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
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
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
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
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
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 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
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
Business Dirty Tricks: Unfair Competition: Intentional Interference, Inducing Breach of Contract, Conspiracy and Defamation
Sometimes businesses and their stakeholders act wrongfully in seeking to advance their interests and / or harm competitors. There are often reports of the “dirty tricks” used by those in business to seek to destroy, defeat or diminish the effectiveness of a competitor. These are often unethical tactics, but sometimes such conduct is also wrongful and has been recognized by the common law as actionable in the courts for damages or injunctive or other urgent equitable relief, or prohibited by a statute which provides for a civil monetary remedy or grounds for an injunction. These causes of action have been recognized and provide the basis of lawsuits for harm, loss and damage, and in suitable circumstances, grounds for an immediate injunction or mandatory order prohibiting the further commission of the wrongful acts. In short, wrongful intentional acts causing harm, loss or damage to businesses or their stakeholders may give rise to a cause of action in common law business torts (the so-called … Read More
US Court of Appeals Reverses Lower Court Decision; Re-Opens US Trademark Infringement Claims Against Canadian Operation
In Trader Joe’s Company v. Hallatt, the United States Court of Appeals for the Ninth Circuit recently overturned a lower court decision which had originally dismissed claims that Mr. Hallatt, a Canadian citizen but permanent resident of the United States, was violating the trademark rights of Trader Joe’s, a popular US grocery store chain, by reselling their products in Canada under the name “Pirate Joe’s” and by using an allegedly confusingly similar store design and motif. Mr. Hallatt’s business involved purchasing Trader Joe’s products in Washington state, transporting them across the border to British Columbia, and re-selling the product to Canadians at a mark-up. Trader Joe’s, which does not carry on business in Canada, sued in Washington state, claiming Mr. Hallatt was infringing on their US trademark rights. They asserted that Hallatt’s actions were damaging their trademark rights under US law. At the lower level, Trader Joe’s claims were dismissed, as … Read More
Court Stays Arbitration but Denies Costs to Successful Party for “Blameworthy Conduct”
In Gorman v Kosowan, 2016 ONSC 5085, the applicant commenced a proceeding regarding a business dispute. The applicant and individual respondent were joint owners of a transportation and warehouse business. A dispute arose between them. The respondents subsequently terminated the applicant’s employment and excluded him from the business. The applicant sought relief from the allegedly oppressive conduct under the Canada Business Corporations Act and the Ontario Business Corporations Act. The respondents brought a motion to stay the oppression application based on an arbitration clause in the parties’ Unanimous Shareholders’ Agreement (“USA”). The USA arbitration clause required arbitration for “disputes under” the USA. The Judge found that the applicant’s claims were covered by the arbitration clause and granted the respondents’ motion to stay the application. In the Judge’s subsequent costs decision, here, the Judge denied the respondents’ request for costs of the motion. While a winning party is typically entitled to its costs … 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
Enforcement of Ontario Judgment in US (U.S.A and American States)
If you are looking for Enforcement of US Judgment in Ontario, Canada, then click here. ____ Enforcement of Ontario Judgment in US (U.S.A and American States) We sometimes act for clients in litigation against defendants located in an American state, or having assets located in one or more U.S. states. Other times we are retained simply to assess and / or seek enforcement of an Ontario or other Canadian judgment in an U.S. state. Accordingly, the consideration sometimes arises whether a money judgment obtained in a court of Ontario or Canada is readily enforceable in a particular US state. Neither Ontario nor Canada is a party to any bilateral enforcement of money judgement treaty or convention with the U.S. or any particular state in the U.S.. However many U.S. states have enacted statutes concerning the enforcement of foreign (including Ontario and Canada) money-judgments in that state. Since this is largely … Read More
In Jurisdiction Dispute, Court of Appeal Confirms Contract Made Where Acceptance Received
In Eco-Tec Inc. v. Lu, the Plaintiff Ontario company researched, developed and manufactured proprietary technology and products. The Defendants were Lu, a Canadian citizen, his BVI company and three Chinese companies owned by him or his parents. The Defendant companies were the Plaintiff’s consultant, agent or distributor in China. In the course of their relationship, the Plaintiffs and Defendants signed a number of agreements. The Plaintiff ended its relationship with the Defendants in 2012, alleging that the Defendant’s Chinese companies were selling clones of the Plaintiff’s product in China. The Plaintiff brought a claim for breach of confidence, breach of contract, breach of fiduciary duty, conspiracy, unjust enrichment and/or unlawful interference with its economic interests. The Defendants brought a motion to dismiss the Ontario action on the basis that the Ontario Court did not have jurisdiction. The motion judge dismissed the motion, finding, among other reasons, that the dispute was connected … Read More