COURT OF APPEAL FOR ONTARIO

CITATION: Ustymenko v. Sadochok Centre Inc. (Sadochok Preschool Centre), 2020 ONCA 123

DATE: 20200212

DOCKET: C67046

Simmons, Pepall and Trotter JJ.A.

BETWEEN

Dr. Stanislav Ustymenko and Anna Zelenova

Applicants (Appellants)

and

Sadochok Centre Inc. o/a Sadochok Preschool Centre

Respondent (Respondent)

John W. Bruggeman, for the appellants

Derrick M. Fulton and Taras Kulish, for the respondent

Heard and released orally: February 5, 2020

On appeal from the judgment of Justice Jane Ferguson of the Superior Court of Justice, dated May 7, 2019.

REASONS FOR DECISION

[1] The respondent Sadochok Centre Inc., operating as Sadochok Preschool Centre, is a small, non-profit Ukrainian daycare centre. K.K. was hired in 1979 as an administrator and bookkeeper and in 1989 also became a director. She resigned from the latter in 2016 and the former in 2017. The appellants became directors in January 2016. By the date of the hearing of the application, the appellants were no longer directors and had no other role at the Centre. The appellants appeal from the May 7, 2019 order of Ferguson J. dismissing their request for leave to commence a derivative action based on allegations that K.K. had misappropriated money in her capacity as director and derived personal benefit from the Centre.

[2] Before the application judge, the parties agreed that a derivative action could be brought pursuant to equitable principles. Assuming without deciding that they were correct in that regard, we see no reason to interfere with the application judge’s decision. The evidence did not disclose that K.K. was paid as a director but as an administrator and bookkeeper. The Board of Directors investigated the allegations as did the Public Guardian and Trustee who decided to take no further material action.

[3] Moreover, the application judge determined that the action was “bound to fail”. We agree.

[4] Lastly, as for the application judge’s costs award, this is not a case that warrants the granting of leave to appeal.

[5] For these reasons, the appeal is dismissed and leave to appeal costs is also dismissed. Costs of the appeal are to the respondent on a partial indemnity scale fixed in the amount of $15,000, inclusive of disbursements and HST.

“Janet Simmons J.A.”

“S.E. Pepall J.A.”

“Gary Trotter J.A.”