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Case Law is a sample selection from the weekly summaries of notable unreported civil and criminal court decisions published in Law Times newspaper.

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Conflict of Laws

Contracts

There was no error in analysis of juridical advantage

Plaintiff signed employment contract in Ontario, but worked for over one year in New York. Plaintiff was dismissed for cause and brought wrongful dismissal action in Ontario. Defendant brought motion to stay plaintiff’s action on basis that, relative to New York State, Ontario was forum non conveniens. Motion was dismissed. Defendant appealed. Appeal dismissed. There was no error in master’s analysis of juridical advantage. Master’s analysis included finding that Ontario law would likely apply and that New York State was “at will” jurisdiction that does not recognize, and would not be accustomed to applying, principles of wrongful dismissal and right to reasonable notice that are familiar to judges in Ontario. This was legitimate factor to take into account, and there was nothing to contrary in Supreme Court of Canada decision cited by defendant. Master merely recognized existence of juridical advantage for plaintiff to have case decided by judge who is accustomed to applying governing legal concepts that are simply not part of New York law. Ontario Court of Appeal has recognized that juridical advantage may be particularly relevant where claims are simply unknown under U.S. law.
Machado v. Catalyst Capital Group Inc. (2016), 2016 CarswellOnt 16911, 2016 ONSC 6719, Molloy J. (Ont. Div. Ct.); affirmed (2015), 2015 CarswellOnt 15650, 2015 ONSC 6313, Master D.E. Short (Ont. S.C.J.).


Civil Practice and Procedure

Final or interlocutory

Order dismissing summary judgment motion was not final order

S was driving his wife’s car with others, including K, as passengers. S stopped at store and K took over driving and got into accident, injuring S. S brought claim under “uninsured automobile coverage” provisions in s. 5 of Policy, “inadequately insured motorist” provisions in Endorsement, and s. 265 of Insurance Act. Insurer brought unsuccessful motion for summary judgment to dismiss S’s action. Motion judge determined that it was not clear that vehicle was taken by K without consent, held that s. 265(2) of Act and policy were ambiguous, interpreted policy and Act as meaning that vehicles owned by insured or spouse, if insured, were uninsured automobiles when taken without consent and that, if K took vehicle without consent, K was inadequately insured motorist under policy. Insurer appealed. Appeal dismissed. Motion judge’s order dismissing summary judgment motion was not final order. Motion judges dismissing summary judgment motions were presumed to be simply explaining there was no genuine issue requiring trial and not making determination binding on parties at trial. As it was unclear whether motion judge in this case intended determination to be binding on parties at trial, ambiguity regarding consent meant motion judge’s conclusions were not be taken as anything more than explanation for finding that there was genuine issue for trial. S’s concession that trial judge was free to conclude that wife’s automobile was not “uninsured automobile” because it was owned by S’s spouse was consistent with view that order was interlocutory and not final. Motion judges dismissing summary judgment motions were urged to invoke R. 20.04(4) and make clear in orders and reasons when they intended their determinations of law to be binding on parties at trial.
Skunk v. Ketash (2016), 2016 CarswellOnt 17669, 2016 ONCA 841, Alexandra Hoy A.C.J.O., P. Lauwers J.A., and M.L. Benotto J.A. (Ont. C.A.).

Alternative Dispute Resolution

Stay of court proceedings

Arbitration clause did not exclude tort claims, misrepresentation or fraud

Plaintiff was overseas resident who went into business with defendants to run restaurant. Plaintiff, who invested $200,000, entered into shareholders’ agreement with defendants that contained arbitration clause. After failure of restaurant, plaintiff brought action against defendants. Defendants’ application to stay action in favour of arbitration was dismissed. Defendants appealed. Appeal allowed. Mandatory language of s. 7 of Arbitration Act strongly favoured giving effect to arbitration agreement. Motion judge did not properly consider impact of jurisprudence’s similar pro-arbitration orientation on his determinations . Plaintiff’s allegations of misrepresentations largely related to defendants’ failures to perform obligations under shareholders’ agreement. Motion judge’s finding that pith and substance of claims, apart from oppression claim, related to fraudulent misrepresentation that induced plaintiff to enter into business agreement could not be accepted. Motion judge erred in assuming that tort claims fell outside scope of arbitration agreement and that fraud claim vitiated arbitration agreement, since neither assumption was supported by case law as automatically applying principle. Arbitration clause contained broad language and did not exclude tort claims, misrepresentation or fraud. Motion judge failed to advert to policy of enforcing arbitration agreements and letting arbitrators decide scope of their authority. Motion judge fell into error in equating forum selection clauses with arbitration agreements. Motion judge’s conclusion that bulk of claims fell outside arbitration clause simply did not bear up under scrutiny . Motion judge erred in refusing to grant stay on ground that subject matter was beyond scope of shareholders’ agreement.
Haas v. Gunasekaram (2016), 2016 CarswellOnt 16116, 2016 ONCA 744, J.C. MacPherson J.A., Janet Simmons J.A., and P. Lauwers J.A. (Ont. C.A.); reversed (2015), 2015 CarswellOnt 12596, 2015 ONSC 5083, S.A.Q. Akhtar J. (Ont. S.C.J.).

