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Supreme Court Cases

Windsor (City) v. Canadian Transit Co. 2016 SCC 54

The Supreme Court of Canada ruled that the Federal Court does not have inherent jurisdiction:

To decide whether the Federal Court has jurisdiction over a claim, it is necessary to determine the essential nature or character of that claim. Determining the claim’s essential nature allows the court to assess whether it falls within the scope of s. 23 (c) of the Federal Courts Act , which grants jurisdiction to the Federal Court only when a claim for relief has been made, or a remedy has been sought, “under an Act of Parliament or otherwise”. ….

The Federal Court has only the jurisdiction it has been conferred by statute: it is a statutory court, without inherent jurisdiction. Accordingly, the language of the Federal Courts Act is completely determinative of the scope of the Court’s jurisdiction. Parliament established the Federal Court pursuant to its competence, under s. 101 of the Constitution Act, 1867 , to establish “additional Courts for the better Administration of the Laws of Canada”.

Windsor (City) v. Canadian Transit Co., 2016 SCC 54

Windsor (City) v. Canadian Transit Co.

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Categories
Rule of Law

Federal Court of Canada does not have inherent jurisdiction

The Supreme Court of Canada ruled that the Federal Court does not have inherent jurisdiction:

To decide whether the Federal Court has jurisdiction over a claim, it is necessary to determine the essential nature or character of that claim. Determining the claim’s essential nature allows the court to assess whether it falls within the scope of s. 23 (c) of the Federal Courts Act , which grants jurisdiction to the Federal Court only when a claim for relief has been made, or a remedy has been sought, “under an Act of Parliament or otherwise”. ….

The Federal Court has only the jurisdiction it has been conferred by statute: it is a statutory court, without inherent jurisdiction. Accordingly, the language of the Federal Courts Act  is completely determinative of the scope of the Court’s jurisdiction. Parliament established the Federal Court pursuant to its competence, under s. 101  of the Constitution Act, 1867 , to establish “additional Courts for the better Administration of the Laws of Canada”.

Windsor (City) v. Canadian Transit Co., 2016 SCC 54

Categories
Breach of Contract

eBay auction for Nike Foamposite shoes

eBay cancelled an auction for a pair of Nike Foamposite shoes when the top bid reached $98,000 CAD. eBay then became liable for the seller’s losses for cancelling the auction for no legitimate reason.

A Quebec Superior Court ordered eBay to pay the seller and his brother, the eBay account holder, $98,000 less the 10% eBay commission of $9800 and the current value of the shoes at $1500, for a total judgment of $86,700, for breach of contract damages, plus court costs.

The following judgment is an English translation of the French language judgment, as translated by Google:

Mofo Moko c. eBay Canada Ltd., 2016 QCCS 4669 (CanLII)

Date: 2016-09-23
dossier: 500-17-071900-123
reference: Mofo Moko c. eBay Canada Ltd., 2016 QCCS 4669 (CanLII) < http://canlii.ca/t/gtwdq >, accessed 2016-10-05
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Mofo Moko c. eBay Canada Ltd. 2016 QCCS 4669
JC2308

SUPERIOR COURT

CANADA
QUEBEC PROVINCE
DISTRICT MONTREAL
NOT : 500-17-071900-123
DATE: September 23, 2016
______________________________________________________________________
IN THE CHAIR: HONOURABLE CHANTAL CORRIVEAU, JCS
______________________________________________________________________
KEVIN MOFO MOKO

and

THIERRY SANDRIN MOFO MOKO

Plaintiffs
c.
eBAY CANADA LTD
Defendant
______________________________________________________________________
JUDGMENT
______________________________________________________________________

[ 1 ]            The plaintiffs, Kevin Mofo Moko ( ” Kevin “) and Thierry Sandrin Mofo Moko ( ”  Thierry “) [1] , claiming damages from eBay Canada Ltd. ( ” eBay “) following the withdrawal of their announcement set auction of a pair of shoes that have reached more than 300 times the purchase price.

[ 2 ]            eBay disputes the claim invoking the terms of his contract allowing him to withdraw an advertisement. In addition, it advocates the absence of privity because the shoes were purchased by one of the applicants, while the eBay account used was opened by another. Finally, it contends that the applicants have not proven their damage.

[ 3 ]            Shortly before Star game of “National Basketball Association” in February 2012, Thierry learns that Nike is preparing to market 1200 pairs of shoes Model “Air Foamposite Galaxy 1”. Forty pairs will be sold in a shop in Montreal.

[ 4 ]            Thierry decides to use the eBay site to resell for profit it will acquire a pair. On 21 February 2012, using the eBay account of his brother Kevin, with his consent and assistance, it places the ad [2] . It is selling a pair of shoes of the model cited by way of an auction that will close February 24, 2012 at 15:30. The following day, on February 22, braving the winter in Quebec, Cameroonian born starts queue in front of the Montreal store that will put the shoes on sale, about 30 hours later at midnight.

[ 5 ]            On 24 February 2012, a little after midnight, Thierry is one of the lucky buyers who purchases a pair of Nike “Air Foamposite Galaxy 1” at a cost of $ 280 plus taxes.

