Boffo Family Holdings Ltd. v. Mountainview Developments Ltd.

Boffo Family Holdings Ltd. v. Mountainview Developments Ltd.

The court held that the BCA and the companies' articles permit interim indemnification of directors for legal expenses (subject to the statutory safeguards and undertakings under s.162), the petitioners need only show a serious question to be tried (not a strong prima facie case), the petitioners failed to establish irreparable harm or that the balance of convenience favoured an injunction, and accordingly the interlocutory injunction restraining indemnification was dismissed; companies must keep records of indemnity payments.

Citation
2010 BCSC 560
Parties
Petitioner: Boffo Family Holdings Ltd.; Petitioner: John Bordignon; Petitioner: Allan Bullock; Respondent: Mountainview Developments Ltd.; Respondent: Grappa Investments Corporation; Respondent: Louie Bortolazzo; Respondent: Carmelo Mattiazzo; Respondent: Ottavio Boffo; Respondent: Mario Dalla Zanna; Respondent: Alfredo Baldissera
Court
Supreme Court of British Columbia
Jurisdiction
Canada
Judgment Date
26 April 2010
Procedural Posture
Petition Under Business Corporations Act (ss.227 and 232) / Interlocutory Application/hearing for Injunction and Derivative Leave
Outcome
Petitioners' application for interlocutory injunction dismissed; respondents entitled to interim indemnification by MDL and Grappa subject to statutory safeguards and undertakings; companies ordered to keep records; costs in the cause.
Legal Topics
Shareholder Oppression, Director Indemnification, Interim Injunction, Derivative Action Leave, Directors' Duties and Conflicts
Source Language
English
Corporate Law Company Law Equity Shareholder Oppression Director Indemnification Interim Injunction Derivative Action Leave Directors' Duties and Conflicts

Case Brief

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Parties

Boffo Family Holdings Ltd.

Petitioner

John Bordignon

Petitioner

Allan Bullock

Petitioner

Mountainview Developments Ltd.

Respondent

Grappa Investments Corporation

Respondent

Louie Bortolazzo

Respondent

Carmelo Mattiazzo

Respondent

Ottavio Boffo

Respondent

Mario Dalla Zanna

Respondent

Alfredo Baldissera

Respondent

Procedural Posture

Petition Under Business Corporations Act (ss.227 and 232) / Interlocutory Application/hearing for Injunction and Derivative Leave

Legal Issues

  1. 1 Whether MDL and Grappa may indemnify directors for interim legal costs under the BCA and their articles
  2. 2 Whether petitioners established a serious question to be tried on oppression and derivative claims and entitlement to interlocutory relief
  3. 3 Whether the balance of convenience and irreparable harm favour granting an injunction restraining indemnity payments

Ratio Decidendi

The court held that the BCA and the companies' articles permit interim indemnification of directors for legal expenses (subject to the statutory safeguards and undertakings under s.162), the petitioners need only show a serious question to be tried (not a strong prima facie case), the petitioners failed to establish irreparable harm or that the balance of convenience favoured an injunction, and accordingly the interlocutory injunction restraining indemnification was dismissed; companies must keep records of indemnity payments.

Court Disposition

Petitioners' application for interlocutory injunction dismissed; respondents entitled to interim indemnification by MDL and Grappa subject to statutory safeguards and undertakings; companies ordered to keep records; costs in the cause.

Orders

  • Petitioners' motion for an interlocutory injunction restraining MDL and Grappa from indemnifying individual directors dismissed
  • MDL and Grappa are entitled to indemnify/pay interim legal expenses of the individual respondents in defending the petition and related derivative actions pursuant to their articles and the BCA (ss.160-163)