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Legal Blog: Commercial Matters
Mar
30
2026
Deemed Provisions in Order / Conversion
2668602 Ontario Inc. v. GWL Realty Advisors Inc. 2026 Ont C.A.
Purchaser bought warehouse fixtures, including extensive racking, during insolvency proceedings but failed to remove them by the deadline after the lease disclaimer. The insolvency order deemed that if purchaser did not do so, purchaser would be deemed to have abandoned them. Purchaser did nothing to remove the racking and the landlord ultimately sold it for $45,000. 18 months later, purchaser sued the landlord for conversion. The Court of Appeal held that the deemed abandonment, in the context of the case, could not be rebutted and, regardless, the facts did not actual rebut the abandonment. Although not applicable, the Court noted that conversion damages would have been the fair market value of the racking at the date of the conversion.
Continue Reading >Mar
27
2026
Interest Act s. 8
Rabinowitz v. 2528061 Ontario Inc. 2026 Ont C.A.
Purchaser sought specific performance of a failed commercial real estate transaction and repayment of a six‑month mortgage that vendor had granted to secure purchaser’s deposit. Interest was 0% to the closing date and 12% on closing and the mortgage proceeds were to be applied to the purchase price. The trial judge found vendor repudiated the agreement but, holding that the property was not unique and that damages would adequately compensate purchaser, dismissed purchaser’s specific‑performance claim. The Court of Appeal agreed and refused purchaser’s attempt to amend its pleadings to claim for damages. The judge ordered vendor to repay the mortgage but refused to order the 12% contractual interest as violating s. 8 of the Interest Act. The Court of Appeal restored the 12% contractual interest, holding that the interest rate increase was not a consequence of the breach of the agreement and that s. 8 did not apply.
Continue Reading >Mar
20
2026
Part Performance
273 Ontario v. 238 Ontario 2025 Ont CA
The vendor sought to enforce an oral land‑sale agreement and had taken extensive steps toward closing, including preparing documents and tendering funds; the purchaser refused to close despite participating in the closing process. The trial judge found that part performance rendered the oral agreement enforceable, notwithstanding the Statute of Frauds. The Court of Appeal agreed that the vendor’s extensive closing activities amounted to detrimental reliance, satisfying both the evidentiary and equitable components of part performance.
Continue Reading >Jan
26
2026
Wilfully Blind
Chen v. Huang 2024 Ont SCJ affirmed 2025 Ont CA
Majority shareholders claimed that corporation’s sole director and officer, but minority shareholder, fraudulently placed two arm’s length mortgages for $7.7 million and that the mortgagees were wilfully blind to the misconduct and lack of authority. The motion judge held that credit risk was not a badge of fraud for mortgagees who loaned money based on equity. Because the director had ostensible and actual authority, the mortgages were valid and enforceable. The Court of Appeal agreed.
Continue Reading >Sep
11
2025
Grammar – Interpretation
Paloma Resources LLC v. Axis Insurance Company 2025 US C of A
The plaintiff sued its insurer for denying coverage in a prior lawsuit in which a third party alleged that the plaintiff’s employee stole confidential information. The plaintiff settled the third party’s action and wanted the insurer to cover the settlement. The trial court granted summary judgment for the insurer, finding the insurance policy’s intellectual property exclusion applied. The Court of Appeals vacated the summary judgment regarding the exclusion. The interpretation turned on the grammatical effect of the insertion of the determiner “the” before another phrase in a list. The clause was over 5 lines long in one sentence and demonstrated the effect of bad drafting.
Continue Reading >Sep
09
2025
Substantial Indemnity Costs
100 Bloor Street West Corporation v. Barry’s Bootcamp Canada Inc. 2025 Ont CA
Landlord and tenant disputed the calculation of the tenant’s property tax obligations under a ten-year triple net lease for a commercial property. The landlord attempted to evict the tenant, leading to an injunction and multiple applications and motions. The motion judge held for the tenant and awarded substantial indemnity costs against the landlord, deeming its litigation conduct “reprehensible.” The Court of Appeal allowed the landlord’s appeal regarding the costs, finding that while the landlord’s attempt to evict the tenant was unreasonable, the litigation itself was not a “ruse.” Even if substantial indemnity costs were applicable, the court would have reduced the amount as not-proportionate. Had it been asked, it would have also reduced the disbursement amount that included unsupported time of corporate counsel.
Continue Reading >Dec
19
2023
Oppression
Pereira v. TYLT Technologies Inc. 2023 Ont CA
The corporation’s founder and officer, director, and shareholder was fired by his co-founder and an outside director and removed as a director. His unvested shares were to be purchased pursuant to a shareholders’ agreement at a nominal value. Regardless of the shareholders’ agreement and that an employment agreement allowed the termination, the Court of Appeal noted that the oppression remedy, which was equitable, requires not just a legalistic analysis, but a determination of whether the actions of the majority were “fair.” The court found that the founder could reasonably expect that he would continue in his role with the corporations at least until his shares were fully vested. The court remitted the matter to be heard by way of a trial to determine whether the majority acted properly so that it was in the best interests of the corporation to divest the founder of a further role in the corporation and the unvested shares.
Continue Reading >Apr
25
2023
Entire Agreement Clause
10443204 Canada Inc. v. 2701835 Ontario Inc. 2022 Ont CA
Vendor of a coin laundry sued the purchaser for payment of a purchase money loan. The purchaser defended, alleging that the vendor made negligent and fraudulent misrepresentations as to the revenue of the business. The agreement had an entire agreement clause disavowing all representations. It also gave the purchaser the right to review all accounts and attend at the premises for due diligence. The motion judge granted judgment on a summary judgment motion, holding that the entire agreement clause, coupled with the purchaser’s right for and lack of due diligence disentitled the purchaser to claim negligent or fraudulent misrepresentation. The Court of Appeal overturned regarding the fraudulent misrepresentation defence. An entire agreement clause insulates the vendor from the noise of the negotiations, but does not do so for fraudulent misrepresentations – regardless of lost opportunities for due diligence.
Continue Reading >Apr
25
2023
Changed Substratum
Celestini v. Shoplogix Inc. 2023 Ont CA
An employment agreement may properly set out the notice to be given to a terminated employee. However, if, during the period between the date of the agreement and termination, the employment duties changed so significantly that it can be said that the parties could not have intended the employment agreement to apply to the new circumstances, then the employment agreement no longer binds and common law notice governs. This is known as the changed substratum doctrine. In this case, the court held that the employment duties changed so significantly that the 12-month notice period in the agreement could not stand and that 18 months was more appropriate.
Continue Reading >Apr
04
2023
Personal Liability
Li v. Zhu 2023 Ont SCJ (AJ)
Associate judge decided that he had jurisdiction to grant default judgment on a reference. He held that the individual was liable for the corporation’s defaults because it was a one-person, single-purpose, shell corporation and the individual had falsely represented that he and the corporation could complete the renovation work properly. The individual was held liable both in misrepresentation and by piercing the corporate veil.
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