Marcy McKee

The appellants appealed a summary judgment dismissing their action against the respondents.

The dispute arose from the exercise of a shotgun buy/sell provision in a unanimous shareholders' agreement.

The appellant alleged breach of fiduciary duty, theft of corporate opportunity, and other claims after learning the respondent financed the buyout by agreeing to transfer corporate properties to a lender.

The Court of Appeal dismissed the appeal, finding the motion judge applied the correct summary judgment test and correctly concluded that no fiduciary duty exists between shareholders exercising a shotgun provision, nor was there any appropriation of a corporate opportunity.

The appellant bank issued letters of credit to secure payment for shrimp supplied by the respondent to the bank's customer.

The letters of credit required delivery receipts as a precondition to payment.

The bank's customer failed to provide the receipts, and the bank used the proceeds from the sale of the shrimp to pay down the customer's line of credit instead of paying the respondent.

The Court of Appeal upheld the trial judge's finding that the bank was disentitled from relying on the defence of strict documentary compliance because it colluded with its customer to defeat the purpose of the letters of credit and breached its implied duty of good faith.