The applicant, a former officer of a municipally-owned utility corporation, sought indemnity and advancement of legal costs for his participation in a judicial inquiry investigating the sale of the utility's shares.
The respondent corporation denied the request, arguing the inquiry was not a proceeding that triggered the indemnity bylaw and that allegations of possible misconduct precluded advancement.
The court held that the inquiry was a proceeding under the bylaw and that section 136 of the Business Corporations Act provided discretionary authority to order advancement of costs.
The court ordered the respondent to advance the applicant's legal costs for the ongoing phase of the inquiry, subject to repayment if the applicant is ultimately found not to have acted honestly and in good faith.
