CITATION: Cana International Distributing Inc., c.o.b. as Sexy Living v. Standard Innovation Corporation, 2016 ONSC 7197
COURT FILE NO.: 10-49230
DATE: 2016/11/18
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
CANA INTERNATIONAL DISTRIBUTING INC., c.o.b. as SEXY LIVING
Plaintiff
– and –
STANDARD INNOVATION CORPORATION
Defendant
Howard J. Wolch, for the Plaintiff
Peter N. Mantas and Alexandra Logvin, for the Defendant
A N D B E T W E E N:
STANDARD INNOVATION CORPORATION
Plaintiff by Counterclaim
– and –
CANA INTERNATIONAL DISTRIBUTING INC., c.o.b. as SEXY LIVING and MICHELINE CIOLLI
Defendants by Counterclaim
Peter N. Mantas and Alexandra Logvin, for the Plaintiff by Counterclaim
Howard J. Wolch, for the Defendants by Counterclaim
HEARD AT OTTAWA: April 4–8, 11–15, 18–22, 25–29 and June 20–21, 2016
P. Smith J.
REASONS FOR JUDGMENT
Overview
[1] Cana International Distributing Inc., carrying on business as Sexy Living (“Cana”), brings this action against Standard Innovation Corporation (“Standard Innovation”) for breach of contract of two purported agreements, whereby Cana would act as the exclusive distributor of an adult sex toy manufactured by Standard Innovation within two distinct channels: the “Mainstream” market, which comprised of Canadian food stores and drug stores, and the “Adult” or “Sex Toy Industry” market, including brick-and-mortar sex stores. A third purported agreement related to attendance at the Efficient Collaborative Retail Marketing (“ECRM”) conference held in Miami, Florida in May 2010, including the promotion of the sale of Standard Innovation’s products both at the conference and subsequently to an international market.
[2] Cana alleges that the “Mainstream agreement” was initially formed in August 2009, the terms of which having been updated in November 2009, and that the “Adult agreement” had been completed in November 2009, with minor adjustments having been made later that month. Both agreements were followed by ongoing negotiations and formal distribution agreements in March 2010.
[3] Cana states that both parties operated under the Mainstream and Adult channel agreement for seven to nine months until a disagreement over the ECRM conference arose. Cana alleges that the ECRM agreement is an oral or verbal agreement that was in place by April 5, 2010, and “that the Canadian Mainstream agreement terms would apply to sales to retailers (approximately 30%) and 15% for sales to other distributors”. In reliance on these terms, Cana states that it expended significant time, money, and capital to attend the ECRM conference and has suffered damages for lost profits from future sales that would have been earned from customers acquired at the conference.
[4] Cana alleges that it suffered damages ranging between $92,000 and $142,000 for breach of the Mainstream agreement; between $826,000 and $966,000 for breach of the Adult agreement; and between $2,266,000 and $4,767,000 for breach of the ECRM agreement.
[5] Standard Innovation argues that Cana has failed to demonstrate that there was a breach of contract for either of the Adult or Mainstream channels, or for the ECRM trade conference, and states that the lengthy negotiations between the parties never came to fruition and that no agreements were concluded.
[6] Standard Innovation asserts that the parties were operating on an ad hoc basis from purchase order to purchase order and were not bound by an exclusive distributorship agreement.
[7] Standard Innovation has counterclaimed against Cana and its principal, Micheline Ciolli. The counterclaim may be grouped into the following four categories: (a) defamation for Ciolli’s statement to Health Canada; (b) the three torts of injurious falsehood, misrepresentation, and breach of confidence and trust; (c) interference with economic relations; and (d) a conditional plea that, if an Adult agreement is found to exist, losses were suffered by Standard Innovation as a result of Cana breaching the agreement.
[8] Standard Innovation seeks, inter alia, general damages, punitive or exemplary damages, and its expert and legal costs.
The Parties
[9] The Plaintiff, Cana International Distributing Inc., is a Vancouver-based company carrying on business in North America as Sexy Living, a sexual health and wellness manufacturer and wholesale distributor of premium brand-name products.
[10] The Defendant, Standard Innovation Corporation, is an Ottawa-based company and the manufacturer of an adult sex toy known as the We-Vibe Couples’ Massager (“We-Vibe”), for which it owns the patent.
Timeline
[11] The following presents a brief timeline of important, non-contentious events in this matter:
April 2008 Bruce and Melody Murison first meet Micheline and Franco Ciolli at tradeshow in Las Vegas and discuss doing business together
November 3, 2009 The parties release a joint Press Release regarding Cana acting as the exclusive North American distributor of We-Vibe II for Standard Innovation
March 25, 2010 Cana registers to attend the ECRM conference in Miami and is invoiced
May 23–26, 2010 Micheline and Franco Ciolli and Steve Traplin attend the ECRM in Miami, Florida
June 30, 2010 Standard Innovation v. CANA International: Notice of Application to seek directions (File No. 10-48882)
July 29, 2010 Cana receives a customer complaint concerning a defective product (the “Smoking We-Vibe” letter)
August 24, 2010 CANA International v. Standard Innovation: the Statement of Claim is issued and Motion Record filed by Cana for an injunction (the first injunction)
Sep. 30 and Nov. 1, 2010 Motion for the first injunction heard (pertaining to purported Adult agreement)
November 18, 2010 Reasons are released dismissing Cana’s application for injunctive relief (per C. McKinnon J.)
November 26, 2010 Standard Innovation terminates supply of products to Cana for Adult channel after winning interlocutory injunction
Nov. 10 and 22, 2011 Motion for second injunction heard (pertaining to purported Mainstream agreement)
January 4, 2012 Reasons are released dismissing Cana’s second application for injunctive relief (per Hackland R.S.J.)
March 4, 2012 Last day of operation of Sexy Living’s distribution in Mainstream channel pursuant to Justice Hackland’s Endorsement in second injunction
April 16, 2012 Service on Cana of Statement of Claim in Standard Innovation v. Lelo et al. (T-750-12)
April 19, 2012 Statement sent by M. Ciolli to Health Canada
April 26, 2012 Statement sent by M. Ciolli to Health Canada via “Incident Report: Form for Consumers”
May 25, 2012 Responding Letter of Standard Innovation to Health Canada
May 29, 2012 Motion by Standard Innovation for leave to amend pleading to add the tort of defamation
July 5, 2012 Cross-motion by Cana for, inter alia, summary judgment to dismiss the claim of defamation
The Main Action
Background
[12] Micheline Ciolli is the owner and president of Cana. She started the business in the late 1990s. Franco Ciolli, her husband, is the financial officer for Cana.
[13] Nelson Wood was the president of Standard Innovation for 2.5 years beginning in 2008. It was with Mr. Wood whom Ms. Ciolli had several significant discussions and negotiations concerning the agreements in dispute.
[14] Steve Traplin was former vice-president of sales and business development of Standard Innovation. Anne Finlayson was former chief executive officer of Standard Innovation.
[15] Bruce Murrison is the inventor of the We-Vibe and held the position of chief executive officer of Standard Innovation after Ms. Finlayson departed from the company. His wife, Melody, supported his role at Standard Innovation.
[16] Micheline and Franco Ciolli first met Bruce and Melody Murison at the Las Vegas lingerie show in 2008, where they engaged in preliminary discussions about Cana acting as Standard Innovation’s exclusive distributor in Canada for the sale of its We-Vibe product.
[17] In April 2009, the parties renewed their discussions and Cana began ordering and distributing the We-Vibe I in the ordinary course of its business and not under any formal distribution agreement. At the time, Standard Innovation was also using other distributors, including Vibratex in the USA, as well as some Canadian distributors, BMS, Landco, JDS, Caya, and Telford.
[18] On June 22, 2009, Nelson Wood sent Ms. Ciolli a draft Term Sheet Agreement for exclusive distributorship of the latest We-Vibe device in Canada for virtually all aspects of the market, including Mainstream, Adult, some web stores, sales on their own web-site, and the three major distributors, BMS, Landco, and Telford. The agreement also provided a right of first refusal for all other products developed by Standard Innovation.
The “Mainstream Agreement”
The Position of Cana
[19] On August 10, 2009, Nelson Wood sent Ms. Ciolli an updated Term Sheet Agreement for exclusive distributorship of the latest We-Vibe device in the Canadian mainstream market, specifically the Food and Chain Drugstore Channel in Canada.
[20] On August 18, 2009, Mr. Wood provided Ms. Ciolli with a further revised Term Sheet Agreement for the same market (the “Mainstream agreement”). Unlike the August 10th draft, the Mainstream agreement afforded Cana “the right of first refusal for exclusivity”, and not full exclusivity as had been initially discussed by the parties:
[Standard Innovation] agrees that [Cana] has the right of first refusal for exclusivity in the Territory, until March 31, 2010, subject to mutually agreed performance criteria after that, with an initial three-year term, following that, and with subsequent renewal for two-year periods after the initial three-year term.
[21] Ms. Ciolli signed two copies of the Mainstream agreement and mailed them to Mr. Wood.
[22] On September 22, 2009, Mr. Wood signed, scanned, and emailed a copy of the signing page of the Mainstream agreement to Ms. Ciolli. This was a clean copy of the agreement, not bearing a signature from Ms. Ciolli. Mr. Wood was in Africa at the time and did not have access to Ms. Ciolli’s couriered copies.
[23] As will be discussed below, even at best, the two separate signed copies were two unique offers, neither having been accepted by other party. This is evidenced by subsequent negotiation of their intended agreement.
