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June 30, 1998 |
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| 448048 Ontario Inc. v. First United Real Estate Investors Inc. |
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448048 Ontario Inc., applicant (respondent), and First United Real Estate Investors Inc., Alain Checroune and 1428203 Ontario Limited, respondents (appellants) |
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[2005] O.J. No. 1614
Court File No. 13/05 |
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Ontario Superior Court of Justice
Divisional Court - Toronto, Ontario
G.D. Lane, J.R.R. Jennings and K.E. Swinton JJ. |
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Heard: April 5, 2005.
Judgment: April 25, 2005.
(28 paras.) |
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Kevin D. Sherkin, for the Applicant (Respondent)
Theodor Kerzner, Q.C., for the Respondents (Appellants) |
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Subject: Contracts; Corporate and Commercial; Torts; Insolvency; Civil Practice and Procedure
Debtors and creditors --- Fraudulent preferences -- General principles |
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| Oppression remedy under Ontario Business Corporations Act -- C was sole shareholder and director of F Inc. -- F Inc. agreed on November 11, 1999, to purchase one-half interest of 448 Inc. in property for $14 million -- F Inc. failed to close transaction by February 4, 2000, in accordance with its contractual obligation -- 448 Inc. commenced application against F Inc. on February 9, 2000 -- Pursuant to minutes of settlement, consent order was provided by court on February 9, 2000, whereby F Inc. was ordered to purchase 448 Inc.'s interest for $14 million with closing of June 30, 2000 -- F Inc. breached consent order by failing to close on June 30, 2000 -- 448 Inc. continued application, seeking as damages difference between stipulated purchase price of $14 million for 448 Inc.'s one-half interest and fair market value thereof -- Court found in favour of 448 Inc. -- F Inc. agreed to pay damages in amount of $1,075,000 -- On July 13, 2000, 13 days after breach of consent order, F Inc. sold property ("A property") at profit of $1,476,248.60 -- 448 Inc. successfully applied for declaration that C and F Inc. conducted themselves in fraudulent and oppressive manner by appropriating profit realized upon sale of A property -- F Inc. and C were jointly and severally liable to 448 Inc. for $1,476,248.60 -- F Inc. and C appealed -- Appeal dismissed -- Effect of C's conduct was to prevent 448 Inc. from executing its judgment -- No error on part of application judge in holding C and F Inc. liable for full amount of sum owing to 448 Inc. -- Application judge found that there had been oppression and s. 248(3) of Business Corporations Act empowers court, after finding oppression, to make any order "it thinks fit" -- Fact that proceeding was by way of application rather than by action was not fatal to application court's decision -- Matter involved interpretation of documentation and there were no credibility issues which required resolution by trial -- No error on part of application judge in awarding costs against C and F Inc. on substantial indemnity basis. |
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