Corporate Governance Considerations During the Covid-19 Pandemic

Sabrina Saltmarsh, B.A. (Hons), J.D.Business Interruption, Business Law, Business Litigation, Business Torts | Economic Torts, By-laws, Closely-Held Business Disputes, Commercial, Commercial and Contract Litigation, Commercial Contracts, Commercial Law, Commercial Leasing, Commercial List Matters, Commercial Litigation, Contract Disputes, Coronavirus, Corporate Disputes, Corporate Litigation, COVID-19, Derivative Actions, Directors' and Officers' Liability, Family Business Disputes, Oppression Remedies, Partnership Dispute, Partnerships and Shareholder Disputes, Retail Disputes, Retail Litigation, Sale of Business Disputes, Shopping Mall Lease Disputes, Shopping Mall Lease Litigation0 Comments

Corporate governance issues are top of mind for directors and businesses who are attempting to navigate through the Covid-19 Pandemic related closures and emergency measures. Boards of Directors still need to operate and make decisions in the best interests of the corporation, and this can involve tough decisions, particularly where there is little guidance as to how measures to lift Covid-19 related restrictions will play out. By example, while it may be in the best interest of investors and shareholders that the Board act to lay off employees in the short term, the impact of staff shortages when Covid-19 restrictions are lifted may pose it’s own challenges. Many businesses must consider how to hold governance meetings during Covid-19 times. On March 30, 2020, Ontario passed an Order under the Emergency Management and Civil Protection Act (EMCPA), (Ontario Regulation 107/20) entitled “Meetings for Corporations” making temporary changes to the Business Corporations … Read More

COVID-19 / Coronavirus: Rent Relief for Small Businesses Is Coming

Nick P. Poon, B.Sc. (Hons.), B.A., J.D.Business Interruption, Business Litigation, Civil Litigation, Commercial and Contract Litigation, Commercial Arbitrator, Commercial Contracts, Commercial Law, Commercial Lease Arbitrator, Commercial Leasing, Commercial List Matters, Commercial Litigation, Contract Disputes, Contract Termination, Coronavirus, COVID-19, Real Estate Litigation0 Comments

On April 16, 2020, the Federal government announced the Canada Emergency Commercial Rent Assistance (CECRA) program to assist small businesses with their rent payments during the COVID-19 crisis. The CECRA program will provide loans and/or forgiveable loans to commercial property owners who will be expected to pass on the benefit to small businesses by lowering or forgoing rent for April (retroactively), May and June 2020.  Further details of the program are expected to be released soon and the program will be administered by the provincial and territorial governments. Although the Ontario Superior Court of Justice had issued an Order on March 19, 2020 suspending the eviction of residents from their homes (unless ordered otherwise under an urgent motion), there was no similar protection against evictions for commercial tenants which included many small business owners. Commercial rent payments are typically the second largest operating expense for most small businesses after payroll … Read More

The Impact of Covid-19 / Coronavirus On Franchise Disclosure Obligations

Sabrina Saltmarsh, B.A. (Hons), J.D.Business Interruption, Business Litigation, Commercial, Commercial and Contract Litigation, COVID-19, Force Majeure, Franchise | Licensing, Franchise Law, Government Action, Retail Disputes, Retail Litigation, Shopping Mall Lease Disputes, Shopping Mall Lease Litigation0 Comments

The Covid-19 / Coronavirus pandemic has disrupted social and economic life globally and here in Ontario. It is apparent that the Covid-19 pandemic, resulting closures and physical distancing measures implemented by various governments will have a considerable impact on investment decisions in the franchise context. In this blog we consider the impact of the Covid-19 pandemic on current and shortly anticipated franchise disclosure obligations. The Crucial Role Of Franchise Disclosure The franchise disclosure obligations which arise during a franchise purchase or franchise renewal process are critical for both franchisees and franchisors. It provides crucial information to a franchisee so that they can make a fully informed investment decision, and sets the groundwork and expectations on behalf of the franchisor to ensure the relationship is off to a good start and lasts to the mutual benefit of both parties. Updating Franchise Disclosure With Covid-19 / Coronavirus Impact Considerations Franchisors who are … Read More

