Divorce and the Family Business

David Alderson, LL.B, LL.M (Commercial and Corporate), Lawyer, Qualified Arbitrator and MediatorBusiness Dispute Arbitrator, Business Litigation, Business Mediation, Business Mediator, Closely-Held Business Disputes, Commercial, Divorce & Family Business, Family Business Disputes, Oppression Remedies, Partnership Arbitrator, Partnership Dispute, Partnership Dispute Arbitrator, Partnerships and Shareholder Disputes, Shareholder Arbitrator, Shareholder Dispute Arbitrator0 Comments

Family Business Challenges from Divorce or Separation Many businesses in Canada are family businesses or have evolved from family businesses. Family businesses present unique challenges as they grow should the personal relationships of the key members of the family business change or deteriorate. Divorce and separation can have serious impact upon family-owned and family-run businesses, whether incorporated companies or partnerships. Changes in a family business and the challenges presented by change can often result in legal disputes between interested parties. Family business disputes are often be protracted, expensive, and disruptive, and may even result in the sale, division or winding up of the family business. Impact of Separation and Divorce on Family Businesses Complex questions arise in the division of property and assets when dealing with a family business during a separation or divorce. The value of the family business may be included in the equalization of net family property … Read More

Internal Business Disputes in Trades, Subtrades, Contractors and Subcontractors

David Alderson, LL.B, LL.M (Commercial and Corporate), Lawyer, Qualified Arbitrator and MediatorAppointing Auditor, Appointing Inspector, Business Disputes, Business Torts | Economic Torts, Closely-Held Business Disputes, Commercial, Corporate Disputes, Corporate Litigation, Derivative Actions, Directors' and Officers' Liability, Oppression Remedies, Partnership Dispute, Partnerships and Shareholder Disputes0 Comments

Internal Business Disputes in Trades, Subtrades, Contractors and Subcontractors Our Business Dispute Practice Group can represent shareholders in dispute with other shareholders and/or directors in Closely Held Businesses, Family Businesses, and Startup Businesses. Often a dispute arises because a shareholder cannot obtain access to financial information, financial statements, financial documents and records of the corporation, voting rights, rights with respect to meetings or fraud. In some circumstances, an application can be made by a shareholder for access to financial information, financial statements and records of the corporation.  Shareholders remedies include oppression remedy actions and derivative actions, and the appointment of an auditor or an an inspector.  One of our senior business litigation lawyers was a faculty member of the Osgoode PD professional development program concerning Shareholder Litigation and the Closely-Held Company.  Oppression Remedy The oppression remedy is a mechanism in the Ontario Business Corporations Act and the Canada Business Corporations Act to protect the interests … Read More

Ontario Court of Appeal Comments on the Oppression Remedy – Oppression is Focused on Fairness and Equity, not on Legal Rights

Gilbertson Davis LLPAppeals, Business Law, Business Litigation, Business Torts | Economic Torts, Civil Liability, Civil Litigation, Commercial and Contract Litigation, Corporate Litigation, Directors' and Officers' Liability, Oppression Remedies, Partnerships and Shareholder Disputes, Shareholder Dispute Arbitrator0 Comments

In the recent decision of the Ontario Court of Appeal (“ONCA”), Pereira v. TYLT Technologies Inc. (TYLTGO), 2023 ONCA 682, the appellant successfully appealed a judgment dismissing his application for an oppression remedy under the Canada Business Corporations Act, RSC 1985, c C-44 (the “CBCA”). The appellant argued that the application judge erred in only considering the appellant’s expectations as an employee and failing to consider his expectations as a shareholder. The ONCA opined that the application judge took an “overly narrow” approach by placing focus mostly on the documents signed by the parties and not considering all of the circumstances. The ONCA considered some of the major principles related to the oppression remedy, including the following: Oppression is an equitable remedy which seeks to ensure fairness. Thus, conduct found to be oppressive does not need to be “unlawful” per se, because oppression is focused on “fairness and equity”, rather … Read More

Impact of Divorce or Separation on a Family Business

David Alderson, LL.B, LL.M (Commercial and Corporate), Lawyer, Qualified Arbitrator and MediatorBusiness Disputes, Closely-Held Business Disputes, Commercial, Division of Property, Family Business Disputes, Family Law, Injunction & Specific Performance, Oppression Remedies, Partnership Dispute, Partnerships and Shareholder Disputes, Sale of Business Disputes0 Comments

