Last July, in Deguise v. Montminy, 2014 QCCS 2672 the Québec Superior Court had occasion to revisit these issues from in Alie v. Bertrand & Frere Construction Co. Ltd., 2002 CanLII 31835, applying the Ontario Court of Appeal decision in that 2002 case to civil law concepts relating to allocation of responsibility among insurers. Many of the rulings in the decision were specific to Québec civil law. In one aspect, however, the case provided an opportunity to test the writer’s hypothesis that the Alie court called on parties and counsel to present expert evidence to show when damage actually started to occur, for the purpose of allocating insurer responsibility.* In other words, Deguise offered an opportunity to apply the ‘injury in fact theory’ of liability insurance coverage to facts proven by evidence, instead of legal conjecture. The decision, penned in French and applying civil law, has so far escaped the notice of the Bar in the rest of Canada. The Deguise court … Read More
Court of Appeal Overturns Motion Decision on Forum Non Conveniens
In Bouzari v. Bahremani the Defendant Bahremani (the “Defendant”) had brought a motion to stay the Ontario action on the basis that Ontario was forum non conveniens. The motion judge dismissed the motion, and the Defendant appealed to the Ontario Court of Appeal. The Plaintiff had sued the Defendant for alleged events claimed were alleged to have taken place in Rome, Italy and Tehran, Iran. The Plaintiff lived in Vienna, Italy and England, before moving to Canada. The Defendant was a citizen of Iran, with no connection to Canada. When the action was commenced, the Defendant was living in England. By the time the Defendant commenced the forum non conveniens motion, the Defendant had returned to Iran and could not travel to Canada. Also, the Defendant had previously attempted to obtain a visa to enter Canada unsuccessfully on two occasions. The parties agreed that the action could not proceed in Iran. The Defendant argued that England was … Read More
Ontario Court Given Jurisdiction over Internet Defamation Claim
A recurring issue in online defamation cases is the proper jurisdiction where a claim should be commenced. In many cases, the people who read the allegedly defamatory statements will be located across the planet, meaning that a publisher of such materials may find themselves having to defend claims brought far away from their actual home jurisdiction. In Goldhar v. Haaretz.com et al., Justice Faieta allowed an Ontario claim to continue for allegedly defamatory statements posted online by an Israeli-based newspaper organization. The defendants brought a motion to have the plaintiff’s claim stayed, arguing that the action should be heard in Israel, as the majority of the publication of the article was in Israel, and only 200-300 persons in Canada read the English online article. The court ultimately concluded that it did have jurisdiction over the defendants, and the plaintiff’s claim could continue in Ontario. By finding that at least some … Read More
Vicarious Liability for Vehicle Owners under HTA Based on Possession, not Operation
The Superior Court has confirmed that a vehicle owner is vicariously liable for the negligence of another driver under the Highway Traffic Act, even if the owner consents only to the possession of the vehicle, and not its operation on the highway. In Fernandes v. Araujo et al., the owner’s insurer brought a motion for summary judgment stating that the owner was not vicariously liable for the driver’s negligence as the owner had not given permission to the driver to operate the vehicle, an ATV located on the owner’s farm, on the highway, as the driver only had a G1 license and was not licensed to use the ATV on a highway. The insurer attempted to rely on the similar decision of Newman v. Terdik, where the owner was not found to have given consent as he had expressly forbidden the driver from taking the vehicle off his farm and … Read More
Divisional Court Addresses “Best Foot Forward” Requirement on Summary Judgment
The recent decision of the Ontario Divisional Court of Pereira et al. v. Contardo found in favour of the plaintiff on a summary judgment motion to dismiss the plaintiff’s personal injury claim as statute-barred. At issue was whether the plaintiff complied with his obligation to put his best foot forward in opposing the motion, as the plaintiff did not file any responding material, and simply relied on the evidence put forward by the defendant to defend the motion. The Rules of Civil Procedure require that a responding party on a motion for summary judgment “must set out, in affidavit material or other evidence, specific facts showing that there is a genuine issue requiring a trial”. Rather than file responding material, the plaintiff simply relied on the affidavit evidence put forward by the defendant and argued that the limitation period for his claim started when he received an expert medical report, … Read More
