Emily Head

The appellant corporation sued three of its former directors and its secured lender for breach of duty leading to its bankruptcy.

The defendants successfully moved for an order requiring the corporation to advance their legal expenses incurred in defending the action.

The Court of Appeal upheld the motion judge's decision, finding that the corporation's by-laws, read in conjunction with s. 136 of the Business Corporations Act, made the advancement of legal costs mandatory for the former directors.

The court also upheld the finding that the loan agreement required advancement for the secured lender, and that the motion judge did not err in ordering payment prior to assessment under the Solicitors' Act.

The appellant appealed a trial decision ordering specific performance of an oral agreement to sell 100,000 shares of a private company to the respondent.

The appellant argued that no binding agreement was reached, that third-party approval was a condition precedent, and that specific performance was an inappropriate remedy.

The Court of Appeal dismissed the appeal, finding no palpable and overriding error in the trial judge's conclusion that an objective reasonable bystander would find the parties intended to contract based on securities industry custom.

The Court also upheld the specific performance order, noting the shares were unique and damages would be inadequate.

The appellant appealed a judgment regarding the interpretation of a corporate resolution related to a share purchase agreement.

Under the agreement, the appellant received an $800,000 reduction in the purchase price in exchange for a pre-closing dividend declaration in favour of the respondent.

The Court of Appeal dismissed the appeal, finding that the appellant's interpretation would allow it to enjoy both the reduced purchase price and full ownership of the warrants involved in the dividend, which was contrary to the parties' joint good faith commercial intentions.