APAC Limited v. Cronin, 2019 ONSC 86
On January 4, 2019, the Ontario Superior Court of Justice Divisional Court dismissed an appeal of an application brought under section 255 of the Ontario Business Corporations Act. The appeal was filed by Interra Management Group Limited (“Interra” or the “Company) and Patrick Cronin (“Cronin” and, collectively with Interra, “the Appellants”). The Appellants also challenged the related costs decision dated July 25, 2018, for which leave to appeal was required.
Cronin was the majority shareholder of Interra. The respondent on appeal, APAC Limited (“APAC”), was the minority shareholder in Interra. Prior to 2012, APAC was responsible for managing the Company’s day-to-day operations. In 2012, Cronin assumed responsibility for the Company’s day-to-day operations. Cronin had mortgaged certain properties owned by Interra without APAC being aware of the same. The Appellants had refused to provide APAC with information in relation to the mortgages or the use of the mortgage proceeds. The application judge ordered Cronin and Interra to produce various documentation and information and to account for the mortgage proceeds. The Divisional Court upheld the application judge’s finding that APAC had a reasonable expectation of ongoing access to financial disclosure and that the Appellants conduct in failing to keep APAC informed and refusing to provide pertinent information was oppressive. Leave to appeal the costs order was denied.
John Downing and Jack Masterman (Commercial Litigation) represented the successful respondent in this appeal.