Cohen v. Jonco Holdings Ltd.,

• Jurisdiction: Manitoba
• Judge: Philp, Monnin and Hamilton, JJ.A.
• Neutral Citation: 2005 MBCA 48
• Citation: 2005 MBCA 48,(2005), 192 Man.R.(2d) 252 (CA),[2005] 7 WWR 212,4 BLR (4th) 232,16 ETR (3d) 54,[2005] CarswellMan 131,[2005] MJ No 126 (QL),192 Man R (2d) 252,[2005] M.J. No 126 (QL),192 Man.R.(2d) 252,(2005), 192 ManR(2d) 252 (CA),192 ManR(2d) 252
• Date: 22 April 2005
• Court: Court of Appeal (Manitoba)

Cohen v. Jonco Holdings Ltd. (2005), 192 Man.R.(2d) 252 (CA);

    340 W.A.C. 252

MLB headnote and full text

Temp. Cite: [2005] Man.R.(2d) TBEd. AP.055

Gwendolyn M. Cohen (applicant/respondent) v. Jonco Holdings Ltd., Daniel F. Cohen (a.k.a. Frank Daniel Cohen), Shaun D. Cohen (respondents/appellants) and Fay Candice Cohen and Maureen Cohen (respondents/respondents)

(AI 04-30-05974; 2005 MBCA 48)

Indexed As: Cohen v. Jonco Holdings Ltd. et al.

Manitoba Court of Appeal

Philp, Monnin and Hamilton, JJ.A.

April 22, 2005.

Summary:

A minority shareholder applied under the Corporations Act for an oppression remedy.

The Manitoba Court of Queen's Bench ordered that the company either be wound up or that it redeem the minority shareholder's shares. The court found conduct that was unfairly prejudicial to, and unfairly disregarded, the minority shareholder's interests. The controlling shareholders appealed.

The Manitoba Court of Appeal dismissed the appeal.

Company Law - Topic 2170

Shareholders - Shareholders' rights - To rectify oppressive or unfairly prejudicial act - [See Company Law - Topic 9785 ].

Company Law - Topic 9785

Actions against corporations and directors - Action for oppressive conduct - Oppression, prejudice or disregard of interests - Cohen's 1992 will left his Class C preferred shares in the family holding company to his widow and control of the company to his sons - His will directed that the company be wound up within five years - The preferred shares were non-voting and gave the directors a discretion to pay the widow an annual dividend - The shares were redeemable for $1 per share, but the widow had no right to demand redemption - In 1999, the widow, unhappy with, inter alia, the failure to wind up the company or pay dividends, applied under s. 234 of the Corporations Act for an oppression remedy, submitting that her sons' conduct was oppressive or unfairly disregarded and unfairly prejudiced her interests - The Manitoba Court of Appeal affirmed the trial judge's remedy under s. 234 that either the company be wound up or the widow's shares be redeemed - The widow's reasonable expectation was that she receive dividends and that the company be wound up within five years, as her husband had directed - The failure to meet those expectations unfairly prejudiced and unfairly disregarded the widow's interests, entitling her to a remedy under s. 234 - Further, one son's use of company assets to secure a personal loan was also unfairly prejudicial to and unfairly disregarded the widow's interests - See paragraphs 1 to 53.

Limitation of Actions - Topic 1581

Equitable relief - General - [See Limitation of Actions - Topic 4405 ].

Limitation of Actions - Topic 4405

Statutory causes of action - Oppression action - The Manitoba Court of Appeal stated that "the equitable nature of the relief available pursuant to s. 234 and s. 207 of the [Corporations] Act dictates that an application pursuant to these sections is governed by s. 2(1)(k) of the Limitation of Actions Act ... the limitation period is within six years from the discovery of the cause of action" - See paragraph 55.

Cases Noticed:

First Edmonton Place Ltd. v. 315888 Alberta Ltd. (1988), 60 Alta. L.R.(2d) 122 (Q.B.), refd to. [para. 22].

Scottish Co-op Wholesale Society Ltd. v. Meyer, [1959] A.C. 324 (H.L.), refd to. [para. 23].

Miller v. F. Mendel Holdings and Mitchell, [1984] 2 W.W.R. 683; 30 Sask.R. 298 (Q.B.), refd to. [para. 23].

Westfair Foods Ltd. v. Watt et al., [1990] 4 W.W.R. 685; 106 A.R. 40 (Q.B.), affd. [1991] 4 W.W.R. 695; 115 A.R. 34; 79 D.L.R.(4th) 48 (C.A.), refd to. [para. 23].

820099 Ontario Inc. v. Ballard (Harold E.) Ltd. (1991), 3 B.L.R.(2d) 113 (Ont. Gen. Div.), refd to. [para. 23].

Diligenti v. RWMD Operations Kelowna Ltd. (1976), 1 B.C.L.R. 36 (S.C.), refd to. [para. 23].

Mason v. Intercity Properties Ltd. (1987), 22 O.A.C. 161; 38 D.L.R.(4th) 681 (C.A.), refd to. [para. 24].

