CANADA LAW AND PRACTICE Contributed by: Kevin West, Andrea Hill, Priya Ratti and Meryam Kellow, SkyLaw
Lochan v Binance Holdings The Court of Appeal of Ontario emphasised that standard-form “click” contracts that require users to accept numerous terms, including bur- densome arbitration clauses, can render such clauses invalid on the grounds of public policy or unconscionability. Businesses should carefully consider the structure of their arbitration claus- es, particularly with respect to forums and cost. 3.2 Significant Changes to Takeover Law Takeover Bid Amendments The last significant amendments to the takeover bid rules in Canada were implemented in 2016. These amendments included: • the extension of the minimum bid period from 35 days to 105 days (which may be short- ened in certain circumstances) to allow target boards adequate time to respond to hostile bids; • the introduction of a mandatory 50% mini- mum tender condition (at least 50% of the shares not already owned by the acquiror and its joint actors must be tendered before any shares can be taken up by the acquiror); and • a mandatory ten-day extension to the bid period if, at the end of the initial deposit period, all terms and conditions of the bid have been complied with or waived and the minimum tender requirement has been met. Securities regulators are inclined to strictly enforce these rules in order to promote predict- ability in the takeover bid regime. Exemptions and variations are rare.
rowed shares on the secondary market does not qualify as “distribution” . Mithaq Canada (Re) Following an attempted hostile takeover bid, the Ontario Capital Markets Tribunal held that while a private placement was a defensive response, it was permissible, due to the target’s need for financing. This case signals a more flexible stance on defensive tactics in Canada (even if they restrict shareholder choice during hostile takeovers) and indicates that defensive place- ments may make future takeover attempts more challenging. Achter Land & Cattle v South West Terminal The Saskatchewan Court of Appeal reinforced that although it is a highly fact-specific analysis, a thumbs-up emoji can constitute acceptance of a contract. Dr. C. Sims Dentistry v Cooke Following the sale of his practice, the seller went on to work at a competing practice, contrary to the non-competition clause. The Ontario Court of Appeal upheld the restrictive covenant and confirmed such provisions are intended to pro - tect the goodwill of the acquired business and, therefore, are deemed lawful unless shown to be unreasonable. Alternatively, in an employment context, courts will often find the same covenant overbroad and unenforceable. Dente v Delta Plus An Ontario court held that post-closing commu- nications between counsel and the sellers of a target corporation may be subject to joint privi - lege whereas during negotiations, such com- munications and documentation are privileged.
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