Court of Appeal Dismisses Appeal Pursuant to “Competence-Competence” Principle
In Ciano Trading & Services C.T. v. Skylink Aviation Inc. the Ontario Court of Appeal considered the appeal of an order staying court proceedings pending the arbitration of the dispute. The arbitration clause at issue was part of a Services Agreement that was terminated prior to commencement of the court proceedings. The Services Agreement listed the provisions that would survive termination, but did not specifically address whether the arbitration clause survived termination. The appellant argued that the motion judge should have found that the arbitration clause did not survive termination of the Services Agreement, and therefore should not have stayed the court proceedings. The Court of Appeal disagreed stating that, because it was arguable whether the arbitration clause survived termination of the Services Agreement, it was preferable to leave the issue of jurisdiction to the arbitrator pursuant to the “competence-competence” principle. The Court of Appeal dismissed the appeal. If you require advice … Read More
Divisional Court dismisses Groia v. LSUC appeal, reveals flawed strategy
Today, the Divisional Court of the Ontario Superior Court of Justice dismissed Joseph Groia’s appeal from the Law Society of Upper Canada’s discipline conviction for uncivil conduct during a criminal trial (Groia v. LSUC). One of the recurrent aspects of Groia’s position, both during tribunal and judicial proceedings, was that the Law Society ought not to have prosecuted the lawyer when the trial judge from the criminal trial against Groia’s client, John Felderhof, meted out no disciplinary measure against Groia. Belief in this theory of defence appears to have guided the much of the strategy of the defence. At paragraphs 26-45 of the Divisional Court’s decision, Justice Nordheimer explained that the Law Society, as the statutory regulator of all lawyer conduct, has both the authority and expertise to consider allegations of lawyer misconduct. In contrast, the supervisory role exercised by judges and courts can be tempered by exigencies of the … Read More
Court Considers Effect of Non-Exclusive Jurisdiction Clause
In Silveira v. FY International Auditing & Consulting Corp., the Plaintiff commenced an action in Ontario alleging breach of an agreement and misrepresentation. Less than a month later, one of the Defendants commenced an action in British Columbia against the Plaintiff based on the same agreement. The Defendants acknowledged that the Ontario had jurisdiction simpliciter, but brought a motion to stay the Plaintiff’s action on the grounds that Ontario was forum non conveniens and that the action should proceed in British Columbia. The Court found that there were not sufficient evidence to conclude, as the Plaintiff argued, that B.C. action was “tactical”. Further, the Court stated that the fact that the Plaintiff started her action in Ontario first was not a basis to determine which forum was more appropriate for litigation of the dispute. The Court found that both the Plaintiff and the Defendants, and their evidence, had equally strong connections to Ontario and … Read More
Court Finds No Real And Substantial Connection Despite Ontario Contract
CIBC FirstCaribbean v. Glasford involved an equitable mortgage held by a Barbados bank, FirstCaribbean, over a St. Kitts property owned by one of the Plaintiffs, Glasford, a Barbados resident. The second Plaintiff, Vinton, was Glasford’s son, who lived in Toronto. Vinton was the second mortgagor on the property. The Plaintiffs claimed that they were induced into the mortgage by the Defendant’s alleged misrepresentations. The Plaintiffs had already commenced an action in St. Kitts regarding the mortgage, as had FirstCaribbean in St. Kitts to enforce the mortgage. FirstCaribbean brought a motion to dismiss or permanently stay the Ontario action. The Judge considered whether Ontario had jurisdiction by “a real and substantial connection between Ontario, the subject matter of the litigation and the defendant”. The Judge found that the mortgage was presumptively connected to Ontario because the mortgage agreement was made in Ontario. Specifically, Vinton signed and returned the mortgage agreement by mail … Read More
Court Allows Equitable Rectification to Undo Transaction Which Had Caused Adverse Tax Consequences
In Fairmont Hotels Inc. et al v. A.G. Canada, the Applicants, Fairmont and affiliated companies (“Fairmont”), redeemed shares which Fairmont said mistakenly triggered a foreign exchange gain and tax assessment. Fairmont applied for rectification of the share redemption. The respondent, the Attorney General of Canada, opposed Fairmont’s application, which it characterized as retroactive tax planning. In brief, Fairmont had financed the purchase of two US hotels by Legacy, an investment trust, through reciprocal loans. Legacy routed the financing through Fairmont and a US Fairmont affiliate, which received preferred shares in a US affiliate. The financing was in US dollars, representing a potential foreign exchange tax exposure. Fairmont stated that it had structured the loan transaction to be accounting neutral to fully hedge its foreign exchange exposure. However, that intention was frustrated a some years later when another company purchased Fairmont, triggering deemed foreign exchange losses which could not be carried forward … Read More
