Canadian Appeals Monitor Information and Commentary on Upcoming and Recent Appeal Court Decisions

Category Archives: Corporate Law

Subscribe to Corporate Law RSS Feed

Caution: An Entire Agreement Clause May Have Greater Implications Than Expected

Posted in Case Comments, Contracts, Corporate Law

At issue in One West Holdings Ltd. v Greata Ranch Holdings Corp. et al. was whether an entire agreement clause which referred to multiple contracts could be used to incorporate an arbitration clause from one of the other contracts. The British Columbia Court of Appeal held that it could despite the fact that the contracts involved… → Read More

Are pre-contractual representations “continuing”? Even if the contracting parties change?

Posted in Case Comments, Contracts, Corporate Law

Circumstances change and what is true today may not be true tomorrow. For that reason, some representations carry with them the obligation to advise the representee if the relevant circumstances change. These are usually referred to as “continuing” representations. But can a continuing representation carry with it the obligation to update a third party, to… → Read More

Piercing the corporate veil may be easier than you think

Posted in Case Comments, Contracts, Corporate Law

How do corporate and personal liability intersect in a corporation that has only one officer, director and shareholder?  In the recent Shoppers Drug Mart v. 6470360 Canada Inc. case, the Court of Appeal helped to clarify when the person behind the corporation will be found liable. Background In October 2005, Shoppers Drug Mart (“Shoppers”) contracted… → Read More

“Stop and Identify” Yourself, to Avoid Personal Liability when Acting on Behalf of a Company

Posted in Case Comments, Contracts, Corporate Law

Third parties must know exactly who they are entering into a contract with, especially when dealing with a limited liability company. That said, the identity of the true contracting party may not be clear when an officer, director or employee of a company is negotiating on behalf of the company. Indeed, third parties are generally… → Read More

The UK Supreme Court clarifies: no marshalling without an underlying debt, and maybe no marshalling in any event

Posted in Bankruptcy and Debt, Contracts, Corporate Law, Financial Services

The doctrine of marshaling has existed for centuries and was developed to address inequitable circumstances in which secured parties were unable to realize on their security. The UK Supreme Court has recently considered the doctrine in a case, Szepietowski (nee Seery) (Appellant) v The National Crime Agency (formerly the Serious Organised Crime Agency) (Respondent), which… → Read More

Attribution of Knowledge: Does it depend on the identity of the victim?

Posted in Administrative, Bankruptcy and Debt, Corporate Law

In Jetivia SA & Anor v Bilta (UK) Ltd & Ors, the England and Wales Court of Appeal confirmed and clarified the circumstances in which a director’s knowledge of fraudulent conduct will be attributed to the company. In particular, it explained that a director’s knowledge will not be attributable to the company in the context… → Read More

Lost in Contractual Interpretation: No Agreement at ABCA on Interpretation of Multiple Contracts Within a Single Transaction

Posted in Contracts, Corporate Law, Labour and Employment

In a very recent decision of the ABCA, Benfield Corporate Risk Canada Limited v. Beaufort International Insurance Inc, 2013 ABCA 200, the Court attempted to address a host of interesting contract issues, some with potentially wide implication, such as how to interpret multiple contracts within a single transaction, including the effect of entire agreement clauses… → Read More

The Rascal Returns: The Supreme Court Reaffirms Doctrine of Constructive Trust in Nishi v. Rascal Trucking Ltd.

Posted in Case Comments, Class Actions, Construction and Real Estate, Contracts, Corporate Law, Manufacturing, Municipal

The Supreme Court has issued its decision in the case of Nishi v. Rascal Trucking Ltd., 2013 SCC 33, clarifying the scope of the resulting trust doctrine, in the commercial context. The Court reaffirmed its own precedent and refused to abolish well-established doctrine in the absence of a “compelling” reason for doing so, strong dissents… → Read More

What is Market Manipulation?: The High Court of Australia Weighs In.

Posted in Case Comments, Corporate Law, Securities

In a recent decision, the High Court of Australia adopted an expansive approach to the market manipulation provision in that country’s corporations statute. In particular, the High Court rejected the notion that market manipulation is restricted to the misuse of monopolistic or dominant market power. The High Court instead held that purchasing shares for the… → Read More

UK Supreme Court Confirms – No Breach of Confidence without a Breach… or Confidence

Posted in Case Comments, Contracts, Corporate Law, Intellectual Property, Manufacturing

Introduction In a knowledge economy protection of trade secrets is critical to a corporation’s continued success and profitability. The misuse of trade secrets by competitors can be devastating to a corporation’s position in the marketplace. That is particularly true when it is ex-employees who are misusing trade secrets to compete against their former employer. In… → Read More

The Second Opinion: BCCA Finds Limited Partners Not Purchasers of Property Sold to Limited Partnership

A Commentary on Recent Legal Developments by the Opinions Group of McCarthy Tétrault LLP

Posted in Corporate Law, Tax

When a limited partner sells property to the limited partnership, is the limited partner itself a purchaser of that property, or is the only purchaser the general partner on behalf of the limited partnership?  That is the question which the British Columbia Court of Appeal recently addressed in Edenvale Restoration Specialists Ltd. v. British Columbia… → Read More