[ 6 ]            Back home, he consulted the early morning hours the site of the announcement on behalf of his brother and found to his amazement that the US $ 50 000 prize is offered for his shoes, while the the auction continues.

[ 7 ]            Later that day, an interested buyer contacts the on-site sales and offers to purchase directly the shoes for $ 80,000 US, off the eBay network [3] . An eBay message appears immediately on the announcement page recalling the prohibition to do so. Thierry complies with this directive and does not communicate with the potential buyer.

[ 8 ]            Shortly after, Thierry finds that the bid amount reached US $ 98,000 [4] .

[ 9 ]            About two hours before the close of the Auction, without notice, the page disappears. Kevin receives a message from eBay [5] stating that a problem has been detected and that the ad is removed. The message title refers to a violation of intellectual property. According to the notice, the withdrawal is due to the historic low of sale on the eBay account. Moreover, it is forbidden to place the ad again.

[ 10 ]         Thierry communicates with eBay by phone and the attendant tells him he can place the ad again, he does. He hands the announcement, including the same text and photo, this second auction is set up from 24 to 26 February 2012.

 

[ 11 ]         Thierry decides to withdraw the announcement before the end of the auction, when the offered price is 1 $ 500. Indeed, he believes that in order to pursue eBay damage, it shall retain the pair of shoes.

[ 12 ]         Thierry Kevin and eBay continue to have terminated the contract unilaterally. They demanded $ 98,000, which is the highest price recorded last to buy the shoes when the ad is removed by eBay without notice [6] .

[ 13 ]         In defense, eBay opposes seekers certain clauses of his contract: ” User Agreement “. She claims to have sole discretion to remove an ad and it does not make it liable for any damages whatsoever.

[ 14 ]         Applicants believe that the alleged termination clause is unenforceable against them.

[ 15 ]         Thus, the Tribunal must answer the following questions:

1)    Did the applicants the necessary interest to prosecute eBay?

2)    eBay she found that the plaintiffs have not met their contractual obligations?

3)    The implementation of the unilateral termination clause by eBay can it engage its responsibility to applicants?

4)    If so, what are the compensable damage?

———

1)   Did the applicants the necessary interest to prosecute eBay?

[ 16 ]         The eBay account used to place the ad is that of Kevin. Thierry owns shoes on sale.

[ 17 ]         The evidence Kevin agreed and participates in the development of the announcement. The brothers want to help their parents pay a claim concerning the family home they live with them.

[ 18 ]         The eBay policies do not prohibit this practice. A retainer may have been agreed between the two brothers.

 

 

[ 19 ]         Given the consent and participation of the applicants in the preparation of the announcement for the use of a single account and in the absence of contractual clauses prohibiting the Court concludes that the applicants have requisite interest against eBay.

2) eBay she found that the plaintiffs have not met their contractual obligations?

[ 20 ]         eBay tries to oppose several contractual clauses to the applicants, arguing that they have not complied with them. She pleads and have a valid reason to withdraw the ad without notice.

[ 21 ]         The Tribunal believes that the plaintiffs can not now be met clauses raised by eBay because they have not transgressed them.

[ 22 ]         The Tribunal below shows the contractual clauses raised by eBay and contained the ” User Agreement[7] .

  •       The clause prohibiting the transfer of account:

using eBay

While using eBay sites, services and tools, you will not:

(…)

transfer your eBay account (Including feedback) and User ID to Reviews another party without our consent;

[ 23 ]         The Tribunal has already provided in the previous section, there is no transfer of the eBay account, but a joint use, which is not prohibited by the policy. There is therefore no breach of this clause.

  •       Photo Selection for an ad on the site:

happy

(…)

For the convenience of sellers, we offer May catalogs of stock images, descriptions and product specifications are provided by That third party (Including eBay users). May you use catalog glad Solely in connection with your eBay listings During the time your listings are on eBay’s sites.

[ 24 ]         We will return later in the context of the analysis of the liability of eBay on the issue of choice of the photo, but it appears that the contractual policies of that permit the use of generic images ” stock image “.

  •       Reference to other eBay policies:

Additional Terms

The Following policies (…) are share of this Agreement and Provide additional terms and conditions related to specific services offert on the websites:

(…)

[ 25 ]         The title of a series of policies are listed and the site user can access by clicking on a hyperlink.

[ 26 ]         Despite this, eBay opposes seekers another policy that is not listed in the list entitled ” Additional Terms “, it is the “political SellingPractice Policy “.

[ 27 ]         The representative of eBay claims that all policies are found after each other. However, the documents produced before the Court do not show that.

[ 28 ]         It seems rather that the last policy to which we have just referred would be included in one of the policies available by hyperlink previously mentioned.

[ 29 ]         Furthermore, the applicants argue that this policy would be an external clause that their would be unenforceable. As for this question, the Tribunal did not respond to since in any case, he believes that the plaintiffs did not violate this policy.

[ 30 ]         Here are excerpts cited by eBay in the text ” Policy overview

Be safe to follow the guidelines in this policy. If you do not, your listings May be removed, and you May be subject to a Range of –other shares Including restrictions of your buying and selling privileges and suspension of your account. (…)

[ 31 ]         Counsel for eBay pleaded before the Court that the shoes sold by the plaintiffs are used goods. The proof, however, reveals that this new property acquired a few hours earlier, no used and offered in their original box. It would be absurd to pretend each time an individual sells a new well that is actually the sale of used goods. In addition, the terms of the contract eBay fail to support this argument.

