A contract dispute, a breakdown between shareholders or a civil lawsuit can put your company, savings or reputation at risk. When the stakes are high, the first priority is to understand your position and take the steps that preserve your options.
Effective advocacy starts with a clear view of the evidence, the remedies available and the outcome that matters to you. Our civil litigation services and business and commercial litigation practice help clients address disputes with a strategy built around their circumstances.
Facing civil litigation in Ontario? Protect your position early
The decisions made at the beginning of a dispute can shape what happens next. Before sending a termination notice, signing a release or responding to a claim, gather the relevant documents and obtain advice about your obligations.
- Preserve the evidence. Keep contracts, amendments, invoices, financial records, emails and messages in their original form. Prepare a clear timeline and identify people with first-hand knowledge.
- Identify urgent deadlines. Court response dates, contractual notice requirements and limitation periods need immediate attention.
- Define a practical objective. Consider whether you need payment, protection against ongoing harm, an orderly business exit or a negotiated resolution that preserves a valuable relationship.
Ontario’s Limitations Act, 2002 generally provides a two-year period from discovery of a claim, subject to exceptions and other applicable rules. Discovery has a specific legal meaning. Do not assume that the deadline runs from the day you decide to sue, or that settlement discussions have stopped the clock.
Contract disputes involve both the agreement and the conduct
The written contract remains central. Its payment terms, termination rights, notice provisions and limits on liability can be decisive. The way the parties performed the agreement may also matter.
In Bhasin v. Hrynew, 2014 SCC 71, the Supreme Court of Canada recognized an organizing principle of good faith and a duty of honest contractual performance. Parties must not lie or knowingly mislead one another about matters directly connected to performing the contract.
C.M. Callow Inc. v. Zollinger, 2020 SCC 45, applied that duty to the exercise of a termination right. Meeting the contract’s notice requirement did not excuse conduct that knowingly misled the other party about whether the agreement would continue. Depending on the circumstances, misleading conduct can include half-truths or failing to correct a false impression created by one’s own conduct.
These decisions do not impose a general obligation to disclose every commercial intention or sacrifice your own interests. Nor does an ordinary breach-of-contract claim always require proof of dishonesty. A sound assessment identifies the particular obligation breached and the evidence supporting it.
Shareholder disputes require a careful assessment
Being excluded from a business you helped build can raise issues beyond a broken contract. For corporations governed by Ontario’s Business Corporations Act, section 248 provides an oppression remedy. For companies governed by the Canada Business Corporations Act, section 241 provides a corresponding remedy.
The analysis includes whether the claimant’s reasonable expectations were violated by conduct amounting to oppression, unfair prejudice or unfair disregard of a protected interest. The Supreme Court explained that framework in BCE Inc. v. 1976 Debentureholders, 2008 SCC 69. Shareholder agreements, corporate records and the history of the parties’ dealings can therefore be important. A disagreement or disappointing business result does not, by itself, establish oppression.
Choose a remedy that addresses the problem
A strong strategy connects the legal claim to a useful result. Depending on the facts and the applicable law, that may involve compensation, a declaration of rights, an injunction or a negotiated settlement.
Where immediate protection is needed, counsel can assess whether an interlocutory injunction under section 101 of the Courts of Justice Act is available. Such orders are discretionary and require evidence meeting the applicable legal test.
Specific performance, which requires a party to carry out a contractual obligation, is also discretionary. It is not an automatic response to a broken agreement. The adequacy of monetary compensation matters, as the Supreme Court discussed in Southcott Estates Inc. v. Toronto Catholic District School Board, 2012 SCC 51.
Prepare for court while evaluating settlement
Careful preparation supports both courtroom advocacy and informed negotiation. A focused demand letter, direct negotiations or mediation may resolve a dispute; other cases require a court determination. The right approach depends on the evidence, urgency, commercial realities and willingness of the parties to reach a workable agreement.
Costs also belong in that assessment. Under rule 57.01 of Ontario’s Rules of Civil Procedure, the court may consider the result, written settlement offers and the parties’ conduct when deciding costs. A strategy should therefore address potential recovery, legal expense and the risk of an adverse costs order.
Take the next step with Hashmi Law Group
If you are facing a contract, shareholder or other civil dispute, we can review the relevant documents, assess your options and discuss a practical way forward. Learn more about our civil litigation practice or contact Hashmi Law Group to arrange a consultation.
This article provides general information about Ontario law and is not legal advice. The appropriate steps depend on the facts, applicable law and deadlines in your matter. Reading this article or contacting the firm does not, by itself, create a solicitor-client relationship.
