Canadian Appeals Monitor

Information and Commentary on Upcoming and Recent Appeal Court Decisions

Do What You Say, Not Just What You Write: Subsequent Oral Amendments to Written Contracts

Posted in Case Comments, Civil Litigation, Contracts
Richard Lizius

Globe Motors, Inc. & Ors v. TRW Lucas Varity Electric Steering Ltd. & Anor, [2016] EWCA Civ. 396 is the latest statement of the England and Wales Court of Appeal with respect to whether parties can make an oral amendment to a contract, notwithstanding a clause requiring any amendment to be in writing (an “anti-oral amendment” clause).

In Globe the Court of Appeal concluded that such an oral amendment could be effective, and was not necessarily precluded by the anti-oral amendment clause. This is a significant decision that clarified a divergence in UK appellate law and, in Canada, will be persuasive authority to expand the role of such oral amendments to commercial contracts in general.

Background

Globe concerned a contractual dispute between TRW LucasVarity Electric Steering (“TRW”), a company which produces electric power-assisted steering systems, and Globe Motors Inc. (“Globe”) which designs and manufactures electric motors.

Globe and TRW entered into a long term supply contract whereby TRW was to acquire certain motors only from Globe, and Globe was to provide those motors only to TRW. TRW’s requirements changed, and it needed to acquire motors somewhat different to those listed in the supply agreement with Globe. A dispute arose as to whether the new motors fell under the supply agreement, and consequently whether TRW was obliged to acquire those motors only from Globe, or could go to one of Globe’s competitors (as TRW actually did). The Court of Appeal sided with TRW and found that the new motors were materially different to those covered by the supply agreement. It therefore concluded that TRW had not breached the contract.

A secondary issue arose as to whether Globe Motors Portugal (“Porto”), a subsidiary of Globe, was a party to the Agreement. Porto was not a party to the written contract, but the trial judge found that the agreement was varied or waived by the parties’ conduct because in their dealings under the agreement, over a long period, they operated as if Porto was a party. The supply agreement included an article which provided that it could only be amended by a written document, signed by both parties.

There was therefore a dispute as to whether Porto was a party, notwithstanding the anti-oral agreement clause. In light of the fact that it found there had been no breach of the contract by TRW, this issue was obiter, but the Court of Appeal nevertheless provided reasons on this point.

Analysis

The Court of Appeal was faced with two conflicting cases on the question of whether the anti-oral amendment clause was effective: United Bank v Asif (an unreported decision which held that such clauses were effective, and prevented subsequent amendments) and World Online Telecom v. I-Way Ltd, [2002] EWCA Civ. 413 (which held that oral amendments could be effective, notwithstanding such a limitation clause).

Counsel for TRW submitted that anti-oral amendment clauses promote certainty because they prevent a party from manufacturing an allegation of subsequent oral amendment to avoid summary judgment in a clear case. Notably, counsel did concede that the doctrine of estoppel could apply in appropriate cases, where detriment could be shown. The ability to make arguments on the basis of estoppel would likely have the same chilling effect on summary judgment, making this policy argument unconvincing.

The Court of Appeal addressed this concern by noting prior judgments have held that a court requires “strong evidence” before finding that there has been an oral variation, and that this resolves the concern with “manufactured” amendments. In Canada, the expanded scope of summary judgment motions following the Supreme Court of Canada’s decision in Hryniak v. Mauldin, 2014 SCC 7 likely means that such “manufactured” claims could easily be disposed of on a summary judgment motion.

The Court of Appeal concluded that recognizing the ability of the parties to make a subsequent oral agreement, modifying a contract, was consistent with general principles of contract law. Indeed there is no reason why an anti-oral amendment clause itself should not be subject to modification:

[100] Absent statutory or common law restrictions, the general principle of the English law of contract is that to which I referred at [64] above. The parties have freedom to agree whatever terms they choose to undertake, and can do so in a document, by word of mouth, or by conduct. The consequence in this context is that in principle the fact that the parties’ contract contains a clause such as Article 6.3 [the anti-oral amendment clause] does not prevent them from later making a new contract varying the contract by an oral agreement or by conduct.

