Gregory N. Hemsworth

The appellant, a corporate director, appealed a decision finding him personally liable under s. 248 of the OBCA for a corporate debt owed to the respondent for fresh produce.

The Divisional Court allowed the appeal, finding that while the appellant was a director, there was no evidence he exercised his powers in an oppressive or unfairly prejudicial manner.

A related appeal from a decision refusing to set aside the original order on the basis of mistake was dismissed.

The appellant appealed an order dismissing his motion to set aside a default judgment and for leave to deliver a statement of defence.

The motions judge had dismissed the motion on the basis that it was a collateral attack on a final order and should have been appealed to the Divisional Court.

The Court of Appeal held that the motions judge erred in finding he lacked jurisdiction, as the proper remedy to set aside a default judgment is under Rule 19.08.

However, the Court of Appeal declined to set aside the default judgment, finding that the appellant failed to put forward a good defence on the merits due to an entire agreement clause in the personal indemnity he signed.

The appeal was dismissed.

On an appeal from summary judgment in a construction trust case, the court held that rents received by a commercial landlord after certification of substantial performance were trust funds under s. 7(3) of the Construction Lien Act until the unpaid contractor was paid.

The court rejected the argument that rent used for operating expenses, taxes, utilities, and mortgage payments fell outside the statutory trust or that only profits were captured.

The sole officer, director, controlling mind, and signing officer was personally liable under s. 13 because he at least reasonably ought to have known of the breach.

Relief under s. 35 of the Trustee Act was unavailable, although the prejudgment interest rate against the individual appellant was varied from the contractual rate to the rate under the Courts of Justice Act.