ADGA Systems Intl. v. Valcom Ltd.

• Jurisdiction: Ontario
• Court: Court of Appeal (Ontario)
• Judge: Carthy, Laskin and Goudge, JJ.A.
• Citation: (1999), 117 O.A.C. 39 (CA),1999 CanLII 1527 (ON CA),1999 CanLII 1527 (NS CA),43 OR (3d) 101,168 DLR (4th) 351,41 BLR (2d) 157,44 CCLT (2d) 174,[1999] CarswellOnt 29,[1999] OJ No 27 (QL),117 OAC 39,39 CCEL (2d) 163,85 ACWS (3d) 320
• Date: 23 October 1998

ADGA Systems Intl. v. Valcom Ltd. (1999), 117 O.A.C. 39 (CA)

MLB headnote and full text

Temp. Cite: [1999] O.A.C. TBEd. FE.009

ADGA Systems International Ltd. (plaintiff/appellant) v. Valcom Ltd., Brian Vissers, Kenneth Balkwill, Allan Ebel, Paul MacPherson, George Ewing and John Stuart McKenzie (defendants/respondents)

(C28907)

Indexed As: ADGA Systems International Ltd. v. Valcom Ltd. et al.

Ontario Court of Appeal

Carthy, Laskin and Goudge, JJ.A.

January 12, 1999.

Summary:

ADGA held a government contract. Val­com wanted to bid on the contract when it came up for renewal. The tendering party had to provide the names of 25 senior tech­nicians together with their qualifications, to assure that it was competent to perform the work. A Valcom director and two other senior Valcom employees (the Valcom individual defendants) contacted ADGA's employees about working for Valcom if it won the contract and allowing Valcom use their names in its bid. Most of the ADGA employees agreed to do so. Both companies presented the same staff in their tender offerings. Valcom won the contract. ADGA sued its own employees and Valcom for damages. ADGA sued the Valcom individual defendants for, inter alia, inducing breach of fiduciary duty. The Valcom individual defendants applied for summary judgment dismissing the claim against them.

The Ontario Court (General Division) dismissed the application. The Valcom in­dividual defendants appealed.

The Ontario Divisional Court, in a decision reported at 105 O.A.C. 209, allowed the appeal and dismissed the action against the Valcom individual defendants. ADGA appealed.

The Ontario Court of Appeal allowed the appeal.

Company Law - Topic 320

Nature of corporations - Lifting the cor­porate veil - Persons entitled to - ADGA held a government contract -Valcom want­ed to bid on the contract when it came up for renewal - The tendering party had to provide the names of 25 senior technicians together with their qualifica­tions, to assure that it was competent to perform the work - A Valcom director and two other senior Valcom employees con­tacted ADGA's em­ployees about working for Valcom if it won the contract and allowing Valcom to use their names in its bid - Most of the ADGA employees agreed to do so - Val­com won the contract - ADGA sued its own employees and Valcom - ADGA also sued the three Valcom employees for inducing breach of fiduciary duty - The Valcom employees applied for summary judgment dismissing the action against them - The Ontario Court of Appeal dis­missed the application.

Company Law - Topic 320

Nature of corporations - Lifting the cor­porate veil - Persons entitled to - The Ontario Court of Appeal analyzed the development of the law respecting the liability of corporate officers and directors for acts done in pursuance of a corporate purpose - See paragraphs 9 to 42.

Company Law - Topic 4183

Directors - Liability of directors - For torts - [See both Company Law - Topic 320 ].

Company Law - Topic 4566

Officers and agents - Liability - General - For tortious acts - [See both Company Law - Topic 320 ].

Company Law - Topic 4665

Officers and agents - Liability to third parties - For torts - [See both Company Law - Topic 320 ].

Cases Noticed:

Montreal Trust Co. of Canada et al. v. Scotia McLeod Inc. et al. (1995), 87 O.A.C. 129; 129 D.L.R.(4th) 711 (C.A.), refd to. [para. 6, footnote 1].

Scotia McLeod Inc. v. Peoples Jewellers Ltd. - see Montreal Trust Co. of Canada et al. v. Scotia McLeod Inc. et al.

Salomon v. Salomon & Co., [1895-9] All E.R. 33 (H.L.), refd to. [para. 10].

Said v. Butt, [1920] 3 K.B. 497, refd to. [para. 11].

Kepic v. Tecumseh Road Builders et al. (1987), 23 O.A.C. 72; 18 C.C.E.L. 218 (C.A.), refd to. [para. 11].

Golden v. Anderson (1967), 64 Cal. Rptr. 404, refd to. [para. 11].

Lewis v. Boutilier (1919), 52 D.L.R. 383 (S.C.C.), refd to. [para. 19].

Berger v. Willowdale A.M.C. et al. (1983), 41 O.R.(2d) 89 (C.A.), leave to appeal refused (1983), 41 O.R.(2d) 89; 145 D.L.R.(3d) 247 (S.C.C.), refd to. [para. 20].

Sullivan and Sullivan Farms Ltd. v. Desrosiers et al. (1986), 76 N.B.R.(2d) 271; 192 A.P.R. 271 (C.A.), leave to appeal refused (1987), 80 N.R. 315; 79 N.B.R.(2d) 90; 201 A.P.R. 90 (S.C.C.), refd to. [para. 21].

London Drugs Ltd. v. Brassart and Vanwinkel, [1992] 3 S.C.R. 299; 143 N.R. 1; 18 B.C.A.C. 1; 31 W.A.C. 1, refd to. [para. 23].

London Drugs Ltd. v. Kuehne & Nagel International Ltd. - see London Drugs Ltd. v. Brassart and Vanwinkel.

Craik et al. v. Aetna Life Insurance Co. of Canada, [1995] O.J. No. 3286 (Gen. Div.), affd. [1996] O.J. No. 2377 (C.A.), refd to. [para. 31].

Truckers Garage Inc. v. Krell (1993), 68 O.A.C. 106; 3 C.C.E.L.(2d) 157 (Div. Ct.), refd to. [para. 32].

Normart Management Ltd. v. West Hill Redevelopment Co. et al. (1998), 113 O.A.C. 375; 37 O.R.(3d) 97 (C.A.), refd to. [para. 40].

Alper Development Inc. v. Harrowston Corp. et al. (1998), 107 O.A.C. 318; 38 O.R.(3d) 785 (C.A.), refd to. [para. 42].

Counsel:

Howard Yegendorf, for the appellant;

James O'Grady, Q.C., and Katherine Young, for the respondent.

This appeal was heard on October 23, 1998, by Carthy, Laskin and Goudge, JJ.A., of the Ontario Court of Appeal. Carthy, J.A., delivered the following judgment for the Court of Appeal on January 12, 1999.