Cumbo v. 1120323 Ontario Limited, 2016 ONSC 6535
CITATION: Cumbo v. 1120323 Ontario Limited, 2016 ONSC 6535
DIVISIONAL COURT FILE NO.: 16-210-0000 DATE: 20161019
ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT
SWINTON, NORDHEIMER and BALTMAN JJ.
BETWEEN:
CARMELO CUMBO Applicant (Respondent)
– and –
1120323 ONTARIO LIMITED and DAVID CALCAGNO Respondents (Appellants)
Peter W.G. Carey, for the respondent
David J. McGhee, for the appellants
HEARD at Toronto: October 19, 2016
ORAL REASONS FOR JUDGMENT
NORDHEIMER J. (orally)
[1] 1120323 Ontario Limited and David Calcagno appeal from the judgment of Hainey J. that granted a declaration, under s. 248 of the Business Corporations Act, R.S.O. 1990, c. B.16, that Carmelo Cumbo was the legal and beneficial owner of 20% of the appellant company and that the appellant company should issue a share certificate to the respondent for his shares. The judgment also awarded the respondent his costs of the application in the amount of $25,000.
[2] Central to the appellants’ position, both here and before the application judge, was the allegation that the respondent is in breach of a trust arrangement that existed between his father-in-law and him regarding monies that the father-in-law loaned to the respondent and his wife to purchase a home. The appellants contend that, under that trust agreement, the father-in-law was to have a half interest in the home and that the respondent failed to honour that agreement by selling the house in 2005 and not paying half of the proceeds of sale to the father-in-law, who is now deceased.
[3] The application judge determined that the issue over the trust agreement was a separate matter from the application before him and was irrelevant to the issues that he had to determine. I agree. There is nothing that links the two other than the fact that the father-in-law’s children (who included the respondent’s deceased wife) now own the appellant company that was formerly owned by the father-in-law. Whether the respondent did or did not honour the alleged trust agreement has nothing to do with whether the respondent is the legal owner of shares in the appellant company.
[4] There is no basis to dispute that the respondent’s wife became entitled to 20% of the appellant company when her mother died. There also can be no dispute that when the respondent’s wife died, the respondent inherited her ownership interest in the appellant company.
[5] The application judge also found that the appellants have known about the trust agreement, and its alleged breach, since at least May, 2006. He therefore held that any claim pursuant to that trust agreement would have expired by virtue of the general two year limitation period found in s. 4 of the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B. The appellants assert that the application judge applied the wrong limitation period. They contend that the applicable limitation period is the 10 year limitation provided for in s. 4 of the Real Property Limitations Act, R.S.O. 1990, c. L.15.
[6] The problem with that submission is that, even if the appellants are correct, that limitation period has also now expired. No action has ever been taken by the Estate to enforce this alleged trust agreement or to otherwise raise the issues for determination that are now being set up as a block to the ownership of shares in the appellant corporation. Consequently, even if, in some fashion, the trust claim could have been set up as a defence to the share issue, that claim appears to have disappeared as has any ability it might have to act as a defence to the claim for the shares.
[7] The application judge concluded that the refusal to transfer Joanne’s shares in the company to the respondent was unjustified, oppressive and unfairly prejudiced the respondent. There is no basis for concluding that the application judge made any error in reaching that ultimate conclusion. Consequently, the appeal is dismissed.
COSTS – Swinton J.
[8] I have endorsed the Appeal Book and Compendium as follows: “This Appeal is dismissed for oral reasons delivered today by Nordheimer J. Costs are awarded to the respondent on a partial indemnity basis in the amount of $10,000.00 for fees plus HST plus $874.00 for disbursements, payable by the appellants jointly and severally.”
___________________________ NORDHEIMER J.
SWINTON J.
BALTMAN J.
Date of Reasons for Judgment: October 19, 2016
Date of Release: October 20, 2016
CITATION: Cumbo v. 1120323 Ontario Limited, 2016 ONSC 6535
DIVISIONAL COURT FILE NO.: 16-210-0000 DATE: 20161019
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
SWINTON, NORDHEIMER and BALTMAN JJ.
BETWEEN:
CARMELO CUMBO
Applicant(Respondent)
– and –
1120323 ONTARIO LIMITED and DAVID CALCAGNO
Respondents (Appellants)
ORAL REASONS FOR JUDGMENT
NORDHEIMER J.
Date of Reasons for Judgment: October 19, 2016
Date of Release: October 20, 2016