Source: http://isthatlegal.ca/index.php?name=170-case-law
Timestamp: 2019-04-21 18:44:28+00:00

Document:
It is undisputed that, Mr. McGoey, as a director and CEO of UBS, owed the company fiduciary duties. The imposition of fiduciary duties on directors and officers of a corporation is consistent with the origins of the doctrine in trust law. A director or senior officer of a corporation is in a position of trust. He or she is charged with managing the assets of a corporation honestly and in a manner that is consistent with the objects of the corporation. Courts will be loath to interfere with the legitimate exercise of corporate duties, but they will intervene where a fiduciary breaches the trust reposed in him or her.
 Mr. McGoey’s fiduciary duties included an obligation to act in good faith and in the best interests of the corporation. He had a specific obligation to scrupulously avoid conflicts of interest with the corporation and not to abuse his position for personal gain: Peoples Department Stores Inc. (Trustee of) v. Wise, 2004 SCC 68 (CanLII), 2004 SCC 68,  3 S.C.R. 461, at paras. 35 and 42; and BCE Inc. v. 1976 Debentureholders, 2008 SCC 69 (CanLII), 2008 SCC 69,  3 S.C.R. 560, at paras. 39 and 89.
Subsumed in the fiduciary’s duties of good faith and loyalty is the duty to avoid a conflict of interest. The fiduciary must not only avoid a direct conflict of interest but must also avoid the appearance of a possible or potential conflict. The fiduciary is barred from dividing loyalties between competing interests, including self-interest.
 Disclosure of a directors’ interest in a transaction is just the first step. Disclosure does not relieve a director of his or her obligation to act honestly and in the best interests of the corporation: UPM-Kymmene Corp. v. UPM-Kymmene Miramichi Inc. 2002 CanLII 49507 (ON SC), (2002), 214 D.L.R. (4th) 496 (Ont. S.C.), aff’d 2004 CanLII 9479 (ON CA), (2004), 183 O.A.C. 310 (C.A.).
 The subjective intent of one party to a contract “has no independent place” in interpreting contractual provisions: Eli Lilly & Co. v. Novopharm Ltd., 1998 CanLII 791 (SCC),  2 S.C.R. 129, at para. 54.
 While the plain meaning of the words used by the contracting parties is important, the contract must be read as a whole and in the context of the circumstances as they existed when the contract was created: Dumbrell v. The Regional Group of Companies Inc., 2007 ONCA 59 (CanLII), 2007 ONCA 59, 85 O.R. (3d) 616, at para. 52.
 Courts will avoid a contractual interpretation which results in rendering the agreement unlawful. As Blair J.A. discussed in Ventas, Inc. v. Sunrise Senior Living Real Estate Investment Trust, 2007 ONCA 205 (CanLII), 2007 ONCA 205, 85 O.R. (3d) 254, at para. 57, quoting John D. McCamus, The Law of Contracts (Toronto: Irwin Law, 2005), at p. 729, “where an agreement admits of two possible constructions, one of which renders the agreement lawful and the other of which renders it unlawful, courts will give preference to the former interpretation”; see also Cantor Art Services Ltd. v. Kenneth Bieber Photography Ltd.,  1 W.L.R. 1226 (C.A.).
[w]here words may bear two constructions, the more reasonable one, that which produces a fair result, must certainly be taken as the interpretation which would promote the intention of the parties. Similarly, an interpretation which defeats the intentions of the parties and their objective in entering into the commercial transaction in the first place should be discarded in favour of an interpretation of the policy which promotes a sensible commercial result.
 As stated by the House of Lords in Mannai Investment Co. Ltd. v. Eagle Star Life Assurance Co. Ltd.,  2 W.L.R. 945, at p. 964 (H.L.), commercial contracts should be “interpreted in the way in which a reasonable commercial person would construe them. And the standard of the reasonable commercial person is hostile to technical interpretations and undue emphasis on niceties of language”.
 The interpretation of a contract is a question of law. Accordingly, the standard of review by an appellate court is correctness: Bell Canada v. The Plan Group, 2009 ONCA 548 (CanLII), 2009 ONCA 548, 96 O.R. (3d) 81.

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