As a lifelong fan of the Montreal Canadiens, I was as sickened as anyone else at the sight of Habs enforcer George Parros lying on the ice during the Habs home opener game against the Toronto Maple Leafs on October 1^st.

Parros was signed by the team to a contract paying him almost $1,000,000.00 for the season during this past summer. He was not signed for his scoring abilities. During his career as a professional hockey player, he has played for a variety of teams where he has served exactly one role, which is that of a professional fighter on skates. The fact that he was injured in the course of a fight to the extent that he suffered a concussion and will be out of the line-up indefinitely, should come as a surprise to no one.

Over the course of the last year, at least three noted NHL “enforcers”, retired and otherwise, have died. Those deaths gave rise to a flurry of comments from a variety of sources concerning the place of fighting in professional hockey, and particularly, whether or not additional rules should be implemented to discourage or outlaw it. The injury to Mr. Parros has sparked yet another such flurry.

However, in an interesting article published online on TSN.ca on October 2^nd, TSN Legal Analyst Eric Macramalla looked at the question of whether or not the NHL could be held liable for brain trauma sustained as a result of a career playing hockey.

Mr. Macramalla refers to the legal action that had been commenced by a number of retired NFL players against the National Football League alleging that the League is responsible for the long-term effects of concussions which the players have suffered. The alleged basis for liability had to do with the proposition that the League was well aware of the long-term risks of brain injuries and failed to disclose those risks to players while they were active.

In my view, there is a significant difference between the two sports when it comes to possible brain trauma. Football is an inherently violent sport. Heads collide on an ongoing basis as an integral part of play in the NFL. While equipment manufacturers have improved head protection considerably since the days of leather helmets, the other protective equipment worn by NFL players is probably equivalent to suits of armour worn by knights during the Middle Ages in terms of rigidity. If the NFL had scientific evidence as to the long-term effects of repeated collisions of this nature and deliberately withheld that information out of a concern for the future of the game, and its ability to generate revenues for team owners, that would indeed be a problem. Having said that, in professional football, it is hard to see that there are any steps at all that could be taken to prevent head trauma during play. The only answer, as far as I can see, is to simply stop playing.

Professional hockey does not, or at least should not, involve collisions between players’ heads and other rigid surfaces as an inherent part of the game. These things do happen of course, and careers are sometimes ended as a result. However, for the most part, the most serious injuries of this nature seem to occur to those players whose main function is to fight. While fighting has always been a part of professional hockey, it does not absolutely have to be. To a significant extent, it is voluntary.

It is theoretically possible that the NHL might well have evidence available to it that suggests that long-term brain damage can result from repeated trauma such as that suffered by NHL enforcers. If so, it is possible to construct a legal argument that might give rise to a damage claim. In my view, however, the possibility of a successful action of this nature is exceedingly remote. NHL enforcers are grown men who know what they are getting into when they sign contracts to be professional fighters on skates.

The recent decision of the Ontario Court of Appeal in Khan v. Metroland Printing, Publishing and & Distributing Ltd. et al is a useful reminder that even though the wheels of justice may feel like they turn slowly, there is a limit to everything.

This case arose out of a mayoral election in Richmond Hill, Ontario in 1997. The successful candidate in that election was William Bell. The unsuccessful candidate was Colleen Khan. Both are now deceased.

In January 1998, Ms. Khan and others commenced this action alleging that defamatory statements, including statements allegedly made by Mr. Bell, were published in Metroland’s newspaper. The action was defended and Bell also delivered a counterclaim alleging that Ms. Khan’s campaign literature included defamatory statements about him.

The pleadings and examinations for discovery were completed in late 1998.

Nothing else happened to move the case forward. In 2001, the Court made an Order requiring Mr. Bell to pay security for costs into Court. That Order was finally set aside in May 2005.

Nothing took place between May 2005 until February 2013 when the Defendants brought a motion to dismiss the action for delay. In response, the Plaintiffs insisted that they still intended to proceed with the case.

