The Ontario Court of Appeal has affirmed earlier case law and
the plain language of Ontario's Business Corporations
Act, R.S.O. 1990, c. B.16 (the "OBCA") concerning
the retroactive effect of the statute's corporate status
In Achilles Motors Limited v. 1717222 Ontario Inc., 2014 ONCA
139, Achilles appealed the dismissal of its application to have
an agreement of purchase and sale with the respondent 171 declared
void because the numbered company had been dissolved and not yet
revived at the time the parties entered into the
contract. Neither party had been aware of the dissolution
(which occurred following 171's failure to file a Notice of
Change Form 1) at the time of contracting, and 171 acted
immediately to have the company's charter reinstated upon being
informed by Achilles' counsel of the lapse a year and a half
later. The charter was reinstated within two months.
On appeal, 171 relied on the plain words of the OBCA's
241(5) Where a corporation is dissolved under subsection (4) or
any predecessor of it, the Director on the application of any
interested person, may, in his or her discretion, on the terms and
conditions that the Director sees fit to impose, revive the
corporation; upon revival, the corporation,
subject to the terms and conditions imposed by the Director and to
the rights, if any, acquired by any person during the period of
dissolution, shall be deemed for all purposes to have never
been dissolved. [Emphasis added.]
Achilles relied on Swale Investments Ltd. v. National Bank
of Greece (Canada), 1997 CanLII 12439 (ON SC), in which a judge
distinguished between reviving a company's existence and
reviving its "legal position" in a dispute:
 In my view, the plaintiff corporation, having been
dissolved and not having been revived, has no legal existence.
Section 241(5) merely provides that the corporation, upon revival,
has all the rights and privileges and liabilities it would have had
if it had not been dissolved. This does not mean that upon
revival its legal position is restored retroactively.
The Court in Achilles implicitly rejected this distinction,
finding that the phrase "shall be deemed for all purposes to
have never been dissolved" in section 241(5) clearly signals
that reinstatement is meant to be retroactive in effect, and that
an interpretation favouring retroactivity is in keeping with the
curative intent of the provision. It distinguished Swale on
the basis that no revival of the company had been attempted in that
case (rendering the revival provision irrelevant, and the
judge's comments on retroactivity obiter), and noting that the
judge in that case erred in rejecting the reasoning of an earlier
case ultimately upheld by the Court in Zangelo Investments Ltd.
v. Glasford State Inc. (Ont. C.A.), 1988 CanLII
4532 (ON CA). The Court confirmed that Zangelo is
still the law in Ontario.
The decision in Achilles confirms that a company's
"legal position" may indeed be restored retroactively
upon revival (subject, as the statute says, to conditions the
Director may impose at its discretion). It also reaffirms that
brevity by the Court does lessen the impact of its
decisions. The Court's relatively brief endorsement
rejects the appellant's argument that the Court's
endorsement in Zangelo should not be followed because it too was
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