A change in law after a decision as been reached does not affect the application of the doctine of issue estoppel.
http://www.canlii.org/en/on/onca/doc/2008/2008onca746/2008onca746.html
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and see lower court decision: http://www.canlii.org/en/on/onsc/doc/2008/2008canlii27479/2008canlii27479.html
"...[28] In my view, the appeal against the refusal to grant a stay can and should be resolved solely on the basis of issue estoppel. Accordingly, for the purposes of this appeal, I will assume without deciding that Dell and Rogers do change the law of Ontario and that ss. 7 and 8 of the Consumer Protection Act, 2002 do not have retroactive effect. Before discussing issue estoppel, I will briefly address the jurisdictional issues.
[53] I conclude that the motion judge did not err in exercising his discretion in favour of applying issue estoppel in the circumstances of this case. Even if Dell and Rogers would now compel a court to stay a class proceeding in the face of a consumer agreement providing for arbitration, when all of the circumstances of this case are considered, I agree with the motion judge that it would not be unjust to apply issue estoppel and to hold the appellants to the prior determination.
[55] Even if the Consumer Protection Act, 2002 provisions do not have retroactive effect and even if the Supreme Court of Canada’s decisions in Dell and Rogers have changed the law in Ontario, I conclude that the doctrine of issue estoppel precludes the appellants from relitigating the issue of whether this action should be stayed on account of the arbitration clauses. The appellants have fully litigated the issue all the way to the Supreme Court of Canada and lost. Following that loss, the action proceeded to certification, discovery and it is now set down for trial. It would be fundamentally unjust at this late stage of the proceedings to grant the appellants a stay that would not, in fact, send this case to arbitration but rather would have the effect of denying any remedy to borrowers who are subject to arbitration clauses...."
Tuesday, February 10, 2009
Invasion of Privacy
Plaintiff sues defendant for defamatory internet postings, assault and invasion of privacy.
Defendant posted plaintiff's contact information coupled with posted invitations to harm Plaintiff and posted threats to harm him. This gave rise to the tort of assault, apprehension of imminent physical harm. Posting the contact information including aerial maps of residence and so on gave rise to the tort of invasion of privacy. Defendant liable for aggravate damages of $10,000.00 for defamation and $5,000.00 as aggravated damages for assault.
Warman v. Grosvenor 92 O.R. (3d) 663 (O.S.C.)
Defendant posted plaintiff's contact information coupled with posted invitations to harm Plaintiff and posted threats to harm him. This gave rise to the tort of assault, apprehension of imminent physical harm. Posting the contact information including aerial maps of residence and so on gave rise to the tort of invasion of privacy. Defendant liable for aggravate damages of $10,000.00 for defamation and $5,000.00 as aggravated damages for assault.
Warman v. Grosvenor 92 O.R. (3d) 663 (O.S.C.)
Failing to Post Security for Costs
http://www.canlii.org/fr/on/onsc/doc/2008/2008canlii43768/2008canlii43768.html
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Plaintiff ignores order to pay security for costs. Defendant moves under rule 56.06 to dismiss the action. Court rejects arguments that form of order can change despite no material change of circumstances and for relief from forfeiture. Action dismissed.
See as well 92 O.R. (3d) 730 for another cite of same case
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Plaintiff ignores order to pay security for costs. Defendant moves under rule 56.06 to dismiss the action. Court rejects arguments that form of order can change despite no material change of circumstances and for relief from forfeiture. Action dismissed.
See as well 92 O.R. (3d) 730 for another cite of same case
Rectification
http://www.canlii.org/en/on/onca/doc/2008/2008onca601/2008onca601.html
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"...2. The Remedy of Rectification
[13] Rectification is an equitable remedy designed to ensure that one party is not unjustly enriched at the expense of another. A court will rectify an inaccurately drawn written agreement so that it conforms to the agreement the parties intended to make. In Downtown King West Development Corp. v. Massey Ferguson Industries Ltd. 1996 CanLII 1232 (ON C.A.), (1996), 28 O.R. (3d) 327 at 336 (C.A.), Robins J.A. explained the remedy’s underlying rationale, while acknowledging that rectification cannot be used to correct every mistake.
