Ettinger v Trillium Railway Co. Ltd., 2019 ONSC 7321
CITATION: Ettinger v Trillium Railway Co. Ltd., 2019 ONSC 7321
COURT FILE NO.: DC-18-984 and DC-18-985
DATE: 20191217
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
D.L. CORBETT, R.B. FITZPATRICK, and F.L. MYERS, JJ.
B E T W E E N:
WAYNE ETTINGER and MARJORIE ETTINGER
Respondents
- and -
TRILLIUM RAILWAY CO. LTD., MAPLE ONE RAIL CORP., GIO RAIL HOLDINGS INC., and GERRY GIONET
Appellants
COUNSEL:
Eric Kay, for the Respondents
Daniel S. Murdoch and Zev Smith, for the Appellant Maple One Rail Corp.
Kenneth A. Dekker, for the Appellants Gio Rail Holdings Inc. and Gerry Gionet
HEARD at Hamilton: June 4, 2019
REASONS FOR DECISION
Corbett J. (Dissenting):
[1] I find myself in respectful disagreement with the decision of my colleagues to defer to the findings of the applications judge on the “first issue”. I would allow the appeal, set aside the decision of the applications judge, and dismiss the application, with costs throughout to the respondents.
[2] I have had the benefit of reading the thorough reasons of Myers J. I agree with it except for the conclusion that this court should defer to the application judge’s finding that the reasonable expectation of the parties was that the drag along right would not apply in a sale below fair market value.
[3] The oppression remedy precludes mistreatment of certain vulnerable stakeholders in a company from abuse, usually abuse by persons holding a dominant position in the company.
[4] But this resort to equity to ensure fairness in company affairs does not oust the law in favour of the storied Chancellor’s foot. These claims must be analysed with a view to respecting the agreements parties have reached among themselves. The contracts must be read within the context in which they arose – in order to do equity, not just to the minority shareholder (in this case), but also to the majority shareholder, which relied on the terms agreed between the parties in acquiring the railway in the first place.
[5] First, the applications judge imported a requirement for sale at fair market value into the USA. This, in my view, is an error. This is a small company of uncertain value, almost certainly of greater value to Maple One than to anyone else. The cost of obtaining expert assistance to value or sell this company would likely outstrip the value added by the cost of that assistance, and the parties chose a clear and efficient way in which to establish value: the price at which the 85% shareholder was willing to sell its interest to an arm’s length purchaser. The USA reflect the reasonable expectations of both Maple One and Mr Ettinger: it is what they agreed. The oppression remedy is not a tool to rescue parties from the consequences of their commercial bargains on the basis of a court’s after-the-fact assessment of what would be “just and equitable in the circumstances”: J.S.M. Corp. (Ontario) Ltd. v. Brick Furniture Warehouse Ltd., 2008 ONCA 183; BCE Inc. v. 1976 Debentureholders, 2008 SCC 69.
[6] Second, as noted by my colleague, it is not established on the record that the company was sold for less than fair market value. I appreciate the deference owed to the experienced applications judge on these issues, and do not depart from his conclusions lightly, but it is not at all clear that the price paid to buy the railway is less, let alone much less, than the fair market value. It is an error in principle to find a transaction below fair market value with “virtually no evidence” establishing that fair market value: Saramia Crescent General Partner Inc. v. Delco Wire and Cable Limited, 2018 ONCA 519, para. 53.
[7] Third, this was Mr Ettinger’s claim to prove. As a result of the applications judge’s decision, the respondents will pay for a valuation of fair market value, a cost they should not have to bear on the basis of the USA. I would have dismissed the application for failure of the applicant to establish a reasonable basis for believing the sale was unfair. Ordering the respondents to front the cost of a valuation, on this record, re-writes the USA.
