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a guest Oct 19th, 2018 64 Never
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  1. Summary: Application by the plaintiff for a Mareva injunction or, alternatively, an order for the preservation of assets, and an order requiring the defendants to deliver certain documents. The plaintiff and the individual defendants Chua, Morand and Foo each held 25 per cent of the shares in the corporate defendant Organo Gold Enterprises Inc., which was a worldwide business specializing in the marketing of coffee and other foods infused with a mushroom extract. The plaintiff claimed that in 2008, he, Chua and Morand formed an unwritten partnership under which he was entitled to a 32.5 per cent share of Organo's worldwide earnings. In the fall of 2009 tension developed between the parties about how the partnership was functioning and the business was being run, which led to the termination of the plaintiff's employment with Organo. Thereafter, the plaintiff started a new company, Serenigy Global Inc., which sold the same product as Organo and employed many of its former personnel. The plaintiff commenced an action against Organo and the individual defendants for oppression and other relief. The defendants counterclaimed for an accounting and damages alleging that the plaintiff breached his contact by misusing confidential information and soliciting suppliers, distributors and employees. In addition, Organo commenced an action against Serenigy for the same relief. The plaintiff sought full disclosure of Organo's financial records to prove the existence of a partnership agreement. In addition, he sought a Mareva injunction or, alternatively, a preservation order, to prevent the defendants from stowing assets out of the jurisdiction and an order requiring them to list assets.
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  3. HELD: Application allowed in part. The plaintiff showed a strong prima facie case for an unwritten partnership agreement between himself, Morand and Chua. The existence of a shareholder agreement did not preclude the existence of a partnership agreement and it was not anomalous that the parties' share percentage did not correspond to the share of profits they were entitled to. Furthermore, dissolution of the partnership did not, itself, defeat a former partner's claim for profits derived from the partnership's assets. However, the plaintiff had failed to establish that he would suffer irreparable harm if the Mareva injunction was not granted as Organo was profitable and the defendants would be motivated to sustain its profitable operations. Given that a Mareva injunction was refused, it was not appropriate to grant a preservation order. All of the non-commercially sensitive documentation the parties sought from one another was to be produced. Commercially sensitive documentation relating to communications between the plaintiff and Organo's distributors, suppliers and employees, communications between the plaintiff and Organo's and Serenigy suppliers and Organo's financial documentation was to be produced as they were in the parties' possession and could be used at trial to prove a material fact and any prejudice resulting from the disclosure of confidential information could be redressed by the terms of the confidentiality order and the parties' general obligation to maintain confidentiality. Each party was to disclose their list of suppliers to the others' counsel at the same time and counsel were to compare lists and prepare a statement of facts confirming names of common suppliers.
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