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
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 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
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
License to use “Marilyn Monroe” Trade-mark is not a Franchise Agreement
In MGDC Management Group Inc. v. Marilyn Monroe Estate, 2014 ONSC 4584, the Respondents and Applicants were parties to a License Agreement which granted to the Applicants the exclusive right to use the trademark “Marilyn Monroe” in its restaurants. The Applicants sought rescission of the License Agreement by claiming that the License Agreement qualifed as a franchise agreement which entitled it to receive full disclosure under the Arthur Wishart Act (Franchise Disclosure), 2000 (the “Act”). The Respondents moved to dismiss the Application. Justice Morgan of the Ontario Superior Court of Justice found that the Act did not apply to the License Agreement for the following reasons: The parties expressly agreed that franchise disclosure laws such as the Act did not apply to the License Agreement. And, in fact, the principal of the Applicants acknowledged that she was aware of this provision when she signed the License Agreement. Section 2(3)5 of the Act stated that it does not apply to a single trade-mark licensing agreement. The … Read More
International Sale of Goods Convention – New Members in 2014 and 2015
The United Nations Convention on Contracts for the International Sale of Goods (“CISG”) establishes a comprehensive code of legal rules governing the formation of contracts for the international sale of goods, the obligations of the buyer and seller in contracts for the international sale of goods, and the remedies for breach of contracts for the international sale of goods. Canada on accession to the CISG declared that, in accordance with article 93 of the Convention, the Convention would extend to Ontario (and other provinces named in the declaration). The Canadian International Sale of Goods Contracts Convention Act, S.C. 1991, c. 13, has been in effect in Ontario since 1992 because of the International Sale of Goods Act, R.S.O. 1990, c. I.10. These two acts brought into effect in Canada the United Nations Convention on Contracts for the International Sale of Goods. The Ontario International Sale of Goods Act provides that the contracting parties “may … Read More
Court Grants Ex Parte Injunction Against Pipeline Protesters
In Enbridge Pipelines Inc. v. Jane Doe, the Applicant had an easement through a property for its gas pipeline. The protesters (according to their social media postings) opposed further construction on the pipeline, and occupied and refused to leave the property. The Applicant brought an ex parte (without notice) application for an interlocutory injunction prohibiting the protesters from occupying a work site on the property. The Applicant argued i) that the work on the pipeline was an immediate safety concern, ii) that any delay caused by the protesters would have serious impact on its economic concerns (the supply of oil to its customers), and iii) that the Applicant’s property rights – the easement – were in a “privileged position”, and that a trespass to property rights is virtually always remedied by an injunction. The Judge found with respect to i) that there was not an immediate safety concern, but with respect to ii) … Read More
Franchise Rescission Granted Due to Deficient Disclosure
The recent Ontario Superior Court of Justice decision in 2337310 Ontario Inc. v. 2264145 Ontario Inc., 2014 ONSC 4370, addressed a partial summary judgment motion brought by the franchisee of a cafe seeking a declaration that it was entitled to exercise its right of rescission under the Arthur Wishart Act (Franchise Disclosure), 2000 (“the Act”). The franchisee sought to rescind the franchise agreement approximately six months after entering into the agreement by arguing that the disclosure document provided by the franchisor was so deficient that it amounted to receving no disclosure at all. In contrast, the franchisor argued that the franchisee was provided with disclosure as required under the Act, and the franchisee was simply attempting to resile from a bona fide transaction due to its own incompetence and inability to operate the business successfully. The Court found a number of deficiencies in the disclosure provided by the franchisor, including failure to provide: (1) … Read More
Partial Summary Judgment Granted for Rescission of Franchise Agreement
In the recent Ontario Superior Court of Justice decision in 2147191 Ontario Inc. v. Springdale Pizza Depot Ltd., the plaintiffs brought a partial summary judgment motion seeking to rescind a franchise agreement under the Arthur Wishart Act (Franchise Disclosure), 2000 (the “Act”). After purchasing the business from an existing franchisee, the plaintiffs alleged that they were entitled to receive disclosure from the franchisor but the disclosure received was so materially deficient that it amounted to no disclosure at all. As a result, the plaintiffs claimed that they were entitled to rescind the franchise agreement within two years of entering into the franchise agreement. The defendant franchisor argued that it was not required to provide disclosure to the plaintiffs due to its minimal involvement in the sale transaction, or in the alternative, it provided satisfactory if imperfect disclosure which would only entitle the plaintiffs to rescind the franchise agreement within sixty days of receiving the disclosure documents (which had elapsed). Under subsections 5(7) and 5(8) … Read More
Motion to Set Aside Default Judgment Denied in Internet Defamation Case
The Ontario Superior Court of Justice in Busseri v. Doe, 2014 ONSC 819, dealt with the defendant’s motion to set aside default judgment against him in an internet defamation case. The plaintiff brought the underlying defamation action after discovering numerous posts by the defendant on a stock-related online public forum called stockhouse.com. Although the defendant was provided adequate notice of the lawsuit and the subsequent motion for an interim injunction against posting further defamatory statements, the defendant did not take any steps to defend in any way until it became clear that the default judgment ($200,000 + costs) would be enforced in the defendant’s jurisdiction. In considering a motion to set to aside default judgment, the Court must consider the following factors: (1) whether the motion to set aside the default judgment was brought without delay after the moving party learned of the default judgment; (2) whether the circumstances giving rise to the default judgment have been adequately explained; and (3) whether the moving party has an … Read More