Family Business Challenges from Divorce or Separation Many businesses in Canada are family businesses or have evolved from family businesses. Family businesses present many unique challenges as they grow should the personal relationships of the key members of the family business change or deteriorate. Divorce and separation can have serious impact upon family-owned and family-run businesses, whether incorporated companies or partnerships. Changes in a family business and the challenges presented by change can often result in legal disputes between interested parties. Family business disputes are often be protracted, expensive, and disruptive, and may even result in the sale, division or winding up of the family business. Impact of Separation and Divorce on Family Businesses Complex questions arise in the division of property and assets when dealing with a family business during a separation or divorce. The value of the family business is included in the equalization of net family property … Read More

Confidentiality, Non-Competition and Non-Solicitation Clauses In Contracts

Sabrina Saltmarsh, B.A. (Hons), J.D.Breach of Confidentiality Clause, Breach of Non-Competition Agreement, Breach of Non-Competition Clause, Breach of Non-Solicitation Agreement, Breach of Non-Solicitation Clause, Business Disputes, Business Law, Business Litigation, Business Torts | Economic Torts, Closely-Held Business Disputes, Commercial, Commercial Contracts, Commercial List Matters, Commercial Litigation, Confidentiality Agreement, Confidentiality Clause, Corporate Litigation, Directors' and Officers' Liability, Injunction & Specific Performance, Joint Venture Disputes, Management Contracts, Mareva Injunction, Non-Compete, Non-Competition Agreement, Non-Competition Clause, Non-Solicitation Agreement, Non-Solicitation Clause, Norwich Order, Partnership Dispute, Partnerships and Shareholder Disputes, Sale of Business Disputes, Shareholder Disputes0 Comments

Confidentiality, non-competition, and non-solicitation clauses often show up in a variety of business contracts including employment and executive contracts, shareholder, and director agreements, as well as, independent contractor agreements, joint venture agreements and mergers, to name a few. A question that must be considered by contracting parties to such agreements is: What is the enforceability of these types of restrictive covenants? This question particularly becomes important when parties may part ways and a breach of the clauses is suspected or confirmed. These clauses are premised on the assumption that the relationship between the parties will result in the sharing of proprietary and sensitive business knowledge, contacts and relationships related to the operations of a business, which the company seeks to protect, particularly once the relationship between the parties ends. Non-competition clauses usually restrict one’s ability to engage in a competing business. Non-solicitation clauses prohibit one from soliciting stakeholders and contacts … Read More

Corporate Governance Considerations During the Covid-19 Pandemic

Sabrina Saltmarsh, B.A. (Hons), J.D.Business Interruption, Business Law, Business Litigation, Business Torts | Economic Torts, By-laws, Closely-Held Business Disputes, Commercial, Commercial and Contract Litigation, Commercial Contracts, Commercial Law, Commercial Leasing, Commercial List Matters, Commercial Litigation, Contract Disputes, Coronavirus, Corporate Disputes, Corporate Litigation, COVID-19, Derivative Actions, Directors' and Officers' Liability, Family Business Disputes, Oppression Remedies, Partnership Dispute, Partnerships and Shareholder Disputes, Retail Disputes, Retail Litigation, Sale of Business Disputes, Shopping Mall Lease Disputes, Shopping Mall Lease Litigation0 Comments

Corporate governance issues are top of mind for directors and businesses who are attempting to navigate through the Covid-19 Pandemic related closures and emergency measures. Boards of Directors still need to operate and make decisions in the best interests of the corporation, and this can involve tough decisions, particularly where there is little guidance as to how measures to lift Covid-19 related restrictions will play out. By example, while it may be in the best interest of investors and shareholders that the Board act to lay off employees in the short term, the impact of staff shortages when Covid-19 restrictions are lifted may pose it’s own challenges. Many businesses must consider how to hold governance meetings during Covid-19 times. On March 30, 2020, Ontario passed an Order under the Emergency Management and Civil Protection Act (EMCPA), (Ontario Regulation 107/20) entitled “Meetings for Corporations” making temporary changes to the Business Corporations … Read More

Liability of Directors and Officers | Oppression Remedy | Shareholders Claims

David Alderson, LL.B, LL.M (Commercial and Corporate), Lawyer, Qualified Arbitrator and MediatorBusiness Disputes, Business Fraud, Business Litigation, Business Torts | Economic Torts, Closely-Held Business Disputes, Commercial, Commercial Litigation, Directors' and Officers' Liability, Embezzlement, Family Business Disputes, Mareva Injunction, Norwich Order, Oppression Remedies, Partnerships and Shareholder Disputes, Shareholder Disputes, Start-Up Disputes0 Comments

