The Court of Appeal of Ontario decision in 1418885 Ontario Ltd. v. 2193139 Ontario Limited, 2018 ONCA 54, recently overturned a summary judgment motion decision which confirmed the importance of requisition letters in real estate transactions. In this case, the parties had entered into an Agreement of Purchase and Sale for a property with a restaurant, golf course, 12 residential apartments, a two-storey home and a banquet hall. The Agreement of Purchase and Sale included the following requisition clause: 8. TITLE SEARCH: Buyer shall be allowed until 6:00 p.m. on the 30th day of May, 2016 (Requisition Date) to examine the title to the property at his own expense and until the earlier of: (i) thirty days from the later of the Requisition Date or the date on which the conditions in this Agreement are fulfilled or otherwise waived or, (ii) five days prior to completion, to satisfy himself that there are … Read More
Court of Appeal Provides Guidance on Whether Party Carrying on Business in Ontario as Basis for Jurisdiction
In Sgromo v. Scott, 2018 ONCA 5, the Court of Appeal considered the scope of one of the presumptive grounds for jurisdiction of the Ontario Court: whether a party carried on business in Ontario. The Defendants were incorporated in jurisdictions outside of Ontario. The Defendants brought motions to stay or dismiss the subject actions. On the motion, the Plaintiff alleged that because the products of some of the Defendants were advertised, marketed, and distributed by third party retailers in Ontario, the Defendants were carrying on business in Ontario, such that Ontario had presumptive jurisdiction. The motion judge rejected that argument. On appeal, the Court of Appeal agreed with the motion judge’s reasons, stating that: as set out by the Supreme Court of Canada in Club Resorts Ltd. v. Van Breda, 2012 SCC 17 (CanLII), the Courts must be cautious when considering whether an entity is carrying on business in the jurisdiction, … Read More
Ontario Court Decides Motion in Loblaws Bread Price Fixing Class Action
The recent Ontario Superior Court of Justice decision in David v. Loblaw, 2018 ONSC 198, involved a motion brought by the plaintiff to challenge the terms of a $25 consumer card program that the Loblaw defendants (“Loblaws”) had offered to consumers after various class actions were commenced in connection to a bread price fixing scheme that Loblaws participated in from 2002 to 2015. Customers may sign up for the consumer card, either online or by paper application, by declaring that he or she had purchased bread from Loblaws during the relevant time period. The application advised customers that sign up for the consumer card that they will still be eligible to receive “incremental compensation” and recommended they seek legal advice from plaintiff’s counsel or from independent counsel. The application also included a form of Release, which read in part as follows: In exchange for this twenty-five (25) Canadian Dollar Loblaw Card you hereby release and forever discharge Loblaw … Read More
Court of Appeal Allows Negligence Claim Against Individual Starbucks Employees to Proceed
In Sataur v. Starbucks Coffee Canada Inc., 2017 ONCA 1017, the plaintiff alleged that a Starbucks barista poured scalding water on the plaintiff’s hands. The plaintiff sued Starbucks, and also brought claims against the barista and the Starbucks store manager personally. The plaintiff alleged that the barista and the store manager owed the plaintiff a duty of care and that each was personally liable to the plaintiff for breaching those duties. Starbucks brought a motion to strike the plaintiff’s claims against the barista and store manager on the basis that, among others, the plaintiff could not claim against them personally. The motion judge agreed, stating that employees are not liable for acts within the scope of their authority and done on behalf of their corporation. The motion judge struck the plaintiff’s claims against the barista and store manager. The plaintiff appealed. The Court of Appeal, citing the Supreme Court of Canada’s … Read More
Ontario Court Finds Jurisdiction Resulting From Cumulative Effect of Individually Insufficient Connecting Factors
In Freshway Services Inc. v. CdEnviro Ltd., 2017 ONSC 6591, the plaintiff Ontario company contracted with the defendant Northern Irish company. The defendant was to build a waste recycling facility and install it at the plaintiff’s facility in Ontario. A third party to provide warranty coverage and servicing for components of the waste recycling plant, once it was built and delivered to Ontario. A dispute arose between the parties, and the plaintiff sued the defendant in Ontario. The defendant brought a motion to stay the Ontario action on the basis that Ontario lacked jurisdiction. The motion judge considered the the presumptive connecting factors for jurisdiction set out by the Supreme Court in Club Resorts Ltd. v Van Breda, 2012 SCC 17, being whether the contract was made in the Ontario: whether the defendant was carrying on actual business in Ontario; whether the defendant is resident in Ontario; or where the … Read More
Ontario Court Declines To Find that Twitter Posts Require Libel Notice
In Levant v. Day, 2017 ONSC 5956, the defendant was regular participant on social media. The defendant posted numerous times on Twitter criticising a fundraising campaign by Rebel News. The plaintiff is the principal of Rebel News. The plaintiff brought an action seeking damages for defamation. The defendant brought a motion to dismiss the action under the section 137.1(3) of the Courts of Justice Act, which was implemented to prevent strategic lawsuits against public participation (the “anti-SLAPP” provisions). As part of an anti-SLAPP motion, the Court considered whether there were grounds to believe the defendant had a valid defence. The defendant argued, among other things, that the plaintiff had failed to deliver a libel notice. Section 5(1) of the Libel and Slander Act requires that a plaintiff has give notice to the defendant in writing within six weeks after the alleged libel comes to the plaintiff’s knowledge, specifying the … Read More
