BC appeal court overturns $970,000 award over poorly documented private investment
After the relationship soured and the company’s assets sold for about $7.7 million in March 2020, the investor pursued several proceedings. In the action under appeal, filed June 22, 2022, she claimed that an oppression remedy she had already won did not fully compensate her for losses caused by the shareholder’s alleged breaches of contract.
A chambers judge agreed on a summary trial, awarding $970,708.39 in principal and interest on the theory that the investor had put $1,495,820 into two share purchases. The judge also ordered the shareholder to pay a $275,820.32 indemnity for legal fees from the oppression proceeding.
The Court of Appeal found those conclusions could not stand on the evidence before the trial judge. Writing for a unanimous panel, Justice Gomery held that the written agreements did not, on their face, require the shareholder to buy back a second 20 percent block of shares the investor acquired in 2019, and that the oral evidence on the point was incomplete and unclear.
Fresh evidence proved decisive. Earlier affidavits showed the investor had withheld $70,000 of one payment while claiming a credit the court said she was not entitled to, and that part of the disputed $640,820 figure had already been counted toward an earlier purchase. The damage and interest calculations, the appeal court found, were overstated.
The panel was pointed about the duty to be candid with the court. The investor “did not intend to mislead the chambers judge, but that is what she did,” Justice Gomery wrote.
