Maurice v. Alles et al. Alles et al. v. Maurice

[Indexed as: Maurice v. Alles]

Ontario Reports

Court of Appeal for Ontario,

G.J. Epstein, van Rensburg and Hourigan JJ.A.

April 21, 2016

130 O.R. (3d) 452 | 2016 ONCA 287

Case Summary

Civil procedure — Summary judgment — Applications — Motion for summary judgment under Rule 20 not available in application under Rule 14 unless application is converted into action — Rules of Civil Procedure, R.R.O. 1990, Reg. 194, Rules 14, 20.

Limitations — Corporations — Oppression — Appellant bringing application for oppression remedy arising from respondents' failure to provide him with requested information about sale of shares which potentially had adverse impact on value of appellant's shares — Appellant aware of sale and non-disclosure in July 2008 — Two-year limitation period in s. 4 of Limitations Act applying to application for oppression remedy under Ontario Business Corporations Act — Continuous refusal to produce documents not amounting to ongoing oppression — Motion judge nevertheless erring in concluding that claim was statute-barred — Another discrete potentially oppressive act occurring when respondents commenced application for appointment of valuator to determine fair value of shares in 2013 and attempted to rely upon their previous allegedly oppressive conduct as part of share valuation — Limitations Act, 2002, S.O. 2002, c. 24, Sch. B, s. 4 — Business Corporations Act, R.S.O. 1990, c. B.16.

The parties' late father, M, owned an interest in Tasco through his holding company KM. Marlba owned the land on which Tasco operated, and was owned equally by KM and another holding company owned by M's business partner S. M gave equal interests in Tasco to each of his six children and S's six children. Fifty-four per cent of Tasco's voting preferred shares were issued to KM. The M siblings entered into a unanimous shareholder agreement which provided, among other things, for a share sale procedure. A shareholder selling his/her shares in Tasco and Marlba was required to also sell, at a fair value to be determined by a valuator, his/her shares in KM. In 1996, the appellant exercised his right to sell his shares in Tasco and Marlba and, in accordance with the USA, offered to sell his shares in KM. The sale of the Tasco and Marlba shares closed in 2007. The appellant remained a shareholder and director of KM. At a shareholders' meeting in July 2008, the appellant learned that his siblings had sold their shares in Tasco and Marlba to the unknown owner of a numbered company and that KM's preferred shares in Tasco were being sold for redemption at face value. The appellant opposed the sale, arguing that his siblings should obtain a valuation before selling their shares in Tasco and Marlba. Since that meeting, he had requested a valuation of his shares in KM and information relating to how KM's preferred shares in Tasco were valued for the purposes of their sale. Those requests were either ignored or refused. In May 2013, the appellant's siblings brought an application for the appointment of a valuator to value the issued and outstanding shares of KM. The appellant brought a cross-application for relief under the oppression remedy section of the Business Corporations Act. The [page453] respondents brought a motion for summary judgment to dismiss the cross-application as statute-barred and for the valuator's appointment. The motion was granted. The appellant appealed.

Held, the appeal should be allowed.

A motion for summary judgment under Rule 20 of the Rules of Civil Procedure is not available in an application under Rule 14 unless the application has been converted into an action. However, considering that neither party objected to the use of the summary judgment procedure and that both fully participated in the motion, any error in disposing of the limitation issue by way of a motion for summary judgment was merely a procedural defect that caused no prejudice to the parties.

The appellant had knowledge in July 2008 that the respondents were selling their common shares in Tasco and Marlba, that the Tasco preferred shares would be sold for redemption at face value, and that the respondents were not disclosing information regarding valuation of their shares and any potential impact of the sale on the value of the appellant's shares in KM. The two-year limitation period in s. 4 of the Limitations Act, 2002 applies to an oppression claim. The appellant had an obligation to commence a claim based on the respondents' failure to produce the requested information within two years of his discovery that they would not produce it to him. This was not a case where there was ongoing oppressive conduct. The continuous refusal to produce documents did not operate to extend the limitation period. Nevertheless, the motion judge erred in law in concluding that the oppression claim was out of time. Another discrete potentially oppressive act occurred when the respondents commenced their application for a valuator. There was no reference in that application to the circumstances surrounding the disposal of the Tasco preferred shares and what impact it had on the value of the appellant's KM shares. Nor was there any production of the documents related to the share sale until they were produced as part of the respondents' disclosure on the cross-application. The respondents were in effect seeking a valuation process and payout to the appellant that did not take into account their earlier oppressive conduct. The practical effect of the motion judge's reasoning is that where a party is alleged to have acted in an oppressive manner and no oppression remedy application is commenced as a consequence, he or she is free to take additional oppressive steps in furtherance of, or based upon, the initial oppressive conduct. That reasoning is contrary to the broad purposive interpretation that must be afforded this statutory cause of action. The parties were directed to proceed to trial on the allegation that the share sale transaction executed by the respondents was oppressive, or unfairly prejudicial to, or unfairly disregarded the appellant's interest in obtaining fair market value for his shares in KM.