[24] On October 15, 2009, the first delivery under the Mainstream agreement for 432 units of the We-Vibe II was made to London Drugs, the first delivery of the latest We-Vibe device to a retailer anywhere in the world. Standard Innovation maintains that this product supply occurred on the basis of Cana’s first purchase order.
[25] On November 26, 2009, Mr. Wood wrote to Ms. Ciolli advising her that he had misplaced her signed copy of the Mainstream agreement, and that he was sending her a signed and slightly revised version of the Mainstream agreement. The updated terms appeared primarily in the appendices: one of which extended the warranty period from 90 days to 6 months, the other changed information about the website to an information-only website. Mr. Wood also suggested slightly raising the price of the We-Vibe to match its price in the “Adult agreement” (as discussed below) and crediting Cana with the difference for sales under the Mainstream agreement.
[26] By email dated December 7, 2009, Ms. Ciolli responded to Mr. Wood’s updated terms, requesting that a term in the body of the agreement reflect this new 6-month warranty, proposing a new method of streamlining returns of defective merchandise, and providing Mr. Wood with Cana’s toll-free customer service number.
[27] The next day, Mr. Wood responded and agreed with Ms. Ciolli’s suggestions. He asked Ms. Ciolli whether she would prefer a clean copy of the agreed-upon terms, or if modifying and initialing the copies he mailed approximately two weeks prior would suffice.
[28] In response, Ms. Ciolli requested a clean copy of the revised Term Sheet with the appropriate changes for her signature. Her evidence at trial was that these changes were relatively minor, and reflected the spirit of cooperation that existed between the parties.
[29] The amendments were never executed, and Cana alleges that the latest draft bearing both signatures was the revised Mainstream agreement dated November 26th which, after being signed by Ms. Ciolli, remained in her possession and was never sent back to Standard Innovation.
[30] Cana advances the position that, although there is no single copy of the Mainstream agreement, dated August 18, 2009, bearing both parties’ signatures, Cana and Standard Innovation both signed the agreement and intended to be bound by it. The essential terms of the relationship — price, territory, and term — were agreed to as of this date.
[31] Both parties conducted business since August 2009 pursuant to the terms of the “misplaced” Mainstream agreement of August 18th, the updated terms of the “revised” Mainstream agreement of November 26th, and the email discussions between Ms. Ciolli and Mr. Wood on December 7th and 8th.
The Position of Standard Innovation
[32] Standard Innovation disputes Cana’s assertion that the parties ever reached an agreement.
[33] It points to the numerous drafts and red-lined multicolour versions of the purported Mainstream agreement to suggest that the parties were never ad idem.
[34] Standard Innovation argues that the draft signed by Mr. Wood on November 26, 2009 and forwarded to Ms. Ciolli was not accepted by her. Moreover, Ms. Ciolli refused to sign the November 26th draft and, in December, requested changes. Standard Innovation maintains that, by doing so, Ms. Ciolli made a counteroffer and that both parties contemplated exchanging and signing a new, revised agreement. The counteroffer was never accepted and a new draft was never signed.
[35] The record shows that the draft Mainstream agreement of August 18th — which was signed and delivered by Mr. Wood — was overtaken in November and December by subsequent negotiations, offers, and counteroffers. In addition, Standard Innovation maintains that the two versions of the agreement in the record, which Mr. Wood and Ms. Ciolli allegedly signed, do not correspond.
[36] In the alternative, should this court find that there was a binding Mainstream agreement, Standard Innovation contends that it did not breach it.
[37] Standard Innovation argues that exclusivity was not a term in any of the documents that had been tendered to prove the existence of the Mainstream agreement and that, consequently, the parties simply enjoyed a distribution relationship, working on an ad hoc basis from one purchase order to the next. Although Cana was treated as an exclusive distributor while the parties worked towards a fixed agreement, this was not permanent. In short, neither party was bound during negotiations, save for the fulfillment of any outstanding purchase orders.
[38] Exclusivity was only provided with respect to a right of first refusal (“ROFR”). Cana had the option to obtain exclusivity by March 31, 2010, but never exercised that right.
[39] The ROFR was also conditional on the parties’ agreement on what constituted performance criteria. Such an agreement was never reached. Accordingly, no exclusivity ever arose in relation to the purported Mainstream agreement.
[40] Moreover, Standard Innovation states that there is nothing in any of the alleged agreements to suggest that it had an obligation to sell or supply Cana any product and, conversely, Cana did not have an obligation to buy any product from Standard Innovation.
The “Adult agreement”
The Position of Cana
[41] Stemming from the omnibus draft Term Sheet Agreement in June 2009, which outlined the parties’ intention to give Cana distributorship rights to the various market channels, Cana and Standard Innovation began negotiations on September 24, 2009 for a second distribution agreement for the “Adult” or “Sex Toy Industry” market.
[42] On October 27, 2009, Mr. Wood sent Ms. Ciolli the first draft Term Sheet Agreement for the sex toy industry in Canada (“Adult agreement”).
[43] Following negotiations that took place between October 27th and November 2nd, Mr. Wood sent a revised Adult agreement dated November 2nd to Ms. Ciolli.
[44] Ms. Ciolli claims that she sent two signed copies of this revised Adult agreement to Mr. Wood on November 3, 2009, as evidenced by a Canada Post invoice.
[45] Although there is no fully-executed copy of the Adult agreement, Cana alleges that the document dated November 2nd contained all of the essential terms necessary to find that a binding agreement existed between Cana and Standard Innovation.
[46] In support of this argument, Cana points to the email correspondence between Mr. Wood and Melody Murison prior to the issuance of a press release regarding the new distributorship arrangement, in which Standard Innovation stated that the Adult agreement was “done” or, at least, “agreed in principle”.
[47] The press release, issued jointly by Cana and Standard Innovation on November 4, 2009, reads, in part, as follows:
Canadian distribution rights for We-Vibe™ products have been acquired by [Cana], reflecting [Standard Innovation’s] strategic decision to focus on our core competencies of designing and manufacturing the world’s best Loveware™.
[48] Cana argues that email correspondence between the parties subsequent to the press release shows that Standard Innovation considered the Adult agreement to be binding and to have created an exclusive distributorship arrangement with Cana.
[49] This email correspondence shows, however, that Bruce Murison suggested revisions to both the Mainstream agreement and the Adult agreement. On November 26, 2009, Nelson Wood sent a further revision of the Adult agreement to Ms. Ciolli. Ms. Ciolli argued that a number of the suggested revisions were more a reflection of factual developments of the parties’ relationship thus far and were not significant since an agreement had already been reached on all essential terms and the parties were acting in accordance with it.
The Position of Standard Innovation
[50] Standard Innovation adopts a similar position regarding the purported Adult agreement as it does for the purported Mainstream agreement: the parties operated on an ad hoc basis from purchase order to purchase order.
[51] Ultimately, no Adult agreement came to fruition. The relationship broke down before the conclusion of an agreement. Standard Innovation claims that it began receiving numerous complaints from retailers about Cana’s distribution practices and could not afford to alienate the retail community toward its products.
[52] Again, if there was a binding Mainstream agreement, Standard Innovation contends that it did not breach it: the contract was non-exclusive, and Standard Innovation had no obligation to order, buy, or supply the product.
Formal Distribution Agreements
[53] Beginning in February 2010, Standard Innovation began drafting and negotiating with Cana comprehensive “legal drafts” of the Mainstream agreement and Adult agreement, which have been termed “formal distribution agreements”. These distribution agreements granted Cana a “non-exclusive, non-transferable right: (i) to procure Products from [Standard Innovation] and to directly market, promote, distribute, and resell such Products to Authorized Channels in the Territory….”
[54] Mr. Wood sent Ms. Ciolli draft versions of these agreements on March 4, 2010.
[55] Ms. Ciolli testified that she was under the impression that these formal agreements were being undertaken for Cana’s protection in the event that Standard Innovation was sold, and that having such formal distribution agreements would increase the value of the corporation. Her evidence was that the Mainstream agreement and Adult agreement were concluded and binding, as the parties had been operating under them for several months.
[56] Notwithstanding, in May of 2010, Ms. Ciolli and Mr. Wood continued to negotiate specific terms of the formal agreements. Ms. Ciolli sent these draft versions to be reviewed by her lawyer, Jane Shackell.
[57] None of the formal distribution agreements were ever executed. The parties’ relationship broke down before any formal agreement could be signed.
ECRM Conference in Miami, Florida
The Position of Cana
[58] Cana alleges that Standard Innovation approached Cana to help it promote its international mainstream sales.
[59] Cana states that it recommended, and that Standard Innovation agreed, that Cana should attend two major trade show conferences organized by Efficient Collaborative Retail Marketing (“ECRM”). The ECRM International Health & Beauty Care Conference is one of the largest industry trade shows worldwide.
[60] The first trade show conference, which involved major international food and chain drugstores outside of North America, was scheduled for May 23–26, 2010, in Miami, Florida. Retailers and distributors from Europe, Asia, Central America, and Latin America would be present.
[61] The second trade show conference, which involved major Canadian and U.S. food and chain drugstores, was scheduled for August 22–25, 2010, in Scottsdale, Arizona.
[62] Nelson Wood directed that Standard Innovation’s representative, Steve Traplin, attend the first conference. Cana was there to facilitate the sales of the We-Vibe II and Mr. Traplin was attending purely in a support role.
[63] There is no dispute that no formal written agreement was entered into with respect to Cana’s attendance at the ECRM conference.
