Law Times

May 11, 2009

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Law Times • may 11/18, 2009 requiring clarification. There was no reason to doubt correct- ness of motion judge's decision. Lastly, matter did not raise issues of such importance that leave to appeal should be granted. Sauer v. Canada (Minister of Ag- riculture) (Jan. 22, 2009, Ont. S.C.J. (Div. Ct.), Wilson J., File No. 05-CV-287428CP) Leave to appeal from 169 A.C.W.S. (3d) 27 was refused. Order No. 009/028/010 (17 pp.). SET-OFF Set-off not available in response to claim that sounded in damages Defendants and plaintiff's hus- band entered agreement that provided in event of death of founder of company, widow would be placed on payroll as consultant. Agreement pro- vided schedule for compensa- tion. Plaintiff's husband died. Company advised plaintiff that plaintiff would not receive com- pensation because plaintiff's hus- band allegedly misappropriated $129,000 in disability benefits and converted $60,000 to own use. Plaintiff sought pretrial de- termination of question of law of whether defence of legal or equitable set-off was available to defendants. Defence of set-off was not available. Set-off at law was not available in response to claim that sounded in damages. Equitable set-off did not apply. Cross-claims did not arise out of same transactions. Set-off claims were not brought about by plaintiff's claim. Green v. Mirtech International Security Inc. (Jan. 30, 2009, Ont. S.C.J., Belobaba J., File No. CV-08-361526) Order No. 009/035/088 (5 pp.). SUMMARY JUDGMENT Summary judgment refused where law unsettled on issue Novel legal issue was whether city could sue own expert wit- ness for alleged negligence in preparing expert report filed by city as evidence in defence of summary judgment motion in previous proceeding. Mat- ter in summary judgment mo- tion in previous proceeding was settled before summary motion was heard. Expert brought mo- tion to dismiss claim on basis opinion was evidence in legal proceeding which was protected by absolute privilege. Expert claimed entitlement to rely on witness immunity protection. Motion for summary judgment was dismissed. Law was unset- tled on issue. It was necessary to imply term of contract which was question of mixed fact and law. Trial of issue was required to provide court with full fac- tual record. Robinson v. Ottawa (City) (Jan. 15, 2009, Ont. S.C.J., Smith J., File No. 02-CV-21270; 02-CV-21270A) Order No. 009/028/075 (24 pp.). Whether defendant fell within definition required trial Plaintiff hired respondent to do roofing repairs. There was fire on roof, causing over $1.3 mil- lion in damage. Plaintiff's prop- erty insurer brought subrogated claim. Defendant did not advise defendant's insurer that defendant was working on plaintiff's facil- ity. Defendant's insurer relied on exclusions to bar liability cover- age. Defendant brought third party claim against defendant's insurance. Defendant's motion for summary judgment was dis- missed. Phrase "companies un- der management control" was ambiguous, requiring determi- nation through trial. Whether defendant fell within definition required trial. Trial was required before determination could be made defendant was express beneficiary of waiver of subro- gation clause. Atomic Energy of Canada v. Ron Robinson Roofing Inc. (Jan. 26, 2009, Ont. S.C.J., Kershman J., File No. 00-CV-13759; 00-CV- 13759A; 00-CV-1379B) Order No. 009/029/017 (12 pp.). TRIAL Motion to change venue was allowed Respondent recently retired from employment. Respondent sought to eliminate or reduce ob- ligation to pay spousal support. Applicant moved to Sudbury after separation and has resided in Sudbury since 2001. Appli- cant did not work since 2003 because of injuries sustained in motor vehicle accident. Appli- cant's motion to change venue from Thunder Bay, Ontario to Sudbury, Ontario was allowed. Respondent also had medical problems. Applicant would be unable to attend in person in Thunder Bay. Applicant would suffer greater disadvantage and potential harm if proceeding re- mained in Thunder Bay than re- spondent would face travelling to Sudbury. It was more conve- nient for matter to be heard in Sudbury. Majority of witnesses were in Sudbury. Swearengen v. Swearengen (Jan. 22, 2009, Ont. S.C.J., Warkentin J., File No. FS-99- 3535012676-01) Order No. 009/041/281 (12 pp.). Conflict Of Laws