Corporate/Commercial Law - ONCA

An appeal from a summary judgment motion dismissing a claim for breach of confidence.

The appellant, a pharmaceutical company, alleged that the respondent misused confidential information regarding a potential equipment manufacturer (HED International) that was disclosed during a due diligence period for a failed asset purchase agreement.

The motion judge dismissed the claim, finding no detriment to the appellant.

The appellate court upheld the dismissal, finding that although the motion judge's approach to detriment was overly narrow, the appellant suffered no detriment as a matter of fact because it was not ready to manufacture its products and could not have benefited from direct access to the equipment manufacturer.

This appeal and cross-appeal arose from a fraudulent scheme involving the sale of used vehicles.

The trial judge found the appellant garage liable for conversion of five missing vehicles and awarded damages of $40,792.

The trial judge dismissed conversion claims regarding consigned vehicles, finding the parties acquired them in good faith without notice of defects in title.

The appellants challenged the findings regarding stolen vehicles, mitigation of damages, quantum of damages, and the failure to adjudicate certain counterclaims.

The respondents cross-appealed the mercantile agent finding and the costs award.

The appellate court dismissed the appeal and cross-appeal, with limited relief granted for a contribution and indemnity claim against one defendant.

The appellant, principal of a hotel corporation that defaulted on mortgage financing, appealed a motion judge's decision regarding interpretation of a forbearance agreement.

The appellant argued that under the forbearance agreement with the respondent lender, the debt was limited to $8.5 million (the amount paid to discharge the original mortgage), rather than the full $17 million outstanding.

The appellant also sought relief from forfeiture under section 98 of the Courts of Justice Act.

The Court of Appeal upheld the motion judge's decision, holding that the forbearance agreement clearly assigned the full $17 million debt and that relief from forfeiture was not warranted as the transaction was not unconscionable and the result was not disproportionate.

The appellant appealed from a trial judge's orders relating to the division of net family property and spousal support in a family law matter.

The principal issues were: (1) whether the trial judge erred in discounting a $5,000,000 promissory note by 90% for equalization purposes, where the note was signed on behalf of the appellant's holding company in favour of his parents for a condominium project loan; and (2) whether the trial judge erred in awarding indefinite spousal support.

The Court of Appeal upheld both decisions, finding that the trial judge properly applied the law regarding contingent liabilities and exercised reasonable discretion in awarding indefinite spousal support based on the respondent's health issues and the compensatory nature of support.

The appellants appealed a summary judgment decision granting the respondent judgment on its claim without set-off or stay pending the counterclaim.

The appellants raised three grounds of appeal: (1) that the motion judge failed to apply the appropriate test on summary judgment regarding equitable set-off and the interconnection of the claims; (2) that the motion judge erred in granting partial summary judgment; and (3) that the motion judge erred in piercing the corporate veil to impose personal liability on the individual appellant.

The Court of Appeal upheld the lower court decision on all grounds, finding that the claims were not so closely connected as to warrant equitable set-off, that no inconsistency issues arose from the partial judgment, and that the circumstances supported personal liability based on the individual's control and direction of the company's actions.

The appellants, corporate entities and individual guarantors, appealed summary judgments granted by the motion judge in favour of the respondent bank.

The corporate appellants had entered into franchise agreements to operate restaurants with financing provided by the respondent.

After difficulties arose and the franchisees sought to rescind the franchise agreements, they returned the restaurant operations to the franchisor.

The respondent bank demanded repayment of the outstanding financing, alleging events of default including cessation of business.

The motion judge granted summary judgment finding events of default had occurred.

The appellants argued the motion judge erred in concluding they had ceased to carry on business, contending their business had merely changed to recovering their franchise investments.

The Court of Appeal upheld the motion judge's decision, finding the appellants' position lacked business reality and common sense.

An online retailer of prescription eyewear based in British Columbia appealed an application judge's decision that found it was in breach of Ontario's Regulated Health Professions Act by dispensing prescription eyewear to Ontario customers without involving Ontario-licensed health care providers.

The Court of Appeal allowed the appeal, finding that the application judge erred in determining that sufficient constitutional connection existed between the respondent's online sales and Ontario's regulatory scheme.

The court held that while delivery of prescription eyewear falls within the continuum of dispensing activities, the mere delivery of product ordered online and processed in compliance with British Columbia's regulatory regime does not establish sufficient connection to apply Ontario's controlled act provisions to an out-of-province supplier.