The Judge hearing the motion pointed out that over fifteen years had passed since the alleged defamation took place and fourteen years had passed since the action was started. While the position of the Khans on the motion was that they wanted to proceed to trial, there was simply no explanation as to why the action was not set down on the trial list in the subsequent fourteen years.

In this case, there was evidence of actual prejudice as a result of the loss of witnesses, as well as a presumption of prejudice arising from the delay.

The action was dismissed and on appeal to the Court of Appeal, the appeal was dismissed with costs.

Notwithstanding efforts that have been made in the administration of our court system, there are delays inherit in the system. At the moment, in Toronto, it can take seven months to obtain time from the Court for the hearing of a Masters motion. A motion before a judge will take at least four months, and only if it is relatively short. So an action can still take a long time to get to trial, even if both sides move the case along in a reasonable way. But if the parties allow an action to languish, this case is a useful reminder that there is indeed a limit to how long that will be tolerated.

Aside from the nuisance caused during the construction process, the construction of new highways to replace routes through small towns is usually welcomed by motorists simply because it tends to expedite travel. Unfortunately, the rerouting of a highway will damage a business built along a well-traveled road if it depends on passing motorists for business, and if the road is no longer used.

The recent Supreme Court of Canada decision in Antrim Truck Centre v. Ontario (Minister of Transportation) provides an interesting insight into the law governing the circumstances under which such a property owner can obtain compensation.

In this case, the Plaintiff operated a truck stop on Highway 17 near the hamlet of Antrim from 1978 until 2004 when construction was completed on a new section of Highway 417 running parallel to Highway 17. Motorists travelling on the new highway did not have direct access to the truck stop and as a result, in effect, it was put out of business.

The Plaintiff brought a claim for damages against the Province before the Ontario Municipal Board under the Expropriations Act on the basis that the highway project substantially interfered with its use and enjoyment of its property. The OMB awarded damages of $393,000.00 for loss of business and the decrease to the value of the property.  On appeal, the Divisional Court affirmed the OMB’s decision. On further appeal to the Ontario Court of Appeal, the Board’s decision was reversed.  At the final appeal stage, before the Supreme Court of Canada, the Supreme Court restored the Board’s decision.

The legal doctrine governing the issue is the law of nuisance. The issue in the case was quite simply whether or not the rerouting of a highway constituted a nuisance as a matter of law, and if so, what right the Plaintiff might have to compensation.

The Court defined the main question in the case as how to decide whether an interference with the private use and enjoyment of land is unreasonable, and therefore a nuisance, when it results from construction that serves an important public purpose. The Court decided that one determines the reasonableness of such interference by balancing the competing interests of the public and the land owner. This involves answering the question of whether, in all of the circumstances, the private party has shouldered a greater share of the burden of construction then it would be reasonable to expect individuals to bear without compensation.

Given the public interest served in the construction of a new highway, if the penalty suffered by an individual land owner is no more than his or her fair share of the costs associated with providing a public benefit, there will be no recovery. In this case, the Court found that the interference with the truck stop caused by the construction of the new highway inflicted significant and permanent loss, and as a result, the Plaintiff was entitled to compensation.

There are a number of instances in common-law jurisprudence generally in which such a balancing of competing interests is required. This circumstance probably arises most frequently in the context of applications for injunctions. In such cases, the Court must consider a test known as the “balance of convenience” i.e. the Court must balance the apparent harm to the party seeking the injunction if the injunction is not granted against the apparent harm to the other party if the injunction is granted. This is often a particularly difficult exercise because in most injunction cases, the facts are heavily disputed and the Judge must make the decision without being able to determine exactly what did or did not happen. In many cases, this makes it very difficult for parties and their lawyers to be able to predict with any reasonable certainty what the outcome of an application for injunction is likely to be.