Court of Appeal States that Security for Costs Should Not be Treated Differently for Recognition and Enforcement Actions
Yaiguaje v. Chevron Corporation, 2017 ONCA 741 arose from an action by the Plaintiffs to enforce an Ecuadorean judgment in Ontario against the Defendant. The Defendants obtained summary judgment dismissing the Plaintiffs’ claim. After the Plaintiffs appealed, the Defendant sought a security for costs against the Plaintiffs, who were non-Ontario residents from Ecuador. The Plaintiffs argued that security for costs should not be ordered because of, among other reasons, the unique nature of a recognition and enforcement action. The Plaintiffs relied on the Supreme Court of Canada decision on jurisdiction in the same action: Chevron Corp v. Yaiguaje, 2015 SCC 42, [2015] 3 S.C.R. 69. The Plaintiffs argued that the Supreme Court’s decision required courts to treat recognition and enforcement cases in a different manner than first instance actions. The Court of Appeal confirmed that courts should take a “generous” approach in finding jurisdiction in recognition and enforcement actions. … Read More
Summary Judgment Granted in Multiple Proceedings Surrounding Enforcement of Italian Judgment
The case of King v Lang Michener, 2017 ONSC 1917 (one of three related actions), began with a transaction that went awry. The Plaintiff, Gregory King, a lawyer at Aylesworth and later Gowling Lafleur Henderson LLP, acted in a transaction relating to a new hotel in China with an Italian company, Sincies Chiementin SpA (“Sincies”), and various other foreign individuals and businesses. Mr. King received a 5% interest in the hotel, and Aylesworth was to receive payment for legal fees. Sincies went bankrupt, and one of its assets, a $600,000.00 USD deposit, vanished. Sincies’ trustee in bankruptcy eventually sued Mr. King, among others, in Italy, to try to recover the money. Mr. King did not defend the Italian proceedings. The Italian court ruled against him, and ordered him to pay the deposit. Mr. King did not pay the judgment on the grounds that the Italian court lacked jurisdiction. Sincies’ trustee then … Read More
Supreme Court of Canada Upholds Worldwide De-Indexing Order Against Google
The Supreme Court’s recent decision in Google Inc. v. Equustek Solutions Inc. has approved the use of a worldwide injunction directing Google to de-index the defendant’s website used to facilitate the sale of goods in violation of the Equustek’s intellectual property rights. Equustek obtained an interlocutory injunction against the website owner directly, however the defendant left Canada, refused to comply with the order, and continued to sell products on their website from an unknown location. To help prevent or reduce further ongoing harm, Equustek sought for Google to de-index the site, making it less likely that a potential purchaser will discover the infringing website. Google initially agreed to de-index the result from Canadian search results on google.ca, but refused to enforce this order worldwide. It was concerned that the Canadian courts were using Google to usurp the laws of other nations, particularly on free speech issues, and potentially would force Google … Read More
Supreme Court of Canada Narrowly Rules Facebook’s Jurisdiction Clause Unenforceable
Facebook, and most other large social media and internet companies, set out in their terms of use that users of their services must bring any litigation disputes in the jurisdiction of their choice. However, in Douez v. Facebook, the Supreme Court of Canada has recently held, in a 4-3 decision, that Facebook could not enforce that clause against the plaintiff, a British Columbia woman complaining that their use of her photo and name in advertising breached her rights under British Columbia’s Privacy Act. Notably, the Privacy Act specifically requires that any action under that statute “must be heard” by the British Columbia Supreme Court. The majority held that while a jurisdiction clause is ordinarily enforceable, it could not be enforced in this instance as doing so would violate public policy, since the quasi-constitutional rights the statute provides and the exclusive jurisdiction to BC courts it requires means that the statute ought to be interpreted … Read More
CASL Private Right of Action Suspended Indefinitely
In a recent press release, the Canadian government stated that they will be suspending the introduction of the private right of action set out in Canada’s anti-spam legislation (frequently referred to as CASL). The private right of action was meant to come into effect on July 1, 2017, but the government has suspended the implementation of this section to give a parliamentary committee more time to review the legislation and determine the best course of action to balance the protection of Canadian consumers against minimizing extra costs and unintended breaches by business owners. The legislation has received mixed reviews thus far. While undoubtedly a step forward in minimizing unwanted spam, many business owners have expressed concern that the definition of commercial activity are vague, the requirements for consent are onerous, and the penalties for even unintentional non-compliance are harsh. The private right of action (most likely to be done as class … Read More
Ontario Court Identifies New Presumptive Connecting Factor in Establishing Jurisdiction
