Robak Industries Ltd. et al. v. Gardner et al.

• Jurisdiction: British Columbia
• Court: Court of Appeal (British Columbia)
• Judge: Levine, Thackray and Lowry, JJ.A.
• Citation: (2007), 236 B.C.A.C. 237 (CA),2007 BCCA 61
• Date: 01 February 2007

Robak Ind. Ltd. v. Gardner (2007), 236 B.C.A.C. 237 (CA);

    390 W.A.C. 237

MLB headnote and full text

Temp. Cite: [2007] B.C.A.C. TBEd. FE.009

Robak Industries Ltd. and John Brent Lepinski (appellants/plaintiffs) v. Robert C. Gardner, Ross Glanville & Associates and Ross Glanville (respondents/defendants)

(CA034544; 2007 BCCA 61)

Indexed As: Robak Industries Ltd. et al. v. Gardner et al.

British Columbia Court of Appeal

Levine, Thackray and Lowry, JJ.A.

February 1, 2007.

Summary:

The defendant obtained an order striking out parts of the plaintiff's statement of claim (see [2006] B.C.T.C. Uned. 774). The plaintiff applied for directions as to whether leave to appeal was required.

The British Columbia Court of Appeal, in a decision reported at 232 B.C.A.C. 120; 385 W.A.C. 120, per Finch, C.J.B.C., held that leave to appeal was not required.

The British Columbia Court of Appeal dismissed the appeal.

Company Law - Topic 2164

Shareholders - Shareholders' rights - Derivative actions - The plaintiffs, Lepinski and his wholly-owned holding company, Robak Industries Ltd., sought damages from the defendants for alleged wrongful conduct relating to the control and management of a publicly-traded corporation, Getty Copper Inc. - Their claims included various intentional torts (conspiracy, defamation, wrongful interference with economic relations), and breaches of duties (fiduciary duties and duties of care) owed to them - The case management judge ordered that certain portions of the statement of claim be struck out on the ground that the allegations and claims made by the plaintiffs in those portions disclosed no reasonable cause of action - The chambers judge held that only the company, not individual shareholders, could sue for wrongs done to the company - The plaintiffs appealed, asserting that the principle of Foss v. Harbottle and the Canadian authorities should not be rigidly applied, but the pleadings should be construed in light of recent "refinements, rearticulations, and expressions of exceptions" to the classic principle, by "recognizing nuances in the facts and the established jurisprudence that are not inconsistent with established principles" - The British Columbia Court of Appeal dismissed the appeal - The chambers judge made no error in striking out the portions of the statement of claim - The alleged wrongs to Getty did not give rise to a cause of action on the part of either Lepinski or Robak, or permit Robak to claim as damages the loss of value in its shares of Getty.

Practice - Topic 230

Persons who can sue and be sued - Individuals and corporations - Status or standing - Shareholders - [See Company Law - Topic 2164 ].

Cases Noticed:

Foss v. Harbottle (1843), 2 Hare 461; 67 E.R. 189 (Ch.), refd to. [para. 3].

Hunt v. T & N plc et al., [1990] 2 S.C.R. 959; 117 N.R. 321, refd to. [para. 3].

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. 4].

Haig v. Bamford et al., [1977] 1 S.C.R. 466; 9 N.R. 43, refd to. [para. 4].

Rogers v. Bank of Montreal, [1987] 2 W.W.R. 364; 9 B.C.L.R.(2d) 190 (C.A.), affing. (1985), 64 B.C.L.R. 63 (S.C.), refd to. [para. 4].

Johnson v. Gore Wood & Co., [2002] 1 A.C. 1 (H.L.), refd to. [para. 4].

Prudential Assurance Co. v. Newman Industries Ltd. and others (No. 2), [1982] 1 All E.R. 354 (C.A.), refd to. [para. 11].

Howard and Witchell v. Woodman Matthews, [1983] B.C.L.C. 117 (C.A.), refd to. [para. 18].

Heron International v. Gradem (Lord), [1983] B.C.L.C. 244 (C.A.), refd to. [para. 18].

Fischer (George) (Great Britain) Ltd. v. Multi Construction Ltd. and Dexion Ltd. (third party), [1995] 1 B.C.L.C. 260 (C.A.), refd to. [para. 18].

Barings v. Coopers & Lybrand, [1996] E.W.J. No. 706 (C.A.), refd to. [para. 18].

Gerber Garment Technology Inc. v. Lectra Systems Ltd., [1997] R.P.C. 443 (C.A.), refd to. [para. 18].

Christensen v. Scott, [1996] 1 N.Z.L.R. 273 (C.A.), refd to. [para. 18].

Stein v. Blake, [1998] 1 All E.R. 724 (C.A.), refd to. [para. 25].

Meditrust Healthcare Inc. v. Shoppers Drug Mart et al. (2002), 165 O.A.C. 147; 220 D.L.R.(4th) 611 (C.A.), refd to. [para. 29].

Goldex Mines Ltd. v. Revill et al. (1974), 7 O.R.(2d) 216 (C.A.), refd to. [para. 33].

Green v. Victor Talking Mach. Co. (1928), 24 F.2d 378 (C.A., 2nd Cir.), refd to. [para. 33].

Gardner v. Parker, [2004] 2 B.C.L.C. 554 (C.A.), refd to. [para. 37].

Thomas v. D'Arcy, [2005] QCA 68 (Aust. C.A.), refd to. [para. 37].

Counsel:

H. Shapray, Q.C., for the appellants;

J. Sheilds, for R.C. Gardner;

R. McFee, Q.C., and M. Buhler, for R. Glanville.

This appeal was heard on January 8 and 9, 2007, at Vancouver, B.C., by Levine, Thackray and Lowry, JJ.A., of the British Columbia Court of Appeal. The following judgment of the Court of Appeal was delivered by Levine, J.A., on February 1, 2007.