The slides include a summary of the following cases and statutory materials:

Privacy:

Cite Cards Canada Inc. v. Pleasance, 2011 ONCA 3

Leon’s Furniture Limited v. Alberta (Information and Privacy Commissioner), 2011 ABCA 94

State Farm Mutual Automobile Insurance Company v. Privacy Commissioner of Canada, 2010 FC 736

Nammo v. TransUnion of Canada Inc., 2010 FC 1284

Randall v. Nubodys Fitness Centres, 2010 FC 681

Stevens v. SNF Maritime Metal Inc., 2010 FC 1137

Vancouver (City) v Ward, 2010 SCC 27

Hannaford Bros. Co. Customer Data Security Breach Litigation 4 A.3d 492 (Sup, Ct. Me. 2010)

Paul v Providence Health System 240 P.3d 1110 (2010)

Doe 1 v. AOL LLC 719 F.Supp.2d 1102 (N.D.Cal. 2010)

LaCourt v. Specific Media, Inc. 2011 WL 1661532 (C.D.Cal. Apr. 28, 2011)

Claridge v. RockYou, Inc.  2011 WL 1361588 (N.D.cal. Apr. 11, 2011)

Jones v. Tsige, 2011 ONSC 1475

CTB v. News Group Newspapers Ltd & Anor [2011] EWHC 1326 (QB)

City of Ontario, Cal. v. Quon, 130 S. Ct. 2619

R. v. Cole, 2011 ONCA 218

U.S. v. Warshak 631 F.3d 266 (6th Cir. 2010)

FCC v. AT&T INC., 562 US__ (2011)

Holmes v. Petrovich Development Co. 191 Cal. App. 4th 1047

Bigstone v. St. Pierre, 2011 SKCA 34

Mosley v. UK (EU Ct. Human Rights) (10 May 2011)

Sparks v. Dubé, 2011 NBQB 40

Warman v. Wilkins-Fournier, 2011 ONSC 3023

Contracts and Electronic Agreements:

Seidel v. TELUS Communications Inc., 2011 SCC 15

AT&T Mobility LLC v. Conception, 2011 WL 1561956 (U.S. Sup. Ct. 2011)

Evans v. Linden Research, Inc., 2011 WL 339212 (E.D.Pa. 2011)

St-Arnaud v. Facebook Inc., 2011 QCCS 1506

Grosvenor v. Qwest Communications Intern., Inc., 2010 WL 3906253 (D. Colo. 2010)

Hoffman v. Supplements Togo Management, LLC, 2011 WL 1885675 (N.J.Super.A.D. 2011)

Roling v. E*Trade Securities, LLC, 756 F. Supp. 2d 1179 (N.D. Cal. 2010)

Patco Const. Co., Inc. v. People’s United Bank, 2011 WL 2174507 (D.Me. May 27, 2011)

Harold H. Huggins Realty, Inc. v. FNC, Inc., 575 F.Supp. 2d 696, 708 (D.Md. 2008) 

U.S. v. Nosal 2011 WL 1585600 (9th. Cir. Apr 28, 2011)

United Stats v. Rodriguez, 628 F. 3d 1258, (11th Cir. 2010)

Facebook, Inc. v. Power Ventures, Inc. 2010 WL 3291750 (N.D.cal.2010)

Naldi v. Grunberg, 908 N.Y.S.2d 639 (N.Y.A.D. 2010)

Golden Ocean Group Ltd. v Salgaocar Mining Industries PVT Ltd. & Anor [2011] EWHC 56 (Comm) (21 January 2011) 

Barwick v. Government Employee Ins. Co., Inc. 2011 Ark. 128 (Sup. Ct. Ark. 2011)

Distinct Fortune Ltd. v. Hyndland Investment Co. Ltd. [2010] HKEC 2013

Yazdani v. Canada (Citizenship and Immigration), 2010 FC 885

Contract and License Issues:

De Beers UK Ltd. v. Atos Origin It Services UK Ltd. [2010] EWHC 3276 (16 December 2010) 

Vernor v. Autodesk, Inc. 621 F.3d 1102 (9th Cir. 2010)

MDY Industries, LLC v Blizzard Entertainment, Inc. 2010 WL 5141269 (9th.Cir. 2010)

London Borough of Southwark v. IBM UK Ltd. [2011] EWHC 549 (17 March 2011) 

Agence France Presse v. Morel, 2011 WL 147718 (S.D.N.Y.2011)

Baidu, Inc. v. Register.com, Inc., 2010 WL 2900313 (S.D.N.Y.2010)

Facebook, Inc. v. Pacific NorthWest Software, Inc., 2011 WL 1843509 (9th Cir. 2011)

Patents and Trade-marks

Amazon.com, Inc. v. Attonrey General of Canada, 2010 FC 1011

Microsoft Crop. V I4I Limited Partnership 564 U.S. __ (2011)

Global-Tech Appliances, Inc. v. SEB S.A., 563 U.S. __ (2011)

Board of Trustees of Leland Stanford Junior University v. Roche Molecular Systems, Inc., 563 U.S. ___(2011)

