The case I studied was the regarding the appeal from the plaintiff shareholders of
D Ltd against the defendants, the shareholders of the V Ltd. The judgement was
settled in the year of 2000. The plaintiffs sued the defendant for ‘breach of contract;
unjust enrichment, constructive trust and conversion; unlawful interference with
economic relations; oppression; and breach of fiduciary duty’ (CanLII 22363 (ON SC)).
Based on tort law, the decision being made previously in the sample cases recorded
under the Supreme Court of Canada, the argument between defendants and plaintiff,
the court made a conclusion that there is a existence of tort of conspiracy.
The background of the case:
The defendant P, and other certain shareholders established a new company V
Ltd., and proposed to plaintiffs, the shareholders of D Ltd., for acquiring all the shares
of D Ltd., through the new company V Ltd. Under defendants’ proposal, the plaintiffs
were to receive shares in V Inc. in exchange for the shares they held in D Ltd. Except
the certain number of shares that were free for restriction, the restricted shares were
unblock every six months until all of the shares are released. However, V Ltd. Breach
the agreement. They failed to provide the share at the beginning and also, they
restricted all the shares of V Ltd. Following, they only released small amount of share
at the later date of the voting agreement have been made. Also, during the gap of the
V Ltd shares acquiring date and the sharing releasing date, the share value of the V
Ltd dropped. The plaintiffs brought an action against V Inc., D Ltd. and individual
directors for the loss on declining value of the shares between the dates when the
plaintiffs ought to have been able to dispose of their shares under the terms of the
voting agreement and the dates when they could in fact dispose of the shares (CanLII
22363 (ON SC)).
Legal issues the court have to decided:
The plaintiff had made the claim on the following statement, which are the issues
that the court have to decide whether it was stand (CanLII 22363 (ON SC)):
(i) Breach of contract. For breaching the contract (CanLII 22363 (ON SC)), first
thing had to be decided is that whether the contract was valid, and then to decide if
the action the defendant did had breached the contract.
(ii) Conspiracy (CanLII 22363 (ON SC)). For deciding if there was conspiracy exist,
it had to be confirm that the action defendants did were breach the tort law and there
was an intention on conspiracy.
(iii) Unjust enrichment, constructive trust and conversion (CanLII 22363 (ON SC)).
The court had to decide if the first and foremost be an enrichment, if the conversion
was sustainable and if there was constructive trust breached.
(iv) Unlawful interference with economic relations (CanLII 22363 (ON SC)). For
the tort of intentional interference with contractual relations and economic interests
requires the plaintiff to prove that there was an intention to injure the plaintiff; there
was interference with another's method of gaining his or her living or business by illegal
means and there was economic loss caused thereby (CanLII 22363 (ON SC)).
(vi) breach of fiduciary duty (CanLII 22363 (ON SC)).
Ways to make decision and the reason on why had such decision
The court analysis each of the above-mentioned legal issues separately to
identify whether the claim from the plaintiffs stand.
The court identified the voting
agreement was eligible for conduction.
Regarding to the Conspiracy, the court cited the statement from the defendants
and the plaintiffs, and made the judgement based on the nature of the tort. The judge
mentioned that, to make the claim that the tort of conspiracy exist, it should allege
the agreement between the defendants to conspire, and state precisely what the
purpose or what were the objects of the alleged conspiracy, and it must then proceed
to set forth, with clarity and precision, the overt acts which are alleged to have been
done by each of the alleged conspirators in pursuance and in furtherance of the
conspiracy; and lastly, it must allege the injury and damage occasioned to the
plaintiff thereby (CanLII 22363 (ON SC)). The judge brought the claim of the plaintiff
and link it to the defendant’s statement. Then the judge came up with a conclusion of
the conspiracy stand.
Regarding to unjust enrichment, constructive trust and conversion, the court
decided the claim should be struck out. In order to sustain such a claim there must
first and foremost be an enrichment. The came up the reason for why the claim did
not established was that ‘the plaintiffs did not plead that the defendants sold shares in
V Ltd. during the time that the shares held by the plaintiffs were improperly restricted’
(CanLII 22363 (ON SC)). In this case, generating for themselves profits that were not
available to the plaintiffs (CanLII 22363 (ON SC)). The court also refer the previous
cases as an example
For the judgement of unlawful interference with economic relations, the judge
used the quotation from the decision of Lord Justice Dillon as there was a similar case
being judged. To prove the unlawful interference with economic relations, it had to be
proved byt there was an intention to injure plaintiff. The plaintiff argued that there was
an intention interference with unlawful means on the case, which caused them
economical lost. Therefore, regarding to intention of injured, the judge gave the
following conclusion, the statement of claim sets out a reasonable cause of action
based on this tort and the attempt to strike out this claim must fail (CanLII 22363 (ON
SC)). While for the economic interest, the intention on interference on the economic
interest related to the voting agreement was not stand as the Develcon was not alleged
to have taken any subsequent steps in interference with that economic interest (CanLII
22363 (ON SC)).
‘Reading subpara. (c) generously, I take it to essentially allege that those individual
defendants who were directors of Vianet used their positions as such to direct Vianet
not to issue the shares and subsequently directed it to only issue the shares with the
restriction complained of. In my view, that is an adequate, although far from perfect,
pleading of an overt act that is sufficient to satisfy the requirement for the plea of the
tort of conspiracy. Therefore, the claim for having intentionally interfered with the
voting agreement could not stand (CanLII 22363 (ON SC)).
The conclusion and decision made regarding to the case.
For the above outlined reason and decision, the judge reviewed the statement and
amended the statement on struck out the pleas of unjust enrichment, constructive trust
and conversion. In addition, the claim of unlawful interference with economic relations
was also struck out. The plaintiffs are granted leave to further amend the amended
statement of claim in light of these reasons 2000 (CanLII 22363 (ON SC)). Given the
the above-mentioned legal fact that being struck out, there might not be a sustain of
tort, but sustain the claim in conspiracy.
The jude come up the decision that, although the plaintiff have an positive
position regarding to this motions, the success of the pleas was still divided. In
addition, the details statement on clear claims could avoid many of the challenges
regarding to uncareful claims. If the lawyer had
Reference:
1. Private Equity Management Company et al. v. Vianet Technologies Inc. et
al.[Indexed as: Private Equity Management Co. v. Vianet Technologies Inc.] 48 O.R.
(3d) 294 [2000] O.J. No. 1398 Court File No. 99-CV-180354, 2000 CanLII 22363 (ON
SC),https://www.canlii.org/en/on/onsc/doc/2000/2000canlii22363/2000canlii22363.ht
ml?searchUrlHash=AAAAAQAEdG9ydAAAAAAB&resultIndex=2
2.
Corporate
and
Business
Law,
course
content,
Unit
3:
Tort
https://e.centennialcollege.ca/d2l/le/content/567037/viewContent/6379805/View
Law,