Kevin A. Johnson

The appellant, Interhealth Canada Limited, appealed a trial decision dismissing its claims against its former CEO, Michael O’Keefe, and Canadian Hospitals Network International Inc. (CHNI) for breach of fiduciary duty and diversion of corporate opportunities.

The appellant alleged O’Keefe diverted two maturing opportunities (HIH Opportunity and Cromwell Opportunity) to CHNI after his resignation.

The appeal also raised process-related issues, including a "trial by stopwatch" and the dismissal of a recall motion.

The Court of Appeal dismissed the appeal, upholding the trial judge's findings that the opportunities did not fairly belong to the appellant and were fundamentally different from those the appellant pursued.

The court also found no prejudice from the trial management and upheld the recall motion dismissal.

The plaintiff corporation sued its former CEO and director, alleging he breached his fiduciary duties by resigning to usurp lucrative hospital management opportunities in London and Abu Dhabi for his own benefit through a new corporate entity.

Following a four-week trial, the court dismissed the action, finding that the opportunities in question were not mature, were not in the plaintiff's direct line of business, and were not available to the plaintiff due to a lack of trust from the contracting parties.

The court concluded that the opportunities arose from the defendant's personal relationships and professional reputation, and therefore did not fairly belong to the plaintiff.

The defendant brought a motion seeking to discharge a certificate of pending litigation registered against disputed lands, to require the plaintiff to pay $300,000 into court in exchange for the certificate, and to compel answers and undertakings arising from examinations for discovery.

Due to time constraints, the motion proceeded only on the refusals and undertakings issues.

The court reviewed the disputed discovery questions and ordered several further and better answers, production of the plaintiff’s current insurance policy, and additional itemized responses regarding claimed expenditures and work performed on the property.

Some requests were found premature, while others required re‑attendance at discovery.

The balance of the relief sought was adjourned to a later date, with costs reserved.