The lawyers in our Business Dispute Practice Group have acted in Ontario and other jurisdictions for small, mid-sized and large corporations (incorporated in Ontario and in Canada), shareholders, directors, officers, and executives in corporate disputes and shareholder disputes. We have acted for clients in both oppression remedy action and derivative actions. Oppression Remedy The oppression remedy is a mechanism in the Ontario Business Corporations Act and the Canada Business Corporations Act to protect the interests of shareholders and stakeholders in a corporation against wrongful conduct.  Whether the Ontario or Canada Act will apply depends on the jurisdiction in which the corporation was incorporated. The oppression remedy can be used to protect the interests of shareholders, directors, officers or creditors against the acts of other shareholders, the board of directors or other affiliates of the corporation. The oppression remedy can be used to protect the interests of shareholders, directors, officers or creditors against the … Read More

Partnership Disputes – Dentists, Doctors, Accountants, Lawyers, Architects and Engineers

David Alderson, LL.B, LL.M (Commercial and Corporate), Lawyer, Qualified Arbitrator and MediatorAppeals, Appellate Advocacy, Arbitration, Arbitrators, Breach of Non-Solicitation Agreement, Business Litigation, Closely-Held Business Disputes, Commercial, Commercial and Contract Litigation, Commercial Arbitration, Commercial List Matters, Confidentiality Agreement, Corporate Disputes, Joint Venture Disputes, Non-Compete, Non-Competition Agreement, Non-Competition Clause, Non-Solicitation Agreement, Non-Solicitation Clause, Partnership Dispute, Partnerships and Shareholder Disputes, Professions0 Comments

Partnerships Professionals often carry on their professional practice as partners in a partnership or limited liability partnership. Partnerships can be created simply by conduct and the application of the Partnership Act or by a simple or complex partnership agreement. Joint Venture Contract – Fiduciary Duties? In other cases professionals associate in practice by participation in a contractual joint venture which, depending on the agreement and the circumstances, may or may not at law also be a partnership but, in any event, may attract the duties and obligations of partners, including fiduciary duties. Sharing Space Some professionals may consider that they are only sharing space with other professional and may be very surprised to find that the arrangement gave rise at law to unexpected obligations. Duty of Honest Performance The recent decision of the Supreme Court of Canada in Bhasin v. Hrynew, though not a case about partnerships, nonetheless has a wide-ranging impact on … Read More

Shareholder Disputes, Oppression Remedy, and Liability of Directors and Officers

David Alderson, LL.B, LL.M (Commercial and Corporate), Lawyer, Qualified Arbitrator and MediatorArbitration, Business Law, Business Litigation, Commercial, Commercial Arbitration, Commercial List Matters, Commercial Litigation, Corporate Litigation, Directors' and Officers' Liability, Family Business Disputes, Partnership Dispute, Partnerships and Shareholder Disputes, Professions, Shareholder Disputes1 Comment

Our lawyers have acted in Ontario and other jurisdictions for small, mid-sized and large Ontario and Canadian corporations, shareholders, directors, officers, executives and creditors in corporate disputes and shareholder disputes. We have acted in both oppression remedy action and derivative actions. Oppression Remedy The oppression remedy is a mechanism in the Ontario Business Corporations Act and the Canada Business Corporations Act to protect the interests of shareholders and stakeholders in a corporation against wrongful conduct.  Whether the Ontario or Canada Act will apply depends on the jurisdiction in which the corporation was incorporated. The oppression remedy can be used to protect the interests of shareholders, directors, officers or creditors against the acts of other shareholders, the board of directors or other affiliates of the corporation. The oppression remedy can be used to protect the interests of shareholders, directors, officers or creditors against the acts of other shareholders, the board of directors or other affiliates … Read More

Partnership Disputes Between Professionals – Dentists, Doctors, Accountants, Lawyers, Architects and Engineers

David Alderson, LL.B, LL.M (Commercial and Corporate), Lawyer, Qualified Arbitrator and MediatorArbitration, Breach of Non-Competition Clause, Breach of Non-Solicitation Agreement, Business Litigation, Commercial Arbitration, Commercial Contracts, Commercial Litigation, Joint Venture Disputes, Non-Competition Agreement, Non-Competition Clause, Non-Solicitation Agreement, Non-Solicitation Clause, Partnership Dispute, Partnerships and Shareholder Disputes, Professional Services0 Comments

