Corporate Governance Considerations During the Covid-19 Pandemic

Sabrina Saltmarsh, B.A. (Hons), J.D.Business Interruption, Business Law, Business Litigation, Business Torts | Economic Torts, By-laws, Closely-Held Business Disputes, Commercial, Commercial and Contract Litigation, Commercial Contracts, Commercial Law, Commercial Leasing, Commercial List Matters, Commercial Litigation, Contract Disputes, Coronavirus, Corporate Disputes, Corporate Litigation, COVID-19, Derivative Actions, Directors' and Officers' Liability, Family Business Disputes, Oppression Remedies, Partnership Dispute, Partnerships and Shareholder Disputes, Retail Disputes, Retail Litigation, Sale of Business Disputes, Shopping Mall Lease Disputes, Shopping Mall Lease Litigation0 Comments

Corporate governance issues are top of mind for directors and businesses who are attempting to navigate through the Covid-19 Pandemic related closures and emergency measures. Boards of Directors still need to operate and make decisions in the best interests of the corporation, and this can involve tough decisions, particularly where there is little guidance as to how measures to lift Covid-19 related restrictions will play out. By example, while it may be in the best interest of investors and shareholders that the Board act to lay off employees in the short term, the impact of staff shortages when Covid-19 restrictions are lifted may pose it’s own challenges. Many businesses must consider how to hold governance meetings during Covid-19 times. On March 30, 2020, Ontario passed an Order under the Emergency Management and Civil Protection Act (EMCPA), (Ontario Regulation 107/20) entitled “Meetings for Corporations” making temporary changes to the Business Corporations … Read More

COVID-19 / Coronavirus: Rent Relief for Small Businesses Is Coming

Nick P. Poon, B.Sc. (Hons.), B.A., J.D.Business Interruption, Business Litigation, Civil Litigation, Commercial and Contract Litigation, Commercial Arbitrator, Commercial Contracts, Commercial Law, Commercial Lease Arbitrator, Commercial Leasing, Commercial List Matters, Commercial Litigation, Contract Disputes, Contract Termination, Coronavirus, COVID-19, Real Estate Litigation0 Comments

On April 16, 2020, the Federal government announced the Canada Emergency Commercial Rent Assistance (CECRA) program to assist small businesses with their rent payments during the COVID-19 crisis. The CECRA program will provide loans and/or forgiveable loans to commercial property owners who will be expected to pass on the benefit to small businesses by lowering or forgoing rent for April (retroactively), May and June 2020.  Further details of the program are expected to be released soon and the program will be administered by the provincial and territorial governments. Although the Ontario Superior Court of Justice had issued an Order on March 19, 2020 suspending the eviction of residents from their homes (unless ordered otherwise under an urgent motion), there was no similar protection against evictions for commercial tenants which included many small business owners. Commercial rent payments are typically the second largest operating expense for most small businesses after payroll … Read More

Small Business Relief Resources During COVID-19 / Coronavirus

Nick P. Poon, B.Sc. (Hons.), B.A., J.D.Business Disputes, Business Interruption, Civil Litigation, Commercial, Commercial and Contract Litigation, Commercial Contracts, Commercial Leasing, Commercial Lending, Commercial Litigation, Contract Disputes, Contract Termination, Coronavirus, COVID-19, Creditors Rights, Debt and Enforcing Judgments, Distribution Agreements, Event Cancellation, Event Termination, Force Majeure, Franchise | Licensing, Government Action, Loan and Guarantee, Mortgage Enforcement, Mortgage Litigation, Real Estate Litigation, Retail Disputes, Retail Litigation, Shopping Mall Lease Disputes, Shopping Mall Lease Litigation0 Comments

On April 14, 2020, the Ontario legislature passed a bill during an emergency sitting to extend the state of emergency to May 12, 2020. The state of emergency in Ontario was initially declared on March 17, 2020, and subsequently extended to April 14, 2020.  Under the Emergency Management and Civil Protection Act, any further extensions must be passed by the legislature, and can only be extended for additional periods of no more than 28 days.  On May 12, 2020, the state of emergency was extended to June 2, 2020 (Updated: May 12, 2020). Although the extension of the state of emergency does not automatically apply to individual orders such as the closure of non-essential businesses, it is expected the mandatory closure of non-essential businesses will be extended as well to combat the COVID-19 pandemic.  In addition, many small businesses (deemed essential) have voluntarily closed due to safety concerns for their … Read More

