2082825 Ontario Inc. et al. v. Platinum Wood Finishing Inc. et al.

[Indexed as: 2082825 Ontario Inc. v. Platinum Wood Finishing Inc.]

96 O.R. (3d) 467

Ontario Superior Court of Justice, Divisional Court, J.M. Wilson, Low, Karakatsanis JJ. March 30, 2009

Corporations -- Oppression -- Parties agreeing in unanimous shareholder agreement that respondent would be president of company and that he would manage it at annual salary of $100,000 in exchange for accepting 30 per cent of shares rather than 50 per cent -- Majority shareholders voting respondent out as president, removing him as director and terminating his employment -- Majority shareholders acting oppressively -- Business judgment rule not protecting majority shareholders from finding of oppression as rule has no application in circumstances where shareholders have put their mind to particular business issue and have agreed upon terms -- Application judge not erring in dealing with respondent's wrongful dismissal claim as part of oppression application as there was intimate connection between employment contract and shareholders' agreement -- Majority shareholders also acting oppressively in causing one of company's customers (which they controlled) to stop paying accounts to company -- Application judge properly finding that customer to be jointly and severally liable with majority shareholders for damages for wrongful dismissal and for buy-out of respondent's shares.

The respondent B brought the opportunity to purchase Platinum to the appellants, and the parties initially contemplated acquiring equal shares. B ultimately agreed to become a 30 per cent shareholder in Platinum on the condition that he was to be the president and employed as the manager of Platinum at an annual salary of $100,000. Those terms were set out in a unanimous shareholders' agreement. The individual appellants were not involved in the operation of Platinum and ran a separate business, H Ltd., which was a major client of Platinum. While B was in hospital suffering from leukemia, the appellants unilaterally caused Platinum to stop paying his salary. After B returned to work, a meeting was held in which the appellants voted him out as president, formally terminated his employment and effectively removed him as a director. The appellants also caused H Ltd. to stop paying accounts to Platinum. B brought an application for relief under the oppression provisions of the Business Corporations Act, R.S.O. 1990, c. B.16. The application was granted. The application judge found that the appellants had acted in an oppressive manner towards B. He also found that B was wrongfully dismissed and ordered a trial on the issue of damages for the wrongful dismissal. The appellants appealed.

Held, the appeal should be dismissed.

The business judgment rule has no application in circumstances where the shareholders have put their minds to a particular business issue and have agreed upon terms. If the business judgment rule were held to override the express terms of a unanimous shareholder agreement, such agreements would be of negligible value to a minority shareholder who becomes an equity owner in reliance on the protection contained in a unanimous shareholder agreement. In this case, the shareholders had expressly agreed that B was to take the management role and as to his remuneration. Those terms were central to B agreeing to take a minority shareholder position. The business judgment rule did not protect the actions of the appellants from scrutiny and a finding of oppression.

The application judge did not err in finding that the appellants acted oppressively both in terminating B and excluding him from Platinum and in letting the receivables of H Ltd. build up to the detriment of Platinum.

B's claim for wrongful dismissal was appropriately dealt with as part of the oppression application as there was an intimate connection between the employment contract and the shareholders' agreement. This was a case which was at heart an oppression claim with a wrongful dismissal component.

The application judge did not err in finding that all of the appellants, including H Ltd., were jointly and severally liable for damages for wrongful dismissal and for a buy-out of B's shares.

APPEAL from a judgment allowing an application for oppression remedies.

Cases referred to

Flatley v. Algy Corp. (c.o.b. Mezzrow's), 2000 22783 (ON SC), [2000] O.J. No. 3787, 9 B.L.R. (3d) 255, 100 A.C.W.S. (3d) 411 (S.C.J.), distd Budd v. Gentra Inc., 1998 5811 (ON CA), [1998] O.J. No. 3109, 111 O.A.C. 288, 43 B.L.R. (2d) 27, 81 A.C.W.S. (3d) 779 (C.A.), apld

