DIGEST
OF RECENT DECISIONS FROM CANADA’S COURTS
Michael Hamilton, LL.B. E-mail: jandm@hfx.eastlink.ca
ARBITRATION
JURISDICTION OF ARBITRATOR
– Arbitrator exceeded his jurisdiction
by reducing the value of a promissory
note and finding that appellant had
fraudulently misrepresented the pro-
jected sales of the company.
Appeal from an arbitration award.
Appellant had sold his shares in a company to respondents for $2,000.000. The
share purchase agreement attributed a
price of $700,000 for all 100 Class A
shares of the company, plus $900,000 for
shareholder loans secured by a note and
$400,000 for the Brault Loan Note from
the company to appellant. That promissory note was created as part of appellant’s acquisition costs of the shares. The
arbitrator held that the note was to be
valued at $0 dollars, based on his finding
that the note had been completely paid off
years before the parties entered into the
present share purchase agreement. The
arbitrator also made a finding of fraudulent misrepresentation against appellant
based on a 2007 sales budget for the company sent by appellant to respondents
which projected sales of $18 million. The
actual sales of the company for 2007
ultimately turned out to be $13,674,199.
HELD: Appeal allowed. The arbitrator
exceeded his jurisdiction when he reduced
the promissory note by contravening the
specific terms of the share purchase agreement as well as the stated issue submitted
to him by the parties in the arbitration
agreement. Under the terms of the share
purchase agreement, the Brault Loan
Note could only be reduced under the provisions of the price adjustment clause.
The arbitrator should have restricted himself to determining any necessary adjustment to the Brault Loan Note as might
have been required by the price adjustment clause, once the extent of the reduction of actual net working capital had
been determined in the arbitration. The
arbitrator also exceeded his jurisdiction
and erred in law in finding fraudulent
misrepresentation on the part of appellant. Representations as to the future
were not actionable unless incorporated
as a contractual warranty. A projected
sales budget was such a future representation. There was no warranty as to projected sales of the company provided for
in the share purchase agreement.
Demers v. Desrochers, [2010] O.J. No.
3870, Ont. S.C.J., Hackland J., Sept. 15/10.
Digest No. 3023-001 (Approx. 11 pp.)
CIVIL PROCEDURE
AFFIDAVIT OF DOCUMENTS – In
a wrongful dismissal action, plaintiff
was not entitled to production of settle-
ment documents related to other
employees.
Motion for an order directing delivery
of a further and better affidavit of docu-
ments by defendant employer and pro-
duction of all documentation relating to
settlements entered into by defendant
with other employees. In November 2009
plaintiff commenced an action arising out
of termination of his employment after
eight and a half years. The claim alleged
that other employees were given better
terms of settlement by defendant. Plain-
tiff filed an affidavit identifying seven
individuals who were terminated and
received severance packages and asserted
that at least five of them obtained an
additional bonus.
DISCOVERY – Appellate court
upheld order for production of an air-
craft’s cockpit voice recorder.
Appeal from an order requiring the
production of an aircraft’s cockpit voice
recorder. While landing in a severe
thunderstorm, an airplane overshot the
runway, pitched into a ravine and burst
into flames, causing injuries to several
passengers. A class action was commenced
on behalf of the passengers against a
number of parties including the airline
and respondent NAV Canada, the body
responsible for air traffic control at the
airport. In its pleadings, NAV Canada
alleged that the pilots were negligent in
the way that they approached the runway
and landed the aircraft. The accident was
investigated by appellant Board. In the
course of its investigation, the Board took
possession of the aircraft’s cockpit voice
recorder, which contained complete
recordings of the conversations between
the pilots, and their communications with
air traffic control prior to the crash. NAV
Canada brought a motion for the production of the cockpit voice recorder. In
applying the statutory test in s. 28 of the
Canadian Transportation Accident
Investigation and Safety Board Act, the
motions judge considered the content of
the cockpit voice recorder and the circumstances of the case. He determined that
the public interest in the proper administration of justice outweighed the statutory
privilege attached to the cockpit voice
recorder given that the contents of the
recorder were highly relevant, probative
and reliable. The judge ordered that the
recorder be produced.
HELD: Appeal dismissed. The
motions judge clearly understood that
the test he was required to apply was
prescribed by subs. 28( 6) of the Act and
he carried out the task exactly as
described by the Act. In assessing the
importance of the production of the
cockpit voice recorder to the public inter-
est in the proper administration of jus-
tice, the judge considered a number of
factors beyond whether the recorder was
the best and most reliable evidence.
