Corporate/Commercial Law - OCA

The appellant appealed the dismissal of his action against the respondent.

The Court of Appeal upheld the motion judge's finding that the action was essentially about a promissory note to which the respondent was not a party, as the loan was made to a company and her husband.

The appeal was dismissed with costs fixed at $5,000.

The appellant, acting as trustee for noteholders, appealed the dismissal of its application against the respondent mining corporation.

The appellant argued that the respondent's failure to obtain foreign environmental permits triggered a 'Project Change of Control' under the trust indentures, and that the respondent improperly sold equipment purchased with note proceeds.

The appellant also sought an oppression remedy under the Canada Business Corporations Act, arguing the respondent was insolvent and its directors should have prioritized creditor interests.

The Court of Appeal dismissed the appeal, finding no breach of the trust indentures and upholding the application judge's conclusion that the directors' business decisions were reasonable and did not constitute oppression, even in the context of financial distress.

The respondent entered into a Tax Refund Agreement with Grant Forest Products Inc. (GFPI) to purchase income tax refunds.

GFPI failed to deliver the required transfer document before seeking CCAA protection.

The motion judge applied the equitable maxim that equity considers done what ought to be done, declaring the transfer had taken place.

The appellant, representing secured lenders, appealed.

The Court of Appeal dismissed the appeal, holding that the motion judge correctly applied the maxim to cure GFPI's breach and that doing so did not inequitably rewrite the contract or create an unlawful preference.

The defendant supplied a helicopter engine to the plaintiff under a commercial agreement containing a forum selection clause specifying Arizona as the exclusive jurisdiction.

After the helicopter crashed in Saskatchewan, the plaintiff sued in Ontario.

The motion judge dismissed the defendant's motion to stay the action, applying a forum non conveniens analysis.

The Court of Appeal allowed the appeal, holding that the motion judge erred by treating the forum selection clause as merely one factor in a forum non conveniens analysis.

Under the strong cause test, a forum selection clause in a commercial contract must be enforced unless exceptional circumstances are shown.

The appellants appealed a summary judgment enforcing an equipment financing lease, arguing the lease was illegal and void for contravening the Electrical Safety Code.

The Court of Appeal dismissed the appeal, finding that the lease contained non-recourse provisions and that not every statutory breach invalidates a commercial contract for illegality.

The court concluded there was no genuine issue for trial regarding the lease's enforceability.

The Ontario Energy Board (OEB) imposed a condition on Toronto Hydro-Electric System Limited (THESL) requiring approval from a majority of its independent directors before declaring future dividends to its affiliates, due to concerns over large dividend payouts amidst aging infrastructure.

The Divisional Court struck down this condition, finding the OEB exceeded its jurisdiction.

The OEB appealed.

The Court of Appeal allowed the appeal, holding that the OEB's broad rate-setting powers under the Ontario Energy Board Act included the jurisdiction to impose such a condition to protect ratepayers.

The Court found the OEB's decision was reasonable and did not improperly usurp corporate law principles, as it merely added a regulatory check to the directors' discretion.

The appellants appealed a trial judgment finding that a Memorandum of Understanding regarding a joint property purchase was a binding contract that they had repudiated.

The appellants argued the respondent breached fiduciary duties by attempting to obtain a secret commission.

The Court of Appeal dismissed the appeal, finding no palpable and overriding error in the trial judge's conclusion that the unsuccessful attempt to gain a secret commission did not amount to a breach of fiduciary duty, especially since the issue was raised late in the trial.

The court also upheld the remedy of rescission.

The appellant appealed a trial judgment finding that a robotic weld cell it designed and produced for the respondent was not reasonably fit for its intended purpose.

The appellant argued the trial judge erred by failing to find an implied term in the contract requiring the respondent to provide pretacked assemblies within tolerances suitable for robotic welding.

The Court of Appeal dismissed the appeal, finding the contract documents and commercial realities placed the responsibility on the appellant, who had specialized expertise in robotic welding and knowledge of the respondent's facility.

The appellant appealed a summary judgment dismissing his action against the respondent bank for breach of a settlement agreement.

The appellant argued the bank improperly reported his written-off debt as an R9 'bad debt' credit rating.

The Court of Appeal dismissed the appeal, finding the motion judge correctly applied the summary judgment test and that the settlement agreement explicitly stated the bank was not required to report to credit agencies in any particular way.

The appellant sought to purchase the respondents' business and the parties executed a letter of intent.

On the closing date, the appellant was in Florida with the respondents' knowledge, but the respondents refused to close the transaction.

The trial judge dismissed the appellant's action for specific performance and damages, finding the letter of intent was not a binding contract.

The Court of Appeal allowed the appeal, holding that the letter of intent and the parties' subsequent conduct evidenced a clear intention to be legally bound.

The Court declined to order specific performance but awarded damages for loss of opportunity, increasing the damages period from three to seven months.

The appellant appealed a trial judgment regarding liability under a commercial lease and the dismissal of its counterclaim.

The Court of Appeal allowed the appeal, finding that the appellant had no liability for matters predating the 1999 lease under the assignment of lease.

