Law Times

Page 14 June 3, 2013 Law Times • CASELAW eries, were typically lower-paying than sales representative's job. Minister also raised various other facts that supported determination, including that large pay raise and large salary advance would not be given at beginning of employment in arm's length relationship. Zhang v. Minister of National Revenue (Feb. 20, 2013, T.C.C. [Employment Insurance], J.M. Woods J., File No. 2012-2508(EI)) 225 A.C.W.S. (3d) 865. ONTARIO CIVIL CASES Arbitration APPOINTMENT OF ARBITRATOR Arbitration provisions not restricted to matters referred to in agreement Parties were shareholders in corporation. Corporation's principal asset was five-storey office building. Dispute arose whether payments, distributions and loans were fairly and equitably shared amongst shareholders. Single shareholder requested other four purchase his shares in corporation. Parties reached May 2009 buyout agreement regarding single shareholder's shares. Buyout provisions included preparation of opinion of fair market value and review of corporation's financial transactions. Single shareholder objected reports not prepared in accordance with instructions to agreed-upon firm. Single shareholder refused to tender shares. Remaining shareholders served notice of application pursuant to January 1987 shareholders agreement. Single shareholder refused to assist in appointment of arbitrator. Application for order that dispute proceed to arbitration, and appointing single arbitrator. Application granted. Arbitration provisions of shareholders agreement not restricted to matters referred to in agreement. Applicants' conduct to single shareholder not so oppressive as to destroy the underpinnings of the arbitration provisions. Dispute arguably one covered by arbitration clause. Dispute directed to proceed to single arbitrator. As to determination of arbitrator's jurisdiction, court deferred to arbitrator. November 2010 notice of application constituted dispute to be arbitrated. Specific arbitrator appointed. Aubrey Falls Investments Ltd. v. Kozak (Oct. 5, 2012, Ont. S.C.J., E.J. Koke J., File No. 421/11) 225 A.C.W.S. (3d) 700. Bankruptcy and Insolvency ARRANGEMENTS Monetary loss suffered by shareholder did not diminish assets available to creditors Shareholders commenced class action against corporation, auditors and others. Shareholders alleged: corporation misrepresented assets and financial situation; and auditors and underwriters failed to detect misrepresentations. Shareholders sought damages of $9.2 billion. Corporation obtained protection under Companies' Creditors Arrangement Act (Can.). As yet uncertified class actions were stayed. Supervising judge granted claims procedure order in May 2012. Auditors and underwriters filed individual proofs of claims against corporation for contribution and indemnity for any amounts order to pay under class actions. Corporation applied for order auditors' and underwriters' claims were equity claims under Act. Supervising judge's July 2012 decision granted order. Auditors and underwriters appealed. Appeal denied. Claims for contribution and indemnity are equity claims under s. 2(1)(e) of Act. Parliament's intention that monetary loss suffered by shareholder did not diminish assets available to general creditors. "Equity claim" was not confined by definition or definition of "claim" to claims advanced by holder of equity interest. Parliament could have but did not limit claims for contribution or indemnity to those made by shareholders. Logic of s. 2(1) (a) to (e) supported notion that s. 2(1)(e) referred to claims for contribution or indemnity by others than shareholders. Definition of equity claim in Act sufficiently clear to alter pre-existing common law. If shareholder sued auditors and underwriters for loss, and defendants claimed contribution or indemnity against debtor, assets available to general creditors would be diminished. Sino-Forest Corp., Re (Nov. 23, 2012, Ont. C.A., S.T. Goudge J.A., Alexandra Hoy J.A., and S.E. Pepall J.A., File No. CA C56115, C56118, C56125) Decision at 218 A.C.W.S. (3d) 489 was affirmed. 