COVID-19 / Coronavirus: Urgent Hearings for Enforcement Matters

Nick P. Poon, B.Sc. (Hons.), B.A., J.D.Civil Litigation, Commercial and Contract Litigation, Commercial Contracts, Commercial Litigation, Contract Disputes, Coronavirus, COVID-19, Creditors Rights, Debt and Enforcing Judgments, Fraud Recovery0 Comments

Further to my blog posts in respect to scheduling urgent hearings in the Ontario Superior Court of Justice for commercial lease matters and real estate closings, an urgent hearing was recently granted in an enforcement matter involving a contempt hearing against a judgment debtor. In Morris v. Onca, 2020 ONSC 1805, the judgment creditor had obtained default judgment in November 2019 for repayment of funds obtained by fraud.  The judgment creditor took steps to enforce the default judgment, including conducting examinations in aid of execution, but the process was frustrated by the judgment debtor’s refusal to answer relevant questions and his failure to comply with court orders to produce documents.  The judgment debtor did not dispute the adjudged amount was owed to the judgment creditor but provided numerous excuses for his failure to pay the default judgment and to produce documents in accordance with court orders. The judgment creditor had previously … Read More

Covid-19 Pandemic Closures: Considerations For Commercial Tenants And Landlords

Sabrina Saltmarsh, B.A. (Hons), J.D.Building | Property Management, Business Disputes, Business Interruption, Commercial and Contract Litigation, Commercial Contracts, Commercial Lease Arbitrator, Commercial Leasing, Commercial Litigation, Contract Termination, Coronavirus, COVID-19, Force Majeure, Franchise | Licensing, Government Action, Injunction & Specific Performance, Insurance, Property Management, Real Estate Litigation, REIT Disputes, Shopping Mall Lease Disputes, Shopping Mall Lease Litigation0 Comments

What can commercial tenants and landlords do to protect themselves from the impact of Covid-19 related closures on commercial lease obligations? Here are some tips for businesses who are in the difficult situation of having to deal with potential defaults on commercial rent obligations related to closures or reductions due to the Covid-19 situation. 1. Review The Lease Agreement Carefully For Potentially Relevant Clauses In Ontario, the commercial landlord-tenant relationship is governed by the Commercial Tenancies Act, R.S.O. 1990, c. L.7., (the “Act”) which outlines the relationship, rights and obligations between commercial landlords and tenants. However these relationships are heavily governed by the commercial lease agreement in place between the landlord and the tenant, which can take precedence over the Act based on the agreement of the parties. Review the Act and more importantly, review your commercial lease agreement carefully to appreciate whether the agreement contemplates the type of situation … Read More

COVID-19 / Coronavirus: How to Schedule an Urgent Civil or Commercial List Hearing

Nick P. Poon, B.Sc. (Hons.), B.A., J.D.Business Disputes, Civil Litigation, Commercial, Commercial and Contract Litigation, Commercial Contracts, Commercial Law, Commercial Leasing, Commercial List Matters, Commercial Litigation, Contract Disputes, Contract Termination, Coronavirus, COVID-19, Injunction & Specific Performance, Real Estate Litigation0 Comments

On March 15, 2020, the Chief Justice of the Ontario Superior Court of Justice released a Notice to the Profession advising that all scheduled civil hearings were adjourned until further notice.  The Notice to the Profession provides a procedure to schedule urgent and time-sensitive motions and applications where immediate and significant financial repercussions may result without a hearing.  When motion or application materials are filed, by email to the appropriate courthouse, seeking an urgent hearing, the triage judge will determine whether or not the matter is urgent and should be scheduled for a hearing. There have been a few recent endorsements reported in respect to the scheduling of urgent commercial lease matters. Urgent Motion – Relief From Forfeiture In Oppong v. Desoro Holdings Inc., 2020 ONSC 1697, the applicant sought relief from forfeiture to set aside the landlord’s termination of the lease.  Although the application was brought promptly and scheduled to be … Read More

Contract Arbitrator – Event Cancellation Dispute Arbitrator, Force Majeure Clause Dispute – Reasonable Fees and Good Availability – Gilbertson Davis LLP Arbitration and Mediation Chambers