[8] Fourth, Maple One’s obligation to act in good faith does not alter its contractual entitlement to invoke the drag along clause of the USA: Bhasin v. Hrynew, 2014 SCC 71. It acquired there railway in the first place because of its concerns that it was not being operated properly by the Ettingers, and Maple One needed to secure transportation for its goods. The difficulties with its continued ownership of the railway were as a result of federal regulatory concerns, and were real. There is nothing in the record to impugn Maple One’s good faith decision to sell the railway, or its choice of current management as an appropriate buyer: there is no basis to conclude that Maple One was acting in bad faith trying to undermine Mr Ettinger’s interests: Time Development Inc. v. Bitton, 2018 ONSC 4384.
[9] Fifth, the remedy granted here reflects the error in principle in the decision: the motions judge ordered a valuation. As argued by the appellant, it is possible that the valuation will establish that the sale was at or above fair market value, in which case the underlying finding of oppression will be undone: the “failure” of Maple One to obtain a valuation is not, itself oppression, and so a valuation favourable to Maple One will lead to a result where oppression has been found when no unfairness resulted.
In conclusion, it is clear that the motions judge felt that Maple One sale at a “fire sale” price, but he did not have the evidence before him to ground that conclusion. He granted judgment as if he had the necessary evidence, and then, by way of remedy, he ordered that the evidence be obtained, not by the party whose onus it was to prove value, but by the party which had acted in reliance on a contract that did not require that such a valuation be obtained. In my view Mr Ettinger did not prove oppression and therefore the claim ought to have been dismissed.
D.L. Corbett J.
F.L. Myers J.:
Background and Outcome
[10] There are two appeals brought against the order made by Sweeny J. dated November 2, 2018 granting an oppression remedy against the appellants under the Business Corporations Act, RSO 1998, c B.16.
[11] Maple One Rail Corp. held 85% of the shares of Trillium. In 2018, it decided to sell its shares to Gio Rail Holdings Inc. As part of the terms of the sale, Maple One exercised its drag along right under a unanimous shareholders agreement to require the minority shareholder, Wayne Ettinger, to sell to Gio Rail his remaining 15% of the shares of Trillium.
[12] The application judge held that the exercise of the drag along right by Maple One against the Mr. Ettinger was oppressive because the sale price accepted by Maple One was less than the fair market value of the shares.
[13] The application judge ordered that a third-party valuation of the Trillium’s shares be conducted on certain assumptions that he directed and that the parties then appear before him for further argument with respect to remedy.
[14] For the reasons that follow, I would allow the appeal in part and vary the order as set out below.
The Facts
[15] Trillium operates a short-haul railway on tracks bought and leased from CN in the Welland and Port Colborne area. The Ettingers initially owned Trillium. In October 2016, they sold 85% of their shares to Maple One.
[16] Maple One bought Trillium because a company affiliated with Maple One was a major customer of the railway. It wanted to own the transportation company that it needed to use to get its goods to market. Maple One also had concerns with the reliability of the operations of Trillium under Mr. Ettinger.
[17] Maple One and Mr. and Ms. Ettinger entered into a share purchase agreement dated October 7, 2016. Under the agreement, Maple One paid $1.5 million for the shares on closing. In addition, it agreed to pay another $1.5 million to the Ettingers if CN renews its lease upon its expiry in late 2019. For their part, the Ettingers agreed to indemnify Maple One and Trillium from certain accrued liabilities that were expected to become payable by Trillium after the purchase closed. The indemnity is expressly stated to be in favour of Trillium in addition to Maple One although Trillium is not a party to the share purchase agreement in which the indemnity is contained. This indemnity will become a more significant issue below.
[18] It was also a term of the share purchase agreement that the parties enter into a unanimous shareholders agreement referred to by them as the Ancillary Rights Agreement. Among other things, the Ancillary Rights Agreement provided that the Ettingers would be entitled to participate in any sale of shares by Maple One that would result in it no longer having control of Trillium. This is referred to in the M&A world as a “tag along” right. In addition, the parties agreed to a corresponding “drag along” right under which Maple One could require the Ettingers to sell their shares to a purchaser who was buying the shares of Maple One.