Essex Condominium Corp. No. 5 v. Rose-Ville Community Center Assn., [2007] O.J. No. 2067, 51 C.P.C. (6th) 89, 157 A.C.W.S. (3d) 517 (S.C.J.); Ravikovich v. College of Physicians & Surgeons (Ontario), 2010 CarswellOnt 6643 (S.C.J.), apld

Fracassi v. Cascioli, [2011] O.J. No. 2425, 2011 ONSC 178, 204 A.C.W.S. (3d) 65 (S.C.J.); Metcalfe v. Anobile, [2010] O.J. No. 4548, 2010 ONSC 5087, 77 B.L.R. (4th) 293, 194 A.C.W.S. (3d) 476 (S.C.J.); Waxman v. Waxman, 2004 CanLII 39040 (ON CA), [2004] O.J. No. 1765, 186 O.A.C. 201, 44 B.L.R. (3d) 165, 132 A.C.W.S. (3d) 1046 (C.A.) [Leave to appeal to S.C.C. refused [2004] S.C.C.A. No. 291], consd

Other cases referred to

Baker v. Chrysler Canada Ltd. (1998), 1998 CanLII 14672 (ON SC), 38 O.R. (3d) 729, [1998] O.J. No. 531, 53 O.T.C. 230, 18 C.P.C. (4th) 36, 77 A.C.W.S. (3d) 726 (Gen. Div.); [page454] 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, 172 A.C.W.S. (3d) 915; Harris v. Leikin Group Inc. (2014), 120 O.R. (3d) 508, [2014] O.J. No. 2914, 2014 ONCA 479, 98 E.T.R. (3d) 81, 374 D.L.R. (4th) 452, 321 O.A.C. 181, 29 B.L.R. (5th) 1, 241 A.C.W.S. (3d) 120; Hryniak v. Mauldin, [2014] 1 S.C.R. 87, [2014] S.C.J. No. 7, 2014 SCC 7, 314 O.A.C. 1, 453 N.R. 51, 2014EXP-319, J.E. 2014-162, EYB 2014-231951, 95 E.T.R. (3d) 1, 12 C.C.E.L. (4th) 1, 27 C.L.R. (4th) 1, 21 B.L.R. (5th) 248, 46 C.P.C. (7th) 217, 37 R.P.R. (5th) 1, 366 D.L.R. (4th) 641, 2014EXP-319, J.E. 2014-162; Joseph v. Paramount Canada's Wonderland (2008), 90 O.R. (3d) 401, [2008] O.J. No. 2339, 2008 ONCA 469, 294 D.L.R. (4th) 141, 56 C.P.C. (6th) 14, 241 O.A.C. 29, 166 A.C.W.S. (3d) 762; Marshall v. Watson Wyatt & Co. (2002), 2002 CanLII 13354 (ON CA), 57 O.R. (3d) 813, [2002] O.J. No. 84, 209 D.L.R. (4th) 411, 155 O.A.C. 103, 16 C.C.E.L. (3d) 162, [2002] CLLC Â210-019, 111 A.C.W.S. (3d) 75 (C.A.); Maurice v. Alles, [2013] O.J. No. 4568, 2013 ONSC 6046, 19 B.L.R. (5th) 164, 233 A.C.W.S. (3d) 282 (S.C.J.); Paul v. 1433295 Ontario Ltd., [2015] O.J. No. 3186, 2015 ONSC 3588, 46 B.L.R. (5th) 115, 255 A.C.W.S. (3d) 92 (Div. Ct.), varg (2013), 120 O.R. (3d) 339, [2013] O.J. No. 6292, 2013 ONSC 7002, 23 B.L.R. (5th) 252, 240 A.C.W.S. (3d) 833 (S.C.J.); Rea v. Wildeboer (2015), 126 O.R. (3d) 178, [2015] O.J. No. 2651, 2015 ONCA 373, 335 O.A.C. 161, 384 D.L.R. (4th) 747, 37 B.L.R. (5th) 101, 253 A.C.W.S. (3d) 87; Reinhart v. VIXS Systems Inc., [2011] O.J. No. 5072, 2011 ONSC 5349 (S.C.J.); Solar Harvest Co. v. Dominion Citrus Ltd., [2015] O.J. No. 1024, 2015 ONSC 1315, 39 B.L.R. (5th) 141, 250 A.C.W.S. (3d) 336 (S.C.J.); Sterling Waterhouse Inc. v. LMC Endocrinology Centres (Toronto) Ltd., [2015] O.J. No. 4898, 2015 ONCA 645, varg [2015] O.J. No. 3350, 2015 ONSC 3987 (S.C.J.); Unique Broadband Systems Inc. (Re) (2014), 121 O.R. (3d) 81, [2014] O.J. No. 3253, 2014 ONCA 538, 13 C.B.R. (6th) 278, 322 O.A.C. 122

