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

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

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

David Alderson, LL.B, LL.M (Commercial and Corporate), Lawyer, Qualified Arbitrator and MediatorAppeals, 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

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

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

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 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

Court of Appeal Considers Scope of Errors of Jurisdiction under Model Law on International Commercial Arbitration

Andrew Ottaway, B.A. (Hons.), LL.B.Appeals, Appellate Advocacy, Arbitration, Business Litigation, Civil Litigation, Commercial and Contract Litigation, Commercial Arbitration, Contract Disputes, Jurisdictional Challenges0 Comments

In Consolidated Contractors Group S.A.L. (Offshore) v. Ambatovy Minerals S.A., 2017 ONCA 939, the respondent was constructing a mine.  The appellant was contracted by the respondent to build a pipeline.  The construction contract contained a three stage dispute resolution process, being: 1) disputes were to be determined by the respondent’s supervising engineer; 2)  if the dispute was not resolved, it would be referred to adjudication by a sole adjudicator; and 3) if a party did not accept the adjudication, it could refer the dispute to arbitration pursuant to the International Commercial Arbitration Act, R.S.O. 1990, c. I.9, which incorporates the Model Law. Problems arose in the project.  The appellant alleged that the respondent had breached the contract.   The appellant sought an extension of the time for performance, compensation for its costs arising from delay, and compensation for additional work.   The appellant submitted its claims to the respondent’s engineer for … Read More

Ontario Court Finds Jurisdiction Resulting From Cumulative Effect of Individually Insufficient Connecting Factors

Andrew Ottaway, B.A. (Hons.), LL.B.Business Litigation, Civil Litigation, Commercial Contracts, Commercial Litigation, Contract Disputes, Contract Termination, Cross-Border Litigation, Forum Challenges, International Sale of Goods, Jurisdictional Challenges0 Comments

In Freshway Services Inc. v. CdEnviro Ltd., 2017 ONSC 6591, the plaintiff Ontario company contracted with the defendant Northern Irish company.  The defendant was to build a waste recycling facility and install it at the plaintiff’s facility in Ontario.  A third party to provide warranty coverage and servicing for components of the waste recycling plant, once it was built and delivered to Ontario.  A dispute arose between the parties, and the plaintiff sued the defendant in Ontario.  The defendant brought a motion to stay the Ontario action on the basis that Ontario lacked jurisdiction. The motion judge considered the the presumptive connecting factors for jurisdiction set out by the Supreme Court in Club Resorts Ltd. v Van Breda, 2012 SCC 17, being whether the contract was made in the Ontario: whether the defendant was carrying on actual business in Ontario; whether the defendant is resident in Ontario; or where the … Read More

Use At Your Own Risk: Partial Summary Judgment Motions

Nick P. Poon, B.Sc. (Hons.), B.A., J.D.Appeals, Business Litigation, Civil Litigation, Commercial, Franchise Law, Misrepresentation, Negligence, Summary Judgment0 Comments

The Ontario Court of Appeal in Butera v. Chown, Cairns LLP, 2017 ONCA 783, recently overturned an award of partial summary judgment in a professional negligence action and provided guidance on the appropriate circumstances in which partial summary judgment motions should be brought. In the original action, the plaintiffs brought an action against various Mitsubishi companies after their Mitsubishi dealership franchise failed, claiming damages for breach of contract, misrepresentation, negligence and breaches of the Arthur Wishart Act.  The original action was dismissed on summary judgment because the applicable two-year limitation period had passed.  The plaintiffs were also ordered to pay $150,000 in costs for both the action and the summary judgment motion. The plaintiffs appealed the summary judgment motion decision and argued that a six-year limitation period was applicable notwithstanding that they had conceded at the motion that the applicable limitation period was two years.  The appeal was dismissed. The plaintiffs then brought the subject action against their former lawyers for negligence.  The plaintiffs claimed damages for … Read More

Court of Appeal States that Security for Costs Should Not be Treated Differently for Recognition and Enforcement Actions

Andrew Ottaway, B.A. (Hons.), LL.B.Appeals, Appellate Advocacy, Business Litigation, Civil Litigation, Commercial and Contract Litigation, Commercial Litigation, Corporate Litigation, Cross-Border Litigation, Enforcement of Foreign Judgments, Of Interest to US Counsel0 Comments

Yaiguaje v. Chevron Corporation, 2017 ONCA 741 arose from an action by the Plaintiffs to enforce an Ecuadorean judgment in Ontario against the Defendant.   The Defendants obtained summary judgment dismissing the Plaintiffs’ claim.  After the Plaintiffs appealed, the Defendant sought a security for costs against the Plaintiffs, who were non-Ontario residents from Ecuador.   The Plaintiffs argued that security for costs should not be ordered because of, among other reasons, the unique nature of a recognition and enforcement action.  The Plaintiffs relied on the Supreme Court of Canada decision on jurisdiction in the same action: Chevron Corp v. Yaiguaje, 2015 SCC 42, [2015] 3 S.C.R. 69.  The Plaintiffs argued that the Supreme Court’s decision required courts to treat recognition and enforcement cases in a different manner than first instance actions. The Court of Appeal confirmed that courts should take a “generous” approach in finding jurisdiction in recognition and enforcement actions. … Read More

Court of Appeal Provides Guidance on Interpretation of Success Fee Contract

Andrew Ottaway, B.A. (Hons.), LL.B.Appeals, Appellate Advocacy, Business Litigation, Civil Litigation, Commercial and Contract Litigation, Contract Disputes0 Comments

In RBC Dominion Securities Inc. v. Crew Gold Corporation, 2017 ONCA 648, the Plaintiffs (“RBC”) sued the Defendant (“Crew”) for a success fee (the “Success Fee,”) that RBC alleged it was owed under an agreement for the provision of investment banking services (the “Agreement”).  The Agreement provided, among other things, that RBC was entitled to the Success Fee “if a Transaction [was] completed involving any party, whether or not solicited by RBC, pursuant to an agreement to effect or otherwise complete a Transaction entered into during the term of its engagement […]”.   RBC provided certain services under the Agreement.  During the course of the Agreement, Crew was subject to a takeover.  The takeover was not anticipated by either party.  RBC was not involved in the takeover transaction.   The issue at trial was whether RBC was entitled to the Success Fee for its services. The trial judge found that the … Read More