[19] The key term of the drag along right that is in issue in this appeal is the following:
[Maple One] may require the other shareholders of [Trillium] to sell all…of their shares …to a third party on the same terms and conditions as [Maple One] is selling its shares to such party provided that such third party is dealing at arm’s length with [Maple One].
[20] After buying Trillium, Maple One arranged for it to hire and appoint Gerry Gionet as its President. Mr. Gionet was not related to any of the parties. He has a lengthy history in the rail industry. According to the appellants, he brought credibility to Trillium that was appreciated by the market place and, in particular, CN.
[21] On June 6, 2017, Investment Canada ordered Maple One to divest its shares of Trillium within 180 days.
[22] On August 31, 2017, Mr. Ettinger offered to buy Maple One’s shares for $1.3 million.[^1] The offer included, expressly or impliedly, a waiver of the obligation for Maple One to pay the remaining $1.5 million instalment on its purchase price in the event that CN renews its lease with Trillium. Mr. Ettinger argues that his offer was therefore worth $2.8 million for 85% of Trillium.
[23] Maple One did not accept the offer or even negotiate with Mr. Ettinger. It knew that Mr. Ettinger did not have the funds that he offered to pay and they did not think he could raise the funds. If Mr. Ettinger used Trillium to borrow the sale proceeds, Trillium would have had a severe working capital shortage. Maple One was worried about Trillium’s ability to continue to provide its much-needed transportation services for its affiliate. In addition, it was concerned that Mr. Ettinger would replace Mr. Gionet as President and this carried the risk that he would once again mismanage the railway’s operations and finances in Maple One’s view.
[24] Maple One’s evidence is that despite efforts, it was unable to find a buyer for its shares. After obtaining an extension of time from the government, it approached Mr. Gionet. He indicated a willingness to buy 100% of the company as he did not want Mr. Ettinger to be involved further.
[25] On March 5, 2018, Mr. Gionet’s company Gio Rail acquired all the shares of Trillium for $300,000. It agreed to pay $255,000 to Maple One for its shares and Maple One agreed to drag Mr. Ettinger along for the pro rata price of $45,000. The price was payable in future and was paid by promissory notes.
[26] Mr. Ettinger argues that the price of $300,000 promised is grossly below fair market value of Trillium. He has refused to deliver up his shares to close the deal. The promissory note in his favour remains in escrow.
[27] As of the time of hearing this proceeding below, the Ettingers remained liable to indemnify Maple One and Trillium for taxes and HST owing by Trillium from prior to the purchase by Maple One of just over $500,000. In addition, another amount of as much as $550,000 may be owing by the Ettingers under their indemnity relating to an amount due by Trillium under a lease of track with ASW.
[28] A term of purchase of shares of Maple One’s shares by Gio Rail was that Trillium would walk away from any claim that it might have as a third party beneficiary to the Ettinger’s indemnity obligations. In effect, Mr. Gionet was accepting that Trillium under his ownership would have to pay whatever amounts CRA and ASW were owed from prior ownership periods. Maple One would keep its indemnity rights against the Ettingers however. The effect of this requires some explanation.
[29] Had Trillium paid its tax obligation and ASW and called upon the Ettingers for indemnity, the Ettingers would have effectively received back 15% of the amounts that they had to pay to the corporation. Or, at least, their share values would reflect the economic impact of 15% of their payments. Mr. Gionet and Maple One structured their agreement, in effect, to give that 15% to Maple One. While the indemnity always ostensibly was owed to Maple One as the party to the share purchase agreement, the economics of the deal was that the Ettingers were keeping them whole from liabilities accrued on their watch. Indemnifying Trillium for amounts as it became or becomes required to pay to CRA and ASW fulfilled the agreement. There is nothing in the indemnity language to give one to suspect that it was intended to give a profit or windfall to Maple One of the portion of the indemnified funds referable to the Ettinger’s ongoing 15% stake in Trillium.
