Giles,
A.S.P.:—
When
this
motion
came
on
before
me,
Mr.
Klotz
responding,
indicated
that
he
had
been
retained
only
to
present
argument
with
respect
to
the
alleged
inadequacies
of
the
authorization
for
Olympia
Interiors
Ltd.
to
commence
the
action.
I
indicated
that
Mr.
Klotz
would
be
appearing
as
a
barrister
for
that
purpose
and
would
not
be
a
solicitor
of
record.
He
would
neither
have
to
be
added
as
solicitor
nor
move
to
remove
himself
from
the
record
after
the
conclusion
of
the
hearing.
In
this
case
an
action
was
commenced
in
the
names
of
Olympia
Interiors
Ltd.
and
Mary
David.
Sometime
prior
to
the
commencement
of
this
action
Mary
David
had
been
the
sole
shareholder
and
sole
director
and
was
an
officer
of
Olympia.
Mary
David
became
bankrupt
and
upon
that
happening
the
shares
of
Olympia,
previously
owned
by
Mary
David,
became
vested
in
her
trustee
in
bankruptcy
and
Mary
David
ceased
to
be
a
director
and
an
officer.
On
becoming
bankrupt
Mary
David
apparently
tendered
the
share
certificates
to
the
trustee
who
handed
them
back
indicating
they
were
of
no
value
to
him.
Mary
David
therefore
had
at
all
times
share
certificates.
In
due
course
Mary
David
was
discharged
from
bankruptcy
and
attempted
to
take
control
of
the
company.
The
trustee
in
bankruptcy
indicated
his
willingness
to,
but
did
not
purport
to
execute,
any
formal
transfer
of
the
shares
to
Mary
David,
nor
did
he
obtain
the
consent
of
the
inspectors
of
the
bankrupt
estate
to
the
transfer.
It
was
argued
that
the
trustee
having
indicated
he
would
transfer,
there
was
an
equitable
transfer.
I
disagree.
This
is
not
a
case
of
a
mere
failure
to
prepare
and
execute
formal
papers.
The
trustee
at
the
time
was
not
in
a
position
to
transfer
and
did
not
become
entitled
to
transfer
until
after
the
action
had
been
started.
Mary
David
not
being
a
shareholder
could
not
elect
herself
a
director
nor
appoint
herself
an
officer
and
therefore
had
no
right
to
cause
the
company
to
start
an
action.
Were
Olympia
Interiors
a
company
incorporated
in
a
traditional
manner
the
purported
authorization
of
commencement
of
action
would
have
been
an
absolute
nullity
from
the
start
and
there
would
have
been
no
possibility
of
validating
it
retroactively
to
the
date
it
purported
to
be
done.
However,
Olympia
Interiors
was
incorporated
under
the
Business
Corporations
Act
of
Ontario
and
section
128
of
the
Business
Corporations
Act
1982
provides
that
an
act
done
by
a
director
or
by
an
officer
is
not
invalid
by
reason
only
of
any
defect
that
is
thereafter
discovered
in
his
appointment
election
or
qualification.
The
reason
Mary
David's
purported
authorization
of
commencement
of
the
action
by
Olympia
Interiors
could
be
claimed
to
be
a
nullity
is
that
there
was
a
defect
in
her
appointment
election
and
qualification.
It
appears
that
her
lack
of
capacity
was
only
discovered
(although
it
may
have
been
suspected
by
the
Crown)
after
the
Crown
heard
from
the
trustee
and
the
inspectors
that
the
trustee
had
executed
no
assignment
of
the
shares
and
the
inspectors
had
approved
no
such
assignment.
The
Crown
ascertained
this
after
the
statement
of
claim
was
filed.
Because
of
the
provisions
of
section
128
I
find
the
action
was
not
a
nullity.
The
motion
challenging
the
commencement
of
the
action
will
be
dismissed
without
prejudice
to
the
right
of
the
Crown
to
move
to
strike
the
claim
or
any
part
thereof
for
other
reasons.
Those
parts
of
the
motion
seeking
to
strike
parts
of
the
claim
will
be
adjourned
sine
die.
The
plaintiffs
requested
that
I
set
a
date
for
the
motion
to
be
brought
on
but
in
view
of
the
possibility
of
an
appeal
of
this
order
I
declined
to
do
so.
I
did
indicate
that
Mary
David,
who
for
the
time
being
is
acting
for
herself
and
for
the
company,
should
be
given
somewhat
more
than
the
usual
two
days'
notice
when
the
motion
to
strike
is
again
brought
on.
Order
That
part
of
the
motion
challenging
the
institution
of
the
action
is
dismissed.
The
remainder
of
the
motion
is
adjourned
sine
die.
Email this Content