Roorda et al. v. MacIntyre et al., 2010 ABCA 156

• Judge: Hunt, Costigan and Bielby, JJ.A.
• Court: Court of Appeal (Alberta)
• Case Date: May 06, 2010
• Citations: 2010 ABCA 156;(2010), 487 A.R. 213 (CA)

Roorda v. MacIntyre (2010), 487 A.R. 213 (CA);

      495 W.A.C. 213

MLB headnote and full text

Temp. Cite: [2010] A.R. TBEd. MY.113

Jacob Roorda and Leeward Enterprises Limited (appellants/plaintiffs) v. Kent MacIntyre, James T. Bruvall, Canadian Income Fund Group Inc., 423543 Alberta Inc., Citadel Diversified Management Ltd., Citadel S1 Management Ltd., Citadel TEF Management Ltd., Citadel CPRT Management Ltd., Mydas Management Inc., Citadel Multi-Sector Management Inc., Citadel Series Management Ltd., Citadel IG Management Ltd., Equity Lift Management Ltd., N.A. Energy Management Inc., Stable Yield Management Inc., Sustainable PE Management Inc., Citadel VF Management Ltd., CGF Funds Management Ltd. and Equal Weight Management Ltd. (respondents/defendants)

(0901-0086-AC; 2010 ABCA 156)

Indexed As: Roorda et al. v. MacIntyre et al.

Alberta Court of Appeal

Hunt, Costigan and Bielby, JJ.A.

May 18, 2010.

Summary:

MacIntyre conceived an idea to create a closed-end mutual fund trust called Citadel Diversified Investment Trust (CDIT). The trust was established by a joint venture agreement. MacIntyre, Roorda and Bruvall and others participated in the agreement through corporate vehicles. MacIntyre subsequently created a new closed-end mutual fund called Citadel S1 Income Trust Fund. MacIntyre and Bruvall participated in Citadel S1, but Roorda was not invited to participate. Bruvall proposed to CDIT's directors that the costs of administering new funds should be shared with CDIT. In exchange, Bruvall received permission for the new funds to use the Citadel name. Roorda and a corporation (collectively Roorda) commenced an action, claiming a right to participate in the other Citadel funds.

The Alberta Court of Queen's Bench, in a decision reported at [2009] A.R. Uned. 99, framed the central issue as whether the dealings between Roorda, MacIntyre and Bruvall gave rise to a fiduciary duty such that MacIntyre and Bruvall were obliged to extend to Roorda the opportunity to participate in the other Citadel funds. The court concluded that the parties' commercial relationship and any fiduciary duties that arose from that relationship were limited to CDIT's business. Roorda appealed.

The Alberta Court of Appeal dismissed the appeal.

Equity - Topic 3650

Fiduciary or confidential relationships - Breach of fiduciary relationship - Joint ventures - MacIntyre conceived an idea to create a closed-end mutual fund trust called Citadel Diversified Investment Trust (CDIT) - The trust was established by a joint venture agreement (the agreement) - MacIntyre, Roorda and Bruvall and others participated through corporate vehicles - MacIntyre subsequently created a new closed-end mutual fund called Citadel S1 Income Trust Fund - MacIntyre and Bruvall participated in Citadel S1, but Roorda was not invited to participate - Bruvall received permission for the new funds to use the Citadel name - Roorda and a corporation (collectively Roorda) commenced an action, claiming a right to participate in the other Citadel funds - The trial judge framed the central issue as whether the parties' dealings gave rise to a fiduciary duty such that MacIntyre and Bruvall were obliged to extend to Roorda the opportunity to participate in the other Citadel funds - The judge concluded that the parties' commercial relationship and any fiduciary duties that arose from that relationship were limited to CDIT's business - The Alberta Court of Appeal affirmed the decision - The agreement described the project's scope in the singular as "the creation of a closed-end mutual trust fund" - It specifically authorized the parties to conduct other business activities and precluded them from acquiring any interest in any other business conducted by a party - Moreover, it specifically disclaimed the creation of a partnership, thereby effectively excluding the operation of fiduciary duties that might arise from a partner relationship - All of these terms were circumscribed by an entire agreement clause - The scope of a fiduciary duty was dependent upon the nature of the parties' relationship - There was no support for the proposition that a fiduciary duty that arose in one relationship had to extend to other relationships between the same parties - The court rejected an assertion that the other Citadel funds were extensions or continuations of CDIT's business - The trial judge applied well-established tests to determine whether the alleged fiduciary duty arose - He noted correctly that the law of fiduciary relations did not ordinarily apply to parties who were dealing at arms length in commercial transactions - Therefore, the parties' relationship did not fall within a class that was presumptively fiduciary in nature - The judge properly considered whether a fiduciary relationship arose as a matter of fact out of the specific circumstances of the parties' relationship - He found that Roorda could not reasonably have expected that MacIntyre and Bruvall would act in his best interests in developing other funds - That finding was entitled to deference - See paragraphs 13 to 17.

Equity - Topic 3713

Fiduciary or confidential relationships - Commercial relationships - Arm's length commercial transactions - [See Equity - Topic 3650 ].

Joint Ventures - Topic 1402

Relations between parties - General - Fiduciary - [See Equity - Topic 3650 ].

Cases Noticed:

Housen v. Nikolaisen et al., [2002] 2 S.C.R. 235; 286 N.R. 1; 219 Sask.R. 1; 272 W.A.C. 1; 2002 SCC 33, refd to. [para. 12].

Meyer v. Partec Lavalin Inc. et al. (2001), 281 A.R. 339; 248 W.A.C. 339; 2001 ABCA 145, refd to. [para. 12].

McAteer v. Billes et al. (2007), 409 A.R. 143; 402 W.A.C. 143; 2007 ABCA 137, refd to. [para. 12].

Director of Investigation and Research, Competition Act v. Southam Inc. et al., [1997] 1 S.C.R. 748; 209 N.R. 20, refd to. [para. 12].

International Corona Resources Ltd. v. LAC Minerals Ltd., [1989] 2 S.C.R. 574; 101 N.R. 239; 36 O.A.C. 57; 61 D.L.R.(4th) 14, refd to. [para. 16].

Ironside et al. v. Smith (1998), 223 A.R. 379; 183 W.A.C. 379; 70 Alta. L.R.(3d) 393; 1998 CarswellAlta 1045; 1998 ABCA 366, refd to. [para. 16].

Counsel:

L.M. Sali, Q.C., and A.D. Grosse, for the appellants;

L.R. Duncan, Q.C., and L.C. Livingstone, for the respondents.

This appeal was heard on May 6, 2010, by Hunt, Costigan and Bielby, JJ.A., of the Alberta Court of Appeal. The following memorandum of judgment was delivered by the court at Calgary, Alberta, on May 18, 2010.