The appellant signed a distributorship and membership agreement with a company that was never legally incorporated due to restrictions under the Ontario Business Corporations Act.
The respondent sued on a promissory note related to the agreement.
The trial judge initially dismissed the action, finding the contracting company was not a legal entity.
However, after allowing a motion to call further evidence, the trial judge reversed her decision, finding the unincorporated company and a similarly named incorporated company were the same entity.
The Court of Appeal allowed the appeal, holding that the trial judge erred in reversing her initial, well-reasoned decision based on inadequate clerical evidence.
The contract was formed with a non-legal entity and was therefore unenforceable.
