Ryan Cookson

The appellants, selling shareholders in a family business, appealed the dismissal of their action for breach of fiduciary duty and oppression against the non-selling shareholders and the corporation's professional advisors.

The trial judge had utilized a 'hybrid' trial model following a failed summary judgment motion.

The Court of Appeal dismissed the appeal, finding that the appellants were precluded from challenging the hybrid trial model as they had not appealed the initial trial management order.

Furthermore, the Court upheld the trial judge's finding that no fiduciary duty was owed during the share redemption negotiations, as the relationship between the parties was highly adversarial and marked by distrust.

The substantial indemnity costs award of nearly $2.5 million was also upheld.

The plaintiffs sought a Mareva injunction against the assets of the defendants, specifically a biodiesel plant owned by Great Lakes Biodiesel Inc., alleging that funds were fraudulently conveyed by Verdeo Inc. to the defendants to fund the plant's construction.

In the alternative, the plaintiffs sought interim relief under the oppression provisions of the Business Corporations Act or a certificate of pending litigation.

The court dismissed the motions, finding that the plaintiffs failed to establish a strong prima facie case of a fraudulent conveyance from the intermediary corporations to Great Lakes Biodiesel Inc., and that the balance of convenience did not favour a certificate of pending litigation.