Other cases referred to

2082825 Ontario Inc. v. Platinum Wood Finishing Inc., 2008 48125 (ON SC), [2008] O.J. No. 3715, 51 B.L.R. (4th) 301 (S.C.J.); BCE Inc. v. 1976 Debentureholders, [2008] 3 S.C.R. 560, [2008] S.C.J. No. 37, 2008 SCC 69, 52 B.L.R. (4th) 1, EYB 2008-151755, J.E. 2009-43, 301 D.L.R. (4th) 80, 71 C.P.R. (4th) 303, 383 N.R. 119; Canada (Minister of Citizenship and Immigration) v. Tobiass, 1997 322 (SCC), [1997] 3 S.C.R. 391, [1997] S.C.J. No. 82, 151 D.L.R. (4th) 119, 218 N.R. 81, J.E. 97-1836, 1 Admin. L.R. (3d) 1, 118 C.C.C. (3d) 443, 14 C.P.C. (4th) 1, 10 C.R. (5th) 163, 40 Imm. L.R. (2d) 23, 74 A.C.W.S. (3d) 52, REJB 1997-02452; Housen v. Nikolaisen, [2002] 2 S.C.R. 235, [2002] S.C.J. No. 31, 2002 SCC 33, 211 D.L.R. (4th) 577, 286 N.R. 1, [2002] 7 W.W.R. 1, J.E. 2002-617, 219 Sask. R. 1, 10 C.C.L.T. (3d) 157, 30 M.P.L.R. (3d) 1, 112 A.C.W.S. (3d) 991; Mohan v. Philmar Lumber (Markham) Ltd., [1991] O.J. No. 3451, 39 C.C.E.L. 211, 50 C.P.C. (2d) 164 (Gen. Div.); Naneff v. Con-Crete Holdings Ltd. (1995), 1995 959 (ON CA), 23 O.R. (3d) 481, [1995] O.J. No. 1377, 85 O.A.C. 29, 23 B.L.R. (2d) 286, 55 A.C.W.S. (3d) 86 (C.A.), varg (1994), 1994 7542 (ON SC), 19 O.R. (3d) 691, [1994] O.J. No. 1811, 73 O.A.C. 334, 16 B.L.R. (2d) 169, 49 A.C.W.S. (3d) 1067 (Div. Ct.), varg [1993] O.J. No. 1756, 11 B.L.R. (2d) 218, 42 A.C.W.S. (3d) 64 (Gen. Div.); Stein v. Kathy K (The), 1975 146 (SCC), [1976] 2 S.C.R. 802, [1975] S.C.J. No. 104, 62 D.L.R. (3d) 1, 6 N.R. 359; Walters v. Harris Partners Ltd., [2001] O.J. No. 1560, 2001 CarswellOnt 1424 (S.C.J.)

Statutes referred to

Business Corporations Act, R.S.O. 1990, c. B.16, s. 248 [as am.] Canada Business Corporations Act, R.S.C. 1985, c. C-44

Gregory M. Sidlofsky, for applicants (respondents in appeal). Erik Savas, for respondent (appellants).

The judgment of the court was delivered by

[1] J.M. WILSON J.: -- Platinum Wood Finishing Inc. ("Platinum") was acquired in 2005 by the individual appellants' company 2081526 Ontario Inc. (the "appellants' Company") and Barbieri's company, 2082825 Ontario Inc. ("Barbieri's Company"). After the acquisition of Platinum in 2005, the respondent, Bruno Barbieri assumed the role of both president and manager of Platinum. This was pursuant to an agreement among Barbieri and the appellants.

[2] In March 2008, Barbieri was diagnosed with leukemia. While in hospital, Barbieri was visited by one of the appellants who advised him that the appellants were not prepared to have the company continue to pay Barbieri his salary. The appellants unilaterally caused Platinum to stop paying Barbieri's salary.

[3] Two days following Barbieri's return to work in June 2008, a meeting was held in which the appellants voted Barbieri out as president of Platinum, formally terminated his employment and effectively removed him as a director. Barbieri and his company immediately sought relief in an application pursuant to the oppression remedies under the Ontario Business Corporations Act, R.S.O. 1990, c. B.16 ("OBCA").

The Appeal

[4] The appellants appeal from the judgment of Newbould J. dated September 25, 2008 [2008 48125 (ON SC), [2008] O.J. No. 3715, 51 B.L.R. (4th) 301 (S.C.J.)]. He concluded that the appellants had acted in an oppressive manner towards the respondents within the meaning of s. 248 of the OBCA as the appellants had: (i) wrongfully frozen Barbieri out of the management of Platinum; and (ii) caused a corporation controlled by the individual appellants to stop paying accounts to Platinum, resulting in Platinum having to borrow funds to continue its operations, to the detriment of Platinum.

