Ronald Smith

Following the sudden death of a successful furniture manufacturer, his common-law spouse and his daughters from a previous marriage engaged in extensive litigation.

The spouse, who operated her own furniture business from the same premises as the deceased's failing company, sued the daughters, the estate, and various professional advisors for breach of contract, civil conspiracy, and unlawful interference with economic relations after the deceased's company was placed into bankruptcy and her access to equipment was interrupted.

The court dismissed the conspiracy and interference claims, finding the defendants acted reasonably to manage the insolvency, but awarded the spouse $72,520 for breach of a handwritten lease and equipment agreement.

In related applications, the court upheld a change of life insurance beneficiary executed by the deceased before his death and enforced the terms of a cohabitation agreement, allowing the spouse to remain in the family home and ordering the estate to pay $84,106.25 for property maintenance and capital expenses.

The respondent, a judgment creditor of a deceased's estate and his company, brought an action claiming relief under the oppression remedy provisions of the Business Corporations Act.

The trial judge found that the transfer of the company's assets to other companies controlled by the deceased's widow, and the assumption of a mortgage, constituted oppression and ordered the appellants to pay the judgment debt.

On appeal, the Court of Appeal found that the trial judge misapprehended the evidence regarding the mortgage, which was a legitimate charge against the company's assets.

The Court also held that the respondent, as a contingent creditor, did not have a reasonable expectation that the company would be managed to ensure his debt was paid in priority to others, including tax authorities.

The appeal was allowed and the action dismissed.