COURT OF APPEAL FOR ONTARIO

CITATION: Leggat v. Jennings, 2014 ONCA 754

DATE: 20141028

DOCKET: C58633

Feldman, Juriansz and Rouleau JJ.A.

BETWEEN

Brian Leggat and 1180330 Ontario Inc.

Plaintiff (Appellants)

and

Kelly Jennings, Craig Beck, 1393024 Ontario Inc., Peninsula Motor Sales Limited, 4061357 Canada Inc., 921384 Ontario Inc. D.B.A Midland Honda, 2233361 Ontario Ltd. D.B.A. Powerband Global, Elizabeth Jennings, Brianne Jennings, Courtney Jennings and 2213922 Ontario Inc. D.B.A Peninsula Automotive Sales & Leasing

Defendants (Respondents)

AND BETWEEN

Kelly Jennings, 1393024 Ontario Inc., and Peninsula Motor Sales Limited

Plaintiffs

and

Brain Leggat, Doug Leggat, 1180330 Ontario Inc., 2095008 Ontario Inc., 2155866 Ontario Inc., Four Ways Inc. (F.K.A. 2064281 Ontario Inc.) 952430 Ontario Inc., 4061420 Canada Inc., Leggat Pontiac Buick Cadillac Limited

Defendants

Shaun F. Laubman and Lauren Epstein, for the appellant

Neil Stuart Rabinovitch and Kathryn McCulloch, for the respondents

Heard and released orally: October 20, 2014

On appeal from the order of Justice A. Donald K. MacKenzie of the Superior Court of Justice, dated March 12, 2014.

ENDORSEMENT

[1] The sale process ordered by the court was in response to the need for both sides to deal with the pressure from the bank that it would force the sale of the dealerships if it was not paid out. They submitted the matter to the court as part of the oppression remedy claim. The court accepted the respondent’s position that for sale purposes the two corporations being sold could no longer be parties to the litigation. He had the power to include that provision as part of the sale process order.

[2] The parties made it clear in their affidavits that their intent in agreeing to a sale process was that it would not affect or prejudice anyone in the litigation. The appellant now says there are tax reasons why any damages for oppression must be paid to and flowed through the corporation and not directly to the plaintiffs. They acknowledge, however, that the practical effect of the relevant tax consequences can be achieved by expert calculation without actually flowing any payment of damages through a party corporation. It was clearly the intent both of the parties and of the motion judge that there be no effective prejudice to the litigant by this order.

[3] The appellant also raises with the court a third party claim that has arisen against Peninsula after the order appealed from. In our view, the parties can deal with the practical efficacies of that claim as part of trial management. It does not affect the judges’ decision that for the purposes of the sale, the two corporations should no longer be parties to the main action.

[4] The appeal is therefore dismissed with costs fixed at $10,000 inclusive of disbursements and HST.

“K. Feldman J.A”

“R.G. Juriansz J.A.”

“Paul Rouleau J.A.”