Proost v. Ferncroft Equities Ltd. et al., 2015 NSSC 231

• Judge: Moir, J.
• Court: Supreme Court of Nova Scotia (Canada)
• Case Date: December 22, 2014
• Jurisdiction: Nova Scotia
• Citations: 2015 NSSC 231;(2015), 364 N.S.R.(2d) 153 (SC)

Proost v. Ferncroft Equities Ltd. (2015), 364 N.S.R.(2d) 153 (SC);

    1146 A.P.R. 153

MLB headnote and full text

Temp. Cite: [2015] N.S.R.(2d) TBEd. AU.001

Michaela Amalie Elizabeth Zoé Mauricia Molhant Proost (applicant) v. Ferncroft Equities Limited, Giuseppe Costantino, Brunello Donati, Zeus Holding SA, and Dominic Anthony Max Dolph Claude Gregory Edward Bunford (respondents)

Dominic Anthony Bunford (applicant) v. Michaela Amalie Elizabeth Zoé Mauricia Molhant Proost, Marie-Claude Bunford, Ferncroft Equities Limited, and Coloony Ltd. (respondents)

Dominic Anthony Bunford (applicant) v. Michaela Amalie Elizabeth Zoé Mauricia Molhant Proost, Marie-Claude Bunford, Ferncroft Equities Limited, and Coloony Ltd. (respondents)

(Hfx. No. 416894; 419766; 422061; 2015 NSSC 231)

Indexed As: Proost v. Ferncroft Equities Ltd. et al.

Nova Scotia Supreme Court

Moir, J.

July 30, 2015.

Summary:

A mother, son and daughter originally each owned 1/3 of a property in France worth 50 million euros. Title was now held by Ferncroft Equities. The mother and children each held 1/3 of the shares in Ferncroft. In 2007, the mother signed a revocable trust placing her shares in trust for her son. In 2013, the mother attempted to revoke the trust and transfer her shares to her daughter. The directors of Ferncroft refused to accept the revocation because the mother did not sign the revocation (daughter signed on her behalf) and because they knew that the property was the subject of ongoing litigation in this family feud. The daughter applied for a declaration that she was the sole legal and beneficial owner of the mother's shares. It was converted into an Application in Court. She sought an order that the directors effect the transfer and issue a new share certificate. Pending the hearing of that full application, the daughter moved for an amendment to the share register to acknowledge the transfer and the issuance of a new certificate to the daughter (i.e., partial summary judgment). The son contested the motion and had previously commenced other legal proceedings: (1) challenging the attempted revocation and transfer on the basis of undue influence, duress and non est factum; and (2) an action for shareholder oppression that also requested injunctive relief.

The Nova Scotia Supreme Court, in a judgment reported (2014), 342 N.S.R.(2d) 210; 1083 A.P.R. 210, dismissed the partial summary judgment application. The son withdrew his notice contesting the motion.

The Nova Scotia Supreme Court, in a judgment reported [2014] N.S.R.(2d) Uned. 161, granted the declaratory relief sought by the daughter. Given the son's concession that there were no factual disputes, there was no evidence of fraud, undue influence or mental incompetence, the daughter was declared to be the sole and rightful owner of the transferred shares. Now at issue was the quantum of costs payable by the son to the mother and daughter in the three proceedings.

The Nova Scotia Supreme Court awarded the mother and daughter solicitor and clients costs (full indemnity) in all three proceedings, to be assessed by an adjudicator.

Practice - Topic 7454

Costs - Solicitor and client costs - Entitlement to - Improper, irresponsible or unconscionable conduct - [See Practice - Topic 7762 ].

Practice - Topic 7462.1

Costs - Solicitor and client costs - Entitlement to solicitor and client costs - Unproven allegations of dishonest or improper conduct (incl. malice) - [See Practice - Topic 7762 ].

Practice - Topic 7470

Costs - Solicitor and client costs - Entitlement to - Unproved allegation of fraud - [See Practice - Topic 7762 ].

Practice - Topic 7762

Costs - Special orders - Indemnity - A mother, son and daughter originally each owned 1/3 of a property in France worth 50 million euros - Title was now held by Ferncroft Equities - The mother and children each held 1/3 of the shares in Ferncroft - In 2007, the mother signed a revocable trust placing her shares in trust for her son - In 2013, the mother attempted to revoke the trust and transfer her shares to her daughter - The directors of Ferncroft refused to accept the revocation because the mother did not sign the revocation (daughter signed on her behalf) and because they knew that the property was the subject of ongoing litigation in this family feud - The daughter applied for a declaration that she was the sole legal and beneficial owner of the mother's shares - It was converted to an Application in Court - She sought an order that the directors effect the transfer and issue a new share certificate - Pending the hearing of that full application, the daughter moved for an amendment to the share register to acknowledge the transfer and the issuance of a new certificate to the daughter (i.e., partial summary judgment) - The son contested the motion and had previously commenced other legal proceedings: (1) challenging the attempted revocation and transfer on the basis of undue influence, duress and non est factum; and (2) an action for shareholder oppression that also requested injunctive relief - Both were discontinued - The trial judge dismissed the partial summary judgment application, as the issues on the full application and partial summary judgment application were not severable - They were so closely intertwined that it would not be feasible or practicable to grant summary judgment - In any event, partial summary judgment would have been denied on the ground that there were material facts in issue respecting the "rightfulness" of the attempted revocation and transfer which could not be decided on the basis of conflicting affidavit evidence - The son withdrew his notice contesting the motion, but then sued the mother and daughter in Belgium - Given the son's concession that there were no factual disputes and no evidence of fraud, undue influence or mental incompetence, the daughter was declared to be the sole and rightful owner of the transferred shares - The Nova Scotia Supreme Court awarded the mother and daughter solicitor and clients costs (full indemnity) in all three proceedings, to be assessed by an adjudicator - The son reprehensibly abused the court's processes "to harass his mother and his sister" - He made unsupported allegations of dishonesty and fraud - The court stated that "Having put [the daughter and mother] through pointless contests at great expense, [the son's] tactics take us into the realm of rare and exceptional circumstances in which reprehensible conduct demands full indemnity" - See paragraphs 66 to 101.

Cases Noticed:

Armoyan v. Armoyan (2013), 337 N.S.R.(2d) 365; 1067 A.P.R. 365; 2013 NSCA 136, refd to. [para. 68].

Campbell v. Lienaux et al. (2001), 195 N.S.R.(2d) 220; 609 A.P.R. 220; 2001 NSSC 44, refd to. [para. 69].

Brown v. Metropolitan Authority et al. (1996), 150 N.S.R.(2d) 43; 436 A.P.R. 43 (C.A.), refd to. [para. 71].

Commerce Capital Trust Co. v. Berk, Wall, Chadwick et al., [1989] O.J. No. 1763 (C.A.), refd to. [para. 102].

Commerce Capital Trust Co. v. Berk, Wall, Chadwick et al. (1989), 33 O.A.C. 373 (C.A.), refd to. [para. 103].

Landymore et al. v. Hardy et al. (1992), 112 N.S.R.(2d) 410; 307 A.P.R. 410 (S.C.), refd to. [para. 107].

Counsel:

John A. Keith, Q.C., and Jack Townsend, for Ms. Molhant Proost;

Andrew Fraser and Scott Campbell, for Mr. Bunford;

William Mahody, Q.C., for Mde. Bunford.

This matter was heard on December 22, 2014, at Halifax, N.S., before Moir, J., of the Nova Scotia Supreme Court, who delivered the following judgment on July 30, 2015.