What happens when statutes collide? In Schnarr v Blue Mountain Resorts Limited, the Ontario Court of Appeal was recently asked to bar a negligence suit by enforcing waivers of liability signed by skiers visiting a ski resort. The issues in the case clustered around the dual application of both the Occupiers’ Liability Act (“OLA“) and the Consumer Protection Act (“CPA“) to agreements between skiers and ski resorts. As an occupier of premises, ski resorts are subject to the OLA. To encourage landowners to make their property available for recreational activities, the OLA allows for landowners to limit their liability through waivers of liability. However, as a consumer agreement, these ski resort contracts are also governed by the CPA. The CPA requires services supplied under a consumer agreement to be of a reasonably acceptable quality and deems waivers purporting to limit resultant liability to be void. The concurrent governance of the OLA and … Read More
Real Estate Litigation: Failure to Give Extension of Closing Date is not Bad Faith
The recent summary judgment motion decision in Time Development Group Inc. v. Bitton, 2018 ONSC 4384, involves a situation that arises quite often in failed closings of real estate transactions. One of the main causes for an aborted real estate transaction is the failure of the purchaser to obtain the required financing to close on the transaction, possibly influenced by the Ontario Fair Housing Plan and the new mortgage lending rules. In this case, the plaintiff entered into an agreement to purchase three adjoining properties for a residential home redevelopment project. There were a series of amendments to the agreement with the terms as follows: (a) purchase price of $10.55 million; (b) deposit of $500,000; (c) two vendor take back mortgages; and (d) closing date of July 31, 2017. The plaintiff had secured a commitment letter to finance the transaction, however, six days before the closing date, the plaintiff was dismayed to find out that their financing had been withdrawn because the market conditions had changed. … Read More
Canadian Court Shuts Down Loan Shark’s Law Suit
In Canada, it is not everyday one witnesses a loan shark resorting to judicial process to collect on outstanding obligations. In fact, outside cases involving payday loans and hidden credit card fees, where legitimate loans might inadvertently cross the 60% interest rate threshold under s. 347 of the Criminal Code, we have to date not seen any cases where the court has considered enforcement of blatantly usurious loans bearing interest of, say, 2,000% APR, as the Superior Court did in Ikpa v. Itamunoala, now available on line. Gilbertson Davis successfully obtained summary judgment rejecting the bid by the plaintiff, a resident of the United Kingdom (where laws banning usury no longer exist), to recover USD$500,000 on a USD$100,000 promissory note that had remained outstanding for four months before the start of litigation. The plaintiff sought to have an equitable mortgage securing the note paid out in priority to the defendants’ registered mortgage. … Read More
Dominican Republic Vacation Claim Examined in Di Gregorio v. Sunwing Vacations Inc.
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
A Successful Constructive Dismissal Claim in Hagholm v. Coerio Inc.
Constructive dismissal occurs when an employee is indirectly and effectively dismissed from the position or terms he/she had previously agreed formed the employment. Without the consent of the employee, a substantial alteration is presented that fundamentally changes the terms of the agreed upon contract. Hagholm v. Coerio Inc. represents a successful claim for constructive dismissal. The respondent had entered into her employment on the understanding that she could work from home three days a week. When this condition was changed, the respondent claimed constructive dismissal and ceased coming to work. The Motion Judge, on a motion for summary judgment, found that there was constructive dismissal because this was an essential term and the appellant arbitrarily withheld a bonus from the respondent. The Court of Appeal also confirmed that the respondent was not required to mitigate her damages for the appellant’s breach of contract in these circumstances. Also in this case, the … Read More
An Illegal By-Law in Perelli v. The Town Corporation of Richmond Hill
Matthew Stroh represented the plaintiff in Perelli v. The Corporation of the Town of Richmond Hill, 2017 ONSC 6062, who was successful on a motion for summary judgment declaring that The Corporation of the Town of Richmond Hill (“the Town”) By-Law 135-14 is illegal. From December 1, 2010 to November 30, 2014, the plaintiff was employed as an elected municipal councillor for Ward 2 of the Town. Upon the completion of his term, the plaintiff was entitled to severance pay, but only received a deducted amount due to the Town By-Law 135-14 (“the By-Law”) that authorized said deduction. The deduction represents the amount charged in postage by the plaintiff to the Town’s corporate account in conducting a survey. Justice Sutherland of the Ontario Superior Court of Justice found the By-Law to be invalid due to lack of statutory authority and void for bad faith. The By-Law was enacted without the plaintiff … Read More
Federal Court of Appeal Considers Reviewing of Evidence in Judicial Review Applications
In judicial review applications, like most legal proceedings, evidence plays an essential role in securing a successful result. This includes not just the quality of the evidence, but the process through which the court considers that evidence. The Federal Court of Appeal’s recent decision in Apotex Inc. v. Canada (Health), 2018 FCA 147 (“Apotex”) affirms the control accorded to judges when reviewing evidence in judicial review applications.
