CaseALPC Housing Solutions Inc. v. Martin,Read the following scenario and click “Next” to work through the case.?017 NSSC 49This case involved Bryony House, which is a transition house that provides shelter to women and their children in Halifax, Nova Scotia. Maria Sancho was a former resident of Bryony House and a partner at ALPC Housing Solutions, Inc. (“ALPC”), which became involved in a campaign to raise capital for the future expansion of Bryony House. Sancho was president of ALPC and her partner in the business, Kris Martin, was a director and secretary-treasurer until she resigned.Laurie Ehler, the executive director of Bryony House, had reached out to Sancho about the campaign, and Sancho informed her partner at ALPC, Martin, about it. The three subsequently discussed fundraising ideas. Sancho and Martin pitched the idea of a lottery to Ehler, and Martin suggested that her home be the main prize, the property title of which was in her husband’s name. Martin told Ehler that the lottery represented the best deal for Bryony House.Ehler, Sancho, and Martin subsequently met with the Board of Directors of Bryony House to propose the lottery. They told the Board that ALPC would market the lottery, run it, and then deliver the proceeds. The Board approved the idea, and Bryony House signed a letter of intent with ALPC.Jacques Martin held legal title to the home and sold it to Bryony House for $1,075,000, after which Martin and her husband moved out, and ticket sales began. Both Ehler and Martin went to the house on weekends to sell tickets. At some point, Ehler and Sancho became aware that Martin had been telling people that she was prepared to repurchase the house from the lottery winner.Unfortunately, ticket sales were slow. The relationship between Ehler and ALPC soured. In addition, toward the end of the lottery, the relationship between Sancho and Martin deteriorated as well. They argued and stopped communicating with one another. The lottery eventually took place, and Martin met the winners. In the days following the draw, Martin negotiated with them to repurchase the home, and, a week later, Martin’s husband bought the home from the winners for $621,500.Cases and Discussion QuestionsCaseALPC Housing Solutions Inc. v. Martin,?017 NSSC 49Fiduciary DutyWhat is fiduciary duty? Did Martin owe a fiduciary duty to ALPC??. ?ynasty Kitchen Cabinets v. Soheili, 2011 BCPC 414 (CanLII)The corporate defendant consented to a judgment against it. The issue was whether its owner/director, Soheili, was personally liable. Dynasty provided cabinets for Soheili’s personal residence. The transaction was with the corporate defendant. The house went into foreclosure, but Dynasty was owed $250 000. Soheili did not give a personal guarantee; he owed $250 000 to the corporate defendant for the cabinets.Is this a case in which the Court would “lift the corporate veil”? Why or why not?2. ?LPC Housing Solutions Inc. v. Martin, 2017 NSSC 49ALPC became involved in a campaign to raise funds to expand a transition house for women and children. Kris Martin was a director of ALPC. She suggested her home be the main prize in the campaign. Her husband sold the house to the organization that owned the transition house for $1 075 000. One week after the draw, he repurchased the house from the winners of the draw for $621 500. ALPC sued, claiming that Kris breached her fiduciary duty.Did the Court find Kris liable for breach of fiduciary duty? If it did, what damages was she ordered to pay? Did the Court find her husband liable for the damages?3. ?CE Inc. v. 1976 Debentureholders, [2008] 3 S.C.R. 560, 2008 SCC 69[Note: Your instructor may assign this case as a Shared Writing activity.]Bell Canada debenture holders opposed a buyout of BCE, a large Canadian telecommunications corporation, by a group headed by the Ontario Teachers’ Pension Plan board. The buyout was financed in part by the assumption, by Bell Canada, a wholly owned subsidiary of BCE, of $30 billion of debt. This would reduce the value of the Bell Canada debentures by about 20 percent. The value of the BCE shares would, on the other hand, increase by about 40 percent as a result of the buyout. The debenture holders therefore opposed court approval of the buyout and claimed that they were entitled to relief under the oppression remedy. The Quebec Supreme Court approved the buyout, but the Court of Appeal allowed the debenture holders’ appeal and disallowed the buyout. The case went to the Supreme Court of Canada.To whom do corporate directors owe a fiduciary duty? What should the directors do if the interests of the corporation and of particular stakeholders do not coincide? What remedies do these stakeholders have if they believe that they have not been treated fairly? Does the law require that business decisions be perfect or they will be overturned by the courts if subsequent events showed that the decisions were not correct?4. ?aur v. Canada, 2013 TCC 227 (CanLII)Kaur was assessed liability as the sole director of a corporation for its unremitted GST. Kaur left the operational and financial matters of the corporation to the general manager, who did not remit the GST. Kaur claimed that she did not have the expertise, knowledge, or experience to manage the administrative matters of the corporation.Explain whether Kaur would be able to avoid liability for the unpaid GST because she had shown due diligence in respect of payment of the tax.5. ?richuk v. Kent,?017 ABQB 432 (CanLII)Urichuk and Kent were the directors of Prospect Oil and Gas (POG). In 1991, Kent developed a plan to ensure that POG maintained its operatorship of an oilfield. The plan involved POG lending money and assigning the promissory notes to a corporation directed by Kent. Kent abstained from voting on the loan, but not the assignment. Urichuk’s agent, a chartered accountant, approved both transactions on his behalf. The loan appeared in POG’s financial documents. In 2015, Urichuk sought leave to commence an action on behalf of POG. Urichuk claimed that Kent took corporate funds and then fraudulently concealed the theft.The Court denied Urichuk’s application for leave to commence a derivative action on the basis that such an action was not in the best interests of POG. What reason did the Court give for this decision?6. ?ohen v. Jonco,?005 MBCA 48 (CanLII)Jonco was incorporated in 1962 by John Cohen, who died in 1992. His will contemplated that Jonco would be wound up by 1997 and left certain preferred shares to his wife, Gwen. His children owned the other shares of the corporation and two of his sons were directors. Gwen received annual dividends of $259 744.80 until 1999. In 2003 she demanded that her shares be redeemed, as she was concerned that she was not being paid dividends, that she was not being provided information about Jonco, and that Jonco refused to diversify its holdings. When her request was denied, she made an application, alleging oppressive conduct that unfairly disregarded her interests and that was prejudicial to her interests. She claimed that her expectation was that Jonco would be liquidated within five years, as her husband has indicated in his will.Should the Court consider John’s intentions as stated in his will in deciding whether the conduct of the directors was oppressive? Why or why not?7. ?. Bryant Shears Ltd. V. Northward Services Ltd., 2012 CanLII 79020 (NL SCTD)Shears sued Northward for damages for negligence and breach of contract. The Statement of Claim was filed after Northward had filed Articles of Dissolution. After the relevant limitation period had expired, Northward filed an application to strike the claim, on the basis that Northward was dissolved when the Statement of Claim was filed. Northward then filed Articles of Revival.Did the Court strike the Statement of Claim? Why or why not?BusinessManagementBusiness LawBUSI 2390
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