 

  •       Object Photo on sale

[ 32 ]         Another invoked clause states:

What not to do (…)

You can not include pictures That do not Accurately Represent the item for sale.

[ 33 ]         The evidence is clear and the representative of eBay has acknowledged, the ad photo is indeed the shoes offered for sale and match their description or the “Nike Air Foamposite Galaxy 1”. Again, there are no elements that can be charged to applicants.

  •       Ownership of the property sold

[ 34 ]         As to the availability of goods on sale, eBay raises the clause:

Product availability

(…)

You must Ensure the items you’re Offering are in stock for the duration of the listing and are Delivered to the buyer, UNLESS the buyer Does not meet the terms of your listing.

[ 35 ]         In this case, eBay reproach applicants to have placed the ad before acquiring the shoes. However, before the close of the auction and before the withdrawal of the announcement, Thierry has in his possession the shoes for the product sold.

[ 36 ]         Pursuant to section 1713 C.cQ . The sale of another’s property is valid if the seller acquires ownership of the property seller, which is the case here.

[ 37 ]         Here, Thierry became owner of the property in time. The Tribunal believes that the sale could be achieved and that applicants meet the requirements of the aforementioned provision of the Civil Code of Québec .

[ 38 ]         In the Tribunal’s view, the applicants have contravened any of the policies mentioned in the document entitled ” Selling Practices Policy “.

[ 39 ]         Thus, the Tribunal finds that eBay has not established that the applicants have violated other clauses raised in its service contract “User agreement ” or some contractual obligation raised by eBay.

 

3) The implementation of the termination clause by eBay Can liability claimants face?

[ 40 ]         eBay attempts to evade responsibility by raising its service termination clause and that concerning its liability limit.

  •       service termination clause in case of misuse:

Abusing eBay

(…)

Without limiting –other remedy, we May limit, suspend or terminate our service and user accounts, Prohibit access to our websites and Their happy, services and tools, delay or remove hosted pleased, and take technical and legal steps to keep users off the yew websites we think That They are Creating problems or can legal liabilities, infringing the intellectual property rights of third parties or acting inconsistently with the letter or spirit of our policies (for example, and without limitation, policies related to shill bidding, Conducting off-eBay transactions, feedback manipulation, circumventing temporary or permanent suspension or users believe Who we are harassing our –other employed or users).Additionally, we May, in Appropriate Circumstances and at our discretion, suspend or terminate accounts of users Who May be repeat infringer of intellectual property rights of third parties. We also reserve the right to cancel unconfirmed accounts or accounts-have beens That inactive for a long time, to modify or discontinuous or eBay sites or services tools. [8]

[ 41 ]         At first glance, it is a discretionary clause that eBay could raise against the applicants. We will deal with the next section of the validity of this clause, in particular in view of the Consumer Protection Act [9] ( ”  LPC  “) which binds the parties in the file [10] as well as the rules inthe Civil Code Quebec [11] .

  •       limitation of liability clause:

Limitation of Liability

(…) We are not Involved in the actual transaction entre buyers and sellers. (…) We-have no control over and do not guarantee the quality, safety or Legality gold advertised items, the truth or accuracy of users’ content listings or, the Ability of sellers to sell items, the Ability of buyers to pay for items, That a buyer or seller will gold Actually Complete a transaction or return an item.

[ 42 ]         eBay invoked this clause to illustrate that it is only a platform that allows buyers and sellers to meet, a bit like a shopping center.

[ 43 ]         According to the title of the message sent to the owner of the site [12] , eBay alleges in its opinion justifying withdrawal of the announcement a problem of respect for intellectual property.

[ 44 ]         eBay representatives explained that in light of some 800 million listings that are found on eBay simultaneously, 100 000 new ads each day, it is impossible to evaluate them all.

[ 45 ]         A computer program detects, according to an undisclosed grid, ads that could be problematic. After the announcement indicated by the computer program of eBay, it is put on hold until it is brought to the attention of a sales consultant.

[ 46 ]         The advisor review and make a decision. In this case, someone decided that the ad was problematic was withdrawn and the above notice was sent by email.

[ 47 ]         The Tribunal must decide whether the termination clause may be applied to applicants. At the very least, the Court will consider whether the exercise of the clause was made of culpable or not.

[ 48 ]         Somewhat surprisingly, a research case law and foreign and Canadian doctrine gave few answers to this question [13] . As argued in the proceedings, the authorities found in the principle that eBay is a platform with little control over the obligations of potential buyers and sellers. The company declared not responsible for poor quality or non-delivery of goods sold as well as the non-payment of property acquired.

[ 49 ]         Moreover, the authorities report a supervision requirement that eBay must take reasonable measures to prevent fraud and the sale of counterfeit goods on its site.

[ 50 ]         According to an Australian doctrine of Article [14] who analyzed the legality of clauses in contracts eBay from various jurisdictions, the termination clause of the type applicable herein is not clearly unreasonable.

[ 51 ]         Thus, according to this study, it would be acceptable that eBay protects its users by excluding from its site some unscrupulous users.