Implications

The Globe decision enhances the ability of Canadian litigants to argue in favour of oral amendments to contracts, notwithstanding “entire agreement” clauses.

Notably, the leading Ontario case on this point Shelanu Inc. v. Print Three Franchising Corp. (2003), 64 O.R. (3d) 533 (CA) was decided in the context of a franchise agreement where it has been said that there is an imbalance of power between the franchisee and franchisor. In that context, the Ontario Court of Appeal was willing to overlook limitation clauses, which may have prevented oral modifications, and enforce a subsequent oral modification to a contract (as a collateral contract). The Ontario Court of Appeal also relied on the doctrine of contra proferentum to overlook the anti-oral agreement clause.

The Globe decision strengthens the argument to enforce subsequent oral variations to commercial contracts, even when there is no imbalance of power and the principle of contra proferentum does not apply.

The Globe decision should be persuasive to Canadian courts, particularly in light of the recent Supreme Court of Canada decisions Bhasin v. Hrynew, 2014 SCC 71 and Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53. Bhasin recognized the duty of good faith in Canadian contract law and Sattva recognized the importance of the “factual matrix” or “surrounding circumstances” in interpreting a contract. Both of these principles are consistent with the analysis in Globe.

Both Bhasin and Sattva reflect a doctrine of contractual interpretation that looks at all of the surrounding circumstances, and considers how the parties would have understood their obligations, rather than slavishly following the text of the contract. The approach to anti-oral amendment clauses adopted in Globe fits neatly into that paradigm: the Court considers the surrounding circumstances to determine whether the parties intended to override the limitation clause by way of a subsequent agreement. In that way, it respects both the intent of the contracting parties and leads to the fairest result.

Case Information

Globe Motors, Inc. & Ors v. TRW Lucas Varity Electric Steering Ltd. & Anor, [2016] EWCA Civ. 396

 

 

Québec Court of Appeal to hear its first case on the scope of lobbying legislation

Posted in Case Comments, Civil Litigation, Lobbying law
Gabriel Querry

The Québec Court of Appeal recently granted leave to appeal from Directeur des poursuites criminelles et pénales c. Cliche, 2016 QCCS 1288. To our knowledge, it is the first time the Court of Appeal agrees to rule on the scope of the Québec Lobbying Transparency and Ethics Act (“LTEA”).

Cliche, a windfarm business’ executive, was charged under the LTEA for failing to register as a lobbyist after he asked municipal officials to endorse his employer’s bid to a third party’s RFP and to champion the project before environmental regulators. The endorsement was meant to demonstrate the bid’s “social acceptability” and to prevent negative media coverage.

In overturning Cliche’s acquittal by the provincial court, the Superior Court found that the communications were an attempt to influence or “[translation] could reasonably be considered as capable of influencing” a public office holder’s decision in relation to the development of an agreement, a resolution or an action plan. The Court also found that the “public proceedings” exemption did not apply, even though Cliche’s representations had been publicized during town hall meetings.

We expect that the Court of Appeal will take this opportunity to bring much needed certainty to the scope of lobbying law. We bear in mind however that the National Assembly is currently studying a bill that will likely replace the Act by a more exacting regime in the years to come.

Case Information

Directeur des poursuites criminelles et pénales c. Cliché, 2016 QCCS 1288

Docket: 500-36-007693-156

Date of Decision: March 15, 2016

Is your Clearly Descriptive Place of Origin Mark Distinctive? Prove it!

Posted in Case Comments, Civil Litigation, Trade-mark
Dharshini Sinnadurai

The Federal Court of Appeal recently clarified the applicable test for challenging a trade-mark that is clearly descriptive of a good’s place of origin, pursuant to s. 12(1)(b) of the Trade-marks Act, RSC 1985, c. T-13 (the “Act”). The Court also articulated how such a trade-mark could still be ruled distinctive, and, accordingly valid: good old fashioned proof!

The context for the decision in MC Imports Inc. v. AFOD Ltd., 2016 FCA 60 [1] was a dispute between two importer-distributors of bagoong, a fish and shrimp based condiment from the Philippines.

