Judgment debtor and director acted in manner that was oppressive

Ontario civil | Corporations

OPPRESSION

Judgment debtor and director acted in manner that was oppressive

Respondents were directors of three corporate entities. Applicant leased equipment to one of corporations. Corporation defaulted on lease and refused to return equipment. Applicant obtained court order requiring equipment to be returned. Equipment was returned. Amount remained owing. Judgment was granted to applicant. Director of corporation was held in contempt for failing to answer outstanding undertakings. Requested information was produced. New company was incorporated to carry on business of judgment debtor corporation. Applicant sought remedy for oppression. Application was allowed. Director abandoned judgment debtor corporation and transferred operating business from judgment debtor corporation to new corporation controlled by director for purpose of escaping obligations to creditors. Judgment debtor and director acted in manner that was oppressive or unfairly prejudicial to interests of applicant. It was appropriate to grant relief against three companies given entanglement of companies’ affairs. Directors of three corporations were jointly and severally liable to pay judgment obtained by applicant against judgment debtor company.

Pitney Bowes of Canada Ltd. v. Belmonte (June 15, 2011, Ont. S.C.J., Murray J., File No. 3514/10) 203 A.C.W.S. (3d) 524 (10 pp.).

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