The applicants purchased all shares of Stuart Investment Management Ltd. from the respondents pursuant to a Share Purchase Agreement.
Post-closing, the applicants discovered unpaid legal invoices from an ongoing regulatory investigation and faced a wrongful dismissal claim from a retained employee.
The applicants sought indemnification for these liabilities under the agreement, while the respondents cross-applied for unpaid rent under a sublease.
The court held that the respondents must indemnify the applicants for the undisclosed legal invoices, but not for the wrongful dismissal claim, which arose from the applicants' post-closing actions.
The court also found the individual respondent was not personally liable and dismissed the cross-application for rent due to lack of privity.
