The COVID-19 pandemic has caused economic disruption impacting transactions where parties seek to abandon deals on the grounds that the business climate is materially different and thereby avoid existing contractual obligations. The recent decision Fairstone Financial Holdings Inc. v. Duo Bank of Canada involves the application of material adverse effect (MAE) provisions that are common […]
Category Archives: Complex Corporate Commercial Litigation
Justice Delayed is Justice Denied: Adjournment of Hearings
Legal proceedings take a great deal of time, effort and expense from all involved to get their matter to the adjudication stage. Having set a date for the hearing, it is assumed that this will motivate the parties to be ready on that date. The administration of justice wants to see matters move along as […]
Discoverability In Claims for Contribution and Indemnity
Parties to civil proceedings in Ontario are permitted to bring into the litigation all persons they feel should be present to effectively and completely adjudicate on all the issues raised and who fit the criteria set out in the Rules of Civil Procedure. Those who are named as defendants can bring additional parties in through […]
The Duty of Good Faith in Contracts, Further Defined
The Supreme Court of Canada (SCC) established a duty of good faith in contractual performance in its precedent-setting 2014 decision of Bhasin v. Hrynew. In this decision, the court recognized an organizing principle of good faith which contractual parties must observe in order to perform their contractual duties honestly and reasonably and not capriciously. Since […]
Objections to, and the Assumption of, Forum Conveniens or Non-Conveniens
There are many aspects of litigation to consider when bringing a claim, but perhaps first and foremost is where to bring the claim. It may seem obvious in most cases, but litigants are not always located in the same geographic area. Further, the issue in question might have occurred in a location where neither party […]
The Importance of a Comprehensive Shareholder Agreement
The existence of a carefully thought-out shareholder’s agreement can go a long way to avoiding costly and time-consuming litigation. Shareholder agreements can set out the terms for various transactions in advance, determine how shareholders and directors are appointed, and a variety of other issues that will be faced by most shareholders over a corporation’s lifetime. […]
Waiver of Tort as a Cause of Action or the Remedy for Disgorgement?
There has been an ongoing controversy in Canada’s courts over whether the doctrine of ‘waiver of tort’ was sufficient to create a cause of action on its own. The Supreme Court of Canada (SCC) had briefly considered the issue in Pro-Sys Consultants Ltd. v Microsoft Corporation, however, this decision did not end the debate, since […]
The Duties of Good Faith & Honest Performance
The Supreme Court of Canada (SCC) originally created a duty of “good faith in contractual performance” in its 2014 decision of Bhasin v. Hrynew. In the decision, the SCC recognized an organizing principle of good faith that parties generally must observe in order to perform their contractual duties honestly and reasonably and not capriciously or […]
Fraud, Letters of Credit & the Autonomy Principle
A standby letter of credit is a promise from a bank to a creditor that the bank will pay funds to the creditor in the event of a default by a debtor, so long as certain conditions are met. For example, a commercial landlord may require a standby letter of credit from a tenant’s bank […]
Commercial Tenant Prevented From Using Force Majeure to Escape Rent Obligations
We wrote about the issues of frustration and force majeure in our previous post called “Force Majeure and Frustration in Contracts Following the COVID-19 Pandemic” Force majeure clauses are dealt with through the law of contract. Such a clause needs to be an express term and will not be implied. These clauses act as a […]