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
United Nations Commission on International Trade Law, Model Law on International Commercial Arbitration (1985) – More States adopt Model Law Legislation
In 1981, an international working group was formed with the objective of creating a model law for commercial arbitration. The goal was to develop a framework for utilization as a reference for domestic legislation by nations aiming to establish a contemporary legal structure promoting commercial arbitration. The Model Law was formally adopted by the United Nations Commission on International Trade Law (UNCITRAL), on June 21, 1985. The United Nations Commission on International Trade Law, sometimes known as the Model Law, provides the basis of Ontario’s statute for the International Commercial Arbitration Act, 2017, S.O. 2017, c. 2, Sched. 5. In 1986, Canada was the first country to adopt the Model Law with the federal Commercial Arbitration Act, and British Columbia was the first jurisdiction in the world to adopt the Model Law with the enactment of the International Arbitration Act. Today, legislation based on the Model law has been adopted … Read More
Summary Judgment Granted, Costs Awarded – Ontario Superior Court grants Summary Judgment in FactR Limited v. R.R.I.C.H. Construction, 2024 ONSC 4792
Summary judgment is a powerful procedural mechanism, allowing a party to file a motion to resolve a case early in the proceedings if there are no genuine issues for trial. In FactR Limited v. R.R.I.C.H. Construction, 2024 ONSC 4792, the Ontario Superior Court recently demonstrated the enhanced fact-finding powers afforded to judges when determining summary judgment motions involving contractual breaches and conversion of property. In FactR Limited v. R.R.I.C.H. Construction, the plaintiffs sought to recover money loaned to two defendants (the “Contract Defendants”) through invoicing factoring agreements (the “Agreements”), as well as an additional defendant for their alleged role in improperly converting a cheque payable to the plaintiffs (the “Fraudulent Defendant”). The motion judge ultimately ruled in favour of the plaintiffs, granting summary judgment and concluding there were no genuine issues requiring a trial. At the hearing for the summary judgment motion, the plaintiffs tendered evidence demonstrating the Contract Defendants’ … Read More
No Adjournment Granted, International Arbitration Award Upheld: Court of Appeal for Ontario
In Xiamen International Trade Group Co., Ltd. v. LinkGlobal Food Inc., 2024 ONCA 605, the respondent brought an application in Ontario to enforce an international arbitration award from China. During the hearing of this request, the appellant sought an adjournment of the hearing to initiate legal proceedings in China. The goal of these proceedings was aimed at compelling the appellant’s former legal counsel to provide testimony regarding alleged breaches of natural justice in the international arbitration process. Such breaches, if substantiated, may have resulted in the refusal to enforce the arbitration award. The Court of Appeal for Ontario denied the appellant’s argument, noting that the scope of denial for an international arbitration award is “narrow” and without evidence or substantive submissions with an air of reality, judgment should be granted to enforce the order. The Court of Appeal remarked that the appellant had a complete year from the date of … 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
Recognition and Enforcement of a CIETAC Arbitral Award Allowed as Partial Summary Judgment
In Shanghai Investment Co. Ltd. V. Lu et al. 2024 ONSC 2762, the Ontario Superior Court of Justice (Commercial List), allowed a foreign arbitral award to be recognised and made enforceable as a partial summary judgment. The Plaintiff, Shanghai Lianyin Investment Co Ltd. (“SLIC”) sought the recognition and enforcement of a CAD $233 million arbitral award rendered under the rules of the China International Economic and Trade Arbitration Committee (“CIETAC”) against the Defendant Zheng Yao Lu (“Lu”) as a threshold matter; and a declaration that the other defendant, Lichun Guo (“Guo”) held her interest in two properties in Ontario on behalf of Lu, and that SLIC could enforce its award against these properties. The court found that the CIETAC award should be recognised and made enforceable as both of the following requirements under Articles IV and V of the New York Convention (incorporated in the International Commercial Arbitration Act, 2017, S.O. 2017, c. … 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
Letters of credit and the fraud exception: Supreme Court examines applicability to fraud by a third party
A letter of credit or a bank guarantee is an autonomous instrument that is issued by a financial institution on the directions of a customer. The letter of credit seeks to underwrite the customer’s obligations to the beneficiary under the distinct underlying contract. It entitles the beneficiary to payment on demand from the issuing bank, so long as that demand strictly complies with the requirements set out in the letter of credit. The obligation of the financial institution to pay when presented with a valid demand is near absolute. The only recognized exception in Canadian law is when there is fraud by the beneficiary that is brought to the financial institution’s attention prior to payment. In Eurobank Ergasias S.A. v. Bombardier Inc. 2024 SCC 11 (CanLII), the Supreme Court of Canada examined a critical issue of when an issuing bank is required to refuse to honour a demand for payment … 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