[64] In a proposed draft email to Ms. Ciolli, Mr. Wood suggested the following wording to Steve Traplin regarding Standard Innovation’s intention to compensate Ms. Ciolli for her efforts at the ECRM conference:
In the meantime, we can agree that we will make suitable arrangements with you for any accounts that you introduce to us at the ECRM event or otherwise, similar to our distribution dealings in Canada. We have also indicated that we would entertain some type of commission where you administer or manage the relationship with an account, but don’t act as distributor.
[65] Ms. Ciolli testified that it was agreed that Cana would be compensated for 15% of all sales to qualified or approved distributors or 30% for direct sales to chain retailers, plus 50% of expenses.
[66] On May 18, 2010, Ms. Ciolli wrote to Standard Innovation and requested written confirmation from Mr. Wood of their agreement. She suggested the following terms:
As per our agreement, [Standard Innovation] agreed to pay Cana a minimum of 15% on business Cana is responsible for creating as a result of presenting at ECRM, Florida by an International, third party distributor for the term of the Distributor’s business dealings with [Standard Innovation]…; And 30% plus a BDF (Business Development Fund) to cover the fee & expense(s) of Cana working direct with International, Food & Drugstore Chains on an ongoing basis…; [Standard Innovation] also agrees to pay 50% of all expenses incurred for ECRM, Florida….
[67] Mr. Wood responded on May 20, 2010 with a Letter of Intent for the ECRM conference, whereby Standard Innovation agreed to only reimburse Cana for its actual out-of-pocket pecuniary expenses. It made no commitment to reimbursing Cana relative the 15%/30% structure Ms. Ciolli anticipated; these were terms that would be subject to discussion.
[68] Despite this disagreement, Micheline and Franco Ciolli decided to attend the conference in an effort to salvage the situation and to maintain the reputation of both Cana and Standard Innovation in the international mainstream marketplace.
[69] Micheline and Franco Ciolli did attend the conference and met with potential purchasers and distributors each day. They conducted 54 20-minute back-to-back appointments with potential customers and spent evenings at networking dinners.
[70] In its submissions, Cana claims it invested between $34,194 and $36,172, along with hundreds of hours of its employees’ time, in preparation for the ECRM conference, including the designing and printing of numerous promotional items. Cana also asserts that it has suffered damages by not being allowed to pursue potential sales generated by the contacts that it made during the conference.
The Position of Standard Innovation
[71] Standard Innovation maintains that there was never an oral or written agreement with respect to the ECRM conference, but rather oral discussions or, at most, an agreement to agree.
[72] To Standard Innovation, ECRM was merely an exploratory venture and stemmed from a dinner conversation one night at a Las Vegas lingerie show.
[73] The relationship of the parties was simply to explore the international market before entering into any engagement. The only agreement made was to share expenses, “examine an expansion” of business, and “explore product and marketing initiatives”.
[74] Cana sent Standard Innovation an invoice for 50% of Cana’s registration for the conference, and 100% of Mr. Traplin’s registration fee. The invoice included the costs of renting the private room for 20-minute sessions, and attendance and accommodation fees for Steve Traplin. It also included the services of ECRM, which included setting up meetings.
[75] Standard Innovation paid the invoice and maintains that this was consistent with what it agreed to in its Letter of Intent.
Procedural History
Application for interlocutory injunction to enforce the “Adult agreement”
[76] In late 2010, Cana applied for an interlocutory injunction to restrain Standard Innovation from breaching the alleged Adult agreement. Central to the hearing was the issue of whether an Adult agreement existed.
[77] By endorsement dated November 18, 2010, Justice C. McKinnon dismissed Cana’s application.
[78] Setting out the test for granting an interlocutory injunction in R.J.R.-MacDonald Inc. v. Canada (A.G.), 1994 CanLII 117 (SCC), [1994] 1 S.C.R. 311, McKinnon J. found that
i. Cana failed to demonstrate a strong prima facie case, as the requested relief was in the nature of a mandatory order (to find an exclusive agreement to exist would effectively bind Standard Innovation);
ii. Cana would not suffer irreparable harm if the injunction was not granted (loss of sales and market share are compensable in damages); and
iii. The balance of convenience favoured Standard Innovation (see paras. 14–25).
[79] Furthermore, McKinnon J. noted that whether an exclusive distribution agreement exists was the very issue to be decided at trial (at para. 15).
Motion seeking a further order of the court pertaining to the “Mainstream agreement”
[80] In his reasons, McKinnon J. stated that he was not required to resolve the dispute between the parties as to whether the purported Mainstream agreement existed:
The parties have agreed that the Mainstream agreement shall remain in full force and effect pending any alteration of the agreement as may be mutually agreed to, or upon further order of this court (at para. 2).
[81] The dispute between the parties persisted and, in late 2011, Standard Innovation moved for a “further order” of the Court, as contemplated in Justice McKinnon’s reasons, as to whether the Mainstream agreement had expired or whether it continued in force. Cana sought an interlocutory injunction to require Standard Innovation to continue to abide by the purported Mainstream agreement pending trial.
[82] By endorsement dated January 4, 2012, Regional Senior Justice Hackland (as he then was) denied Cana’s application for an interlocutory injunction for the same reasons Cana was denied relief in 2010, based upon his findings regarding the criteria of irreparable harm and balance of convenience. However, Hackland R.S.J. required the terms of the alleged Mainstream agreement to be maintained in full force and effect for a temporary further period of 60 days following the date of his order. This would allow Cana a reasonable period to fill existing and new orders for the We-Vibe and to transition to such replacement products from other suppliers, as they may require.
Issues in the Main Action
[83] The central issue in the main action is whether Cana has proven, on a balance of probabilities, the existence of a legal contract with Standard Innovation for the Adult and Mainstream market channels or for the ECRM conference. Without proof of an agreement, the claim for damages for breach of contract must fail.
Applicable Principles of Contract Law
[84] As mentioned above, the central issue in dispute is whether there are enforceable contracts regarding the Adult and Mainstream channels and the ECRM conference. For that reason, a brief review of some of the basic principles of contract law will provide additional context to these reasons.
[85] It is a well-established legal principle that agreement is the heart of a legal enforceable contract. There must be evidence that the parties had a meeting of the minds and that there was consensus ad idem as to the terms of the agreement (see Sigrist v. McLean, 2011 ONSC 7114, at para. 34).
[86] In circumstances where the discussions between the parties may be oral, partly oral and written, or where there are several documents exchanged purporting to evidence an agreement, a court may have difficulty finding clarity of intention and clarity of terms. As well, resolving whether there has been an identifiable offer and acceptance may be challenging.
[87] In cases where there is no single document that can clearly be identified as the contract, but rather several documents exchanged over the course of time, and there are many discussions evidencing a series of negotiations, everything that occurs between the parties relevant to the alleged contract must be considered by the court (Baynes v. Bd. Sch. Trustees of Vancouver, 1927 CanLII 339 (BC SC), [1927] 2 D.L.R. 698 (B.C.S.C.)). Courts will examine the words and conduct of the parties to determine their intent and look for evidence that they have taken steps to perform the contract that are consistent with the terms of the alleged agreement (Kay Corp. v. Dekayser (1977), 1977 CanLII 1261 (ON CA), 15 O.R. (2d) 697 (C.A.); Sudbrook Trading Estate Ltd. v. Eggleton, [1983] 1 A.C. 444 (H.L.); Tate v. Mario’s Gelati Ltd., 1997 CarswellBC 2842 (S.C.), at para. 35).
[88] A court is not concerned with what a party believed was the meaning of what the other party said or did that is the criterion of an agreement. As stated by Professor Fridman, “it is whether a reasonable man in the situation of that party would have believed and understood that the other party was consenting to the identical terms.” (G.H.L. Fridman, The Law of Contract, 6th ed., at p. 15. See also Energy Fundamentals Group Inc. v. Veresen Inc., 2015 ONCA 514, 388 D.L.R. (4th) 672.)
[89] A term may also be reasonably implied in a contract where the term gives business efficacy to the transaction (Energy Fundamentals, supra, at para. 32).
[90] As Cromwell J.A. (as he then was) stated in Mitsui & Co. (Point Aconi) Ltd. v. Jones Power Co., 2000 NSCA 95, 189 N.S.R. (2d) 1, at para. 82, “[t]he question of certainty does not relate to the correct meaning of the words, but rather to whether the words are capable of being given a reasonably certain meaning by the court”.
[91] It is the responsibility of the parties to make an enforceable bargain themselves. The court cannot make a contract for them where there is uncertainty. If a contract is not clearly created by the words or conduct of the parties, the court will not construct one for them.
[92] There must be certainty regarding all essential terms of a contract. Uncertainty about some specific obligation may suffice to make impossible the conclusion that there is a contract in effect between the parties. The test is whether the terms in question relate to essential aspects of the alleged contract (Bawitko Investments. Ltd. v. Kernels Popcorn Ltd. (1991), 1991 CanLII 2734 (ON CA), 79 D.L.R. (4th) 97 (Ont. C.A.)).
[93] In some cases, an acceptance or offer contemplates something more by way of formalization to create a binding contract. If the intent of the offer clearly indicates that the essential terms of the bargain are set out and may be accepted, the court will find that an enforceable contract exists. However, where by words or by action, there is a suggestion that further negotiations are contemplated before a final agreement is reached, there is no “offer” to accept. As stated by Professor Fridman, “[i]n cases of this kind the question posed is whether the result of the offer and acceptance is a contract to enter in to a contract, an agreement clarifying the preliminaries to an eventual legally binding agreement, or a binding agreement” (Fridman, supra, at p. 62; Von Hatzfeldt-Wildenburg v. Alexander, [1912] 1 Ch. 284, at pp. 288–89). Put another way, when there is agreement on all of the essential terms of a bargain, the fact that a formal written contract is intended to be signed later does not alter the binding validity of the bargain.
