Frasco v. Saturn 121, Inc. et al., 2015 ONSC 1535
COURT FILE NO.: CV-14-518664
DATE: 20150309
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Joseph Frasko
Plaintiff
– and –
Saturn 121, Inc. et al.
Defendants
Unrepresented
Undefended
HEARD: March 9, 2015
S. F. DUNPHY, J.
[1] This is a novel application. The plaintiff Joseph Frasko claims to be in the business of buying and selling shelf companies. He has commenced an action by way of Statement of Claim against 115 corporations claiming the right to become their owner.
[2] Each of the 115 corporate defendants appear to have once been incorporated pursuant to the provisions of the Ontario Business Corporations Act, R.S.O. 1990, c. B-16 (the “OBCA”). Each of the corporate defendants has been dissolved and had their corporate charters cancelled by reason of non-filing of annual corporate filings (s. 241 OBCA) and none have carried on business since or been revived. The dissolutions occurred between 2 and 14 years in the past.
[3] The plaintiff has noted all of the defendants in default and moves for judgment upon his claim on the basis that the defendants are deemed to admit all of the allegations contained therein. The plaintiff filed in support of that noting in default a 100 page affidavit of service.
[4] I have reviewed the affidavit of service and I must say that I have grave doubts as to its accuracy. According to the affidavit of service, an attempt at personal service was made in respect of each of the 115 corporate defendants located at a wide variety of addresses in locations throughout Ontario over only three days. According to the affidavit, Mr. Frasko personally attended at 115 different addresses ranging from the Ottawa to Chatham, Hamilton to Niagara Falls; Scarborough to Burlington and numerous points in between. A virtually identical application (Fraasko v. 911908 Ontario Limited et al,) alleged service upon a further 10 corporations on the same dates, adding stop-offs in Barrie, Sarnia and various addresses in Toronto. While Santa Claus has perfected the art of visiting millions of homes in a single night, Mr. Frasko’s affidavit of service makes no claim to having enlisted such assistance in effecting such a miracle of personal service.
[5] The affidavit of service invokes Rule 16.03((6) to claim the right to effect an alternative to personal service on the basis that the head office, registered office or principal place of business cannot be found at the last address recorded. Many of the addresses listed in the Affidavit of Service were clearly residential addresses and it cannot be presumed that the office “cannot be located” at the address merely because a sign or dedicated mailbox is not visible.
[6] I questioned Mr. Frasko on his affidavit and he insists that he performed all of the miracles of service that his two affidavits (including the companion application re 911908 Ontario Limited et al) allege.
[7] However, apart entirely from my clear concerns regarding the veracity of the affidavits of service, this action cannot succeed on the merits and rather than put the plaintiff through the expense of serving again what is admittedly a very enterprising and imaginative claim, a decision on the merits of his motion for judgment would appear the more efficient means of proceeding.
[8] The plaintiff alleges that “in accordance with well settled common law principles that personal property owners may relinquish property rights through abandonment, and that abandoned property may be appropriated by the first finder who takes possession or control of it” he is now the sole and rightful owner of each Defendant. In effect, the plaintiff claims to succeed by virtue of the rule of “finders keepers”.
[9] While the plaintiff has brought action against 115 corporate defendants who no longer exist, it appears that s. 242(1) (b) of the OBCA contemplates just such an eventuality since a civil proceeding may be brought against a dissolved corporation “as if the corporation had not been dissolved”.
[10] In support of his application, the plaintiff has filed corporate profile reports for each of the 115 corporations showing last registered office, date of dissolution and reason therefor. The profile reports confirm that each of the dissolved corporations was dissolved as of the date of the reports at least . The reports have currency dates of between 2012 and 2014.
[11] Where a corporation is dissolved, any property of the corporation that has not been distributed is forfeited to and vests in the Crown (s. 244(1) of the OBCA), but this is subject to the ability of “any interested person” to apply for articles of revival of a dissolved corporation pursuant to s. 241(5) within twenty years of dissolution. The provision is clearly intended to benefit former shareholders who may come across property inadvertently not distributed or else creditors whose claims were not satisfied in the process of dissolution.
[12] Mr. Frasko would not be an “interested person” entitled to apply to revive any of the 115 corporations today. There is nothing on the record to indicate that he has any connection with the corporations whatsoever and the use of the phrase “interested person” in s. 241(5) of the OBCA does not refer to intellectual interest but to demonstrable legal interest. He does not claim to have any right whatsoever to any shares of any of the corporations. He appeared to be under the mis-impression that the corporations could be revived without reviving the share interests as they existed at the time of dissolution.
[13] Can Mr. Frasko accomplish indirectly through this action that which he cannot accomplish directly? I have concluded that he cannot for two reasons.
[14] Firstly, s. 241(5) is clearly intended to permit shareholders (or other interested persons such as creditors) a period of twenty years in which to claim any property which would otherwise remain vested in the Crown. By seeking to claim control of the corporations prior to the expiry of the twenty years, Mr. Frasko could be depriving such persons unknown of the substantive right they would otherwise enjoy under s. 241(5) of the OBCA without notice or service. As noted above, were a corporation to be revived, Mr. Frasko would neither be a shareholder nor a director of the corporations so revived even if he could somehow use the claimed judgment to bootstrap himself into the position of an “interested person”.
[15] Secondly, and perhaps more fundamentally, a corporation is not property that can be “found” in the way lost treasure can be claimed by the finder. A corporation is a person at law. What is a form of property, however, are the shares by which a corporation can be controlled. Shares are a form of intangible personal property. Shares can be securities and, in some circumstances, ownership can be transferred by delivery.
[16] A dissolved corporation is not abandoned and in fact does not even exist. At best it has a potential existence in that it can be revived and in some limited circumstances it can be sued. However, until revived a dissolved corporation is dissolved and it simply is not property that can be found or taken control of.
[17] The motion is denied and the action is dismissed.
S. F. Dunphy, J.
Released: March 9, 2015
COURT FILE NO.: CV-14-518664
DATE: 20150309
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Joseph Frasko
Plaintiff
– and –
Saturn 121, Inc. et al.
Defendants
REASONS FOR JUDGMENT
S.F. Dunphy, J.
Released: March 9, 2015