Recognition of Foreign Judgments – Judgment is Enforceable Regardless of Pending Appeal
In the recent decision of the Ontario Superior Court of Justice (“ONSC”), Acteon v. Verona Medical Group, 2023 ONSC 5140, the plaintiff was successful in obtaining the recognition of a judgment issued by a court in France, the Commercial Court of Bordeaux (the “Summary Proceeding Judgment”), albeit the ONSC stayed the plaintiff’s ability to enforce the Summary Proceeding Judgment in Ontario pending the defendants’ appeal of a related judgment (the “Merits Proceeding Judgment”) in France. The main contentious issue in this recognition proceeding was the defendants’ position that the plaintiff’s Summary Proceeding Judgment was not “final” because of the defendants’ appeal of the Merits Proceeding Judgment in France. The plaintiff’s legal expert advised the ONSC that though the Summary Proceeding Judgment was a “provisional award”, it was still “final, valid, binding and fully enforceable”. The defendants’ legal expert disagreed, positing that the Summary Proceeding Judgment was only an interim decision … Read More
Directors Can Be Liable To Corporations Creditors For Stripping Assets
In the recent Court of Appeal decision of FNF Enterprises Inc. v. Wag and Train Inc., 2023 ONCA 92 the Court of Appeal considered whether a landlord in a commercial lease arrangement could pursue a claim against the sole director and officer of the tenant corporation, for stripping the assets of the corporation to evade their debt obligations under the lease. The Facts The Appellants, FNF Enterprises Inc., and 2378007 Ontario Inc. (the “Landlord”) owned a commercial premises in Kitchener, Ontario which they leased to one of the Respondents on the appeal, a corporate entity named Wag and Tag Inc., (the “Tenant”). Wag and Tag Inc. was in the business of providing dog grooming, training and daycare services. The lease ran from 2015 to March 31, 2021. The premises was abandoned by the Tenant prior to the end of the lease term. The Claim In September 2020, the Landlord commenced … Read More
Are my Trademark Rights being Breached? Trademark Infringement and Passing Off Lawyers
In Subway IP LLC v. Budway, Cannabis & Wellness Store, 2021 FC 583, the Federal Court of Canada (“FC”) found that the respondents infringed on the applicant’s registered trademark contrary to section 20 of the Trademarks Act. The FC found that the use of the “BUDWAY” trademark amounted to the tort of passing off and depreciation of goodwill in the appellant’s trademark. As a result, the court granted the applicant, Subway, damages in the amount of $15,000 and an injunction against the respondents prohibiting them, among other things, from dealing in goods or services in association with the trademark or trade name “BUDWAY”. What is Considered a Breach of Trademark Rights? In the FC’s reasons for its decision, it advised generally that: A trademark registration grants the owner the exclusive right to use the mark throughout Canada in respect of the goods and services in the registration; The right to … Read More
Ontario Court Affirms “Generous and Liberal Approach” to the Recognition/Enforcement of Foreign Judgments
In the recent decision, M1 Florida Developments Inc. v. Ameristar Development Corporation, 2021 ONSC 6883 (CanLII), the Ontario Superior Court of Justice (“OSCJ”) granted the plaintiffs default judgment in Ontario for the registration and enforcement of a judgment that the plaintiffs obtained in the United States of America (the “Foreign Judgment”). The OSCJ advised that Canadian courts “have adopted a generous and liberal approach to the recognition and enforcement of foreign judgments”. Further, the OSCJ opined that the purpose of an action for the recognition of a foreign judgment “is to assist in enforcing an already-adjudicated dispute” and is not “to evaluate or re-litigate the underlying claim”. The OSCJ was satisfied that the foreign court “properly assumed jurisdiction over the dispute” and noted that a Canadian court “will generally recognize and enforce a foreign judgment where the foreign court assumed jurisdiction on the same basis as the domestic court would”. … Read More
Recognition of Foreign Judgments – Supreme Court Leaves Determination of Enforceability of “Ricochet Judgments” for another day – Update on Previous Blog
This is an update on our blog, Recognition of Foreign Judgments – The Ontario Courts will not Recognize Enforcement Orders (a.k.a. “Ricochet Judgments”), regarding the Superior Court decision in H.M.B. Holdings Ltd. v. Attorney General of Antigua and Barbuda, 2021 ONSC 2307 (CanLII). That decision has been appealed up to the Supreme Court of Canada (“SCC”), which has now also rendered its decision. In dismissing the appeal, the SCC agreed with the application judge, and with the Court of Appeal, that Ontario’s Reciprocal Enforcement of Judgments Act (the “Act”) bars the plaintiff (appellant) from registering a default judgment that it obtained in British Columbia to enforce a judgment granted by the Judicial Committee of the Privy Council. The SCC advised that the Act only applies to (1) reciprocating jurisdictions, such as British Columbia, and (2) judgments or orders of a court in a civil proceeding where a sum of money … Read More
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