The remedy of rectification is available only in certain defined circumstances and cannot be invoked to correct every mistake. In principle, rectification is permitted, not for the purpose of altering the terms of an agreement, but to correct a contract which has been mistakenly drawn so as to carry out the common intention of the parties and have the contract reflect their true agreement. The remedy is normally granted only where the mistake is mutual or common to the contracting parties...
[14] RBC, however, argues that to obtain an order for rectification Ellis must show more than a common intention. He must also satisfy Sylvan’s four prerequisites to rectification. I do not agree.
[15] Sylvan was a case of unilateral mistake. The party seeking rectification, because of his own negligence, had mistakenly signed an inaccurately drawn document. Binnie J., writing for court, set out four prerequisites for parties seeking rectification for unilateral mistake: (i) a previous oral agreement inconsistent with the written document; (ii) the other party knew or ought to have known of the mistake and permitting that party to take advantage of the mistake would amount to unfair dealing; (iii) the document can be precisely rewritten to express the parties’ intention; and (iv) each of the first three prerequisites must be demonstrated by convincing proof.
[16] The case before us is not a case of unilateral mistake. On the trial judge’s reasonable view of the record, it is a case of common mistake: when entering into the written agreement neither party intended to create two independent $700,000 obligations. Both thought the obligations were connected.
[17] The prerequisites in Sylvan do not apply to cases of common or mutual mistake. The following statement by Binnie J. para. 31 of Sylvan clarifies the scope of the application of the prerequisites: “The traditional rule was to permit rectification only for mutual mistake, but rectification is now available for unilateral mistake (as here), provided certain demanding preconditions are met.” Sylvan, in effect, broadened the circumstances in which courts could rectify a unilateral mistake, allowing rectification subject to the “demanding preconditions” outlined above. It left untouched the circumstances, under the “traditional rule,” in which courts could rectify a mutual or common mistake. See also John D. McCamus, The Law of Contracts (Toronto: Irwin Law, 2005), at 555-62; Wasauking First Nation v. Wasausink Lands Inc., [2004] O.J. No. 810 at paras. 76-85 (C.A.) (discussing Sylvan but not applying the Sylvan preconditions to a case of mutual mistake).
c) Later conduct
[32] Although unnecessary to the trial judge’s finding of common intention, the trial judge concluded that the parties’ later conduct was consistent with that finding. Evidence of later conduct consistent with a claim for rectification is relevant and admissible. See Bercovici v. Palmer (1966), 59 D.L.R. (2d) 513 (Sask. Q.B.), aff’d (1966) 59 D.L.R. (2d) 516 (Sask. C.A.)...."
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"...2. The Remedy of Rectification
[13] Rectification is an equitable remedy designed to ensure that one party is not unjustly enriched at the expense of another. A court will rectify an inaccurately drawn written agreement so that it conforms to the agreement the parties intended to make. In Downtown King West Development Corp. v. Massey Ferguson Industries Ltd. 1996 CanLII 1232 (ON C.A.), (1996), 28 O.R. (3d) 327 at 336 (C.A.), Robins J.A. explained the remedy’s underlying rationale, while acknowledging that rectification cannot be used to correct every mistake.
The remedy of rectification is available only in certain defined circumstances and cannot be invoked to correct every mistake. In principle, rectification is permitted, not for the purpose of altering the terms of an agreement, but to correct a contract which has been mistakenly drawn so as to carry out the common intention of the parties and have the contract reflect their true agreement. The remedy is normally granted only where the mistake is mutual or common to the contracting parties...
[14] RBC, however, argues that to obtain an order for rectification Ellis must show more than a common intention. He must also satisfy Sylvan’s four prerequisites to rectification. I do not agree.
[15] Sylvan was a case of unilateral mistake. The party seeking rectification, because of his own negligence, had mistakenly signed an inaccurately drawn document. Binnie J., writing for court, set out four prerequisites for parties seeking rectification for unilateral mistake: (i) a previous oral agreement inconsistent with the written document; (ii) the other party knew or ought to have known of the mistake and permitting that party to take advantage of the mistake would amount to unfair dealing; (iii) the document can be precisely rewritten to express the parties’ intention; and (iv) each of the first three prerequisites must be demonstrated by convincing proof.
[16] The case before us is not a case of unilateral mistake. On the trial judge’s reasonable view of the record, it is a case of common mistake: when entering into the written agreement neither party intended to create two independent $700,000 obligations. Both thought the obligations were connected.
