Court dismisses statutory misrepresentation claim against credit union board in landmark decision

For the first time, the Ontario Superior Court of Justice released a decision that considered issues of statutory misrepresentation in an offering statement under the Credit Unions and Caisses Populaires Act, 1994[1] (Act). Polla v. Croatian (Toronto) Credit Union also provides extensive guidance on issues of directors’ and officers’ liability more generally. There is very limited jurisprudence in this area, and this landmark decision is expected to provide valuable guidance to boards and insurers on risk prevention. This insight provides a high-level overview of the decision.

Facts

The plaintiff, Ferdinando Polla (Polla), invested CA1 $5 million in the Croatian Credit Union (CCU) after the struggling credit union filed an offering statement in order to raise funds.

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Khalid v 2262351 Ontario Inc.: Third party discoverability grounded in reasonability

Introduction

In negligence-based actions, defendants routinely issue third party claims for contribution and indemnity to reduce their liability exposure. As a result, the plaintiff can commence a claim believing certain defendants to have caused the plaintiff’s loss, but, after successive third party claims, learn that several other persons might have contributed to the loss. To increase the prospect of recovery, the plaintiff often moves to add these third parties as defendants, long-after the impugned act or omission took place.

In these circumstances, third parties should consider whether to oppose a motion to be added as a defendant pursuant to section 21(1) of the Limitations Act, 2002:

21 (1) If a limitation period in respect of a claim against a person has expired, the claim shall not be pursued by adding the person as a party to any existing proceeding.

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Liability pitfalls and defences for Directors and Officers under federal and provincial cannabis legislation

Introduction

On October 17, 2018, the lion’s share of the federal Cannabis Act1 and the Ontario Cannabis Act20172 took legal effect, marking the legalization of non-medical cannabis across Canada, within defined limits. Directors and officers of federal and provincial corporations in the legal cannabis sector now operate in a new and dynamic regulatory climate.

As with any regulated industry, directors and officers should apprise themselves of the legal pitfalls in the post-legalization world, and liability insurers should prepare carefully for the potential risks that might shadow the cannabis market in its early days.

At a minimum, liability insurers should consider (a) new offences to which directors and officers are exposed, (b) what procedures are in place with respect to those offences, (c) what penalties might a director or officer be liable to pay, and (d) what defences are available, if any.

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Usanovic v. Penncorp Life Insurance Co.

Common law contract and principles require an insurer’s duty of good faith to an insured. The Ontario Court of Appeal (the “Court”) has recently confirmed that this duty does not include a general obligation to provide notice of an insured’s limitation periods and for bringing a coverage claim against the insurer.

The Court l has recently confirmed that where there is no statutory provision to the contrary, the window of time in which an individual can sue their insurer remains open for two years. In 2017, the Court held that insurance providers do not have a duty to inform insureds of pending limitation periods.

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Benefits of a well crafted release: Biancaniello v. DMCT LLP

A release is a contract that relieves one or more parties of future liability surrounding certain incidents. Parties often use releases in the context of settlements, to avoid future litigation in connection with the negotiations.

In the past, it has been uncertain how the courts will interpret the general language of standard form releases in the insurance context (i.e. it was not always clear whether broadly-worded releases would be enforceable against unforeseen claims). Recently, the Ontario Court of Appeal ( “Court”) provided some clarity on this subject. The Court held that express language is required to exclude claims that were not contemplated, provided that the language of the release is sufficiently broad.

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Defining parameters: Insurers duty to defend v. duty to indemnify

Practically every business and homeowner obtains insurance to protect themselves against losses to their property or business caused by an unforeseen event. However, sometimes when these events happen, both the insurers and insureds alike find themselves faced with the seminal question of whether such an event is covered by the insurance policy. Two most important aspects of an insurance policy when determining what is covered are: (i) The insurers duty to defend; and (ii) The insurers duty to indemnify. The duty to indemnify is the most common and known aspect of an insurance policy. This duty requires the insurer to pay for any judgment awarded to the third party against its insured, or any settlement that the parties may reach in lieu of judgment. Read more