JURISDICTION Quebec not more appropriate forum for defamation action commenced in Ontario Application by Quebec defen- dants to stay defamation action commenced in Ontario. Plain- tiff mining corporation claims to have been defamed in book researched, written, edited and published by defendants. Mo- tion dismissed. Quebec not the more appropriate forum, considering: issue of harm to reputation not determined by fact that only small majority of books distributed in Ontario; applicable law is that where defamatory statement received, here in Ontario; action com- menced in plaintiff's province of "residence", where publica- tion of alleged defamation most harmful; plaintiff's choice to proceed in Ontario not inap- propriate forum shopping, but appropriate given forseeability of harm to plaintiff in Ontario and real and substantial con- nection to province; substantive juridical advantage to plaintiffs in Ontario given varying ap- proaches to determining liability CASELAW for defamation in Ontario and Quebec. Banro Corp. v. Editions Ecoso- ciete Inc. (Feb. 23, 2009, Ont. S.C.J., Roberts J., File No. CV- 08-00356266-0000) Order No. 009/056/078 (14 pp.). Corporations DERIVATIVE ACTIONS Actions were derivative actions disguised as negligence claims Plaintiff brought motion to amend statement of claim to remove all plaintiffs except M.. Claims against all plaintiffs were dismissed except M. with prej- udice. Bank brought motion to strike claims against bank. Claim alleged bank failed to fol- low signing instructions with respect to cheques. Bank's mo- tion was allowed. Actions were derivative actions disguised as negligence claims. Plaintiff had no standing to assert claims. Claims against two companies were dismissed. No facts were pleaded to establish fiduciary duty between plaintiff and two companies. Claim against numbered company was dis- missed. Plaintiff had no author- ity to assert claim on behalf of two companies. Claim against management business was dis- missed. There was no triable is- sue with respect to claim against W. and it was dismissed. Claim against F.M. was dismissed be- cause she was never involved with companies. Claims against two individual defendants were dismissed because plaintiff had no status to assert claims in own names. Claim did not dis- close reasonable cause of action. Claim did not establish founda- tion for duty of care to plaintiff or contractual relationship with plaintiff. Mernick Construction Co. v. Royal Bank of Canada (Jan. 30, 2009, Ont. S.C.J., Aston J., File No. 07-CV-345654PD1; 07-CV-345028PD1) Order No. 009/035/081 (7 pp.). OPPRESSION Failure of respondents to comply with agreements was oppressive Applicants claimed individual respondent used control of LSME to turn it into LML's competitor. Applicant sought oppression remedy. Applicants requested order appointing one of applicants and third unaf- filiated director to Board of Directors of respondent. Ap- plicants sought order prohibit- ing individual respondent from competing or causing corporate respondents to compete with ap- plicant without UK sharehold- ers consent. Individual respon- dent sought order directing UK shareholders to transfer shares to individual respondent for fair market value. Evidence sup- ported expectations relied on. Applicants' expectations were reasonable and were violated. There was reasonable expecta- tion individual respondent and corporate respondents would comply with agreements. Fail- ure to do so was oppressive and unfairly disregarded interests of UK shareholders. Causation and prejudicial consequences were established. It was just and equitable to give UK sharehold- ers opportunity to purchase in- dividual respondent's shares for specified amount. If UK share- holders did not wish to purchase shares, individual respondent was directed to purchase shares of UK shareholders for specified price. Le Maitre Ltd. v. Segeren (Feb. 11, 2009, Ont. S.C.J. (Comm. List), Pepall J., File No. 07-CL- 6910) Order No. 009/054/087 (28 pp.). SALE OF ASSETS Genuine issues for trial in action arising from share purchase agreement and corporate consolidation Motion by purchaser for sum- mary judgment with respect to moneys placed in escrow pursu- ant to share purchase agreement and corporate consolidation. At issue was plaintiff's entitlement to proceeds of receivables placed in trust and alleged breaches of representation