Case information

Commercial law — Corporations — Shareholder’s rights — Derivative actions — Whether, in applying the statutory test for leave to bring a derivative action, courts can make findings of credibility when assessing the good faith criterion of the test — Whether courts can determine the merits of a limitations defence at the leave stage for a derivative action — Companies Act, R.S.N.S. 1989, c. 81, Third Schedule, s. 4.

Case summaries are prepared by the Office of the Registrar of the Supreme Court of Canada (Law Branch). Please note that summaries are not provided to the Judges of the Court. They are placed on the Court file and website for information purposes only.

The applicant brought an application seeking leave to bring an action in the name of Jack Link’s Canada Company (“Link Canada”), a Nova Scotia corporation. He wished to pursue an action against Link Snacks, Inc., a Wisconsin company that the applicant has previously been a shareholder of, and against its individual directors and officers. The application judge applied the three-part test set out in the statute. He concluded that the applicant failed to establish two of the criteria required: he did not demonstrate he was acting in good faith, nor that the proposed action appeared to be in the interests of Link Canada. The application judge therefore dismissed the application. The Court of Appeal concluded that the application judge did not err in the application of the principles in his determination that the applicant failed to establish that he was acting in good faith. It dismissed the appeal.