The outcome of this case would have been similarly difficult to predict. The Ontario Municipal Board and the Divisional Court balanced the competing interests of the truck stop owner and the Province in a particular way. The Ontario Court of Appeal had the opposite opinion of the same facts. The Supreme Court of Canada disagreed with the Ontario Court of Appeal. All of this serves to demonstrate quite clearly the difficulty faced by land owners having to decide whether or not to seek compensation from the Province in such circumstances.

Adding to the difficulty, of course, is the fact that if the construction of a new highway has effectively put the land owner out of business, the land owner might have difficulty being able to afford to fund an application for compensation – especially if the Province is intent on taking the dispute all the way up to the Supreme Court of Canada for a final resolution. Conversely, if the impact of the new highway is not so severe as to out the land owner out of business, so that the land owner can be expected to be able to fund an application for compensation, its case might not be as compelling simply because it has not been put out of business. Based on this case, however, it would appear that any time a land owner is victimized this way, some consideration should be given to an application for compensation.

In the recent decision of a Superior Court Master in Garacci vs. Ross, the Court dealt with a motion by the Defendant in a personal injury action to force the Plaintiff to disclose photographs on the private portion of her Facebook account.

The Plaintiff had been involved in a car accident and claimed that she had sustained serious and permanent injuries to her left leg and ankle. At Discovery, she testified that she was now unable to pursue recreational activities that she previously enjoyed, including soccer, waterskiing, competitive dancing, and snowboarding. She admitted that she could still swim, go to the gym, and travel among other things.

The Defendant found a dozen pictures on public areas of her Facebook page showing the Plaintiff kneeling on the ground, climbing a tree, and wrestling a friend to the ground. The Defendant argued that there must be other similar photographs showing her engaged in similar activities among her 1,100 private photographs and asked that all of them be produced.

It appears that the Plaintiff either produced or provided the Court with access to these photographs and the Court reviewed about 10% of them at random. The Court concluded that none of them showed the Plaintiff engaged in any significant physical activity. The Court observed that most of the photographs were taken from the waist up and only showed her involved in low impact activities.

The Court dismissed the motion on a number of grounds.

Firstly, the Court did not consider the photographs to be particularly relevant.

Secondly, given the number of photographs involved, the Court considered the request that every single one taken since the accident be produced, to be “merely a high-tech fishing expedition” which was “not an appropriate or proportional form of discovery”.

This leaves one to wonder as to whether or not the result might have been different if instead of 1,100 photographs, there were perhaps two dozen.

Of more significance is the fact that in principle, private photographs on a Facebook account are not out of bounds in appropriate cases. If one of the photographs viewed by the Court had shown the Plaintiff involved in a significant physical activity, the result might have been different and it is possible that the Plaintiff would have had to produce all of them. This result would have been even more likely if the Plaintiff would have been foolhardy enough to post such photographs on the public portion of her Facebook account.

This case is yet another useful reminder to litigants to be extremely careful about how they manage their Facebook or other social media accounts, both with respect to photographs and texts, and both with respect to the public and private sections of their accounts.

Mark Twain once made a comment about how reports of his death were highly exaggerated.

Perhaps the same can be said about the chances of a corporate plaintiff obtaining specific performance of an agreement of purchase and sale for commercial property, given the recent decision of the Superior Court of Ontario in 2329131 Ontario Inc. v. Carlyle Development Corporation.

This case involved an agreement of purchase and sale for 3 adjacent buildings in Espanola, Ontario which contained a gas bar, a convenience store, several quick service restaurants, and some smaller tenants.

There was no question that the plaintiff purchaser was trying to buy this property to own and maintain for the profit to be derived from the leases to the various tenants.

The agreement of purchase and sale was amended by the parties on a number of occasions. The last written amending agreement provided for a specific closing date, which passed without either side attempting to close. Both sides continued to behave as if the transaction was still valid but neither party identified a new closing date.