[30] Justice Sweeny held that the reasonable expectation of the Ettingers was that for Maple One to invoke the drag along right “the shares would be sold for fair market value, not a fire sale value”.
[31] Maple One and Mr. Gionet argued that the price did represent fair market value. No other purchaser had come forward. Mr. Ettinger’s offer was not real as he could not afford to pay what he offered and the offer was not financeable. Maple One argued that it bought the business for $1.5 million when CN had three years left on its lease. The further $1.5 million was conditional on CN renewing. By the time of the sale to Mr. Gionet, the lease was near over. Renewal remained speculative. They also relied on Mr. Gionet’s waiver of Trillium’s right to seek indemnity from the Etingers for accrued taxes and ASW payments as being tantamount to the assumption of liabilities by the buyer Gio Rail worth nearly another $1.1 million. (However, Mr. Ettinger was not going to receive 15% of this value as discussed above.)
[32] The judge found, on the evidence before him, that CN is likely to renew its lease for eight years. He found that the $300,000 figure had been tossed out by Maple One and had not been arrived at based on any calculations by Maple One relating to the assumptions of liabilities by Mr. Gionet. While that judge was satisfied that the price “bears no relationship to the actual value of the shares” so as to enable him to find liability, he found that without a proper third-party valuation, he lacked “sufficient information to fashion the appropriate remedy”.
[33] The judge therefore ordered that a valuation be performed by a qualified business valuator. The cost are to be borne by Maple One, Mr. Gionet, and Gio Rail. The valuation should assume that CN would renew its lease for eight years and that taxes owing would be paid by the Ettingers and not Trillium.
[34] The judge also confirmed the Ettingers’ liability for tax arrears when they come due. He ordered a trial of an issue as to whether the Ettingers have liability to Maple One in respect of the ASW lease.
[35] Maple One and Mr. Gionet/Gio Rail each appeal. Maple One raised the following issues that were adopted by Mr. Gionet and Gio Rail:
a. Did the application judge err in using the oppression remedy to strip Maple One of its contractual rights? Put less colourfully, ought the judge to have drawn his assessment of the reasonable expectations of the parties from the unanimous shareholder agreement and found that the sale was not oppressive because Mr. Gionet and Maple One were dealing at arm’s length? I would re-cast Mr. Murdoch’s question to ask whether the judge err is substituting “fair market value” as a requirement of the drag along right in place for the negotiated requirement of an “arm’s length” buyer?
b. Did the judge make a palpable and overriding error of fact in finding that the sale of shares by Maple One to Gio Rail was not at fair market value when he found that he still needs a third-party valuation to determine fair market value; and
c. Did the judge make a palpable and overriding error of fact or mixed fact and law in misconstruing the evidence to find that the amounts paid and liabilities assumed by Mr. Gionet and his company were not fair market value?
[36] Mr. Gionet also argued that the judge erred in finding him personally liable to pay the costs of the valuation ordered. There was no finding of oppression against Mr. Gionet personally and therefore, he says there was no basis to hold him personally liable.
Jurisdiction
[37] An appeal lies to this court under s.255 of the OBCA.
Standard of Review
[38] The court will intervene on an appeal from an order of a judge only where the judge made an error of law or a palpable and overriding error of fact or mixed fact and law. Housen v. Nikolaisen, 2002 SCC 33. Where a judge has made an order in the exercise of judicial discretion, the court will intervene only if the exercise of the judge’s discretion was based on a wrong principle, a failure to consider a relevant principle, or a misapprehension of the evidence: Aldo Group Inc. v. Moneris Solutions Corporation, 2013 ONCA 725, 118 O.R. (3d) 81, at para. 30.