David Alderson, LL.B, LL.M (Commercial and Corporate), Lawyer, Qualified Arbitrator and MediatorAgency Arbitrator, Arbitration, Arbitrators, Brokerage Arbitrator, Business Arbitrator, Business Dispute Arbitrator, Civil Litigation, Commercial, Commercial Arbitration, Commercial Arbitrator, Commercial Contracts, Commercial Lease Arbitrator, Condo Arbitrator, Contract Disputes, Contract Termination, Coronavirus, COVID-19, Employment Dispute Arbitrator, Energy Arbitrator, Enforcement of Foreign Arbitral Awards, Franchise Arbitrator, Infrastructure Arbitrator, International Commercial Arbitrator, International Joint Venture Arbitrator, Internet Arbitrator, Investment Arbitrator, IT Arbitrator, Joint Venture Arbitrator, Licensing Arbitrator, Marine Arbitrator, Maritime Arbitrator, Partnership Arbitrator, Partnership Dispute Arbitrator, Real Estate Arbitrator, Reinsurance Arbitrator, Sale of Goods Arbitrator, Shareholder Arbitrator, Shareholder Dispute Arbitrator, Technology Arbitrator, Transportation Arbitrator0 Comments

Contract Dispute Arbitrator  Sole Arbitrator – $450.00 per hour, plus HST An arbitrator, or an arbitration tribunal, obtains jurisdiction to adjudicate and decide a dispute from an agreement / contract which has been made by the parties to the arbitration. This jurisdiction is not typically provided by legislation, though there are exceptions, such as the arbitration provision deemed by statute to be included in a condominium declaration. Even if there is no arbitration clause in the contract or agreement made by the parties and a dispute arises, then parties to that contract may still agree to have their dispute determined by arbitration. The parties to a contract may prefer to have a dispute determined by arbitration, since it is presumptively a confidential process, it may be faster and less expensive than going to court, or they may wish to participate in the selection of the adjudicator. Common Contractual Issues Arbitrated … Read More

Measures of Last Resort – The Benefits of Exit Provisions in Shareholder’s Agreements

Sabrina Saltmarsh, B.A. (Hons), J.D.Business Law, Business Litigation, Business Torts | Economic Torts, Civil Litigation, Closely-Held Business Disputes, Commercial, Commercial and Contract Litigation, Commercial Contracts, Corporate Disputes, Family Business Disputes, Non-Compete, Non-Competition Agreement, Non-Solicitation Agreement, Non-Solicitation Clause, Oppression Remedies, Sale of Business Disputes, Shareholder Disputes0 Comments

The benefits of a shareholder’s agreement may not be fully considered when parties are intending to go into business together and become joint shareholders in a corporation. Perhaps the mood is optimistic and none of the participants anticipate that things might sour between them down the road. Sometimes corporations are formed absent such an agreement. However, among other benefits, these agreements become particularly useful in managing risk and guiding shareholders through governance issues and disputes that may arise, efficiently so as to minimize disruption to the corporation’s business. Absent a shareholder’s agreement, shareholders in a closely held corporation that cannot see eye-to-eye regarding the operation and path of the corporation, may become stuck in a deadlock where decision-making is effectively stifled due to a stalemate between them. Shareholder’s agreements can serve to provide mechanisms to address deadlock, protect the voice and rights of minority shareholders, provide a road map for … Read More

Legal Consequences of COVID-19 / Coronavirus on Commercial Contracts

David Alderson, LL.B, LL.M (Commercial and Corporate), Lawyer, Qualified Arbitrator and MediatorArbitration, Commercial Contracts, Commercial Litigation, Contract Disputes, Contract Termination, Coronavirus, COVID-19, Cross-Border Litigation, Distributors | Dealers, Fashion Industry, International Joint Venture Arbitrator, International Sale of Goods, International Traders, Manufacturers | Re-Sellers, Marine | Maritime | Aviation, Sale of Goods, Textiles and Apparel0 Comments