Measures of Last Resort – The Benefits of Exit Provisions in Shareholder’s Agreements

Sabrina Saltmarsh, B.A. (Hons), J.D.Business Law, Business Litigation, Business Torts | Economic Torts, Civil Litigation, Closely-Held Business Disputes, Commercial, Commercial and Contract Litigation, Commercial Contracts, Corporate Disputes, Family Business Disputes, Non-Compete, Non-Competition Agreement, Non-Solicitation Agreement, Non-Solicitation Clause, Oppression Remedies, Sale of Business Disputes, Shareholder Disputes0 Comments

The benefits of a shareholder’s agreement may not be fully considered when parties are intending to go into business together and become joint shareholders in a corporation. Perhaps the mood is optimistic and none of the participants anticipate that things might sour between them down the road. Sometimes corporations are formed absent such an agreement. However, among other benefits, these agreements become particularly useful in managing risk and guiding shareholders through governance issues and disputes that may arise, efficiently so as to minimize disruption to the corporation’s business. Absent a shareholder’s agreement, shareholders in a closely held corporation that cannot see eye-to-eye regarding the operation and path of the corporation, may become stuck in a deadlock where decision-making is effectively stifled due to a stalemate between them. Shareholder’s agreements can serve to provide mechanisms to address deadlock, protect the voice and rights of minority shareholders, provide a road map for … Read More

Liability of Directors and Officers | Oppression Remedy | Shareholders Claims

David Alderson, LL.B, LL.M (Commercial and Corporate), Lawyer, Qualified Arbitrator and MediatorBusiness Disputes, Business Fraud, Business Litigation, Business Torts | Economic Torts, Closely-Held Business Disputes, Commercial, Commercial Litigation, Directors' and Officers' Liability, Embezzlement, Family Business Disputes, Mareva Injunction, Norwich Order, Oppression Remedies, Partnerships and Shareholder Disputes, Shareholder Disputes, Start-Up Disputes0 Comments

The lawyers in our Business Dispute Practice Group have acted in Ontario and other jurisdictions for small, mid-sized and large corporations (incorporated in Ontario and in Canada), shareholders, directors, officers, and executives in corporate disputes and shareholder disputes. We have acted for clients 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. The oppression remedy can be used to protect the interests of shareholders, directors, officers or creditors against the … Read More

Limitation Period Considerations in Derivative Proceedings

Sabrina Saltmarsh, B.A. (Hons), J.D.Business Fraud, Business Law, Business Litigation, Closely-Held Business Disputes, Corporate Disputes, Corporate Litigation, Directors' and Officers' Liability, Family Business Disputes, Oppression Remedies0 Comments

Under modern business corporation legislation, a claim for wrongdoing against a corporation can only be brought by the corporation itself, or by way of a derivative action for which leave from the court is required. In Ontario, there is a standard two-year limitation period that applies to the commencement of most lawsuits, including derivative claims on behalf of a corporation. When wrongs done to a corporation are alleged to have been done by a director or directors who exercise control and decision-making on behalf of the corporation, it is unlikely that those same directors will agree to commence a claim on behalf of the corporation for those wrongs. It is then up to other interested stakeholders, such as shareholders, to seek leave to commence a derivative claim on behalf of the corporation for the wrongs done to the corporation. Until the release of a 2015 Supreme Court of Canada ruling … Read More

Part Two – Timing is Everything in Real Estate Agreements of Purchase and Sale

Nick P. Poon, B.Sc. (Hons.), B.A., J.D.Appeals, Business Litigation, Civil Litigation, Commercial, Commercial and Contract Litigation, Commercial Contracts, Commercial Litigation, Contract Disputes, Contract Termination, Injunction & Specific Performance, Real Estate | Developers, Real Estate Litigation, Specific Performance, Summary Judgment0 Comments

