In re Crédit Canadien Incorporé / Sun Trust Company Ltd. v. Bégin

In re Crédit Canadien Incorporé / Sun Trust Company Ltd. v. Bégin

The Supreme Court dismissed the appeal because the evidence did not establish the call was unenforceable nor that the directors exercised the forfeiture power for an illegitimate purpose or collusively; the forfeiture was therefore intra vires and, on these facts, in the company's interest and valid.

Citation
[1937] SCR 305
Parties
Appellant (petitioner, Liquidator): Sun Trust Company Limited (Petitioner, Liquidator of Crédit Canadien Incorporé); Respondents (contestants): Wilfrid Bégin and others
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
21 April 1937
Procedural Posture
Winding Up (company Liquidation) / Appeal to Supreme Court of Canada From Court of King’s Bench (appeal Side)
Outcome
Appeal dismissed with costs; petition dismissed; forfeiture upheld.
Legal Topics
Forfeiture of Shares, Calls on Shares, Directors' Fiduciary Duties, Ultra Vires, Collusive Transactions, Winding Up Contributories
Source Language
English
Commercial Law Company Law Corporate Governance Equity Forfeiture of Shares Calls on Shares Directors' Fiduciary Duties Ultra Vires +2 more

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Parties

Sun Trust Company Limited (Petitioner, Liquidator of Crédit Canadien Incorporé)

Appellant (petitioner, Liquidator)

Wilfrid Bégin and others

Respondents (contestants)

Procedural Posture

Winding Up (company Liquidation) / Appeal to Supreme Court of Canada From Court of King’s Bench (appeal Side)

Legal Issues

  1. 1 Whether the directors' call and subsequent forfeiture of shares were valid or ultra vires
  2. 2 Whether directors breached fiduciary duties by declaring forfeiture for improper purposes or collusion with shareholders
  3. 3 Whether forfeiture was in the interest of the company or for the benefit of shareholders

Ratio Decidendi

The Supreme Court dismissed the appeal because the evidence did not establish the call was unenforceable nor that the directors exercised the forfeiture power for an illegitimate purpose or collusively; the forfeiture was therefore intra vires and, on these facts, in the company's interest and valid.

Court Disposition

Appeal dismissed with costs; petition dismissed; forfeiture upheld.

Orders

  • Appeal dismissed with costs.
  • Petition dismissed.