Statutes referred to

Business Corporations Act, R.S.O. 1990, c. B.16 [as am.]

Corporations Act, R.S.O. 1990, c. C.38 [as am.]

Limitations Act, 2002, S.O. 2002, c. 24, Sch. B [as am.], ss. 4, 16 [as am.], 19 [as am.]

Real Property Limitations Act, R.S.O. 1990, c. L.15 [as am.]

Rules and regulations referred to

Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rules 1.03, 1.04, 14, 14.05(3), 20, 38.10, (1)(b), (2), (3)

APPEAL from the order of Pattillo J., [2015] O.J. No. 1239, 2015 ONSC 1671 (S.C.J.) granting a motion for summary judgment dismissing a claim.

Peter Griffin and Nadia Campion, for appellant.

Richard Worsfold, for respondents.

The judgment of the court was delivered by

HOURIGAN J.A.: —

A. Overview

[1] This appeal of the order of the motion judge dismissing an oppression remedy claim on a motion for summary judgment [page455] raises two issues. First, is summary judgment available in the context of an application as opposed to an action? Second, does the two-year limitation period in the Limitations Act, 2002, S.O. 2002, c. 24, Sch. B apply to oppression remedy claims and, in particular, to claims of ongoing oppressive conduct?

[2] For the reasons that follow, I am of the view that a motion for summary judgment under Rule 20 is not available to adjudicate issues raised on an application under Rule 14 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 unless the application is converted into an action. However, as I will go on to explain, the use of Rule 20 in the circumstances of this case was merely a procedural defect and thus I would not interfere with the motion judge's decision on this basis.

[3] An oppression remedy claim must be commenced within two years of the discovery of a potential claim. The alleged oppressive conduct in this case is not ongoing. However, where, as here, a party engages in conduct that is in furtherance of, or based upon, earlier oppressive conduct, this is a new cause of action because it is new oppressive conduct.

[4] For this reason, I conclude that the motion judge erred in dismissing the appellant's oppression claim as statute-barred. I would allow the appeal and order that the oppression remedy claim proceed as a trial.

B. Background Facts

[5] The appellant and the individual respondents are siblings, except for George Alles, who is the husband of Lorraine Alles. Starting in the 1950s, their late father, Mr. Maurice, owned an interest in Television Antenna & Service Co. ("Tasco") through his holding company Kirby-Maurice Company Limited ("Kirby-Maurice"). Marlba Investments Limited ("Marlba") owned the land on which Tasco operated. Marlba, in turn, was owned equally by Kirby-Maurice and another holding company owned by their father's business partner, Mike Sayer.

[6] Mr. Maurice restructured Tasco in the late 1970s. He gave equal interests in Tasco to each of his six children and Mr. Sayer's six children, preserving voting control for his family by causing the issuance of 54 per cent of Tasco's voting preferred shares to Kirby-Maurice.

[7] In the early 1990s, litigation between the Maurice and Sayer families concerning Tasco and Marlba concluded with a settlement agreement that provided for the ownership structure of the two companies. It also specified that both families would enter into unanimous shareholder agreements ("USAs") [page456] to govern the business and affairs of each company. The appellant and his siblings were parties to this settlement agreement.

