In Krieser v. Seligman, 2024 ONCA 827, the case revolved around the construction of a luxury home in Forest Hill, Toronto, and a subsequent legal battle involving allegations of contract breaches, construction deficiencies, and claims of fiduciary duty. In 2004, the plaintiffs contracted the defendant to build their home. While construction progressed, disputes emerged, leading the plaintiffs to withhold payments. Litigation ensued in 2007, with both parties asserting significant claims: the plaintiffs sought damages for alleged deficiencies, while defendant pursued payment for outstanding invoices. The case culminated in a trial in 2022-2023, where the trial court largely ruled against the plaintiffs. The appeal focused on two primary issues: the alleged breach of contract and a claim for breach of fiduciary duty. The plaintiffs argued that the trial judge erred in finding their delayed payments constituted a breach that disentitled them from warranty claims. Additionally, they contended the judge failed to … Read More
Evidence in Summary Judgment Motions: Ontario Superior Court Provides Guidance for Responding Parties
A recent decision of the Ontario Superior Court of Justice (the “Court”) provides an important reminder for parties responding to a summary judgment motion. In Lukey Capital Corp v. 1000110300 Ontario Inc. et al, 2024 ONSC 6589 (“Lukey Capital”), the plaintiff brought a motion for summary judgment before the Court for the payment of a loan it made to the Defendants under a promissory note. Upon reviewing the evidence before it, the Court granted the sought relief. In doing so, the Court underscored a key principle for parties responding to a summary judgment motion to keep in mind. The Defendants made several arguments that there were genuine issues in the proceeding which required a trial. Among these arguments was a submission that other evidence may be uncovered through further examinations and productions which would support their defence. The Court, echoing well-settled principles regarding evidence on summary judgment motions … Read More
Essential Terms of a Contract: Ontario Superior Court of Justice Confirms Agreements Must Be Complete and Concise
In Qureshi v. Zeema Investments Incorporated, 2024 ONSC 5855, the Ontario Superior Court of Justice emphasized the importance of ensuring that the essential terms of contractual agreement are comprehensive and clear. This summary judgment arose from an unpaid commission payment on a real estate transaction. A broker was mediating a purchase and sale of a hotel between a buyer and seller. the broker and buyer had executed a Buyer’s Representation Agreement (the “BRA”) listing the commission owing to the broker by the buyer on closing at “TBD,” and was to be confirmed upon executing an agreement. The BRA required a commission to be paid to the broker in the event of buyer default on any agreement of purchase and sale that is entered. The broker subsequently entered a Commission Agreement with the seller, which included a commission payment of $650,000 that was owed by the seller to the broker on … Read More
Promises vs. Paperwork: Ontario Court Clarifies Limits of Proprietary Estoppel in Share Disputes in Burwell et al v. Wozniak, 2024 ONSC 5851
In the recent Ontario Superior Court of Justice decision Burwell et al v Wozniak, 2024 ONSC 5851, the Court examined complex trust and proprietary estoppel issues between former partners. The decision in Burwell clarifies the boundaries of proprietary estoppel within Ontario law and emphasizes the importance of consistency between preliminary promises and formal agreements in trust disputes. The applicant and respondent were involved in a former relationship, during which time the applicant and their business partner launched a subscriber-based billing management software company (the “Company”). The applicant sought to establish a family trust; however, the pair separated. Wishing to reconcile the relationship, the applicant sent the respondent an email purporting to bequeath her fifty (50) percent of the shares of the Company (the “Email”). Later the pair finalized a trust agreement appointing the applicant and respondent as beneficiaries. However, the trust agreement did not clearly define the ownership of the … Read More
Promissory Estoppel, Part Performance, and Limitation Periods: Ontario Superior Court Refuses to Enforce Mortgage Beyond 10-Year Limit
