A near-$1M win collapsed on appeal after the paperwork - and the numbers - didn't hold up
British Columbia's Court of Appeal has overturned a roughly $970,000 award over a poorly documented private investment, ruling it unsuitable for a summary trial.
The decision released July 2, 2026, sets aside a February 2025 judgment that had awarded an investor damages for breach of contract, plus about $276,000 to cover her legal costs from an earlier oppression fight. The appeal court sent the case back to the trial court, finding the record too thin to resolve fairly.
The dispute traces to transactions beginning in 2018, when the controlling shareholder of a private company encouraged the investor to buy in. She eventually acquired 45 percent of the business, which owned a White Rock property running a motel and restaurant. The parties' dealings, the court noted, were not well documented, and the governing agreements were drafted without the conventions typical of Canadian legal documents.
After the relationship soured and the company's assets sold for about $7.7 million in March 2020, the investor pursued several proceedings. In the action under appeal, filed June 22, 2022, she claimed that an oppression remedy she had already won did not fully compensate her for losses caused by the shareholder's alleged breaches of contract.
A chambers judge agreed on a summary trial, awarding $970,708.39 in principal and interest on the theory that the investor had put $1,495,820 into two share purchases. The judge also ordered the shareholder to pay a $275,820.32 indemnity for legal fees from the oppression proceeding.
The Court of Appeal found those conclusions could not stand on the evidence before the trial judge. Writing for a unanimous panel, Justice Gomery held that the written agreements did not, on their face, require the shareholder to buy back a second 20 percent block of shares the investor acquired in 2019, and that the oral evidence on the point was incomplete and unclear.
Fresh evidence proved decisive. Earlier affidavits showed the investor had withheld $70,000 of one payment while claiming a credit the court said she was not entitled to, and that part of the disputed $640,820 figure had already been counted toward an earlier purchase. The damage and interest calculations, the appeal court found, were overstated.
The panel was pointed about the duty to be candid with the court. The investor "did not intend to mislead the chambers judge, but that is what she did," Justice Gomery wrote.
On the legal-fee indemnity, the court said the trial judge should have examined whether every cost from the oppression claim actually flowed from a covered breach, rather than allowing close to the full amount.
For advisors and the firms structuring private investments, the ruling is a plain reminder that guarantees and buyback promises carry little weight if they are not clearly papered, and that a claim built on shaky figures can unravel even after an apparent win. The litigation now returns to the lower court.
