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
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 of Appeal Considers Effect of Nude Photos on Contractual “Morals Clause”
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
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 Confirms Importance of Requisitions in Real Estate Transactions
The Court of Appeal of Ontario decision in 1418885 Ontario Ltd. v. 2193139 Ontario Limited, 2018 ONCA 54, recently overturned a summary judgment motion decision which confirmed the importance of requisition letters in real estate transactions. In this case, the parties had entered into an Agreement of Purchase and Sale for a property with a restaurant, golf course, 12 residential apartments, a two-storey home and a banquet hall. The Agreement of Purchase and Sale included the following requisition clause: 8. TITLE SEARCH: Buyer shall be allowed until 6:00 p.m. on the 30th day of May, 2016 (Requisition Date) to examine the title to the property at his own expense and until the earlier of: (i) thirty days from the later of the Requisition Date or the date on which the conditions in this Agreement are fulfilled or otherwise waived or, (ii) five days prior to completion, to satisfy himself that there are … Read More
Court of Appeal Allows Negligence Claim Against Individual Starbucks Employees to Proceed
In Sataur v. Starbucks Coffee Canada Inc., 2017 ONCA 1017, the plaintiff alleged that a Starbucks barista poured scalding water on the plaintiff’s hands. The plaintiff sued Starbucks, and also brought claims against the barista and the Starbucks store manager personally. The plaintiff alleged that the barista and the store manager owed the plaintiff a duty of care and that each was personally liable to the plaintiff for breaching those duties. Starbucks brought a motion to strike the plaintiff’s claims against the barista and store manager on the basis that, among others, the plaintiff could not claim against them personally. The motion judge agreed, stating that employees are not liable for acts within the scope of their authority and done on behalf of their corporation. The motion judge struck the plaintiff’s claims against the barista and store manager. The plaintiff appealed. The Court of Appeal, citing the Supreme Court of Canada’s … Read More
Court of Appeal Considers Scope of Errors of Jurisdiction under Model Law on International Commercial Arbitration
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
Court of Appeal Confirms Strict Notice Requirements in the Termination of Commercial Leases
The Ontario Court of Appeal in Jay-Pee Drycleaners Inc. v. 2321324 Ontario Inc., 2017 ONCA 798, recently overturned a summary judgment motion decision involving the termination of a commercial lease agreement. In this case, the tenant had operated a dry cleaning business for 12 years before the lease was converted into a month-to-month tenancy. After the new landlord purchased the property and was assigned the lease, it demanded the tenant provide evidence that it had successfully completed a course related to the management of dry cleaning contaminants and waste. Even though the tenant advised that the Ministry of Environment had deemed the course to be unnecessary and the course was not available until the following year, the new landlord terminated the lease and retained a bailiff to re-enter and re-possess the premises. The tenant brought an action for damages arising from the unlawful termination of the lease. The new landlord responded with a counterclaim and brought a summary judgment motion. The … Read More
Use At Your Own Risk: Partial Summary Judgment Motions
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
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 Confirms Retrospective Application of Amendments to Prejudgment Interest, Statutory Deductible and Costs Considerations
The Ontario Court of Appeal recently released the much anticipated decision in Cobb v. Long Estate, 2017 ONCA 717, which addressed the issue of whether legislative amendments in 2015 to prejudgment interest on non-pecuniary damages, statutory deductible and costs considerations apply retrospectively in motor vehicle accident litigation. Ever since Gilbertson Davis LLP’s blog post in November 2014, judges in the Superior Court of Justice and Divisional Court have made divergent rulings on this issue including retrospective application, prospective application and relying on their discretion for something in between. This appellate decision provides much needed guidance and clarity to the claimants, counsel and insurance companies in tort actions involving motor vehicle accidents. Although it is unknown at this time whether the Plaintiff intends to apply for leave to appeal to the Supreme Court of Canada, it is safe to assume that will be the case given the significance of this decision. Prejudgment Interest for Non-Pecuniary Damages On January 1, 2015, the Insurance Act was amended to change the prejudgment interest for non-pecuniary damages from 5% … Read More
Timing is Everything in Real Estate Agreements of Purchase and Sale