Westbourne Galleries Ltd. - see Ebrahimi v. Westbourne Galleries Ltd.

Ebrahimi v. Westbourne Galleries Ltd., [1973] A.C. 360 (H.L.), refd to. [para. 25].

Wondoflex Textiles Pty. Ltd., Re, [1951] V.L.R. 458 (Aust.), refd to. [para. 26].

Naneff v. Con-Crete Holdings Ltd. et al. (1995), 85 O.A.C. 29; 23 O.R.(3d) 481 (C.A.), refd to. [para. 31].

Maple Leaf Foods Inc. v. Schneider Corp. - see Pente Investment Management Ltd. et al.

Pente Investment Management Ltd. et al. v. Schneider Corp. et al. (1998), 113 O.A.C. 253; 42 O.R.(3d) 177 (C.A.), refd to. [para. 31].

Lee et al. v. To et al., [1998] 9 W.W.R. 1; 168 Sask.R. 66; 173 W.A.C. 66 (C.A.), refd to. [para. 31].

Casurina Limited Partnership et al. v. Rio Algom Ltd. et al. (2004), 181 O.A.C. 19 (C.A.), refd to. [para. 31].

Sutherland et al. v. Birks et al. (2003), 174 O.A.C. 29; 65 O.R.(3d) 812 (C.A.), refd to. [para. 31].

Themadel Foundation et al. v. Third Canadian Investment Trust Ltd. (1998), 107 O.A.C. 188; 38 O.R.(3d) 749 (C.A.), refd to. [para. 31].

American Reserve Energy Corp. v. McDorman et al. (2002), 217 Nfld. & P.E.I.R. 7; 651 A.P.R. 7; 2002 NFCA 57, refd to. [para. 31].

LeBlanc v. Corporation Eighty-Six Ltd. (1997), 192 N.B.R.(2d) 321; 489 A.P.R. 321 (C.A.), refd to. [para. 31].

Stabile v. Milani et al., [2004] O.A.C. Uned. 113; 46 B.L.R.(3d) 294 (C.A.), refd to. [para. 31].

Arthur v. Signum Communications, [1993] O.J. No. 1928 (Div. Ct.), affing. [1991] O.J. No. 86 (Gen. Div.), refd to. [para. 32].

Ferguson and Imax Systems Corp., Re (1983), 150 D.L.R.(3d) 718 (Ont. C.A.), leave to appeal refused (1983), 52 N.R. 317 (S.C.C.), refd to. [para. 34].

Clarke et al. v. Rossburger et al. (2001), 293 A.R. 223; 257 W.A.C. 223; 2001 ABCA 225, refd to. [para. 35].

Jowsey (R.J.) Mining Co., Re, [1969] 2 O.R. 549 (C.A.), refd to. [para. 37].

Glaves (Gordon) Holdings Ltd. v. Care Corp. of Canada Ltd. et al. (2000), 133 O.A.C. 111; 48 O.R.(3d) 737 (C.A.), refd to. [para. 45].

Jaska v. Jaska (1996), 141 D.L.R.(4th) 385 (Man. C.A.), refd to. [para. 54].

Hughes et al. v. Tallman (Bob) Investments Inc. et al. (2005), 192 Man.R.(2d) 123; 340 W.A.C. 123; 2005 MBCA 16, refd to. [para. 55].

Seidel v. Kerr et al., [2004] 1 W.W.R. 53; 330 A.R. 284; 299 W.A.C. 284; 2003 ABCA 267, refd to. [para. 55].

Lacroix v. Dominique, [2001] 9 W.W.R. 261; 156 Man.R.(2d) 262; 246 W.A.C. 262; 2001 MBCA 122, refd to. [para. 56].

Strong v. Paquet (2000), 135 O.A.C. 161; 15 O.R.(3d) 129 (C.A.), refd to. [para. 56].

Waxman et al. v. Waxman et al. (2004), 186 O.A.C. 201 (C.A.), leave to appeal denied (2005), 339 N.R. 200 (S.C.C.), refd to. [para. 57].

Statutes Noticed:

Corporations Act, R.S.M. 1987, c. C-225; C.C.S.M., c. C-225, sect. 234(2), sect. 234(3) [para. 20].

Authors and Works Noticed:

Campion, John A., Brown, Stephanie A., and Crawley, Alistair H., The Oppression Remedy: Reasonable Expectations of Shareholders, L.S.U.C. Special Lectures 1995: Law of Remedies (1995), p. 229 [para. 24].

Counsel:

V.L. Jackson, for the appellants;

R.A. Dewar, Q.C., and S.E. Field, for the respondent, G.M. Cohen;

W.J. Burnett, Q.C., and G.M. Fleetwood, on a watching brief.

This appeal was heard January 20, 2005, before Philp, Monnin and Hamilton, JJ.A., of the Manitoba Court of Appeal.

On April 22, 2005, Hamilton, J.A., delivered the following judgment for the Court of Appeal.