Case Background

The action began as a trade-mark infringement proceeding commenced by MC Imports Inc. (“MC Imports”), which owned the trade-mark LINGAYEN. The trade-mark was registered in August 2003 and MC Imports had licensed the trade-mark until the trade-mark was assigned to it in October 2011.  Prior to the trade-mark being registered, MC Imports’ predecessor company sold products using the same LINGAYEN mark dating back to 1975.  Around May 2011, AFOD Ltd. (“AFOD”) began importing and distributing bagoong products, with its trade-mark Napakasarap and the words “Lingayen Style” on the label.  Lingayen is a Philippine municipality that is known for its distinctive style of bagoong.

MC Imports alleged that AFOD’s use of the term Lingayen on its product labels violated its LINGAYEN trade-mark and commenced the infringement proceeding in November 2011.  AFOD responded to the infringement claim by, inter alia, challenging the validity of the LINGAYEN trade-mark on the basis that it was clearly descriptive or deceptively misdescriptive of the place of origin of MC Import’s bagoong.

Relevant Trade-marks Act Provisions and Summary Trial Outcome

The Act lists several requirements for a trade-mark to be registrable. In particular, a trade-mark must not be “… either clearly descriptive or deceptively misdescriptive… of the character or quality of the goods… or of their place of origin.”[2]  A trade-mark may be deemed invalid if the trade-mark was not registrable at the time of registration or if the trade-mark is not distinctive at the time when its validity is challenged.[3]  Even if a trade-mark is clearly descriptive of a good’s place of origin, it may still be registrable if the mark has become distinctive due to prior use of the mark in Canada.[4]

It was undisputed at the summary trial of this matter before the Federal Court that Lingayen is a geographical region in the Philippines. The judge found that MC Import’s bagoong originated in Lingayen.  Faced with two lines of seemingly conflicting case law, the judge concluded that both tests reached the same result: the LINGAYEN mark was clearly descriptive of the place of origin of the bagoong, was not registrable at the time of registration, and was accordingly invalid.

Which Test to use: the Parma vs. Leyda Contest

On appeal, MC Imports argued that the judge erred in his application of the relevant test by failing to apply the approach used in the Parma[5] case, pursuant to which the ordinary consumer’s perception of the trade-mark should factor into the analysis.  Although Parma was a “deceptively misdescriptive” case, MC Imports argued that it applied because, like the current case, Parma dealt with a longstanding use of the mark prior to registration.  AFOD argued that the case of Leyda[6] articulated the law on a “clearly descriptive” place of origin: i.e. average customer perception is not relevant to the analysis.

The Federal Court of Appeal, referencing the Federal Court’s ruling in Atlantic Promotions,[7] determined that the Leyda test applied and accordingly found that consumer perception is generally only relevant in deceptively misdescriptive type cases.  However, as explained below, there may be circumstances under which a Court must resort to consumer perception in a clearly descriptive origin case in order to resolve an ambiguity and/or consider the mark’s acquired distinctiveness.

The Court articulated a three-step test for determining whether a geographic name is unregistrable because it is clearly descriptive of the place of origin of a good/services:

  1. Determine whether the trade-mark is a geographical name;
  2. Determine the place of origin for the goods or services;
  3. Assess the trade-mark owner’s assertion of prior use, if any.

1. Geographical Name

The first step may seem fairly obvious: does the mark correspond with an identifiable place on a map? Although this will likely be the extent of the analysis in many cases, the inquiry allows for some nuance to account for terms which happen to share a name with a geographic location.  For instance, as the Court points out, numerous towns in the US and UK share a name with the everyday sandwich.  Other examples of goods that share names with places, to name a few, include java, hamburger, bikini, cognac, jersey fabric, Bristol board and brie cheese.

For situations in which there are multiple meanings for a term, the Court advocated the approach adopted in Atlantic Promotions, which held that the primary meaning of the word to a person of “ordinary education and intelligence” dictates its meaning.  A party defending against a challenge related to clearly descriptive type of trade-mark would need to submit evidence that the primary meaning of the mark is not the geographic location.

2. Place of Origin

The analysis for many cases will likely conclude at this stage. If the good originates from the same location as its geographical namesake, the Court will draw the inference that the mark is clearly descriptive of its place of origin and, as a result, unregistrable, unless the defending party asserts distinctiveness as a result of prior use (discussed below).

