Martin v. Artyork Investments Ltd., [1997] 2 S.C.R. 290

Heinrich Martin                                                                                 Appellant

v.

Artyork Investments Limited                                                            Respondent

Indexed as:  Martin v. Artyork Investments Ltd.

File No.:  25006.

1997:  May 26.

Present:  Lamer C.J. and La Forest, L’Heureux‑Dubé, Sopinka, Gonthier, Cory, McLachlin, Iacobucci and Major JJ.

on appeal from the court of appeal for ontario

Corporations ‑‑ Directors ‑‑ Indoor management rule ‑‑ Appellant providing director of respondent company with funds to invest in company ‑‑ Appellant entitled to rely on indoor management rule ‑‑ Respondent bound by director’s representations ‑‑ Business Corporations Act, R.S.O. 1990, c. B.16, s. 19.

Statutes and Regulations Cited

Business Corporations Act, R.S.O. 1990, c. B.16, s. 19.

APPEAL from a judgment of the Ontario Court of Appeal (1995), 25 O.R. (3d) 705, 85 O.A.C. 221, reversing a decision of the Ontario Court (General Division), [1991] O.J. No. 1890 (QL), allowing the appellant’s action against the respondent.  Appeal allowed.

Joel Richler and J. A. Prestage, for the appellant.

Raymond M. Slattery, for the respondent.

//Iacobucci J.//

The judgment of the Court was delivered orally by

1                        Iacobucci J. ‑‑ Based on the findings of the trial judge, the appellant was entitled to the protection afforded by s. 19 of the Ontario Business Corporations Act in his dealings with the director of the respondent.  Accordingly, the respondent is bound by its director’s representations.  Therefore the appeal is allowed with costs in the Ontario Court of Appeal and here, the judgment of the Court of Appeal is set aside, and the trial judgment is restored.

Judgment accordingly.

Solicitors for the appellant:  Blake, Cassels & Graydon, Toronto.

Solicitor for the respondent:  Julian Polika, Toronto.