Contractual relationships often lead to lawsuits when parties to the contract disagree over their contractual obligations and rights. Traditionally, courts have held parties to the strict written terms of their contract, even in cases where the terms seemed unfair. In 2014, the Supreme Court of Canada released a ground-breaking decision that imposed a mutual obligation of good faith and honest performance on the parties to a contract. This case has broad implications for businesses as they negotiate contracts with consumers, suppliers, and vendors, as lawsuits involving contract disputes will now be viewed by the courts in this context. Here’s what you need to know. 1) Courts Recognize That Parties To A Contract Will Be Self-Interested Commercial certainty has always been a fundamental tenet of the law of contracts. Traditionally the common law has recognized that contracts usually involve a commercial transaction between two entities that are fundamentally self-interested. With this … Read More
Supreme Court Considers Oppression Remedy
In Mennillo v. Intramodal inc., 2016 SCC 51, the Supreme Court of Canada addressed the application of the oppression remedy under the Canada Business Corporations Act (“CBCA”), which applies to federally incorporated companies. (The Ontario Business Corporations Act, which applies to Ontario incorporated companies, also contains an oppression remedy). The case involved a private corporation with originally two shareholders. There was no shareholders’ agreement. The Court described the parties’ dealings as being “marked by extreme informality”. One of the two shareholders, Mennillo, eventually resigned as officer and director of the company by providing a notice of resignation. The notice did not address his status as a shareholder. There was conflicting evidence from the parties about whether Mennillo intended to cease being a shareholder. Ultimately, the trial judge accepted that Mennillo’s withdrawal from the company included his intention to no longer guarantee the company’s debts. The trial judge found that Mennillo agreed … Read More
Blockchain Technologies Create Novel Legal Issues
Blockchain technology is increasingly gaining traction in a variety of different markets and industries, including insurance, securities, and enforcing contracts, and with these new uses come new legal considerations. Blockchain is essentially a ledger, decentralized with copies maintained across numerous computers, which maintains records of transactions which can be added to in an automated and secure manner. Because the entire history of the validated blockchain ledger is incorporated into all subsequent versions of the ledger, it allows for easy verification of the completion and authenticity of a transaction, since the history of the fund or asset can be traced back to the beginning of the entire blockchain. It is also very resistant to fraud and hacking, since any attempt to create a fraudulent transaction the blockchain must simultaneously modify all previous versions of the blockchain on the majority of the computers running the ledger in order for the transaction to be validated. One of the … Read More
Family Business Dispute, Start Up Company Dispute, and Closely-Held Company Litigation
We have experience acting for, advising and representing those in closely-held company litigation, both arising from family business disputes and from start-up company disputes. Family Business Disputes Many businesses in Canada are family businesses or have evolved from family businesses. Family businesses present many unique challenges as they grow, as key members of the company or partnership leave the family business, or when personal relationships of the key members of the family business change or deteriorate. One of the most common differences between a family business and other established businesses, whether or not a shareholders’ agreement, partnership agreement and other legal documentation was used in the formation of the family business, is the informality in operation of the family business, including the often ignored distinction in fact between employees, shareholders, or partners – since family members take on multiple roles. Please see our webpage on Family and Closely Held Business Disputes. Start Up Company … Read More
Shareholder Disputes, Oppression Remedy, and Directors and Officers Liability
Our lawyers have acted in Ontario and other jurisdictions for small and mid-sized Ontario corporations, shareholders, directors, officers, executives and creditors in corporate disputes and shareholder disputes. We have acted in both oppression remedy action and derivative actions. Oppression Remedy The oppression remedy is a mechanism in the Ontario Business Corporations Act and the Canada Business Corporations Act to protect the interests of shareholders and stakeholders in a corporation against wrongful conduct. Whether the Ontario or Canada Act will apply depends on the jurisdiction in which the corporation was incorporated. The oppression remedy can be used to protect the interests of shareholders, directors, officers or creditors against the acts of other shareholders, the board of directors or other affiliates of the corporation. When any act or omission of the corporation or any of its affiliates effects or threatens to effect a result; the business or affairs of the corporation or any of its affiliates are, … Read More
Partnership Disputes & Joint Venture Litigation