The Court distinguishes the deceptively misdescriptive type of challenge at this step. If it turns out that the good originates from a different location than the one for which it is named, the trade-mark is misdescriptive.  A different type of analysis than that discussed in this case would follow to determine if the misdescription is deceptive.

3. Prior Use

Finally, even if a trade-mark is clearly descriptive of a good’s place of origin, the trade-mark may still be registrable if it has, through use in Canada by the owner of the mark or a predecessor in title, become distinctive.

The issue of consumer perception of the trade-mark is highly relevant for this inquiry. The holder of the trade-mark bears the onus of demonstrating that the mark “has acquired a dominant secondary or distinctive meaning in relation to the wares or services” with which it is associated.  Evidence of mere use of the mark is not sufficient to satisfy this onus.

Comments

It appears that MC Imports did not submit any evidence to argue that through its predecessor’s use of the mark since 1975, LINGAYEN had acquired a distinctive meaning at the date of its filing, January 2000. Its mere assertion that there had been significant “time for the mark to establish its reputation and awareness among customers” was insufficient.  The outcome may have been different in this case if s. 12(2) evidence tending to prove the mark’s acquired distinctiveness had been before the Court.  Affidavits from actual customers, retailers and/or industry specialists speaking to the reputation of the mark and its associated bagoong, both generally and in comparison to competitors’ bagoong products, could have very well impacted the ultimate outcome in this case.

MC Imports’ efforts to protect its rights and prevent infringement of its trade-mark resulted in that same trade-mark being ruled invalid. A significant takeaway for businesses considering enforcement of a registered trade-mark would be to assess the validity of the trade-mark and consider the evidence required to prove the reputation of the mark before undertaking a court proceeding.

Case Information

MC Imports Inc. v. AFOD Ltd., 2016 FCA 60

Docket: A-569-14

Date of Decision: February 23, 2016

_______________________________________________________________________

[1] 2016 FCA 60.

[2] Act, s. 12(1)(b).

[3] Act, s. 18(1)(a) and (b).

[4] Act, s. 12(2).

[5] Consorzio del Prosciutto di Parma v. Maple Leaf Meats Inc., 2001 F.C.J. No. 89 [Parma]

[6] Sociedad Agricola Santa Teresa Ltd. v. Vina Leyda Limitada, 2007 FC 1301 [Leyda]

[7] Atlantic Promotions Inc. v. Canada (Registrar of Trade Marks), 2 CPR (3d) 183.

Ontario Court of Appeal Recognizes Potential Liability of the Corporate Parent of a Franchisor Under the Duty of Good Faith

Posted in Case Comments, Civil Litigation, Franchise and Distribution
Adam ShipSarah Ahsan

On May 3rd, 2016, the Court of Appeal for Ontario (the “OCA”) overturned a decision of the Ontario Superior Court which had held that a franchisor’s parent company could never be liable to a franchisee of its subsidiary for breach of the duty of good faith under the Arthur Wishart Act (the “Act”).

On May 28th, 2015, the Ontario Superior Court allowed a motion brought by the parent company, General Motors US (the “parent company”), to strike the franchisees’ claim that the patent company owed it a duty of good faith under the Act and at common law. A summary of that decision can be found in the following link:

http://www.consumerretailadvisor.com/2015/08/not-everyone-is-a-party-some-comfort-for-foreign-franchisors/

The OCA overturned the motion judge’s decision on the basis that he applied the wrong legal test to whether the claim disclosed a reasonable cause of action. In particular, the OCA held that the motion just erroneously focused on whether it was likely that franchisee’s claim would succeed rather than on whether it was “plain and obvious” that it would not succeed.  Since there was no evidentiary record yet and the motion was based on the pleadings alone, a very stringent test applied to whether the claim should be struck.

The OCA also emphasized that the Act is remedial legislation designed to protect franchisees in the face of the power imbalance that exists between a franchisor and franchisee. As such, it was necessary to adopt a purposive approach to the interpretation of the Act in favour of the protection of the franchisee. The OCA highlighted that the duty of good faith also exists under the common law in the context of the franchisor-franchisee relationship. As well, it was noted that the duty of good faith in the context of this case involves important questions of legal interpretation that are addressed properly through a factual record rather than on the basis of the pleadings alone.

