Background:

• Marketology sued DGA North American Inc. ("DGA NA") for $27 million after DGA terminated their contract.
• An arbitrator awarded Marketology $878,638.36, which DGA NA did not pay, claiming insolvency. Marketology argued that DGA transferred assets to related entities (Altaris and DGA Fulfillment Services) to avoid payment.
• The trial judge found oppression but did not conclusively decide on fraudulent conveyance, awarding Marketology over $1.1 million but rejecting punitive damages.

Court of Appeal Findings:

1. Fraudulent Conveyance:

   • The trial judge’s findings were inconsistent—accepting DGA's explanation of keeping the business afloat while suggesting intent to avoid creditors.
   • The judge did not clearly apply the legal test for fraudulent conveyance.

2. Oppression:

   • Relief was granted on a new, unpleaded theory that Marketology had a “reasonable expectation” of a reserve fund for the award.
   • This theory was not argued or supported by evidence, making the judgment procedurally unfair.

3. Sufficiency of Reasons:

   • The judge’s reasoning was unclear and insufficient, hindering proper appellate review.

Outcome:

• The Court of Appeal ordered a new trial due to legal errors and insufficient reasoning.
• Costs of $40,000 were awarded to the defendants/appellants, with first trial costs reserved for the new trial.