225 A.C.W.S. (3d) 601. Civil Procedure COSTS Respondent's conduct in rigging bids sufficient to justify substantial indemnity costs This was to determine trial costs after appeal was partially successful. Appeal was allowed respecting claim for negligent misrepresentation and new trial was ordered limited to damages. Appellant was awarded costs of appeal on partial indemnity basis fixed at $40,000, including disbursements and taxes. Trial costs were to be adjusted to account for fact that appellant did not succeed on issue related to manufacture and sale of manual attenuators. Application granted. It was appropriate in circumstances to make costs award now instead of deferring assessment of trial costs until damages were quantified in new trial. Case called for costs on substantial indemnity scale. Respondent had rigged bids. Respondent failed to produce relevant documents without explanation. Respondent's conduct prior to commencement of litigation in rigging bids was sufficient to justify substantial indemnity costs. Fair adjustment was 20% for issues appellant was not successful on. Appellant's trial costs on substantial indemnity scale were fixed in amount of $370,000, inclusive of disbursements and taxes. Oz Optics Ltd. v. Timbercon Inc. (Oct. 30, 2012, Ont. C.A., Janet Simmons J.A., Robert P. Armstrong J.A., and H.S. LaForme J.A., File No. CA C51799) Additional reasons to 209 A.C.W.S. (3d) 710. 225 A.C.W.S. (3d) 659. Competition Law GENERAL Enforcing Letter of Request would not contravene public policy or sovereignty Commissioner of Competition commenced criminal investigation into manufacturers' alleged conspiracy to enhance prices unreasonably. Class actions were commenced in Canada and United States, combined into multi-district litigation in United States. Plaintiffs proposed to examine former president and chief officer ("individual") of one-time defendant in class action. Individual not himself a defendant in class action. Case management judge issued Letter of Request for International Judicial Assistance ("LOR") to Ontario court. LOR requested order compelling individual to appear for deposition and oral testimony. Ontario judge granted order enforcing LOR, subject to conditions. Individual's appeal denied. Judge applied correct test. No error in conclusion enforcing LOR would not contravene public policy or sovereignty. No error in conclusion enforcing LOR would not, with additional conditions, impose undue burden on individual. Three additional protective provisions added to minimize prejudice to individual. Commissioner could not seek or receive information regarding contents of individual's examination. Commissioner could not seek order to access testimony, except in two circumstances. Any request by commissioner to obtain order for access to testimony must be brought in Ontario on notice to individual. Treat Canada Ltd. v. Leonidas (Nov. 27, 2012, Ont. C.A., S.T. Goudge J.A., K. Feldman J.A., and R.A. Blair J.A., File No. CA C55002) Decision at 217 A.C.W.S. (3d) 551 was varied. 225 A.C.W.S. (3d) 687. Contracts PERFORMANCE AND BREACH Licence did not contain representation that seats were in front row Plaintiff appealed dismissal of action. Plaintiff engaged in sale of gift cards as corporate incentives. Plaintiff acquired seating licenses for exclusive seating at sporting events. Plaintiff acquired VIP seats at Air Canada Centre ("ACC"). Defendant owner/operator of ACC reconfigured seating, with result that VIP seats were no longer front row seats. Plaintiff alleged defendant breached terms of personal seat license. Plaintiff claimed lost profits and future economic loss arising from defendant's reconfiguration and www.lawtimesnews.com misrepresentations. Action was dismissed. Trial judge found that alleged representations were not made and there was no basis for claims in contract or negligence. Appeal dismissed. Trial judge gave careful and considered reasons rejecting plaintiff 's claim based on alleged representation as to location and configuration of seats in connection with license. Trial judge did not err. Findings that license did not contain any representation that seats were in front row or that they would remain with same view and configuration were open to her on evidence, as was finding that there were no oral representations. There was no basis to interfere with trial judge's decision. DLF Solutions Inc. v. Maple Leaf Sports & Entertainment Ltd. (Nov. 6, 2012, Ont. C.A., Sharpe J.A., Gillese J.A., and Rouleau J.A., File No. CA C54920) Decision at 213 A.C.W.S. (3d) 338 was affirmed. 