[94] Case law has long established that, in order for a contract to be binding, there must be communication of the acceptance of the offer. A contract is formed when acceptance of an offer occurs and when communicated by the offeror to the offeree (Brinkibon Ltd. v. Stahag Stahl und Stahlwarenhandels-Gesellschaft m.b.H., [1983] 2 A.C. 34 (H.L.)).
The Failure of Standard Innovation to Call Nelson Wood as a Witness
[95] Cana asserts that the court should draw an adverse inference against Standard Innovation for their failure to call Nelson Wood as a witness.
[96] As mentioned above, Nelson Wood was involved in many of the discussions and meetings with the Plaintiff. Apparently, Mr. Wood’s employment with Standard Innovation ended and they have an unfriendly relationship.
[97] Cana argues that the unexplained failure to call a witness who can give relevant evidence leaves open an inference that the evidence of that witness would be helpful to the opposite party (Claiborne Industries Ltd. v. National Bank of Canada (1989), 1989 CanLII 183 (ON CA), 69 O.R. (2d) 65 (C.A.), at p. 77; Lévesque v. Comeau, 1970 CanLII 4 (SCC), [1970] S.C.R. 1010, at pp. 1012–13).
[98] The situation of the failure to call a party litigant can be distinguished from the case where there is failure to call a witness who is not a party to the action but whose evidence is material. In the former case, the court can draw an adverse inference; in the latter case, an adverse inference may only be drawn when the witness is under that exclusive control of the party failing to call the witness (Sidney Lederman, Alan Bryant & Michelle Fuerst, The Law of Evidence in Canada, 4th ed., at pp. 386–87).
[99] In the case at bar, it is clear that Standard Innovation has no relationship with Mr. Wood and that he is not under their control. For that reason, this Court declines to draw an adverse inference against Standard Innovation. If Cana wanted to adduce the testimony of Mr. Wood presumably, they could have subpoenaed him themselves.
Analysis
The Adult Agreement
[100] Cana alleges that, on November 2, 2009, an exclusive distribution agreement was concluded for the adult channel. Ms. Ciolli testified in her examination-in-chief that the written agreement was sent as an attachment to an email sent to Nelson Wood on November 2nd (at Exhibit 1, Tab 8).
[101] However, during cross-examination, when shown the actual attachment, Ms. Ciolli changed her position and admitted that she was confused and the document that she had identified earlier in chief was not the Adult channel agreement, but that the attachment presented to her in cross-examination was the agreement.
[102] During cross-examination, Ms. Ciolli eventually conceded that the November 2nd document had never been executed by her, that exclusivity was not a part of any of the documents that constituted an agreement, and that none contained a term that obligated Standard Innovation to provide any product to Cana or any obligation on Cana to purchase product.
[103] It was Ms. Ciolli’s evidence that she signed an adult agreement and sent it to Standard Innovation as evidenced by a courier tracking sheet. She did not retain a copy of the agreement nor did she send an email advising that the agreement was signed and sent. No explanation was offered as to why she did not follow up and ask why a signed copy of the agreement had not been returned. The witnesses for Standard Innovation all testified that no one at their company saw the document.
[104] The record is clear that the parties continued to negotiate the terms of an agreement well into 2010, with several discussions about terms that Cana alleges were part of the agreement made in November 2009.
[105] If an agreement indeed existed, why would Cana continue to negotiate terms to which it had already agreed? There is no evidence that Cana stated during ongoing negotiations that an agreement already existed and that they would not engage in re-negotiation.
[106] The relationship between the parties became toxic with Cana threatening to sue over the ECRM conference. Negotiations eventually ceased and, in July 2010, this lawsuit was commenced by Cana.
[107] There are numerous drafts of an Adult agreement and numerous emails back and forth between the parties, long after November 2nd, discussing various terms of an agreement. An executed agreement does not exist. Terms that were once agreed to were re-negotiated and changed. For example, the issue of currency exchange continued to be discussed well into 2010.
[108] The email from Nelson Wood on November 2nd to Cana sent at 18:42 attaches a revised term sheet, raises important issues such as pricing, and seeks input and a response. There is no suggestion that there is an agreement and no request to sign the document and return a copy to Standard Innovation (see Exhibit 9, Tab 3).
[109] Cana argues that the essential terms of an agreement were agreed to and that ongoing negotiations were simply fine tuning. A comparison of the two agreements identified by Ms. Ciolli as being the Adult channel agreement reveals significant differences in substantial issues, including pricing (see Exhibit 1, Tab 8 and Exhibit 9, Tab 3). Both documents contain redlining that tracked the many changes that the parties were making over time.
[110] The press release issued to retailers on November 3, 2009 cannot be interpreted as binding Standard Innovation to a long-term commitment to treat Cana as its exclusive distributor. Cana was treated as an exclusive distributor while negotiations occurred, the parties working towards a comprehensive agreement, neither of them being bound except for the fulfillment of outstanding purchase orders.
[111] On November 26,2009, Nelson Wood emailed Ms. Ciolli with the “latest draft attached” with grey highlighting of his revisions and comments and seeking “advice” on the terms (at Exhibit 4, Tab 176). Several significant issues are raised, such as provisions on Webstores, transition accounts, territory and market channel, PR budget, pricing regarding home parties, and conditions on warranty. Ms. Ciolli replied, stating that she does not have time to review and respond “because of other pressing business matters”, but comments on the warranty and Webstore (see Exhibit 9, Tab 4). Her reply does not state that an Adult agreement already exists.
[112] Ms. Ciolli signed the November 26th draft. This alone suggests that there cannot have been an adult agreement reached on November 2nd, as alleged by Cana.
[113] I need not review in detail the ongoing negotiations subsequent to November 26, 2009 or the details of the many drafts that were exchanged by the parties.
[114] What is clear is that the parties continued to negotiate into June 2010. On June 11th, Nelson Wood sent an email to Ms. Ciolli stating, “We have never signed an agreement for the Sex Toy Industry. Since early 2010, we have been working with you” on an agreement and “those efforts are still in progress.” (at Exhibit 1, Tab 25)
[115] On June 11th, Ms. Ciolli replied and requested that Wood sign and send her an executed agreement (at Exhibit 1, Tab 25). This suggests that there never was an executed adult agreement.
[116] Without a document that can be reliably identified as the Adult agreement, the record supports the position of Standard Innovation that the parties had a distribution relationship and worked on an ad hoc basis from one purchase order to the next.
[117] There are many situation where, in the absence of a written agreement, the terms of an oral agreement are clear, certain, and identifiable, and there is evidence of unambiguous offer and acceptance. This case, however, is not one of them.
[118] An alleged agreement that relies in part on oral discussions or on a variety of documents, including letters of intent or emails, must be clearly manifested. The inward intent and belief of a party will not suffice to prove the existence of a contract. As stated by Sirois J. in Gutheil v. Rural Municipality of Caledonia No. 99 (1964), 1964 CanLII 357 (SK QB), 48 D.L.R. (2d) 628, at p. 635, “[t]he law judges of the intention of a person by his outward expression only, and it judges of an agreement between two persons exclusively from those expressions of their intentions, which are communicated between them.” To put it another way, the law is concerned not with the parties’ intentions, but with their manifested intentions.
[119] In the case at bar, the question is not whether Ms. Ciolli believed or understood, but rather whether the parties have indicated to the outside world and the objective reasonable bystander, their intention to contract and the terms of the contract.
[120] The evidence establishes that the parties were not ad idem on several important issues. Further, the evidence fails to demonstrate that there was a clear and identifiable offer and acceptance. There are too many conflicting documents and emails going back and forth over a lengthy course of time that create significant uncertainty. In these circumstances, I find that an outside bystander would not be able to reasonably conclude that the parties were ad idem, that there was certainty as to terms or that there is a clear and identifiable offer and acceptance.
Finding
[121] I find that the Plaintiff has failed to prove that an agreement for the adult market exists and therefore this claim is dismissed.
The Mainstream agreement
[122] To a large degree, the analysis of the evidence regarding the mainstream channel is similar to the evidence with respect to the adult channel: numerous ongoing discussions over a lengthy period of time with the exchange of several offers and counter-offers.
[123] During her testimony both in chief and in cross-examination, Ms. Ciolli was unable to identify a signed document as the contract for the mainstream channel between the parties.
[124] The emails of August and September 2009, referring to a signed copy of the agreement, evidenced, at best, two distinct offers, neither of which was accepted by the other party. Moreover, the parties continued to negotiate the terms of this agreement.
[125] On November 26, 2009, Nelson Wood signed a draft agreement and sent it by courier to Ms. Ciolli for execution. There appears to have been no immediate follow up by either Wood or Ciolli. Eventually, on December 7, 2009 Ms. Ciolli confirmed receipt of the November 26th agreement and emailed Mr. Wood, stating that she will not sign it as it contains important issues that need to be resolved (Exhibit 1, Tab 4).
[126] It is curious therefore that the record contains an executed copy of the November 26th draft sent by Mr. Wood, ostensibly signed by both parties on that date, although Ciolli’s signature is undated (Exhibit 1, Tab 5).
[127] The record, however, shows that, after rejecting the November 26th draft, Ms. Ciolli made a counter-offer and there were discussions ongoing about changes regarding various terms. That said, the November 26th offer was not open for acceptance and I find that the signed copy of that document does not constitute a contract for the mainstream channel.
[128] From December 7th going forward, several more emails were exchanged between Mr. Wood and Ms. Ciolli. On December 8th, Ms. Ciolli emails requesting a clean copy of the November 26th draft “with the appropriate changes” for her signature (email from Ciolli to Wood, December 8, 2009, Exhibit 1, Tab 4).