[5] Newbould J. ordered that the appellants were required to purchase Barbieri's Company's shares in Platinum, subject to terms. He also concluded that Barbieri had been wrongfully dismissed. He ordered a trial on the issue of damages for the wrongful dismissal and for any disputed issues that may arise with respect to the valuation of Barbieri's Company's shares.

Background Facts

[6] Newbould J. found that a letter dated September 29, 2005, prepared by the accountant acting on the initial purchase of Platinum, and signed on behalf of the two numbered companies owning shares in Platinum, was a unanimous shareholders' agreement ("Shareholder Agreement"). It contemplated that a more comprehensive shareholder agreement would be prepared incorporating the agreed-upon terms. A draft was prepared and circulated, but never executed. Newbould J. concluded that the executed letter therefore governs the relationship between the parties as the Shareholder Agreement.

[7] Counsel for the appellants now concedes this finding of Newbould J. However, the parties have very different interpretations as to the meaning of the Shareholder Agreement, particularly with respect to Barbieri's right to employment as the manager of Platinum.

[8] With respect to this issue, the Shareholder Agreement provides:

4. Shareholder Agreement content to include: (a) Unanimous Agreement of all shareholders is needed for decisions regarding: -- rent -- price charged for pre-finishing to Herwynen Sawmill Ltd. -- remuneration to Bruno, the three Herwynen Brothers and their related partners -- dividends . . . . . b) Officers -- President -- Bruno Barbieri -- Vice President -- Dave Herwynen -- Secretary -- Peter Herwynen -- Treasurer -- John Herwynen . . . . . i) Bruno is to be employed as president and general manager at a salary of $100,000.00 per annum. (Emphasis added)

[9] Platinum was acquired in 2005 from a third party by the appellants' Company and Barbieri's Company for an acquisition price of $2 million. The appellants' Company owns 70 per cent of the Platinum shares, and Barbieri's Company owns 30 per cent. Half of the purchase price was financed and half was paid by the shareholders. Notwithstanding that Barbieri acquired only a 30 per cent interest, he was required to contribute $350,000 toward the cash portion of the purchase price whereas the Appellants' Company contributed only $650,000 for its 70 per cent share.

[10] Platinum is in the business of finishing hardwood flooring. In addition to holding the office of president, Barbieri was also the manager in charge of the daily operations of Platinum. The individual appellants, John, Peter and David Herwynen, were not involved in the operation of Platinum, but rather ran a separate business, Herwynen Sawmill Inc. It produces rough-cut hardwood flooring and was a major client of Platinum.

[11] The opportunity to purchase Platinum was brought by Barbieri to the appellants and the initial discussions between the parties contemplated equal ownership of the shares of Platinum. However, the Herwynen brothers could not all agree to a 50/50 shareholding as between Barbieri and the appellants. They wanted the majority interest.

[12] Barbieri's Company therefore agreed to become a 30 per cent shareholder in Platinum on the condition that Barbieri was to be the president and employed as the manager of Platinum for the sum of $100,000 annually. A term of the Shareholder Agreement was that Barbieri's remuneration could not be changed except by unanimous shareholder agreement.

[13] The history of the negotiations and the terms agreed to between the parties are very relevant to determining the reasonable expectations of Barbieri as a shareholder. The following excerpt from the affidavit of Barbieri, sworn in support of the oppression motion before Newbould J., discloses the importance of the income flow to Barbieri:

18. John took the position that since Superior Flooring would remain the largest single customer, I should have to pay a premium for my 30% interest.

19. Although I was not happy with these terms, I agreed to them on the condition that unanimity be required on the following matters:

the rates charged to Superior Flooring;

my remuneration;

rent for our business space. (Emphasis added)

[14] It is not disputed that under the management of Barbieri and until his illness, Platinum flourished. In the two and a half years prior to Barbieri's illness, the lion's share of the $1 million bank loan borrowed to finance the purchase was paid down. As well, very significant dividends were declared for the benefit of the shareholders, including the individual appellants. In the first year of operation, Platinum enjoyed net profits of $523,235. In the second year of operation, the net profits were $511,031.