The Second Opinion: Restrictive Covenants at the Ontario Court of Appeal

A Commentary on Recent Legal Developments by the Opinions Group of McCarthy Tétrault LLP

Posted in Competition, Contracts, Corporate Law, The Second Opinion

The Ontario Court of Appeal has released an important new judgment concerning the enforceability of restrictive covenants: Martin v. ConCreate USL Limited Partnership, 2013 ONCA 72.  The decision provides guidance about when a restrictive covenant will be unenforceable owing to its duration and the scope of its prohibited activities, and suggests that a different test for unenforceability… → Read More

This Week at the SCC (07/12/2012)

Posted in Aboriginal, Bankruptcy and Debt, Corporate Law, Environmental, Labour and Employment, Securities, This Week at the SCC

Cases Decided The Supreme Court of Canada released one decision this week of interest to Canadian businesses and professions. In Newfoundland and Labrador v. AbitibiBowater Inc., 2012 SCC 67, the majority of the Court held that environmental protection orders issued under provincial legislation, which required an insolvent company to undertake remediation measures but which were… → Read More

Round and Round We Go: BCCA Declines Opportunity to Shape Leave Test in Secondary Market Class Actions

Posted in Case Comments, Class Actions, Corporate Law, Procedure, Securities, Torts

In a decision released this month, the British Columbia Court of Appeal has declined to enter the national fray on the question of how courts should interpret statutory leave requirements adopted throughout Canada in recent securities legislation amendments.  These leave requirements impose a preliminary hurdle for plaintiffs seeking to advance statutory secondary market class action… → Read More

The Penalty Doctrine: Focus on Substance Not Form Says The High Court of Australia

Posted in Case Comments, Class Actions, Contracts, Corporate Law, Financial Services

When is a contractual term a penalty? Traditionally, a penalty has been characterized as a provision that results in unconscionable and disproportionate compensation for breach of contract. The recent decision of Australia’s High Court in Andrews v. Australia and New Zealand Banking Group Ltd (“Andrews”) has widened the scope of the common law penalty doctrine… → Read More

UK Supreme Court to Pierce the Issue of the Corporate Veil

Posted in Case Previews, Conflict of Laws, Contracts, Corporate Law

The UK Supreme Court has granted permission to appeal in a case that raises important issues regarding the legal doctrine of “piercing the corporate veil”.  The decision in VTB Capital Inc. v. Nutritek International Corp. will give the Court an opportunity to clarify when the veil should be pierced, and whether the legal effect of doing so is to constitute the… → Read More

Back to Basic: US Supreme Court to Hear Amgen and Clarify “Fraud-on-the-Market” Reliance Presumption in Class Actions

Posted in Case Previews, Class Actions, Corporate Law, Securities, Torts

The Supreme Court of the United States has announced it will hear the appeal in Amgen Inc. v. Connecticut Retirement Plans and Trust Funds, setting the stage for an important clarification of the use of the “fraud-on-the-market” reliance presumption in U.S. securities class actions. The Court first set out the presumption in its 1988 landmark… → Read More

U.S. Supreme Court Refuses to Adopt a Bright-Line Rule on Limitation Periods for Corporate Insider Profit Claims

Posted in Case Comments, Corporate Law, Procedure, Securities

There is little law in Canada regarding if and how limitation periods applicable to statutory causes of actions in securities legislation can be tolled. For many public companies, this can create uncertainty regarding whether investor lawsuits are statute-barred. For example, the limitation period in s. 138 of the Ontario Securities Act, which covers causes of… → Read More

The UK Supreme Court to Decide: Whither the Risk Free Injunction?

Posted in Case Previews, Corporate Law

The United Kingdom Supreme Court recently granted permission to Barclays Bank plc to appeal the decision of the Court of Appeal that the Financial Services Authority (the “FSA”) need not provide a cross-undertaking for damages in favour of third-parties impacted by an injunction requested by the FSA. This hearing promises to be closely watched by… → Read More

In DIP Financing We Trust? Supreme Court of Canada to Hear Indalex Appeal

Posted in Bankruptcy and Debt, Case Previews, Contracts, Corporate Law

The Supreme Court has announced it will hear the appeal in the high profile Indalex Ltd., Re. The appeal is of great interest to the commercial litigation, insolvency and pension bar. Its outcome will be closely watched and may have dramatic impact on Canadian corporate reorganizations. Background The Indalex decision arose out of the insolvency… → Read More

SCC to Consider the Residence of Trust for Tax Purposes

Posted in Case Previews, Corporate Law, Financial Services, Tax

The residence of trusts and other business entities for income tax purposes has long been a source of confusion.  The Supreme Court of Canada will attempt to resolve that confusion in the St. Michael Trust cases, from which it recently granted leave to appeal. Decisions Below The cases arise as conjoined appeals from the decision of the Federal Court of Appeal in St…. → Read More

Franchisor’s Implicit Obligation of Good Faith and Loyalty

Posted in Case Comments, Corporate Law

The decision in Automobile Cordiale Ltée v. DaimlerChrysler Canada Inc., J.E. 2010-164 raises the question of the implicit obligation of good faith and loyalty in an exclusive dealership contract. Automobile Cordiale Ltée (the Franchisee) and DaimlerChrysler Canada Inc. (the Franchisor) entered into an agreement in 1994 whereby the Franchisee was granted exclusive right to sell… → Read More