and warranty by vendor. Summary judgment denied. Parties' intention in crafting language defining right of set-off of receivables as com- pared to receivables reserve a genuine issue for trial. Whether accounting treatment of three inventory issues in 2004 audit- ed financial statements satisfied general accepted accounting principles also a genuine issue for trial to extent of potential adjustment to Working Capital Increase Account. Genuine issue for trial found related to claimed breaches of representation total- ling $800,057 including: alleged failure to file sales taxes returns and pay or accrue taxes payable; allegedly defective equipment at time of closing; cost of repair of leaking roof; undisclosed con- tract for purchase of inventory, and; treatment of United States dollar exchange rate used on consolidation of American sub- sidiary. Rannala v. 1212802 Alberta Ltd. (Jan. 16, 2009, Ont. S.C.J., Wilton-Siegel J., File No. 08-CL-7405) Order No. 009/029/047 (8 pp.). Courts JURISDICTION Superior Court, not Landlord and Tenant Board, had jurisdiction over plaintiffs' claims At trial, appellants sought dec- laration that they had equitable interest in cottage property, rectification of written lease agreement to extend term to 100 years and declaration that unsigned written lease was valid and subsisting, as well as dam- ages of $250,000 on account of improvements to cottage on basis of quantum meruit and unjust enrichment. On ap- peal, appellants submitted that trial judge lacked jurisdiction to hear claim they brought be- cause Residential Tenancies Act, 2006 (Ont.), applied to cottage and Landlord and Tenant Board had exclusive jurisdiction to deal with matters in issue. Act was neither pleaded nor raised at trial. Assuming Act applied to cottage property, Superior Court had jurisdiction to grant any and all of relief claimed by PAGE 17 appellants, Board did not. Any jurisdiction board had was, by virtue of s. 207(2) of Act, non- exclusive. It would be contrary to interests of justice to entertain appellants' argument respecting Act with view to having issue of applicability of Act determined by this court or new hearing. Kaiman v. Graham (Jan. 28, 2009, Ont. C.A., Weiler, Juri- ansz and MacFarland JJ.A., File No. C47530) Appeal from 58 R.P.R. (4th) 305 dismissed. Or- der No. 009/029/004 (7 pp.). Education TEACHERS Penalty for unprofessional conduct not unreasonable Teacher was suspended because of allegations teacher acted in unprofessional manner reinstated and treated students in physically and verbally abusive manner. Arbitrator teacher with full seniority without com- pensation. Penalty was suspen- sion without pay for four and one-half years. Application for judicial review was dismissed. There was evidence supporting range of factors board weighed against gravity of misconduct when determining appropriate penalty. Penalty imposed was severe. Penalty imposed was not unreasonable. There was noth- ing unreasonable in failure to address union concession. Simcoe County District School Board v. O.S.S.T.F. (Jan. 15, 2009, Ont. S.C.J. (Div. Ct.), Carnwath, Swinton and Bel- lamy JJ., File No. 445/08) Or- der No. 009/021/219 (9 pp.). Employment WRONGFUL DISMISSAL Contractual notice provision applied Wrongful dismissal action by 54-year-old Director of Opera- tions hired in 1992 and termi- nated without cause. In 2003, shortly after being promoted, plaintiff signed an employment contract describing entitlement on termination without cause: "Employee will be entitled to re- ceive a severance amount equal to 12 months' Base Salary, which shall represent the equivalent of 12 months' notice". On termi- nation, 12 months base salary paid. Wrongful dismissal action alleged contract unenforceable and claimed 20-month notice period. Action dismissed. Plain- tiff himself insisted upon em- ployment agreement and was not under duress. Twelve-month contractual notice entitlement neither unconscionable, grossly unfair nor improvident. Termi- nation provision not ambiguous and could not reasonably be in- terpreted as entitling plaintiff to minimum of 12 months' notice as alleged. Rawlley v. Coretec Inc. (Jan. 27, 2009, Ont. S.C.J., Trotter J., File No. 05-CV-295127PD3) Order No. 009/029/036 (9 pp.). Equity SET-OFF Right of set-off under s. 181 of Bills of Exchange Act (Can.) inapplicable

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