



COURT OF APPEAL FOR ONTARIO

CITATION:  Achilles Motors Limited v. 1717222 Ontario Inc.,
    2014 ONCA 139

DATE:  20140224

DOCKET: C57401

Hoy A.C.J.O., LaForme and Pardu JJ.A.

BETWEEN

Achilles Motors Limited

Appellant

and

1717222
    Ontario Inc.
and Nucorp Realty Ltd. Brokerage

Respondents

Charles Baker, for the appellant

William C. McDowell and Lindsay N. Beck, for the
    respondents

Heard:  February 13, 2014

On appeal from the order of Justice Fitzpatrick of the Superior
    Court of Justice, dated July 5, 2013.

ENDORSEMENT


[1]

The appellant, Achilles Motors Limited, appeals the dismissal of its
    application (1) for a declaration that an agreement of purchase and sale entered
    into after the respondent 1717222 Ontario Inc
.
(171)
    had been dissolved, and before it had been revived, was void and (2) for the
    forfeiture and delivery to the appellant of the $100,000 deposit held by the
    respondent real agent, Nucorp Realty Ltd. Brokerage.

[2]

The appellant argues that the application judge erred in concluding that
    the revival of 171 under s. 241(5) of the
Business Corporations Act
,
    R.S.O. 1990, c. B.16 (the 
OBCA
) was retroactive in effect, and the
    agreement of purchase and sale was therefore enforceable.

[3]

For the reasons that follow, we agree with the application judges
    conclusion and, accordingly dismiss this appeal.

[4]

Briefly, the appellant and 171 entered into an agreement of purchase and
    sale on November 18, 2010. That agreement was subsequently amended. Unbeknownst
    to them, on November 16, 2010, 171s corporate charter had been dissolved by
    the Ministry of Government Services for failure to file a Notice of Change Form
    1. 171 learned of the cancellation by letter dated June 20, 2012 from the
    appellants counsel. 171 immediately filed a Form 1 and received a Certificate
    of Revival dated September 19, 2012. Until the appellant discovered that 171
    had been dissolved, the parties had dealt with each other on the basis that the
    agreement of purchase and sale was binding on them.

[5]

More than 25 years ago, this court established in
Zangelo Investments
    Ltd. v. Glasford State Inc.
(1988),
63 O.R. (2d) 542 that the revival provision in Ontarios then current corporate
    statute, namely s. 240(4) of the
Ontario
Business Corporations Act
,
1982
, S.O. 1982, c. 4, was retroactive
    in effect. That section provided as follows:

240(4) Where a corporation is dissolved under subsection (3) or
    any predecessor thereof, the Director on the application of any interested
    person immediately before the dissolution, made within five years after the
    date of dissolution, may, in his discretion, on such terms and conditions as he
    sees fit to impose, revive the corporation
and thereupon
the
    corporation, subject to the terms and conditions imposed by the Director and to
    any rights acquired by any person after its dissolution
,
is restored to
    its legal position
, including all its property, rights and privileges
    and franchises, and is subject to all its liabilities, contracts, disabilities
    and debts,
as of the date of its dissolution, in the same manner and to the
    same extent as if it had not been dissolved
.
[Emphasis added.]

[6]

In doing so, this court upheld the decision of the application judge,
    Oyen J. In a short endorsement, Blair J.A. wrote that:

We agree with the reasoning and the conclusion of Oyen J. The
    wording of s. 240(4) of the
Ontario
Business Corporations Act
,
1982
, S.O. 1982, c. 4, is such that
    the only reasonable inference that can be drawn is that a dissolved company
    that is revived, is revived as of the date of dissolution so as to update all
    action taken by the company during its time of dissolution.

[7]

We reject the appellants argument that because this courts decision in
Zangelo
was in the form of a short endorsement, it should be
    disregarded. The court adopted the reasoning and conclusion of the application
    judge, as it was entitled to do so. The courts decision was clear.

[8]

Section 241(5) of the
OBCA
is worded slightly differently from
    s. 240(4). However, the changes - particularly the words shall be deemed for
    all purposes to have never been dissolved - make it even clearer that s.
    241(5) is similarly retroactive in effect:

241(5) Where a corporation is dissolved under subsection (4) or
    any predecessor of it, the Director on the application of any interested
    person, may, in his or her discretion, on the terms and conditions that the
    Director sees fit to impose, revive the corporation;
upon revival, the
    corporation
,
subject to the terms and conditions imposed by the
    Director and to the rights, if any, acquired by any person during the period of
    dissolution,
shall be deemed for all purposes to have never been dissolved
.
[Emphasis added.]

[9]

Moreover, an interpretation giving retroactive effect is consistent with
    the curative purpose of s. 241(5) of the
OBCA
.

[10]

As
    the application judge highlighted, revival of a dissolved corporation under s.
    241(5) is in the discretion of the Director, and the Director may impose terms
    and conditions. Without commenting on whether any such terms and conditions
    could impact on the otherwise retroactive effect of s. 241(5), we note that
    none of the terms and conditions set out in 171s Certificate of Revival
    purport to interfere with the retroactive nature of 171s revival.

[11]


The appellant relies on
Swale
    Investments Ltd. v. National Bank of Greece (Canada)
(1997),

37 B.L.R. (2d) 324 (Ont. S.C.),
    and decisions that have followed it.  In our view,
Swale
wrongly concluded
    that s. 241(5) is not retroactive in effect. In coming to that conclusion, the
    application judge in
Swale
rejected the reasoning of Oyen J. that had
    been specifically approved by this court in
Zangelo
.
Moreover,
    that conclusion was obiter. The result in
Swale
turned on the fact
    that no revival had taken place or been attempted. As the application judge in
Swale
noted, the revival provision was therefore not relevant. We note that the
    appeal of the respondent in
Swale
to this court was dismissed, on
    consent, without a determination on the merits:
Swale Investments Ltd. v.
    National Bank of Greece (Canada)
,
    [1998] O.J. No. 5383 (C.A.)
. This courts decision in
Zangelo
that the revival provision in s. 240(4) of the earlier version of the
OBCA
is retroactive in effect remains the law, and supports the conclusion that s.
    241(5) is retroactive in effect.

[12]

The
    appeal is accordingly dismissed. The respondent 171 is entitled to costs in the
    agreed, all inclusive, amount of $7500.

Alexandra
    Hoy A.C.J.O.

H.S.
    LaForme J.A.

G.
    Pardu J.A.


