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September 2011

Ontario Edition

Inside this Issue: This month we have summarized what we feel are the five most interesting cases from the Ontario C.A. in August 2011.

We highlight cases from the following areas of law: Family Law; Maintenance and Support; Calculation or Attribution of Income - p.4 Contracts; Express Warranty; Negligent Misrepresentation - p.6 Civil Procedure; Assessment or Fixing of Costs - p.8 Civil Litigation; Evidence; Conflict of Laws - p.10 Civil Litigation; Service; Out of Jurisdiction; Conflict of Laws; Information technology; Domain name system - p.12

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Beck v. Beckett Areas of Law: Family law; Maintenance and support; Calculation or attribution of income Under Appeal: Justice P.Z. Magda CLICK HERE TO ACCESS THE JUDGMENT



he appellant was Brenda Yvette Beck. The respondent was Daniel Clifford Beckett. The parties began living together in 1984 and had two children. Their principal source of income was the respondent’s employment at General Motors. The parties separated in 2006, at which time the respondent’s annual income was almost $73,000, and the appellant’s about $36,000. Approximately $400,000 of the respondent’s GM pension was attributable to the period of the parties’ relationship. Within a year of separation, at the age of 49, the respondent took voluntary retirement from

General Motors which included a $70,000 severance package. He did not seek other employment. The respondent paid no child or spousal support but did comply with an order to pay the parties’ mortgage and line of credit. Subsequently, the home sold and the appellant received $125,000 of the proceeds. The respondent’s share ($126,000 plus interest) was held in trust pending the outcome of the trial. In 2009, the appellant earned $48,118. The respondent’s pension income was $41,768. The respondent was ordered to pay child support of $666 per month based upon an imputed income of $73,000. At the time of the November 2009 trial, both children lived with the appellant. The trial judge found that the respondent did not retire to reduce or avoid his support obligations, but still had an imputed income of $61,528, based upon $19,760 per year at minimum wage, plus his pension income. A lump sum support payment was deemed inappropriate. Although the appellant was entitled to spousal support and the respondent was to pay child support of $570 per month, the child support payment constituted 54.7% of the respondent’s net income, making an award of spousal support inappropriate.

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Beck v. Beckett (cont.) APPELLATE DECISION


the trial judge’s discretion. As the respondent had not made any child support payments in accordance with the trial judge’s order, the child support payments that should have been made, in addition to spousal support due, were to be paid out of the funds held in trust prior to the release of the funds to the respondent. The parties were to bear their own costs of the trial.

he appeal was allowed in part. As the parties’ youngest child was no longer a minor, spousal support in the amount of $433 per month was ordered and the order for child support eliminated. The respondent’s imputed income was not varied by the Court of Appeal, and the refusal to order a lump sum support award was within

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Kapuskasing Plumbing and Heating Limited v. Fortier Beverages Ltd. Areas of Law : Contracts; Express warranty; Negligent misrepresentation Under Appeal: Justice R.A. Riopelle CLICK HERE TO ACCESS THE JUDGMENT



he appellants were Kapuskasing Plumbing and Heating Limited and Gerald Villeneuve, its president. The respondent was Fortier Beverages Limited. Both parties were Culligan franchisees. During a preliminary meeting regarding the respondent’s purchase of the appellant’s water business, Villeneuve made a “quick mental calculation”, and told the respondent that approximately 200,000 18-litre bottles were sold in the previous year. This figure was reiterated in a memo from Villeneuve that also suggested a $1.2 million selling price. A series of letters followed: • July 25, 2006: the 200,000 figure was referenced along with a preliminary agreement to pay $4.00 for every 18-litre bottle sold in the previous year. The exact number was to be calculated from Culligan International monthly reports. • July 28: the respondent proposed payment of $600,000 upon closing and an annual consulting fee of $100,000 for six years.

• August 3: the appellant stated that the $600,000 payment was not dependent upon the number of bottles sold. • August 8: the respondent stated that the $600,000 payment was dependent upon obtaining confirmation of the company’s sales of the company. The appellant provided financial disclosure documentation including monthly reports to Culligan International. The reports did not expressly refer to units sold, but a reasonable estimate showing yearly sales of fewer than 200,000 could be drawn from examining the report’s numbers. Upon closing, the respondent paid $560,000, with the balance to be paid in monthly installments over six years. No representation or warranty as to the volume of unit sales was in the asset purchase agreement. Subsequently, Culligan informed the parties of a mutual mistake concerning the boundary of Kapuskasing’s sale region which resulted in an amended agreement giving the respondent a credit of $150,000. The amended agreement mentioned the 200,000-unit estimate. After a year, the respondent calculated it had sold 90,512 bottles of water and stopped making payments. The appellant sued for the balance owing on the agreement. The respondent counterclaimed for breach of warranty and negligent misrepresentation. The trial judge dismissed the appellant’s claim. The respondent’s claim for breach of warranty was also dismissed, but $70,258.32 for negligent misrepresentation was awarded to the respondent. The appellant appealed on the basis that the trial judge erred in finding the respondent’s reliance on the misrepresentation regarding the number of bottles of water sold was reasonable.