In Arend v Boehm, 2017 ONSC 3424, the three Applicants in a corporate dispute applied for orders pursuant to the oppression remedy (section 248) of the Ontario Business Corporations Act in respect of BitRush, an Ontario company. The Judge noted that BitRush’s business was “reflective of the worldwide impact of business connected with the internet.” The international character of BitRush’s business was reflected in the identity of the Respondents, who were: 1) BitRush’s CEO, an Austrian resident; 2) a former BitRush board member, also an Austrian resident; 3) BitRush’s majority shareholder, a UK company; and 4) another Austrian resident. The Applicants sought: 1) a declaration that the Respondent CEO has acted oppressively, in breach of his fiduciary duty to BitRush; 2) an order transferring shares of BitRush from the Respondent UK company to certain other stakeholders; and 3) an order that the Respondent UK company’s remaining shares in BitRush be … Read More
Court of Appeal Considers Law Applicable to Bifurcation of Disputes between Court and Arbitration
In Wellman v. TELUS Communications Company, 2017 ONCA 433, the Ontario Court of Appeal recently considered the law applicable to determining whether to bifurcate a dispute between court proceedings and arbitration. In Wellman v. TELUS, the plaintiffs consisted of consumers and businesses. The plaintiffs commenced a class action against the defendant, Telus, regarding alleged overbilling. The Telus contact contained an arbitration clause. Telus acknowledged that the arbitration clause was not binding on the consumer plaintiffs (due to the Consumer Protection Act, 2002). But Telus’s position was the the business plaintiffs were bound by the arbitration clause. Telus brought a motion to stay the business plaintiffs’ class action in favour of arbitration. Telus relied upon, among other things, section 7(5) of the Ontario Arbitration Act, which provides for a partial stay of court proceedings to be granted where an arbitration agreement deals with only some of the matters in respect … Read More
Possible Changes to Choice of Court Agreements and Recognition of Foreign Judgments
Ontario recently enacted the International Choice of Court Agreements Convention Act, 2017, which will give effect to the Hague Convention on Choice of Court Agreements (the “Hague Convention”) in Ontario once Canada ratifies the Hague Convention. (Canada has not yet signed or ratified the Hague Convention. It is not yet known when Canada will ratify the Hague Convention. The Uniform Law Conference of Canada adopted a model implementation statute in 2010, suggesting that Canada may sign and ratify the Hague Convention.) In preparation for ratification, Ontario businesses should be aware of the Hague Convention’s key features, including: • where parties of member States have expressly agreed to a court in their contract, the court selected by parties must act in every case as long as the choice of court agreement is valid. The agreed Court does not have discretion (on forum non conveniens or other grounds) to decline jurisdiction in favour of courts of another State. • any court … Read More
The Importance of Brand Protection
In many cases, a business’s brand, reputation, and goodwill, can be its most important assets. Customers will visit, re-visit, and refer others to a business because of the reputation created through its successful branding initiatives and quality products and services. Therefore, it is important for any business to be aware of the tools available to protect their brand from being devalued or misused by others. Some of these tools are preventative, such as by registering a trademark with CIPO. the USPTO, or other national trademark offices, and by ensuring the proper assignments or licences are set out in any contracts with any designers or users of your trademarks. The copyrights for creative works can be registered, while fashion designers can seek protection of their creations as an industrial design. Unfortunately, the more successful a trademark or brand, the more likely it is to be used by copycats, counterfeiters, and competitors to drive business … Read More
International Sale of Goods – the Law Applicable in Ontario
Many Ontario businesses buy and sell goods from foreign companies. However, few Ontario businesses are aware that different laws apply to international purchases and sales of goods. For purchases and sales of goods between Ontario companies, the Ontario Sale of Goods Act will typically apply. However, for purchases and sales of goods between Ontario and foreign companies, the United Nations Convention on Contracts for the International Sale of Goods (the “CISG”) will typically apply. The CISG is “Ontario law”. It is enacted in Ontario by the International Sales Conventions Act. There are a number of key differences between the Ontario Sale of Goods Act and the CISG. One of the most notable is the obligation on the buyer to inspect goods (article 38) and give notice of any non-conformity (article 39). The inspection obligation imposed by article 38 can have significant consequences: if the buyer fails to detect a lack of conformity … Read More
Court Considers When Jurisdiction May be Found Against Sole Officer And Director of Foreign Corporation
In Olympique CMCT Inc. v Les Industries Pancor Limitée, 2017 ONSC 1929, the Plaintiff, Olympique, was a Quebec company. Olympique obtained default judgment in a Quebec action against the Defendants Pancor, an insolvent Ontario company, and Panarese, Pancor’s sole officer and director. Olympique brought an action in Ontario seeking recognition and enforcement of the Quebec judgment against Panarese in Ontario. Panarese argued that Ontario should not enforce the Quebec judgment because, among other reasons, the Quebec Court did not have jurisdiction to grant the Quebec judgment against him. Panarese lived in Ontario. Pancor was primarily located in Ontario. However, the Court stated that it was sufficient that Quebec had a real and substantial connection with the subject matter of the action, even if it had no connection with Panarese. The Court found that Panarese signed purchase orders which were transmitted to Olympique in Quebec, meaning that the contracts between Pancor and … Read More