I had written a previous blog on the “time is of the essence” clause in real estate agreements where it was discussed that the strict adherence to any agreed upon time limits was generally the case. A recent Ontario Court of Appeal case, Fortress Carlyle Peter St. Inc. v. Ricki’s Construction and Painting Inc., serves as a reminder that the “time is of the essence” clause is not absolute and unfettered, and there are preconditions that must be satisfied for a party to rely upon and insist on time being of the essence. The facts are not overly complicated in this case.  The respondent was a condominium developer in the process of acquiring properties for a proposed project in downtown Toronto.  The developer entered into an Agreement of Purchase and Sale (“APS”) with the vendor to acquire the subject property.  Although the APS required the vendor to provide estoppel certificates five days prior … Read More

Partnership Disputes – Dentists, Doctors, Accountants, Lawyers, Architects and Engineers

David Alderson, LL.B, LL.M (Commercial and Corporate), Lawyer, Qualified Arbitrator and MediatorAppeals, Appellate Advocacy, Arbitration, Arbitrators, Breach of Non-Solicitation Agreement, Business Litigation, Closely-Held Business Disputes, Commercial, Commercial and Contract Litigation, Commercial Arbitration, Commercial List Matters, Confidentiality Agreement, Corporate Disputes, Joint Venture Disputes, Non-Compete, Non-Competition Agreement, Non-Competition Clause, Non-Solicitation Agreement, Non-Solicitation Clause, Partnership Dispute, Partnerships and Shareholder Disputes, Professions0 Comments

Partnerships Professionals often carry on their professional practice as partners in a partnership or limited liability partnership. Partnerships can be created simply by conduct and the application of the Partnership Act or by a simple or complex partnership agreement. Joint Venture Contract – Fiduciary Duties? In other cases professionals associate in practice by participation in a contractual joint venture which, depending on the agreement and the circumstances, may or may not at law also be a partnership but, in any event, may attract the duties and obligations of partners, including fiduciary duties. Sharing Space Some professionals may consider that they are only sharing space with other professional and may be very surprised to find that the arrangement gave rise at law to unexpected obligations. Duty of Honest Performance The recent decision of the Supreme Court of Canada in Bhasin v. Hrynew, though not a case about partnerships, nonetheless has a wide-ranging impact on … Read More

Protecting Your Internet Domain Name

Sabrina Saltmarsh, B.A. (Hons), J.D.Business Fraud, Business Litigation, Business Torts | Economic Torts, Copyright Infringement, Cyber Fraud, Cyber Risks, Domain Name Disputes, eCommerce | Online Retail, Identity Fraud, Injunction & Specific Performance, Intellectual Property, Internet | Technology, Internet Fraud, Passing Off, Specific Performance, Start-Up Disputes, Technology and Internet, Trademark Infringement, Website Copying0 Comments

In the age of the internet and e-commerce, the domain name of a business holds tremendous value and is often an integral part of the identity of a business. Since a website can only have one domain name on the internet, there is no shortage of disputes which arise over ownership rights of domain names, particularly those closely affiliated with a registered or unregistered trademark. What is Cyber-Squatting? Cyber-Squatting occurs when someone has registered a domain name in which they have no legitimate business interest, and can sometimes involve setting up a fake website for a business. The reason could be that the registrant will then seek to sell the domain name to the legitimate owner of the business or trademark, or their competitor for a profit. Alternatively, it may be to syphon away business leads online to competitors for a fee, or for advertising revenues. Typo-Squatting is similar to … Read More

Manufacturers and Distributors – Toronto Litigation Lawyers

David Alderson, LL.B, LL.M (Commercial and Corporate), Lawyer, Qualified Arbitrator and MediatorBrand Protection, Business Litigation, Business Torts | Economic Torts, Commercial, Commercial and Contract Litigation, Commercial Arbitration, Commercial Litigation, Contract Disputes, Contract Termination, Counterfeit Goods, Cross-Border Litigation, Dealership Agreements, Distribution Agreements, Distributors | Dealers, Domain Name Disputes, eCommerce | Online Retail, Passing Off, Retail Disputes, Retail Litigation, Technology and Internet, Textiles and Apparel, Trademark Infringement0 Comments

