Corporate/Commercial Law - ONCA

The appellant appealed an order requiring it to deliver a signed release.

The motion judge had held that releasing an individual partner's 'agents' also released his law firm from vicarious liability for his conduct.

The Court of Appeal disagreed, finding that while a partner is an agent of the firm under the Partnership Act, the firm is not generally an agent of the individual partner.

The appeal was allowed in part to permit the appellant to plead that the law firm was vicariously liable for the partner's conduct.

The original minority shareholder of a closely held corporation brought an oppression action against the majority shareholder and the company.

Due to ill health, he assigned his shares, contractual rights, and the oppression claim to the appellant.

The motion judge and Divisional Court held the assignment of the cause of action was invalid.

On appeal, the Court of Appeal found the assignment valid, as it fell within the exception to the rule against champerty and maintenance because the cause of action was ancillary to the assigned property interest in the shares.

The appellant appealed a trial judgment dismissing its claims for maintenance fees and unjust enrichment.

The Court of Appeal upheld the trial judge's findings that the claim for maintenance fees under an oral contract was statute-barred, as the appellant knew or ought to have known of the non-payment years prior.

The Court also upheld the finding that the appellant's acquiescence barred recovery for unjust enrichment regarding management services.

The appeal was dismissed with costs.

The appellant Noteholders appealed orders approving a bridge loan, a $36 million DIP financing facility, and a Management Incentive Plan (MIP) for the respondent debtor under the CCAA.

The debtor's principal asset was a $3.4 billion arbitration claim against Venezuela.

The Noteholders argued the DIP financing, which could outlast the CCAA protection period and granted the lender a 35% interest in the arbitration proceeds, was effectively an arrangement requiring creditor approval.

The Court of Appeal dismissed the appeal, finding that the supervising judge reasonably exercised his broad discretion under s. 11.2 of the CCAA to approve the financing necessary to pursue the arbitration, and that the financing did not constitute a plan of arrangement.

The appellants appealed a summary judgment granting the respondent possession under a mortgage.

The appellants argued that the respondent was required to advance the full loan amount before acting on any default.

The Court of Appeal dismissed the appeal, finding that the General Security Agreement permitted the respondent to withhold payments upon an event of default, such as the borrowing company's voluntary bankruptcy.

As the remaining funds were not due before the default occurred, the respondent was entitled to move for possession.

The appellants appealed a motion judge's decision that a restrictive covenant in a franchise agreement was not ambiguous to the point of being unenforceable as a pure question of law.

The Court of Appeal dismissed the appeal, finding that the provision was not facially ambiguous when read in the context of the entire agreement, and that any factual ambiguities would need to be determined at trial.

The appellants appealed a decision declaring the respondents were entitled to rescind a second franchise agreement due to the appellants' failure to provide a disclosure document.

The Court of Appeal upheld the application judge's findings that the matter was appropriate for an application, that the second agreement was a 'franchise agreement' under the Arthur Wishart Act triggering disclosure obligations, and that the rescission claim was not statute-barred because the limitation period only began when the franchisor disputed the notice of rescission.

The appellant leased a water heater from the respondent.

The respondent proposed an amendment to the rental agreement requiring customers to deal directly with the respondent to terminate the agreement, rather than using an agent.

The appellant sought a declaration that the amendment was invalid under the Consumer Protection Act.

The Court of Appeal held that the amendment did not comply with the Regulation because the right to terminate was not unconditional.

However, the Court upheld the application judge's decision to invoke s. 93(2) of the Act, binding the appellant to the amendment, as the application was brought for a collateral purpose to benefit a competitor and no consumer was prejudiced.

The appellant insurer appealed a decision finding that its directors and officers insurance policy provided coverage for defence costs incurred by the respondent in an OSC proceeding.

The respondent had previously given notice of potential claims to a prior insurer.

The Court of Appeal upheld the application judge's finding that, viewed objectively, the parties intended the new policy to cover the prior acts referred to in the notice up to the first $5 million of the policy limits.

The court found that the insurer had waived the carve-out provisions in the application and that general exclusion clauses did not override the specific agreement for prior acts coverage.

The appeal and cross-appeal on costs were dismissed.

The appellants appealed a Superior Court judgment regarding a debt and share pledge.

The Court of Appeal dismissed the appeal, finding that the respondent's retention of shares did not extinguish the underlying debt, given his undertaking to return the shares once the principal debt was paid in full.

The court also upheld the trial judge's findings regarding notice of a guarantee.

The respondent commenced an action alleging the appellants fraudulently obtained and illegally transmitted its satellite programming to apartment tenants.

The appellants moved to stay the action under s. 7(1) of the Arbitration Act, relying on an arbitration clause in the residential subscriber agreement.