[8] Those USAs were never executed. The parties, however, governed themselves according to provisions set out in the settlement agreement, which were to be contained in the USAs. Those provisions included a prohibition on the transfer of shares in either Tasco or Marlba except between members of the same family, a shareholder's right to require the corporation to repurchase their common shares for cancellation at fair value, and a right of first refusal with respect to the shares sought to be repurchased by the corporation.

[9] The Maurice siblings, who were each 20 per cent owners of Kirby-Maurice, later entered into a USA concerning their interests in that company (the "Kirby-Maurice USA"). The Kirby-Maurice USA provided, among other things, for a share sale procedure. Critical to this appeal were provisions requiring a shareholder selling their shares in Tasco and Marlba to also sell, at a fair value to be determined by a valuator, his or her shares in Kirby-Maurice.

[10] On May 13, 1996, the appellant exercised his right to sell his shares in Tasco and Marlba. In accordance with the terms of the Kirby-Maurice USA, the appellant offered to sell his shares in Kirby-Maurice at the same time. The sale of the appellant's shares in Tasco and Marlba did not close until March 23, 2007, almost 11 years after he first exercised his right under the settlement agreement. When it did, the appellant received a total of $2,275,000 for his shares: $1,966,700 for his shares in Tasco and $308,300 for his shares in Marlba, based on the July 31, 2005 valuation completed by PricewaterhouseCoopers.

[11] Negotiations between the respondents and a prospective purchaser ultimately led to Tasco and Marlba shareholders (including the respondent siblings and Kirby-Maurice) receiving a letter of intent from a third party with an interest in acquiring their shares in June 2007. The appellant, who was no longer a shareholder of Tasco or Marlba, first learned of the potential purchase in October 2007. He expressed his view that Kirby-Maurice's 54 per cent of the voting preferred shares in Tasco should fetch a premium given that they represented control of the company.

[12] In the meantime, although he had offered his shares in Kirby-Maurice for sale, the appellant remained a shareholder and director of Kirby-Maurice. He received notice of a Kirby-Maurice shareholders' meeting scheduled for July 25, 2008 to discuss a proposed sale of Kirby-Maurice's shares in Tasco and Marlba. At the meeting, the appellant was advised of the [page457] following: his siblings had sold their shares in Tasco and Marlba; the purchaser was a numbered company; the owner of that company was unknown; Kirby-Maurice's preferred shares in Tasco were being sold for redemption at face value; and Kirby-Maurice's nominees to Tasco and Marlba's boards of directors were resigning.

[13] The appellant opposed the sale. He argued that proceeding without the unanimous consent of the shareholders would breach the Kirby-Maurice USA and that his siblings should obtain a valuation before selling their shares in Tasco and Marlba. After the appellant left the meeting, his siblings approved the sale of Kirby-Maurice's shares in Tasco and Marlba.

[14] Since the meeting of July 25, 2008, the appellant has requested a valuation of his shares in Kirby-Maurice and, on numerous occasions, requested information relating to how Kirby-Maurice's preferred shares in Tasco were valued for the purposes of their sale. These requests have been either ignored or refused by his siblings.

[15] In 2013, the appellant's siblings brought an application for the appointment of a valuator to value the issued and outstanding shares of Kirby-Maurice. The appellant commenced a cross-application against his siblings, George Alles and Kirby-Maurice, alleging breach of both the settlement agreement and the Kirby-Maurice USA, and seeking relief under the oppression remedy section of the Business Corporations Act, R.S.O. 1990, c. B.16 ("OBCA") arising out of the sale of Kirby-Maurice's shares in Tasco and Marlba.

[16] In 2014, the appellant received a copy of the share purchase agreement for the sale of the respondents' and Kirby-Maurice's shares in Tasco and Marlba, dated August 1, 2008, as part of the respondents' disclosure. The appellant also learned the following:

-- negotiations over the sale lasted more than a year;

the purchase price increased over the course of the negotiations;

each sibling shareholder received $2,980,025 for their shares in Tasco and Marlba; and

the issue whether Kirby-Maurice's preferred shares in Tasco should be valued at more than face value was considered.

C. Decision Below

[17] Pursuant to an order of Newbould J., dated October 1, 2013 [Maurice v. Alles, [2013] O.J. No. 4568, 2013 ONSC 6046 (S.C.J.)], [page458] the cross-application was to be determined as a mini-trial before the application to appoint a valuator. The respondents brought a motion for summary judgment to dismiss the claims in the cross-application as being statute-barred and for the valuator's appointment. The appellant brought a motion requiring the respondents to reimburse Kirby-Maurice for legal fees the corporation paid on the respondents' behalf in connection with the ongoing disputes with the appellant from 2008 onward.

