Bhasin v. Hrynew: A New ‘Fair Opportunity’ Doctrine in Canadian Contract Law?

R. Lee Akazaki, C.S., B.A. (Hons.), J.D.Civil Litigation, Commercial Law, Franchise Law0 Comments

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

MtGox Bitcoin Bankruptcy Comes to Ontario

Andrew Ottaway, B.A. (Hons.), LL.B.Civil Litigation, Commercial Law, Commercial Litigation, Enforcement of Foreign Judgments, Information Technology0 Comments

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

Andrew Ottaway, B.A. (Hons.), LL.B.Civil Litigation, Commercial Law, Commercial Litigation, Contract Disputes, Cross-Border Litigation, Employment & Wrongful Dismissal0 Comments

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

Nick P. Poon, B.Sc. (Hons.), B.A., J.D.Civil Litigation, Commercial, Commercial Law, Commercial Litigation, Contract Disputes, Franchise Law0 Comments

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

Court Grants Ex Parte Injunction Against Pipeline Protesters

Andrew Ottaway, B.A. (Hons.), LL.B.Civil Litigation, Commercial Law, Commercial Litigation, Injunction & Specific Performance0 Comments

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

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

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

Court of Appeal Defines Key Terms Relating to Injunctions

Andrew Ottaway, B.A. (Hons.), LL.B.Commercial Law, Injunction & Specific Performance0 Comments

In 1711811 Ontario Ltd. (AdLine) v. Buckley Insurance Brokers Ltd. a dispute arose between the parties regarding access to a laneway, resulting in three Court endorsements referring to “interim”, “interlocutory”, “permanent”, and “mandatory” injunctive relief.  The Court of Appeal took the opportunity to clarify these key terms relating to injunctions: Interim injunction:  Pre-trial relief, which may be sought with or without notice to the other party. Argument in an interim injunction proceeding is usually brief.  The injunction is typically for a short, defined period of time. Interlocutory injunction: Pre-trial relief, again restraining a party for a limited period of time, but often for longer than an interim injunction (such as until trial or other disposition of the action).  Argument in an interlocutory injunction proceeding is typically lengthier than in an interim injunction proceeding, and involves both parties.  The test for an interlocutory injunction is set out in in RJR-MacDonald, and recognizes that the Court does not have the ability … Read More