[17] The prerequisites in Sylvan do not apply to cases of common or mutual mistake. The following statement by Binnie J. para. 31 of Sylvan clarifies the scope of the application of the prerequisites: “The traditional rule was to permit rectification only for mutual mistake, but rectification is now available for unilateral mistake (as here), provided certain demanding preconditions are met.” Sylvan, in effect, broadened the circumstances in which courts could rectify a unilateral mistake, allowing rectification subject to the “demanding preconditions” outlined above. It left untouched the circumstances, under the “traditional rule,” in which courts could rectify a mutual or common mistake. See also John D. McCamus, The Law of Contracts (Toronto: Irwin Law, 2005), at 555-62; Wasauking First Nation v. Wasausink Lands Inc., [2004] O.J. No. 810 at paras. 76-85 (C.A.) (discussing Sylvan but not applying the Sylvan preconditions to a case of mutual mistake).
c) Later conduct
[32] Although unnecessary to the trial judge’s finding of common intention, the trial judge concluded that the parties’ later conduct was consistent with that finding. Evidence of later conduct consistent with a claim for rectification is relevant and admissible. See Bercovici v. Palmer (1966), 59 D.L.R. (2d) 513 (Sask. Q.B.), aff’d (1966) 59 D.L.R. (2d) 516 (Sask. C.A.)...."
Costs: Substantial Indemnity for Defendant: H.L. Staebler v. Allan 92 O.R. (3d) 788, (O.C.A.)
Where a defendant makes a reasonable offer and the action is dimissed, by a combination of rule 49.13 and 57.01 the court may award a defendant substantial indemnity costs from date of offer to settle.
H.L. Staebler v. Allan 92 O.R. (3d) 788, (O.C.A.)
H.L. Staebler v. Allan 92 O.R. (3d) 788, (O.C.A.)
Restrictive Covenants v Non Competition Clauses v Non Solicitation
http://www.canlii.org/en/on/onca/doc/2008/2008onca576/2008onca576.html
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"...[42] In short, a general principle flowing from Elsley and reiterated in Lyons is that a non-solicitation clause -- suitably restrained in temporal and spatial terms -- is more likely to represent a reasonable balance of the competing interests than is a non-competition clause. An appropriately limited non-solicitation clause offers protection for an employer without unduly compromising a person’s ability to work in his or her chosen field. A non-competition clause, on the other hand, is enforceable only in exceptional circumstances.
43] The other legal principle that warrants mention is this: the fact that a clause might have been enforceable had it been drafted in narrower terms will not save it. The question is not whether a valid agreement might have been made but whether the agreement that was made is valid.[9]
[44] In accordance with the framework provided by Elsley, I begin my determination of the validity of the Restrictive Covenant by assessing it within the context of the employment relationship between Staebler and the Employees.
[45] For ease of reference, the Restrictive Covenant is set out again now.
In the event of termination of your employment with the Company, you undertake that you will not, for a period of 2 consecutive years following said termination, conduct business with any clients or customers of H.L. Staebler Company Limited that were handled or serviced by you at the date of your termination.
[46] It will be recalled that the trial judge found that the Restrictive Covenant was a “hybrid” clause. I disagree. On a plain reading of the Restrictive Covenant, it is a non-competition clause. It does not purport to merely restrain the Employees from soliciting the clients and customers they had served when they worked at Staebler, it prohibits the Employees from “conduct[ing] business” with any such clients or customers.
[47] As has been mentioned, Elsley indicates that an assessment of the clause is to be done with due consideration of the “surrounding circumstances”. This entails an examination both of the nature of the employer’s business and the character of the employee’s position.[10] The trial judge made two key findings in this regard: (1) the Employees knew that they would not receive the benefit of “gifted” clients unless they signed employment contracts with Staebler; and, (2) the Employees enjoyed close personal relationships with their clients.
[48] In my view, neither finding justifies the trial judge’s conclusion that the Restrictive Covenant was reasonable. The findings indicate only that an employment contract with some type of restrictive covenant was warranted. They do not, on their own, provide evidence of “exceptional” circumstances that would justify a non-competition clause nor do they speak to the reasonableness of the limits of the Restrictive Covenant. In order to decide those matters, the three factors enunciated in Elsley must be considered. I turn to a consideration of those factors now.