[18] On the motion and cross-motion, the respondents argued that the appellant's claims all related to the sale by Kirby-Maurice of its shares in Tasco. The respondents argued that the appellant discovered the claims as of July 25, 2008, the date of the shareholder's meeting when the appellant learned of the respondents' sales of their own shares and the proposed sale of Kirby-Maurice's shares in Tasco and Marlba. As the cross-application was commenced more than two years after the claims were discovered, the claims were out of time. The appellant argued that his claims were not barred since the oppressive conduct was ongoing.

[19] With respect to the appellant's claims for breach of the settlement agreement and the Kirby-Maurice USA, the motion judge found that the appellant was aware of these breaches as of July 25, 2008. Accordingly, he held that the breach of contract claims were statute-barred.

[20] The motion judge found that the appellant was similarly aware of the facts giving rise to the oppression claims related to the Kirby-Maurice USA as of July 25, 2008. Consequently, those claims were also statute-barred. At para. 54 of his reasons, the motion judge relied on Fracassi v. Cascioli, [2011] O.J. No. 2425, 2011 ONSC 178 (S.C.J.) for the proposition that "pursuant to the Limitations Act, the applicable limitation period for an oppression claim begins two years after the day on which the claim for oppression was discovered".

[21] The motion judge held [at para. 55] that even if the oppression is ongoing, "such continuation does not operate to extend the limitation period beyond the time of two years from discovery". In this regard, the motion judge distinguished [at para. 56] Waxman v. Waxman, 2004 CanLII 39040 (ON CA), [2004] O.J. No. 1765, 186 O.A.C. 201 (C.A.), leave to appeal to S.C.C. refused [2004] S.C.C.A. No. 291 and Metcalfe v. Anobile, [2010] O.J. No. 4548, 2010 ONSC 5087, 77 B.L.R. (4th) 293 (S.C.J.) on the basis that, while those cases referred to the ongoing nature of the conduct to defeat a limitation period, "it is discoverability that is the key factor in determining when the limitation period begins to run". [page459]

[22] As the appellant only learned of his oppression claim for legal fees paid by Kirby-Maurice through information produced by the respondents in 2014, the motion judge held that this claim was not statute-barred. However, this payment of legal fees by Kirby-Maurice would only be oppressive to the appellant if Kirby-Maurice did not have sufficient funds to purchase the appellant's shares at the price determined by the valuator. The motion judge granted the respondents' motion for the valuator's appointment.

D. Issues

[23] Although the notice of appeal referenced the dismissal of the appellant's breach of contract and oppression remedy claims, the appellant limited his argument in both his factum and oral submissions to the dismissal of the oppression remedy claim. For the purposes of the appeal, therefore, the issues to be determined are whether the motion judge erred in

(i) granting summary judgment in the context of an application; and

(ii) finding that the limitation period applicable to the appellant's oppression remedy claim had expired.

E. Analysis

(i) Summary judgment in an application

[24] Counsel for the appellant raised with the panel at the hearing of the appeal the issue of whether a motion for summary judgment is an available procedure in the context of an application. He admitted that this was an issue that came to him shortly before the hearing of the appeal and that it was not raised before the motion judge or in the materials originally filed on this appeal.

[25] Generally, a party who has participated in a process in the court below without complaint cannot object to that process on appeal: Harris v. Leikin Group Inc. (2014), 120 O.R. (3d) 508, [2014] O.J. No. 2914, 2014 ONCA 479, at para. 53; see, also, Marshall v. Watson Wyatt & Co. (2002), 2002 CanLII 13354 (ON CA), 57 O.R. (3d) 813, [2002] O.J. No. 84 (C.A.), at paras. 14-15. I nonetheless think it is important to address the issue of the availability of a summary judgment motion on an application under Rule 14, especially given the increased prevalence and importance of summary judgment motions since the Supreme Court of Canada's decision in Hryniak v. Mauldin, [2014] 1 S.C.R. 87, [2014] S.C.J. No. 7, 2014 SCC 7. [page460]

[26] The parties have brought one relevant decision to our attention. In Essex Condominium Corp. No. 5 v. Rose-Ville Community Center Assn., [2007] O.J. No. 2067, 51 C.P.C. (6th) 89 (S.C.J.), Pomerance J. held that summary judgment was not available in the context of an application to wind up a corporation under the Corporations Act, R.S.O. 1990, c. C.38.

