This case arose from a family dispute following a corporate restructuring in September 2020 involving two patio furnishings businesses operated by spouses Kimberley and Steven Jackson.
The applicants sought to invalidate the transfer of nine shares in Distinctly Patio Inc. (DPI) to their son Peter, claiming the transfer was funded through an unauthorized bonus paid by DPI to Peter.
The applicants also sought an accounting for profits allegedly earned by 2131376 Ontario Ltd. (operating as Think Patio) in violation of a non-competition clause in the DPI shareholders' agreement.
The respondents relied on a two-year limitation period defense.
The court found that while Peter became a shareholder despite not signing the shareholders' agreement, the applicants' claims based on the bonus and share transfer were statute-barred.
The court dismissed the constructive trust claim on the merits, finding insufficient evidence of misappropriation.
However, the court found that Steven and 2131376 likely breached the non-competition clause and ordered an accounting reference.
The court also granted Peter's counterapplication for oppression remedies, ordering DPI to redeem his shares for $17,167.42.