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1.888.894.4280 | Kapuskasing Plumbing and Heating Limited v. Fortier Beverages Limited (cont.) APPELLATE DECISION

The appeal was allowed. The judgment was set aside and judgment in favour of the appellant Kapuskasing was granted in the amount owing under the agreement. The memo of July 20, 2006, did not constitute a disclosure statement. The trial judge’s finding that it was reasonable for the respondent to rely upon the misrepresentation as to the number of bottles sold was inconsistent with the finding that there was no warranty requested. The amending agreement and its reference to the 200,000-bottles estimate did not impact the breach of warranty or

the issue of reasonable reliance, but only gave a purchase credit due to the mutual mistake regarding the boundary of the sales territory.

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Toronto Star Newspapers Ltd. v. Fraleigh Areas of Law : Civil Procedure; Assessment or fixing of costs Under Appeal: Justice Alan C.R. Whitten CLICK HERE TO ACCESS THE JUDGMENT



he appellant was Toronto Star Newspapers Ltd. The respondent was Greg Fraleigh. At issue was a cost award arising from the respondent’s intervention in a civil action. The respondent was divorced from Joanne Fraleigh in November 2008. The file was sealed in December 2008. In 2009, Ms. Fraleigh issued a Statement of Claim against the respondent’s insurance carrier, Great-West Life Assurance Company (“GWL”) and its employee Catherine Killen (with whom the respondent had entered a relationship in 2007). Ms. Fraleigh’s civil action alleged negligence and breach of trust arising out of Killen’s involvement in adjusting medical insurance claims made by the respondent while she was in a personal relationship with him. On

January 7, 2010, as a non-party to the action, the respondent obtained an ex parte order extending the sealing order of December 2008 and a complete publication ban over Ms. Fraleigh’s civil action. The order was eventually extended to an unspecified return date. The appellant sought leave to intervene solely to have set aside the publication ban and the sealing order. The respondent sought leave to intervene to respond to the appellant’s application. Leave was granted for both parties to intervene. The complete publication ban and sealing order of January 2010 was replaced with a temporary publication ban on information pertaining to the respondent’s health, pending full argument on the respondent’s motion. On May 5, 2010, the respondent’s motion for an indefinite publication ban and confidentiality order pertaining to information about the respondent’s health and any health care he had ever received was granted. In September 2010, full indemnity costs of $93,173.67 were awarded against the appellant, and it is the cost award alone that was under appeal.


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1.888.894.4280 | Toronto Star Newspapers Ltd. v. Fraleigh (cont.) APPELLATE DECISION


he appeal was allowed in part. The order of full indemnity costs was set aside and an order of partial indemnity costs was substituted. In all other respects, the appeal was dismissed. Privacy issues must be weighed against the public interest in open courts and also with financial interests. Both parties intervened in the action for legitimate purposes. The general rule that interveners are not awarded costs nor ordered to pay them has

exceptions, and it is within a judge’s discretion to award costs to interveners. The motion judge’s finding that the appellant was partially motivated by business interests opened the possibility of ordering costs. However, the motions judge failed to exercise discretion on a proper basis, as there were no findings of actual misconduct or reprehensible conduct. Thus, the order for full indemnity costs was set aside and substituted with an order of partial indemnity of costs.