[ 52 ]         Moreover, it would be unfair to withdraw an advertisement or suspend without adequate justification. Thus, the absence of reasonable notice could lead to liability of eBay.

[ 53 ]         We are in the presence of an adhesion contract within the meaning of Article 1379 C.cQ . and consumption according to Article 1384C.cQ . An unfair term may be canceled and therefore be declared unenforceable [15] in application of Article 1437 C.cQ .

[ 54 ]         The Article 11.3 LPC also applies to the review of the eBay termination clause:

11.3      A stipulation that a merchant reserves the right to unilaterally terminate a service contract involving sequential performance for a definite period except pursuant to Articles 1604 and 2126 of the Civil Code and, in the latter case, that in accordance with Article 2129 of the code.

A merchant who intends to cancel a successive performance contract of service of indefinite duration shall, if the consumer is in default to perform his obligation, submit a written notice at least 60 days before the date of termination.

[ 55 ]         This provision applies subject to the section 1604 C.cQ . which conditions are not met in this case. Moreover, the Court considers it necessary to examine whether eBay has, in the circumstances, fulfilled its obligations under the 2126 items and 2129 C.cQ . ending its service delivery to the place of the applicants, by withdrawing their ad for a bid without notice. The text of these provisions:

  1.  The contractor or service provider can not unilaterally terminate the contract for cause, and even then, it can not at an inopportune;otherwise, he is bound to repair the damage caused to the customer by the termination.

He is obliged, when terminates the contract, to do whatever is immediately necessary to prevent a loss.

  1.  The customer is obliged, upon termination of the contract, to pay to the contractor or service provider, in proportion to the agreed price, the actual costs and expenses, the value of work performed before the end of the contract or before the notice of termination and, if so, the value of goods supplied, where they can be returned to him and he can use them.

Contractor or service provider must, for its part, to repay any advances he has received in excess of what he has earned.

In either case, each party is liable for any damage that the other party may have suffered.

[ 56 ]         The termination clause gives eBay an almost limitless discretion. This clause can be implemented by eBay in the following circumstances: “… we May limit, suspend or terminate our services … If we think That They (user account) are Creating problems or can legal liabilities, infringing the intellectual property rights of third parts, or acting inconsistently with the letter or spirit of our policies … We also reserve the right to modify discontinuous gold … eBay sites, services or tools. ”

[ 57 ]         The authors L’Heureux and Lacoursière [16] :

  1. General – The provisions which reserve to the trader the right to determine unilaterally the arrival of a fact or consumer failure are prohibited (art. 11). The contract should clearly state all the facts and all the circumstances that determine it. (…)

[ 58 ]         The eBay termination clause is very vague and general. His writing is certainly not the happiest. According to the Court, this clause can be canceled since it gives discretion to terminate its offer same services without justification and therefore unenforceable against applicants.

[ 59 ]         As to the applicants, they believe that the implementation of this eBay termination clause caused them damage for which they claim compensation.

[ 60 ]         Let us now examine the implementation of the clause to the facts of this case. The opinion [17] issued by eBay after the withdrawal of the announcement indicates a violation of intellectual property and the historical low of the seller.

 

[ 61 ]         At the hearing, the representative of eBay added a third previously unknown reason, either the short duration of the auction. Finally, during the telephone call after removing the announcement, the attendant eBay would have raised that choosing a photo would create a doubt.

  1. i)          The violation of intellectual property

[ 62 ]         For the Court, there is no evidence of copyright infringement in this case. Aside from the title appearing on the notice issued following the withdrawal of the announcement, the evidence reveals no hint or link between an alleged violation of intellectual property and the withdrawal of the announcement. The title of the opinion seems unfounded and there is no evidence of such a breach.

  1. ii) Low historical

[ 63 ]         In the opinion, it is indicated as a ground for withdrawal announcement historic low seller.

[ 64 ]         The fact that the sale is initiated by a first user of eBay will not be charged to applicants. There is still always a first time for any new user of this site. This reason is not valid. For the Court, this is a pattern that can not justify a service contract terminated by the withdrawal of the announcement.

iii) bid Time

[ 65 ]         eBay reproach applicants to have placed the ad for the duration of three days.

[ 66 ]         The representative of eBay adds that in his experience, an ad will appear when suspect is a bid placed for only three days, the shortest period. Again, bids can be placed for a minimum of three days or for a longer period. The fact that applicants have chosen the short term can not be opposed them as a violation of policy. The three-day period is proposed by eBay to its clients.

  1. iv) photo

[ 67 ]         Finally, eBay accuses the applicants of using a generic picture.

[ 68 ]         On the eBay website, it is common to see the products for sale using a generic picture, this may not be a valid reason for termination.Indeed, one finds on the eBay site countless examples of using generic pictures ” stock photos ” used for the sale of goods. In addition, the contract clause ”  User Agreement  ” in the “content” above expressly permitted.

[ 69 ]         eBay recognizes that none of the previously discussed reasons not individually warrant termination. However, it maintains that the cumulative reasons is sufficient to justify such a decision and the withdrawal of the announcement.

[ 70 ]         In light of the analysis of the reasons given by eBay to terminate the service contract, the Tribunal believes that eBay has not established a valid reason for termination of his services.