Rosetta Stone Ltd. v. Google Inc., 730 F. Supp. 2d 531 (E.D. Vir. 2010)

Jurin v Google Inc., 2011 WL 572300 (E.D.Cal.2011)

Private Career Training Institutions Agency v. Vancouver Career College (Burnaby) Inc., 2010 BCSC 765 

Network Automation Inc. v Advanced Systems Concepts Inc, 638 F.3d 1137 (9th.Cir.2011)

Microsoft Corp. v. Shah, 2011 WL 108954 (W.D.Wash. 2011)

Masterpiece Inc. v. Alavida Lifestyles Inc., 2011 SCC 27

Copyright:

Sirius Canada Inc. v. CMRRA/SODRAC, 2010 FCA 348

Harmony Consulting Ltd. v. G.A. Foss Transport Ltd., 2011 FC 340

Telstra Corporation Limited v. Phone Directories Company Pty Ltd. [2010] FCAFC 149 (15 December 2010)

Acohs Pty Ltd. v. Ucorp Pty Ltd. [2010] FCA 577 (10 June 2010)

Roadshow Films Pty Ltd. v  iiNet Limited, [2011] FCAFC 23

REFERENCE for a preliminary ruling from the Nejvyšší správní soud (Czech Republic) ECJ 22 December, 2010

SAS Institute Inc. v. World Programming Ltd. [2010] EWHC 1829 (Ch) (23 July 2010) 

SAS Institute Inc v World Programming Ltd [2010] EWHC 3012 (Ch) (22 November 2010) 

The Newspaper Licensing Agency Ltd. v. Meltwater Holding BV [2010] EWHC 3099 (Ch) (26 November 2010) 

La société Des Auteurs des Arts Visuels et de L’image Fixe Visual Auteurs (SAIF) v. Google France  S.A.R.L. and Google Inc., Paris Court of Appeal, Jan. 26, 2011

Google v Copiepresse et al, Brussels Court of Appeal (9th Chamber) May 5, 2011

Media C.A.T. Ltd. v. A [2010] EWPCC 17 (01 December 2010) 

The Authors Guild et al v. Google Inc.  2011 WL 986049 (S.D.N.Y. 2011)

US v. ASCAP, 2010 WL 3749292 (2nd. Cir. Sept. 28, 2010)

Kernal Records Oy v. Mosley,  2011 WL 2223422 (S.D.Fla. Jun. 7, 2011)

Seng-Tiong Ho v. Taflove, 2011 WL 2175878 (7th.Cir, 2011)

The Supreme Court had considered on several previous occasions the effect of a fundamental breach on limitations of liability terms. In Hunter Engineering Co. v. Syncrude Canada Ltd., 1989 CanLII 129 (S.C.C.), [1989] 1 S.C.R. 426, Dickson C.J. observed that the doctrine of fundamental breach had “spawned a host of difficulties”, the most obvious being the difficulty in determining whether a particular breach is fundamental.  The doctrine obliged the parties to engage in “games of characterization” which distracted from the real question of what agreement the parties themselves intended.  Accordingly, in his view, the doctrine should be “laid to rest”.  The situations in which the doctrine is invoked could be addressed more directly and effectively through the doctrine of “unconscionability”.

Wilson J. (concurring) disagreed.  In her view, the courts retain some residual discretion to refuse to enforce exclusion clauses in cases of fundamental breach where the doctrine of pre-breach unconscionability did not apply. Wilson J. considered it more desirable to develop through the common law a post-breach analysis seeking a “balance between the obvious desirability of allowing the parties to make their own bargains … and the obvious undesirability of having the courts used to enforce bargains in favour of parties who are totally repudiating such bargains themselves”.

Last week in Tercon Contractors Ltd. v. British Columbia, 2010 SCC  4 the Supreme Court sided with Dickson C.J and decided to lay to rest the doctrine of fundamental breach applied to limitation and disclaimers of liability. Although the Court split on the facts before the Court, all members of the Court agreed on the methodology to be applied in assessing the enforceability of a contract disclaimer. The test was set out by Binnie j., as follows:

“The present state of the law, in summary, requires a series of enquiries to be addressed when a plaintiff seeks to escape the effect of an exclusion clause or other contractual terms to which it had previously agreed.

The first issue, of course, is whether as a matter of interpretation the exclusion clause even applies to the circumstances established in evidence. This will depend on the Court’s assessment of the intention of the parties as expressed in the contract. If the exclusion clause does not apply, there is obviously no need to proceed further with this analysis. If the exclusion clause applies, the second issue is whether the exclusion clause was unconscionable at the time the contract was made, “as might arise from situations of unequal bargaining power between the parties” (Hunter, at p. 462).  This second issue has to do with contract formation, not breach.

If the exclusion clause is held to be valid and applicable, the Court may undertake a third enquiry, namely whether the Court should nevertheless refuse to enforce the valid exclusion clause because of the existence of an overriding public policy, proof of which lies on the party seeking to avoid enforcement of the clause, that outweighs the very strong public interest in the enforcement of contracts.”

