Cousins of the late Barry Sherman have lost what may be their final bid for part of the billionaire’s fortune.

A three-justice panel of the Ontario Court of Appeal ruled Wednesday that a lower court’s decision that there was no need for a trial in the case was correct. The justices also upheld the lower court’s decision last September that the decades-old fight was an “abuse of process” by the Sherman cousins.

The cousins have now been ordered to pay $60,000 to the Sherman side to cover its legal costs in defending the appeal, on top of the $300,000 in costs awarded Sherman in September 2017 when Justice Kenneth Hood of the Superior Court of Justice made the ruling that the court of appeal adjudicated.

“It would be unfair and an abuse of process” to allow the cousins to take the matter to trial, the court of appeal justices state in their reasons. (The court of appeal panel was made up of justices Robert Sharpe, Russell Juriansz and Lois Roberts.)

Sherman, who was murdered last December along with his wife Honey, had provided millions of dollars of financial support to the cousins over the years but withdrew it when his cousins sued him.

Another claim by the cousins, launched in 2007 against Royal Trust, the company that was looking after the cousins’ affairs when they were minors, also failed at the lower court and that decision was upheld on appeal.

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The cousins, Paul, Jeff, Kerry and Dana (Dana is deceased and represented by his widow), were the sons of Lou Winter, founder of Empire Laboratories, a company Barry Sherman worked at while in university in Toronto in the early 1960s. After Lou Winter died in 1965, Sherman and a partner made two separate bids to buy Empire from Royal Trust, representing the children’s interests. The four boys were all under 7 years old when their father died. Sherman was in his mid-20s at the time.

Eventually, Sherman and his partner purchased Empire in 1967 at a price of $450,000. Empire was a fledgling generic drug business. Sherman and his partner ran Empire for a few years, then sold it. Sherman went on to found Apotex in 1974 and built it into a multi-billion-dollar generic company.

The cousins have long argued that Sherman owed them a “fiduciary duty,” because they were “vulnerable” at the time Sherman purchased their late father’s business. An option agreement that one of the court of appeal judges called a “sweetener” inserted by Sherman in his purchase offer in 1967 called for Sherman to employ the cousins at Empire when they were old enough and allow them, should they work at Empire for two years, to each purchase 5 per cent of Empire.

Sherman’s side argued that the option died when Sherman was no longer in control of Empire, which is clearly stated in the option agreement.

The cousins’ assertion that Sherman still owed a duty to the cousins never went to trial. Instead, the Sherman side brought a motion in 2017 to end the case. Justice Hood of the Superior Court dismissed the cousins’ argument as “nonsensical.”

In reviewing Hood’s ruling to end the case, the court of appeal agreed with Hood that “Dr. Sherman did not undertake to look after the (cousins’) interest or ever abandon his own self-interest.”

Kerry Winter, who has been the most vocal of the cousins in the court battle, said Wednesday that they will “seek leave to appeal to the Supreme Court” of Canada. “Wish us luck,” Winter said. Their claim has long been that it was Sherman’s involvement in their father’s company that gave him the leg up that allowed him to start Apotex. That’s why the cousins say they are deserving of part of the Apotex wealth, roughly a $1-billion share.

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If the Supreme Court refuses to hear an appeal, the case will be over.

Meanwhile, Toronto Police continue their investigation into what they have termed the “targeted” killing of the Shermans. The couple was last seen alive on Wednesday, Dec. 13. Their bodies were discovered in the basement swimming pool room of their home on the following Friday morning.

Kevin Donovan is the Star's chief investigative reporter based in Toronto. Reach him by email at kdonovan@thestar.ca or follow him on Twitter: @_kevindonovan

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