Our lawyers have acted in Ontario and other jurisdictions for partners in small and mid-sized partnerships, and limited liability partnerships (LLPs) and contractual parties and partners in joint ventures. Partnership Disputes Partnership is a relationship between persons carrying on a business in common with a view to profit, which is not a corporation. It is one of the most commonly used business associations for small and medium-sized business. A partnership can be created at law and the Partnerships Act, R.S.O. 1990, c. P.5 sets out rules for determining existence of partnership, though commonly the parties enter into a partnership agreement. Joint Venture – Is it a Partnership? Joint ventures are often established to synergize what each member of the joint venture can add to the consortium. Sometimes a joint venture is the structure chosen because those members engaged in the joint venture are located in different jurisdictions. While invariably created by contractual agreement, some … Read More
Former Employee Ordered to Transfer Social Media Accounts in Trade-Mark and Copyright Infringement Case
The Federal Court decision in Thoi Bao Inc. v. 1913075 Ontario Limited involved a former employee of the plaintiff developing and operating a competing online news website that infringed on the plaintiff’s trade-marks and copyrighted content. The plaintiff, Thoi Bao, is a well-known Vietnamese language news company that provides news services throughout Canada in a variety of formats including newspapers, radio, television and online. The company’s website, www.thoibao.com, provides online content such as news, editorials, opinions, links to other news agency services, self-produced television shows and newscasts. The former employee registered the domain name, www. thoibaotv.com, without the knowledge or consent of the plaintiff and began offering online news services in Canada in the Vietnamese language. The former employee did not appear to make any effort to conceal his activities because the infringing website prominently used TBTV Online as the website title, streamed webcasts that were produced by the plaintiff, and incorporated … Read More
Court of Appeal Emphasizes Confidence in Fact Finding on the Record for Summary Judgment
In Meehan v Good, 2017 ONCA 103, the Court of Appeal allowed the appeal of the plaintiffs of the dismissal of their claims by summary judgment against their former lawyer, Mr. Cardill. The motion judge had determined that the subject retainer was only with respect to assessment of the accounts of their earlier former lawyer, Mr. Good, and not any possible negligence action against Mr. Good, and thus there was no genuine issue whether Mr. Cardill owed the plaintiffs a duty of care to advise them about the limitation period in relation to a possible negligence action against Mr. Good. The Court of Appeal held that the motion judge’s analysis focused narrowly on the written retainer agreement, and not, as is required when determining if a lawyer owes a duty of care to a client, examining all the surrounding circumstances that define the lawyer and client relationship, when, as was pleaded here that … Read More
Superior Court Refuses to Strike Adware Breach of Privacy Claims
In Bennett v Lenovo, the plaintiff alleged breach of contract, breach of the implied condition of merchantability, the tort of intrusion upon seclusion, and breach of provincial privacy laws as a result of the factory installation of an alleged adware program “Virtual Discovery” on certain Lenovo laptops. The Court allowed the claim to proceed on three of the causes of action, dismissing only the breach of contract claim. The plaintiff asserted that the Virtual Discovery program intercepted a user’s internet traffic to analyze it and display targeted advertising to the user based on that analysis. The plaintiff claimed that these actions were a breach of his privacy, was a vulnerability that exposed his information to third party hackers, and caused the laptop to be unfit for any online use, as well as negatively impacting performance and battery life. The defendant asserted that the claims had no chance of success and should be … Read More
Court of Appeal Provides Guidance On Pleading Defamation
In The Catalyst Capital Group Inc. v. Veritas Investment Research Corporation, the parties were involved in the venture capital industry. The plaintiff company alleged that the defendants had attempted to damage the plaintiff with a “short selling” strategy. The plaintiff claimed damages for conspiracy to injure, intentional interference with economic relations, and defamation. As part of the defamation claim, the plaintiff alleged that defamatory material was published by one of the defendants to known individuals on known dates as well as to to unknown people on unknown dates. The defendants brought a motion to strike the allegations of unknown publication, arguing that it was impermissible in a defamation claim to plead publication to unknown people on unknown dates. The motion judge agreed, and ordered that specific allegation be struck out. On appeal, the Court of Appeal disagreed. The Court of Appeal acknowledged that defamation claims are typically held to … Read More
Court of Appeal Holds that Two Year Limitation Period Applies To Foreign Judgments
There was conflicting case law in Ontario regarding whether a two-year limitation period applied to an action to enforce a foreign judgment in Ontario (from a jurisdiction to without a reciprocal enforcement agreement). The Court of Appeal addressed that conflicting case law in Independence Plaza 1 Associates, L.L.C. v. Figliolini, 2017 ONCA 44. The debate turned on whether an action to enforce a foreign judgment was a claim within section 16(1) of the Limitations Act, 2002, which creates a class of claims to which no limitation period applies. Specifically, the question was whether a claim to enforce a foreign judgment is a claim to “enforce an order of a court or any other order that may be enforced in the same way as an order of a court” (under section 16(1)(b)). The Court stated that a foreign judgment cannot be directly enforced in Ontario in the absence of reciprocal enforcement legislation. A … Read More
Federal Court Restricts Republication of Canadian Legal Decisions Under PIPEDA