[129] A clean copy of the agreement with revisions was never sent, which is further evidence that the signed copy of the November 26th document cannot be said to be a properly executed contract regarding the Mainstream channel.
[130] As was commented above regarding the Adult channel, given that Ms. Ciolli testified that an agreement for the Mainstream channel existed as early as August 2009 and most certainly by November 26th, it is noteworthy that at no time in the ongoing discussions with Mr. Wood continuing into 2010 is there a mention by her of an agreement or declaration that there is an existing contract rendering negotiations unnecessary and improper.
[131] On March 4, 2010, a new draft of the Mainstream agreement was sent by Mr. Wood to Ms. Ciolli. In an email dated March 4, 2010 to Mr. Wood, Ms. Ciolli acknowledged receiving the new draft and stated that she would review it with her legal counsel and, if acceptable, would sign it (email from Ciolli to Wood, March 4, 2010, Exhibit 9, Tab 7).
[132] Discussions continued but eventually broke down in the spring or summer of 2010.
[133] As I stated regarding the Adult channel agreement, the evidence concerning the Mainstream channel establishes that the parties were not ad idem on several important issues. Further, the evidence fails to demonstrate that there was a clear and identifiable offer and acceptance. There are too many conflicting documents and emails going back and forth over a lengthy course of time that create significant uncertainty. In these circumstances, I find that an outside bystander would not be able to reasonably conclude that the parties were ad idem, that there was certainty as to terms or that there was a clear and unambiguous offer and acceptance.
Finding
[134] I find that the Plaintiff has failed to prove that an agreement for the Mainstream market exists and therefore this claim is dismissed.
The ECRM Conference
[135] The testimony of the Plaintiff is that an oral agreement regarding the distribution of We-Vibe product internationally was reached during a dinner meeting in late March or early April 2010 at a Las Vegas lingerie trade show.
[136] The evidence of Micheline and Franco Ciolli is that an agreement was reached regarding the ECRM conferences — to be held in Miami, Florida, and in Scottsdale, Arizona — during a dinner with Nelson Wood and Steve Traplin, representatives of Standard Innovation. Both testified that the agreement reached was for Cana (Sexy Living) to distribute the We-Vibe products internationally.
[137] During dinner, the Ciollis suggested that they attend the ECRM Conference as representatives of Standard Innovation for the sale of its We-Vibe II product. The ECRM conference is a large international gathering where product vendors are paired with chain drugstore buyers from several countries. Standard Innovation had no knowledge of the conference until the dinner meeting with the Ciollis.
[138] Standard Innovation agreed to allow Cana to promote the We-vibe at the Florida ECRM Conference. Steve Traplin attended on behalf of the company, although his role was limited by Cana as a result of a dispute that arose between the parties just prior to the Conference beginning.
[139] There is no dispute that Cana attended the Conference and met with several possible customers in their promotion of the We-Vibe. ECRM invoiced Cana for the Conference, including the registration fee for Steve Traplin. Standard Innovation paid the invoice including the entire fee for Traplin.
[140] Cana claims that they should be reimbursed for other expenses related to the Conference, as well as for lost sales that it would have generated from contacts that they made with potential purchasers.
[141] Additional Conference expenses include the design and production of a pamphlet, creation of a showroom, and many hours of preparation and planning.
[142] After the conclusion of the ECRM Conference, the relationship between the parties deteriorated rapidly. Standard Innovation did not allow Cana to proceed with any sales that may have been generated at the Florida Conference and refused to allow representatives to attend the Arizona conference, where Cana had penetrated the market with sales of We-Vibe products to Walgreens and CVS drugstores.
[143] Regarding the claim for lost sales, Cana’s position, based upon the testimony of Ms. Ciolli and Melanie Russel, an expert in damage calculations, is that the company would have been able to generate sales of $16 million annually with the customers that it recruited at the conference. Damages for lost sales sought by the Plaintiff are estimated between $2,266,000 and $4,767,000.
[144] There is a paucity of documentary evidence to prove the intention of the parties. Further, the evidence adduced at trial reveals that each party had a completely divergent view of their relationship and what was to transpire at the conference and afterwards.
[145] Contrary to the testimony of Ms. Ciolli, the evidence of Steve Traplin was that Cana would promote the We-Vibe at the Florida conference, he would join the Ciollis there, and expenses would be shared. He was very clear that beyond this there was no agreement in place.
[146] I agree with the position of Standard Innovation that the evidence supports the position that, at best, there was an oral agreement to explore a new venture — sale to an international market, but nothing more.
[147] On March 12, 2009, Nelson Wood emailed Ms. Ciolli and copied Traplin, stating he was “interested in exploring opportunities in ‘mainstream’ channels with [Cana].”
[148] Ms. Ciolli responded the same day, stating that she was pleased that Standard Innovation was “serious about exploring the [ECRM] opportunities” with Cana.
[149] This email is followed by a reply from Nelson Wood, also sent on March 12th, to Ms. Ciolli that, for Florida, they will “examine an expansion of our business outside of North America by meeting with retailers and distributors from Europe, Asia and Latin America.”
[150] On May 20, 2010, just before the Conference was scheduled to begin, Standard Innovation delivered a draft letter of intent stating as follows: “This is to confirm that [the parties] are exploring possibilities to market and sell the We-Vibe II™ to international Food & Drug Store chains globally”. The draft went on to set out the cost sharing arrangements: payment of 50% of Cana’s registration fee and 100% of Steve Traplin’s registration fee.
[151] The expenses that Cana claims for attending the conference are for preparatory work, creation of a show room in their hotel room, and production of a pamphlet about the We-Vibe. There is no evidence to suggest that Standard Innovation knew about these expenses until after the Conference or agreed to them in advance.
[152] On April 9, 2010, Cana sent Standard Innovation an invoice in accordance with the letter of intent. The invoice was paid in full.
[153] It is not reasonable to conclude that Standard Innovation, on the basis of a dinner conversation, would grant a global distribution right for their extremely successful product for sale into unknown territories on unknown and unspecified terms.
[154] Further, it is not reasonable to conclude that Standard Innovation would choose Cana as their global distributor when Cana did not have experience or knowledge of the global market.
[155] The evidence very clearly indicates that the parties were not ad idem and that, at best, they had agreed to explore an opportunity but nothing more.
Finding
[156] I find that the Plaintiff has failed to prove the existence of an agreement regarding the ECRM conference and this claim is therefore dismissed.
The Counterclaim
Overview
[157] Standard Innovation has brought a counterclaim against Cana and Ms. Ciolli in her personal capacity. The counterclaim can be divided into four categories: (1) defamation; (2) injurious falsehood, misrepresentation, breach of trust, and breach of confidence; (3) interference with economic relations; and (4) breach of contract in the event that this Court finds a binding Adult agreement.
[158] Standard Innovation seeks damages in the counterclaim as follows:
(a) $100,000 in general damages for defamation;
(b) $25,000 in punitive or exemplary damages for defamation;
(c) the cost of having to retain an expert to rebut the Plaintiffs’ defamatory statements to Health Canada and the cost of legal advice, subsumed in the amount of damages awarded for defamation and set at a nominal value; and
(d) between $70,000 and $90,000 for economic interference with third party adult channel retailers.
The Claim for Defamation
Overview
[159] The claim for defamation is based on Ms. Ciolli’s statement made to Health Canada, via email, dated April 19, 2012.
[160] It is the position of Standard Innovation that Cana supported Ms. Ciolli’s misconduct and is therefore vicariously liable for damages caused by it. Standard Innovation alleges that the content of the statement to Health Canada was defamatory, untrue, and made without justification, along with the assertion that the timing of it is significant: it was made after Ms. Ciolli ceased to be a distributor of the We-Vibe product, three (3) days after Standard Innovation sued Cana for patent infringement, and years after receipt of a customer letter of complaint of a defective We-Vibe, the basis upon which the statement to Health Canada was made.
[161] Cana and Ciolli, the defendants to the counterclaim (the “defendants”), argue that the statement in question was not written for Ms. Ciolli’s personal benefit, nor for the benefit of Cana.
[162] The defendants plead that the contents of the statement were true and were only made because Micheline Ciolli felt she had a moral duty to make them known to Health Canada so that they could investigate and determine whether there were safety concerns that could endanger the public.
[163] The defendants assert that the evidence is clear that the statement was only made to Health Canada and to the Competition Bureau and has not been made public, nor have the contents been communicated publically. Further, Health Canada only makes public information when there is a Product Advisory, Warning, or Recall. In this case, Health Canada decided not to investigate, did not issue an advisory, warning, or recall, and closed its file.
[164] The defendants plead that there has been no dissemination of the statement to “consumers, retailers and distributors of the product, and other regulatory agencies in Canada and abroad”, no evidence that the statement caused consumers unnecessary alarm, no proof of any financial loss or damage to reputation or damage to retailers and distributors of We-Vibe products, and therefore no damage suffered by Standard Innovation.
[165] Cana and Ciolli allege that an employee of Cana prepared and submitted the Health Canada Incident Report form and mistakenly filled out the form in Ms. Ciolli’s name. Cana’s corporate address and telephone number are also on the official form that the employee submitted.
Applicable Legal Principles
[166] The statement in question is the email sent by Ms. Ciolli to Health Canada on April 19, 2012.
