PRACTICE |
Pleadings |
Motion to Strike |
Dixon v. Canada
T-2311-97
Gibson J.
22/12/99
9 pp.
Application for order striking out plaintiffs' statement of claim as abuse of process or as disclosing no reasonable cause of action--Plaintiffs' action based on losses suffered by Highwood Distillers Ltd. (Highwood) as result of investigations by defendants (Queen, MNR, RCMP) into alleged illegal sale of alcohol--Consequent drop in price of Highwood shares, and losses by shareholder plaintiffs-- Highwood's action for damages against same defendants settled in November 1996--Application allowed--Rule in Foss v. Harbottle (1843), 67 E.R. 189 (Ch.) providing individual shareholders have no cause of action in law for wrongs done to corporation and any action in respect thereof must be brought either by corporation or by way of derivative action: Hercules Managements Ltd. v. Ernst & Young, [1997] 2 S.C.R. 165--Rule in Foss v. Harbottle extending to situations where, as here, defendant Crown in right of Canada: Antrim Yards Ltd. v. Canada, [1991] 3 F.C. 459 (T.D.)--On facts of action as pleaded, plaintiffs obviously cannot succeed herein--Furthermore, by analogy to reasoning in Burt v. McLaughlan (1992), 11 C.P.C. (3d) 92 (Alta. Q.B.), action herein abuse of process--In Burt v. McLaughlan, where action arose out of collapse of Canadian Commercial Bank, after liquidator's action against Crown settled, shareholders commenced own action for losses due to diminution of share value--Court found respondent shareholders' rights same as bank's; rights to be exercised through liquidator; abuse of process to allow shareholders to pursue already settled claims.