EXAMINATION OF NON-PARTIES
– Plaintiff was granted an order to
examine his brother to assist in deter-
mining the identity of the defendant.
Plaintiff sought an order requiring his
brother S to attend to be examined as a
non-party for the purpose of assisting him
in identifying defendant John Doe. In
February 2010 plaintiff learned of a website which described him in very unflattering terms and also contained his picture
with the word “Loser” scrawled and a
photo of his home. The photos were
posted from an account hosted by Photobucket. The administrator of the account
was identified as John Doe holding himself out as “joshlatner”. Both the Photobucket account and blog were shut down.
In March 2010, pursuant to a court order,
both Google and Photobucket released
information from which plaintiff obtained
the IP address from which John Doe
made his postings, which was owned by
Rogers. The IP address belonged to S.
HELD: Motion granted on terms.
There was reason to believe that S had
information relevant to the matter in
issue. The IP address was registered to
him. In addition, plaintiff could not get
the information from anyone else he was
entitled to examine for discovery. It would
be unfair to require plaintiff to proceed to
trial without having an opportunity to
examine S.
Latner v. Doe, [2010] O.J. No. 3806,
Ont. S.C.J., Haberman J., Sept. 14/10.
Digest No. 3023-004 (Approx. 6 pp.)
MEDICAL EXAMINATIONS –
Plaintiff only ordered to attend defence
psychiatric examination if examination
was audio recorded.
Motion for an order requiring plaintiff
to attend medical assessments by a psychiatrist and an orthopedic surgeon without
the assessments being recorded. Plaintiff
sued for personal injuries suffered in a
motor vehicle accident. Plaintiff wanted
the examination by the psychiatrist video
or audio recorded and refused to attend
an examination by the orthopedic surgeon. The proposed psychiatrist had his
opinions disregarded by the court on at
least three prior occasions and had been
criticized by the court for delivering his
evidence as an advocate for the party calling him as a witness. The proposed psychiatrist also refused to conduct an assessment while being taped.
HELD: Motion allowed in part. In
light of the new duties to the court of
experts, the defence ought to be granted
some latitude in selecting the expert they
were retaining. By her or his undertak-
ing accompanying any report, the expert
was now the court’s expert and must not
be an advocate for either side. The court
expected and relied upon frank and
unbiased opinions from its experts and
was required to fashion appropriate pro-
cedural safeguards to ensure the trial
court had proper independent and reli-
able evidence and reports available. It
was appropriate for plaintiff to have an
audio recording of the entire examina-
tion. If the proposed psychiatrist con-
tinued to refuse to conduct an examina-
tion that was audio recorded, defendant
would have to select another physician.
If a psychiatric examination was con-
ducted, it should be audio recorded.
Plaintiff was ordered to attend the ortho-
pedic examination.
MULTIPLICITY OF PROCEED-
INGS – Court struck out an action
brought by plaintiff in Newmarket
against the same defendant as a
pending action in Toronto.
Motion by defendants to strike out a
claim brought in Newmarket. Plaintiff
was a customer of defendant. He subscribed to a number of their products
and complained that they allowed a third
party unauthorized access to his e-mail
and voicemail accounts, resulting in significant harm to him. In November 2008
he started a lawsuit against defendant in
Toronto alleging a breach of fiduciary
duty and negligence. He started an action
against defendant and individual members of its board of directors in Newmarket in February 2010.
HELD: Motion granted. There were
some differences between the two actions,
but in pith and substance they were the
same claim. The Toronto action was
pending. While it remained pending the
current action offended the rule against a
multiplicity of proceedings. Generally,
directors had no personal liability for the
actions of the corporation unless his or
her actions were themselves tortious. A
plaintiff must specifically plead the cause
of action asserted against the individual
director(s) and clearly set out why he or
she was being sued personally and separately from the corporation. Plaintiff
failed to set out the specific cause of
action against the individual directors.
The claim must be struck out.
Marino v. Horn, [2010] O.J. No.
4025, Ont. S.C.J., Boswell J., Sept.
15/10. Digest No. 3023-006 (Approx.
6 pp.)
STRIKING OUT PLEADINGS –
Appellate court refused to set aside
orders striking out plaintiff’s statement
of claim. The claim disclosed no cause
of action.
Appeal from an order striking plaintiff’s statement of claim against the
defendants. Plaintiff was a self-repre-sented litigant. In 1987 he had open heart
surgery and subsequently received treatment from several doctors at various hos-