Court of Appeal Considers Ontario Labour Relations Board’s Jurisdiction, Limitation Periods in Class Actions
In United Food and Commercial Workers Canada, Local 175, Region 6 v. Quality Meat Packers Holdings Limited, 2018 ONCA 671 (“Quality Meat Packers”), the Ontario Court of Appeal considered (1) the Ontario Labour Relations Board’s (“OLRB”) jurisdiction to decide claims related to the wrongful dismissal of unionized employees; and (2) whether, in proposed representative proceedings under Rules 12.08 and 10.01, representation orders must be obtained during the limitation periods for the individuals’ claims.
Court Considers Jurisdiction in Context of Online Sales
In Dish v. Shava, 2018 ONSC 2867 (CanLII), plaintiffs obtained judgment in Virginia, including an injunction, against the defendants, who were located in Ontario. The plaintiffs then brought an action in Ontario seeking recognition and enforcement of the Virginia judgment and injunction in Ontario. On the motion for summary judgment, the Ontario Court considered whether the Virginia Court had exercised jurisdiction based on the Ontario test for jurisdiction: i.e. whether the defendants had a real and substantial connection with Virginia. The defendants owned and operated an interactive, commercial website through which users purchased TV set-top boxes. The Ontario Court found that the defendants had a real substantial connection to Virginia based on the nature of the business they were operating, specifically: users in Virginia purchased the TV set-top boxes from the defendants’ website. At least 193 customers with a Virginia shipping address purchased Shava TV product from the Defendants’ distributor … Read More
Ontario Securities Commission Clarifies Test for Severance Motions
In Hutchinson (Re), 2018 ONSEC 40 (“Hutchinson”), the Ontario Securities Commission (“OSC”) considered the proper framework to assess a motion for severance in the context of a regulatory proceeding before the OSC. OSC Staff alleged that the respondent, David Paul George Sidders (“Sidders”), engaged in insider trading with respect to three transactions. The OSC also alleged that three other individual respondents, one of which settled, engaged in insider trading and/or insider tipping. Respondent Sidders moved before an OSC Commissioner (“Commissioner”) to request that it sever his hearing from the hearings of the other remaining respondents. The question before the Commissioner was how to assess, in the context of an OSC proceeding, whether the interests of justice require severance. The Supreme Court of Canada in R v. Last, 2009 SCC 45 (“Last”) listed several factors to consider when balancing the risk of prejudice to the accused with the public interest in … Read More
When is Oral Evidence Required to Resolve Credibility Issues in Summary Judgment Motions?