[167] Defamation can be defined as:
one which has a tendency to injure the reputation of the person to whom it refers; which tends, that is to say, to lower him [or her] in the estimation of right-thinking members of society generally and in particular to cause him [or her] to be regarded with feelings of hatred, contempt, ridicule, fear, dislike, or disesteem. The statement is judged by the standard of an ordinary, right-thinking member of society. Hence the test is an objective one… (Canadian Broadcasting Corp. v. Color Your World Corp. (1998), 1998 CanLII 1983 (ON CA), 38 O.R. (3d) 97 (C.A.), at para. 14, citing R.F.V. Heuston & R.A. Buckley, Salmond & Heuston on the Law of Torts, 21st ed. (London: Sweet & Maxwell, 1996), at p. 140, Sim v. Stretch, [1936] 2 All E.R. 1237 (H.L.), at p. 671, and Vander Zalm v. Times Publishers (1980), 1980 CanLII 389 (BC CA), 109 D.L.R. (3d) 531 (B.C.C.A.), at pp. 535, 543).
[168] The tort of defamation is one of strict liability. The plaintiff need not show that the defendant intended to do harm or that the defendant was careless (Grant v. Torstar Corp., 2009 SCC 61, [2009] 3 S.C.R. 640, at para. 28).
[169] Falsity and damage are presumed when the plaintiff satisfies the following three elements of the tort on a balance of probabilities: (1) the words were defamatory; (2) they referred to the plaintiff; and (3) they were published (Grant, supra, at para. 28).
[170] For words to be defamatory, the defendant must convey the defamatory meaning to a single third party, the receiver of the statement. There is no requirement to make the statement available to the public at large (Crookes v. Newton, 2011 SCC 47, [2011] 3 S.C.R. 269, at para. 16).
[171] Once the test for defamation has been satisfied, the onus then shifts to the defendant to raise a defence and to prove it on a balance of probabilities (Cusson v. Quan, 2007 ONCA 771, 87 O.R. (3d) 241). The defence raised by Cana and Ms. Ciolli’s in their pleadings — the Amended Amended Reply and Defence to Counterclaim — is the defence of justification or truth (at para. 80).
[172] If the statements are found to be false, the defendant will still be found liable, notwithstanding that the statement was published with an honest and reasonable belief in its truth and upon information supplied by a third party (Daboll v. DeMarco, 2011 ONSC 1, at para. 26; McRae v. Santa, 2006 CanLII 32920, at para. 23 (Ont. S.C.)).
The Contents of the Statement
[173] In her email to Health Canada, Ms. Ciolli’s requested an official inquiry into the safety and compliance of all We-Vibe products:
I write to request an official inquiry by Health Canada, Consumer Product Safety Division & Medical Device (Licenses) Division into We-Vibe® brand name products manufactured by Standard Innovation Corp. located at at [sic] Unit #330-1130 Morrison Drive, Ottawa, Ontario K2H 9N6. Telephone: (613) 828-6678. Website: www.we-vibe.com. Owner: Mr. Bruce Murrison [sic] due to my serious concern for consumer safety & compliance with Health Canada Medical Device (Licence) requirements.
‘THE PRODUCTS’
We-Vibe II Couples’ Massager - External/Internal, Rechargeable Couples’ Massager advertised by the manufacturer as designed to be “Worn While You Make Love”.
We-Vibe III Couples’ Massager - External/Internal, Remote-Control Rechargeable Couples’ Massager advertised by the manufacturer as designed to be “Worn While You Make Love”.
We-Vibe Tango - Insertable, Rechargeable Lipstick-Shaped, Sensual Massager.
We-Vibe Touch - External, Rechargeable Sensual Massager.
We-Vibe Salsa - External, Rechargeable Sensual Massager.
(email from M. Ciolli to R. Thaller, Health Canada, April 19, 2012, Exhibit 4, Tab 178)
[174] Ms. Ciolli’s statement then set out the alleged safety concerns:
‘THE SAFETY CONCERN(S)’
ITEM 1:
- ‘The Products’ appear to have a completely encased or sealed rechargeable, battery. Due to the battery(s) being completely encased or sealed, it is believed that gases are not able to be emitted, thereby leading to the potential & unsafe build-up of gases such as hydrogen, placing these products minimally at risk of not charging, failing to hold their charge & more seriously of failing to turn off, overheating, smoking/smouldering, catching on fire, and even exploding prior to or during usage.
Important Note: I am in receipt of approximately 100-150 letters from Canadian retailers & end consumers w/ proof of purchase reporting defects with We-Vibe® products. Additionally, I am in possession of a significant quantity of defective products including a return from a consumer reporting that her product emitted smoke & evidence of melting. If requested by Health Canada, I am prepared to provide a copy of these letters as well as defective product returns for review and product safety testing purposes.
b) There appears to be no technical specifications on the product packaging including product packaging inserts located inside the box with any technical specifications stating the type of battery used or battery chemistry.
c) There appears to be no technical specification on the product packaging including the product packaging inserts located inside the box regarding the Frequency Range or Radiation Range and no indication these products have been safety tested.
d) It is unclear whether or not the Product Circulatory Board is adequately protected to ensure consumer safety.
ITEM 2 - GOVERNMENT OF CANADA COMPETITION BUREAU -- REQUIREMENT FOR TRUTH IN ADVERTISING…“MISLEADING ADVERTISING & LABELLING”.
- The product packaging states that ‘The Products’ are Phthalate Free, Lead Free, WEEE Compliant, Carbon Neutral, CE Compliant, Recyclable. It is believed that one or more of the claims being made are not truthful. In particular, the claims that ‘The Products’ are Phthalate Free, Lead Free, CE Compliant, & Carbon Neutral.
Explanation
A) Regarding the manufacturer claim(s) of Phthalate Free & Lead Free, I am in possession of correspondence from the manufacturer’s representative stating that these specific claims on the packaging may not be truthful. In fact, I was specifically requested in writing by this individual to remove these claims from my company’s printed publication featuring We-Vibe II produced for the scientific community due to the ability of members of the scientific community to test the product(s) for the presence of these potentially harmful esthers [sic] & alloys.
B) Regarding the manufacturer's claim that ‘The Products’ are made from Medical Grade silicone…Based on the odor ommitted [sic] from these products (off-gasing), I have reason to believe that these products are either potentially not made from Medical Grade silicone (outer skin) and or that the chemicals used in processing may be contributing to the introduction of impurities that are causing the subject odor. In addition to the type of odor being emmitted [sic], the outer skin has a medium to high gloss finish & is sticky upon contact. I would like to point out that this is not my experience with other products advertised as made from Medical Grade silicone.
C) ‘The Products’ are designed in Canada and manufactured in Shenzhen, China and shipped via Hong Kong virtually worldwide by Air Freight & Sea Freight. There is no evidence to date of the manufacturer entering into either the practice of balancing carbon dioxide released into the atmosphere from burning fossel [sic] fuels with renewable energy that creates a similar amount of useful energy or using only renewable energies (post-carbon economy); And or entering into the practice, criticized by some of carbon offsetting by paying others to remove or sequester 100% of the carbon dioxide emitted from the atmosphere - for example by planting trees or by funding carbon projects that should lead to the prevention of future greenhouse gas emissions, or by buy carbon credits to remove (or retire) them through carbon trading.
D) The CE mark is a mandatory conformity and has been in effect since 1990 in the European Union (EU). It ensures the free movements of the product within the EFTA & European market. The EN71 toy safety standard test is similar to the ASTM F963. The toys comply with the essential requirements of the relevant European health, safety and environmental protection legislation. All toys that carry this mark are phthalate free and a strict limit of lead content has to be met. Please see my comments under Item A above. Also, please see below comments regarding Product Classification(s).
ITEM 3 - PRODUCT CLASSIFICATION
In Canada, the majority of ‘sex toys’ are marketed & sold as Novelty products. As such, ‘sex toys’ generally are not subject to Health Canada scrutiny or regulations except in instances whereby Health Canada receives a bona fide complaint(s) or notification(s) from the public or another regulatory body such as the FDA.
In the case of We-Vibe® documents from the Canada intellectual Property Office…the We-Vibe Couples’ Massagers are classified as ELECTRO-MECHANICAL SEXUAL STIMULATION DEVICES…. Additionally, USA Intellectual Property Office documents also list the We-Vibe Couples’ Massagers as a[n] ELECTRO-MECHANICAL SEXUAL STIMULATION DEVICE as do sworn, legal documents filed at the Court of Texas, and with the USA, ITC (International Trade Commission).
Additionally, there has been numerous Local, National, & International newspaper articles whereby the manufacturer states that We-vibe® is not a ‘sex toy’ that it is an electromechanical device or kinesiotherapy device (Definition: The treatment of disease by means of passive or active movements, such as massage & exercise - also referred to as kinesiatrics). Reference: December 6, 2011 Canada.com - Headline: Bad vibrations: Ottawa sex-toy company takes aim at cheap Chinese knock-offs.
CONCLUSIONS
The lst Classification (legal) would reasonably elevate the We-Vibe® in the eyes of consumers from a ‘Novelty Toy’ to a ‘Medical-Sexual Device’ as well as provide the manufacturer with protection against infringement of its’ [sic] patent by competing products as well as reasonably permit the manufacturer to sell the products at a higher price. Conversely, the description (non-legal) on the Manufacturer's website stating that We-vibe® is a Novelty Toy would remove the Manufacturer from being required by Health Canada to obtain a Medical Device Licence and or Medical Establishments Licence & Payment Of Any Applicable Health Canada, Medical Device Licence or Medical Establishment Licence (Annual Fees & Percentage Sales - Re: Class 3 or Class 4); And potentially insulate the manufacturer against any potential claim(s) arising from the direct or indirect usage of ‘The Products’.