The court also found no evidence of the cost to remove partitions erected by the appellant.

The main action was dismissed.

The court also allowed the appeal regarding the counterclaim, ordering a new trial because the trial judge provided no analysis on liability or damages.

An addendum was later released confirming the result despite counsel's correction regarding evidence of partition removal costs.

The Hudson's Bay Company sold a division, transferring employees to a successor employer who established a new pension plan.

The transferred employees sought a pro rata share of the actuarial surplus from the original pension plan and challenged the employer's payment of plan expenses from the pension fund.

The Court of Appeal held that under the plan documentation, the transferred employees had no entitlement to the surplus, and thus the employer did not breach any trust by not transferring it.

Furthermore, the court found that the employer was legally entitled to pay plan administration and fund management expenses from the pension fund based on valid amendments to the trust agreements.

The appellants appealed the trial judge's decision allowing the respondents' claims for the balance of a vendor take-back loan and wrongful dismissal, and dismissing the appellants' action for breach of contract and fiduciary duty arising from a complex business sale.

The Court of Appeal upheld the trial judge's interpretation of the contractual documents, finding that the non-competition covenant had to be read in conjunction with a mutual undertaking that granted a right of first refusal for distribution contracts.

The Court also agreed that the respondent did not owe a fiduciary duty to the appellants, as the parties were at arm's length and of equal strength.

The appeals were dismissed.

The appellants appealed a decision declaring that the respondent was not obligated to continue paying a 1% royalty on the manufacture and sale of products in jurisdictions where the underlying patents had expired.

The Court of Appeal upheld the application judge's interpretation of the commercial contract, finding that royalties were only payable where patent protection existed.

The Court also rejected the appellants' arguments that post-agreement inventions were covered by the contract and that the respondent was estopped from ceasing payments due to past inadvertent overpayments.

The appeal was dismissed.

The appellants, Canadian 'Names' in the Lloyd's insurance market, appealed a decision allowing the registration and enforcement of U.K. judgments against them for unpaid reinsurance premiums.

They argued that the U.K. proceedings denied them natural justice by preventing them from litigating fraud claims before judgment, and that enforcing the judgments would be contrary to Ontario public policy because Lloyd's had breached the prospectus requirements of the Ontario Securities Act.

The Court of Appeal dismissed the appeal, finding no denial of natural justice because the U.K. courts assumed the fraud allegations were true but found they did not provide a legal defence.

The Court also held that enforcing the judgments was not contrary to public policy, emphasizing international comity and the fact that Ontario courts had previously determined England was the proper forum for the dispute.

The appellant sold corn to the respondents, stating it was 'good corn'.

The corn contained toxic substances and caused damage to the respondents' pigs.

The trial judge found that the appellant's statement constituted a warranty that the corn was suitable for feeding to pigs, and awarded damages of $36,500.

The Court of Appeal dismissed the appeal, holding that it was open to the trial judge to conclude that the appellant assumed the risk that the corn would not be suitable for the respondents' pigs.

The appellant appealed a summary judgment dismissing his action against his former wife, daughter, and a business college.

He alleged that the respondents illegally took the company from him, claiming certain documents were forged.

The Court of Appeal upheld the motions judge's finding that the appellant provided no evidence to substantiate his claims, noting that he had previously declared bankruptcy and sworn he owned no shares.

The appeal was dismissed with costs.

The appellants, including a golf course developer and the Royal Bank, appealed a trial judgment finding them liable to a class of 169 club-member investors.

The investors had provided letters of credit to secure memberships, which were drawn down by the developer and applied to a Royal Bank construction loan before the contractual conditions for draw down were met.

The Court of Appeal upheld the trial judge's findings that the developer breached its contract and fiduciary duties by drawing on the funds prematurely.

The Court also upheld the finding that the Royal Bank was liable for knowing receipt of trust funds, as it was unjustly enriched and failed to make adequate inquiries despite knowing the conditions for draw down were unmet.

The appeal was dismissed, and the awards for restitution, punitive damages, and compound interest were affirmed.

The appellant, DeGasperis Muzzo Corporation, appealed a judgment declaring that the mortgage security interests of Montreal Trust and Stadco in the SkyDome ranked in priority to its leasehold interest in a SkyBox suite.

The Court of Appeal dismissed the appeal, agreeing with the trial judge that the mortgage instruments were registered prior to the leasehold interest under the Land Titles Act, and that the appellant had agreed to subordinate its interest in the lease.

The cross-appeal was also dismissed.

The appellant bank sought recovery of funds paid under a clean irrevocable letter of credit, alleging the respondent beneficiary’s call was fraudulent because the proceeds were applied to a different project under a cross-collateralization agreement unknown to the bank.

The court upheld the trial judge’s conclusion that there was no fraud, emphasizing the wording of the letter of credit, the legal advice obtained before the call, and the existence of formal grounds supporting the call in any event.

The related claims in mistake of fact and unjust enrichment failed because they were tied to the fraud allegation.

The respondent’s appeal from the trial costs disposition was also dismissed, including its request for solicitor-and-client costs and its effort to shift third party costs to the bank.