Cousins owned common shares in group of closely-held family companies. Eight of eleven cousins decided to monetize value of interests in shopping centres which were two core assets of companies. Cousins entered share redemption transaction with companies. Non-selling cousins brought in equity investor First Capital who purchased 50% stake in shopping centre. Equity investor was public company. Selling cousins found out price paid by equity investor reflected much higher value attributed to shopping centre than that on which share redemption transactions had been negotiated. Selling cousins brought action against non-selling cousins, family companies’ lawyers and accountants, and public company. Ogilvy Renault was corporate counsel to Leikin Group of companies. GGFL was accounting firm. Motion for summary judgment brought by First Capital was allowed. Motions for summary judgment brought by non-selling cousins, Ogilvy Renault defendants and Accounting defendants were dismissed. Evidence disclosed no basis for claim against First Capital. First Capital did not make offer to purchase interest until after shareholders executed letter of intent. First Capital made offer to purchase interest after RBC completed reviews of bids. There was no genuine issue for trial in respect of claim against First Capital. Claim against non-selling shareholders and Leikin Group were for damages for breach of fiduciary duty, oppression, breach of confidence, misuse of confidential information and unjust enrichment. Determination of factually disputed issues required findings about credibility. Non-selling shareholders and Leikin Group did not show there was no genuine issue requiring trial and summary judgment was not granted to them. Ogilvy Renault defendants did not show there was no genuine issue for trial. Court wished to hear viva voce evidence from individual before making final findings about individual’s credibility. Accounting defendants did not show there was no genuine issue for trial. Court needed to hear further argument about nature and scope of GGFL retainer.
Harris v. Leikin Group Inc.
(June 13, 2011, Ont. S.C.J., Brown J., File No. 08-CL-7482) 203 A.C.W.S. (3d) 500 (131 pp.).