Impact of COVID-19 / Coronovirus Events on International and Domestic Commercial Contracts  The reports from China show that COVID-19 / Coronavirus not only has a tragic impact on the lives of very many, but has already caused the consequential events of closure of manufacturing, halting exports and affecting transportation operations. This can be caused by forced movement of labour, government-ordered closure and / or state sanction and embargo, or the business decision to cease production. Interruption of Supply, Outsourcing and Transportation of Goods   This often has serious consequences for Canadian companies dependent upon foreign supply, outsourcing of manufacturing and the international carriage of goods. The central question is often whether or not the performance of a supply, outsourcing or transportation contract is legally suspended or excused because of the events surrounding the spread of COVID-19 / Coronavirus. Frustration | Impossibility  International trade and transportation contracts may not expressly refer to … Read More

Part Two – Timing is Everything in Real Estate Agreements of Purchase and Sale

Nick P. Poon, B.Sc. (Hons.), B.A., J.D.Appeals, Business Litigation, Civil Litigation, Commercial, Commercial and Contract Litigation, Commercial Contracts, Commercial Litigation, Contract Disputes, Contract Termination, Injunction & Specific Performance, Real Estate | Developers, Real Estate Litigation, Specific Performance, Summary Judgment0 Comments

I had written a previous blog on the “time is of the essence” clause in real estate agreements where it was discussed that the strict adherence to any agreed upon time limits was generally the case. A recent Ontario Court of Appeal case, Fortress Carlyle Peter St. Inc. v. Ricki’s Construction and Painting Inc., serves as a reminder that the “time is of the essence” clause is not absolute and unfettered, and there are preconditions that must be satisfied for a party to rely upon and insist on time being of the essence. The facts are not overly complicated in this case.  The respondent was a condominium developer in the process of acquiring properties for a proposed project in downtown Toronto.  The developer entered into an Agreement of Purchase and Sale (“APS”) with the vendor to acquire the subject property.  Although the APS required the vendor to provide estoppel certificates five days prior … Read More

Partnership Disputes Between Professionals – Dentists, Doctors, Accountants, Lawyers, Architects and Engineers

David Alderson, LL.B, LL.M (Commercial and Corporate), Lawyer, Qualified Arbitrator and MediatorArbitration, Breach of Non-Competition Clause, Breach of Non-Solicitation Agreement, Business Litigation, Commercial Arbitration, Commercial Contracts, Commercial Litigation, Joint Venture Disputes, Non-Competition Agreement, Non-Competition Clause, Non-Solicitation Agreement, Non-Solicitation Clause, Partnership Dispute, Partnerships and Shareholder Disputes, Professional Services0 Comments

Partnerships Professionals often carry on their professional practice as partners in a partnership or limited liability partnership. Partnerships can be created simply by conduct and the application of the Partnership Act or by a simple or complex partnership agreement. Joint Venture Contract – Fiduciary Duties? In other cases professionals associate in practice by participation in a contractual joint venture which, depending on the agreement and the circumstances, may or may not at law also be a partnership but, in any event, may attract the duties and obligations of partners, including fiduciary duties. Sharing Space Lastly, some professionals may consider that they are only sharing space with other professional and may be very surprised to find that the arrangement gave rise at law to unexpected obligations. Duty of Honest Performance The recent decision of the Supreme Court of Canada in Bhasin v. Hrynew, though not a case about partnerships, nonetheless has a wide-ranging impact … Read More

Fork In the Road: Critical Considerations by Condominium Corporations in Anticipatory Failed Closings

Gilbertson Davis LLPAppeals, Appellate Advocacy, Civil Litigation, Commercial, Commercial Contracts, Condo Construction, Condo Litigation, Contract Disputes, Real Estate Litigation0 Comments

In 1179 Hunt Club Inc. v. Ottawa Medical Square Inc., 2019 ONCA 700, the purchasers, Ottawa Medical Square Group, entered into an Agreement for Purchase and Sale to purchase condominium units owned by the vendor, 1179 Hunt Club Inc. The value of the commercial condominium units in the Hunt Club Project was $5.6 million dollars. Five days before closing, the purchasers, sent a request to the vendor, requesting an extension of time as the purchasers had not yet finalized their arrangements for financing. Three days before closing, the vendor advised that it would insist on closing, and if the purchaser could not close, it would exercise its rights and remedies under the Agreement for Purchase and Sale. On the date of closing, the vendor learned that the Land Registry Office had made an error in assigning parcel identification numbers. Although this error was ameliorated later that day, this mishap, prevented … Read More

Can a Pre-Incorporation Contract Prevent the Forfeiture of a Deposit on the Failed Closing of a Property?