[ 71 ]         None of the reasons given is found to be justified. Despite the extraordinary volume of ads that are active daily, in the case under study, eBay should at least suspend the announcement before canceling.

[ 72 ]         According to the evidence, there were still two hours before the end of the auction, a suspension would have been possible.Moreover, there was no attempt by eBay to communicate with applicants or at least with the plaintiff Kevin, registered user.

[ 73 ]         By choosing to do so, eBay is exposed, as in this case to be held responsible for damage caused by its unilateral action and unfounded untimely. In this case, the Tribunal finds that eBay has made a mistake by removing the announcement of applicants.

[ 74 ]         The Tribunal assesses in the next section the consequences of the lack of eBay at the site of the plaintiffs’ claim.

4) What are the compensable damage?

[ 75 ]         At the hearing, the plaintiffs amended their statement that their findings reflect their claim to $ 98,000. This amount corresponds to the bid entered when eBay withdrew the announcement of applicants.

[ 76 ]         These and assess their damage since the unilateral termination of the service contract by eBay has actually canceled the auction.They feel they have lost the chance to realize a gain.

[ 77 ]         They argue that the Court must assess their damage by assessing the loss of opportunities as developed by the Supreme Court inLaferrière v. Lawson [18] .

[ 78 ]         For them, the damage is not related to the value of the shoes. Moreover, since the applicants are still in possession of these, if the Tribunal considers it appropriate, they offer rely on eBay shoes or alternatively, they accept a deduction of the value of those they feel about 1 $ 200.

[ 79 ]         eBay disputes the claim for damages for several reasons. According to her, the applicants have not established that the purchase of shoes would be concluded at the price offered in the auction for $ 98,000.

[ 80 ]         Second, it alleges that the Tribunal must take into account the value of the shoes it believes $ 1 200 in the purpose of computing compensable damage.

[ 81 ]         Furthermore, it claims that since the plaintiffs have kept the shoes would require compensation to be established either deducted from the value that it evaluates for these purposes to $ 98,000 !!! …

[ 82 ]         It is everything and its opposite, trying to see clearly. To assess the damage, the Court should answer the following questions:

  1. he established the Plaintiffs have suffered a loss?
  2. Since the auction was canceled, applicants have they established that they were deprived of a gain of $ 98,000?
  3. Have the applicants mitigated their damage?

——–

  1. a) Applicants he established have a loss?

[ 83 ]         An injury may be compensated even if future. There must be certain or probable. In this case, the Tribunal assesses the evidence in order to compensate for the loss or, as in this case, the unrealized profit, and that, because of wrongdoing.

[ 84 ]         The loss must still be proved by a preponderance of the evidence.

[ 85 ]         In the case at bar, the fault is eBay have removed the announcement of applicants without reasonable cause, thereby ending the auction that would close two hours later.

[ 86 ]         The parties agree that at the time of withdrawal of the auction, it has reached $ 98,000.

[ 87 ]         According to the testimony of the representative of eBay in the last 12 hours before the end of an auction, a buyer offering is bound by its implementation very quickly unless he withdraws it by invoking a big mistake His part. This would apply, for example, if a buyer offering includes an additional figure posing a bet of a hundred dollars to a thousand dollars.

 

[ 88 ]         In addition to these exceptional cases, buyers applicants are bound by their offer.

[ 89 ]         Also, in response to another question from the Court, the representative of eBay says that if the last prospective buyer is dedicated to its offer, then there is a mechanism for the seller to conclude its sale with the preliminary last prospective buyer and so conclude its sale.

[ 90 ]         At the hearing, eBay has attempted to demonstrate the poor quality of applicants buyers who bet $ 80,000 and more for shoes applicants. She tried to show that these buyers have bad history with eBay, having withdrawn from bids made to acquire other goods on its site.

[ 91 ]         The Tribunal upheld the objection of the applicants and refused to admit the evidence announced late to the opposing party, a few days before the hearing.

[ 92 ]         eBay has also failed in its belated attempt to put in evidence at the hearing prices paid between 2012 and 2016 for shoes of the same model as those of applicants on its website. She hopes to demonstrate that these shoes traded on its site were for amounts less than $ 2,000.

[ 93 ]         Again, this evidence under its control, but announced just before the hearing, was not allowed by the Tribunal lateness.

[ 94 ]         The Court nevertheless considered that according to the policies included in the ” User Agreement ” eBay gives no guarantee for the completion of the purchase, the creditworthiness of the buyer, the quality of property purchased and the supply of goods by the seller.

[ 95 ]         This limitation of liability of eBay concerning relations between buyers and sellers do not exempt them from personal liability.

[ 96 ]         In this case, since the auction mechanism in place and that a buyer can not easily renege once the bet is housed together with the fact that if a buyer does not comply with his setting, it is possible for the next buyer to purchase the object, the Tribunal finds that there is a preponderance of evidence of a loss or an unrealized gain.

  1. b) Since the auction was canceled, applicants have they established that they were deprived of a gain of $ 98,000?

[ 97 ]         The plaintiffs believe their lost profits of $ 98,000, which is the highest setting when eBay has canceled his contract by withdrawing the ad.

