Pasnak et al. v. Chura et al., (2004) 201 B.C.A.C. 15 (CA)
| Judge | Donald, Hall and Low, JJ.A. |
| Court | Court of Appeal (British Columbia) |
| Case Date | April 23, 2004 |
| Jurisdiction | British Columbia |
| Citations | (2004), 201 B.C.A.C. 15 (CA);2004 BCCA 221 |
Pasnak v. Chura (2004), 201 B.C.A.C. 15 (CA);
328 W.A.C. 15
MLB headnote and full text
Temp. Cite: [2004] B.C.A.C. TBEd. MY.002
Allen Gregory Pasnak and Double J. Investments Ltd. (appellants/plaintiffs) v. Norman Francis Chura, Chura Holdings Ltd., Summit Motors Ltd., Summit Leasing Ltd., Fleetwood Motors Ltd. and Summit Investments Ltd. (respondents/defendants)
(CA031085; 2004 BCCA 221)
Indexed As: Pasnak et al. v. Chura et al.
British Columbia Court of Appeal
Donald, Hall and Low, JJ.A.
April 23, 2004.
Summary:
Pasnak and Chura, through holding companies, were 50 percent shareholders of Summit Motors and Fleetwood Motors and two related companies and were equal directors and officers in the companies. A shareholders' agreement gave them equal management rights. Fleetwood Motors, operated by Chura, went out of business. The parties agreed that Pasnak and his holding company would purchase all the shares of Chura and his holding company in the four companies. They agreed on the value of the interests to be purchased. At issue was whether the purchase price should be reduced because of Chura's conduct in the management of Fleetwood Motors, as well as payments received by Chura since the company ceased business. The action was founded in oppression, negligence, breach of fiduciary duty, breach of partnership duty and breach of a shareholders' agreement.
The British Columbia Supreme Court, in a decision reported at [2003] B.C.T.C. 782, rejected all the claims except one and fixed the sale price. Pasnak and his company appealed. They applied for a stay of all proceedings in the trial court pending the appeal.
The British Columbia Court of Appeal, per Low, J.A., in a decision reported in 188 B.C.A.C. 80; 308 W.A.C. 80, granted the stay, on condition that Pasnak pay Chura $10,000 per month pending the hearing of the appeal.
The British Columbia Court of Appeal, in the following decision, varied the order at trial by deleting the pre-judgment interest component, but otherwise dismissed the appeal.
Editor's Note: see also a related case at 26 B.C.T.C. 328.
Company Law - Topic 2164
Shareholders - Shareholders' rights - Derivative actions - Pasnak and Chura, through holding companies, were 50% shareholders/directors/officers in four companies - One company ceased business - The parties agreed that Pasnak would purchase all of Chura's shares in the four companies - The shares were valued by an expert, but Pasnak sought certain deductions from the purchase price based on alleged misconduct by Chura - Pasnak sued Chura for oppression, negligence, breach of fiduciary duty, partnership duty and a shareholders' agreement - The British Columbia Court of Appeal affirmed that Pasnak, as shareholder, failed to show direct and special harm to maintain a personal action for oppression, and must seek leave to bring a derivative action in the company's name - See paragraphs 1 to 5, 25 to 37.
Company Law - Topic 2170
Shareholders - Shareholders' rights - To rectify oppressive or unfairly prejudicial act - [See Company Law - Topic 2164 ].
Company Law - Topic 7267
Fundamental changes and shareholders' rights - Actions by or on behalf of shareholders - Action by director - General - [See Company Law - Topic 2164 ].
Company Law - Topic 9781
Actions against corporations and directors -Action for oppressive conduct - When available (incl. time for) - [See Company Law - Topic 2164 ].
Cases Noticed:
Foss v. Harbottle, [1843] 2 Hare 461; 67 E.R. 189, refd to. [para. 2].
Salomon v. Salomon and Co., [1897] A.C. 22 (H.L.), refd to. [para. 26].
S.G. & S. Investments (1972) Ltd. v. Golden Boy Foods Inc. et al. (1991), 1 B.C.A.C. 303; 1 W.A.C. 303; 56 B.C.L.R.(2d) 273 (C.A.), refd to. [para. 28].
Diligenti v. RWMD Operations Kelowna Ltd. (1976), 1 B.C.L.R. 36 (S.C.), refd to. [para. 31].
National Building Maintenance Ltd. and Lee v. Dove, [1972] 5 W.W.R. 410 (B.C.C.A.), refd to. [para. 31].
Goldex Mines Ltd. v. Revill (1974), 54 D.L.R.(3d) 672 (Ont. C.A.), refd to. [para. 32].
Furry Creek Timber Corp. v. Laad Ventures Ltd. (1992), 75 B.C.L.R.(2d) 246 (S.C.), refd to. [para. 33].
Hercules Management Ltd. et al. v. Ernst & Young et al., [1997] 2 S.C.R. 165; 211 N.R. 352; 115 Man.R.(2d) 241; 139 W.A.C. 241, refd to. [para. 34].
