The appellant former directors and officers of Look Communications Inc. sought advance funding for their legal costs to defend an action brought against them by the corporation for breach of fiduciary duty.
The corporation resisted the claims under s. 124(4) of the Canada Business Corporations Act, arguing the appellants had not acted in good faith.
The application judge refused advance funding, finding the corporation had established a strong prima facie case of bad faith regarding equity cancellation payments and legal retainers.
The Court of Appeal dismissed the appeal, confirming that s. 124(4) applies to actions brought by the corporation and that the strong prima facie case standard is the appropriate test for denying advance funding.
