Growthworks Commercialization Fund Ltd. v. Growthworks WV Management Ltd.

Ontario Reports Court of Appeal for Ontario Doherty, Rouleau and D.M. Brown JJ.A. May 6, 2019

146 O.R. (3d) 222 | 2019 ONCA 371

Case Summary

Corporations — Dissolution — Parties agreeing that corporation should be liquidated and dissolved — Motion judge not erring in acceding to applicant's request and ordering liquidation without appointing liquidator — Motion judge having authority to make that order under s. 217 of Canada Business Corporations Act — Canada Business Corporations Act, R.S.C. 1985, c. C-44, s. 217.

The parties agreed that G Ltd. should be liquidated and dissolved, but in their competing applications, they disagreed over the appropriate liquidation process. The motion judge acceded to the applicant's request and ordered the liquidation without appointing a liquidator. He rejected the respondent's argument that a court-appointed liquidator could undertake the liquidation faster or cheaper than the expert hired by the applicant, and found that the respondent would suffer no prejudice as a result. The respondent appealed.

Held, the appeal should be dismissed.

The motion judge had the power under s. 217 of the Canada Business Corporations Act to order the liquidation and dissolution of G Ltd. without appointing a liquidator. He gave cogent reasons for doing so, and his conclusions were supported by the record.

Statutes Referred To

Canada Business Corporations Act, R.S.C. 1985, c. C-44, ss. 211(7), 217

Parties and Counsel

APPEAL from the orders of T.J. McEwen J. of the Superior Court of Justice dated January 22, 2018.

Melvyn L. Solmon and Cameron Wetmore, for appellant.

Geoff R. Hall and Emily M. MacKinnon, for respondent.

Decision

[1] BY THE COURT: -- The appellant, Growthworks WV Management Ltd., was the manager of the respondent, Growthworks Commercialization Fund Ltd. (the "Fund"), a corporation incorporated under the Canada Business Corporations Act, R.S.C. 1985, c. C-44 (the "CBCA"). The parties share common ground that the Fund should be liquidated and dissolved. In their competing applications, they disagreed over the appropriate liquidation process. The motion judge ordered the liquidation of the Fund, using the process proposed by the Fund, which did not involve the appointment of a liquidator. He granted the Fund's application and dismissed that brought by the Manager.

[2] The Manager appeals and raises two grounds of appeal.

[3] First, the Manager submits that the application judge erred by relying on s. 217(a) of the CBCA to grant the Fund an order for the liquidation and dissolution of the Fund. The Manager contends that section was not available to grant relief to the Fund. We regard the Manager's challenge to the basis articulated by the judge for his liquidation order as overly technical and without any practical consequence. There was no dispute that the Fund should be liquidated and dissolved. Nor was there any dispute that the motion judge had the jurisdiction to order the liquidation of the Fund. Indeed, the Manager brought an application seeking that very relief. Accordingly, no error can lie where the application judge ordered the liquidation and dissolution of the Fund in response to both parties asking for that relief. We give no effect to this ground of appeal.

[4] The Manager's second ground of appeal -- and the real issue that was before the application judge -- concerns the process by which the Fund should be liquidated. The Manager sought an order that the Fund be liquidated under the supervision of the court, with the appointment of a liquidator. On its part, the Fund had asked for the liquidation to proceed using the process set out in the CBCA s. 211(7) concerning voluntary liquidations. The application judge ordered the liquidation to proceed in accordance with the process proposed by the Fund.

[5] The Manager argues that the application judge erred because he ordered the liquidation without appointing a liquidator.

[6] We see no reversible error by the application judge.

[7] Section 217 of the CBCA grants a judge the power to make a wide range of orders "[i]n connection with the dissolution or the liquidation and dissolution of a corporation". Under the section, a court may "make any order it thinks fit". While the section enumerates several types of orders a court may make, the section clearly states that the enumeration of such orders does not limit the generality of the court's power to make any order it thinks fit. Nor does s. 217 mandate the appointment of a liquidator when a court orders the liquidation of a corporation.

[8] The application judge gave cogent reasons why he considered that the process proposed by the Fund -- which did not include the appointment of a liquidator -- was the one most fit in the circumstances. He stated:

[T]he Fund is modest in size. The Fund has hired an expert to undertake the liquidation which is unique in nature given the illiquid securities. The Fund believes that it can complete the process in 12-18 months.

I do not accept that the Manager has established that a Court-appointed liquidator could do it quicker or cheaper. I agree with the Fund that the evidence supplied by the Manager concerning fees is underdeveloped and speculative and based on limited discussions/information.

I cannot identify any real prejudice to the Manager in granting the relief sought by the Fund. It is my view that allowing the Fund to continue would likely be quicker than having a Court-appointed liquidator start anew.

[9] Those conclusions find ample support in the record. As a result, we see no basis upon which to interfere with the application judge's order concerning the liquidation process.

[10] The appeal is dismissed.

[11] The Fund is entitled to its costs of the appeal fixed in the amount of $10,000, inclusive of disbursements and HST.

Appeal dismissed.

End of Document