Educational law

Colleges and universities

Student union was not subject to Charter

Applicants were university students who were members of pro-life organization seeking status as “student group.” University’s student union denied organization’s final appeal to be granted “student group” status. Applicants applied for declarative relief quashing student union’s decision. Application dismissed. It was not appropriate to exercise jurisdiction to review student union’s decision. Student union was private corporation with broad powers to act independently. Student union’s decision to grant or deny student group status was private decision by private entity, within its powers to make, and which did not engage principles of administrative law. Student union was not subject to Canadian Charter of Rights and Freedoms. There was no basis for conclusion that student union failed to take into account applicant’s rights to freedom of expression and association. To extent that student union had contractual obligation to consider and decide applicants’ request fairly and in accordance with its own procedures, that obligation was fully discharged. Applicants were free to continue to associate and express themselves on university campus, holding meetings or events and raising funds for their cause.
Grant v. Ryerson Students’ Union (2016), 2016 CarswellOnt 15862, 2016 ONSC 5519, Stewart J. (Ont. S.C.J.).


Business Associations

Legal proceedings involving business associations

Motion to quash appeal for want of jurisdiction was dismissed

Plaintiffs claimed defendants deprived them of their interest in corporations. Claim was subject of bifurcation order whereby determination of plaintiffs’ request for declarations as to their rights was split from their request for remedies related to any declared rights. Declaration was made that plaintiffs had one-third interest in corporations and in all monies, benefits and opportunities withdrawn or diverted directly or indirectly from those corporations. Defendants were ordered to make interim payments to plaintiffs pending later trial to determine what further remedies were available to plaintiffs. Defendants appealed. Plaintiffs brought motion to quash appeal for want of jurisdiction. Motion dismissed. Order under appeal was final. It was not appeal under Ontario Business Corporations Act to which s. 255 applied requiring appeal to Divisional Court. Appeal was not devoid of merit.
Buccilli v. Pillitter (2016), 2016 CarswellOnt 16393, 2016 ONCA 775, E.A. Cronk J.A., Paul Rouleau J.A., and Grant Huscroft J.A. (Ont. C.A.).


Debtor and Creditor

Fraudulent transactions

Claim to set aside transfer of land as fraudulent conveyance was dismissed

Plaintiffs obtained judgment against defendants. SM made payments subsequent to judgment. One of plaintiffs signed release with regard to debt owed. Plaintiffs asserted defendants represented that plaintiffs would be paid notwithstanding bankruptcy. Plaintiffs brought claim seeking to set aside transfer of land as fraudulent conveyance based on allegation that SM at time of transfer was indebted to plaintiff pursuant to unpaid judgment debt. Defendants asserted SM was released from any liability by assignment in bankruptcy and subsequent discharge from bankruptcy. Defendants asserted that SM acquired his interest in land after date of his discharge and transfer of land was made more than 10 years after his discharge from bankruptcy. Defendants brought motion for summary judgment to dismiss plaintiffs’ action. Motion granted. There was no genuine issue requiring trial. Defendants made out prima facie case . Claim was based on SM being indebted to plaintiffs at time of transfer in 2010, but at time of transfer SM was released from his obligation under judgment as result of discharge from bankruptcy. There was no basis on which to set aside transfer of lands made by SM 10 years after his discharge from bankruptcy and where he acquired lands three years after discharge from bankruptcy. Release and confirmation of financial settlement, and payment were sufficient to release SM from all further payments traceable to judgment, or any alleged agreement to pay judgment notwithstanding SM’s discharge from bankruptcy. Evidence failed to establish that plaintiff who did not sign release was aware of agreement to withhold filing proof of bankruptcy in exchange for promise by defendants to pay judgment. Failure of SM to list plaintiff as creditor when making assignment in bankruptcy had no effect on validity of SM’s discharge from bankruptcy. Pleadings could not be interpreted as basis of claim in contract or detrimental reliance arising out of alleged representations by defendants at time of SM’s assignment in bankruptcy.
Youssef v. Meddaoui (Aug. 31, 2016, Ont. S.C.J., Victor Mitrow J., 5261/11) 270 A.C.W.S. (3d) 770.


Contracts

Franchise agreements

Franchisor was not excused from statutory mandatory disclosure obligations

Franchisor provided franchisee with Franchise Disclosure Document (FDD) that indicated franchisor had “no reasonable means of estimating or predicting” costs of converting existing premises in lieu of building new premises. Franchisee and guarantors executed franchise agreement at time when location for franchise had not been determined, and franchisee later signed sublease before seeing head lease. Conversion costs ended up being in range of costs for building new premises, and franchisee and guarantors ultimately served notice of rescission. Franchisee and guarantors commenced action against franchisor and related companies for, among other things, declaration that franchise agreement was validly rescinded by them. Franchisee and guarantors brought motion for partial summary judgment relating to entitlement to rescind franchise agreement. Franchisor and related companies brought cross-motion for summary judgment dismissing claim of franchisee and guarantors in its entirety. Motion granted; cross-motion granted in part. Franchisor and related companies were not excused from their statutory mandatory disclosure obligations in s. 5 of Arthur Wishart Act (Franchise Disclosure), 2000 (Ont.) simply because location of proposed franchise was not identified before franchise agreement was signed. Form of lease included in FDD was materially incomplete, and FDD expressed uncertainty about costs. It was insufficient for franchisor to simply say that required material information was not known at time of disclosure, and plain words of Act did not allow for introduction of concepts of waiver or contracting out of disclosure obligations. It was premature to purport to deliver FDD under Act and enter into franchise agreement, and notice of rescission under s. 6(2) of Act was timely and effective since lack of disclosure was egregious. Peripheral claims were dismissed since franchisee and guarantors did not provide any focussed argument seeking to demonstrate that either of those claims had been proved or required trial.
Raibex Canada Ltd. v. ASWR Franchising Corp. (Sep. 7, 2016, Ont. S.C.J., W. Matheson J., CV-14-518145) 270 A.C.W.S. (3d) 752.


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