The plaintiffs brought a motion seeking the appointment of an interim receiver over the shares of one of the defendants in several companies involved in land development projects.
The parties, who are shareholders in these companies, had a significant falling out, leading to defaults on secured loans.
The plaintiffs argued that a receiver was necessary to refinance debt and maximize value.
The court determined that the appropriate test for the interlocutory receiver appointment was the RJR MacDonald test, with an elevated 'strong prima facie case' standard due to the Mareva-like nature of the relief.
The court found that the plaintiffs failed to meet the merits requirement, as they asserted no legal or beneficial interest in the defendant's shares and the memorandum of understanding did not obligate the defendant to contribute further funds.
Furthermore, the court found no irreparable harm and that the balance of convenience did not favor the appointment, concluding that a receivership was not an appropriate remedy for a shareholder dispute where the moving party sought to eliminate the other party's control over their own shares.