Should Health Canada have any further questions or comments or require copies of correspondence, newspaper articles defective product returns, etc. please feel free to contact the undersigned by return e-mail.
I look forward to being advised of Health Canada’s decision to investigate & conduct product safety testing.
Yours Truly,
Micheline Ciolli
(email from M. Ciolli to R. Thaller, Health Canada, April 19, 2012, Exhibit 4, Tab 178; emphasis in original)
Discussion
[175] At trial, Ms. Ciolli admitted that she had no evidence of any safety or compliance issues with the Tango, Touch, and Salsa despite mentioning these products in her statement. It is not in dispute that Cana had never distributed these products or the We-Vibe III.
[176] Cana did not call an expert to testify as to the truth of the allegations made by her in her email. Rather, Ms. Ciolli relied on her own independent research to support the truth of the allegations. She admitted in her testimony at trial that she was not expert qualified to give expert opinion evidence regarding the safety or technical issues raised in her letter.
[177] Bruce Murison testified on behalf of Standard Innovation. He is the inventor of the products mentioned in the statement to Health Canada and is in charge of product development for the company.
[178] Following the delivery of Ms. Ciolli’s statement of complaint, Health Canada commenced an investigation and contacted Standard Innovation for a response. Prior to being contacted by Health Canada, Standard Innovation had no knowledge that Ms. Ciolli had any safety concerns about any of its products.
[179] Immediately after receiving a copy of the statement from Health Canada, Standard Innovation wrote to Ciolli requesting all evidence of defects leading to the injury of customers and all information about the “consumer reporting that her product emmitted [sic] smoke & evidence of melting” (email from A. Finlayson to M. Ciolli, May 23, 2012, Exhibit 31, Tab 27). Standard Innovation never received a response to this request and first learned of the defective We-Vibe or “smoking We-Vibe”, as it was referred to at trial, during the examination in chief of Ms. Ciolli six years after the customer had complained.
[180] In order to respond to Health Canada, Standard Innovation retained an industry expert and replied on May 25, 2012, disputing all allegations raised in the statement (letter from Standard Innovation to Health Canada, May 25, 2012, Exhibit 31, Tab 28).
[181] Shortly after receiving Standard Innovation’s response, Health Canada discontinued its investigation.
[182] Anne Finlayson and Bruce Murison testified about their concerns that, although the statement was sent to Health Canada and not distributed elsewhere, it is available to the public and may have a potential negative impact on the company and its reputation. Further, they identified a concern that the statement was communicated to Health Canada, the government regulatory department that Standard Innovation is now seeking approval from with respect to new products.
[183] In addition to writing to Health Canada, Ms. Ciolli wrote to the Competition Bureau of Canada making similar allegations. The Bureau declined to undertake an investigation.
[184] Standard Innovation submits that the timing of Ms. Ciolli’s statement is noteworthy since it was made three days after the commencement of litigation brought by it in the Federal Court of Canada for patent infringement against Lelo, the manufacturer of the infringing product, and against Cana, a distributor of the product.
[185] At trial, Ms. Ciolli testified that her motivation for sending her statement to Health Canada was due to “serious concerns” she had about the product, based on information she received while a distributor of Standard Innovation. During cross-examination, she admitted that, despite having these concerns, she did not bring these concerns to Standard Innovation before her email to Health Canada.
[186] It was the evidence of Bruce Murison and Anne Finlayson that customer complaints about its products were received from time to time, however these were not safety concerns and were very different than those raised in the statement sent to Health Canada (e.g. the device not holding a charge or failing to turn off and the battery draining).
[187] Ms. Ciolli testified about a complaint received from an Ottawa customer about a We-Vibe that had overheated and smelled of smoke (the “smoking We-Vibe”). The statements made by Ms. Ciolli are serious and suggest that the We-Vibe II, a device designed to be used inside the body of a woman, posed a danger to users and could possibly explode and catch on fire.
[188] There is no evidence before the Court that suggests that the device caught fire or that it presented a risk of explosion.
[189] What is known is that the customer in question was content to receive a replacement device, that Cana replaced it, and that nothing further transpired until this incident was raised during the trial.
[190] I need not recite the evidence of Bruce Murison regarding the “smoking We-Vibe” in detail. Suffice it to say that he was extremely knowledgeable about the device and testified that his examination and testing did not reveal any defect or safety concern.
[191] Specifically, Mr. Murison stated that, in his opinion, the device had been exposed to an external flame and that the suggestion that the battery had ignited and caused the silicone to blacken was not possible because the melting point of metal was significantly lower than silicon. This evidence and a comparative x-ray of the “smoking We-Vibe” clearly illustrated that Ms. Ciolli’s theory and concerns about safety of the We-Vibe device were not feasible.
[192] With respect to Ms. Ciolli’s concern about the technical specifications and circuit boards (items b), c), and d) in her statement), Mr. Murison testified that there was no requirement to provide these details to a customer nor were there any safety issues that had ever been raised in the course of selling hundreds of thousands of the devices. As noted, Ms. Ciolli admitted to possessing no expertise in this area.
[193] Regarding the allegations set out in Item 2 of Ms. Ciolli’s statement (“Misleading Advertising & Labelling”), she admitted during her cross-examination that she also had no experience or qualifications to substantiate the statements except for her own internet research. No other witnesses were called by Cana to provide further evidence regarding this issue.
[194] The evidence of Bruce Murison was detailed and revealed a depth of knowledge based upon his training and lengthy experience designing and producing We-Vibe products. His evidence was that all of the statements made were false and he described why the labelling of the product was accurate, how his company had strived to become as carbon neutral as possible and that medical grade silicone was used in manufacturing.
[195] It is noteworthy that nowhere in her statement does Ms. Ciolli inform Health Canada that she had been as a distributor of the We-Vibe for Standard Innovation.
[196] The record shows that Cana’s Graphics Department assisted in developing and preparing the statement sent to Health Canada.
The Defence of Qualified Privilege
[197] The defendants have raised the defence of qualified privilege for the first time during trial.
[198] It is trite law that party is required to plead with specificity any defences it wishes to assert and cannot raise a defence at trial for the first time.
[199] The British Columbia Court of Appeal held that “adequate disclosure in defamation pleadings still assumes a greater importance than in other actions” (Wang v. British Columbia Medical Assn., 2014 BCCA 162, 373 D.L.R. (4th) 693, at para. 77).
[200] A defendant is required to either expressly plead qualified privilege as a defence to a defamation claim or plead sufficient facts to support the existence of qualified privileged.
[201] Pleadings must include facts that establish the interest or duty in publishing the statement, the corresponding interest of those to whom it was published to receive it, and that it was necessary and proper to do so in order to protect a legitimate interest (MacArthur v. Meuser (1997), 1997 CanLII 12312 (ON SC), 146 D.L.R. (4th) 125 (Ont. Gen. Div.), at para. 34; Raymond E. Brown, Brown on Defamation (Canada, United Kingdom, Australia, New Zealand, United States), 2nd ed. (Toronto: Thomson Reuters, 2016), at p. 19.4(3)).
[202] I find that the defendants have not properly raised the defence of qualified privilege and have failed to plead the factual basis to support this defence.
[203] I find that the three requirements necessary to establish defamation have been met: (1) the words were defamatory; (2) they referred to the plaintiff; and (3) they were published (Grant, supra, at para. 28).
[204] Further, I find that the defendants have not satisfied the onus upon them to prove that the factual allegations contained in the statement are true. The evidence demonstrates that the statements made are false and were timed and intended to cause harm to Standard Innovation and the sale of its products.
Damages
[205] General damages in defamation cases are presumed from the publication of the false statement and are awarded at large. There is no principle that requires the damages to be nominal or low. If the court finds that a defamatory statement has been made, a court may make an award of damages, regardless of whether any loss of business has been proven (Hill v. Church of Scientology, 1995 CanLII 59 (SCC), [1995] 2 S.C.R. 1130, at paras. 164, 168).
[206] General damages in defamation cases serve three functions: “(1) consolation to the plaintiff for the distress suffered from the publication of the defamation[;] (2) to repair the harm to reputation, including, where relevant, business reputation; and (3) as a vindication of reputation” (Mina Mar Group Inc. v. Divine, 2011 ONSC 1172, at para. 13; see also Mudford v. Smith, 2009 CanLII 55718 (Ont. S.C.), at para. 56, aff’d 2010 ONCA 395).
[207] The factors that should be taken into account in the determination of the appropriate quantum of damages in the defamatory context were summarized by Blair J.A. in Barrick Gold Corporation v. Lopehandia (2004), 2004 CanLII 12938 (ON CA), 71 O.R. (3d) 416 (C.A.). They include the parties’ conduct, the plaintiff’s position and standing, the nature of the defamation, the mode and extent of publication, the motivations of the defendant, the possible effect of the defamation on the plaintiff, the absence or refusal of any retraction or apology, the whole conduct and motive of the defendant from publication through judgment, “up to and including conduct at trial,” and any evidence of aggravating or mitigating circumstances (Barrick Gold, supra, at para. 29; 122164 Canada Ltd. v. C.M. Takacs Holdings Corp., 2012 ONSC 6338, at para. 20; Alleslev-Krofchak v. Valcom Limited, 2009 CanLII 30446 (Ont. S.C.), at para. 305, aff’d 2010 ONCA 557, at para. 102, leave to appeal to SCC refused, 33907 (31 March 2011); Mina Mar Group, supra, at para. 11; Dover Investments Ltd. v. TransPacific Petroleum Corp., 2009 BCSC 1620, at para. 19, aff’d 2010 BCCA 114, 82 C.C.E.L. (3d) 1, leave to appeal to SCC refused, 33685 (16 September 2010).