The recent Court of Appeal decision in Preiano v. Cirillo, 2017 ONCA 615, involved a residential real estate Agreement of Purchase and Sale which required the purchasers to deliver a deposit of $25,000 in the form of a negotiable cheque to the vendors’ brokerage within 24 hours of acceptance of the agreement. The closing date was scheduled to take place about three months later. The agreement included a “time shall be of the essence” clause. The purchasers had initially submitted a personal cheque in the amount of $25,000 with the offer but the vendors’ brokerage requested the deposit be paid in certified funds. The purchasers subsequently delivered the deposit in the form of a bank draft to the vendors’ brokerage but it was about one day late. The vendors’ brokerage did not take issue with the late delivery and provided a receipt for the deposit. Six days before the scheduled closing date, the vendors took the position that they would not be closing … Read More
Court of Appeal Provides Guidance on Interpretation of Success Fee Contract
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
Court of Appeal Confirms Defamation Notice Periods Apply to Online Newspapers
The Ontario Court of Appeal recently released its decision in John v. Ballingall, et al, 2017 ONCA 579, which confirmed that online versions of newspapers are subject to the protections found in Ontario’s Libel and Slander Act, R.S.O. 1990, c. L.12 (the “Act”). The Act provides for certain notice and limitation periods, which if not met, may act as a bar for any future defamation actions. Specifically, Section 5(1) of the Act provides that no action for libel in a “newspaper” or “broadcast” lies unless the plaintiff has, within six weeks after the alleged libel has come to the plaintiff’s knowledge, given the defendant notice in writing of the specific matter complained of. Section 6 of the Act provides that an action for libel in a “newspaper” or “broadcast” shall be commenced within three months after the libel has come to the knowledge of the plaintiff. In this decision, the plaintiff (a rapper known as Avalanche the Architect) commenced an action for libel against the Toronto Star because … Read More
Supreme Court Provides Guidance on Oppression Remedy
In Wilson v. Alharayeri, 2017 SCC 39, The Plaintiff, Alharayeri, was the president, CEO and a shareholder and a director of the subject Corporation. The subject corporation was incorporated under the Canada Business Corporations Act (“CBCA”). In addition to common shares, the Defendant held convertible A and B preferred shares issued only to him as performance-based incentives. The A and B shares were convertible upon the corporation meeting certain performance targets in 2007. The Plaintiff held convertible C preferred shares, issued to him as an incentive for finding financing. The C shares were convertible into common shares upon the Corporation meeting a specific financial target. In early 2007, the Defendant, Wilson, began negotiating a merger with Company M to address the Corporation’s cash flow issues. At the same time, the Defendant arranged to sell some of his common shares to Company M as a result of personal financial difficulties. The Corporation’s Board … Read More
Supreme Court of Canada Upholds Worldwide De-Indexing Order Against Google
The Supreme Court’s recent decision in Google Inc. v. Equustek Solutions Inc. has approved the use of a worldwide injunction directing Google to de-index the defendant’s website used to facilitate the sale of goods in violation of the Equustek’s intellectual property rights. Equustek obtained an interlocutory injunction against the website owner directly, however the defendant left Canada, refused to comply with the order, and continued to sell products on their website from an unknown location. To help prevent or reduce further ongoing harm, Equustek sought for Google to de-index the site, making it less likely that a potential purchaser will discover the infringing website. Google initially agreed to de-index the result from Canadian search results on google.ca, but refused to enforce this order worldwide. It was concerned that the Canadian courts were using Google to usurp the laws of other nations, particularly on free speech issues, and potentially would force Google … Read More
Restriction on Use of Summary Judgment Where Key Issues Turn on Credibility
Since the Supreme Court of Canada’s landmark decision in Hryniak v Mauldin, 2014 SCC 7, summary judgment has been lauded as an effective tool to enhance access to justice and achieve cost-effective results for litigants. Indeed, in recent years, summary judgment motions have become more common, making trials in civil litigation a rare occurrence. But has the pendulum begun to swing now in the opposite direction? The Court of Appeal’s recent decision in Lesenko v Guerette, 2017 ONCA 522, challenges the limits of summary judgment, and outlines that it may not be appropriate in cases where key issues turn on the credibility of the parties. In Lesenko, a husband, his wife, and his sister decided to sell their respective homes and buy a house together. The sister sold her home, and some of those sale proceeds went to pay for the entire purchase price of the subject property. The sister … Read More