Beechwood Cemetery Co. v. Graham, (1998) 117 O.A.C. 59 (CA)

• Judge: Krever, Doherty and O'Connor, JJ.A.
• Court: Court of Appeal (Ontario)
• Case Date: December 17, 1998
• Jurisdiction: Ontario
• Citations: (1998), 117 O.A.C. 59 (CA)

Beechwood Cemetery Co. v. Graham (1998), 117 O.A.C. 59 (CA)

MLB headnote and full text

Temp. Cite: [1998] O.A.C. TBEd. DE.032

The Beechwood Cemetery Company (plaintiff/respondent) v. John Graham, John Graham, In Trust, John Graham and Company Limited, 942836 Ontario Inc., Triple D Properties Inc., John Graham Realty Investors Limited and 286947 Ontario Ltd. (defendant/appellant)

(C25426)

Indexed As: Beechwood Cemetery Co. v. Graham et al.

Ontario Court of Appeal

Krever, Doherty and O'Connor, JJ.A.

December 17, 1998.

Summary:

The plaintiff company (Beechwood) was incorporated in 1873 to operate a cemetery. The defendant Graham was Beechwood's president from 1975 until 1991, when he was removed by the board of directors for several alleged improprieties. During Gra­ham's term, he transferred 225 of Beech­wood's shares to his brother's company, 942836 Ontario Inc. The trial judge held that the share transfer was invalid. 942836 appealed.

The Ontario Court of Appeal dismissed the appeal.

Editor's note: for related decisions see 8 O.T.C. 28, 22 O.T.C. 317 and 117 O.A.C. 71.

Company Law - Topic 3306

Share transfer - Restrictions on transfer - General - The plaintiff company (Beech­wood) was incorporated in 1873 to operate a cemetery - Beechwood's original bylaws provided that "[n]o shares in the Capital Stock of the Company shall be transferable without the consent of the Board of Direc­tors" - In 1991 Beechwood's president transferred 225 Beechwood's shares to his brother's company, 942836 Ontario Inc. - The trial judge set aside the transfer hold­ing that it was invalid because the direc­tors had not consented to it as required by the 1873 bylaw - 942836 appealed - The On­tario Court of Appeal dismissed the appeal - The share transfer restriction was valid - Moreover, the evidence indicated that Graham's brother had actual know­ledge of the requirement of board approval on share transfers.

Statutes - Topic 6909

Operation and effect - Commencement, duration and repeal - Repeal - Effect of repeal of statute on regulations or bylaws made thereunder - The plaintiff company (Beechwood) was incorporated in 1873 to operate a cemetery - Beechwood's original bylaws provided that "[n]o shares in the Capital Stock of the Company shall be transferable without the consent of the Board of Directors" - In 1991 Beech­wood's president transferred 225 Beech­wood's shares to his brother's company, 942836 Ontario Inc. - The trial judge set aside the transfer holding that it was in­valid because the directors had not con­sented to it as required by the 1873 bylaw - 942836 appealed, arguing that the bylaw was repealed by a later 1941 bylaw - The Ontario Court of Appeal reviewed the 1941 bylaw and dismissed the appeal - The 1873 restriction on the transfer of shares was valid.

Cases Noticed:

Communities Economic Development Fund v. Canadian Pickles Corp. et al., [1991] 3 S.C.R. 388; 131 N.R. 81; 76 Man.R.(2d) 1; 10 W.A.C. 1, refd to. [para. 26].

Canada National Fire Insurance Co. v. Hutchings (1918), 39 D.L.R. 401 (P.C.), refd to. [para. 26].

Case v. Edmonton Country Club Ltd. (1974), 1 N.R. 563; 44 D.L.R.(3d) 554 (S.C.C.), refd to. [para. 28].

Re Good and Jacob Y. Shantz Son & Co. Ltd. (1911), 23 O.L.R. 544 (C.A.), refd to. [para. 32].

Donner Canadian Foundation, Re (1960), 26 D.L.R.(2d) 274 (P.E.I.C.A.), refd to. [para. 43].

Augdome Corp. v. Gray et al., [1975] 2 S.C.R. 354; 3 N.R. 235, refd to. [para. 43].

Statutes Noticed:

Business Corporations Act, R.S.O, 1990, c. B-16, sect. 1, sect 2(1), sect 53(1) [para. 47, footnote 7]; sect. 56(3) [para. 47].

Companies Act, R.S.C. 1906, c. 79, sect. 45, sect. 80(a) [para. 32, footnote 5].

Counsel:

Alan J. Lenczner and K. Scott McLean, for the appellant;

Andrew Lenz and David Migicovsky, for the respondent.

This appeal was heard on September 28 and 29, 1998, before Krever, Doherty and O'Connor, JJ.A., of the Ontario Court of Appeal.

The following decision was delivered by O'Connor, J.A., on December 17, 1998.