[27] Similarly, in Ravikovich v. College of Physicians & Surgeons (Ontario), 2010 CarswellOnt 6643 (S.C.J.), Ferrier J. concluded that summary judgment is not available in a judicial review application because the remedy is only available for actions and an action is a proceeding that is not an application.

[28] I agree with the analysis of the issue in both cases, although I reach a different result on the facts of this case.

[29] The starting point in the analysis is the language of Rule 20. It is clear that the rule contemplates that it will be used in the context of an action and not an application. The rule specifies that a motion for summary judgment is available to a "plaintiff" after the delivery of the "statement of defence" on all or part of the claim in the "statement of claim". Similarly, a "defendant" may move for summary judgment to dismiss all or part of the claim in the "statement of claim".

[30] The emphasized terms are defined in rule 1.03 and it is plain that they apply in the context of an action and not an application. A plaintiff is defined as "a person who commences an action" and a defendant is "a person against whom an action is commenced". An action is a proceeding that is not an application and includes a proceeding commenced by, among other things, a statement of claim.

[31] There is no reference in the text of Rule 20 to an "applicant", who is defined in rule 1.03 as "a person who makes an application" or to a "respondent" who is defined in rule 1.03 as "a person against whom an application is made or an appeal is brought, as the circumstances require". Nor does the summary judgment rule mention a "notice of application", which is the originating process for an application.

[32] The drafters of the summary judgment rule made a deliberate choice to restrict its availability to actions. There is a valid policy rationale for this restriction. Summary judgment is a simplified procedure, designed to determine all or part of an action in a summary manner, in order to reduce expense and preserve court resources. An application is also a summary process. Its use is restricted, pursuant to rule 14.05(3), to situations where an application is permitted under the Rules or in cases where certain enumerated relief is claimed. Evidence is generally supplied through affidavits and cross-examinations conducted [page461] out of court. Where there is conflicting evidence that requires credibility determinations on central issues, the application must be converted to an action: see Baker v. Chrysler Canada Ltd. (1998), 1998 CanLII 14672 (ON SC), 38 O.R. (3d) 729, [1998] O.J. No. 531 (Gen. Div.). If a proceeding is capable of being resolved as an application, it should be, as that is the most expeditious and least expensive determination of the proceeding on its merits. There is no utility in layering on to this summary process another summary process.

[33] This is not a situation, as the respondents submit, where there is a lacuna in the Rules and the court is required to utilize rule 1.04 to interpret Rule 20 as if it applied to applications under Rule 14. Rule 38.10(1)(b) empowers a judge to order that all or part of an application proceed to trial. Pursuant to rules 38.10(2) and (3), where the application judge orders that all or part of an application should proceed to trial, the proceeding is thereafter treated as an action in respect of the issues to be tried subject to the directions in the order directing a trial. The practical effect of rule 38.10 is that the summary judgment vehicle in Rule 20 will be available to resolve the issues in a Rule 14 application after the application is converted by judicial order into an action.

[34] With this analysis in mind, I turn to a consideration of whether the summary judgment rule was available to the parties and the court below. Newbould J. made an order that the claims of oppression and breach of contract should be determined through a mini-trial. Although Newbould J.'s order did not explicitly direct that the application proceed to trial, he had authority to make such an order pursuant to rule 38.10(1)(b).

[35] Considering that neither party objected to the use of the summary judgment procedure and that both fully participated in the motion, any error in disposing of the limitation period issue by way of a motion for summary judgment was merely a procedural defect that caused no prejudice to the parties. Thus, I would not interfere with the motion judge's decision on the procedural basis raised by the appellant in oral argument.

(ii) Limitation period

(a) Positions of the parties

[36] There is a division in the case law regarding the applicability of the general two-year limitation period prescribed by s. 4 of the Limitations Act, 2002, to cases of ongoing oppression. The positions of the parties on this appeal reflect this division.

[37] The appellant submits that in the Waxman and Metcalfe decisions referenced above, the courts recognized a judge's [page462] remedial discretion to permit a claim commenced more than two years after its discovery if there is an "ongoing fact situation" of continuing oppressive conduct.

