Benjamin Zarnett

The appellant, an investor who purchased shares in the secondary market, sought to certify a class proceeding against the issuer, underwriters, and auditors for negligent misrepresentation in a prospectus.

The motions judge dismissed the action, finding the pleadings failed to disclose a reasonable cause of action as they did not establish a special relationship giving rise to a duty of care.

The Court of Appeal upheld the dismissal, agreeing that the pleadings lacked material facts to support a duty of care owed to secondary market purchasers by the auditors or underwriters.

The appellants appealed the assessment of a court-appointed receiver's fees and disbursements, including those of its solicitors.

They argued the motion judge exhibited bias, erred in precluding cross-examination of the receiver, and erred in finding the fees fair and reasonable.

The Court of Appeal found no reasonable apprehension of bias.

While the court noted that a receiver's accounts should ideally be verified by affidavit to allow for cross-examination, it held that the questioning permitted by the motion judge was an adequate substitute in this case.

The court upheld the receiver's fees but allowed the appeal in part, remitting the solicitors' accounts for reassessment because the motion judge failed to give them separate consideration.

The appellant appealed the dismissal of her action for inducing breach of contract on a motion for summary judgment.

The Court of Appeal found that the motions judge correctly applied the governing principles for summary judgment and that the plaintiff failed to show a genuine issue for trial.

The appeal was dismissed with costs.

The defendants appealed an order directing that a certification motion in a class proceeding be heard in Hamilton based on the balance of convenience.

The Divisional Court allowed the appeal, holding that rule 37.03 of the Rules of Civil Procedure applies to determine the venue of a certification motion and that section 12 of the Class Proceedings Act, 1992 does not oust that rule.

The court further held that the balance of convenience is not the proper test for granting leave under rule 37.03(4) to hear a motion elsewhere.

The appellant mortgagee sought to recover on a mortgage covenant from beneficial owners alleged to be undisclosed principals of a corporate titleholder that executed the mortgage under seal.

The Court held that the sealed contract rule remains part of Canadian common law and bars suit by or against undisclosed principals on contracts executed under seal.

It rejected the argument that the rule does not apply to corporate agents and held that Harmer v. Armstrong did not create a direct right of action against beneficiaries or principals.

Applying s. 13(1) of the Land Registration Reform Act, the Court held the mortgage was deemed under seal for all purposes, making the beneficial owners not liable on the covenant.

The request to abolish the sealed contract rule was refused because the proposed reform was not shown to be necessary and risked far-reaching commercial uncertainty.

The appellant accepted an offer of employment but the employer cancelled the contract before the appellant was obliged to provide services.

The parties settled for $400,000.

The Minister of National Revenue assessed the damages as a taxable 'retiring allowance'.

The Tax Court of Canada set aside the assessment, finding the damages were not a retiring allowance nor income from employment.

The Federal Court of Appeal overturned the trial judge's findings of fact on apportionment and held the damages were taxable as income from employment.

The Supreme Court of Canada allowed the appeal, holding that the Federal Court of Appeal erred in overturning the trial judge's findings of fact.

The Court further held that the damages were not a 'retiring allowance' because the appellant had not yet commenced employment, and they were not taxable under the general provision of s. 3(a) of the Income Tax Act.

The appellant, an unauthorized dealer, sold genuine Seiko watches lawfully acquired from outside the authorized Canadian distribution network.

The respondent, the authorized Canadian distributor, obtained a permanent injunction at trial preventing the appellant from advertising or selling Seiko watches in Canada, arguing that the sale of the watches without the authorized warranty and point-of-sale service constituted passing off.

The Supreme Court of Canada allowed the appeal and struck out the injunction, holding that neither the classic nor the extended tort of passing off applies where a vendor sells identical, lawfully acquired goods under their original trademark, provided there is no misrepresentation to the public.