The Issues

[15] The appellants argue that the judgment of Newbould J. should be set aside as (i) the appellants' actions were honest and reasonable, and in the interest of Platinum, and were therefore protected from scrutiny by the principle known as the "business judgment rule". Hence, the appellants' conduct did not violate Barbieri's reasonable expectation as a shareholder; (ii) the appellant did not, by their actions, oppress or unfairly prejudice the value of Platinum, and hence the value of Barbieri's Company's shares; (iii) Barbieri's employment was not indivisibly connected with the acquisition of Barbieri's Company's shares, hence the wrongful dismissal claim ought to have been dismissed or dealt with in the separate action by way of trial; and (iv) the appellants question aspects of the remedy imposed by Newbould J.

[16] We disagree with the appellants' submissions and conclude that the appeal should be dismissed.

Standard of Review

[17] The standard of review to be applied with respect to Newbould J.'s decision is set out in Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235, [2002] S.C.J. No. 31. In summary, on a pure question of law, this court is free to replace the opinion of a motions judge with its own. The standard of review on a question of law is that of correctness (at para. 8). The standard of review for findings of fact is that such findings are not to be reversed unless it can be established that the motions judge made a "palpable and overriding error" (at para. 10; see Stein v. Kathy K (The), 1975 146 (SCC), [1976] 2 S.C.R. 802, [1975] S.C.J. No. 104). Matters of mixed fact and law lie along a spectrum. As the Supreme Court states at paras. 36-37 of Housen, these questions are subject to a standard of palpable and overriding error unless it is clear that the trial judge made some extricable error in law or principle, which can be reviewed on a standard of correctness.

Issue 1: Applicability of the business judgment rule, and whether the appellants' conduct constituted oppression in breach of Barbieri's reasonable expectations as a shareholder

[18] The primary argument of the appellants is that they were at all times acting reasonably, honestly and in the best interests of Platinum. The appellants assert that the decision to terminate Barbieri was not outside the range of reasonable business decisions. Courts should not interfere with the actions of directors acting in good faith. The appellants note that Newbould J. failed to specifically address the relevance and the application of the business judgment rule. It is the position of the appellants that the business judgment rule trumps any specific terms in the Shareholder Agreement dealing with Barbieri's employment and role in Platinum, as well as any issue with respect to the reasonable expectations of the shareholders, and that therefore the appeal should be allowed.

[19] The respondents assert that the terms of the Shareholder Agreement are clear and that the conduct of the appellants is oppressive and in clear breach of the respondents' reasonable expectations. The respondents argue that the business judgment rule does not apply or, if it does apply, that the actions of the appellants were not reasonable or bona fide in the interests of Platinum.

[20] We agree with the position of the respondents.

[21] The Supreme Court of Canada recently described the function of the business judgment rule in BCE Inc. v. 1976 Debentureholders, [2008] 3 S.C.R. 560, [2008] S.C.J. No. 37, 2008 SCC 69, at para. 99:

Under the business judgment rule, deference should be accorded to business decisions of directors taken in good faith and in the performance of the functions they were elected to perform by the shareholders.

[22] The rule invokes the overarching principle in corporate law that where a director acts bona fide in making decisions on behalf of shareholders, those decisions will not be subject to scrutiny. The rule is therefore intended to facilitate the day-to-day operations of business corporations by affording deference to directors' decisions undertaken in accordance with their responsibilities as agreed upon by the shareholders.

[23] We find that the business judgment rule has no application where, as in the circumstances of this case, the shareholders have put their minds to a particular business issue and have agreed upon terms. In this case the shareholders expressly put their minds to the issue of who would take the management role and agreed that it would be Barbieri and that his remuneration was to be $100,000 per annum. It is apparent from the course of negotiations that those terms were central to Barbieri agreeing to take a minority, and therefore vulnerable, shareholder position. If the business judgment rule were held to override the express terms of a unanimous shareholder agreement, such agreements would be of negligible value to a minority shareholder who becomes an equity owner in reliance on the protection contained in terms of a unanimous shareholder agreement. Instead of providing protection, such agreements could easily become the instruments of a "bait and switch" if controlling shareholders were permitted to shelter under the business judgment rule when violating the terms of a unanimous shareholder agreement to the prejudice of a minority.

