The Lawyers Weekly - December 24, 2010

to separating. After separation, the wife returned to Manitoba and the husband remained in Quebec. The wife pursued her application for support under the Act, which was not yet in force in Quebec, thus requiring her to obtain a provisional order. The motion judge refused to make a provisional support order because, as a common-law spouse, the wife had no right to seek support from the husband under Quebec law.

HELD: Appeal allowed. The effect of the motion judge’s order, contrary to the purpose and intent of the Act, was to prevent the wife from having the same prompt access to a hearing in the husband’s jurisdiction that she would have had if she had not required a provisional order. When making a provisional order under subs. 7(1) of the Act, the Manitoba court could only take into account the legal authority on which the claimant’s application for support was based. It was only the order made by the confirming court in the respondent’s jurisdiction that could create substantive rights and obligations. The Manitoba court was not required to take judicial notice of the law of a reciprocating jurisdiction, even in those circumstances where a provisional order was required. Only the Quebec court could determine how the provisions of its own law should be applied.

Lei v. Kwan, [2010] M.J. No. 347, Man. C.A., per Scott C.J.M. (Chartier and MacInnes JJ.A. concurring), Nov. 22/10. Digest No. 3032-017 (Approx. 6 pp.)

LACK OF INDEPENDENT LEGAL ADVICE – Officer and director of company not required to obtain independent legal advice when guaranteeing company’s debt.

Motion by plaintiff bank for summary judgment against defendant company on its indebtedness to the bank on a line of credit and against the defendant D on his personal guarantee of the company’s debt. The company did not dispute the amount owing but claimed that the bank, by oral agreement, changed the loan agreement so that it was no longer due on demand. The bank issued a written demand for payment to the company and the guarantor. The guarantor argued that he did not receive independent legal advice before signing the guarantee and the documents were not reviewed or explained to him.

HELD: Motion allowed. The contract
between the parties made it clear that any
amendments were required to be in writ-
ing and signed by both the bank and its
customer. No such written agreement
existed here, and there was no evidence
that defendants ever requested that the
alleged oral agreement be reduced to
writing. The company’s position that the
bank agreed to allow the money to be
repaid over time and would always
accommodate the company’s cash flow
lacked an air of commercial reality and
was not supported by the written agree-
ment between the parties. As an officer
and director of the company, D was not
required to obtain independent legal
advice. There was no evidence that he was
subject to any undue influence or fraud
prior to signing the agreement.

INJUNCTIONS

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INTERLOCUTORY INJUNCTIONS – Court rejected plaintiff’s application for interlocutory injunction to restrain defendant from breaching distribution agreement because the claim could by compensated in damages.

Application by plaintiff for an interlocutory injunction to restrain defendant from breaching exclusive territorial and customer rights found in an alleged agreement between the parties. Plaintiff was one of the largest Canadian distributors of adult sex toys. Defendant was the inventor and maker of the “We-Vibe”, a sex toy. The parties did not dispute that plaintiff enjoyed exclusive distribution rights for the We-Vibe pursuant to a “mainstream agreement”, which permitted it to distribute the We-Vibe in Canadian food and drug stores. At issue was an alleged agreement to exclusively distribute the We-Vibe to the adult or sex toy industry market. Defendant denied there was such an agreement.

HELD: Application dismissed. Plaintiff’s principal C deposed that the adult agreement was signed by her on Nov. 3, 2009 and sent to defendant’s principal, W. W stated that there was no agreement concluded between the parties. The agreement which C signed appeared to be a draft agreement requiring further negotiation. By its terms it was non-exclusive. Critical issues remained unresolved. The parties agreed that there was a serious question to be tried. Plaintiff was effectively seeking a mandatory injunction. However the plaintiff failed to establish a strong prima facie case. The specific calculations supplied by plaintiff proved that the action, if successful, could be compensated in damage. Loss of sales and market share did not represent irreparable harm. Cancellation of orders was a looming threat to defendant’s business. The balance of convenience favoured defendant.

Cana International Distributing Inc. (c.o.b. Sexy Living) v. Standard Innovation Corp., [2010] O.J. No. 4919, Ont. S.C.J., McKinnon J., Nov. 18/10. Digest No. 3032-019 (Approx. 6 pp.)

it was incumbent on him to make the determinations of law arising from those undisputed facts. C Inc. was not an owner of the vehicle within the meaning of subs. 2(ak) of the Motor Vehicle Act (N.S.). Subsection 2(ak), when read in light of s. 248, did not impose any liability on the owner of a motor vehicle. It was simply a provision relating to the onus of proof of liability. The lease plainly fell into the lease with right of purchase exception to the definition of “owner”. C Inc. was not vicariously liable for the negligence of JG. There was no common law of vicarious liability between the owner of a vehicle and its driver. The fact that the vehicle was subject to the lease did not change the basic relationship between C Inc., the owner of the vehicle at common law, and JG, the driver.

Gilbert v. Giffin, [2010] N.S.J. No. 611, N.S.C.A., per Farrar J.A. ( MacDonald C.J.N.S. and Saunders J.A. concurring), Nov. 25/10. Digest No. 3032-020 (Approx. 12 pp.)

REAL PROPERTY
NEGLIGENCE

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VICARIOUS LIABILITY – Owner of
vehicle not vicariously liable for negli-
gence of the driver of the vehicle.

Appeals from summary judgment dismissing the action against respondent C Inc. Appellants were involved in a motor vehicle accident. JG was driving a vehicle leased from C Inc. at the time of the accident. PG sued JG, her insurer and C Inc. for compensation in respect of injuries she sustained in the accident. PG alleged that C Inc. was vicariously liable for JG’s negligence.

HELD: Appeals dismissed. The chambers judge did not err in determining that there were no material facts in dispute and

GIFTS – Court found that moneys
advanced to defendants to purchase
property not intended to be a gift.

Application for summary judgment that property was being held in trust for plaintiffs. Defendant NC was the daughter-in-law of plaintiffs. Defendant AC was her son and grandson of plaintiffs. Plaintiffs’ son had abandoned NC after 25 years of marriage. She was left destitute and was going to lose her home. AC decided that he would purchase a home, but did not have the credit history necessary for a mortgage. Plaintiffs offered to be guarantors. However, the bank would not accept that proposal because they were not Canadian citizens. Plaintiffs decided to advance $230,000 to AC for the purchase. They raised the funds by re-mortgaging their own home. Plaintiffs submitted that the parties agreed defendants would make the monthly mortgage payments on plaintiffs’ home and that the loan would be repaid within one year, once AC established enough credit for a mortgage. Defendants claimed that the money was advanced as a gift and plaintiffs reneged on the gift and started demanding payment after AC was charged with assault. The mortgage advisor testified in support of plaintiffs’ position. NC sent many emails to plaintiffs in which she acknowledged defendants’ duty to repay the loan.

HELD: Application allowed. The presumption of advancement did not apply as AC was an adult. NC’s evidence in relation to the moneys being a gift was entirely unreliable. She had initially agreed with plaintiffs’ position but had changed her story to help her son. The claim the moneys were advanced as a gift was entirely inconsistent with the correspondence between the parties and evidence from the mortgage advisor. The loan was consistent with plaintiffs’ original plan to be guarantors and with their financial circumstances. They could not afford to make such a gift and it was inherently implausible that they would do so. A resulting or constructive trust was declared over the property in favour of plaintiffs’, and they were granted a writ of possession.