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. […]
Category Archives: Complex Corporate Commercial Litigation
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 […]
The Anti-Deprivation Rule Pt. 2: SCC Confirms Test
Last week we visited the primary legal authorities in Ontario on fraud in the event of a bankruptcy, and the anti-deprivation rule. Recently the Supreme Court of Canada (SCC), in Chandos Construction Ltd. v. Deloitte Restructuring Inc., 2020, confirmed the reasoning of those cases. Did an Insolvency Penalty Clause Contradict the Anti-Deprivation Rule? A general […]
The Anti-Deprivation Rule, Part 1: Fraud in Bankruptcy
Protecting or preserving assets during a time of insolvency is a natural temptation of debtors. Some even take a proactive approach and design contractual terms that aim to do much the same should insolvency ever arise in the future. However, when such terms are exercised, they run into possibly infringing the “anti-deprivation” rule. What is […]
The High Cost of Self-Representation in Litigation
There is an old adage that says that any lawyer who represents themselves has a fool for a client, but this can also apply to non-lawyers as well. Some litigants choose to represent themselves in civil court matters, usually for one of two reasons. Either they are unable to afford the costs of a lawyer […]
Constructive Trusts: A Remedy for Wrongful Conduct
Constructive trusts are sometimes used by a court to impose a remedy for a party who was deprived of their rights to property via the wrongful or fraudulent conduct of a third party. This is an equitable remedy created through the common law to make the situation right, as though the wrongful conduct had not […]
Derivative Contracts: Speculation or Hedging?
The Supreme Court of Canada (SCC) recently released an important taxation decision dealing with how to characterize capital and income losses under a derivative contract. In MacDonald v. Canada, a taxpayer sought to deduct payments he had made to his bank as part of a loan arrangement. His position was that the payments were income […]