Morton et al. v. Asper et al., (1989) 62 Man.R.(2d) 1 (QB)

• Judge: Morse, J.
• Court: Court of Queen's Bench of Manitoba (Canada)
• Case Date: October 02, 1989
• Jurisdiction: Manitoba
• Citations: (1989), 62 Man.R.(2d) 1 (QB)

Morton v. Asper (1989), 62 Man.R.(2d) 1 (QB)

MLB headnote and full text

Between: Paul Morton, Seymour Epstein, Seyton Limited, Incorporated Broadcasters Limited, and M.A.E. 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, and CanWest Communications Enterprises Inc. (plaintiffs by counterclaim) v. Paul Morton, Seymour Epstein, Seyton Limited, Incorporated Broadcasters Limited, M.A.E. Management Corporation and Global Ventures Western Limited, Global Ventures Holdings Limited, The Canada Trust Company, Carol Rosenfeld, Executrix and Trustee of the Estate of Gurston Rosenfeld, Global Communications Limited and Imagineering Limited (defendants by counterclaim)

(No. 86-01-111103)

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

Manitoba Court of Queen's Bench

Winnipeg Centre

Morse, J.

October 2, 1989.

Summary:

This action arose out of an alleged agreement made in 1984 between the parties, affecting their corporate relationship in Global Ventures Western Ltd. The plaintiffs, inter alia, sought to enforce the alleged agreement. The defendants denied the existence of the agreement and counterclaimed, inter alia, for dissolution of Global.

The Manitoba Court of Queen's Bench dismissed the plaintiffs' action, holding that there was no enforceable contract. The court allowed the counterclaim in part. The court refused to dissolve Global, but ordered a sale of shares by auction to rearrange the corporate relationship. For reports of earlier proceedings in this case - see 49 Man.R.(2d) 167; 55 Man.R.(2d) 207; 55 Man.R.(2d) 61.

Contracts - Topic 5643

Unenforceable contracts - Uncertainty - [See Contracts - Topic 6534 below].

Contracts - Topic 6534

Illegal contracts - Violation of statute law - Companies legislation - Morton, Epstein and Asper executed certain documents affecting their corporate relationship in Global Ventures - The documents were a shareholders' agreement, a deal memorandum and an amendment thereto, and a management fee agreement - The Manitoba Court of Queen's Bench held that the documents did not create an enforceable contract, notwithstanding the intention of the parties, because (1) a clause in a shareholders' agreement which fettered the discretion of the directors of one of the companies involved was contrary to the Manitoba Corporations Act and therefore unenforceable, and (2) the interest provision in the deal memorandum was uncertain - See paragraphs 1 to 83.

Company Law - Topic 7181

Fundamental changes and shareholders' rights - Compulsory sale of shares - General - [See Company Law - Topic 9210 below].

Company Law - Topic 9210

Dissolution - Application for - Grounds - Just and equitable - What constitutes - Pursuant to s. 214 of the Canada Business Corporations Act, a dissatisfied shareholder sought to dissolve a company involved in broadcasting - The Manitoba Court of Queen's Bench refused to grant dissolution where such an order might jeopardize the company's broadcasting licence, but rather ordered a sale of shares by auction to transfer interest in the company - The court discussed conduct which would justify dissolving a company under the "just and equitable" rule in s. 214 of the Act - See paragraphs 139 to 175.

Equity - Topic 3714

Fiduciary or confidential relationships - Commercial relationships - Duty of disclosure - Morton, Epstein and Asper executed certain documents affecting their corporate relationship in Global Ventures - The deal was not completed - The Manitoba Court of Queen's Bench examined the documents and held that there was no binding contract - Further, the court held that even if there was a contract it was unenforceable because Morton and Epstein breached their fiduciary duty to Asper by not disclosing all information material to the transfer - See paragraphs 108 to 135.

Cases Noticed:

Eisenberg v. Bank of Nova Scotia, [1965] S.C.R. 681, refd to. [para. 58].

Calvan Consol. Oil and Gas Ltd. v. Manning, [1959] S.C.R. 253; 17 D.L. R.(2d) 1, refd to. [para. 61].

Motherwell v. Shoof (1949), 4 D.L.R. 812 (Alta. S.C.), refd to. [para. 66].

Canada Square Corporation et al. v. VS Services Ltd. (1981), 34 O.R.(2d) 250 (C.A.), refd to. [para. 80].

Dynamic Transport Ltd. v. O.K. Detailing Ltd., [1978] 2 S.C.R. 1072; 20 N.R. 500, refd to. [para. 87].

Law v. Law, [1905] 1 Ch. 140 (C.A.), refd to. [para. 124].

Bell and Stewart v. Source Data Control Ltd. (1988), 29 O.A.C. 134; 66 O.R.(2d) 78 (C.A.), refd to. [para. 124].

Hogar Estates Ltd. in Trust v. Shedron Holdings Ltd. et al. (1979), 25 O.R.(2d) 543 (H.C.), refd to. [para. 124].

G. Mida Construction Ltd. v. Imperial Developments Ltd., [1978] 5 W.W.R. 557 (Man. C.A.), refd to. [para. 124].

In re Yenidje Tobacco Company Ltd., [1916] 2 Ch. 426 (C.A.), consd. [paras. 169, 170].

Cablecasting (Man.) Ltd. v. Selkirk Communications Ltd. (1986), 50 Man.R.(2d) 227; revsd. 50 Man.R.(2d) 225, refd to. [para. 169].

Re Purvis Fisheries Limited (1954), 13 W.W.R.(N.S.) 401 (Man. C.A.), refd to. [para. 169].

Statutes Noticed:

Canada Business Corporations Act, R.S.C. 1985, c. C-44, sect. 214 [para. 144]; sect. 214(1), sect. 214(2) [para. 140]; sect. 241 [paras. 144, 145]; sect. 241(3) [para. 143].

Corporations Act, R.S.M. 1987, c. 225, sect. 97(1) [para. 66]; sect. 110 [para. 68].

Authors and Works Noticed:

Gower, The Principles of Modern Company Law (3rd Ed.), p. 525 [para. 66].

Huberman, David, Winding-Up of Business Corporations, in Canadian Company Law by Jacob Ziegel, vol. 2 (1973), pp. 280 [para. 141]; 281 [paras. 141, 164], 282 [para. 164]; 304 [para. 170].

Ziegel, Jacob, Canadian Company Law, vol. 2, (1973), pp. 280 [para. 141]; 281 [paras. 141, 164]; 282 [para. 164]; 304 [para. 170].

Palmer, Prentice and Welling, Canadian Company Law, Cases, Notes and Material (2nd Ed. 1978), pp. 6-180, 6-181 [para. 165].

Counsel:

J.F. Howard, Q.C., R.B. McNichol and L.A. Lamb, for the plaintiffs;

T.G. Heintzman, Q.C., W.C. Kushneryk, Q.C., and M. Frieman, for the defendants and I.H. Asper, CanWest Communications Corp., CanWest Communications Holdings Inc. and CanWest Communications Ent. Inc.;

D. Ramsay, for the defendant;

CanWest Broadcasting Ltd., R.B. Goodwin, and R.M. Swystun, for the defendants Liba, Peli, Brinton and Brinco.

This case was heard before Morse, J., of the Manitoba Court of Queen's Bench, who delivered the following decision on October 2, 1989: