G. James Thorlakson

This decision addresses the terms of a court-ordered buy-sell process between two dental practice shareholders following a deadlock.

The court determined that it would not fix the value of the dental practice for the buy-sell notice and rejected the applicant's request for a price reduction based on the respondent's role as the working dentist.

The court found that the parties' negotiated draft shareholders' agreement, which included differential non-competition provisions, adequately protected the applicant's interests.

The final buy-sell notice was approved with only the purchase prices to be inserted by each party.

The appellant, a judgment creditor, appealed the dismissal of its application seeking a declaration of fraudulent conveyance and damages for unlawful conduct conspiracy against the respondents.

The appellant alleged that the transfer of shares by the debtor to Capital Dentistry Group Limited was a fraudulent conveyance and part of an unlawful conspiracy.

The Court of Appeal upheld the application judge's finding that there was no fraudulent intent, noting that the transaction was initiated by an arm's length party, structured consistently with past deals, and occurred as part of a larger acquisition.

As fraudulent intent was not established, the essential element of unlawful conduct for the conspiracy claim failed.

The appeal was dismissed, and costs were awarded to the respondents.

This case involved an application by two dentists seeking a one-third interest in a dental corporation, damages, and remedies for alleged partnership, breach of agreement, oppression, and unjust enrichment against a third dentist and her professional corporation.

The court found no partnership existed, the agreement for the applicant to acquire shares was conditional and unfulfilled by the applicant, and there was no oppressive conduct or unjust enrichment by the respondent.

However, the court did find the dental corporation to be in a deadlock between the two remaining shareholders and ordered a buy-sell arrangement as a just and equitable remedy under the Business Corporations Act, with the court retaining jurisdiction to determine specific terms if the parties cannot agree.

The applicant, a judgment creditor owed over $1.5 million by the respondent dentist, brought an application alleging that the respondent and others conspired to fraudulently convey his interest in several dental practices to a third-party corporation.

The applicant sought damages and a declaration that the sale was a conspiracy by unlawful means.

The court dismissed the application, finding that the sale was initiated by an arm's-length purchaser prior to the judgment, the consideration was consistent with standard industry practices, and there was no intent to defeat, hinder, delay, or defraud the applicant.

Following a successful motion for a disclosure order against the defendants in the context of a judgment debtor examination, the plaintiff sought costs on a substantial indemnity basis.

The court found that the defendants' conduct, including refusing to answer relevant questions, delivering unhelpful answers on the eve of the hearing, and frustrating the plaintiff's attempts to execute its judgment, justified an elevated costs award.

The plaintiff was awarded substantial indemnity costs of $13,954.

The plaintiff, 6071376 Canada Inc., sought an order to compel the defendants, 3966305 Canada Inc. and Mahmood Khedmatgozar, to disclose records to assist in the execution of a $1.19 million judgment.

The defendants had failed to provide adequate answers to undertakings and advisements from a previous judgment debtor examination.

The court granted broad disclosure orders, compelling the defendants to answer all questions, including those previously refused or taken under advisement, and to produce extensive financial records dating back to 2012, emphasizing the debtor's obligation for full and frank disclosure.

A request for immediate transfer of funds held in trust was denied due to lack of evidence.

The plaintiff, 6071376 Canada Inc., invested 40% of the closing funds for a commercial property (the "Hull Project") in exchange for 40% of its net income and net value upon sale.

Title was held by defendant 3966305 Canada Inc., whose sole director and shareholder was defendant Mahmood Khedmatgozar.

Mahmood sold the property without the plaintiff's knowledge, using the proceeds to purchase another property, and repeatedly lied to the plaintiff about the project's status for over six years.

The court found that the defendants owed fiduciary duties to the plaintiff and that Mahmood was personally liable due to piercing the corporate veil, having used 3966305 Canada Inc. as his alter ego to misappropriate funds.

The plaintiff was awarded 40% of the Hull Project's net sale proceeds and net rental profits, plus prejudgment interest.

The defendants' limitation defence was rejected.

Mahmood was ordered to pay $200,000 in punitive damages for his outrageous and reprehensible conduct.