The plaintiffs, former executives and shareholders of Med-Eng, sued the company and its directors for oppressive conduct regarding a share repurchase.
After Med-Eng was acquired by Allen-Vanguard, the plaintiffs commenced a new action against the original defendants and added defendants (the acquirer, offeree shareholders, and escrow agent), seeking a constructive trust over an escrow fund.
The motions judge struck the new action as an abuse of process and for disclosing no reasonable cause of action against the added defendants.
The Court of Appeal dismissed the appeal, finding the new action circumvented the rules for amending pleadings and adding parties, and that no cause of action in unjust enrichment, breach of fiduciary duty, or resulting trust was pleaded against the added defendants.