In Albrecht v 1300880 Ontario Inc., 2024 ONSC 3328, the Ontario Superior Court of Justice examined key legal principles surrounding the extension of limitation periods through promissory estoppel and part performance. The case involved a mortgage that had been in default for over a decade, with the mortgagee seeking enforcement beyond the statutory limitation period (the “Mortgage”). The applicant sought to have the Mortgage discharged, arguing that enforcement was barred under Ontario’s Real Property Limitations Act (“RPLA”) ten-year cutoff. The respondent countered by asserting that an oral agreement between the parties extended the limitation period, relying on promissory estoppel and part performance to justify enforcement despite the expired limitation period. Citing the doctrine of promissory estoppel, which prevents a party from reneging on a promise without formal consideration, the respondent claimed there was an oral agreement to delay the enforcement of the Mortgage until the applicant’s financial condition improved, thereby … Read More
Notice, a Condition Precedent to Coverage – Ontario Court of Appeal says no Relief of Forfeiture for Late Notice of Claim
In the recent case of Furtado v Underwriters, 2024 ONCA 579, the Ontario Court of Appeal reviewed an appeal from an insured party challenging an application judge’s decision denying coverage under a Directors and Officers policy (the “Policy”). The Court upheld the application judge’s ruling, determining that the insured had reported its loss beyond the specified notice period outlined in the contract, as well as affirming the recent legal precedents concerning the doctrine of relief from forfeiture in the insurance context. While the Policy was in effect, the Ontario Securities Commission (“OSC“) initiated inquiries into the business dealings of Go-To, a company in which the insured held a directorial position. Following this, the OSC issued an Order for the insured to produce certain documents related to the investigation into Go-To. As part of the process, the insured was cautioned by the OSC that section 16(1) of the Securities Act prohibited … Read More
Full and Frank Disclosure, Material Misrepresentations, and the availability of Directors’ and Officers’ Liability Coverage
The Ontario Court of Appeal’s (the “Court“) recent decision in Davies v AIG Insurance Company of Canada, 2024 ONCA 509 (“Davies“), deals with an insurance coverage dispute related to the defense of a Ponzi scheme fraud claim. Notably, the Court’s decisions underscores the significance of full and frank disclosure by insureds when applying for coverage. In Davies, the subject Applicants acted as the principals of related Ontario real estate development companies (the “Companies”). AIG Insurance Company of Canada (“AIG”) issued directors’ and officers’ liability insurance policies (the “Policies”) to the Companies. As part of this action, the Applicants were named as defendants in two separate lawsuits alleging that they used the Companies to conduct a Ponzi scheme and that the Companies’ alleged real estate developments were funded by millions of dollars in syndicated mortgages (the “Underlying Actions”). Soon after being named as defendants in the Underlying Actions, the Applicants sought … Read More
Ontario Court of Appeal upholds Partial Summary Judgment Decision in VP Auto Sales & Service Ltd v Ahmed2 Inc.
VP Auto Sales & Service Ltd. v Ahmed2 Inc., 2024 ONCA 507, saw the Ontario Court of Appeal (the “Court”) address a motion judge’s grant of partial summary judgment, with damages being reserved for trial. The Court, in one of its rare decisions on partial summary judgment, agreed with Motion judge’s ruling. The respondent entered an Agreement of Purchase and Sale (the “Agreement”) with the appellant. Before the closing, the appellant raised concerns about the price being too high and requested a discount, which was refused by the respondent. On the scheduled closing date, the appellant did not proceed with the transaction, citing a breach of the Agreement by the respondent. This resulted in the property remaining unsold, prompting the respondent to seek summary judgment against the appellant for the purchase price of $4,750,000. The motion judge granted summary judgment on liability, finding the appellant accountable for the failure to … Read More
Jurisdiction and forum non conveniens in the Digital Age – Ontario Court Refuses to Certify Class Action against the United States Largest Cryptocurrency Exchange due to Lack of Jurisdiction