225 A.C.W.S. (3d) 698. Damages GENERAL Open to judge to determine pub had resale value despite non-viability Defendant solicitor acted for purchasers of pub. Trial judge held solicitor negligently failed to advise purchasers of steps necessary to transfer pub's liquor licence. Purchasers sought damages measured by pub's value as going concern, less debt respondents incurred in operating pub. Trial judge rejected plaintiffs' evidence pub was economically viable. Trial judge awarded damages of $65,000. Damages assessed as one-half of price paid for pub. Defendant appealed on basis: damages awarded on theory not advanced by plaintiffs; damages awarded without supporting evidence; and plaintiffs were authors of own misfortune by not reading licence. Liability not at issue. Appeal denied. Open to judge to determine pub had resale value despite non-viability. Some evidence to support award, including as to: regular clientele; festival opportunities; popularity of microspeciality beers; and favourable lease. Even if purchasers read license, could not have determined approval for change required within 90 days in order to maintain license. McLean v. Shedden (Dec. 6, 2012, Ont. C.A., Robert J. Sharpe J.A., Paul Rouleau J.A., and Alexandra Hoy J.A., File No. CA C54215) 225 A.C.W.S. (3d) 707. Education STUDENT LOANS Appellant had no claim for wrongful denial of student aid Appellant asserted that her student aid funding had been wrongfully denied by respondent Crown. Crown's motion for summary judgment dismissing appellant's claim was granted. Motions judge concluded on basis of evidence that student aid funding was discretionary. As such, appellant had no absolute entitlement to such aid. Restriction on fund- ing to appellant arose because she applied for and received funds to which she was not entitled in and for same academic year under both Ontario Student Assistance Program ("OSAP") and Ontario Student Bursary Program ("OSBP"). Both application forms contained prohibition on receiving OSAP and OSBP funding for same academic year. As part of OSBP application form, appellant had agreed to promptly repay any funds she received in excess of her entitlement. Despite numerous requests to do so, appellant refused to refund over-payment. Appellant had no claim for wrongful denial of student aid in these circumstances. Appeal was dismissed. Motions judge applied correct legal test and determined that appellant's claim disclosed no genuine issue requiring trial. Sochnyeva v. Ontario (Oct. 16, 2012, Ont. C.A., E.A. Cronk J.A., S.E. Pepall J.A., and M. Tulloch J.A., File No. CA C55238) Decision at 223 A.C.W.S. (3d) 265 was affirmed. 225 A.C.W.S. (3d) 712. Employment WRONGFUL DISMISSAL Employer's actions unfair and cruel, but perhaps inadvertent Casino operator dismissed quality assurance analyst without cause in May 2005. Employer determined analyst's skill set was no longer required. Analyst, aged 52, with over eight and one-half years of service. Analyst manager with 11 computer systems, including 2 critical to operations. Analyst did not manage personnel. Plaintiff earned $50,400 annually. During telephone call with manager on eve of termination, analyst overheard manager tell another employee she was "getting canned tomorrow". Wrongful dismissal action allowed. Plaintiff was entitled to nine months' reasonable notice, less mitigation and amounts already paid. No additional award for bad faith conduct by employer. Employer's actions were at least unfair and cruel, but perhaps inadvertent. Plaintiff did not establish employer's actions contributed to depression. No entitlement to additional award for understandable pain and distress of termination itself. Evans v. Complex Services Inc. (Nov. 16, 2012, Ont. S.C.J., Kent J., File No. 5435/06) 225 A.C.W.S. (3d) 714. Family Law COSTS Motion created significant risks for both parents Father applied for costs. Mother brought emergency motion for certain orders without notice. Judge granted restraining order. On return of mother's motion it was determined that there was no urgency to mother's original motion. Parties were returned to terms previously agreed to in separation agreement. Application granted. Father was substantially successful. There was no divided success. There was nothing unreasonable in father's

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