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
Court of Appeal Reiterates Importance of Pleading Particulars of Fraud
In Midland Resources Holding Limited v. Shtaif, 2017 ONCA 320, the trial judge found the appellants liable to a company’s shareholders for fraudulent misrepresentations before and after an initial public offering (IPO). On appeal, the appellants argued that the trial judge erred in finding liability based on the IPO-related statements because the respondents did not plead or argue at trial that such statements amounted to fraudulent misrepresentations. The Court of Appeal stated that a pleading of fraud or misrepresentation must set out with careful particularity the elements of the misrepresentation relied upon, including: the alleged misrepresentation itself; when, where, how, by whom and to whom it was made; its falsity; the inducement; the intention that the plaintiff should rely upon it; the alteration by the plaintiff of his or her position relying on the misrepresentation; the resulting loss or damage to the plaintiff; and if deceit is alleged, an allegation … 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
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
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
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
Court of Appeal Upholds Stay Based on Contractual Choice of Forum/Arbitration Clause Against Non-Contracting Parties
In Novatrax International Inc. v. Hägele Landtechnik GmbH, 2016 ONCA 771, the plaintiff and the defendant Hägele were parties to an Exclusive Sales Agreement (“ESA”). Hägele terminated the ESA. The plaintiff sued Hägele, its individual principals and Cleanfix, a North American company related to Hägele. The defendants collectively moved to stay the Plaintiff’s claim, relying on a forum selection clause in the ESA which stated: “The contractual parties agree that German law is binding and to settle any disputes by a binding arbitration through the “Industrie und Handelskammer” (Chamber of Commerce) in Frankfurt.” The motion judge granted the stay, despite the fact that only Hägele, and not the other defendants, was a party to the ESA. The plaintiff appealed on two grounds: that the motion judge erred in i) interpreting the scope of the forum selection clause and ii) staying the action against the defendants who were not party to the … Read More
Toronto Lawyers for Victims of Investment Fraud: When Investing in a Toronto Business Goes Bad
A bad investment may not be the result of market fluctuations. A false representation inducing and leading to an investment loss may be actionable at law. Often there is a promised high-yield on an investment in a company, project or property. Sometimes a loss occurs from a scheme where there is no intention by those entrusted with an investment to make the promised purchase or transfer. In Ontario, civil lawsuits for the victims of investment fraud have often been framed as claims for deceit, fraudulent misrepresentation, civil conspiracy, breach of contract, unjust enrichment and restitution. Increasingly though, plaintiffs in lawsuits simply claim damages for losses arising directly from the tort of civil fraud. The leading case on civil fraud in Canada is the Supreme Court of Canada decision in 2014 in Hryniak v. Mauldin, 2014 SCC 7, and in that case civil fraud is defined this way “… the tort of … Read More
Court of Appeal Provides Guidance on “Forum of Necessity” Doctrine
In Arsenault v. Nunavut, 2016 ONCA 207, the Plaintiff commenced a lawsuit in Ontario regarding an employment dispute with the defendant, the government of the Canadian territory of Nunavut. The motion judge concluded that Ontario did not have jurisdiction over the dispute because the dispute did not have a “real and substantial connection” with the province of Ontario, and that Nunavut was clearly the more appropriate forum to hear the dispute. The Plaintiff appealed, arguing that the motion judge had not properly considered whether Ontario was the “forum of necessity” – i.e. the doctrine allowing the Court to assume jurisdiction over a dispute, even though there is no “real and substantial connection” with Ontario, because there is no other forum in which the plaintiff can reasonably seek relief (see our previous posts regarding the doctrine of “forum of necessity” here and here). The Court of Appeal dismissed the Appeal. The Court of Appeal noted … Read More
Supreme Court Clarifies Jurisdiction Requirements for Enforcement of Foreign Judgments
In Chevron Corp. v. Yaiguaje, the Supreme Court of Canada clarified the jurisdictional requirements for an Ontario court to consider a proceeding to enforce a foreign judgment. In this case, the plaintiffs obtained judgment against Chevron Corp. in Ecuador for some $9.5 billion USD, and they sought to enforce that judgment in Canada, against both Chevron Corp. and the Canadian subsidiary, Chevron Canada. In a unanimous decision, the Supreme Court confirmed that the plaintiff does not have to show a real and substantial connection between Ontario and the foreign judgment debtor. The court need only be satisfied that there is a real and substantial connection between the foreign court and the defendant when the foreign court issued its judgment. Ontario courts will have jurisdiction over a foreign defendant in an enforcement proceeding as long as the defendant was properly served. It is not even a requirement that the defendant have assets in Ontario prior … Read More
Court of Appeal Rejects Apotex’s Claim for Unjust Enrichment
In the recent decision of Apotex Inc. v. Eli Lily and Company, the Ontario Court of Appeal has dismissed a claim by Apotex, a pharmaceutical company that produces generic pharmaceuticals. In the case, the defendant Eli Lilly relied upon the PM(NOC) patent regulations to restrict Apotex from entering the market and selling a generic version of a pharmaceutical which was subject to a patent. That patent was ultimately invalidated. Apotex claimed that claimed that Eli Lilly had been unjustly enriched by making revenues of some $70 million as it was wrongfully delayed from entering the market and making revenues itself. It argued that allowing Eli Lilly to retain its monopolistic profits and only pay Apotex its lower lost revenues would result in a windfall to Lilly that encourages patent holders to improperly delay others from entering the market. Ultimately, the Court’s objection to Apotex’s position was that Apotex could not … 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