MtGox Bitcoin Bankruptcy Comes to Ontario

Andrew Ottaway, B.A. (Hons.), LL.B.Civil Litigation, Commercial Law, Commercial Litigation, Enforcement of Foreign Judgments, Information Technology0 Comments

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

Andrew Ottaway, B.A. (Hons.), LL.B.Civil Litigation, Commercial Law, Commercial Litigation, Contract Disputes, Cross-Border Litigation, Employment & Wrongful Dismissal0 Comments

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

Nick P. Poon, B.Sc. (Hons.), B.A., J.D.Civil Litigation, Commercial, Commercial Law, Commercial Litigation, Contract Disputes, Franchise Law0 Comments

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

David Alderson, LL.B, LL.M (Commercial and Corporate), Lawyer, Qualified Arbitrator and MediatorCivil Litigation, Commercial and Contract Litigation, Commercial Arbitration, Commercial Litigation, Contract Disputes, Creditors Rights, Cross-Border Litigation, Distributors | Dealers, Forum Challenges, International Distribution, International Sale of Goods, Jurisdictional Challenges, Sale of Goods0 Comments

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

Andrew Ottaway, B.A. (Hons.), LL.B.Civil Litigation, Commercial Law, Commercial Litigation, Injunction & Specific Performance0 Comments

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

Nick P. Poon, B.Sc. (Hons.), B.A., J.D.Civil Litigation, Commercial, Commercial Law, Commercial Litigation, Franchise Law, Summary Judgment0 Comments

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

Nick P. Poon, B.Sc. (Hons.), B.A., J.D.Civil Litigation, Commercial Litigation, Franchise Law, Summary Judgment0 Comments

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

Nick P. Poon, B.Sc. (Hons.), B.A., J.D.Civil Litigation, Injunction & Specific Performance0 Comments

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

Civil Fraud Lawsuit Dismissed on Summary Judgment Motion

Nick P. Poon, B.Sc. (Hons.), B.A., J.D.Civil Litigation, Fraud, Summary Judgment0 Comments

In Danos v. BMW Group Financial Services Canada, 2014 ONSC 2060, the Ontario Superior Court of Justice dealt with a summary judgment motion brought by the defendants to dismiss the plaintiffs’ claims that it forged their signatures on car leasing documents.  The plaintiffs had leased a luxury car from the defendants but failed to keep up with the lease payments.  The defendants took steps to repossess the car and commenced an action to recover its losses.  After receiving the defendants’ productions, the plaintiffs’ allegedly discovered that their signatures were forged on a number of leasing documents, and commenced a fresh action claiming damages arising from the alleged fraud.  The defendants brought a summary judgment motion to dismiss the action. The Supreme Court of Canada in Bruno Appliance and Furniture, Inc. v. Hryniak, 2014 SCC 8, recently summarized the elements of the tort of civil fraud as follows: (1) a false representation made by the defendants; (2) some level of knowledge of the falsehood of the … Read More

Court Dismisses Motion For Forum Non Conveniens

Nick P. Poon, B.Sc. (Hons.), B.A., J.D.Civil Litigation, Cross-Border Litigation0 Comments

In Central Sun Mining Inc. v. Vector Engineering Inc., 2014 ONSC 1849, the Ontario Superior Court of Justice addressed the moving defendants’ motion to dismiss or stay the action on the basis that Ontario was not the convenient forum to hear this action for damages arising from a landslide in Costa Rica.  The moving defendants argued that the claims were based on acts or omissions that occurred in Costa Rica and in the United States, most of the parties and witnesses lived outside Ontario and the evidence was located outside Ontario. Following on the Supreme Court of Canada decision in Club Resorts Ltd. v. Van Breda, 2012 SCC 17, the burden of proof is on the party raising the forum non conveniens issue to show that another forum is in a better position to dispose fairly and efficiently of the litigation, and that another forum is clearly more appropriate than Ontario.  The following factors may be considered in … Read More

Evicted Tenant Granted Relief From Forfeiture in Commercial Lease Case

Nick P. Poon, B.Sc. (Hons.), B.A., J.D.Civil Litigation, Commercial Leasing, Contract Disputes0 Comments

In Kristen Lee Nesbitt v. RJH Reinsurance Services Inc., 2014 ONSC 2643, the landlord evicted the tenant due to alleged unpaid rent, realty taxes, water bills and arrears on a demand loan for leasehold improvements.  The tenant applied to the Court for relief from forfeiture (e.g. possession of the premises) under the Commercial Tenancies Act, R.S.O. 1990, c. L.7, in order to continue operating its restaurant business on the premises. Since relief from forfeiture is an equitable remedy, the Court must consider the proceedings and the conduct of the parties under the circumstances, and any such terms as to payment of rent, costs, expenses, damages, compensation, penalty or the granting of an injunction to restrain any similar breach in the future.  Justice Morgan found that the tenant did not appear to come to the Court with “unclean hands” as the dispute was regarding an accounting issue and the terms of the lease agreement, and it was not equitable to put the tenant out of business … Read More

Insurance Fraud: See No Evil & Pay The Piper

John L. Davis, B.A. (Hons.), J.D.Civil Litigation, Fraud, Insurance0 Comments

With Thompson’s World Insurance News reporting (May 5, 2014) that Aviva detected over C$202.84m in insurance fraud in 2013–a 19% increase over 2012–over 45 claims a day (C$553,370) it is clear that one of the world’s oldest professions must be taken increasingly seriously by insurance claims executives. Fraudsters have historically viewed insurance fraud as a relatively low risk way of building a career in criminality.   Fearful of investigation and defense costs, and of punitive damages verdicts where a defense does not succeed, many insurers have often paid claims they believe to be fraudulent.  It is hard to scope out the true cost of fraud unless adequate resources are devoted to the task: you don’t find what you do not actively and aggressively pursue. With Insurance Bureau of Canada estimates of insurance fraud in Canada north of $500 million a year, the cost of inaction is clear.  Cost/Benefit analyses solely focused on a case by … Read More

