The plaintiffs sued the defendants for breach of a royalty agreement and promissory note following the winding-up of an investment fund.
The court found the defendants breached the royalty agreement by discontinuing payments after the fund's termination, as the agreement provided for a "proportionate continuation" of royalties if a significant amount of unitholders reinvested in successor funds.
However, the court rejected claims of bad faith and the necessity of an Independent Review Committee (IRC) referral for the winding-up decision.
Damages were awarded based on a modified calculation of the proportionate continuation of royalties, significantly less than sought by the plaintiffs.