[38] In Waxman, this court affirmed the trial judge's decision to allow an oppression claim to proceed even though the plaintiff was aware of the facts giving rise to at least some of the claims many years before he commenced his action. Notwithstanding that knowledge, the court found, at para. 536, that "[t]he trial judge exercised her discretion to apply her broad remedial authority to the pattern of oppressive conduct that started in 1979. In doing so she neither abused her discretion nor ran afoul of any legislative limitation period."

[39] In Metcalfe, a case distinguished by the motion judge with facts very similar to the present appeal, the applicant commenced an oppression application on August 7, 2008, more than five years after he began seeking information about his shareholdings. Citing Waxman, the court held that no statutory limitation period was applicable and, in any event, the claim was not statute-barred as the oppression continued until at least March 5, 2007, when the applicant finally obtained some of the information he sought.

[40] The respondents submit that Waxman is distinguishable on the basis that it was decided under the former Real Property Limitations Act, R.S.O. 1990, c. L.15. According to this court's decision in Joseph v. Paramount Canada's Wonderland (2008), 90 O.R. (3d) 401, [2008] O.J. No. 2339, 2008 ONCA 469, the common law discretion to extend a limitation period by applying the doctrine of special circumstances no longer exists under the new legislation. Rather, s. 4 makes clear that a two-year limitation period applies unless the Limitations Act, 2002 provides otherwise.

[41] Pepall J. followed the Joseph decision in Fracassi. Having found that oppression claims are caught by the two-year limitation period under the Limitations Act, 2002, Pepall J. concluded that the limitation defence asserted by the defendants succeeded in part. She also found that limitation periods apply to ongoing oppressive conduct, reasoning that limitation periods begin when the cause of action arises, not when it is remedied, at para. 273.

[42] The respondents cite a number of Ontario Superior Court decisions where Fracassi has been followed: Reinhart v. VIXS Systems Inc., [2011] O.J. No. 5072, 2011 ONSC 5349 (S.C.J.); Paul v. 1433295 Ontario Ltd. (2013), 120 O.R. 339, [2013] O.J. No. 6292, 2013 ONSC 7002 (S.C.J.), vard [2015] O.J. No. 3186, 2015 ONSC 3588 (Div. Ct.); [page463] Sterling Waterhouse Inc. v. LMC Endocrinology Centres (Toronto) Ltd., [2015] O.J. No. 3350, 2015 ONSC 3987 (S.C.J.), vard [2015] O.J. No. 4898, 2015 ONCA 645; and Solar Harvest Co. v. Dominion Citrus Ltd., [2015] O.J. No. 1024, 2015 ONSC 1315, 39 B.L.R. (5th) 141 (S.C.J.). In all of those cases, the courts held that the two-year limitation period applies to oppression remedy claims under the OBCA.

(b) Applicable limitation period

[43] In my view, an oppression remedy claim under the OBCA is subject to the general two-year limitation period prescribed by s. 4 of the Limitations Act, 2002. Oppression is not listed under s. 16 as a claim to which no limitation period applies, nor is it exempted under s. 19 of the legislation. Special circumstances are also not available to extend the limitation period.

[44] In the present case, the respondents' act of selling their common shares in Tasco and Marlba would not qualify as oppressive conduct per se. The potential oppressive conduct that arises from this transaction is twofold. The first is the failure of the respondents to provide the appellant with the requested information regarding the transaction. Second, the transaction itself may qualify as actionable oppression if it adversely impacted the value of the appellant's shareholding in Kirby-Maurice.

[45] The appellant had knowledge in July 2008 that the respondents were selling their common shares in Tasco and Marlba, that the Tasco preferred shares held by Kirby-Maurice would be sold for redemption at face value ($1.20 per share), and that the respondents were not disclosing the information regarding the valuation of their shares and any potential impact of the sale on the value of the appellant's shares in Kirby-Maurice.

[46] The appellant had an obligation to commence a claim based on the respondents' failure to produce the information regarding the share transaction within two years of his discovery that they would not produce it to him. It is not open to this court, as was suggested by the appellant, to look behind his non-action and excuse it based on the fact that this was a family business or that he had a reasonable expectation that the information would eventually be produced. Such an approach would effectively mark the return of the special circumstances doctrine, which has no application under the current limitations regime.