Oakley v. McDougall (1987), 14 B.C.L.R.(2d) 128 (C.A.), refd to. [para. 36].
Ebrahimi v. Westbourne Galleries Ltd., [1972] 2 All E.R. 492 (H.L.), refd to. [para. 42].
Rogers and Agincourt Holdings Ltd., Re (1976), 14 O.R.(2d) 489 (C.A.), refd to. [para. 42].
Counsel:
J.D. Shields and A.P. Morrison, for the appellants;
H.W. Wiebach, for the respondents.
This appeal was heard in Vancouver, British Columbia, on March 18 and 19, 2004, before Donald, Hall and Low, JJ.A., of the British Columbia Court of Appeal. The decision of the court was delivered by Donald, J.A., on April 23, 2004.
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Table of Cases
...149 Pasnak v Chura (2003), 35 BLR (3d) 71, [2003] BCJ No 1591, 2003 BCSC 782, aff’d (2004), 45 BLR (3d) 120, [2004] BCJ No 790, 2004 BCCA 221 ............................................................................................481 Paul v 1433295 Ontario Ltd, 2013 ONSC 7002 ................
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Table of Cases
...v. Chura (2003), 35 B.L.R. (3d) 71, [2003] B.C.J. No. 1591, 2003 BCSC 782, aff’d (2004), 45 B.L.R. (3d) 120, [2004] B.C.J. No. 790, 2004 BCCA 221................................................................... 439 PCL Industrial Constructors Inc. v. CLR Construction Labour Relations Asso......
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...the nature of oppression proceedings and derivative proceedings and their overlap, as discussed by this court in Pasnak v. Chura 2004 BCCA 221. He summarized the substantive requirements for the granting of leave to sue derivatively, as explained in Luft v. Ball 2013 BCSC 574. He then addre......
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Jaguar Financial Corp. v. Alternative Earth Resources Inc. et al., (2016) 386 B.C.A.C. 224 (CA)
...but it must show peculiar prejudice distinct from the alleged harm suffered by all shareholders indirectly. [180] In Pasnak v. Chura , 2004 BCCA 221, Mr. Justice Donald held for this Court: [5] For reasons that follow, I can find no error on the part of the trial judge. The authorities are ......
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1043325 Ontario Ltd. v. CSA Building Sciences Western Ltd. et al., (2016) 389 B.C.A.C. 161 (CA)
...the nature of oppression proceedings and derivative proceedings and their overlap, as discussed by this court in Pasnak v. Chura 2004 BCCA 221. He summarized the substantive requirements for the granting of leave to sue derivatively, as explained in Luft v. Ball 2013 BCSC 574. He then addre......
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Jaguar Financial Corp. v. Alternative Earth Resources Inc. et al., (2016) 386 B.C.A.C. 224 (CA)
...but it must show peculiar prejudice distinct from the alleged harm suffered by all shareholders indirectly. [180] In Pasnak v. Chura , 2004 BCCA 221, Mr. Justice Donald held for this Court: [5] For reasons that follow, I can find no error on the part of the trial judge. The authorities are ......
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Khela v. Phoenix Homes Ltd. et al., 2015 BCCA 202
...Ltd. (1998), 109 B.C.A.C. 255; 177 W.A.C. 255; 50 B.C.L.R.(3d) 195 (C.A.), refd to. [para. 42]. Pasnak et al. v. Chura et al. (2004), 201 B.C.A.C. 15; 328 W.A.C. 15; 2004 BCCA 221, refd to. [para. Holdyk et al. v. Adolph et al., [2012] B.C.A.C. Uned. 7; 2012 BCCA 37, refd to. [para. 42]. He......
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Boffo Family Holdings Ltd. et al. v. Mountainview Developments Ltd. et al., [2010] B.C.T.C. Uned. 560 (SC)
...rights or were otherwise oppressive. Contrary to the requirement articulated in Gopal v. Burke 2007 BCSC 1930, and Pasnak v. Chura , 2004 BCCA 221, the petitioners do not allege as shareholder that they are uniquely impacted by corporate decisions in a manner different than other shareholde......
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Table of Cases
...149 Pasnak v Chura (2003), 35 BLR (3d) 71, [2003] BCJ No 1591, 2003 BCSC 782, aff’d (2004), 45 BLR (3d) 120, [2004] BCJ No 790, 2004 BCCA 221 ............................................................................................481 Paul v 1433295 Ontario Ltd, 2013 ONSC 7002 ................
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Table of Cases
...v. Chura (2003), 35 B.L.R. (3d) 71, [2003] B.C.J. No. 1591, 2003 BCSC 782, aff’d (2004), 45 B.L.R. (3d) 120, [2004] B.C.J. No. 790, 2004 BCCA 221................................................................... 439 PCL Industrial Constructors Inc. v. CLR Construction Labour Relations Asso......