On the issue of whether the patent company was a “franchisor’s associate” under Section 1 of the Act, the OCA rejected the motion judge’s finding that the granting of the franchise occurred before the corporate parent came into existence and that therefore the corporate parent could not be directly involved in the granting of the franchise (as required by one of the statutory definitions of “franchisor’s associate” under the Act). The OCA found that there were sufficient facts pled in the claim to demonstrate that the corporate parent could have been involved in the granting of the franchise. In particular, several conditions were imposed on the franchisee before the signing of the Dealer Sales and Service Agreements (DSSAs) which were related directly to the changing structure of the corporate parent. The OCA also noted that the franchisees had pled several facts related to the corporate parent’s operational control over the franchisees (which could satisfy the second definition of “franchisor’s associate” under the Act). These included the corporate parent’s control over pricing, marketing, and structuring of the dealership network in Canada.

On the question of whether the corporate parent owed a duty of good faith to the franchisees under the Act, the OCA noted that the motion judge did not frame this issue properly. While the Act only appears to impose a duty of good faith on parties to a franchise agreement, it was still possible on a proper evidentiary record that a corporate parent with sufficient control over its subsidiary could be liable.  The OCA once again noted that the corporate parent was involved in the setting of the terms in the franchise agreements, and controlled the marketing and distribution of products in Canada. The issue should be resolved on a proper evidentiary record.

The OCA noted that it was not yet settled in law whether the duty of good faith and fair dealing only applies to parties to the franchise agreement and not to entities with real control over the signatory. It emphasized that a court should not dismiss a case on a motion to strike where the law is subject to limited jurisprudence and remains unsettled. On this point, the OCA cited the Superior Court of Justice’s decision in WP (33 Sheppard) Gourmet Express Restaurant Corp. v. WP Canada Bistro & Express Co. Inc., 2010 ONSC 2644, in which the defendants could be considered as parties to the franchise agreement because they were the “directing minds” of the franchisor. The OCA noted that in that case, the judge stated that the definition of a “party” under the Act is flexible. On this basis, the OCA held that it could not be concluded that the corporate parent could never be a party to the franchise agreement within the meaning of the Act. Overall, the OCA concluded that despite there being no direct contractual relationship between the franchisees and the corporate parent, it was not plain and obvious that the corporate parent did not owe a duty of good faith to the Canadian dealerships.

The decision presents several important takeaways for parties to franchise agreements, and in particular for parent companies with any degree of involvement in the granting of franchises. First, the OCA affirmed that the threshold for dismissing a claim as disclosing no reasonable cause of action in the context of a franchise dispute is fairly high. Importantly, the Act will be interpreted liberally in favour of franchisees. Second, the OCA affirmed that whether a party that is not a signatory to the franchise agreement will be bound by a duty of good faith and fair dealing continues to be an open question.

Case Information

Addison Chevrolet Buick GMC Limited v. General Motors of Canada Limited, 2016 ONCA 324

Docket: C60644

Date of Decision: May 3, 2016

 

Certification of an “Uncommon” Class Action based on a “Central Commonality”

Posted in Case Comments, Class Actions
Sara D.N. Babich

The Ontario Court of Appeal recently reiterated several key principles in the context of class action certification motions. In Good v Toronto Police Services Board, 2016 ONCA 250 [Good], the Court of Appeal upheld the Divisional Court decision to certify the claim of Ms. Sherry Good as representative plaintiff (the “Representative Plaintiff”) in the proposed G20 class action against the Toronto Police Services Board (the “TPS”). The decision in Good reminds us of two very important considerations in class action proceedings: Continue Reading

Standard of review of administrative action: coherence post-Dunsmuir?