[ 98 ]         eBay argues that the Tribunal should rather retain the value of shoes, about 1 $ 200. For these purposes, eBay relies on the testimony of his representative and the documentary evidence validly filed in the record of the Court.

[ 99 ]         Thus, once eBay withdrew the announcement of applicants, it shall advise the buyers being shown availability on its website other pairs of shoes with the same characteristics. These other shoes are then sold for amounts ranging from $ 170 to $ 3,200 according to the documentary evidence in the record [19] .

[ 100 ]      The Court did not accept this argument. We are here in a fault that caused the loss of a gain. It must be analyzed concretely, that is to say, on the evidence of the expected gain lost. Must still establish that the loss of profit is probable and not just potential.

[ 101 ]       The objective value of the shoes is not relevant. Through its website, eBay connects buyers and sellers engaged in an exercise of betting. This auction takes place in a specific context for fans of eBay. The seller is supposed to deliver the goods the buyer buys the offer price. This is an instant sales model, in this moment, happens between sellers and buyers interested in a particular ad, regardless of the property value, the availability of more expensive or less similar goods. It is therefore possible for an individual to sell at a loss or making a very big advantage as it is possible that a buyer make a good economy or pay way too much for a property. Thus, the supply and demand meet the interest arising from the sale of an object without any link to the economic value of the property.

[ 102 ]      For the Court, in this case, the loss of profit is $ 98,000 and not to the value of $ 1,200 Advanced eBay.

[ 103 ]      Should we deduct a certain amount to reflect the uncertainties due to the fact that it was possible that the last bidder is dedicated?

[ 104 ]      The evidence did not establish that the highest prospective buyer would show. According to Exhibit D-4, which illustrates all updates, we note that several potential buyers have made offers to acquire astronomical Shoes until the withdrawal of the announcement. Although eBay’s claims in its written defense, it was not argued at the hearing that auctions have a fireworks character ” shill bidding ” by manipulating bids from people who confer in order to raise auctions.

[ 105 ]      For these reasons, the Tribunal finds that the loss of profit is $ 98,000. Of this, we must subtract the commission due to eBay 10%.Thus, $ 9,800 must be subtracted, leaving a loss of profit 88 200 $.

  • Request amendment

[ 106 ]      At the very end of the hearing, the plaintiffs sought leave to amend their procedures again. They want and respond to the argument raised by eBay to the effect that the Court can not order compensation because the shoes remain in their possession.

[ 107 ]      The plaintiffs want to amend to include their findings in a bid to return the shoes to eBay.

[ 108 ]      eBay opposes the amendment contrary to the interests of justice, is not itself in the trade of selling some assets whatsoever. It maintains that the amendment is unnecessary.

[ 109 ]      The Court rejects the amendment as it is in no way helpful to the resolution of the dispute. Although the Tribunal had upheld, there would not follow, since eBay is not active in the direct sales business assets.

[ 110 ]      In the next section, the Tribunal assesses the obligation to mitigate.

  1. c) Have the applicants mitigated their damage?

[ 111 ]      By ending the second auction and still in possession of the shoes, the Tribunal should expect the value of profit, suffered by the plaintiffs?

[ 112 ]      Indeed, the victim must have an “active approach” against its loss [20] . It must minimize or mitigate its damage. It is recognized that the Supreme Court in Laflamme v.  Prudential-Bache Commodities Canada Ltd. :

The civil law requires the creditor the obligation to minimize damage. This obligation, now codified in art. 1479  C.cQ . , Requires the creditor to avoid the aggravation of risk “by taking steps allegedly taken under the same circumstances a reasonably prudent person” (Baudouin and Deslauriers, op. Cit. , n o  1256). It is therefore necessary to consider the circumstances of each situation in the assessment of what is the expected behavior of the creditor [21] .

[ 113 ]      This principle of jurisprudential origin is codified in section 1479  C.cQ . :

The person required to repair injury does not respond to the aggravation of the injury that the victim could avoid.

[ 114 ]      The Court of Appeal in Lebel v. 9067-1959 Québec inc. [22] recalls that under the obligation to mitigate the damage, the victim must take reasonable steps to prevent a worsening of damages [23] .

[ 115 ]      It adds that the obligation of the victim to mitigate his damages is an obligation of means according to an objective test. The latter is to review the conduct allegedly borrowed a reasonable person in the same circumstances [24] .

[ 116 ]      According to the authors Baudouin and Deslauriers [25] if an injured person does not take the necessary measures would have taken a reasonably prudent and diligent person in a similar situation, it seeks compensation may be scaled down.

[ 117 ]      However, as the authors remind Lluelles and Moore, note the limits of the duty to mitigate the damage, because you can not bear to make a victim too high or too demanding burden.

[ 118 ]      The Court must therefore assess the damage directly caused by the negligent.

[ 119 ]      In this case, the auction was halted while a buyer offered $ 98,000 to acquire them. The second auction initiated by the applicants after the cancellation of the first was stopped 24 hours before its maturity, while the price offered is 1 $ 500. eBay, as mentioned in the previous section, maintains that the shoes have a value of 1 200 $.

[ 120 ]      Taking into account that the applicants are still in possession of the shoes they can sell again, the Tribunal may reduce the amount of damage attributed to them according to the value of the shoes.

