E. Freedman

A shareholder and director brought a crossclaim alleging that another director diverted corporate revenues and misappropriated funds through his separate company.

The court found that the defendant breached his fiduciary duties under the Ontario Business Corporations Act by diverting customer revenues, withdrawing corporate funds for personal use, and engaging in oppressive conduct that harmed the corporation and its other shareholder.

The court held that the conduct constituted fraud, breach of fiduciary duty, and oppression under the OBCA.

Damages were awarded to the corporation for diverted revenues and improper payments, and punitive damages were awarded to the shareholder.

The court also ordered the sale of the defendant’s shares to the other shareholder at fair market value as of the date of exclusion from the business.

Following a complex family law trial, both parties sought costs.

The court analyzed the parties' respective success at trial compared to their offers to settle.

Finding that neither party beat their offers to settle and both engaged in some unreasonable conduct, the court awarded the applicant partial indemnity costs based on her overall success at trial, reduced by 25% due to her unreasonable positions that lengthened the trial.