Partnerships Professionals often carry on their professional practice as partners in a partnership or limited liability partnership. Partnerships can be created simply by conduct and the application of the Partnership Act or by a simple or complex partnership agreement. Joint Venture Contract – Fiduciary Duties? In other cases professionals associate in practice by participation in a contractual joint venture which, depending on the agreement and the circumstances, may or may not at law also be a partnership but, in any event, may attract the duties and obligations of partners, including fiduciary duties. Sharing Space Lastly, some professionals may consider that they are only sharing space with other professional and may be very surprised to find that the arrangement gave rise at law to unexpected obligations. Duty of Honest Performance The recent decision of the Supreme Court of Canada in Bhasin v. Hrynew, though not a case about partnerships, nonetheless has a wide-ranging impact … Read More

Shareholders’ Remedies under the OBCA: An Overview (Part 2/2) 

Janice Perri, B.A. (Summa Cum Laude)Business Law, Business Litigation, Civil Litigation, Closely-Held Business Disputes, Commercial, Commercial and Contract Litigation, Commercial Contracts, Commercial Law, Commercial Litigation, Corporate Disputes, Corporate Litigation, Directors' and Officers' Liability, Oppression Remedies, Partnership Dispute, Partnerships and Shareholder Disputes, Shareholder Disputes0 Comments

When a shareholder’s rights are breached, there are a variety of legal remedies available under the Ontario Business Corporations Act (“OBCA”). For more information on shareholders’ rights, please click here to see part 1 of this post. Oppression Remedy It is first important to note that as per the Ontario Court of Appeal decision Maurice v. Alles, the standard two-year limitation period set out in the Limitations Act applies to oppression remedy claims. The “clock starts to run” when the oppressive conduct first began, meaning that individuals must not delay if they wish to pursue an oppression remedy. The oppression remedy under s. 248 of the OBCA is broad in nature, and there is a large amount of judicial discretion afforded in its application. The oppression remedy can be an especially strong tool in protecting minority shareholders. When the Court determines that there has been oppressive conduct, unfairly prejudicial conduct, or conduct that disregards the interests of any shareholder it may make an order to resolve the matter in a variety of ways. … Read More

Shareholders’ Rights under the OBCA: An Overview (Part 1/2) 

Janice Perri, B.A. (Summa Cum Laude)Business Law, Business Litigation, Civil Litigation, Closely-Held Business Disputes, Commercial, Commercial and Contract Litigation, Commercial Contracts, Commercial Law, Commercial Litigation, Corporate Disputes, Corporate Litigation, Directors' and Officers' Liability, Oppression Remedies, Partnerships and Shareholder Disputes, Shareholder Disputes0 Comments

Under the Ontario Business Corporations Act (“OBCA”), shareholders of a corporation have a variety of rights. Outlined below are a few rights that all shareholders should be aware they possess. Please click here to see part 2 of this post on shareholders’ remedies. Voting Rights The board of directors, under s. 115 are ultimately responsible for managing or supervising the management of the business and affairs of a corporation. Major business decisions also involve the participation of the board of directors, though sales, leases, or exchanges of all or substantially all the property of the corporation that is not in the ordinary course of business requires the approval of shareholders (s. 184(3)). Shareholders also have voting rights that allow them to control the makeup of the board of directors (s. 119(4)), and also the ability to remove directors under s. 122(1) (though this is subject to exceptions under s. 120(f)). Shareholders have additional voting rights under … Read More

Court of Appeal Reiterates Importance of Pleading Particulars of Fraud

Andrew Ottaway, B.A. (Hons.), LL.B.Appeals, Appellate Advocacy, Civil Litigation, Contract Disputes, Fraud, Partnerships and Shareholder Disputes0 Comments

In Midland Resources Holding Limited v. Shtaif, 2017 ONCA 320, the trial judge found the appellants liable to a company’s shareholders for fraudulent misrepresentations before and after an initial public offering (IPO).  On appeal, the appellants argued that the trial judge erred in finding liability based on the IPO-related statements because the respondents did not plead or argue at trial that such statements amounted to fraudulent misrepresentations. The Court of Appeal stated that a pleading of fraud or misrepresentation must set out with careful particularity the elements of the misrepresentation relied upon, including: the alleged misrepresentation itself; when, where, how, by whom and to whom it was made; its falsity; the inducement; the intention that the plaintiff should rely upon it; the alteration by the plaintiff of his or her position relying on the misrepresentation; the resulting loss or damage to the plaintiff; and if deceit is alleged, an allegation … Read More

Court Refuses to Authorize Shareholder Buyout in Absence of Oppression

Gilbertson Davis LLPCommercial Litigation, Partnerships and Shareholder Disputes0 Comments

