COURT OF APPEAL FOR ONTARIO

CITATION: Bienstock v. Adenyo Inc., 2015 ONCA 310

DATE: 20150505

DOCKET: C59395

Simmons, Gillese and Rouleau JJ.A.

BETWEEN

Terry S. Bienstock

Plaintiff (Respondent)

and

Adenyo Inc., 7539088 Canada Inc., Adenyo Acquisition Sub Inc., Adenyo USA Inc., Michael Orr, Michael O’Connor, Paul Heney, Tyler Nelson, David Wilson and Dennis Kavelman

Defendants (Appellants)

Alan L. W. D’Silva and Aaron Kreaden, for the appellants

Ruzbeh Hosseini, for the respondent

Heard: April 27, 2015

On appeal from the judgment of Justice James A. Ramsay of the Superior Court of Justice, dated August 29, 2014, with reasons reported at 2014 ONSC 4997.

ENDORSEMENT

[1] The motion judge granted summary judgment to the respondent against the corporate appellants, permitting the respondent to enforce a Delaware judgment against the corporate appellants in Ontario.

[2] The Delaware judgment required the corporate appellants to pay to the respondent a sum in excess of USD$3 million.

[3] In addition, based on a finding that a fraudulent transfer of assets to Adenyo Inc. had taken place, the Delaware judgment imposed a constructive trust in favour of the respondent over the proceeds of sale of the assets of the corporate appellants to Motricity, Inc., “including, without limitation, the proceeds that remain in the possession of any and all of [the corporate appellants]” until such time as the full amount owing under the judgment is paid by the corporate appellants.

[4] The appellants appeal from the portion of the summary judgment permitting the respondent to enforce the order for a constructive trust in Ontario. Their primary argument is that the motion judge failed to consider the impact of the order for a constructive trust on the rights and interests of third parties – namely, the personal defendants (all of whom are or were officers, directors or shareholders of one or more of the corporate appellants) and other shareholders of the recently amalgamated corporate appellant, 7539088 Canada Inc. The appellants contend that because of this error the motion judge’s consideration of several of the Pro Swing[^1] factors was flawed.

[5] We do not accept these submissions. The motion judge’s reasons demonstrate that he was alive to the possibility that permitting the order for a constructive trust to be enforced in Ontario had the potential to impact on the rights of third parties. We see no basis on which to interfere with the motion judge’s exercise of discretion. He granted summary judgment only against the corporate appellants. In these circumstances, and on the record before him, the possibility that the order for a constructive trust could be enforced in Ontario in a manner that is unfair or unjust to third parties was entirely speculative. We see no error in the motion judge’s consideration of the Pro Swing factors.

[6] Costs of the appeal are to the respondent on a partial indemnity scale fixed in the amount of $25,000 inclusive of disbursements and applicable taxes.

“Janet Simmons J.A.”

“Eileen E. Gillese J.A.”

“Paul Rouleau J.A.”

[^1]: Pro Swing Inc. v. Elta Golf Inc., 2006 SCC 52, [2006] 2 S.C.R. 612.