The Court of Appeal upheld the motion judge's dismissal of the stay, finding the appellants could not invoke the arbitration clause without acknowledging they were parties to it.

The Court also agreed that a partial stay under s. 7(5) was inappropriate as it would cause a multiplicity of proceedings, given that only a few of the 23 defendants were potentially bound by the agreement.

The cross-appellants (the sellers) appealed a trial judgment finding them liable for negligent misrepresentation regarding the value of business inventory sold to the respondents (the buyers).

The trial judge had awarded damages to the buyers but reduced the award by 20 percent due to contributory negligence.

On appeal, the sellers argued the buyers did not reasonably rely on the misrepresentation and suffered no detriment, while the buyers argued the finding of contributory negligence was inconsistent with reasonable reliance.

The Court of Appeal dismissed the appeal, holding that the trial judge's findings of reasonable reliance, detriment, and contributory negligence were supported by the evidence and could co-exist.

The appellant appealed a motion judge's decision striking out his statement of claim for failing to disclose a reasonable cause of action and dismissing his motion for leave to amend.

The appellant argued he should be allowed to amend his claim to assert negligence against the respondent bank as a guarantor or surety of the corporation's obligations.

The Court of Appeal dismissed the appeal, finding no lis between the appellant and the bank because his obligations were to third parties, not the bank.

Furthermore, the court agreed that the appellant's potential claim was derivative of the corporation's claim and could only be asserted by the corporation.

The appellant farmer appealed a trial judgment awarding damages to the respondent grain elevator for breach of several agricultural futures contracts.

The appellant argued that the parties had a single overall business arrangement, that they had mutually agreed to terminate all dealings, and that the respondent failed to mitigate its damages after the appellant's anticipatory repudiation.

The Court of Appeal dismissed the appeal, finding that the contracts were independent, no termination agreement existed, and the respondent acted reasonably by waiting until the contractual delivery dates to calculate its losses in accordance with the contracts' valuation provisions.

The plaintiff employer sued its former president for breach of a non-competition covenant and breach of fiduciary duty after he successfully bid against the employer on a public municipal tender.

The trial judge used blue-pencil severance to cure an ambiguous and unreasonable temporal restriction in the non-competition covenant and found the employee liable.

On appeal, the Court of Appeal held that blue-pencil severance was unavailable because the severed words were not trivial and there was no evidence the parties would have unquestionably agreed to the contract without them.

The Court also found no breach of fiduciary duty, as the employee did not use confidential information or compete unfairly.

The employee's cross-appeal was allowed and the action dismissed.

The appellants appealed a judgment, arguing only one point regarding fresh evidence.

The Court of Appeal dismissed the appeal, finding that the fresh evidence would not have changed the result.

The amount in the fresh evidence was consistent with the internal allocation of payments found by the motion judge and did not affect the finding that interest was being paid on all three loans, which defeated the limitations defence.

The appellant sold a waterjet machine to a debtor and perfected its purchase money security interest by registering under the PPSA.

Unbeknownst to the appellant, the debtor immediately transferred the machine to a related company.

The related company later obtained financing from the respondent, who registered a security interest against the related company's assets.

The Court of Appeal held that the appellant's security interest remained perfected and took priority under s. 48(2) of the PPSA, as the appellant registered a financing change statement within 30 days of learning of the unauthorized transfer.

The appellant's discharge of a separate, unrelated registration against the related company did not unperfect its original security interest.

The appellant landlord appealed an order regarding a commercial lease dispute.

The issues included the commencement date of the lease, the commencement date for parking space rent, and the payment of a leasehold improvements allowance.

The Court of Appeal upheld the application judge's findings that the lease commenced when the demising walls were built and the premises were delivered, and that parking rent commenced when the parking spaces were turned over.

The court amended the order on consent to direct the leasehold improvements allowance to be paid directly to the sub-tenant.

The appeal was otherwise dismissed.

The appellant appealed a trial judgment dismissing its claim for breach of contract.

The appellant argued that a preliminary contract was formed when it submitted a proposal, or alternatively, that an oral contract was formed during a phone call.

The Court of Appeal dismissed the appeal, finding no palpable and overriding error in the trial judge's factual conclusions that a purchase order was required to form a contract and that the phone call did not constitute offer and acceptance.

The appellant appealed an order enforcing a monetary judgment from a Michigan court.

The Court of Appeal upheld the motion judge's finding that the appellant had attorned to the jurisdiction of the Michigan court, which gave the Ontario court jurisdiction to enforce the judgment.

The court also found that the narrow exceptions to enforcement set out in Beals v. Saldanha did not apply.

The appeal was dismissed with costs.