Posted in Administrative, Case Comments
Louis Fouquet

It was widely hoped that the Supreme Court of Canada decision in Dunsmuir v. New Brunswick, 2008 SCC 9 (“Dunsmuir”) would simplify the judicial review of administrative action by limiting the scope of review to two standards: reasonableness and correctness. The divided Supreme Court of Canada opinion in Commission scolaire de Laval v. Syndicat de l’enseignement de la région de Laval, 2016 SCC 8 shows that there is still a long way to go before coherence and uniformity is brought to this area of law. Continue Reading

The SCC Monitor (19/04/2016)

A Commentary on Recent Legal Developments by the Canadian Appeals Monitor

Posted in The SCC Monitor
Laurie BaptisteRyann AtkinsShanique Lake

Leaves to Appeal Granted

Since our last post, the Supreme Court of Canada (SCC) has granted leave in a couple significant cases that will be of interest to our readers:

Douez v. Facebook:  Like or Dislike?

The SCC recently granted leave to appeal from the judgment of the B.C. Court of Appeal in Douez v. Facebook (“Douez”), which likely garnered “dislikes” from online businesses and service providers who rely on choice of law and forum selection clauses in their Terms of Use agreements. Continue Reading

Missing the Mark – Federal Court of Appeal set aside dismissal in passing off and copyright case

Posted in Case Comments, Intellectual Property
Ryann AtkinsKaitlin Soye

In Sadhu Singh Hamdard Trust v. Navsun Holdings Ltd. (2016 FCA 69), the Court of Appeal set aside the Federal Court’s (2014 FC 1139) decision dismissing Hamdard Trust’s claim of copyright infringement and passing off against Navsun Holdings and remitted the matter to the Federal Court for redetermination, with some guidance. Continue Reading

Abuse of Process: Carbon Copy Class Actions Stayed by Courts Coast to Coast

Posted in Case Comments, Civil Litigation, Class Actions, Multijurisdictional
Kelli McAllister

A recent article, Abuse of Process: Carbon Copy Class Actions Stayed by Courts Coast to Coast, published on McCarthy Tétrault LLP’s Class Actions Monitor blog may be of interest to readers of the Canadian Appeals Monitor blog. Kelli McAllister recently published on update to her previous discussion about the ongoing systems access fee class action.

This unusual class action was launched in nine provinces in 2004 by the same counsel on behalf of the same plaintiffs. This class action has now been found to be an abuse of process by the Nova Scotia Court of Appeal in BCE Inc. v Gillis, 2015 NSCA 32, the Alberta Court of Appeal in Turner v Bell Mobility Inc, 2016 ABCA 21 and the Manitoba Court of Appeal in Hafichuk-Walkin et al v BCE Inc et al, 2016 MBCA 32. The Nova Scotia decision has been appealed to the Supreme Court of Canada and the decision on the leave application is pending. The Supreme Court of Canada is faced with a unique situation: not only is same issue being considered by courts across Canada, but, in fact, the exact same case. It remains to be seen whether bringing carbon copy class actions across Canada as part of a litigation strategy and without the intention to pursue the action (except in one province), will likewise be condemned by the Supreme Court of Canada. We will update you on that leave decision in our regular SCC Monitor blog posts.

Careful Putting Your Best Foot Forward: Alberta Court of Appeal Eases Access to Summary Dismissal

Posted in Case Comments, Civil Litigation, Contracts
Timothy Froese

The Alberta Court of Appeal strengthened the post-Hryniak judicial trend in favour of the summary disposition of litigation without trial by upholding the decision of a chambers judge to grant summary dismissal without strict adherence to the applicable Rules of Court.  In Pyrrha Design Inc v Plum and Posey Inc, 2016 ABCA 12, the plaintiff applied for summary judgment but failed to make its case. It saw not just its application, but its entire claim, dismissed, even though the defendant had not brought a cross-application for summary dismissal. Continue Reading

Dunkin’ Donuts: The Supreme Court of Canada puts an end to the saga

Posted in Case Comments, Civil Litigation, Franchise and Distribution
Adam ShipAnne-Marie NaudHelen Fotinos

A recent article published on McCarthy Tétrault LLP’s Consumer and Retail Advisor blog may be of interest to readers of the Canadian Appeals Monitor blog. Adam Ship, Anne-Marie Naud and Helen Fotinos recently published an update to their previous discussion about the Québec Court of Appeal’s decision in Dunkin’ Brands Canada Ltd. c. Bertico inc., 2015 QCCA 624, in particular its finding of implied obligations in franchise agreements. The Supreme Court of Canada (SCC) just announced their dismissal of Dunkin’ Brands Canada Ltd.’s application for leave to appeal from the judgment of the Quebec Court of Appeal. Notably, in a very rare move, Côté J. dissented on the decision to deny the application for leave.