It is apparent from the decision that henceforth, parties seeking to avoid contractual limitations of liability will have to find the clause inapplicable based on its limited intended scope, or by pointing to some paramount consideration of public policy sufficient to override the public interest in freedom of contact that would defeat what would otherwise be the contractual rights of the parties.  Binnie J, gave some examples of what might fall within the public policy exception:

“As Duff C.J. recognized, freedom of contract will often, but not always, trump other societal values.  The residual power of a court to decline enforcement exists but, in the interest of certainty and stability of contractual relations, it will rarely be exercised.  Duff C.J. adopted the view that public policy “should be invoked only in clear cases in which the harm to the public is substantially incontestable, and does not depend upon the idiosyncratic inferences of a few judicial minds” (p. 7).  While he was referring to public policy considerations pertaining to the nature of the entire contract, I accept that there may be well-accepted public policy considerations that relate directly to the nature of the breach, and thus trigger the court’s narrow jurisdiction to give relief against an exclusion clause.

There are cases where the exercise of what Professor Waddams calls the “ultimate power” to refuse to enforce a contract may be justified, even in the commercial context.  Freedom of contract, like any freedom, may be abused.  Take the case of the milk supplier who adulterates its baby formula with a toxic compound to increase its profitability at the cost of sick or dead babies.  In China, such people were shot.  In Canada, should the courts give effect to a contractual clause excluding civil liability in such a situation?  I do not think so.  Then there are the people, also fortunately resident elsewhere, who recklessly sold toxic cooking oil to unsuspecting consumers, creating a public health crisis of enormous magnitude.  Should the courts enforce an exclusion clause to eliminate contractual liability for the resulting losses in such circumstances?  The answer is no, but the contract breaker’s conduct need not rise to the level of criminality or fraud to justify a finding of abuse.

A less extreme example in the commercial context is Plas-Tex Canada Ltd. v. Dow Chemical of Canada Ltd., 2004 ABCA 309, 245 D.L.R. (4th) 650.  The Alberta Court of Appeal refused to enforce an exclusion clause where the defendant Dow knowingly supplied defective plastic resin to a customer who used it to fabricate natural gas pipelines.  Instead of disclosing its prior knowledge of the defect to the buyer, Dow chose to try to protect itself by relying upon limitation of liability clauses in its sales contracts.  After some years, the pipelines began to degrade, with considerable damage to property and risk to human health from leaks and explosions.  The court concluded that “a party to a contract will not be permitted to engage in unconscionable conduct secure in the knowledge that no liability can be imposed upon it because of an exclusionary clause” (para. 53).  (See also McCamus, at p. 774, and Hall, at p. 243).  What was demonstrated in Plas-Tex was that the defendant Dow was so contemptuous of its contractual obligation and reckless as to the consequences of the breach as to forfeit the assistance of the court.  The public policy that favours freedom of contract was outweighed by the public policy that seeks to curb its abuse.

Conduct approaching serious criminality or egregious fraud are but examples of well-accepted and “substantially incontestable” considerations of public policy that may override the countervailing public policy that favours freedom of contract.  Where this type of misconduct is reflected in the breach of contract, all of the circumstances should be examined very carefully by the court.  Such misconduct may disable the defendant from hiding behind the exclusion clause.  But a plaintiff who seeks to avoid the effect of an exclusion clause must identify the overriding public policy that it says outweighs the public interest in the enforcement of the contract.  In the present case, for the reasons discussed below, I do not believe Tercon has identified a relevant public policy that fulfills this requirement.”

It seems clear from his remarks that the public policy threshold is a high one. On the facts of the case, it was accepted that the respondent, the BC government, had acted in an unfair manner and contrary to required standards for tendering public sector contracts. However, Binnie J., made it clear that even breaching an implied duty of fairness in such contracts would not be enough to reach this threshold:

“If the exclusion clause is not invalid from the outset, I do not believe the Ministry’s performance can be characterized as so aberrant as to forfeit the protection of the contractual exclusion clause on the basis of some overriding public policy.  While there is a public interest in a fair and transparent tendering process, it cannot be ratcheted up to defeat the enforcement of Contract A in this case.  There was an RFP process and Tercon participated in it.

Assertions of ineligible bidders and ineligible bids are the bread and butter of construction litigation.  If a claim to defeat the exclusion clause succeeds here on the basis that the owner selected a joint venture consisting of an eligible bidder with an ineligible bidder, so also by a parity of reasoning should an exclusion clause be set aside if the owner accepted a bid ineligible on other grounds.  There would be little room left for the exclusion clause to operate.  A more sensible and realistic view is that the parties here expected, even if they didn’t like it, that the exclusion of compensation clause would operate even where the eligibility criteria in respect of the bid (including the bidder) were not complied with.”

Recent issue posted @ http://mccarthy.ca/pubs/TLQ_Vol5_Issue3_E_online.pdf. Covers recent developments in Internet, e-commerce, tech M&A, tech contracting,  IP, privacy and communications.