Law360 Canada ( December 15, 2021, 6:29 AM EST) -- Appeal by the plaintiff Sonic Holdings, a corporation owned by Roussy, from the dismissal of its action against Savage for breach of fiduciary duties owed as a director and officer of Sonic Drill Systems Inc. (“SDSI”). Roussy and Savage agreed to be equal shareholders in SDSI through personal corporations, and to share in profits and losses equally. They also agreed that Savage would control SDSI’s day-to-day operations as president and general manager. After SDSI went into bankruptcy, Sonic commenced the present action as a creditor of SDSI. Sonic alleged that Savage misappropriated resources for use by a separate company he owned, TCS Industries Ltd. Sonic alleged SDSI performed work for TCS for which TCS was to reimburse SDSI at cost plus a 20 per cent markup. Sonic alleged that Savage failed to maintain proper oversight and adequate financial records for SDSI, to properly invoice TCS for products constructed at SDSI’s facility, and that TCS failed to fully pay SDSI for that work. The trial judge found Roussy agreed that SDSI would carry out the TCS Transactions for the agreed compensation and that Roussy was involved in and aware of the financial operations of SDSI on an ongoing basis. The trial judge found Savage established a defence to the fiduciary claims under the conflict of interest provisions of the Business Corporations Act and did not breach his duty of care to SDSI. Sonic argued the judge erred by failing to place the onus on Savage to establish that the impugned TCS Transactions were fair and reasonable to SDSI, both procedurally and substantively....