[ 121 ]      From $ 88 $ 200 sets in the previous section, under the principle to mitigate damages, given the interruption of the second auction and the fact that the applicants have retained the good they can always sell it should be reduced by $ 1,500 the amount of damages to be awarded.

[ 122 ]      Thus, the lost profit of $ 98,000 which must be deducted from the commission due to eBay 10%, leaving an amount reduced by 88 $ 200 1 $ 500.

[ 123 ]      Accordingly, the Tribunal awards damages to plaintiffs 86 $ 700.

FOR THESE REASONS, THE COURT:

[ 124 ] GRANTS in part the plaintiffs’ claim;

[ 125 ] CONDEMNS eBay Canada Ltd. payable to Kevin Mofo Mofo Moko Moko and Sandrin Thierry damages of $ 86 700, with the additional indemnity from issuance procedures;

[ 126 ] EVERYTHING with court costs against eBay Canada Ltd.

__________________________________

CHANTAL CORRIVEAU, JSC

Me Bruno Sasson
Allali Brault
Counsel for the applicants
Alexandre Thériault-Marois
Stikeman, Elliott
Counsel for the defendant
Hearing dates 10 and June 13, 2016

 

[1]    The Court now uses the first names of the applicants simply for brevity and no disrespect to them.

[2]    D-7.

[3]    P-6.

[4]    This is equivalent to that date in the amount of $ 97,882 CAD based on the exchange rate of the Bank of Canada on February 24, 2012. As the Canadian currency value is almost identical to the value of US divided the Court retains the figure of the claim as Canadian $ 98,000, or the equivalent amount in US currency.

[5]    P-8.

[6]    The conclusions of the plaintiffs’ claim was amended during the hearing.

[7]    P-10.

[8]    This is an excerpt of P-10 including binding contract. This document is dated March 5, 2012. eBay has produced a contract similar but not identical to D-2 which is dated November 9, 2012. So, P-10 is the one accepted by the Court, for more contemporary events of February 2012.

[9]    RLRQ, c. P-40.1 .

[10]    eBay Canada Ltd. v. Mofo Moko , 2013 QCCA 1912 (CanLII) .

[11]    RLRQ, c  CCQ-1991 .

[12]    P-8 MC999 eBay listing removed; Trademark Infringement Unauthorised-item (572 945 140).

[13]    Kanchana KARIYAWASAM and Scott GUY, “The Contractual Legalities of Buying and Selling on eBay: Online Auctions and the Protection of Consumers” (2008) 19JL Inf. & Sci. 42, 49; Mary M. CALKINS Alexei NIKITKOV, Vernon RICHARDSON, ‘Mine shafts on Treasure Island: A Relief Map of the eBay Fraud Landscape “(2008) vol. VIII, 1, 8 Pitt . J. Tech. L. & Pol’y 1, 4 and 24.

[14]    Dr. Christine Riefa, “An Empirical Study of Unfair Terms in Contracts Online Auction in the UK: Evidence of the Need for Better Enforcement Mechanisms” (2013-2014) 37 UW Austl. L. Rev. 1, p. 9-10.

[15]    Benedict Moore, “On the uncertain future of consumer contract” , The notebooks of law , (2008) Volume 49, p.  5; Nicole and Marc L’Heureux LACOURSIÈRE,Consumer Law , 6 th  ed., Cowansville, Yvon Blais, 2011, p. 72.

[16]    N. L’Heureux and Mr. LACOURSIÈRE, Consumer Law , 6th Edition, Cowansville, Yvon Blais, 2011, p. 77.

[17]    P-8.

[18]    [2001] 1 SCR 541 .

[19]    D-7 and D-14.

[20]    Benjamin Lehaire, “Chronicle – Three-dimensional analysis of the obligation to minimize damage in Quebec civil law” in Compass , July 2014 Civil law onlineEYB2014REP1478 .

[21]    Laflamme v. Prudential-Bache Commodities Canada Ltd ., 2000 SCC 26 (CanLII) , para. 52.

[22]    Lebel v. 9067-1959 Québec inc., 2014 QCCA 1309 (CanLII) .

[23]    Lebel v. 9067-1959 Québec inc. , 2014 QCCA 1309 (CanLII) , para. 44.

[24]    Gareau v. Brouillette, 2013 QCCA 969 (CanLII) , para. 39.

[25]    Jean-Louis Baudouin, Patrice Deslauriers and Benoit MOORE, Liability , 8 th Edition, Vol. 1, Cowansville, Yvon Blais, 2014, para. 1-624

Categories
Domain Names

Federal Court of Appeal Ignores the Rule of Law

The Federal Court did not follow the Ontario Property and Civil Rights Act in a dispute over the michaels.ca domain name.

The Federal Court of Appeal set a precedent, in Michaels v Michaels Stores Procurement Company Inc, eliminating the rule of law in Canada. The court said that the Court has jurisdiction to order any appropriate remedy known to common law or equity.  They ruled that they can make an order regarding the transfer of non-infringing property, such as domain names, using the Trade-marks Act.

