Personal Liability of Directors
June 29, 2021 By Brian Babcock Directors and officers of corporations have many potential liabilities. About a decade ago, a client asked us to assemble a collection of all the provisions on director’s liability that we could find. It was over an inch thick. If we updated it, no doubt it would be thicker. However, […]
Absolute Discretion and the Duty of Good Faith
May 10, 2021 By Brian Babcock Absolute discretion under a contract is not always absolute. The Supreme Court of Canada continues to develop the law relating to the duty of good faith in the performance of a contract. In Wastech Services Ltd. v. Greater Vancouver Sewerage and Drainage District, the parties had a long term […]
Reasonable Expectations Cannot Be Ignored
April 15, 2021 By Jonathon Clark Minority shareholders in a closely held private corporation may be entitled to have a reasonable expectation of sharing in the management and operation of the business, regardless of their employment status. Family businesses can be wonderful joint adventures, until events occur which shatter those bonds. LDS Capital Corporation v. […]
Bond Trustees Do Have Duty to Inform
April 15, 2021 By Brian Babcock A trustee has a duty to inform beneficiaries of the existence of the trust where failure to do so might result in the beneficiary suffering a loss. Failing to fulfill his duty may result in the trustee being required to make good the beneficiary’s losses. This principle is noteworthy […]
Buyer Beware: Employment After Share Sale
April 6, 2021 By Brian Babcock Employment contracts related to commercial transactions remain employment contracts and employment law applies. You should not ignore this if you are involved in a purchase and sale transaction, or any terminations after the sale. Ontario courts continue to find in favour of employees on termination of employment issues. In […]
What is a “Quistclose Trust”?
March 30, 2021 By Brian Babcock A Quistclose trust is a trust created where funds are advanced to another person (or corporation) for a specific purpose, on the condition that they be used only for that purpose, and returned if they are not used for that purpose. The name comes from a British case where […]
Corporations, Charter Rights, and Cruelty
March 7, 2021 By Brian Babcock A corporation may be treated like a natural being for many purposes in the law, but not when it attempts to claim the protection of the prohibition against “cruel and unusual punishment” in the Canadian Charter of Rights and Freedoms. The issue was decided by the Supreme Court of […]
Unincorporated Associations and Trusts
February 21, 2021 By Brian Babcock Unincorporated associations are very common creatures. Most of us belong to them at some stage. Sports teams, clubs, and homeowners associations are just a few examples. You likely do not realize that in the eyes of the law, unincorporated associations do not exist. As Justice Eileen E. Gillese puts […]
Clarifying the Need for Honest Performance of Contracts
February 14, 2021 By B. Paul Jasiura The duty of honesty in the performance of a contract applies to all contracts and means “simply that parties must not lie or otherwise knowingly mislead each other about matters directly linked to the performance of the contract”. This quotation from the 2014 decision of the Supreme Court […]
Who Cares about the Duty of Care?
December 23, 2020 By Mark Mikulasik You should, if you operate a business. If you want protection from business financial losses caused by shoddy products, you better have a contract. That is the message that the Supreme Court of Canada is sending in 1688782 Ontario Inc. v. Maple Leaf Foods Inc. This case arises out of […]