CITATION: Mendelson Estate, 2007 ONCA 155

DATE: 20070309

DOCKET: C44531

COURT OF APPEAL FOR ONTARIO

RE:

JAMELLE ANN HOLMES, EXECUTOR OF THE ESTATE OF DAVID G. MENDELSON, Deceased (Plaintiff (Appellant))

– and – DONALD O. NORRIS, TELEPHOTO TECHNOLOGIES INC., D.O.N. HOLDINGS INC. and ROBERT E. LEE (Defendants (Respondents))

BEFORE:

SIMMONS, MACFARLAND JJ.A and PARDU J. (ad hoc)

COUNSEL:

Robert Zigler

for the appellant

Scott Venton and Tamara B. Center

for the respondent

HEARD & RELEASED ORALLY:

February 23, 2007

On appeal from the judgment of Justice John C. Murray of the Superior Court of Justice dated October 24, 2005.

E N D O R S E M E N T

[1] In our view the motion judge erred in dismissing the within action against Robert Lee. It cannot be said that there was no evidence of conduct on Mr. Lee’s part that could constitute oppression in relation to Mr. Mendelson within the meaning of s. 248 of the Ontario Business Corporations Act. Lee read over the Share Purchase Agreement with a view to advising Norris on the financial aspects thereof before it was signed and he was a witness to it. After the subsequent share transfer from Norris to Lee, Mendelson was removed as Chair allegedly as orchestrated by Lee in August of 1998. Thereafter payments to Mendelson as originally agreed to continued for some time before they were reduced and ultimately terminated. Soon thereafter Lee sold his interest in the corporation.

[2] Lee was aware that Mendelson relied on this money for income in his later years. He threatened him when the reduction was made that if Mendelson took action against him in court he would cash in the insurance policies on Mendelson’s life.

[3] While the court may find that the evidence of such conduct does not amount to oppression, at this stage it is not appropriate to weigh that evidence. Its very existence is the reason this case should not have been dismissed at this early stage. As for whether Mendelson is a creditor within the meaning of s. 248 having status to bring this action and also the position here raised for the first time in respect of that part of his claim that relates to wages, those are matters to be determined in the court below if and when it becomes appropriate. They are not matters for this court where the issues were not raised below and appear nowhere in the factums filed.

[4] It was conceded before the motion judge that there was a triable issue with respect to the claim by Mendelson against TTI for Directors’ fees. Mendelson’s oppression claim against Lee rests on his allegation that Lee was the directing mind of TTI and therefore the author of the conduct that is alleged to constitute oppression.

[5] For these reasons the appeal is allowed. The summary judgment of Murray J. dismissing the action against Lee is set aside and the motion for summary judgment is dismissed. It follows that any related costs orders are also set aside.

[6] Costs of the appeal and of the motion below are to the appellant fixed at $10,000.00 and $7,500.00 respectively on a partial indemnity scale inclusive of disbursements and applicable G.S.T.

“Janet Simmons J.A.”

“J. MacFarland J.A.”

“G. Pardu J. (ad hoc)”