



COURT OF APPEAL FOR ONTARIO

CITATION: Lord v. Clearspring Spectrum Holdings L.P., 2017
    ONCA 1016

DATE: 20171222

DOCKET: C63787

Doherty, Benotto and Miller JJ.A.

In
    The Matter Of Spectrum Health Care (GP) Inc.

And In The Matter Of
    Spectrum Health Care Employeeco Inc.

BETWEEN

Lori Lord

Applicant (Respondent in Appeal)

and

Clearspring
    Spectrum Holdings L.P. (As Successor in Interest to

Callisto
    Capital III L.P.) and Clearspring Capital Partners (US) L.P.

(Formerly
    Callisto Capital (US) III L.P.)

Respondents (Appellants)

Arthur Hamilton and Jed Blackburn, for the appellants

Robert Staley, Alan Gardner and William Bortolin for the
    respondents

Heard: December 18, 2017

On appeal from the judgment of Justice Fred Myers of the Superior
    Court of Justice, dated April 12, 2017.

REASONS FOR DECISION

[1]

The parties to this appeal were involved in a commercial dispute
    concerning the operations of Spectrum Health Care  a company co-founded by the
    respondent Lori Lord. They signed a Governance Agreement which gave Lord
    certain rights concerning the replacement of members of the Board of Directors
    of Spectrum. Her application to the Superior Court to enforce those rights was
    granted.

[2]

The respondents appeal submitting that the application judge:  (i) erred
    in interpreting the contract; (ii) should have stayed the application in
    accordance with the arbitration clause in the shareholders agreement; and
    (iii) erred in his alternative findings regarding the oppression remedy and
    interim injunction.

[3]

When interpreting the Governance Agreement, the application judge
    considered the factual matrix of the agreement, the inter-relationship of the
    parties and the shareholders agreement. He concluded that the appellants were
    in breach of their obligation under the Governance Agreement. He also concluded
    that there was no conflict with the shareholders agreement. The Governance
    Agreement was a stand-alone document independent of the shareholders
    agreement. On that basis, the arbitration clause did not apply. Although his
    interpretation of the Governance Agreement was sufficient to resolve the issue,
    he went on to determine, in the alternative, that Lords oppression remedies
    would apply. Further, he concluded that had he sent the matter to arbitration,
    he would have issued an interim injunction.

[4]

The threshold issue here is the application judges interpretation of
    the Governance Agreement.

[5]

In our view, the application judge did not err in his interpretation of
    the Governance Agreement. He made clear, thorough and extensive findings of
    fact which he correctly applied to the law. We see no palpable and overriding
    error or mistake of law.

[6]

Nor did the application judge err with respect to the alternate
    remedies. He concluded that an injunction was appropriate because damages would
    be impossible to calculate and proof of damages would be well-nigh
    impossible. We also agree with his analysis as to the oppression remedy. Lord
    had the reasonable expectation that the commitments made by the respondents
    would be honoured and failure to do so would prejudice her.

[7]

Accordingly, the appeal is dismissed.

[8]

If the parties do not agree on costs, they may provide brief written
    submissions by January 15, 2018.

Doherty J.A.

M.L. Benotto J.A.

B.W. Miller J.A.