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Treat America Limited v. Nestlé Canada Inc. Areas of Law : Civil Litigation; Evidence; Conflict of Laws Under Appeal: Justice C. Campbell CLICK HERE TO ACCESS THE JUDGMENT



he appellant was Nestlé Canada, Inc. The respondent was Treat America Limited. At issue was the enforcement of a Letter of Request (“LOR”) from the United States District Court for the Middle District of Pennsylvania. A number of class actions against several large producers and distributors of candy products alleging U.S. antitrust law violations were pending in the U.S. District Court (“U.S. Proceedings”). The U.S. proceedings appear to have emerged from a 2007 Canadian Competition Bureau investigation into price fixing allegations in Canada involving Nestlé Canada, and the Canadian entities of Hershey, Mars and Cadbury. No charges were brought against Nestlé Canada as a result of

the Competition Bureau’s investigation. In 2009, the claims lodged against Nestlé Canada in the U.S. Proceedings were dismissed on jurisdictional grounds. As a result, there were no direct means in the U.S. Proceedings to compel Nestlé Canada to produce documents that may be relevant to the pleadings or to require its representatives to be examined. The respondent (also a plaintiff in the U.S. Proceedings) was authorized to bring the LOR application in the U.S. Proceedings and also to seek its enforcement in Canada. In February 2011, the Superior Court of Justice allowed the application to enforce the LOR, and the appellant appealed.


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1.888.894.4280 | Treat America Limited v. Nestlé Canada Inc. (cont.) APPELLATE DECISION


he appeal was dismissed. The application judge’s conclusion that the requirements for enforcement of the LOR under s. 601 of the Evidence Act, R.S.O. 1990, c. E.23 and s. 446 of the Canada Evidence Act, R.S.C. 1985, c. C-5 was amply supported by the record. The necessary criteria for enforcement of the LOR were met. The information sought was not otherwise readily obtainable, and was necessary for disposition of the US Proceedings. Additionally, the production and discovery would not be unduly burdensome on the appellant. The application judge did not accept the LOR at face value, but instead independently determined what was appropriate. Quoting the application judge, the Court of Appeal stated that, “the exercise of discretion is based on the general principle that international comity dictates a liberal approach to requests for judicial assistance.”

September 2011


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and scales of justice.... Co. v. Lojas Renner S.A. Areas of Law : Civil litigation; Service; Out of jurisdiction; Conflict of laws; Information technology; Domain name system Under Appea : Justice Sandra Chapnik CLICK HERE TO ACCESS THE JUDGMENT



he appellant was Tucows. com Co., a technology corporation with its principal office in Toronto, Ontario. The respondent was Lojas Renner S.A., a Brazilian company. The issue is the validity of service of the appellant’s statement of claim on the respondent outside the jurisdiction of Ontario. The underlying case involved the appellant’s right to keep the domain name <> in the face of the respondent’s registered trademark “Renner”. In 2006, the appellant purchased over 30,000 surname domain names, including the name <>. In May 2009, the respondent, under the Uniform Domain Name Dispute Resolution Policy (the “UDRP”) of the Internet Corporation for Assigned Names and Numbers (“ICANN”), submitted

a complaint to World Intellectual Property Organization (“WIPO”), an ICANN-approved dispute resolution service provider, and to the appellant. WIPO notified the appellant of the respondent’s complaint regarding the use of the domain name <> in bad faith. The appellant did not respond to the complaint and filed a Statement of Claim in the Ontario Superior Court of Justice claiming legitimate interests in the domain name <>, that <> has neither been registered nor used in bad faith by the appellant, and that Renner is not entitled to the domain name <>. At the appellant’s request, WIPO terminated the proceedings before it. The Ontario Superior Court of Justice, finding no real and substantial connection between the respondent and Ontario, then granted the respondent’s motion to set aside service of the Statement of Claim and permanently stay or dismiss the Canadian action for want of jurisdiction.


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1.888.894.4280 | Co. v. Lojas Renner S.A. (cont.) APPELLATE DECISION


he appeal was allowed. The order of the motions judge was set aside. Ontario was found to have jurisdiction. Service of the Statement of Claim on the respondent outside of Ontario was valid. The UDRP rules contemplate the possibility of litigation before domestic courts, and thus jurisdiction need not be declined on the basis that the

September 2011

matter was already in proceedings under the administrative panel. A claim for declaration of ownership of a domain name is a proceeding in respect to personal property in Ontario within the meaning of rule 17.02(a) of the Rules of Civil Procedure (service outside of Ontario); thus there is a presumption that the dispute has a real and substantial connection to Ontario. The appellant did not breach the spirit of the UDRP and its rules by instituting the action on Ontario. Because of the appellantâ&#x20AC;&#x2122;s rights in the domain name <renner. com>, the name constituted intangible personal property located in Ontario.


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OnPoint Legal Research | Take Five

September 2011 Ontario Take Five  

The September 2011 Ontario edtion of OnPoint Legal Research's monthly newsletter, summarizing the top five cases from the Ontario Court of A...

September 2011 Ontario Take Five  

The September 2011 Ontario edtion of OnPoint Legal Research's monthly newsletter, summarizing the top five cases from the Ontario Court of A...