In Shirodkar v Coinbase Global Inc. et al, 2024 ONSC 1399, the Ontario Superior Court of Justice provides a review of jurisdictional challenges and the issue of forum non conveniens involving a cryptocurrency class action. The defendants, Coinbase Global, Inc., along with its affiliated entities (“Coinbase”), faced a class action lawsuit brought by a user of its online trading platform, Mr. Shirodkar, which Coinbase sought to dismiss due to a lack of jurisdiction. Coinbase operates a platform for buying and selling digital assets, including cryptocurrency. Between October 2017 and January 2021, Mr. Shirodkar conducted transactions on the Coinbase platform while residing in France and later in Ontario. His complaint, in the form of a class proceeding, alleged that the crypto assets traded on the Coinbase platform should be classified as “securities” under the Securities Act, R.S.O. 1990, c. S. 5 and that Coinbase failed to abide by the disclosure requirements … Read More
Licensing Breaches and Lingering Fiduciary Obligations – Ontario Court of Appeal Rules License Agreement Breach Constitutes Fiduciary Duty Violation
In 7868073 Canada Ltd v 1841978 Ontario Inc, 2024 ONCA 371, the Ontario Court of Appeal recently assessed the legal effects of engaging in competing business ventures and the importance of honoring fiduciary duties stemming from license agreements following a parties departure from a former corporation. Robert Langlois (“Langlois”), alongside two partners, launched a powder-coating business, whereby Langlois granted a perpetual license (the “License”) for his industry “knowledge” to 7868073 Ontario Inc. (“786”), a company which the three parties formed and held equal shares in. In turn, 786 owned shares in two other companies (collectively referred to as “ACS”), which Langlois worked with. When Langlois left ACS to start another business without informing his former partners, ACS alleged that Langlois breached the License. The Court of Appeal affirmed the trial judge’s findings, rejecting the argument that the License was void ab initio due to its unreasonable worldwide scope and restrictions … Read More
A Promise Made is a Promise Kept: Ontario Superior Court Grants Permanent Injunction to Enforce Provisions of Long-term Supply and Lease Agreement
In Parkland Corporation v. Caledon Fuels Inc., 2024 ONSC 2361, the Ontario Superior Court of Justice granted an injunction which prevented a party to a long-term lease and supply agreement from breaching certain negative covenants contained in that contract. The Applicant and Respondent were both parties to an agreement under which the Applicant was made the exclusive supplier of petroleum products to a gas station which it subleased to the Respondent. In January of 2024, the Respondent notified the Applicant that it intended to enter into arrangements with another supplier, in contravention of the agreement. The Applicant brought an urgent application seeking a permanent injunction, to prevent the Respondent from doing so. In its decision, the Court’s analysis on the injunctive relief sought by the Applicant followed the Ontario Court of Appeal’s decision in 711811 Ontario Ltd. (AdLine) v. Buckley Insurance Brokers Ltd., 2014 ONCA 125, where that Court cited … Read More
Ontario Superior Court of Justice Finds Expired Arbitration Award Relevant in Motion for Injunctive Relief
In Rogers v. TELUS Communications Inc., 2023 ONSC 5398, the Ontario Superior Court of Justice held that the terms of an expired arbitration decision are relevant when a party seeks injunctive relief that contradicts its terms. The moving and responding parties are both prominent competitors in the Canadian telecommunications market. Under a requirement imposed by the Government of Canada, their customers have the reciprocal ability to “roam” on the other carrier’s network in areas where their own carrier does not provide coverage. This obligation allows Canadian customers to access wireless services across the country. For a time, the parties did not agree on what was displayed to customers when they were roaming on a competitor’s network. The primary dispute was whether the network identifier (“NID”) displayed in the top-left corner of most mobile devices would connote an extension of their own carrier’s network (i.e. “[Carrier]-EXT”), or if it would notify customers … Read More
Stay of Court Proceedings in Favour of Arbitration – Standard of Proof
In the recent decision Husky Food Importers & Distributors Ltd. v. JH Whittaker & Sons Limited, 2023 ONCA 260, the Ontario Court of Appeal (“ONCA”) reviewed the law of international commercial arbitration, and in particular opined on the issue of the standard of proof that a party needs to meet in order for the court to grant a stay of a court proceeding pursuant to section 9 of the International Commercial Arbitration Act, 2017 (the “Act”), in favour or arbitration. Section 9 of the Act states as follows: Where, pursuant to article II (3) of the Convention or article 8 of the Model Law, a court refers the parties to arbitration, the proceedings of the court are stayed with respect to the matters to which the arbitration relates. The appellant submitted that the proper analytical framework for assessing a request to stay an action under the Act was set out in the … Read More
