Top 5 Civil Appeals from the Court of Appeal (May 2017)

Author:Mr Jason Squire
Profession:Lerners
 
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April saw the court release decisions dealing with termination provisions in an employment contract, the requirements for registration as a status Indian, application of the law of misnomer in an action against a trade union, forfeiture of a deposit on a commercial real estate transaction, and fiduciary duties owed within a professional partnership

  1. Redstone Enterprises Ltd. v. Simple Technology Inc., 2017 ONCA 282 (Sharpe, Lauwers and Hourigan, JJ.A.), April 4, 2017 2. Covenoho v. Pendylum Ltd., 2017 ONCA 284 (Rouleau, Pepall and Roberts JJ.A.), April 5, 2017 3. Tim Ludwig Professional Corporation v. BDO Canada LLP, 2017 ONCA 292 (Strathy C.J.O., Weiler and Benotto JJ.A.), April 12, 2017 4. Gehl v. Canada (Attorney General), 2017 ONCA 319 (Sharpe, Lauwers and Miller JJ.A.), April 20, 2017 5. Lawrence v. International Brotherhood of Electrical Workers (IBEW) Local 773, 2017 ONCA 321 (Sharpe, Lauwers and Hourigan JJ.A.), April 20, 2017 1. Redstone Enterprises Ltd. v. Simple Technology Inc., 2017 ONCA 282 (Sharpe, Lauwers and Hourigan, JJ.A.), April 4, 2017 In this case, the Court of Appeal set important limits on the degree to which equitable principles may support relief from forfeiture for a sizeable deposit on a failed commercial real estate transaction. Redstone Enterprises Ltd. sold a warehouse in Brantford to Simple Technology Inc., for $10,225,000. The purchaser successively extended the closing date while it was applying for a marijuana grow-op license, and successively increased its deposit on the property to $750,000. Ultimately, Simple Technology was unable to obtain the license or the necessary financing, and failed to close the transaction. Redstone then applied for a declaration that it was entitled to be paid the deposit of $750,000, which was being held in trust. The motion judge found no legally acceptable justification for the purchaser not to close the transaction and agreed that the deposit was to be forfeited to the seller. He then exercised his equitable jurisdiction under s. 98 of the Courts of Justice Act, R.S.O. 1990, c. C.43 and reduced the sum to be forfeited from $750,000 to $350,000. The Court of Appeal held that the application judge erred in granting partial relief from forfeiture of the deposit to the buyer. Although Redstone suffered no damages, that alone did not render the forfeiture unconscionable. The analysis of unconscionability requires the court to consider the full commercial context, and a finding of unconscionability must be an exceptional one, strongly compelled on the facts of the case. There was no evidence that the deposit of slightly more than seven percent was a commercially unreasonable amount. In considering other indicia of unconscionability such as inequality of bargaining power, a substantially unfair bargain, the relative sophistication of the parties and their conduct – an analysis which the application judge failed to undertake – the court held that there was no unconscionability in this case. 2. Covenoho v. Pendylum Ltd., 2017 ONCA 284 (Rouleau, Pepall and Roberts JJ.A.), April 5, 2017 This case highlights that termination provisions in an employment contract that could ever contravene the Employment Standards Act...

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