[24] While the business judgment rule applies to confer deference upon business decisions made in good faith in the interests of the company, there is no rationale for conferring the same deference where the parties have at the outset made express agreements as to particular business matters.

[25] Although Newbould J. did not specifically refer to the business judgment rule, he carefully reviewed each of the complaints made by the appellants after Barbieri was hospitalized, and some which pre-dated his hospitalization. Newbould J. concluded [at para. 66], quite rightly, that the concerns raised by the appellants came "nowhere close to justifying a dismissal contrary to the shareholder's expectations. They also come nowhere close to justifying a dismissal with cause."

[26] The assertions of the appellants, that the decision to remove Barbieri as president and manager and to terminate his remuneration contrary to the Shareholder Agreement was in good faith and in the interests of the company, do not ring true.

[27] There is no articulated or discernible benefit to Platinum in removing Barbieri as officer, director and manager given the specific terms of the Shareholder agreement and the minor nature of the appellants' complaints, combined with the stellar financial results of Platinum under Barbieri's watch.

[28] The business judgment rule does not allow decisions contrary to the reasonable expectations of the respondents to trump the Shareholder Agreement.

[29] Based upon the undisputed facts, it cannot be said that the appellants' unilateral actions were reasonable business decisions in the interests of Platinum. Their actions were in the interests of the appellants, to the significant detriment of the respondents.

[30] We conclude that there is no merit to the appellants' argument that the business judgment rule protects the actions of the appellants from scrutiny and a finding of oppression.

The Finding of Oppression

[31] The Supreme Court of Canada defined oppressive conduct at common law as conduct that is "burdensome, harsh and wrongful""a visible departure from standards of fair dealing" and an "abuse of power". The court noted that under the Canada Business Corporations Act, R.S.C. 1985, c. C-44"unfair prejudice" and "unfair disregard" of interests also came to fall within the meaning of oppression: BCE, supra [at para. 56].

[32] Whether an officer or director has engaged in oppressive conduct, and if so, determining what relief is appropriate, is largely dependent on reasonable shareholder expectations. As stated in Naneff v. Con-Crete Holdings Ltd. (1995), 1995 959 (ON CA), 23 O.R. (3d) 481, [1995] O.J. No. 1377 (C.A.), at p. 490 O.R., cited in Newbould J.'s reasons:

The law is clear that when determining whether there has been oppression of a minority shareholder, the court must determine what the reasonable expectation of that person were according to the arrangements which existed between the principals.

[33] In his reasons, Newbould J. reviewed the correct test for oppression and the role of the reasonable expectations of the shareholders under the terms of the Shareholder Agreement in assessing whether the appellants' conduct was oppressive.

[34] Newbould J. concluded that the appellants' actions were contrary to the reasonable expectations of Barbieri as a shareholder and that the appellants' conduct was in flagrant breach of the Shareholder Agreement. Newbould J. stated in his reasons [at paras. 32 and 34]:

To exclude Mr. Barbieri from management and the board of directors of Platinum while keeping his equity in the company was not only to unfairly disregard his interests as a shareholder, officer and director but was also conduct that was harsh and wrongful amounting to oppression. . . . . .

There is also a fundamental flaw in the position taken by the respondents. Stopping Mr. Barbieri's salary when he was in the hospital was not authorized by any meeting of any kind. It was simply done on the fiat of the Herwynen brothers. Under the unanimous shareholder agreement, his salary could not be changed without his consent.

[35] Indeed, the parties had expressly addressed the contingency of Barbieri becoming disabled and had agreed as to the point in time when his remuneration was to stop. On a fair reading of those provisions, the parties having agreed to cessation of pay after one year of disability, the logical and reasonable inference is that the parties agreed that sickness or disability for less than a year would not result in cessation of pay.

[36] The conclusion of Newbould J. that the appellants' conduct in terminating Barbieri and excluding him from Platinum was oppressive is amply supported by the evidence. We therefore conclude that there is no merit to the appellants' arguments that the business judgment rule applies to justify the appellants' conduct. This ground of appeal is dismissed.

Issue 2: Did the appellants' actions constitute oppression with respect to the value of Barbieri's Company shares?

