Rea et al. v. Wildeboer et al., (2015) 335 O.A.C. 161 (CA)

• Judge: Weiler, Sharpe and Blair, JJ.A.
• Court: Court of Appeal (Ontario)
• Case Date: January 09, 2015
• Jurisdiction: Ontario
• Citations: (2015), 335 O.A.C. 161 (CA);2015 ONCA 373

Rea v. Wildeboer (2015), 335 O.A.C. 161 (CA)

MLB headnote and full text

Temp. Cite: [2015] O.A.C. TBEd. MY.033

Natale Rea, Rea Holdings Inc. and Edward Sorbara (plaintiffs/appellants) v. Robert Wildeboer, Nick Orlando, Fred Jaekel, Armando Pagliari, Suleiman Rashid, R.A.M. Contracting Limited, Robert Marzilli, 1530309 Ontario Limited, Martin Pathak and Martinrea International Inc. (defendants/respondents)

Robert Wildeboer, Armando Pagliari, Suleiman Rashid and Martinrea International Inc. (plaintiffs by counterclaim) v. Natale Rea and Rea Holdings Inc. (defendants to the counterclaim)

(C59168; 2015 ONCA 373)

Indexed As: Rea et al. v. Wildeboer et al.

Ontario Court of Appeal

Weiler, Sharpe and Blair, JJ.A.

May 26, 2015.

Summary:

The plaintiffs asserted an oppression claim under s. 248 of the Business Corporations Act alleging misappropriation of funds from Martinrea International Inc. and seeking to recover those funds for the corporation. The defendants argued that the claim was solely Martinrea's claim and that it had to be pursued as a derivative action on behalf of the corporation, with leave of the court. The motion judge agreed with the defendants and struck the claim. The plaintiffs appealed.

The Ontario Court of Appeal dismissed the appeal.

Company Law - Topic 9421

Actions by corporations - Derivative actions - General - The Ontario Court of Appeal discussed the difference between an "oppression remedy" and a "derivative action" - See paragraphs 12 to 25.

Company Law - Topic 9421

Actions by corporations - Derivative actions - General - The plaintiffs asserted an oppression claim under s. 248 of the Business Corporations Act alleging misappropriation of funds from Martinrea International Inc. and seeking to recover those funds for the corporation - The defendants argued that the claim was solely Martinrea's claim and that it had to be pursued as a derivative action on behalf of the corporation, with leave of the court - The motion judge agreed with the defendants and struck the claim - The plaintiffs appealed - The Ontario Court of Appeal dismissed the appeal - Claims had to be pursued by way of a derivative action after obtaining leave of the court where, as here, the claim asserted sought to recover solely for wrongs done to a public corporation, the thrust of the relief sought was solely for the benefit of that corporation, and there was no allegation that the complainant's individualized personal interests had been affected by the wrongful conduct - See paragraphs 26 to 47.

Company Law - Topic 9781

Actions against corporations and directors - Action for oppressive conduct - When available - [See both Company Law - Topic 9421 ].

Cases Noticed:

Foss v. Harbottle (1843), 2 Hare 461; 67 E.R. 189 (H.L.), refd to. [para. 15].

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. 15].

Meditrust Healthcare Inc. v. Shoppers Drug Mart et al. (2002), 165 O.A.C. 147; 61 O.R.(3d) 786 (C.A.), refd to. [para. 15].

Ford Motor Co. of Canada Ltd. v. Municipal Employees' Retirement Board (Ont.) et al. (2006), 206 O.A.C. 61; 79 O.R.(3d) 81 (C.A.), leave to appeal refused (2006), 358 N.R. 393; 225 O.A.C. 400 (S.C.C.), refd to. [para. 19].

Hoet v. Vogel et al., [1995] B.C.T.C. Uned. 374 (S.C.), refd to. [para. 19].

Aegon Capital Management Inc. et al. v. BCE Inc. et al., [2008] 3 S.C.R. 560; 383 N.R. 119; 2008 SCC 69, refd to. [para. 22].

Malata Group (HK) Ltd. v. Jung (2008), 233 O.A.C. 199; 89 O.R.(3d) 36; 2008 ONCA 111, refd to. [para. 23].

Jabalee v. Abalmark Inc., [1996] O.J. No. 2609 (C.A.), refd to. [para. 23].

Ontario Securities Commission v. McLaughlin, [1987] O.J. No. 1247 (H.C.), refd to. [para. 26].

Deluce Holdings Inc. v. Air Canada (1992), 12 O.R.(3d) 131 (Gen. Div.), refd to. [para. 26].

C.I. Covington Fund Inc. v. White et al., [2000] O.T.C. 865 (Sup. Ct.), affd. (2001), 152 O.A.C. 39 (Div. Ct.), refd to. [para. 26].

Waxman et al. v. Waxman et al. (2004), 186 O.A.C. 201 (C.A.), leave to appeal refused (2005), 339 N.R. 200; 207 O.A.C. 400 (S.C.C.), refd to. [para. 26].

Hunt v. T & N plc et al., [1990] 2 S.C.R. 959; 117 N.R. 321, refd to. [para. 48].

Hunt v. Carey Canada Inc. - see Hunt v. T & N plc et al.

Falloncrest Financial Corp. v. Ontario (1995), 27 O.R.(3d) 1 (C.A.), refd to. [para. 49].

Authors and Works Noticed:

Iacobucci, Edward M., and Davis, Kevin E., Reconciling Derivative Claims and the Oppression Remedy (2000), 12 S.C.L.R. 87, generally [para. 28]; pp. 90 to 110 [para. 37, footnote 3].

Koehnen, Markus, Oppression and Related Remedies (2004), pp. 440 to 448 [para. 28]; 443 [para. 20]; 454 [para. 37, footnote 3].

MacIntosh, Jeffrey G., The Oppression Remedy: Personal or Derivative? (1991), 70 Can. Bar Rev. 29, generally [para. 28].

Welling, Bruce, Corporate Law in Canada: The Governing Principles (3rd Ed. 2006), p. 509 [para. 18].

Counsel:

Jeremy C. Millard and Holly V.A. Cunliffe, for the appellants;

Don H. Jack and Courtney Raphael, for the respondents.

This appeal was heard on January 9, 2015, by Weiler, Sharpe and Blair, JJ.A., of the Ontario Court of Appeal. The following judgment of the Court of Appeal was delivered by Blair, J.A., on May 26, 2015.