Christopher McLeod

During an urgent conference, the respondent sought an adjournment of an upcoming motion and argued that the application should be converted into an action requiring pleadings and discoveries.

The court declined to adjourn the motion, noting the respondent had previously agreed to the motion date and had failed to comply with earlier court-ordered timelines or deliver responding materials.

The court held that any request to convert the proceeding into an action could be brought by way of a motion for directions but should not delay the scheduled motion hearing.

The court also confirmed that the applicants were entitled to examine a non-party under oath in relation to the pending motion.

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.