiff had successfully run the franchise for 20 years. There was no franchise agreement in place (as the franchise was entered into by oral agreement 20 years earlier when their franchise agreements were not in writing). The Plaintiff sued Kumon for damages, arguing that her franchise was perpetual and could not be terminated. Kumon argued that the franchise agreement could be terminated on reasonable notice, and brought a motion for summary judgment. The Court granted Kumon summary judgment, but asked for further submissions regarding the proper notice period. The Court noted that there were no cases directly on point. The Court accepted that a franchise relationship is close to an employer/employee relationship. However, … Read More
Why the new s. 258.3(8.1) of the Insurance Act will retroactively scale back prejudgment interest rates in MVA actions
This week, the new provision in the Ontario Insurance Act, s. 258.3(8.1) received Royal Assent. When the provision is proclaimed by Order-in-Council,* it will abolish the 5% rate of prejudgment interest (PJI) on non-pecuniary damages for automobile claims. The new subsection says: “Subsection 128 (2) of the Courts of Justice Act does not apply in respect of the calculation of prejudgment interest for damages for non-pecuniary loss in an action referred to in subsection (8) [actions in tort arising from motor vehicle accidents].” Given the eagerness of the Ontario government to send a signal to the insurance industry, we should expect this provision to be proclaimed before long, perhaps as early as the beginning of 2015. In my view, the transfer of non-pecuniary damages, the label for general damages for pain and suffering, and related loss of amenities, to the general calculation formula for PJI, will have a significant effect on damage awards, … Read More
Bhasin v. Hrynew: A New ‘Fair Opportunity’ Doctrine in Canadian Contract Law?
On November 13, the Supreme Court in Bhasin v. Hrynew, 2014 SCC 71 (CanLII) changed the law of contract in Canada by imposing duties of good faith and honesty on all contractual relations. Until now, the duties have been applied to agreements in situations of power imbalance, notably insurance, employment and franchises. The plaintiff was a dealer in education savings plans, a type of consumer investment, offered by the corporate defendant. At the end of the three-year contract, the corporate defendant decided not to invoke a provision blocking the automatic renewal of the contract. The reason for its decision was the favouring of another dealer, the other defendant and a competitor of the plaintiff. On behalf of a unanimous court, Justice Cromwell stated three elements to the new state of contract law in siding with the plaintiff’s claim for damages: (1) There is a general organizing principle of good faith that underlies many … Read More
Federal Court of Appeal Decision on Arrest of Sister Ships
In Westshore Terminals Limited Partnership v. Leo Ocean, S.A, the Federal Court of Appeal considered among other things whether the appellants could arrest the respondents’ ship and its sister ship as well. The offending ship had damaged the appellants’ port facilities while in port, causing an estimated $60 million in damages. The appellants commenced an action and arrested the ship. The appellants also insisted that they could arrest a sister ship of the offending ship to satisfy a judgment. Justice Nadon considered the Federal Courts Act, which gives the Federal Court jurisdiction to seize and sell offending ships (s. 43(2)) and ships which are “owned by the beneficial owner” of the offending ship – i.e. sister ships (s. 43(8)). Justice Nadon stated that the appellants, having arrested the offending ship (under s. 43(2)), were barred from seeking to arrest a sister ship (under s. 43(8)). If you require advice on transportation and marine claims, please contact us for an initial consultation.