[47] Had the appellant taken steps pursuant to the oppression remedy to protect his rights based on the non-disclosure, he would have also been in a position to determine whether he had a potential claim with respect to the respondents' share sale. He then could have potentially commenced a claim seeking compensation or other related relief. [page464]

[48] I am also of the view that this is not a case where there is ongoing oppressive conduct. The sale was a singular event that occurred many years ago. The refusal to produce documents was made known to the appellant in 2008. It is true that no production was made until this proceeding was commenced, but the continuous refusal to produce documents does not operate to extend the limitation period any more than a refusal to pay an outstanding amount in a collection action extends the limitation period until payment is received. As previously mentioned, limitation periods begin when the cause of action arises, not when it is remedied: Fracassi, at para. 273.

[49] Courts must be careful not to convert singular oppressive acts into ongoing oppression claims in an effort to extend limitation periods. To do so would create a special rule for oppression remedy claims.

[50] Despite the foregoing, in my view, the motion judge erred in law in concluding that the appellant's oppression claim was out of time. Another discrete potentially oppressive act occurred when the respondent siblings commenced their application on May 13, 2013 for an order appointing a valuator to determine the fair value of the appellant's shares in Kirby-Maurice.

[51] In that application, there was no reference to the circumstances surrounding the disposal of the Tasco preferred shares and what impact it had on the value of the appellant's Kirby-Maurice shares. Nor was there any production of the documents related to the share sale until they were produced as part of the respondents' disclosure on the cross-application following the decision of Newbould J. The sibling respondents were in effect seeking a valuation process and payout to the appellant that did not take into account their earlier alleged oppressive conduct.

[52] A party that engages in a series of oppressive acts can always make the argument that it is all part of the same corporate malfeasance and that the limitation period begins to run with the discovery of the first oppressive act. In analyzing that conduct, courts must have regard to the remedial nature of the oppression remedy and the fact that any threatened or actual conduct that is oppressive, or unfairly prejudicial to, or unfairly disregards the interests of any complainant can constitute a discrete claim of oppression. The oppression remedy section of the OBCA is drafted in the broadest possible terms to respond to the broadest range of corporate malfeasance.

[53] Where the motion judge erred was in failing to carefully scrutinize the respondents' conduct to determine whether there were any discrete acts of oppression within the two-year period prior to the commencement of the cross-application. In my view, [page465] the sibling respondents committed a new act of alleged oppressive conduct when they brought their application and attempted to rely upon their previous alleged oppressive conduct as part of the share valuation.

[54] The practical effect of the motion judge's reasoning is that where a party is alleged to have acted in an oppressive manner and no oppression remedy application is commenced as a consequence, he or she is free to take additional oppressive steps in furtherance of, or based upon, the initial oppressive conduct. That reasoning is contrary to the broad purposive interpretation that must be afforded this statutory cause of action: see BCE Inc. v. 1976 Debentureholders, [2008] 3 S.C.R. 560, [2008] S.C.J. No. 37, 2008 SCC 69, at para. 58; Rea v. Wildeboer (2015), 126 O.R. (3d) 178, [2015] O.J. No. 2651, 2015 ONCA 373, at para. 33; and Unique Broadband Systems, Inc. (Re) (2014), 121 O.R. (3d) 81, [2014] O.J. No. 3253, 2014 ONCA 538, at para. 107.

[55] The value of the Tasco preferred shares is central to the valuation of the appellant's shares in Kirby-Maurice. The determination of the oppression allegations is an important part of the valuation process and that is why Newbould J. ordered a mini-trial on those allegations. In order to determine whether there is actionable oppression, the court is required to analyze whether there was oppression as a consequence of the respondents' share sale and, if so, whether there is oppression now by reason of the respondents' reliance on their previous misconduct. Therefore, the motion judge erred in dismissing the oppression remedy claim as statute-barred.

F. Disposition

[56] I would allow the appeal and set aside the order for summary judgment dismissing the appellant's oppression remedy claim. I would direct that the parties proceed to a trial on the allegation that the share sale transaction executed by the respondents was oppressive, or unfairly prejudicial to, or unfairly disregarded the appellant's interest in obtaining fair value for his shares in Kirby-Maurice. This trial shall be determined prior to the valuation of the appellant's shares in Kirby-Maurice.

[57] After the hearing of the appeal, the parties advised that they have reached an agreement on costs, which they will provide to the court once our decision has been rendered. They may do so now.

Appeal allowed.

[page466]

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