Investors and shareholders brought an ex parte application seeking the appointment of an inspector under s. 161 of the Ontario Business Corporations Act and s. 229 of the Canada Business Corporations Act to investigate the affairs of several corporations controlled by the principal respondent.
The applicants alleged that funds invested in real estate developments and investment pools were diverted among affiliated corporations and used for unrelated purposes, including renovations of a Florida property.
The court declined to grant an Anton Piller or preservation order due to insufficient evidence that documents would be destroyed or concealed.
However, the court found a prima facie case that corporate funds had been diverted and that the affairs of certain corporations may have been conducted in a manner oppressive or unfairly prejudicial to security holders.
An interim order was granted appointing an inspector to investigate specific corporations pending the return of the application.