Cook or Get Out of the Kitchen: Legitimate Interest Required to Enforce a Restrictive Covenant

Posted in Case Comments, Civil Litigation, Franchise and Distribution
Shanique Lake

MEDIchair LP v DME Medeqip Inc., 2016 ONCA 168 is a case with important implications for all franchisors and franchisees. In the decision released on February 29, 2016, the Ontario Court of Appeal struck down a non-competition covenant because the franchisor had no intention of operating a competing business within the geographical area covered by the covenant.  Overturning the lower court decision, the Court of Appeal held that a legitimate proprietary interest is necessary to enforce a restrictive covenant. Continue Reading

“Crossing the Rubicon” Against Corporations: Authorities Cannot Investigate Corporations Under the Guise of an Audit

Posted in Case Comments, Charter of Rights, Competition, Constitutional, Criminal, Securities, Tax
Julie-Martine LorangerGabriel QuerryPatrick Ostiguy

Authorities must relinquish their broad compulsory auditing powers when engaging in an adversarial determination of penal liability or, as stated by the Supreme Court in R. v. Jarvis, [2002] 3 SCR 757 [1] when they “cross the Rubicon”. This flows from the protection against self-incrimination enshrined under section 7 of the Canadian Charter of Rights and Freedom, a protection which, traditionally, only benefits individuals. However, according to a recent Court of Québec decision in Agence du revenu du Québec c. BT Céramiques inc., 2015 QCCQ 14534 [2] the protection of the Rubicon is not exclusive to individuals: it also shields corporations. This decision’s pending appeal is one to keep an eye out for, as it might revisit the scope of corporations’ rights during regulatory audits and penal investigations. Continue Reading

The SCC Monitor (04/03/16)

A Commentary on Recent Legal Developments by the Canadian Appeals Monitor

Posted in The SCC Monitor
Patrick WilliamsMeghan S. Bridges

Since our last post, most of the judgments and successful applications for leave decided by the Supreme Court have arisen from criminal cases. The most notable exception was the judgment in Canadian Imperial Bank of Commerce v. Green, 2015 SCC 60, concerning secondary market class actions, which we have already covered in detail.

This post will cover the very brief judgment in Canadian Pacific Railway Co. v. Canada (Attorney General), 2016 SCC 1 and the successful application for leave to appeal from Urban Communications Inc. v. BCNET Networking Society, 2015 BCCA 297. Continue Reading

May it Please the Court: Does “May” in an Arbitration Clause Convey Choice About Proceeding to Arbitration?

Posted in Case Comments, Contracts
Meghan S. Bridges

The difference between the mandatory “shall” and the permissive “may” in a contract is, perhaps typically, straightforward. One mandates action; the other allows, but does not require, it. This analysis can be more complex in the context of an arbitration agreement: can a party to the agreement force a stay of litigation based on a clause that states the parties may submit the dispute to arbitration? The Privy Council in Anzen Limited v. Hermes One Limited faced essentially this question, and, in part based on Ontario Court of Appeal jurisprudence, held that the answer is yes. Continue Reading

Complete Relief Provides Defendants With No Relief From Class Actions

Posted in Case Comments, Class Actions
Eric Pellegrino

Defendants cannot defeat a class action by relying on an unaccepted settlement offer made to the proposed representative plaintiff for the full amount of his or her individual claim.  That is the conclusion reached by the Supreme Court of the United States in Campbell-Ewald Co. v. Gomez, No. 14–857.  The majority found that an unaccepted settlement offer creates no lasting right or obligation and, therefore, does not automatically render moot the claims of the representative plaintiff or by extension, those of the putative class members.  That said, the decision does reveal a potential path forward for class action defendants in both the United States and Canada. Continue Reading

Hot Off the Press – Defending Class Actions in Canada: A Guide for Defendants

Posted in Class Actions

Defending_Class_Action_Book_2016In the newly published fourth edition of Defending Class Actions in Canada: A Guide for Defendants, McCarthy Tétrault litigators offer valuable insights for business leaders and professionals exposed to class actions as well as their counsel.

