Mr. Holervich

The applicants, directors and majority shareholders of two corporations, sought an order that the corporations indemnify them for legal costs incurred in a winding-up application and a related action.

The respondents opposed the motion, arguing the applicants did not act honestly and in good faith.

The court found the applicants acted honestly and in good faith with a view to the best interests of the corporations, despite the respondents' active opposition to the winding-up.

The court granted the motion, ordering the corporations to indemnify the applicants for their reasonable legal costs, less unbilled amounts and costs thrown away, and awarded costs of the motion to the applicants.

A trial of an issue was directed to determine the ownership of two skidders between the estate of the deceased and the respondent.

The respondent claimed ownership of one skidder as a gift and an interest in the other via a mechanics lien.

The court found the respondent had no interest in the first skidder due to a failure to register a lien, making it an estate asset.

However, the court accepted corroborated testimony from a beneficiary that the second skidder was gifted to the respondent prior to the deceased's death, satisfying section 13 of the Evidence Act.

The second skidder was declared the property of the respondent.

The plaintiffs brought a motion for leave to appeal an interlocutory order that declined to appoint independent counsel for the corporate plaintiff in a shareholder dispute.

The court found that the moving parties failed to establish conflicting decisions or good reason to doubt the correctness of the order.

The motion for leave to appeal was dismissed with costs.

In a corporate governance dispute among shareholders and directors of closely held corporations, the individual plaintiffs moved for an order appointing independent counsel to oversee and control the corporate plaintiffs.

The applicants argued that independent counsel was necessary to represent the corporations’ interests where conflicts existed between shareholders and directors.

The court held that appointing independent counsel would add cost and delay while providing no practical benefit, particularly because the corporate claims had been stayed and any counsel would require instructions from directors who were defendants in the litigation.

The court concluded that such counsel would face an unavoidable conflict of interest and could not act effectively.

The motion was therefore dismissed.

In a shareholder dispute, the moving defendants sought to remove the plaintiffs' counsel, Hacio Law, alleging a conflict of interest between the individual plaintiffs and the corporate plaintiffs.

The defendants also sought to stay the action, arguing the corporate plaintiffs did not authorize its commencement.

The court ordered Hacio Law removed as counsel for the corporate plaintiffs (on consent) but declined to remove them as counsel for the individual plaintiffs, finding no risk of misuse of confidential information.

The court stayed the action as against the corporate plaintiffs only, as the former directors lacked authority to instruct counsel on their behalf.