Morton et al. v. Asper et al., (1988) 55 Man.R.(2d) 61 (QB)

• Court: Court of Queen's Bench of Manitoba (Canada)
• Case Date: September 15, 1988
• Jurisdiction: Manitoba
• Citations: (1988), 55 Man.R.(2d) 61 (QB)

Morton v. Asper (1988), 55 Man.R.(2d) 61 (QB)

MLB headnote and full text

Paul Morton, Seymour Epstein, Seyton Limited, Incorporated Broadcasters Limited and Mae Management Corporation (plaintiffs) v. Israel H. Asper, Canwest Communications Corporation, Canwest Communications Holdings Inc., Canwest Communications Enterprises Inc., Canwest Broadcasting Ltd., Peter M. Liba, Peli Ventures Inc., Donald C. Brinton and Brinco Media Associates Ltd. (defendants) and Israel H. Asper, Canwest Communications Corporation, Canwest Communications Holdings Inc. and Canwest Communications Enterprises Inc. (plaintiffs by counterclaim) v. Paul Morton, Seymour Epstein, Seyton Limited, Incorporated Broadcasters Limited, Mae Management Corporation and Global Ventures Western Limited (defendants by counterclaim)

(Suit No. 86-01-11103)

Indexed As: Morton et al. v. Asper et al.

Manitoba Court of Queen's Bench

Winnipeg Centre

Scott, A.C.J.Q.B.

September 15, 1988.

Summary:

This action arose out of an alleged agreement made in or about December 1984 between the parties, affecting their corporate relationship in Global Ventures Western Limited. The plaintiffs' statement of claim alleged that the CanWest group of companies sold to the plaintiffs' group approximately 22% of its equity in Global Ventures, and was to receive, inter alia, over $20,000,000.00 in cash, but that the defendants refused to complete the transaction. The plaintiffs sued for specific performance and damages. Certain of the defendants defended and counterclaimed against the plaintiffs. The defence and counterclaim alleged that no agreement was concluded between the parties, and if one was, it was induced by certain stated misrepresentations. The counterclaim alleged that the plaintiffs Morton and Epstein conspired to take de facto control of Global Ventures with the intention of forcing the Asper group to sell to them its interest in Global Ventures. The counterclaim sought an order for the dissolution of Global Ventures and damages. Following several interlocutory proceedings, the following pretrial applications were made: (1) the defendants (plaintiffs by counterclaim) applied to amend the statement of defence and counterclaim; (2) the plaintiffs Morton and Epstein applied for a stay of proceedings respecting one of the issues, on the ground that it should be dealt with by binding arbitration pursuant to an agreement between the parties; (3) the defendants (plaintiffs by counterclaim) applied for an interlocutory mandatory injunction to compel Morton to step down as president and chief operating officer of Global Ventures and (4) the plaintiffs Morton and Epstein applied for an order that Epstein, rather than one John Burgis, be produced as the proper officer to be examined on behalf of the plaintiff MAE Management Corp.

The Manitoba Court of Queen's Bench granted the first application, refused the second and third, and granted the fourth application in part by setting aside the appointment of Burgis as the proper officer to be examined.

Arbitration - Topic 2504

Stay of proceedings - Arbitration clause - Enforcement of - The Manitoba Court of Queen's Bench stated that while the court has a wide discretion to do what is appropriate in the circumstances, where the subject-matter in question falls within the terms of the arbitration clause the court has a prima facie duty to enforce the agreement, with the onus on the party resisting the stay to demonstrate that the court's discretion should be exercised to the contrary - The fact that questions of law may be involved in the decision of an arbitrator is not, by itself, a sufficient reason to refuse the stay - See paragraph 37.

Arbitration - Topic 2514

Stay of proceedings - Bar to stay - Multiplicity of proceedings - Two plaintiffs in a complicated and acrimonious commercial litigation applied to stay proceedings respecting one issue before the court, on the ground that by agreement between the parties it was to be dealt with by binding arbitration - The Manitoba Court of Queen's Bench held that upon giving the agreement its widest reading, the issue was clearly covered therein, and rejected the notion that the plaintiffs' conduct disentitled them to arbitration - The court, however, rejected a stay, because the issues of fact and law in the case were so closely intertwined, with the risk of multiplicity of proceedings with contrary results, that it would be inappropriate for one aspect to be dealt with by an arbitrator - See paragraphs 32 to 51.

Injunctions - Topic 2309

Mandatory injunctions - Interim mandatory injunctions - A complicated and acrimonious commercial litigation arose out of an alleged agreement between the parties affecting their corporate relationship in Global Ventures - Certain defendants applied for an interlocutory mandatory injunction to compel the plaintiff Morton to step down as president and chief operating officer of Global - The defendants alleged a breach of Morton's fiduciary duties and a failure to disclose, contrary to the Canada Business Corporations Act - The Manitoba Court of Queen's Bench refused to grant the injunction, finding no prima facie case that there was a "valid business reason" for requesting Morton's resignation, that serious if not irreparable harm might flow to Global if the injunction was granted and that the balance of convenience was against granting the injunction where the action could proceed to trial very quickly - See paragraphs 52 to 94.