Ultimately, and after the parties encountered difficulty obtaining estoppel certificates from the tenants and confirmation from the plaintiff’s bank that the bank would finance the purchase, the plaintiff purchaser announced that it was ready to close. The defendant vendor took the position that the transaction was no longer alive and refused to complete the transaction.

The purchaser sued and moved for summary judgment, alleging that the vendor had breached the agreement of purchase and sale for a number of reasons and asking the Court to order specific performance by requiring the defendant to hand over a deed to the property.

After reviewing the facts, the Court was satisfied that it was in a position to render a summary judgment simply because the documents were sufficiently clear as to illustrate what had actually happened.

The interesting aspect of the case has to do with the issue of remedy.

The Court observed that the plaintiff had explained why the property was special to the principals of the plaintiff company, using the language “it provides a good opportunity for them to carry on a business and to have good tenants in the other buildings”. The Court also observed that the plaintiff’s principals had “put much effort into obtaining the property”.
Of some significance was the fact that strangely, the defendant did not take issue with the appropriateness of an order for specific performance.

There is an abundance of authority for the proposition that specific performance will not be granted with respect to a commercial property, at least where the only thing special or unique about the property is its ability to generate revenue. This is because it is assumed that a commercial buyer will be able to find another revenue–generating property elsewhere. These types of properties, in this context, are considered commodity items.

Nevertheless, and presumably assisted by the defendant’s failure to challenge the plaintiff’s right to an order for specific performance, the Court determined that “it would not be unjust” to grant specific performance in these circumstances. The Court ruled that a substitute property “is not readily available”.

In my view, this decision is completely inconsistent with both the trend in the jurisprudence over the last number of years and specific comments made in earlier decisions.

Nevertheless, it does provide some support for the idea that specific performance may be available with respect to commercial properties. Reports of the death of that remedy, apparently, are greatly exaggerated.

In the recent case of Pet Valu Canada Inc. v. 1381114 Ontario Limited, the Court dealt with a motion by a franchisor, Pet Valu Canada Inc., against a numbered company operating as “Pet Stuff & Supplies” and its principals. Pet Valu was seeking an injunction stopping the defendants from operating a pet supply store which allegedly breached a non-competition covenant in a franchise agreement.

Robin Martin, as sole officer and director of 1381114 Ontario Limited, entered into a franchise agreement with Pet Valu that contained a restrictive covenant. Ms. Martin personally operated the Pet Valu franchise store until the franchise agreement was terminated.

At that point, according to the franchise agreement, she was prohibited from operating or participating in a competing business for 2 years within a 20 kilometer radius of the store.

Ms. Martin’s husband was one Mark Fingarson. He was the long-time owner and operator of Alfa Security Systems, a security services company.

In the month prior to the termination of Ms. Martin’s franchise agreement, Mr. Fingarson directed a numbered company which he had incorporated earlier to register the business names “Pet Stuff & Supplies” and “Alfa Systems”.

After the termination of the franchise agreement, that numbered company began to operate a pet supply store 450 meters from a Pet Valu store. In addition to pet supplies, the store sold spy equipment and skateboards. Ms. Martin’s former manager was employed there after having set up the store. Shelving, racking and inventory with distinctive labels, price tags and product codes from Ms. Martin’s Pet Valu franchise were in use at the new store.

A private investigation firm hired by Pet Valu conducted surveillance of the store on a Saturday in the month following the termination of the franchise agreement and observed Ms. Martin attending there on two occasions throughout the day including dropping off several roles of change at the business.

Pet Valu sought an injunction to require the new store to close. The judge had no difficulty granting the injunction. The judge found that while Mr. Fingarson had not been a signatory to the franchise agreement, he clearly set up the new company to assist his wife to compete with Pet Valu when she had undertaken not to do so. It was plain to the judge that the new company had been incorporated by Mr. Fingarson to hide his wife’s involvement, and that she was involved in the operation of the new store.

The judge found that this was all a “transparent effort by all of the defendants to avoid the restrictive covenant”. She regarded all of this as “no more than a feeble attempt” to do so.