[208] In the case at bar, there has been no apology proffered since the statement was made. The defendants’ conduct and defamatory statements are serious in nature and were made to a specific audience (Health Canada), which the defendants carefully selected to maximize the harm to the reputation of Standard Innovation (see 122164 Canada Ltd., supra, at paras. 21, 25). Clearly, these are aggravating factors to be taken into consideration when assessing damages.
[209] General damages are assessed and awarded in the amount of $50,000.
[210] An argument has also been made for an award of punitive damages to deter and denounce the defendants’ conduct as being a marked departure from the ordinary standards of decent conduct.
[211] In Whiten v. Pilot Insurance Co., 2002 SCC 18, [2002] 1 S.C.R. 595, the Supreme Court of Canada commented that courts should be mindful of the need to ensure that any award made is proportionate to (a) the blameworthiness of the defendant's conduct; (b) the plaintiff’s degree of vulnerability; (c) the harm or potential harm directed at the plaintiff; (d) the need for deterrence; (e) the other penalties awarded; and (f) the advantage wrongfully gained by the defendants.
[212] Applying the principles set out above, I find that this is not a case where an award of punitive and exemplary damages would be appropriate.
[213] Such an award would not be proportionate to the blameworthiness of the defendants’ conduct, the damage caused to the plaintiff, nor is there a need to express denunciation or to deter further wrongful conduct.
[214] While there is no doubt that the statement was communicated to Health Canada and to the Competition Bureau, I am not convinced that it became disseminated elsewhere and caused injury to the plaintiff.
[215] Standard Innovation also requests an award for special damages to compensate it for the expenses it incurred to respond to Health Canada’s inquiry, in the form of legal and consulting costs. Leave is granted to allow Standard Innovation to address this claim in their cost submissions.
The Claims of Injurious Falsehood, Misrepresentation, Breach of Trust, Breach of Confidence, and Interference with Economic Relations
Injurious Falsehood
[216] Standard Innovation pleads the torts of injurious falsehood, misrepresentation, breach of trust, and breach of confidence in conjunction with their claim for defamation.
[217] With respect to the tort of injurious falsehood, Standard Innovation states in its closing written submissions that it “does not seek damages for injurious falsehood over and above what it may be awarded with respect to defamation” (Closing Argument of the Defendant (Counterclaim), at para. 218).
[218] In lieu of general damages, Standard Innovation requests special damages in relation to Health Canada’s inquiry in the form of legal and consulting costs, which it intends to address in their cost submissions.
[219] Proof of special damages is not required if the words are calculated to cause pecuniary damage to the plaintiff and are published in writing, or if the words are calculated to cause pecuniary damage with respect to the plaintiff’s business (Peter A. Downard, Libel, 2nd ed. (Markham: LexisNexis Canada Inc., 2010), at pp. 262–63; Carbone v. DeGroote, 2014 ONSC 6146, at para. 57; Libel and Slander Act, R.S.O. 1990, c. L.12, s. 17).
[220] The defendants argue that Health Canada is not a body that deals with Standard Innovation in the business sense, but rather is merely a government regulator obligated to regulate products and to investigate whether products pose a consumer risk to the public. Further, the defendants argue that the statements made in the email to Health Canada and the Competition Bureau were true and not made with malice.
[221] I find that the statement made contained false allegations and that Ms. Ciolli knew they were false; that the allegations were published in written form (the statement to Health Canada and the Competition Bureau); and that they were intended to cause harm to Standard Innovation.
[222] Special damages are awarded for the tort of injurious falsehood in an amount to be determined following the delivery of the cost submissions by the parties.
Misrepresentation
[223] The Supreme Court has held that a suit in defamation does not negate a concurrent suit in negligence (Young v. Bella, 2006 SCC 3, [2006] 1 S.C.R. 108, at para. 56).
[224] The requirements of the torts of intentional and negligent misrepresentation are a duty of care, an untrue representation that is made intentionally or negligently, and detrimental reliance on the misrepresentation (Queen v. Cognos Inc., 1993 CanLII 146 (SCC), [1993] 1 SCR 87, at p. 110).
[225] The elements of tort of intentional misrepresentation are identical to those of negligent misrepresentation except that the defendant must have acted intentionally rather than negligently.
[226] Conduct is intentional when the defendant desires the consequences of her conduct or the consequences are substantially certain to result from the conduct (Philip H. Osborne, The Law of Torts, 2nd ed. (Toronto: Irwin Law, 2003), at p. 224; Lewis N. Klar, Tort Law, 5th ed. (Toronto: Thomson Reuters, 2012), at p. 32).
[227] The defendants argue that Standard Innovation’s claims in misrepresentation have no bearing, as the statements cannot qualify as a representation that was intended to be acted upon by Standard Innovation or a communication that was detrimentally relied upon.
[228] Although Ms. Ciolli intended to cause Health Canada to launch an investigation that would cause harm to Standard Innovation and that the statements made were false and without merit, I agree with the position of the defendants that there is no evidence that the statement was detrimentally relied upon.
[229] The claim for damages for misrepresentation is therefore dismissed.
Breach of Confidence
[230] The tort of breach of confidence provides a remedy for the unauthorized use or disclosure by a defendant of confidential information communicated in circumstances of confidence, when the unauthorized use or disclosure results in detriment to the plaintiff (Lac Minerals Ltd. v. International Corona Resources Ltd., 1989 CanLII 34 (SCC), [1989] 2 S.C.R. 574; Cadbury Schweppes Inc. v. FBI Foods Ltd., 1999 CanLII 705 (SCC), [1999] 1 S.C.R. 142).
[231] The recipient of the confidential information is under a duty not to use the confidential information for any purpose other than that for which it was conveyed.
[232] Standard Innovation submits that, as the distributor for Standard Innovation, the defendants were privy to Standard Innovation’s proprietary and confidential information about Standard Innovation’s products, company, and customer correspondence, and had a duty to keep this information confidential.
[233] The defendants respond by arguing that the information communicated to Health Canada concerned consumer complaints about the We-Vibe that potentially caused a health risk, along with issues related to packaging information. None of this information was supplied by Standard Innovation to Cana in confidence.
[234] I agree with the position of the defendants and find that the information communicated to Health Canada and the Competition Bureau was not provided in circumstances of confidence. Accordingly, this claim is dismissed.
Breach of Trust
[235] The law recognizes that a recipient of confidential information has a duty to keep that information confidential. Improper disclosure of confidential information constitutes a breach of trust (MDI Industrial Sales Ltd. v. McLean, 2000 ABQB 521, 267 A.R. 394).
[236] Standard Innovation maintains that the defendants were privy to confidential proprietary information including information about Standard Innovation’s products, communications with its management, and customer letters. By disclosing this information for the purposes of making a false and defamatory statement, Standard Innovation maintains that these actions constitute a breach of trust.
[237] The defendants repeat their argument that the information communicated to Health Canada concerned consumer complaints about the We-Vibe that potentially caused a health risk, along with issues related to packaging information. None of this information was supplied by Standard Innovation to Cana in confidence.
[238] I accept the position of the defendants and find that none of the information contained in the email to Health Canada was confidential in nature. Accordingly, this claim is dismissed.
Interference with Economic Relations
[239] The three essential elements of the tort of interference with economic relations are: (1) the defendant must intend to injure the plaintiff’s economic interest; (2) the interference must be by unlawful means; and (3) the plaintiff must have suffered economic harm or loss as a result (Grand Financial Management Inc. v. Solemio Transportation Inc., 2016 ONCA 175, 395 D.L.R. (4th) 529).
[240] To succeed in establishing the tort a plaintiff must prove a causal connection between the unlawful means and the loss suffered by the plaintiff (Alleslev-Krofchak v. Valcom Limited, 2010 ONCA 557, 322 D.L.R. (4th) 193).
[241] Standard Innovation asserts that the defendants’ interactions with third-party retailers and its sales of infringing products evidence an intention to cause loss to it and constitute self-enrichment.
[242] As Cana was the only distributor for We-Vibe in Canada for a period of a year, Standard Innovation argues that the defendants profited from its exclusive position by making retailer bend to its demands.
[243] In support of this assertion, Standard Innovation relies upon correspondence from retailers that show that Cana imposed onerous terms, made baseless accusations, and threatened legal action against third-party retailers. Accordingly, Cana was acting to enrich itself at the expense of Standard Innovation.
[244] I agree with the position of the defendants that Standard Innovation has failed to prove a causal connection between their actions and any economic injury suffered by it.
[245] Accordingly, this claim is dismissed.
Costs
[246] The parties shall submit written submissions with respect to the issue of costs within 30 days from the date that this decision is released.
[247] Submissions shall not exceed 5 pages in length.
The Hon. Mr. Justice Patrick Smith
Released: November 18, 2016
CITATION: Cana International Distributing Inc., c.o.b. as Sexy Living v. Standard Innovation Corporation, 2016 ONSC 7197
COURT FILE NO.: 10-49230
DATE: 2016/11/18
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
CANA INTERNATIONAL DISTRIBUTING INC., c.o.b. as SEXY LIVING
Plaintiff
– and –
STANDARD INNOVATION CORPORATION
Defendant
A N D B E T W E E N:
STANDARD INNOVATION CORPORATION
Plaintiff by Counterclaim
– and –
CANA INTERNATIONAL DISTRIBUTING INC., c.o.b. as SEXY LIVING and MICHELINE CIOLLI
Defendants by Counterclaim
REASONS FOR JUDGMENT
Patrick Smith J.
Released: November 18, 2016