The appellants, life insurance companies, appealed a trial judgment finding that transactions involving their participating accounts to finance a corporate acquisition breached the Insurance Companies Act.
The Court of Appeal upheld the trial judge's findings that the transactions breached the Act by failing to comply with generally accepted accounting principles, improperly allocating expenses, and constituting prohibited transfers.
However, the Court allowed the appeal in part regarding the remedy, finding that the trial judge's order to return $390 million to the participating accounts via litigation trusts was overly broad and akin to an oppression remedy not available under the Act.
Instead, the Court ordered the transactions unwound as of the present, with adjustments for expense savings already received.