On April 16, 2020, the Federal government announced the Canada Emergency Commercial Rent Assistance (CECRA) program to assist small businesses with their rent payments during the COVID-19 crisis. The CECRA program will provide loans and/or forgiveable loans to commercial property owners who will be expected to pass on the benefit to small businesses by lowering or forgoing rent for April (retroactively), May and June 2020. Further details of the program are expected to be released soon and the program will be administered by the provincial and territorial governments. Although the Ontario Superior Court of Justice had issued an Order on March 19, 2020 suspending the eviction of residents from their homes (unless ordered otherwise under an urgent motion), there was no similar protection against evictions for commercial tenants which included many small business owners. Commercial rent payments are typically the second largest operating expense for most small businesses after payroll … Read More
Small Business Relief Resources During COVID-19 / Coronavirus
On April 14, 2020, the Ontario legislature passed a bill during an emergency sitting to extend the state of emergency to May 12, 2020. The state of emergency in Ontario was initially declared on March 17, 2020, and subsequently extended to April 14, 2020. Under the Emergency Management and Civil Protection Act, any further extensions must be passed by the legislature, and can only be extended for additional periods of no more than 28 days. On May 12, 2020, the state of emergency was extended to June 2, 2020 (Updated: May 12, 2020). Although the extension of the state of emergency does not automatically apply to individual orders such as the closure of non-essential businesses, it is expected the mandatory closure of non-essential businesses will be extended as well to combat the COVID-19 pandemic. In addition, many small businesses (deemed essential) have voluntarily closed due to safety concerns for their … Read More
COVID-19 / Coronavirus: Are Closing Dates Extended Due to Construction Sites Closing?
On April 3, 2020, the Ontario government ordered that further non-essential businesses must close by April 4, 2020 at 11:59 p.m. including closing down most construction sites in order to flatten the curve of the COVID-19 pandemic. The number of essential businesses was reduced from 74 to 44. The revised list of essential businesses can be found here. Construction sites related to the healthcare sector, provincial infrastructure such as transit, and projects related to the production of ventilators and other products directly related to fighting COVID-19 were permitted to remain open. Residential construction sites were permitted to remain open where: (i) a footing permit has been granted for single family, semi-detached and townhouses; (ii) an above grade structural permit has been granted for condominiums; or (iii) the work was related to renovations and started before April 4, 2020. Given the expansive definition of essential residential construction sites, it appears that … Read More
Covid-19 Pandemic Closures: Considerations For Commercial Tenants And Landlords
What can commercial tenants and landlords do to protect themselves from the impact of Covid-19 related closures on commercial lease obligations? Here are some tips for businesses who are in the difficult situation of having to deal with potential defaults on commercial rent obligations related to closures or reductions due to the Covid-19 situation. 1. Review The Lease Agreement Carefully For Potentially Relevant Clauses In Ontario, the commercial landlord-tenant relationship is governed by the Commercial Tenancies Act, R.S.O. 1990, c. L.7., (the “Act”) which outlines the relationship, rights and obligations between commercial landlords and tenants. However these relationships are heavily governed by the commercial lease agreement in place between the landlord and the tenant, which can take precedence over the Act based on the agreement of the parties. Review the Act and more importantly, review your commercial lease agreement carefully to appreciate whether the agreement contemplates the type of situation … Read More
COVID-19 / Coronavirus: How to Schedule an Urgent Civil or Commercial List Hearing
On March 15, 2020, the Chief Justice of the Ontario Superior Court of Justice released a Notice to the Profession advising that all scheduled civil hearings were adjourned until further notice. The Notice to the Profession provides a procedure to schedule urgent and time-sensitive motions and applications where immediate and significant financial repercussions may result without a hearing. When motion or application materials are filed, by email to the appropriate courthouse, seeking an urgent hearing, the triage judge will determine whether or not the matter is urgent and should be scheduled for a hearing. There have been a few recent endorsements reported in respect to the scheduling of urgent commercial lease matters. Urgent Motion – Relief From Forfeiture In Oppong v. Desoro Holdings Inc., 2020 ONSC 1697, the applicant sought relief from forfeiture to set aside the landlord’s termination of the lease. Although the application was brought promptly and scheduled to be … Read More
Nick Poon Comments on Frustration and Force Majeure Clauses for The Huffington Post
Nick Poon was recently asked to comment on the doctrine of frustration and force majeure clauses in the context of travel refunds during the COVID-19 pandemic. The Huffington Post article is found here: You Can Still Get a Refund for a Flight Cancellation During Coronavirus Pandemic. If you require legal advice and representation in respect to contract termination and cancellation, frustration of contract and force majeure clauses and/or travel and tourism, please contact us for an initial consultation.