[37] Newbould J. concluded that the individual appellants' conduct, allowing very significant receivables owed by their company Herwynen Sawmill Ltd. to build up to the detriment of Platinum, constitutes oppressive conduct.

[38] The evidence clearly supports Newbould J.'s finding that the individual appellants chose to let the receivables of Herwynen Sawmill Ltd. build significantly, requiring Platinum, in turn, to borrow funds to support Platinum's day-to-day operations. The actions of the appellants, in essence, made Platinum the interest-free banker of Herwynen Sawmill Ltd., benefiting the appellants to the detriment of the respondents.

[39] The conclusion of Newbould J. that these actions were oppressive was reasonable and fully supported by the undisputed facts. There is no merit to this argument.

Issue 3: Was Barbieri's claim for wrongful dismissal appropriately dealt with as part of this application?

[40] Usually the wrongful dismissal of employees is not to be combined with an oppression remedy. The appellants assert that Barbieri's claim for wrongful dismissal ought to have been either dismissed or dealt with in a separate action by way of a trial.

[41] We disagree.

[42] Although generally wrongful dismissal of an employee is not to be intermingled under the umbrella of a claim for oppression, in limited circumstances, such as in this case, when there is an intimate connection between the employment contract and the shareholders' agreement, a wrongful dismissal may ground a finding of oppression.

[43] It is clear from the undisputed facts of this case that Barbieri's agreement to purchase shares in Platinum through his company was directly tied to his agreement with the appellants that he would be president and manager of the company, and that he would receive $100,000 remuneration for his work. A key term of the Shareholder agreement was that Barbieri's remuneration could not be altered except by a unanimous resolution of the shareholders.

[44] Nordheimer J. clearly identified the issue in cases such as this one in Walters v. Harris Partners Ltd., [2001] O.J. No. 1560, 2001 CarswellOnt 1424 (S.C.J.), at para. 2:

The central issue in my view is whether this is, at its heart, an oppression claim with a wrongful dismissal component as in Naneff v. Con-Crete Holdings Ltd. (1993), 11 B.L.R. (2d) 218 (Ont. Gen. Div.) or whether it is a wrongful dismissal claim that happens to have an oppression component to it as in Mohan v. Philmar Lumber (Markham) Ltd. (1991), 50 C.P.C. (2d) 164 (Ont. Gen. Div.) and Flatley v. Algy Corp., 2000 22783 (ON SC), [2000] O.J. No. 3787 (Ont. S.C.J.).

[45] This is a case which is at its heart an oppression claim with a wrongful dismissal component.

[46] The facts of this case are akin to the decision in Naneff v. Con-Crete Holdings Ltd., [1993] O.J. No. 1756, 11 B.L.R. (2d) 218 (Gen. Div.), where the interests of the employee were found to be "integrally intertwined with his interests as a shareholder, officer and director" and where the employee's dismissal was "part of a pattern of conduct designed to exclude the complainant from any active role in the companies" (at para. 113). In that case, the employee's dismissal was considered an act of oppression. Farley J. in Mohan v. Philmar Lumber (Markham) Ltd., [1991] O.J. No. 3451, 50 C.P.C. (2d) 164 (Gen. Div.) described the circumstances in which an employee's action for wrongful dismissal may be allowed to proceed in the context of oppression as requiring "an intertwining of his employment and his interests in the corporation as an indivisible package" (at para. 1).

[47] This case is distinguishable from the decision in Flatley v. Algy Corp. (c.o.b. Mezzrow's), 2000 22783 (ON SC), [2000] O.J. No. 3787, 9 B.L.R. (3d) 255 (S.C.J.) relied upon by the appellants. In that case, the employee was not an officer and director of the corporation, and there was no expectation that she would be involved in the management of the business. Her employment was therefore not closely intertwined with the interests of the corporation.

[48] Barbieri's position as president and manager, on the other hand, was inextricable from his agreement to acquire a minority interest as opposed to a 50 per cent interest. He did so on terms that he have management of the company and a secure remuneration of $100,000. The vulnerability of Barbieri's Company minority shareholding would be balanced by Barbieri's role in management and his secure salary.