MtGox Bitcoin Bankruptcy Comes to Ontario
MtGox was reportedly the largest exchange for the digital current “bitcoin“. MtGox was forced to suspend trading in bitcoin after a massive digital theft or disappearance of the bitcoin it held. As a result, MtGox declared bankruptcy in Japan. Canadian customers of MtGox brought a class action for the value of their bitcoins. MtGox’s bankruptcy trustee applied for recognition of the Japanese bankruptcy proceedings in Canada as the “foreign main proceeding” under the Canada Bankruptcy and Insolvency Act. Recognition of the Japanese bankruptcy proceedings as foreign main proceeding would have the effect of automatically “staying” (blocking) the Ontario class action. The Court found that the Japanese bankruptcy proceeding was the foreign main proceeding because, among other things, MtGox had no offices, subsidiaries or assets in Canada, it was organized under Japanese law, its headquarters were in Japan, and its main bank accounts were in Japan. The Court stayed the Ontario class … Read More
Court Stays Action in Favour of Mexico Arbitration
In Kavanagh v. Magna, the Plaintiff alleged that he was wrongfully dismissed by his Mexican employer. The Plaintiff sued an Ontario affiliate company of his Mexican employer in the Ontario Courts. The Plaintiff had also brought an arbitration proceeding against his Mexican employer in the Mexico. The Defendants sought to have the Ontario action dismissed on the grounds that the Ontario Courts lacked jurisdiction of over the dispute. The Ontario Court applied a two part test considering i) whether it had jurisdiction, and ii) whether it should assume jurisdiction. i) The Ontario Court found that the dispute did not have a “real and substantial connection” to Ontario: the Plaintiff signed his employment contract in Mexico, worked in Mexico, and was terminated in Mexico. There was also a clause in his employment contract agreeing to resolve disputes in accordance with the laws of Mexico. Nevertheless, the Judge found that the Ontario … Read More
License to use “Marilyn Monroe” Trade-mark is not a Franchise Agreement
In MGDC Management Group Inc. v. Marilyn Monroe Estate, 2014 ONSC 4584, the Respondents and Applicants were parties to a License Agreement which granted to the Applicants the exclusive right to use the trademark “Marilyn Monroe” in its restaurants. The Applicants sought rescission of the License Agreement by claiming that the License Agreement qualifed as a franchise agreement which entitled it to receive full disclosure under the Arthur Wishart Act (Franchise Disclosure), 2000 (the “Act”). The Respondents moved to dismiss the Application. Justice Morgan of the Ontario Superior Court of Justice found that the Act did not apply to the License Agreement for the following reasons: The parties expressly agreed that franchise disclosure laws such as the Act did not apply to the License Agreement. And, in fact, the principal of the Applicants acknowledged that she was aware of this provision when she signed the License Agreement. Section 2(3)5 of the Act stated that it does not apply to a single trade-mark licensing agreement. The … Read More
London Court of International Arbitration (LCIA) – New Rules Include Expanded Provisions on Emergency Relief
The London Court of International Arbitration has announced that its new LCIA Arbitration Rules have been formally adopted by the LCIA Court and the LCIA Board of Directors and will come into effect on 1 October 2014. Article 9B of the new LCIA Arbitration Rules – Emergency Arbitrator provides that in the case of emergency at any time prior to the formation or expedited formation of the Arbitral Tribunal , any party may apply to the LCIA Court for the immediate appointment of a temporary sole arbitrator to conduct emergency proceedings pending the formation or expedited formation of the Arbitral Tribunal. By Article 9.14 of the New Rules, Article 9B does not apply where the parties have concluded their arbitration agreement before 1 October 2014 have not agreed in writing to ‘opt in’ to Article 9B, or the parties have agreed in writing at any time to ‘opt out’ of Article 9B. Reference should be had in this regard to … Read More
Service of Foreign Process (including U.S. Proceedings) in Ontario, Canada
Since 1989 Canada has been a member of Hague Convention of 15 November 1965 on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters, (the Hague Service Convention). The Hague Service Convention requires its member States to designate a “Central Authority” to accept incoming requests for service. The Central Authority in Canada, on the federal level, is the Attorney General for Canada, and the Central Authority on the provincial level, in Ontario is the Attorney General, the Ministry of the Attorney General or the Minister of Justice. In Ontario, service of foreign proceeding under the Hague Service Convention requires that a completed Request for Service Abroad of Judicial or Extrajudicial Documents Form together with the prescribed number of originating process documents and prescribed fee to the Ministry of the Attorney General for Ontario. There are alternatives to the Hague Service Convention service of foreign process in Ontario. If you are seeking advice or … Read More
International Sale of Goods Convention – New Members in 2014 and 2015
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
Court Grants Ex Parte Injunction Against Pipeline Protesters