55] A non-solicitation clause is sufficient in conventional employer/employee situations.[12] The Employees were two of ten commercial insurance salespeople that worked for Staebler. They did not play an exceptional role in the Staebler business – they were ordinary salespeople. They were not managers, directors or key employees. They did not stand in a fiduciary relationship with Staebler.
[57] The 50 mile radius clause which Staebler had with five of its other commercial salespeople is significant. Under its terms, those employees could solicit their clients and customers and conduct business with Staebler clients so long as they did so outside of a 50 mile radius of the Waterloo region. No explanation was given to justify this differential treatment among Staebler’s commercial insurance salespeople which leads me to conclude that Staebler itself viewed the 50 mile radius clause as sufficient protection of its interest. Clearly, the terms of the Restrictive Covenant are far more restrictive than are those of the 50 mile radius clause.[15]
[58] Other provincial appellate courts have affirmed that suitably restricted non-solicitation clauses are likely to be found to be reasonable for “ordinary” salespeople in the insurance brokerage industry whereas non-competition clauses are not. See, for example, Valley First Financial Services Ltd. v. Trach, [2004] B.C.J. No. 1127 (C.A.).
[59] It follows from my determination that the Restrictive Covenant is not enforceable that Stevenson & Hunt are not liable for inducing a breach of contract...."
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"...[42] In short, a general principle flowing from Elsley and reiterated in Lyons is that a non-solicitation clause -- suitably restrained in temporal and spatial terms -- is more likely to represent a reasonable balance of the competing interests than is a non-competition clause. An appropriately limited non-solicitation clause offers protection for an employer without unduly compromising a person’s ability to work in his or her chosen field. A non-competition clause, on the other hand, is enforceable only in exceptional circumstances.
43] The other legal principle that warrants mention is this: the fact that a clause might have been enforceable had it been drafted in narrower terms will not save it. The question is not whether a valid agreement might have been made but whether the agreement that was made is valid.[9]
[44] In accordance with the framework provided by Elsley, I begin my determination of the validity of the Restrictive Covenant by assessing it within the context of the employment relationship between Staebler and the Employees.
[45] For ease of reference, the Restrictive Covenant is set out again now.
In the event of termination of your employment with the Company, you undertake that you will not, for a period of 2 consecutive years following said termination, conduct business with any clients or customers of H.L. Staebler Company Limited that were handled or serviced by you at the date of your termination.
[46] It will be recalled that the trial judge found that the Restrictive Covenant was a “hybrid” clause. I disagree. On a plain reading of the Restrictive Covenant, it is a non-competition clause. It does not purport to merely restrain the Employees from soliciting the clients and customers they had served when they worked at Staebler, it prohibits the Employees from “conduct[ing] business” with any such clients or customers.
[47] As has been mentioned, Elsley indicates that an assessment of the clause is to be done with due consideration of the “surrounding circumstances”. This entails an examination both of the nature of the employer’s business and the character of the employee’s position.[10] The trial judge made two key findings in this regard: (1) the Employees knew that they would not receive the benefit of “gifted” clients unless they signed employment contracts with Staebler; and, (2) the Employees enjoyed close personal relationships with their clients.
[48] In my view, neither finding justifies the trial judge’s conclusion that the Restrictive Covenant was reasonable. The findings indicate only that an employment contract with some type of restrictive covenant was warranted. They do not, on their own, provide evidence of “exceptional” circumstances that would justify a non-competition clause nor do they speak to the reasonableness of the limits of the Restrictive Covenant. In order to decide those matters, the three factors enunciated in Elsley must be considered. I turn to a consideration of those factors now.
55] A non-solicitation clause is sufficient in conventional employer/employee situations.[12] The Employees were two of ten commercial insurance salespeople that worked for Staebler. They did not play an exceptional role in the Staebler business – they were ordinary salespeople. They were not managers, directors or key employees. They did not stand in a fiduciary relationship with Staebler.