Gilbertson Davis LLPCommercial Contracts, Real Estate | Developers, Real Estate Litigation0 Comments

In Benedetto v. 2453912 Ontario Inc., the Ontario Court of Appeal considered whether a pre-incorporation contract could prevent the forfeiture of a deposit provided pursuant to an agreement of purchase of sale of real property. In this case, the purchaser signed an agreement for purchase and sale of real property, indicating that he was signing as a buyer “in trust for a company to be incorporated without any personal liabilities”. The purchaser then provided $100,000.00 as the deposit to secure the purchase of the property. The purchaser subsequently advised that he would not be closing on the transaction and sought the return of the deposit. The vendor refused and commenced civil proceedings resulting in a summary judgment motion, which was held in favour of the vendor. The Ontario Court of Appeal upheld the findings of the lower court and indicated that: A forfeited deposit does not constitute damages for breach … Read More

Court Stays Injunction Claim in Favour of Arbitration / Refuses to Consolidate Arbitration Proceedings Without Consent of All Parties

Andrew Ottaway, B.A. (Hons.), LL.B.Arbitration, Civil Litigation, Commercial and Contract Litigation, Commercial Arbitration, Commercial Contracts, Commercial Litigation, Contract Termination, Injunction & Specific Performance, Insurance0 Comments

In Loan Away Inc. v. Western Life Assurance Company, 2018 ONSC 7229, the plaintiff had an agreement with the defendant by which the plaintiff sold the defendant’s insurance policies in return for payments by the defendant.  The defendant ceased making payments and the plaintiff commenced an action against the defendant for an injunction to require the defendant to make the payments to the plaintiff and to prevent the defendant from terminating the insurance policies that the plaintiff had sold on the defendant’s behalf. The defendant relied upon an arbitration clause in its agreement with the plaintiff to stay the action.  The plaintiff argued, among other things, that the claim should not be stayed because the arbitration clause contained arbitration clause contained an exception for requests for a temporary restraining order or other forms of injunctive relief. The plaintiff argued that its request for a permanent injunction fell under the category … Read More

Dominican Republic Vacation Claim Examined in Di Gregorio v. Sunwing Vacations Inc.

Janice Perri, B.A. (Summa Cum Laude)Appeals, Appellate Advocacy, Civil Litigation, Commercial Contracts, Contract Disputes, Cross-Border Litigation, Jurisdictional Challenges, Negligence, Summary Judgment, Travel & Tour Operators, Travel & Tourism0 Comments

In Di Gregorio v. Sunwing Vacations Inc., the appellants purchased a vacation package to attend the Dreams Punta Cana Resort and Spa through their travel agent, Sunwing Vacations Inc. (“Sunwing”). While on vacation, the balcony railing gave way resulting in the appellants sustaining injuries. The motion judge was found to have erred in not conducting a jurisdictional analysis pursuant to Club Resorts Ltd. v. Van Breda. The Court of Appeal stated that the relevant connecting factor is that the claim pleaded was based on an Ontario contract. The alleged tortfeasors do not need to be party to the contract, as all that is required is that a “defendant’s conduct brings it within the scope of the contractual relationship and that the events that give rise to the claim flow from the contractual relationship” as stated in Lapointe Rosenstein Marchand Melancon LLP v. Cassels Brock & Blackwell LLP. The Court of … Read More

When is Oral Evidence Required to Resolve Credibility Issues in Summary Judgment Motions?

Nick P. Poon, B.Sc. (Hons.), B.A., J.D.Appeals, Business Litigation, Civil Litigation, Commercial, Commercial and Contract Litigation, Commercial Contracts, Commercial Litigation, Contract Disputes, Contract Termination, Franchise | Licensing, Franchise Law, Summary Judgment0 Comments

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

Entire Agreement Clause Upheld in Manorgate Estates Inc. v. Kirkor Architects and Planners

Janice Perri, B.A. (Summa Cum Laude)Appeals, Appellate Advocacy, Business Torts | Economic Torts, Civil Litigation, Commercial, Commercial and Contract Litigation, Commercial Contracts, Commercial Law, Commercial Litigation, Construction | Builders, Construction Litigation, Contract Disputes, Misrepresentation, Negligence, Real Estate | Developers, Real Estate Litigation0 Comments

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