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
Popack v. Lipszyc: Recognition and Enforcement of Arbitration Awards – Clarifying the term “binding”
Popack v. Lipszyc appears to be the first Ontario Court of Appeal case on the recognition and enforcement of arbitration awards under the 2017 International Commercial Arbitration Act (“ICAA”). The ICCA includes the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“New York Convention”) and the 2006 amended version of UNCITRAL Model Law on International Commercial Arbitration (“Model Law”). The appellants used articles 35 and 36 of Model Law to apply for the recognition and enforcement of the international commercial arbitration award they received in August 2013 against the respondents. While the application judge dismissed the application, the Court of Appeal allowed the appeal. The Court of Appeal stated that “in Ontario, a strong “pro-enforcement” legal regime” exists for the recognition and enforcement of international commercial arbitration awards, as grounds for refusal are “to be construed narrowly”. Importantly, the Court, and not the tribunal, is the proper avenue to … Read More
Court Grants Interim, Interim Injunction Without Specific Evidence of Harm
In Knowmadics v. Cinnamon, 2018 ONSC 4451 (CanLII) the plaintiff company sought an urgent interim, interim injunction regarding an app sold by the defendants pending the hearing of a motion for an interlocutory injunction. The plaintiff sold specialized computer software. The individual defendant was employed by the plaintiff and signed an employment agreement, including a confidentiality and non-competition clause. The defendant also had a business, the corporate co-defendant, which did subcontracting work for the plaintiff after the defendant resigned from employment with the plaintiff. The corporate defendant signed a non-disclosure agreement with the plaintiff. The plaintiff alleged that the defendants were selling certain software that directly competed with the plaintiff’s software and infringed the plaintiff’s copyrights. The plaintiffs commenced an action against the defendants. After commencing the action, the plaintiff alleged that they learned that the defendants were also selling a certain app over which the plaintiffs asserted ownership. The … Read More
Entire Agreement Clause Upheld in Manorgate Estates Inc. v. Kirkor Architects and Planners
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
Court Considers When a Matter is in “Public Interest” in Anti-SLAPP Motion
In Paramount v. Johnston, 2018 ONSC 3711 (CanLII), the Ontario Court considered whether to dismiss a defamation claim based on the anti-SLAPP (Strategic Litigation Against Public Participation) provision of the Court of Justice Act (section 137). We have previously blogged on the new anti-SLAPP provision: see our earlier post “Court Awards Damages to Defendant in Defamation Case”. In Paramount v. Johnston, the plaintiff company operates a number of middle-eastern restaurants. The plaintiff company was owned by the individual plaintiffs. The plaintiff company was hosting a fundraiser organised for Prime Minister Justin Trudeau. A protest had been organised outside the restaurant to coincide with the fundraiser. The defendants alleged that they attended at the restaurant for the protest. The defendants allegedly defamed the plaintiffs in a total of eight videos taken on the day of the protest. One of the defendants brought a motion to dismiss the claim against him based … Read More
Shareholders’ Remedies under the OBCA: An Overview (Part 2/2)
When a shareholder’s rights are breached, there are a variety of legal remedies available under the Ontario Business Corporations Act (“OBCA”). For more information on shareholders’ rights, please click here to see part 1 of this post. Oppression Remedy It is first important to note that as per the Ontario Court of Appeal decision Maurice v. Alles, the standard two-year limitation period set out in the Limitations Act applies to oppression remedy claims. The “clock starts to run” when the oppressive conduct first began, meaning that individuals must not delay if they wish to pursue an oppression remedy. The oppression remedy under s. 248 of the OBCA is broad in nature, and there is a large amount of judicial discretion afforded in its application. The oppression remedy can be an especially strong tool in protecting minority shareholders. When the Court determines that there has been oppressive conduct, unfairly prejudicial conduct, or conduct that disregards the interests of any shareholder it may make an order to resolve the matter in a variety of ways. … Read More
Shareholders’ Rights under the OBCA: An Overview (Part 1/2)
Under the Ontario Business Corporations Act (“OBCA”), shareholders of a corporation have a variety of rights. Outlined below are a few rights that all shareholders should be aware they possess. Please click here to see part 2 of this post on shareholders’ remedies. Voting Rights The board of directors, under s. 115 are ultimately responsible for managing or supervising the management of the business and affairs of a corporation. Major business decisions also involve the participation of the board of directors, though sales, leases, or exchanges of all or substantially all the property of the corporation that is not in the ordinary course of business requires the approval of shareholders (s. 184(3)). Shareholders also have voting rights that allow them to control the makeup of the board of directors (s. 119(4)), and also the ability to remove directors under s. 122(1) (though this is subject to exceptions under s. 120(f)). Shareholders have additional voting rights under … Read More