[57] The 50 mile radius clause which Staebler had with five of its other commercial salespeople is significant. Under its terms, those employees could solicit their clients and customers and conduct business with Staebler clients so long as they did so outside of a 50 mile radius of the Waterloo region. No explanation was given to justify this differential treatment among Staebler’s commercial insurance salespeople which leads me to conclude that Staebler itself viewed the 50 mile radius clause as sufficient protection of its interest. Clearly, the terms of the Restrictive Covenant are far more restrictive than are those of the 50 mile radius clause.[15]
[58] Other provincial appellate courts have affirmed that suitably restricted non-solicitation clauses are likely to be found to be reasonable for “ordinary” salespeople in the insurance brokerage industry whereas non-competition clauses are not. See, for example, Valley First Financial Services Ltd. v. Trach, [2004] B.C.J. No. 1127 (C.A.).
[59] It follows from my determination that the Restrictive Covenant is not enforceable that Stevenson & Hunt are not liable for inducing a breach of contract...."
Dead Fly in Culligan's Bottle of Water
http://www.canlii.org/en/ca/scc/doc/2008/2008scc27/2008scc27.html
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Torts — Negligence — Duty of care — Foreseeability — Personal injury — Mental injury — Customer suing his bottled water supplier in negligence after finding remains of flies in unopened bottle — Customer claiming mental injury — Whether damages too remote to allow recovery.
"...In the course of replacing an empty bottle of drinking water with a full one, M saw a dead fly and part of another dead fly in the unopened replacement bottle. Obsessed with the event and its “revolting implications” for the health of his family, he developed a major depressive disorder, phobia and anxiety. He sued C, the supplier of the bottle of water, for psychiatric injury. The trial judge awarded him general and special damages, as well as damages for loss of business, but the Court of Appeal overturned the judgment on the basis that the injury was not reasonably foreseeable and hence did not give rise to a cause of action.
M’s damages are too remote to allow recovery. As the manufacturer of a consumable good, C owed M, the ultimate consumer of that good, a duty of care in supplying bottled water to him, and it breached the standard of care by providing M with contaminated water. The requirement of personal injury, which includes serious and prolonged psychological injury, is also met: M suffered a debilitating psychological injury which had a significant impact on his life. C’s breach caused that injury in fact, but not in law: M failed to show that it was foreseeable that a person of ordinary fortitude would suffer serious injury from seeing the flies in the bottle of water he was about to install. Unusual or extreme reactions to events caused by negligence are imaginable but not reasonably foreseeable. In this case, the trial judge erred in applying a subjective standard. [3] [6‑11] [15] [18]
The claim for damages for breach of contract also fails. M's damages could not be reasonably supposed to have been within the contemplation of the parties when they entered into their agreement.
[6] The relationship between the parties in this case does not belong to a novel category. It has long been established that the manufacturer of a consumable good owes a duty of care to the ultimate consumer of that good: Donoghue v. Stevenson. It follows that Culligan owed Mr. Mustapha a duty of care in the supplying of bottled water to him.
[7] The second question in a negligence action is whether the defendant’s behaviour breached the standard of care. A defendant’s conduct is negligent if it creates an unreasonable risk of harm (Linden and Feldthusen, at p. 130). The trial judge found that the defendant Culligan breached the standard of care by providing the plaintiff with contaminated water, and the parties did not appeal that finding before this Court. This is hardly surprising; it is clear that a supplier of bottled water intended for personal consumption is under a duty to take reasonable care to ensure that the water is not contaminated by foreign elements. The second element of liability in tort for negligence is therefore met.
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Torts — Negligence — Duty of care — Foreseeability — Personal injury — Mental injury — Customer suing his bottled water supplier in negligence after finding remains of flies in unopened bottle — Customer claiming mental injury — Whether damages too remote to allow recovery.
"...In the course of replacing an empty bottle of drinking water with a full one, M saw a dead fly and part of another dead fly in the unopened replacement bottle. Obsessed with the event and its “revolting implications” for the health of his family, he developed a major depressive disorder, phobia and anxiety. He sued C, the supplier of the bottle of water, for psychiatric injury. The trial judge awarded him general and special damages, as well as damages for loss of business, but the Court of Appeal overturned the judgment on the basis that the injury was not reasonably foreseeable and hence did not give rise to a cause of action.