Our lawyers can provide sound advice and effective representation to manufacturers and distributors involved in actual or potential disputes or litigation.  We focus on a wide variety of manufacturing industries in a broad array of legal disputes, including sale of goods, branding and brand protection, transportation and logistics, supply and outsourcing contracts, unpaid accounts, internal business disputes, construction and urgent remedies. The automotive industry, the food and beverage industry and technology industries in the Toronto – Waterloo Innovation Corridor comprise the most substantial sectors of the Ontario manufacturing landscape. We also can provide advice and representation to the many other manufacturing industries in Toronto and elsewhere in Ontario, including these: Automated Machinery and Robotics, Automotive Industry, Auto Parts Manufacturing, Building Materials, Canning and Bottling, Chemical Manufacturing and Supply, Clean Tech, Computer Equipment and Electronic Equipment, Concrete, Brick, Glass, Drywall, Lumber and Stone, Confectionery, Food and Beverage, Financial Technology, Furniture Manufactures and Importers, , Bottling, Packaging and Containers, Heating, Ventilation and Air Conditioning – HVAC, Insulation and Environmental Solutions, … Read More

Shareholder Disputes, Oppression Remedy, and Liability of Directors and Officers

David Alderson, LL.B, LL.M (Commercial and Corporate), Lawyer, Qualified Arbitrator and MediatorArbitration, Business Law, Business Litigation, Commercial, Commercial Arbitration, Commercial List Matters, Commercial Litigation, Corporate Litigation, Directors' and Officers' Liability, Family Business Disputes, Partnership Dispute, Partnerships and Shareholder Disputes, Professions, Shareholder Disputes1 Comment

Our lawyers have acted in Ontario and other jurisdictions for small, mid-sized and large Ontario and Canadian 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. 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 … Read More

Partnership Disputes Between Professionals – Dentists, Doctors, Accountants, Lawyers, Architects and Engineers

David Alderson, LL.B, LL.M (Commercial and Corporate), Lawyer, Qualified Arbitrator and MediatorArbitration, Breach of Non-Competition Clause, Breach of Non-Solicitation Agreement, Business Litigation, Commercial Arbitration, Commercial Contracts, Commercial Litigation, Joint Venture Disputes, Non-Competition Agreement, Non-Competition Clause, Non-Solicitation Agreement, Non-Solicitation Clause, Partnership Dispute, Partnerships and Shareholder Disputes, Professional Services0 Comments

Partnerships Professionals often carry on their professional practice as partners in a partnership or limited liability partnership. Partnerships can be created simply by conduct and the application of the Partnership Act or by a simple or complex partnership agreement. Joint Venture Contract – Fiduciary Duties? In other cases professionals associate in practice by participation in a contractual joint venture which, depending on the agreement and the circumstances, may or may not at law also be a partnership but, in any event, may attract the duties and obligations of partners, including fiduciary duties. Sharing Space Lastly, some professionals may consider that they are only sharing space with other professional and may be very surprised to find that the arrangement gave rise at law to unexpected obligations. Duty of Honest Performance The recent decision of the Supreme Court of Canada in Bhasin v. Hrynew, though not a case about partnerships, nonetheless has a wide-ranging impact … Read More

Gilbertson Davis LLP Successfully Defends Against Appeal of Decision Enforcing Liquidated Damages in Settlement Contract

Andrew Ottaway, B.A. (Hons.), LL.B.Appeals, Appellate Advocacy, Business Litigation, Civil Litigation, Commercial and Contract Litigation, Contract Disputes, Fraud, Fraudulent Schemes, Gilbertson Davis LLP News, Investment Fraud, Summary Judgment0 Comments

