Canada: Gowlings Commercial Litigation Case Notes – December 2013

Aldo Group Inc v Moneris Solutions Corporation, 2013 ONCA 725 – privity of contract

Facts: In licensing and processing agreements between MasterCard, BMO and Moneris (a third-party credit card processor), MasterCard incorporated a forum clause in favour of New York State. Moneris & BMO contracted with Aldo, a shoe retailer, and that agreement included a choice of forum clause in favour of Ontario. Aldo was a victim of a cybercrime attack and brought an action against MasterCard asserting various tort claims.

MasterCard sought to enforce the New York forum clause and argued two main points:  1) Aldo's claim was essentially contractual and thus the New York forum clause was applicable; and 2) Aldo could only assert its claims as an equitable subrogee, and had to accept the original party's limitations including the forum clause. The motion judge rejected both arguments.

Held: Because of concurrent liability in contract and tort, a claim is not necessarily grounded in contract law even when it relates to a contractual relationship. Despite that the underlying conduct giving rise to Aldo's claim occurred in the context of a contractual relationship between MasterCard, BMO, and Moneris, MasterCard did not establish that this context transformed Aldo's pleading into an "essentially contractual" claim.

Since no privity of contract existed between MasterCard and Aldo, the New York choice of law clause was inapplicable. Furthermore, because Aldo's claim was not contractual, it did not require an exception to the doctrine of privity, such as equitable subrogation, in order to bring the claim against MasterCard. Aldo's claims against MasterCard were asserted as a stranger to the licensing and processing agreements, not as a subrogee; it need not wear any shoes but its own.

Trillium Power Wind Corporation v Ontario (Natural Resources), 2013 ONCA 683

Facts: Trillium's proposed wind power project was progressing under an Ontario provincial regulatory structure when all such projects were cancelled by the Province during a provincial election campaign. Trillium sought damages against the Province for breach of contract, unjust enrichment, taking without compensation (which it characterized as expropriation), negligent misrepresentation, misfeasance, and intentional infliction of economic harm. On a motion for summary judgment the action was dismissed on the basis that it did not disclose a reasonable cause of action. Trillium appealed.

Held: In granting the appeal, the Court of Appeal held that while core policy decisions are immune to suit, the exception is when governmental decisions are "taken in bad faith" (for example for the specific purpose of injuring someone, as alleged by Trillium). The Court reiterated the lower Court's finding that decisions based on public policy considerations are within the proper role of government and therefore immune to suit. It upheld the dismissal of all of Trillium's claims except its allegations of  misfeasance, specifically that the Province's decision to cancel the wind power program was targeted at Trillium to injure it by crippling its financial capacity.

The editor wishes to acknowledge the valuable contributions of Elka Dadmand to these case notes.

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