M’s damages are too remote to allow recovery. As the manufacturer of a consumable good, C owed M, the ultimate consumer of that good, a duty of care in supplying bottled water to him, and it breached the standard of care by providing M with contaminated water. The requirement of personal injury, which includes serious and prolonged psychological injury, is also met: M suffered a debilitating psychological injury which had a significant impact on his life. C’s breach caused that injury in fact, but not in law: M failed to show that it was foreseeable that a person of ordinary fortitude would suffer serious injury from seeing the flies in the bottle of water he was about to install. Unusual or extreme reactions to events caused by negligence are imaginable but not reasonably foreseeable. In this case, the trial judge erred in applying a subjective standard. [3] [6‑11] [15] [18]
The claim for damages for breach of contract also fails. M's damages could not be reasonably supposed to have been within the contemplation of the parties when they entered into their agreement.
[6] The relationship between the parties in this case does not belong to a novel category. It has long been established that the manufacturer of a consumable good owes a duty of care to the ultimate consumer of that good: Donoghue v. Stevenson. It follows that Culligan owed Mr. Mustapha a duty of care in the supplying of bottled water to him.
[7] The second question in a negligence action is whether the defendant’s behaviour breached the standard of care. A defendant’s conduct is negligent if it creates an unreasonable risk of harm (Linden and Feldthusen, at p. 130). The trial judge found that the defendant Culligan breached the standard of care by providing the plaintiff with contaminated water, and the parties did not appeal that finding before this Court. This is hardly surprising; it is clear that a supplier of bottled water intended for personal consumption is under a duty to take reasonable care to ensure that the water is not contaminated by foreign elements. The second element of liability in tort for negligence is therefore met.
[10] On the findings of the trial judge, supported by medical evidence, Mr. Mustapha developed a major depressive disorder with associated phobia and anxiety. This psychiatric illness was debilitating and had a significant impact on his life; it qualifies as a personal injury at law. It follows that Mr. Mustapha has established that he sustained damage.
[17] I add this. In those cases where it is proved that the defendant had actual knowledge of the plaintiff’s particular sensibilities, the ordinary fortitude requirement need not be applied strictly. If the evidence demonstrates that the defendant knew that the plaintiff was of less than ordinary fortitude, the plaintiff’s injury may have been reasonably foreseeable to the defendant. In this case, however, there was no evidence to support a finding that Culligan knew of Mr. Mustapha’s particular sensibilities.
[18] It follows that in order to show that the damage suffered is not too remote to be viewed as legally caused by Culligan’s negligence, Mr. Mustapha must show that it was foreseeable that a person of ordinary fortitude would suffer serious injury from seeing the flies in the bottle of water he was about to install. This he failed to do. The only evidence was about his own reactions, which were described by the medical experts as “highly unusual” and “very individual” (C.A. judgment, at para. 52). There is no evidence that a person of ordinary fortitude would have suffered injury from seeing the flies in the bottle; indeed the expert witnesses were not asked this question. Instead of asking whether it was foreseeable that the defendant’s conduct would have injured a person of ordinary fortitude, the trial judge applied a subjective standard, taking into account Mr. Mustapha’s “previous history” and “particular circumstances” (para. 227), including a number of “cultural factors” such as his unusual concern over cleanliness, and the health and well-being of his family. This was an error. Mr. Mustapha having failed to establish that it was reasonably foreseeable that a person of ordinary fortitude would have suffered personal injury, it follows that his claim must fail.
5. The Claim in Contract
[19] The plaintiff also brought a claim for damages arising out of breach of contract, although he appears not to have pursued it with vigour. This claim fails. With regards to Mr. Mustapha’s psychiatric injury, there is no inconsistency in principle or in outcome between negligence law and contract law. Damages arising out of breach of contract are governed by the expectation of the parties at the time the contract was made (Hadley v. Baxendale (1854), 9 Ex. 341, 156 E.R. 145, at p. 151, applied with respect to mental distress in Fidler v. Sun Life Assurance Co. of Canada, 2006 SCC 30 (CanLII), [2006] 2 S.C.R. 3, 2006 SCC 30), as distinguished from the time of the tort, in the case of tort. I have concluded that personal injury to Mr. Mustapha was not reasonably foreseeable by the defendant at the time of the alleged tort. The same evidence suggests that Mr. Mustapha’s damages could not be reasonably supposed to have been within the contemplation of the parties when they entered into their agreement...."
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