This easy-to-read book outlines the procedural machinery of Canadian class actions and the law that governs them, provides strategic analysis on managing the risks they entail, and explains the most important recent developments and trends on a national and international scale.

Edited by Jill Yates and written by Alexandra Cocks, Sarah Corman, Jessica Dorsey, Christopher Hubbard, Miranda Lam, Jean-Francois Lehoux, Elder C. Marques, Kelli McAllister, Michael J.P. O’Brien, Julie Parla, Renee Reichelt, Michael Rosenberg, and Bryan West, the fourth edition of Defending Class Actions in Canada can be purchased here.

This article was original posted on the Canadian Class Actions blog on February 17, 2016.

The Long Arm of the B.C. Securities Commission

Posted in Case Comments, Securities
Patrick Williams

In McCabe v. British Columbia (Securities Commission), 2016 BCCA 7, the B.C. Court of Appeal upheld the ability of the B.C. Securities Commission (the “Commission”) to penalize a resident of British Columbia for publishing misrepresentations about an American company in the United States. This case confirms the Court’s expansive approach to the Commission’s extraterritorial jurisdiction.

Background Continue Reading

Ontario Court of Appeal Inspiring Consumer Misrepresentation Class Actions

Posted in Case Comments, Class Actions, Consumer Protection
Laurie Baptiste

The Ontario Court of Appeal is once again making headlines with the case of Ramdath v George Brown College, which has turned out to be a doubly significant case at the intersection of class actions and consumer protection legislation. Continue Reading

The Ontario Court of Appeal Declines to Extend the Doctrine of Unconscionability into the Performance of Contracts

Posted in Case Comments, Civil Litigation, Contracts
Geoff R. HallTrevor Courtis

In the 14 months since the Supreme Court of Canada rendered its landmark decision in Bhasin v. Hrynew, 2014 SCC 71 [1] the general organizing principle of good faith in contract law has been applied in a very restrained manner by courts across Canada. The recent decision of the Ontario Court of Appeal in Bank of Montreal v. Javed, 2016 ONCA 49 is a further example of this trend. Continue Reading

What’s in a Name?: BCCA Holds that a Bid Made in the Name of a Related Company is Non-Compliant

Posted in Case Comments, Civil Litigation
Patrick Williams

The recent case of M.G. Logging & Sons Ltd. v. British Columbia (Forests, Lands & Natural Resource Operations), 2015 BCCA 526 emphasizes the strict standards required for compliance in the tendering context, highlights the benefits and drawbacks of a discretion clause, and holds that owners do not have an obligation to resolve ambiguities in non-compliant bids. Continue Reading

Ontario Court of Appeal Dismisses Pet Valu Class Action, Clarifies the Scope of the Duty of Good Faith and Fair Dealing and Calls for Greater Judicial Restraint

Posted in Case Comments, Civil Litigation, Class Actions, Franchise and Distribution
Helen FotinosAdam ShipAlexandra Aliferis

The recent decision of the Ontario Court of Appeal in 1250264 Ontario Inc. v. Pet Valu Canada Inc., 2016 ONCA 24 clarifies and narrows the scope of the duty of good faith and fair dealing imposed on franchisors under section 3 of the Arthur Wishart Act (Franchise Disclosure) (“AWA”) and expressly cautions against zealous judicial intervention in the framing and amendment of common issues in class action proceedings. Continue Reading

Looking Back – The 10 Most Important Appeals of 2015

Posted in Features
Laurie BaptisteRyan MacIsaacKate Macdonald

 

 

 

 

“Those who cannot remember the past are condemned to repeat it”
– George Santayana

Top 10_2


Over the holidays, many reflect over the past year in search of lessons learned for the coming year. In line with this tradition the Appeals Monitor is, once again, pleased to present our annual review of the most significant appeal decisions of the past year which we should be mindful of and which can be expected to impact Canadian employees and businesses for years to come. Continue Reading