DATE: 20060613

DOCKET: C44610

COURT OF APPEAL FOR ONTARIO

RE:

GOULD LEASING LTD. (Plaintiff/Appellant) v. RETURN ON INNOVATION FUND INC. and JOHN STERLING (Defendants/Respondents)

BEFORE:

DOHERTY, BLAIR and LAFORME JJ.A.

COUNSEL:

Eric Golden and John Polyzogopoulos

for the plaintiff/appellant

John N. Birch

for the defendants/respondents

HEARD & ENDORSED:

June 8, 2006

On appeal from the decision entered by Justice Hoy of the Superior Court of Justice dated November 16, 2005.

A P P E A L B O O K E N D O R S E M E N T

[1] The court raised the issue of jurisdiction and inquired as to whether under s. 255 of the OBCA the appeal should be to the Divisional Court. Counsel for the appellant argued that the proceedings were brought under the OBCA and the CBCA and that in any event, the order was made under the Rules of Civil Procedure and not the OBCA. The appeal, therefore, is to this court.

[2] The respondent took no position on this issue.

[3] The question is not free from doubt. Given our view of the merits and the fact that the respondent did not suggest the court did not have jurisdiction, we will proceed on the assumption that the court has jurisdiction without deciding the question on its merits.

[4] We agree with the motion judge’s conclusion and the substance of her analysis. The acts which were central to the oppression claim as framed were:

o the sale of Brooklin’s assets to a subsidiary of ROI; and

o ROI’s refusal to permit Crupi to repay the amounts owing to ROI by Brooklin and thus redeem the shares.

[5] Both issues were raised in the receivership proceedings and both were the subject of judicial orders. The appellant was a participant in those proceedings and chose to take no position on these issues and so advised the court. On the motion to approve the sale, the appellant informed the court that it had made an agreement whereby it would have security and “accordingly takes no position” on sale.

[6] In essence, the appellant claims that the sale of Brooklin’s assets was unfair and is oppressive to its position as a creditor of Brooklin. On the motion to approve the sale, the motion judge was obliged to consider not only that the best price was generated, but also the interests of all parties, the integrity of the offering process and the fairness of the process: see Royal Bank of Canada v. Sound Air Corp. (1991), 4 O.R. (3d) 1 at 6 (Ont. C.A.).

[7] It is important that the motion judge who approved the sale found no unfairness in the proposed sale. The time and place for the appellant to have protested the unfairness of the sale to it as a creditor of Brooklin was in that proceeding.

[8] The appeal is dismissed.

[9] Costs to the respondent fixed at $12,000, inclusive of disbursements and GST.