In the recent decision of A.T. v. Globe24h.com, the Federal Court held that the respondent’s re-hosting of publically available Canadian legal decisions ran afoul of the Personal Information Protection and Electronic Documents Act‘s (PIPEDA’s) restriction on the collection, use, and disclosure of personal information without consent, prioritizing the personal information of individuals against the broad open court principle that would otherwise warrant the unrestricted publication of judicial decisions. The respondent operated a website out of Romania which focused on re-publishing judicial decisions which are already publically available through online services such as CanLII. The primary difference between the respondent and services like CanLII was that the respondent’s website was indexed such that its content would appear in search results on Google or other search engines, whereas decisions on CanLII are not indexed and would not appear on any search engine. Any person who collects, uses, or discloses personal information in respect of a … Read More
Sabrina Singh Wins Precedent Court of Appeal Ruling Affirming Parties Obligations in Summary Judgment Proceedings
Many people believe that if they have a legal case, they are entitled to their “day in court” with a full trial and a chance to tell their story in front of a judge and/or a jury. They may find out however that their case will be decided based on documents, and lawyers making arguments on a “summary judgment motion”. The Supreme Court of Canada recently decided that to save time and expense, this process should be used more, and as lawyers we’re seeing more and more cases being dealt with in this way. If a case or issue really requires a trial (e.g., where credibility of witnesses is critical), the court will permit the matter to go to a full trial. Because these types of motions determine substantive issues in a case, the law requires all parties to “put their best foot forward” and “lead trump or risk losing”. … Read More
How to Protect Yourself From a Home Renovation Disaster
With a heated real estate market in Toronto and surrounding regions like Hamilton and Burlington, a lot of homeowners decide it’s a wise investment to undertake renovations to their property for the promise of a higher selling price. Unfortunately a lot of things can go wrong when hiring a contractor, and contractors can have special rights and interests in your property if they are not paid, depending on the scope of the project. Here are a few tips on how to take the appropriate precautions when hiring someone to renovate your property and avoiding contractor disputes. 1) Determine what exactly it is that you want done to the property It’s always a good idea to think about your project in as much detail as possible so that you can ensure that every aspect of the project is discussed and expectations are made clear when you are talking to potential contractors. … Read More
Court of Appeal Upholds Finding Of Jurisdiction Based on Business Activities in Ontario
In Stuart Budd & Sons Limited v. IFS Vehicle Distributors ULC, 2016 ONCA 977, the plaintiff/respondents were eight car dealerships. Four of the eight were located outside of Ontario. The defendant/appellants were: IFS Vehicle Distributors ULC (“IFS”), a British Columbia corporation; International Fleet Sales Inc. (“International”), a California corporation, an affiliate of IFS which supplied parts and accessories to IFS; and two individuals who were officers of both IFS and International, and who resided outside of Ontario. The defendants brought a motion to stay the action, arguing that the out-of-province plaintiffs could not be part of the action, and could not sue the defendants in Ontario. However, the motion judge found that the claim was presumptively connected to Ontario based on one of the factors set out by the Supreme Court in Club Resorts Ltd. v. Van Breda: that the defendant carried on business within the jurisdiction. The motion judge found that … Read More
Supreme Court of Canada To Rule on Scope of Injunction Against Innocent Search Engine
On December 6, 2016, the Supreme Court of Canada heard arguments on the appeal of an order of the British Columbia Court of Appeal which ordered Google to de-list certain websites from being accessible from any of its country-specific search engine domains. The defendants were alleged to have engaged in selling online counterfeit products of the plaintiff, contrary to the plaintiff’s intellectual property rights. The British Columbia Supreme Court originally ordered the defendants to cease all sales of counterfeit product on the internet. The defendants did not comply, and have hidden themselves somewhere unknown, such that the plaintiff could not practically use the courts to compel the individuals responsible from ceasing this activity. As an alternative, the plaintiff looked to Google to make the defendant’s websites not appear in search result listings, which would largely effect the same result in that customers searching for the plaintiff’s products will not discover … Read More
Court Refuses to Enforce Forum Selection Clause
In McMillan McGee Corp. v Northrop Grumman Canada, 2016 ONSC 6334, the Plaintiff sued the Defendants (“Northrop”) for damages arising from work done by the Plaintiff for the Northrop in Ontario. Northrop’s Request for Proposals included “Purchase Order Terms and Conditions” (the “RFP Terms and Conditions”). The RFP Terms and Conditions contained: a forum selection clause, stating that “either Party may only bring suit in federal or state court in the state from which this Order is issued”; and a choice of law clause, stating that “his Order will be construed and interpreted according to the law of the state from which this Order is issued, as identified in the Order”. “Order” was defined as “The instrument of contracting including this Purchase Order and all referenced documents”. The parties’ relationship involved three Purchase Orders, and many change orders. The lawsuit involved invoices delivered after the Second Purchase Order. The First Purchase Order … Read More