SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: CV-14-10458-CL
DATE: 20140819

RE: paul krandel and the rhonda krandel family trust, by its Trustee paul krandel

Applicants

• and –

1714176 ontario limited; 1209623 ontario limited; the brass rail tavern (toronto) limited; michael cooper, gail cooper and jodi cooper frankfort in their personal capacities; jodi frankfort, Trustee of the jodi frankfort family trust; michael cooper, Trustee of the michael cooper family trust; bill greer and jodi cooper frankfort; gail cooper and kenneth l. saltzman in their capacities as Estate Trustees of the Estate of Irving Cooper, Deceased

Respondents

BEFORE: Justice J. M. Spence

COUNSEL: Benjamin Zarnett and Suzy Kauffman, for the Applicants

Alan J. Lenczner and Andrew Porter, for the Respondents

DATE HEARD: August 1, 2014

WRITTEN

SUBMISSIONS: August 15, 2014 by letter from Mr. Zarnett, for the Applicants

E N D O R S E M E N T

Revision to the Endorsement Released August 8, 2014

[1] By letter of August 15, 2014, Mr. Zarnett, for the Applicants, submits that the limitation period was not exceeded in respect of the claim for audited financial statements for the 2011 year because, on the premise adopted in the endorsement that the shareholders were in a position by March 31, 2012 to know that such statements had not been delivered, the limitation period for the claim would have run to March 31, 2014 and the claim was asserted before then, on February 25, 2014. The point is well taken.

[2] Mr. Zarnett, in his letter asks, on the basis of this point, for an order requiring audited financial statements for 2011. The following consideration bears on this request.

[3] The Application was not made simply for audited financial statements. It was made for an order requiring the appointment of an auditor to provide audited financial statements for the years in issue on the basis that the companies had failed to appoint an auditor as required. An auditor for each fiscal year of the companies ought to have been appointed at an annual meeting held within six months of the preceding fiscal year end; i.e. by March 31, 2010 for fiscal 2010 and March 31, 2011 for fiscal 2011 (Ontario Business Corporations Act, R.S.O. 1990, c. B.16, s. 149; ss. 154(1)(a)).

[4] Because the companies did not hold annual meetings, the shareholders were in a position by March 31 of each of the years 2010 and 2011 respectively to know that auditors had not been appointed as required to prepare audited financial statements for those years. Accordingly, they were in a position by those respective dates to know that the claims now asserted would be an appropriate way to seek relief. The limitation periods for those claims began on those dates and expired in 2012 and 2013, well before the commencement of the Application on February 25, 2014. Those claims are therefore barred.

[5] Paragraph 4 of the endorsement is revised as set forth above. No other change is ordered in the endorsement

[6] The time for making submissions as to costs set out in the endorsement is to run from the date of the release of this revision.

Spence J.

DATE: August19, 2014