Court Grants Summary Judgment in Employment Dispute

Andrew Ottaway, B.A. (Hons.), LL.B.Civil Litigation, Contract Disputes, Employment, Employment & Wrongful Dismissal, Summary Judgment, Wrongful Dismissal0 Comments

In Gregory Smith v. Diversity Technologies Corporation, the Plaintiff employee was terminated by the Defendant company for cause.  The Defendant stated that the Plaintiff had made a sale to a customer despite being specifically instructed not to do so, and that the order disrupted the Defendant’s production process.  The Plaintiff denied that he had been instructed not to sell to the customer. The Defendant argued that a Trial was necessary to resolve the credibility issues.  The Judge disagreed, and, following the Supreme Court’s recent decision in Hyrniak v. Mauldin, stated that there was sufficient documentary evidence to allow the court to carry out a fair and just adjudication of the dispute. The Judge stated that she would consider the Defendant’s case “at its highest and best”, and set aside the credibility issues.  She stated that even if the Plaintiff had disregarded the Defendant’s instructions not to sell to the customer, it was … Read More

Leave to Bring Summary Judgment Motion Denied in Dog Bite Lawsuit

Nick P. Poon, B.Sc. (Hons.), B.A., J.D.Civil Litigation, Summary Judgment0 Comments

In Dickson v. Di Michele, 2014 ONSC 2513, the plaintiff claimed the defendants’ dog attacked her while she was delivering a pizza and sued the defendants for damages under the Dog Owners’ Liability Act.  After the plaintiff set the action down for trial, the plaintiff brought a motion requesting leave of the court to bring a summary judgment motion with respect to liability and contributory negligence, while leaving the issue of damages for trial.  The defendants argued that leave should be denied since the well-established test required the plaintiff to prove a substantial or unexpected change in circumstances since the action was set down for trial. Justice Bale found that the issue was whether the proposed summary judgment motion was likely to provide a “proportionate, more expeditious and less expensive means to achieve a just result than going to trial”, citing the Supreme Court of Canada decision in Hyrniak v. Mauldin, 2014 SCC 7. After considering the evidence, Justice Bale held … Read More

Summary Judgment Granted in Condominium Maintenance and Repair Case

Nick P. Poon, B.Sc. (Hons.), B.A., J.D.Civil Litigation, Negligence, Summary Judgment0 Comments

In Patriarcki v. Carleton Condominium Corporation No. 621, 2014 ONSC 1507, the self-represented plaintiff sued her condominium corporation and the condominium corporation’s contractor alleging that they negligently repaired and replaced a boiler in her condominium unit which exposed her to toxic fumes that made her very sick.  The defendants brought a summary judgment motion seeking to dismiss the claims against them. The Court considered the guidance recently provided in the Supreme Court of Canada decision in Hryniak v. Mauldin, 2014 SCC 7, with respect to summary judgment motion principles before providing its analysis of the case.  The issue was whether there was a genuine issue for trial in light of the plaintiff’s alleged failure to present any evidence of liability on the part of the defendants. Although the plaintiff relied on a number of medical reports which opined that her health problems were caused by gas leaks from the boiler, the Court found that the … Read More

Court Finds Foreign Hotel Operator Properly Served in Ontario

Nick P. Poon, B.Sc. (Hons.), B.A., J.D.Civil Litigation, Cross-Border Litigation, Travel & Tour Operators0 Comments

In Klein v. Occidental Hotels & Resorts, 2014 ONSC 2221, the Ontario Superior Court of Justice addressed the issue of whether a foreign hotel operator was properly served with a claim made in Ontario with respect to an accident that occurred at its hotel in the Dominican Republic.  In this case, the Plaintiff purportedly served the claim on the receptionist at the address of the hotel operator’s office in Toronto.  The hotel operator argued that it does not have any offices in Ontario nor does it carry on business in Ontario, and the location where the claim was purportedly served was the address of the marketing company it uses in Ontario.  The hotel operator maintained that the marketing company was not its agent. In considering whether the hotel operator was properly served, Justice Healey considered the three-part test to determine whether a corporation is carrying on business in Ontario: (i) has the corporation carried on business in the jurisdiction for a sufficiently substantial period of time; (ii) … Read More

Court of Appeal Confirms Haunted House is not a Latent Defect in Real Estate Purchase and Sale

Nick P. Poon, B.Sc. (Hons.), B.A., J.D.Civil Litigation, Commercial, Summary Judgment0 Comments

The Ontario Court of Appeal recently released its endorsement in 1784773 Ontario Inc. v. K-W Labour Association Inc., 2014 ONCA 288, a case which involved the purchase and sale of a “haunted” commercial property.  In this case, the purchaser sued the vendor after hearing rumours that the property was haunted by ghosts of people who were murdered or had died on the property.  The purchaser alleged that the vendor failed to disclose these latent defects in the property.  The vendor brought a summary judgment motion to dismiss the claims against it. The judge hearing the summary judgment motion held that there was no genuine issue requiring a trial for the following reasons: (i) there was no evidence that anyone died on the property, either by natural causes or some criminal act; (ii) the vendor was not required to disclose that someone had died on the property or that the property may be haunted; (iii) there was no evidence as to how the purchaser could prove … Read More