The court emphasized that the discrete act of delivery has primarily a commercial aspect rather than a health care one, and that applying Ontario's legislation would effectively grant a monopoly over the importation of prescription eyewear into Ontario.

On appeal from a trial judgment dismissing the appellants' action for breach of contract and repudiation.

The appellants, who operated methadone treatment clinics, hired the respondent physician under a contract requiring her to remit 45% of OHIP billings and containing a non-competition clause.

Following the dissolution of the appellants' joint venture with another clinic operator, the respondent continued working at the jointly-operated clinics.

The trial judge found the contract frustrated by intervening events and that the non-competition provision was not breached.

The appellants appealed, arguing errors in the frustration analysis and interpretation of the non-competition clause.

The Court of Appeal upheld the trial judge's findings on frustration and contractual interpretation but allowed the appeal in part, awarding the appellants $8,194.59 for underpayment during the period prior to the alleged repudiation.

The appellant, a company that purchased land in Kingsville, Ontario, gave a promissory note for $171,000 to Ronald Colasanti in exchange for an assignment of a water allocation.

When the appellant refused to pay, claiming the promissory note was void for failure of consideration, the trustees of Colasanti's estate brought an action in debt.

The trial judge found valid consideration existed and awarded judgment.

On appeal, the appellant renewed its argument that the water allocation never belonged to Colasanti and therefore could not constitute valid consideration.

The Court of Appeal dismissed the appeal, holding that the appellant obtained an immediate resolution of its water supply problem and a building permit, which constituted valid consideration regardless of the legal status of the water allocation itself.

Four consolidated class actions brought by small investors who invested in syndicated mortgages promoted by Fortress Real Capital Inc. and Fortress Real Developments Inc. The investors alleged misrepresentation, breach of fiduciary duty, breach of contract, and negligence.

The motion judge struck claims against individual respondents Jawad Rathore and Vincenzo Petrozza, and dismissed claims to enforce syndicated mortgages against Empire Pace (1088 Progress) Ltd. and ADI Developments entities.

The appellants appealed.

The Court of Appeal upheld the dismissal of personal claims against Rathore and Petrozza but reversed the dismissal of mortgage enforcement claims against Empire Pace and ADI, finding that the motion judge erred in applying Rule 21 to matters requiring evidentiary findings regarding contract interpretation and disclosure.

An appeal by the Ministry of Labour from a provincial offences appeal court decision that reduced sentences imposed on a small furniture warehouse company and two of its directors for Occupational Health and Safety Act violations.

The defendants pleaded guilty to failing to provide fall protection equipment and safety training to an epileptic employee who fell to his death from an elevated order picker.

The sentencing judge imposed a $250,000 fine on the company and 25-day intermittent sentences on the directors.

The appeal judge reduced these to a $50,000 fine and $15,000 fines respectively.

The Court of Appeal dismissed the Crown's appeal, finding that while the appeal judge made errors in principle regarding moral blameworthiness and the rarity of incarceration for regulatory offences, the sentences ultimately imposed were not demonstrably unfit.

The court affirmed that moral blameworthiness is a relevant sentencing consideration for regulatory offences and that incarceration is not per se unavailable for first offenders, but upheld the reduced sentences based on changed circumstances and the principle of restraint.

The appellant sought an order declaring that it had properly commenced an arbitration by written demand dated October 6, 2017.

The arbitration clause in the insurance contract allowed the insured to select the venue and procedural laws of Bermuda or one of London, Toronto, or Vancouver under the English Arbitration Act of 1996.

The appellant argued that while the Act was incorporated by reference, its procedural provisions were excluded for arbitrations outside the UK, and that the UNCITRAL Rules would apply instead.

The Court of Appeal disagreed, finding that the plain wording of the contract required that where Toronto was the seat chosen, the arbitration be conducted in accordance with the procedural laws set out in the Act.

The Court also declined to determine whether the arbitration had been properly commenced, reserving that question to the arbitrators.

The appellants appealed a trial judgment concerning a business purchase agreement that was terminated before completion.

The trial judge found that a $100,000 deposit paid by the appellant toward a $500,000 purchase price was to be retained by the respondent pursuant to a termination agreement entered into by the parties.

The trial judge found no legal fault on either side and concluded that the parties' intention in the termination agreement was that the deposit remain with the respondent.

The Court of Appeal found no palpable and overriding error in the trial judge's interpretation and dismissed the appeal.

The appellant, New Era Development (2011) Inc., appealed a summary judgment decision granting fees of $400,000 to the respondent mortgage broker, Rescon Financial Corporation, and dismissing New Era's counterclaim.