The Ontario Business Corporations Act provides a wide range of remedies to a person affected by the actions of a corporation or its directors that are found to be oppressive, unfairly prejudicial, or unfairly disregard the interests of that person. Most commonly, these remedies are sought by minority shareholders when actions are taken or threatened that would unfairly hurt their interests. One of those remedies is to direct the corporation, or any other person, to purchase the shares of the complainant. This remedy essentially allows shareholders to be relieved of their shares for a fair price, leaving the corporation and its remaining shareholders to carry on without further complaint from the complainant. However, this remedy does not create a free-standing right for a shareholder of a privately-held corporation to force the sale of his or her shares for any reason. This principle was recently confirmed in Wilfred v Dare et al. In that case, the complainant sought … Read More

Supreme Court Considers Oppression Remedy

Andrew Ottaway, B.A. (Hons.), LL.B.Appeals, Appellate Advocacy, Civil Litigation, Commercial, Commercial Litigation, Contract Disputes, Partnerships and Shareholder Disputes0 Comments

In Mennillo v. Intramodal inc., 2016 SCC 51, the Supreme Court of Canada addressed the application of the oppression remedy under the Canada Business Corporations Act (“CBCA”), which applies to federally incorporated companies.  (The Ontario Business Corporations Act, which applies to Ontario incorporated companies, also contains an oppression remedy). The case involved a private corporation with originally two shareholders.  There was no shareholders’ agreement.  The Court described the parties’ dealings as being “marked by extreme informality”.  One of the two shareholders, Mennillo, eventually resigned as officer and director of the company by providing a notice of resignation.  The notice did not address his status as a shareholder.   There was conflicting evidence from the parties about whether Mennillo intended to cease being a shareholder.  Ultimately, the trial judge accepted that Mennillo’s withdrawal from the company included his intention to no longer guarantee the company’s debts.  The trial judge found that Mennillo agreed … Read More

Family Business Dispute, Start Up Company Dispute, and Closely-Held Company Litigation

David Alderson, LL.B, LL.M (Commercial and Corporate), Lawyer, Qualified Arbitrator and MediatorBusiness Litigation, Civil Litigation, Closely-Held Business Disputes, Commercial Arbitration, Commercial Litigation, Contract Disputes, Directors' and Officers' Liability, Family Business Disputes, Injunction & Specific Performance, Oppression Remedies, Partnerships and Shareholder Disputes, Shareholder Disputes, Start-Up Disputes0 Comments

We have experience acting for, advising and representing those in closely-held company litigation, both arising from family business disputes and from start-up company disputes. Family Business Disputes Many businesses in Canada are family businesses or have evolved from family businesses. Family businesses present many unique challenges as they grow, as key members of the company or partnership leave the family business, or when personal relationships of the key members of the family business change or deteriorate. One of the most common differences between a family business and other established businesses, whether or not a shareholders’ agreement, partnership agreement and other legal documentation was used in the formation of the family business, is the informality in operation of the family business, including the often ignored distinction in fact between employees, shareholders, or partners – since family members take on multiple roles. Please see our webpage on Family and Closely Held Business Disputes. Start Up Company … Read More

Partnership Disputes & Joint Venture Litigation

David Alderson, LL.B, LL.M (Commercial and Corporate), Lawyer, Qualified Arbitrator and MediatorArbitration, Civil Litigation, Closely-Held Business Disputes, Commercial, Commercial Arbitration, Commercial Law, Commercial List Matters, Commercial Litigation, Contract Disputes, Contract Termination, Directors' and Officers' Liability, Family Business Disputes, Joint Venture Disputes, Partnership Dispute, Partnerships and Shareholder Disputes, Shareholder Disputes, Start-Up Disputes0 Comments

Our lawyers have acted in Ontario and other jurisdictions for partners in small and mid-sized partnerships, and limited liability partnerships (LLPs) and contractual parties and partners in joint ventures. Partnership Disputes Partnership is a relationship between persons carrying on a business in common with a view to profit, which is not a corporation. It is one of the most commonly used business associations for small and medium-sized business. A partnership can be created at law and the Partnerships Act, R.S.O. 1990, c. P.5 sets out rules for determining existence of partnership, though commonly the parties enter into a partnership agreement. Joint Venture – Is it a Partnership? Joint ventures are often established to synergize what each member of the joint venture can add to the consortium. Sometimes a joint venture is the structure chosen because those members engaged in the joint venture are located in different jurisdictions. While invariably created by contractual agreement, some … Read More