Court Declines Plaintiff’s Request to Stay Its Own Action in Favour of Arbitration
In Paul Wurth Inc. v. Anmar Mechanical and MAG Engineering, the Plaintiff entered into a contract with MAG Engineering. The contract contained an arbitration clause. Nevertheless, the Plaintiff brought a court action against MAG Engineering for breach of contract. The Plaintiff also claimed against Anmar Mechanical. Anmar Mechanical was not a party to the contract. But the Plaintiff alleged that the services under the contract were to be provided by both MAG Engineering and Anmar Mechanical, and that MAG Engineering was an agent, partner, or joint venturer of Anmar Mechanical. After starting its court action, the Plaintiff brought a motion to stay its action and to require MAG Engineering and Anmar Mechanical participate in binding arbitration. In the alternative, the Plaintiff sought to force only MAG Engineering to participate in arbitration, and to stay its action against against Anmar Mechical pending the outcome of that arbitration. The Judge dismissed the Plaintiff’s motion … Read More
Court Sets Out Notice Period to Terminate Franchise Agreement
The Ontario Superior Court in France v. Kumon Canada Inc. considered the appropriate notice period required to terminate a franchise agreement, in this case in respect to a Kumon tutoring franchise. Kumon terminated the franchise agreement with 12 months’ notice. The Plaintiff had successfully run the franchise for 20 years. There was no franchise agreement in place (as the franchise was entered into by oral agreement 20 years earlier when their franchise agreements were not in writing). The Plaintiff sued Kumon for damages, arguing that her franchise was perpetual and could not be terminated. Kumon argued that the franchise agreement could be terminated on reasonable notice, and brought a motion for summary judgment. The Court granted Kumon summary judgment, but asked for further submissions regarding the proper notice period. The Court noted that there were no cases directly on point. The Court accepted that a franchise relationship is close to an employer/employee relationship. However, … Read More
Why the new s. 258.3(8.1) of the Insurance Act will retroactively scale back prejudgment interest rates in MVA actions
This week, the new provision in the Ontario Insurance Act, s. 258.3(8.1) received Royal Assent. When the provision is proclaimed by Order-in-Council,* it will abolish the 5% rate of prejudgment interest (PJI) on non-pecuniary damages for automobile claims. The new subsection says: “Subsection 128 (2) of the Courts of Justice Act does not apply in respect of the calculation of prejudgment interest for damages for non-pecuniary loss in an action referred to in subsection (8) [actions in tort arising from motor vehicle accidents].” Given the eagerness of the Ontario government to send a signal to the insurance industry, we should expect this provision to be proclaimed before long, perhaps as early as the beginning of 2015. In my view, the transfer of non-pecuniary damages, the label for general damages for pain and suffering, and related loss of amenities, to the general calculation formula for PJI, will have a significant effect on damage awards, … Read More
Bhasin v. Hrynew: A New ‘Fair Opportunity’ Doctrine in Canadian Contract Law?
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
Federal Court of Appeal Decision on Arrest of Sister Ships
In Westshore Terminals Limited Partnership v. Leo Ocean, S.A, the Federal Court of Appeal considered among other things whether the appellants could arrest the respondents’ ship and its sister ship as well. The offending ship had damaged the appellants’ port facilities while in port, causing an estimated $60 million in damages. The appellants commenced an action and arrested the ship. The appellants also insisted that they could arrest a sister ship of the offending ship to satisfy a judgment. Justice Nadon considered the Federal Courts Act, which gives the Federal Court jurisdiction to seize and sell offending ships (s. 43(2)) and ships which are “owned by the beneficial owner” of the offending ship – i.e. sister ships (s. 43(8)). Justice Nadon stated that the appellants, having arrested the offending ship (under s. 43(2)), were barred from seeking to arrest a sister ship (under s. 43(8)). If you require advice on transportation and marine claims, please contact us for an initial consultation.
MtGox Bitcoin Bankruptcy Comes to Ontario
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
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