Contract Arbitrator – Event Cancellation Dispute Arbitrator, Force Majeure Clause Dispute – Reasonable Fees and Good Availability – Gilbertson Davis LLP Arbitration and Mediation Chambers
Contract Dispute Arbitrator Sole Arbitrator – $450.00 per hour, plus HST An arbitrator, or an arbitration tribunal, obtains jurisdiction to adjudicate and decide a dispute from an agreement / contract which has been made by the parties to the arbitration. This jurisdiction is not typically provided by legislation, though there are exceptions, such as the arbitration provision deemed by statute to be included in a condominium declaration. Even if there is no arbitration clause in the contract or agreement made by the parties and a dispute arises, then parties to that contract may still agree to have their dispute determined by arbitration. The parties to a contract may prefer to have a dispute determined by arbitration, since it is presumptively a confidential process, it may be faster and less expensive than going to court, or they may wish to participate in the selection of the adjudicator. Common Contractual Issues Arbitrated … Read More
Legal Consequences of COVID-19 / Coronavirus on Commercial Contracts
Impact of COVID-19 / Coronovirus Events on International and Domestic Commercial Contracts The reports from China show that COVID-19 / Coronavirus not only has a tragic impact on the lives of very many, but has already caused the consequential events of closure of manufacturing, halting exports and affecting transportation operations. This can be caused by forced movement of labour, government-ordered closure and / or state sanction and embargo, or the business decision to cease production. Interruption of Supply, Outsourcing and Transportation of Goods This often has serious consequences for Canadian companies dependent upon foreign supply, outsourcing of manufacturing and the international carriage of goods. The central question is often whether or not the performance of a supply, outsourcing or transportation contract is legally suspended or excused because of the events surrounding the spread of COVID-19 / Coronavirus. Frustration | Impossibility International trade and transportation contracts may not expressly refer to … Read More
Part Two – Timing is Everything in Real Estate Agreements of Purchase and Sale
I had written a previous blog on the “time is of the essence” clause in real estate agreements where it was discussed that the strict adherence to any agreed upon time limits was generally the case. A recent Ontario Court of Appeal case, Fortress Carlyle Peter St. Inc. v. Ricki’s Construction and Painting Inc., serves as a reminder that the “time is of the essence” clause is not absolute and unfettered, and there are preconditions that must be satisfied for a party to rely upon and insist on time being of the essence. The facts are not overly complicated in this case. The respondent was a condominium developer in the process of acquiring properties for a proposed project in downtown Toronto. The developer entered into an Agreement of Purchase and Sale (“APS”) with the vendor to acquire the subject property. Although the APS required the vendor to provide estoppel certificates five days prior … Read More
Deposits In Failed Real Property Transactions
The recent Ontario Court of Appeal decision in Azzarello v. Shawqi, 2019 ONCA 820, illustrates the purpose of providing a deposit when purchasing real property and under what circumstances a purchaser will lose their deposit or be refunded the deposit if the sale does not go through. There are some important general principles that purchasers and sellers should be aware of regarding deposits in a real estate transaction: 1) Contemplation Regarding The Deposit In the Contract Is Important Purchasers and sellers should carefully consider the terms to be included in the purchase and sale agreement regarding the deposit. The contract should be clear about what happens to the deposit in all possible scenarios. In cases where it is not, the courts will look to implied terms in the contract and existing case law which governs how deposits are dealt with. 2) The Reason The Sale Fell Apart Is Important The … Read More
Manufacturers and Distributors – Toronto Litigation Lawyers
Our lawyers can provide sound advice and effective representation to manufacturers and distributors involved in actual or potential disputes or litigation. We focus on a wide variety of manufacturing industries in a broad array of legal disputes, including sale of goods, branding and brand protection, transportation and logistics, supply and outsourcing contracts, unpaid accounts, internal business disputes, construction and urgent remedies. The automotive industry, the food and beverage industry and technology industries in the Toronto – Waterloo Innovation Corridor comprise the most substantial sectors of the Ontario manufacturing landscape. We also can provide advice and representation to the many other manufacturing industries in Toronto and elsewhere in Ontario, including these: Automated Machinery and Robotics, Automotive Industry, Auto Parts Manufacturing, Building Materials, Canning and Bottling, Chemical Manufacturing and Supply, Clean Tech, Computer Equipment and Electronic Equipment, Concrete, Brick, Glass, Drywall, Lumber and Stone, Confectionery, Food and Beverage, Financial Technology, Furniture Manufactures and Importers, , Bottling, Packaging and Containers, Heating, Ventilation and Air Conditioning – HVAC, Insulation and Environmental Solutions, … Read More
Court Stays Injunction Claim in Favour of Arbitration / Refuses to Consolidate Arbitration Proceedings Without Consent of All Parties
In Loan Away Inc. v. Western Life Assurance Company, 2018 ONSC 7229, the plaintiff had an agreement with the defendant by which the plaintiff sold the defendant’s insurance policies in return for payments by the defendant. The defendant ceased making payments and the plaintiff commenced an action against the defendant for an injunction to require the defendant to make the payments to the plaintiff and to prevent the defendant from terminating the insurance policies that the plaintiff had sold on the defendant’s behalf. The defendant relied upon an arbitration clause in its agreement with the plaintiff to stay the action. The plaintiff argued, among other things, that the claim should not be stayed because the arbitration clause contained arbitration clause contained an exception for requests for a temporary restraining order or other forms of injunctive relief. The plaintiff argued that its request for a permanent injunction fell under the category … Read More
Real Estate Litigation: Failure to Give Extension of Closing Date is not Bad Faith
The recent summary judgment motion decision in Time Development Group Inc. v. Bitton, 2018 ONSC 4384, involves a situation that arises quite often in failed closings of real estate transactions. One of the main causes for an aborted real estate transaction is the failure of the purchaser to obtain the required financing to close on the transaction, possibly influenced by the Ontario Fair Housing Plan and the new mortgage lending rules. In this case, the plaintiff entered into an agreement to purchase three adjoining properties for a residential home redevelopment project. There were a series of amendments to the agreement with the terms as follows: (a) purchase price of $10.55 million; (b) deposit of $500,000; (c) two vendor take back mortgages; and (d) closing date of July 31, 2017. The plaintiff had secured a commitment letter to finance the transaction, however, six days before the closing date, the plaintiff was dismayed to find out that their financing had been withdrawn because the market conditions had changed. … Read More
A Successful Constructive Dismissal Claim in Hagholm v. Coerio Inc.