Mr. Fingarson had insisted that Pet Stuff was not actually competing business within the meaning of the restrictive covenant because it also sold spy equipment and skate boards. This argument was completely rejected as well.

The judge went on to make a significant point on the law relating to injunctions relating to restrictive covenants.

In a normal injunction proceeding, the party seeking the injunction must show that there is evidence supporting a valid complaint. In addition, it must show if the injunction is not granted, the party seeking the injunction will suffer harm which is “irreparable” which is to say that compensation in damages will not be adequate. Finally, the party must demonstrate that the harm to it if the injunction is not granted outweighs the harm to the defendant if it is granted. This is what is referred to as the “balance of convenience” test.

However, as the Court pointed out, a fundamental aspect of any franchise system is the protection of its method of operation, goodwill, products and services. Accordingly, where there is a clear breach of a negative covenant in a franchise agreement, the elements of irreparable harm and balance of convenience are not required. All the moving party has to do is to demonstrate that it has a valid and supportable claim for a breach of a non-competition provision or other restrictive covenant.

This is a useful reminder of the law relating to the enforcement of restrictive covenants in franchise agreements. It is also a useful reminder to the public generally that transparent attempts to circumvent these covenants will never be tolerated.

In my last blog post, I discussed the ready availability of summary judgments in wrongful dismissal cases.

Several weeks ago, the Superior Court of Justice released a summary judgment in a bank claim on a guarantee, reinforcing another aspect of summary judgment motions that might be of interest.

In this case, the Toronto Dominion Bank v. 1745361 Ontario Corporation, Glenn Carter and Jennifer Smith, the bank made a small business loan to the corporate Defendant. The Defendant Carter gave a personal guarantee to the extent of 25% of that loan. The loan went into default and the bank sued Carter on his guarantee.

Whether or not this evidence, taken on its own, would have been sufficient to justify the Court in granting summary judgment in the face of Carter’s story will never be known

Carter’s defence centered around discussions and an “understanding” that he had reached with the bank representative at the time that he signed the guarantee.

Carter claimed that at that time, he had not yet finalized his arrangements with Smith, the principal of the company, on the terms of his involvement in the business venture. Accordingly, he claimed that he had told the bank representative that he was signing the guarantee on a conditional basis only, i.e., conditional on his finalizing his arrangements with Smith.

He claimed that he had never actually done so and as a result, the guarantee could not be enforced.

The evidence showed that Carter advanced funds into the company’s account, took back something in the nature of a fee for doing so, and obtained an indemnity from the company in respect of his guarantee. There was also evidence before the court that he never actually followed up with the bank with respect to his concern that his execution of the guarantee was conditional on the completion of his business arrangement with Smith.

These facts all seemed to suggest that Carter’s story was not true. Whether or not this evidence, taken on its own, would have been sufficient to justify the Court in granting summary judgment in the face of Carter’s story will never be known, because the Court based its judgment on the legal principles involved, having nothing to do with those facts.

The guarantee itself took the form that is almost universally used by banks these days, and specifically excluded any prior representations or discussions inconsistent with what the guarantee said. It specifically provided that the Guarantor’s liability was “continuing, absolute, and unconditional”. Carter’s attempt to introduce evidence suggesting that the guarantee was conditional was inconsistent with the wording in the guarantee. That type of evidence, referred to as parol evidence, is not available where the terms of a guarantee are clear and unambiguous. That has been the law in Canada for decades.

As a result, the judge had no difficulty granting judgment to the bank.

This is another aspect of the summary judgment rule that one might bear in mind. It is not sufficient to raise any number of factual disputes in the hope of derailing a summary judgment motion on the basis that one has raised triable issues, where there is a legal principle that is crystal clear and squarely against you. In those circumstances, the party whose position is consistent with the clear legal principle will succeed no matter what factual controversies the other side might be able to create.