A New Brunswick court has cancelled 30 shares a lawyer received for incorporating The Farmer's Truck, finding he breached his fiduciary duty by accepting the equity without disclosing the potential conflict or advising the company to obtain independent legal advice.
Justice Maya Hamou of the Court of King's Bench of New Brunswick made the order in The Farmer’s Truck Inc. v Michael David Tripp, 2026 NBKB 189. The decision was issued September 18, 2026, with written reasons released September 23.
The application was undefended. The ruling rescinded the original share issuance; it did not order a $12,000 buyback, decide the company's alternative oppression claim or impose professional discipline.
Shares exchanged for incorporation work
The Farmer's Truck works with non-profit organizations across North America to deliver fresh food to underserved communities. Michael David Tripp acted as its incorporation lawyer and accepted 30 voting common shares on June 1, 2015, representing three per cent of the company's shares at that time.
The court record contained no indication of the cost of the legal services. A company director said Tripp had not advised the business to obtain independent legal advice about issuing shares to him and that no records of conflict disclosure could be located.
In 2021, the company began buying back outstanding shares. Tripp signed a letter of intent that August to transfer his shares for $12,000, followed by a share purchase agreement on similar terms in March 2022.
The transaction never closed. Tripp requested updated shareholder and financial information and suggested he might need a legal opinion. He followed up in July 2022 and July 2023, but the parties did not complete the transfer. The reasons record no further communication from him after July 2023, despite a later follow-up by the company.
The company sought cancellation of the shares or an order completing their transfer so it could proceed with a capital-raising initiative. It obtained an order for substituted service on September 1, 2026. Tripp filed no response, did not communicate with the court and did not attend the September 14 hearing.
Conflict safeguards were missing
Hamou found that Tripp owed the company a fiduciary duty while acting as its lawyer. That duty included loyalty, disclosure of relevant information and avoidance of conflicting personal interests.
The judge considered earlier decisions involving lawyers who acquired interests in clients' businesses, along with New Brunswick's professional-conduct rules. Those rules address conflicts and client consent after disclosure. Here, the record showed neither a discussion of the potential conflict nor advice to obtain independent legal advice before the share transaction.
The court also considered provisions of the provincial Business Corporations Act allowing shares to be issued for services of equivalent value. There was no indication that the company, its directors or its shareholders had been informed of that requirement when the shares were issued. Nor did the evidence establish the contemporaneous value of either the shares or the legal work.
The judge found the incorporation was not a complicated or costly undertaking. Granting shares for that work without the conflict safeguards produced an inequitable transfer and breached Tripp's fiduciary duty. Rescission—undoing the original issuance—was the appropriate equitable remedy.
No need to decide the alternative claim
The company alternatively argued that the failure to complete the later buyback was oppressive or unfairly prejudicial under the Business Corporations Act. Hamou declined to undertake that analysis because it would assume the validity of the original share issuance, inconsistent with the conclusion supporting rescission.
The final order rescinded the issuance of all 30 shares and required Tripp to pay the company $2,500 in costs plus disbursements. The judge placed costs at the lower end of the tariff because the undefended application required less preparation and hearing time.
The $12,000 figure belonged to the uncompleted buyback arrangements, not the court's award. The decision is a civil ruling about this transaction's missing safeguards, not a blanket prohibition on lawyers accepting equity from clients, a disciplinary ruling or a criminal conviction.
