In a shareholders’ dispute involving a corporation operating casinos abroad, the applicant sought interim injunctive relief against a trustee holding shares as bare trustee for the applicant and another beneficial owner.
The trustee refused to transfer the shares, asserting the beneficial owners were defaulting shareholders under a shareholders’ agreement and therefore could not exercise shareholder rights.
Applying the test in RJR-MacDonald Inc. v. Canada (A.G.), the court found a serious issue to be tried regarding whether the trustee breached fiduciary duties by asserting personal shareholder rights in conflict with his obligations as trustee.
The court also found risk of irreparable harm if the trustee continued acting as though the beneficial owners had no rights.
Interim orders were granted restraining the trustee from exercising rights attached to the trust shares and directing cooperation among the shareholders to maintain ordinary course operations pending the hearing of the application.