Constructive dismissal occurs when an employee is indirectly and effectively dismissed from the position or terms he/she had previously agreed formed the employment. Without the consent of the employee, a substantial alteration is presented that fundamentally changes the terms of the agreed upon contract. Hagholm v. Coerio Inc. represents a successful claim for constructive dismissal. The respondent had entered into her employment on the understanding that she could work from home three days a week. When this condition was changed, the respondent claimed constructive dismissal and ceased coming to work. The Motion Judge, on a motion for summary judgment, found that there was constructive dismissal because this was an essential term and the appellant arbitrarily withheld a bonus from the respondent. The Court of Appeal also confirmed that the respondent was not required to mitigate her damages for the appellant’s breach of contract in these circumstances. Also in this case, the … Read More
When is Oral Evidence Required to Resolve Credibility Issues in Summary Judgment Motions?
The Ontario Court of Appeal decision in 2212886 Ontario Inc. v. Obsidian Group Inc., 2018 ONCA 670, involved the appeal of a partial summary judgment decision in a dispute between the franchisor and a franchisee of Crabby Joe’s Tap and Grill. In this case, the franchisee operated a Crabby Joe’s franchise for a year and a half prior to serving a notice of rescission of the franchise agreement on the franchisor. Claims The franchisee claimed that the disclosure document provided was materially deficient and it was entitled to rescind the franchise agreement within two years of execution of the franchise agreement under section 6(2) of the Arthur Wishart Act (Franchise Disclosure), 2000 (“the Act”). The franchisee claimed for rescission damages under section 6(6) of the Act and also damages for breach of contract and breach of the fair dealing obligations under the Act. In response, the franchisor brought a counterclaim for a declaration that the franchise agreement was validly terminated and a … Read More
What Does the Illegal Substances Clause Mean in OREA Agreements of Purchase and Sale?
The Court of Appeal decision in Beatty v. Wei, 2018 ONCA 479, involved the failed closing of a residential property in Toronto and the proper interpretation of an illegal substances clause that is commonly found in OREA Agreements of Purchase and Sale. Illegal Substances Clause in OREA Agreement of Purchase and Sale In this case, about a month after entering into the Agreement of Purchase and Sale, the purchaser’s real estate agent discovered the property had been previously used as a marijuana grow-op in 2004. The purchaser sought to terminate the agreement and demanded the return of the $30,000 deposit. The sellers refused to terminate the agreement and commenced an application for a declaration that the purchaser breached the agreement by failing to close and an order that the sellers were entitled to the deposit and related damages. In response, the purchaser commenced a competing application for similar relief. The dispute was in respect to … Read More
Court Considers Deemed Place of Contracting in Jurisdiction Analysis
In We Serve Health Care LP v. Onasanya, 2018 ONSC 1758, the Applicant was a franchisor of home health care service providers.. The Applicant had its head office in Ontario and regional offices in various jurisdictions, including one in Saskatchewan. The individual Respondent entered into a Franchise Agreement with the Applicant’s predecessor company granting her a license to operate a franchise in Saskatchewan.. She later assigned her rights under the Franchise Agreement to the corporation Respondent. The Applicant refused to renew the Franchise Agreement, resulting in a dispute. The Applicant commenced an Application in Ontario for a declaration that the Franchise Agreement had expired and for a mandatory order that the Respondents comply with their post-expiry obligations under the Franchise Agreement. The Respondents brought a motion to stay the Application on the basis that the Ontario Court did not have jurisdiction. The Applicant argued that the dispute was presumptively … Read More