[49] Based on the evidence and the available jurisprudence, it was appropriate for Newbould J. to conclude that the appellants' conduct and manner in terminating Barbieri's employment was oppressive within the meaning of s. 248 of the OBCA. Newbould J. correctly concluded that Barbieri had been wrongfully dismissed and referred the issue of damages to trial.

[50] There is no merit to the argument that the wrongful dismissal component of the claim should not have been considered.

Issue 4: Remedies

[51] Newbould J. ordered that all appellants be jointly and severally responsible for the damages for wrongful dismissal and for the buy-out of Barbieri's Company's shares.

[52] The appellants argue that Newbould J. granted an order that was excessive and not warranted to protect the respondents' interests. The appellants particularly objected to the conclusion that the Herwynen brothers and Herwynen Sawmill Ltd. were jointly and severally responsible.

[53] We disagree.

[54] The Ontario Court of Appeal decision Budd v. Gentra Inc., 1998 5811 (ON CA), [1998] O.J. No. 3109, 111 O.A.C. 288 (C.A.) confirms, at para. 52, that personal liability for officers and directors may be appropriate in limited circumstances as follows:

The case law provides examples of various situations in which personal orders are appropriate. These include cases in which it is alleged that the directors or officers personally benefited from the oppressive conduct, or furthered their control over the company through the oppressive conduct. Oppression applications involving closely held corporations where a director or officer has virtually total control over the corporation provide another example of a situation in which a director or officer may be held personally liable to rectify corporate oppression.

[55] In our view, the facts of this case fall squarely within the limited circumstances when officers or directors may be personally liable as outlined in Budd.

[56] Herwynen Sawmill Ltd. was directly linked to the oppressive conduct by benefiting from the non-payment of its receivables.

[57] After Barbieri was hospitalized, he was essentially cut out of all management of Platinum and his salary was terminated. He went from a position of running Platinum, to having no involvement and no notice of its activities.

[58] The decision of Newbould J. with respect to aspects of the remedy is discretionary and is dependent upon the facts of this case.

[59] Discretionary decisions should not be lightly interfered with: "an appellate court will be justified in intervening in a trial judge's exercise of his discretion only if the trial judge misdirects himself or if his decision is so clearly wrong as to amount to an injustice" (Canada (Minister of Citizenship and Immigration) v. Tobiass, 1997 322 (SCC), [1997] 3 S.C.R. 391, [1997] S.C.J. No. 82, at para. 87). Where a motions judge exercises his or her discretion, that decision cannot be replaced simply because the appellate court has a different assessment of the facts (Stein v. Kathy K (The), supra).

[60] In our view, Newbould J. appropriately exercised his discretion and the appellants have failed to illustrate that his decision as to the appropriate remedy was clearly wrong. In any event, we agree that the order he made is appropriate to adequately protect the respondents' interests.

[61] This ground of the appeal is dismissed.

Minority Discounts

[62] The appellants argue that it would be appropriate to apply a minority discount to the purchase of the respondent's 30 per cent shareholder interest. We note that the respondents were required to pay a premium to acquire the Platinum shareholdings, which would militate against the application of a minority discount.

[63] Again, this aspect of the order of Newbould J. is a discretionary order. The argument that the minority discount should apply was made by the appellants before Newbould J. and rejected by him. We find that this aspect of the decision of Newbould J. is reasonable. This ground of appeal is dismissed.

The Date for the Purchase of the Shares

[64] The appellants question the valuation date stipulated by Newbould J. for the purchase of Barbieri's Company's shares. Newbould J. stipulated that Barbieri's Company's shares were to be valued and purchased as of March 31, 2008. He considered submissions of counsel and concluded that this date was appropriate. This was the date when Barbieri was in hospital. After this date, Barbieri was effectively shut out of the operation of Platinum and had no knowledge or control with respect to anything that went on in the company. In our view, the valuation date chosen by Newbould J. is reasonable and supported by the evidence. This aspect of the appeal is dismissed.

Disposition

[65] For all of the above reasons, the appeal is dismissed.

Costs

[66] At the conclusion of the argument, we asked counsel for submissions with respect to costs. The parties agreed that if the appeal was dismissed, an appropriate award of costs would be in the amount of $12,000, inclusive, payable by the appellants to the respondents, and we so order.

Appeal dismissed.