In Haas v. Viscardi, 2019 ONCA 133, Andrew Ottaway of Gilbertson Davis LLP assisted the plaintiff in securing his settlement agreement with a defendant (in an earlier investment fraud litigation) with a liquidated damages clause.  Specifically, the defendant was required to pay $60,000 if he failed to make prompt payments under the subject settlement agreement. The defendant, after defaulting, refused to honour the liquidated damages clause.  However, on the plaintiff’s motion for summary judgment, the motion judge upheld the liquidated damages clause and granted judgment.  Our blog post on the motion decision can be found here. On appeal, in Haas v. Viscardi, 2019 ONCA 133, the Court of Appeal rejected the defendant’s argument that the liquidated damages clause was an unenforceable penalty clause, and upheld the motion judge’s decision granting summary judgment.  The Court of Appeal also enforced the provision in the settlement agreement requiring that the defendant pay the plaintiff’s … Read More

Court of Appeal Upholds Dismissal of Recognition Action Based on Limitation Period

Andrew Ottaway, B.A. (Hons.), LL.B.Appeals, Appellate Advocacy, Business Litigation, Civil Litigation, Commercial and Contract Litigation, Cross-Border Litigation, Enforcement of Foreign Judgments, Injunction & Specific Performance, Mareva Injunction, Of Interest to US Counsel0 Comments

In Grayson Consulting Inc. v. Lloyd, 2019 ONCA 79, the plaintiff obtained default judgment in South Carolina dated August 20, 2014 default judgment in the amount of US $451,435,577.37 against the defendant.   The plaintiff sought a Mareva injunction (i.e. a freezing order). Although the Court initially granted the injunction, the Court later set aside the injunction in response to the defendant’s motion arguing that the Ontario proceedings were commenced outside the limitation period.  See our blog on the motion decision here. On appeal, the Court of Appeal reiterated the applicable test from Independence Plaza 1 Associates, L.L.C. v. Figliolini, 2017 ONCA 44, being: (i) the basic two-year limitation period applies to a proceeding on a foreign judgment; and (ii) the limitation period begins to run when the time to appeal the foreign judgment has expired or, if an appeal is taken, the date of the appeal decision, unless the claim … Read More

The Ontario Securities Commission and the “Active Market”

Peter Neufeld, B. Soc. Sc., J.D.Administrative Law, Appeals, Business Law, Business Litigation, Class Action Defence, Directors' and Officers' Liability, Finance Litigation, Investment | Financial Services, Professional Liability, Professional Services, Professions, Securities Litigation, Shareholder Disputes0 Comments

Determining what constitutes an “active market” for securities can have significant implications for Investment Dealers, Approved Persons, and other market participants facing civil lawsuits and regulatory scrutiny.  Such a determination provides ample assistance to investors seeking to quantify damages allegedly sustained through (1) misrepresentations in a company’s financial documents or (2) the negligence of their financial advisors. In Sutton (re), 2018 ONSEC 42, however, the failure to show an active market for securities proved devastating to the defence of a Chief Financial Officer (“CFO”) in charge of pricing those securities. Background  As CFO of First Leaside Securities Inc. (“FLSI”), Brian Sutton’s (“Mr. Sutton”) position required him to assess the price of certain unlisted securities (“Fund Units”) issued by three limited partnerships (“Funds”). In pursuit of meeting these obligations,  Mr. Sutton relied on the Fund Units’ allegedly active market to ascribe an appropriate price. The Industry Investment Regulatory Organization of Canada (“IIROC”) … Read More

Canadian Court Shuts Down Loan Shark’s Law Suit

Gilbertson Davis LLPBusiness Law, Business Litigation, Casino Debt Recovery, Civil Litigation, Commercial Lending, Commercial Litigation, Debt and Enforcing Judgments, Real Estate Litigation1 Comment

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

Federal Court of Appeal Considers Reviewing of Evidence in Judicial Review Applications

Peter Neufeld, B. Soc. Sc., J.D.Administrative Law, Appeals, Business Litigation, Civil Litigation, Commercial, Commercial Litigation, Judicial Review0 Comments

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.