Business Associations – Legal proceedings involving business associations – Practice and procedure in proceedings involving corporations
Individual parties were, through professional corporations, partners in S Co., insurance defence law firm. Defendants brought motion under Rule 45.02 for order directing plaintiff, S Co., to pay capital repayment amounts due and owing to defendants into court to credit of action. Motion dismissed. Plaintiffs had, in theory at least, no incentive to undermine value of partners’ capital, provided there was no differential treatment as between withdrawn partners’ capital and that of remaining partners. Potential risk of untoward treatment of withdrawn partners’ capital can be addressed by appropriate financial management and disclosure orders. Defendants had not established that balance of convenience favoured payment to court. However, while court declined to order payment of the withdrawn partners’ capital into court, it was condition of findings on balance of convenience and term of order that: remaining partners shall not expose withdrawn partners’ capital to any risk or accounting treatment materially different from own capital.
Samis + Company v. Strigberger (2020), 2020 CarswellOnt 1295, 2020 ONSC 585, Penny J. (Ont. S.C.J. [Commercial List]).
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