The defendants appealed an order striking out certain paragraphs of their statement of defence.
The Court of Appeal found that the motion judge erred by failing to consider the plaintiff's cause of action in fraud, which has a different measure of damages than breach of fiduciary duty.
As a result, the motion judge wrongly struck out relevant allegations.
The appeal was allowed, the motion judge's order was set aside, and only the portions of the defence relating to the plaintiff's profits were struck out, with leave to amend.
The appellants were awarded $3,000 in costs.