A statutory basis for the order requiring delivery up of the domain name can also be found in subsection 20(2) of the Federal Courts Act (R.S.C. 1985, c. F-7), which gives the Court jurisdiction to order any appropriate remedy known to common law or equity: Merck v. Apotex, 2006 FCA 323 at para 123. 

[123] Section 20 [as am. by S.C. 1990, c. 37, s. 34] falls under the section of the FCA entitled “Jurisdiction of Federal Court” and is concerned with the Court’s jurisdiction to hear and decide intellectual property matters. Nothing therein suggests that it is intended to limit a judge’s creativity in fashioning appropriate remedies.

David Michaels has owned michaels.ca since February 2001. Michaels Inc will operate from davidmichaels.ca until the Supreme Court of Canada restores the rule of law in Canada and sets aside a Federal Court of Canada default judgment that ignored Ontario’s Property and Civil Rights Act and section 92(13) of the Constitution Acts, 1867.

A Delaware USA Business Trust applied to register the name Michaels in June 2001 as a trademark for retail store services for the sale of hobby, craft and picture framing materials, claiming use in Canada since 1984. There were not any stores called Michaels in Canada selling hobby, craft and picture framing materials before 1993. The Business Trust obtained the trademark registration in 2003. The Business Trust then sold its trademark portfolio to a trademark holding and procurement company, MSPCI.

Given that MSPCI misrepresented the date of first use in Canada, the rules of equity should have prevented MSPCI from getting anything in court. Instead, the court ordered the transfer of michaels.ca to MSPCI, without hearing any evidence from Mr. Michaels.

In 2006, Bain Capital acquired MSPCI and a Texas-based Michaels Stores Inc for $6 Billion USD. Some Michaels Arts & Craft Stores began operating as just “Michaels” in Canada in about 2011.

On January 20 2012, MSPCI offered David Michaels $100,000 for michaels.ca, which he turned down. MSPCI’s lawyers verbally agreed to not sue Mr. Michaels, if didn’t sell custom framing online at michaels.ca.

A classic case of Reverse Domain Name Hijacking (RDNH) happens when a company obtains a trademark after a domain is registered. It tries to buy the domain name it wants but fails. So it files a cybersquatting complaint in a Court or under the Canadian Domain Name Dispute Resolutions Policy (CDRP) or the UDRP.

In March 2014, MSPCI applied to register a Michaels signature trademark that looks like Mr. Michaels signature.

In April 2014, MSPCI sued Mr. Michaels to hijack michaels.ca using their trademark registered after Mr. Michaels registered michaels.ca. MSPCI got a default judgment in the Federal Court of Canada. The court didn’t allow Mr. Michaels to give any evidence at the default judgment hearing because he failed to file an affidavit in advance.

Rule of Law

The rule of law says that similar cases should be decided similarly, based on the law, and not based on which party a court likes better. The Federal Court didn’t care about the rule of law and it refused to follow a previously published decision saying that the court had no jurisdiction to hear cases regarding property, such as domain names.

When I suggested that if the Stratus Company did not like the content on davidstratus.com, or that it may just want the domain name for themselves, the Federal Court should not have jurisdiction to decide the matter. Surprisingly, Justice Stratus gave an animated response to defend himself. He said that if a federal court thought he should lose his domain name, the court would have the jurisdiction to order the transfer.

*********************Breaking News******************

The Supreme Court of Canada rules that the Federal Court does not have inherent jurisdiction:

To decide whether the Federal Court has jurisdiction over a claim, it is necessary to determine the essential nature or character of that claim. Determining the claim’s essential nature allows the court to assess whether it falls within the scope of s. 23 (c) of the Federal Courts Act , which grants jurisdiction to the Federal Court only when a claim for relief has been made, or a remedy has been sought, “under an Act of Parliament or otherwise”. ….

The Federal Court has only the jurisdiction it has been conferred by statute: it is a statutory court, without inherent jurisdiction. Accordingly, the language of the Federal Courts Act  is completely determinative of the scope of the Court’s jurisdiction. Parliament established the Federal Court pursuant to its competence, under s. 101  of the Constitution Act, 1867 , to establish “additional Courts for the better Administration of the Laws of Canada”.

Windsor (City) v. Canadian Transit Co., 2016 SCC 54

**************************************************

Courts should never decide cases based on which party it likes better.

Mr. Michaels hopes that the Federal Court or the Supreme Court will set aside the judgment MSPCI obtained by:

  • Asserting a trademark registration for the name Michaels that MSPCI obtained by fraud;
  • Misrepresenting facts; and
  • Using evidence manufactured by MSPCI’s lawyers in their witnesses’ affidavits.
  • Watch a video analyzing Google analytics that shows that MSPCI’s lawyers manufactured evidence at their offices for their witness’ affidavit sworn by Heather Morschauser: https://youtu.be/9gmZyMjeG1M
  • Carol Morris: https://youtu.be/h9Yi_xygnj4
  • Les Vass:  https://youtu.be/acF9apjo6ss
Mr. Michaels needs representation in a motion for leave to the Supreme Court of Canada to restore the rule of law in Canada. Giberts Law has said that they would do the motion for $20,000. I need the $20,000 by May 1, 2016. Donations are welcome: paypal.me/davidmichaels
Stay tuned for more updates. twitter.com/davidmichaels