David Kelman

The appellant, Interhealth Canada Limited, appealed a trial decision dismissing its claims against its former CEO, Michael O’Keefe, and Canadian Hospitals Network International Inc. (CHNI) for breach of fiduciary duty and diversion of corporate opportunities.

The appellant alleged O’Keefe diverted two maturing opportunities (HIH Opportunity and Cromwell Opportunity) to CHNI after his resignation.

The appeal also raised process-related issues, including a "trial by stopwatch" and the dismissal of a recall motion.

The Court of Appeal dismissed the appeal, upholding the trial judge's findings that the opportunities did not fairly belong to the appellant and were fundamentally different from those the appellant pursued.

The court also found no prejudice from the trial management and upheld the recall motion dismissal.

The plaintiff, Shanghai Lianyin Investment Co., Ltd. (SLIC), brought a motion for an interim preservation order under Rule 45.01(1) of the Rules of Civil Procedure concerning two Ontario properties registered in the name of the defendant Lichun Guo, alleging they were held in resulting trust for her husband, Charles Lu, against whom SLIC held a CAD$233 million arbitral award.

Concurrently, Ms. Guo brought a cross-motion for security for costs.

The court dismissed SLIC's preservation order motion, ruling that Rule 45.01 is not the appropriate mechanism for preventing asset dissipation before judgment where the plaintiff does not assert a legal right to the specific assets, but rather seeks to satisfy a general monetary judgment.

Such relief requires meeting the stricter test for a Mareva injunction or a certificate of pending litigation.

The court granted Ms. Guo's motion for security for costs, finding that SLIC, as an out-of-province corporation with insufficient Ontario assets, did not demonstrate a "good chance of success" on the merits of its complex resulting trust claim, particularly given the unsettled legal question in Ontario regarding a creditor's ability to enforce a judgment against property held by a spouse in resulting trust without an allegation of fraudulent conveyance.

The plaintiff corporation sued its former CEO and director, alleging he breached his fiduciary duties by resigning to usurp lucrative hospital management opportunities in London and Abu Dhabi for his own benefit through a new corporate entity.

Following a four-week trial, the court dismissed the action, finding that the opportunities in question were not mature, were not in the plaintiff's direct line of business, and were not available to the plaintiff due to a lack of trust from the contracting parties.

The court concluded that the opportunities arose from the defendant's personal relationships and professional reputation, and therefore did not fairly belong to the plaintiff.

The applicant, a former majority shareholder who now holds a negligible amount of shares, sought leave nunc pro tunc to commence a derivative action on behalf of the respondent pharmaceutical corporation against its directors.

The applicant alleged mismanagement and breach of fiduciary duties, seeking damages for trading losses he suffered when selling his shares.

The court dismissed the motion, finding that the applicant could not use a derivative action to recover personal trading losses.

Furthermore, the court held that the action was not in the best interests of the corporation, as it would divert limited financial resources and management time, and lacked support from any current shareholders.