The dispute concerned whether Rescon was entitled to commission upon producing an acceptable commitment letter or only upon actual funding.

The motion judge found the commitment letter acceptable, rejected New Era's defences based on fiduciary duty breach, negligence, and statutory violations, and dismissed the counterclaim.

The Court of Appeal upheld the decision on all grounds, finding no genuine issues requiring trial.

The appellants (franchisor and related entities) appealed a motion judge's decision that the respondents (franchisee and principals) validly rescinded a franchise agreement under section 6(2) of the Arthur Wishart Act (Franchise Disclosure), 2000.

The motion judge found the franchise disclosure document (FDD) was so inadequate as to amount to no disclosure because it failed to include the terms of the head lease and did not provide cost estimates for converting an existing restaurant to an ASWR outlet.

The Court of Appeal allowed the appeal, finding that while the FDD may have contained deficiencies, these were not so serious as to amount to a complete lack of disclosure.

The court distinguished the case from prior jurisprudence by noting the franchise agreement contained collaborative site selection and opt-out provisions that protected the franchisee's ability to make an informed decision.

The court awarded damages to the franchisor for unpaid construction invoices and the head lease deposit, less any benefits derived from operating the franchise.

A CCAA monitor brought an oppression action under the Canada Business Corporations Act against the parent company (Essar Global) and related entities, alleging that a port transaction transferring critical assets to an Essar-controlled entity was oppressive to Algoma's stakeholders (trade creditors, employees, pensioners, and retirees).

The trial judge found the monitor had standing as a complainant, the action was properly brought as an oppression remedy rather than a derivative action, and the port transaction and its change of control provision were oppressive.

The court granted a remedy modifying the transaction to remove the change of control veto and provide Algoma with termination rights after GIP's loan was repaid.

The appellants appealed on multiple grounds, including standing, characterization of the claim, reasonable expectations analysis, and the appropriateness of the remedy.

The Court of Appeal upheld the trial judgment in all respects.

The appellant loaned $500,000 to a company with the understanding that it would receive registered shares in a related company as consideration.

Years later, the respondent guaranteed repayment of the loan.

The respondent sought summary judgment to declare the guarantee unenforceable, arguing that a trust agreement had discharged the loan by providing the appellant with a beneficial interest in shares.

The motion judge agreed, but the Court of Appeal reversed, finding that the motion judge's conclusion contradicted his own factual findings and misconstrued the purpose of the trust agreement.

The court held that the trust agreement was intended to provide security, not to discharge the loan, and that the guarantee and general security agreement were enforceable under the Business Corporations Act.

The Attorney General of Canada appealed a rectification order granted by the Superior Court of Justice that allowed Slate Management Corporation to restructure a single-step amalgamation of three subsidiaries into a two-step amalgamation to obtain a tax bump under the Income Tax Act.

The Court of Appeal found the appeal moot based on the principle established in Norcan Oils Ltd. v. Fogler, as the plan of arrangement had been implemented and third parties had relied on the financial consequences of the rectification order.

The court declined to exercise its discretion to hear the moot appeal and quashed it, awarding costs to Slate.

This appeal arises from the 2009 General Motors of Canada bailout and the termination of franchise dealerships.

The franchisor offered Wind-Down Agreements to 240 dealers, providing payment in exchange for comprehensive releases of all claims, including those under the Arthur Wishart Act.

The dealers were required to obtain independent legal advice before signing.

A class action was subsequently brought by terminated franchisees claiming breaches of statutory rights.

The trial judge found the releases valid under the Tutor Time exception to section 11 of the Wishart Act, as they constituted settlements of known and existing claims entered into with legal advice.

The trial judge also held that covenants not to sue and indemnity provisions were void for public policy reasons but were severable from the release.

The Court of Appeal upheld both the validity of the releases and the severance of the covenant not to sue.

The appellant appealed a motion judge's decision interpreting a shareholders' agreement regarding the purchase rights of shares held jointly by a deceased shareholder and his spouse.

The appellant argued that shares held jointly with right of survivorship should not be subject to purchase options upon the shareholder's death, and that the respondent, as a non-founder, had no right to acquire founder's shares.

The Court of Appeal upheld the motion judge's interpretation, finding that Article 2.7 of the agreement required jointly-held shares to be treated as owned by the deceased shareholder for all purposes of the agreement, including purchase options.

The court also found that when the respondent became the sole surviving shareholder, he was entitled to exercise his option to purchase all remaining shares.