Practice - Topic 4243

Discovery - Examination - Persons who may be examined - Corporations - Designation of officer of - The Manitoba Court of Queen's Bench stated that "the law in Manitoba is now well settled that a party wishing to examine a corporation adverse in interest has the right to designate the particular officer to be examined, so long as the selection is not unreasonable or an abuse of process ... This is not an unfettered right, however. The court always has the inherent power to prevent an abuse of its process, where the examination could be abused in the selection of who is to speak for the party adverse in interest" - See paragraph 97.

Practice - Topic 4243

Discovery - Examination - Persons who may be examined - Corporations - Designation of officer of - The Manitoba Court of Queen's Bench held that to permit a person to be designated as the "officer" to be produced on behalf of one plaintiff, where the only purpose in examining him for discovery is to enquire into the affairs of another plaintiff, is an abuse of the discovery process - See paragraphs 98 to 99.

Cases Noticed:

Steward v. North Metropolitan Tramways Co. (1886), 16 Q.B.D. 556, refd to. [para. 16].

Montgomery v. Foy Morgan and Company, [1895] 2 Q.B.D. 321 (C.A.), refd to. [para. 16].

Heyman v. Darwins Limited, [1942] A.C. 356 (H.L.), refd to. [para. 36].

Stokes-Stephens Oil Co. v. McNaught (1918), 44 D.L.R. 682 (S.C.C.), refd to. [para. 36].

Ives and Barker v. Willans, [1894] Ch. D. 478, refd to. [para. 42].

Loeb v. Harzena Holdings Limited (1980), 18 C.P.C. 245 (Ont. S.C.), refd to. [para. 46].

Raymond v. Adrema Limited et al., [1963] 1 O.R. 305, refd to. [para. 46].

InterTec Internationale et al. v. Neptune Bulk Terminals, [1981] 5 W.W.R. 231, refd to. [para. 47].

Marion v. Manitoba Lotteries Foundation et al. (1984), 28 Man.R.(2d) 269 (C.A.), refd to. [para. 52].

Helbig v. Oxford Warehousing Ltd. et al. (1985), 9 O.A.C. 145; 51 O.R.(2d) 421 (C.A.), refd to. [para. 53].

Keenberg v. Marwest Management Ltd., [1985] 1 W.W.R. 700; 30 Man.R.(2d) 267 (C.A.), refd to. [para. 56].

Gulf Islands Navigation Ltd. v. Sea farers International Union of North America (1959), 27 W.W.R.(N.S.) 652 (B.C.S.C.), affd. (1959), 28 W.W.R.(N.S.) 517 (B.C.C.A.), refd to. [para. 58].

Aberdeen Railway v. Blaikie, [1854] 1 MacQ. H.L. 461 (H.L.S.C.), refd to. [para. 60].

Gray v. New Augarita Porcupine Mines, [1952] 3 D.L.R. 1 (P.C.), refd to. [para. 61].

Boston Deep Sea Fishing and Ice Co. v. Ansell (1888), 39 Ch. D. 339 (C.A.), refd to. [para. 62].

Kent Drugs Ltd. v. Kronson et al., [1987] 1 W.W.R. 24; 43 Man.R.(2d) 261 (C.A.), refd to. [para. 97].

Winnipeg (City) v. Lewko (1987), 48 Man.R.(2d) 247 (Q.B.), refd to. [para. 97].

Bassett Furniture v. Sargent Color Television Ltd., [1981] 6 W.W.R. 270; 12 Man.R.(2d) 185 (C.C.), refd to. [para. 97].

Whieldon v. Morrison, [1934] 4 D.L.R. 366 (B.C.A.), refd to. [para. 99].

British Columbia Lightweight Aggregate Ltd. v. Canada Cement La Farge Ltd. (1978), 9 C.P.C. 152, refd to. [para. 100].

Statutes Noticed:

Rules of Court (Man.), Queen's Bench Rules, rule 51(2), rule 122 [para. 16].

Canada Business Corporations Act, R.S.C. 1970, c. C-33, sect. 120(4), sect. 120(5), sect. 120(6), sect. 120(7) [para. 81].

Authors and Works Noticed:

Russell on Arbitration (20th Ed.), p. 91 [para. 39].

Counsel:

R.B. McNicol and L.A. Lamb, for the plaintiffs (defendants by counterclaim);

W.C. Kushneryk and T.G. Heintzman, Q.C., for the defendants (plaintiffs by counterclaim).

These applications were heard before Scott, A.C.J.Q.B., of the Manitoba Court of Queen's Bench, Winnipeg Centre, whose decision was delivered on September 15, 1988.