Entire Agreement Clause Not A Shield To Fraudulent Misrepresentation
In the recent Court of Appeal ruling of 10443204 Canada Inc. v. 2701835 Ontario Inc., 2022 ONCA 745, the Court of Appeal clarified that entire agreement clauses in contracts do not shield any representor or deprive any party to a contract from remedies available for a fraudulent misrepresentation. Background In May of 2019 the appellant Chirag Patel and his corporation 2701835 Ontario Inc. (the appellants) entered into a purchase agreement (the “APS”) with the respondent 10443204 Canada Inc. (the respondent), related to the purchase of a coin laundry business located in Brampton. The APS contained an entire agreement clause of which the relevant part indicated: “There is no representation, warranty, collateral agreement or condition, affecting this Agreement other than as expressed herein.” In accordance with amended terms to the APS concerning the purchase price the appellants made a partial payment of $100,000 on closing and the balance of the purchase … Read More
Court of Appeal Reiterates Limited Scope of Judicial Intervention to Set Aside Arbitral Awards
In the recent Court of Appeal decision of Mensula Bancorp Inc. v. Halton Condominium Corporation No. 137, the Court of Appeal overturned a lower court decision setting aside an arbitrator’s award, on the basis that the approach taken by the learned application judge was contrary to that mandated by Alectra Utilities Corporation v. Solar Power Network Inc., 2019 ONCA 254, 145 O.R. (3d) 481, leave to appeal refused, [2019] S.C.C.A. No. 202 (Alectra). Background The Halton Condominium Corporation 137 (HCC 137) located in Oakville has 82 residential units and 166 parking units located within it’s parking garage, along with common elements such as a lobby and elevators. The parking units comprise of parking for the residential unit owners (the Residential Parking) along with 43 commercial parking units (the Commercial Parking) owned by the defendant Mensula Bancorp Inc. (Mensula), Mensula does not own any residential units and its business is located … Read More
Supreme Court of Canada Clarifies Duty Of Honest Performance In Contractual Relationships
In the decision of C.M. Callow Inc. v. Zollinger, 2020 SCC 45, the Supreme Court of Canada (SCC) expands on the scope of the duty of honest performance in contractual relationships, previously established by the SCC ruling in Bhasin v. Hrynew, 2014 SCC 71, [2014] 3 S.C.R. 494. Our firm previously blogged about the Court of Appeal Ruling in this case. See the previous blog here. The case concerns a breach of contract claim made by the Plaintiff. The Plaintiff is a company that provides maintenance services to condominium communities. The Defendants, a group of condominium corporations, had winter and summer maintenance contracts with the Plaintiff that renewed every two years. The contracts originated in 2012 and ran to 2014. In March or April of 2013, the Defendants decided to terminate the winter contract but they did not provide notice of their intention to terminate until September of 2013. The Defendants delayed … Read More
Breach of Contract Lawyers – Can Contracts that do not Specify Duration or that Lack a Termination Clause be Terminated Unilaterally?
Ontario’s Court of Appeal (“ONCA”) in Conseil Scolaire Catholique Franco-Nord v. Nipissing, 2021 ONCA 544 opined on how contracts that do not specify a termination date or a procedure for termination ought to be interpreted. The ONCA grappled with the question of whether to treat a contract that was silent on the issue of termination as either (1) a perpetual contract, that does not end, or (2) a contract of indefinite duration, into which the court can imply a provision allowing for unliteral termination upon reasonable notice. Historical Approach The ONCA advised that courts used to presume that contracts which were indefinite in time were perpetual in nature. However, this approach was subsequently disregarded, and courts began to presume a right to terminate an indefinite contract by the provision of reasonable notice. New Approach The ONCA advised that even more recently, however, a contextual, fact-specific, approach has been favoured by … Read More