In Enbridge Pipelines Inc. v. Jane Doe, the Applicant had an easement through a property for its gas pipeline. The protesters (according to their social media postings) opposed further construction on the pipeline, and occupied and refused to leave the property. The Applicant brought an ex parte (without notice) application for an interlocutory injunction prohibiting the protesters from occupying a work site on the property. The Applicant argued i) that the work on the pipeline was an immediate safety concern, ii) that any delay caused by the protesters would have serious impact on its economic concerns (the supply of oil to its customers), and iii) that the Applicant’s property rights – the easement – were in a “privileged position”, and that a trespass to property rights is virtually always remedied by an injunction. The Judge found with respect to i) that there was not an immediate safety concern, but with respect to ii) … Read More
Franchise Rescission Granted Due to Deficient Disclosure
The recent Ontario Superior Court of Justice decision in 2337310 Ontario Inc. v. 2264145 Ontario Inc., 2014 ONSC 4370, addressed a partial summary judgment motion brought by the franchisee of a cafe seeking a declaration that it was entitled to exercise its right of rescission under the Arthur Wishart Act (Franchise Disclosure), 2000 (“the Act”). The franchisee sought to rescind the franchise agreement approximately six months after entering into the agreement by arguing that the disclosure document provided by the franchisor was so deficient that it amounted to receving no disclosure at all. In contrast, the franchisor argued that the franchisee was provided with disclosure as required under the Act, and the franchisee was simply attempting to resile from a bona fide transaction due to its own incompetence and inability to operate the business successfully. The Court found a number of deficiencies in the disclosure provided by the franchisor, including failure to provide: (1) … Read More
Arbitration and Enigma: Why it’s better when made up
Getting beyond First Principles Apart from taking part in arbitrations, attending seminars presented by arbitrators and arbitration practitioners, and reading articles, opportunities to learn about arbitration are few and far between. Expose yourself to enough of these sources, and you will find the topics recurring with greater frequency than in other areas of legal practice. Much of it hovers over first principles, although I do not mean to belittle the subject. The basic structure and formulation of arbitrations can involve thinking at a high level. Subjects such as conflicts of interest and bias, avoidance of advocate-arbitrators on panels, and other process topics are tough to grasp because there is no fixed body of practice. Thus, any dialogue about teaching arbitration must acknowledge the following truths: Unlike public court or arbitration decisions, private arbitral awards are not usually published unless there is an appeal or judicial review application to a public … Read More
Partial Summary Judgment Granted for Rescission of Franchise Agreement
In the recent Ontario Superior Court of Justice decision in 2147191 Ontario Inc. v. Springdale Pizza Depot Ltd., the plaintiffs brought a partial summary judgment motion seeking to rescind a franchise agreement under the Arthur Wishart Act (Franchise Disclosure), 2000 (the “Act”). After purchasing the business from an existing franchisee, the plaintiffs alleged that they were entitled to receive disclosure from the franchisor but the disclosure received was so materially deficient that it amounted to no disclosure at all. As a result, the plaintiffs claimed that they were entitled to rescind the franchise agreement within two years of entering into the franchise agreement. The defendant franchisor argued that it was not required to provide disclosure to the plaintiffs due to its minimal involvement in the sale transaction, or in the alternative, it provided satisfactory if imperfect disclosure which would only entitle the plaintiffs to rescind the franchise agreement within sixty days of receiving the disclosure documents (which had elapsed). Under subsections 5(7) and 5(8) … Read More
Gilbertson Davis lawyer represents defence bar in OTLA Standard of Excellence for Conduct Project
During the month of April, 2014, Canadian Defence Lawyers (CDL, Canada’s voice of civil litigation defence lawyers) surveyed its Ontario membership in order to identify areas of unnecessary conflict between plaintiff and defence lawyers in personal injury litigation. CDL will be participating as a stakeholder in a consultation by the Ontario Trial Lawyers Association (OTLA, Ontario’s leading association of plaintiff-side personal injury lawyers) in its campaign to improve standards and civility in personal injury litigation. CDL Board member and Gilbertson Davis LLP lawyer Lee Akazaki has been asked to represent the defence bar in this worthwhile project. OTLA has embarked on this project after recognizing that professional lapses are an impediment to client service. Because of the pool of lawyers surveyed, respondents were more likely to complain about plaintiffs lawyers than fellow defence lawyers. Nevertheless, we intentionally inserted a third question in order to elicit constructive self-criticism. That OTLA has … Read More
Judge scolds feuding neighbours, refuses to grant legal remedies
Nasty and obnoxious rich people are “also” entitled to their day in court. If they cannot resolve their differences, the court is there to resolve it if the law provides a civil remedy, so that it does not escalate into criminal harassment or violence. It is not the duty of the judge to make fun of the litigants, and the cause of the rule of law is not advanced by doing so. In Morland-Jones v. Taerk, the Superior Court judge was not right to turn the litigants away in a derisive manner. From the perspective of the exercise of the public role of the court in explaining the law and diffusing conflict among citizens, the ruling can be criticized in three significant ways: The public was left guessing the precise relief the plaintiffs were seeking and the applicable procedural law, so as to leave the legal analysis a mystery. The court’s message … Read More