Oppression
[39] In BCE Inc. v. 1976 Debentureholders, [2008] 3 SCR 560, 2008 SCC 69, the Supreme Court of Canada discussed the oppression remedy. At para. 58 of the decision, the Court confirmed that the oppression remedy is an equitable remedy that “gives a court broad, equitable jurisdiction to enforce not just what is legal but what is fair.”
[40] The oppression remedy starts with a claimant who holds an unmet expectation. However, not every hope, wish, or expectation, no matter how strongly held, will be actionable. The oppression remedy will only protect a person’s expectation if it is also reasonable.
[41] At para. 67 of BCE, the Supreme Court instructs that even proof of an unmet, reasonable expectation is not enough to establish oppression: “Even if reasonable, not every unmet expectation gives rise to claim [for oppression].” The statute provides a remedy only when the consequence of the act or omission that violates a reasonably held expectation is sufficiently unfair to meet one of three further descriptions. The Court explained:
The section requires that the conduct complained of amount to “oppression”, “unfair prejudice” or “unfair disregard” of relevant interests. “Oppression” carries the sense of conduct that is coercive and abusive, and suggests bad faith. “Unfair prejudice” may admit of a less culpable state of mind, that nevertheless has unfair consequences. Finally, “unfair disregard” of interests extends the remedy to ignoring an interest as being of no importance, contrary to the stakeholders’ reasonable expectations: see Koehnen, at pp. 81‑88. The phrases describe, in adjectival terms, ways in which corporate actors may fail to meet the reasonable expectations of stakeholders.
[42] The Supreme Court identified several sources from which reasonable expectations may be drawn. At para. 72, it held:
Factors that emerge from the case law that are useful in determining whether a reasonable expectation exists include: general commercial practice; the nature of the corporation; the relationship between the parties; past practice; steps the claimant could have taken to protect itself; representations and agreements; and the fair resolution of conflicting interests between corporate stakeholders.
[43] Discussing the role of shareholder agreements in setting reasonable expectations, the Supreme Court wrote:
Shareholder agreements may be viewed as reflecting the reasonable expectations of the parties: Main; Lyall v. 147250 Canada Ltd. (1993), 106 D.L.R. (4th) 304 (B.C.C.A.).
[44] Formal corporate documents and legal arrangements are the most ready source of expectations for those who deal with a corporation. In addition to setting out the parties’ mutual understandings as to the allocation of risks and benefits among themselves, agreements also provide the parties with opportunities to protect themselves from risks or burdens that they do not wish to bear. Shareholder agreements therefore satisfy two of the factors discussed by the Supreme Court in BCE for identifying reasonable expectations. They are both agreements and they are opportunities to protect oneself. See: Lord v Clearspring Spectrum Holdings L.P., 2017 ONSC 2246 affd, 2017 ONCA 1016.
[45] In this case, the parties turned their minds to the conditions that could prevent Maple One from dragging the Ettingers along in a transaction. They chose arm’s length dealings as the basis to protect the Mr. Ettinger from being dragged into an abusive transaction. Although Mr. Gionet was the President of the subsidiary who agreed to release an indemnity that protected the subsidiary for the benefit of the majority parent and to the detriment of Mr. Ettinger, he chose not to argue the case on the basis that Mr. Gionet was not operating at arm’s length from Maple One. Instead, he argued that he had a reasonable expectation that any sale would be at fair market value.
[46] Where did that expectation come from? It is not the protection that he bargained for in the drag long right itself. Moreover, one can readily understand why parties would not set the fair market value as a limiting condition for the very reason that is the issue in this case. One cannot know the fair market without a formal, expensive, and successful sale process or a professional valuation as a proxy for an actual sale. Moreover, valuations are readily contested and can quickly dissolve into a battle of hired gun expert valuators. If contracts are at least partly designed to provide certainty to the parties, the use of a limitation based on a transparent arm’s length relationship provides a more easily observed and certain basis for invoking the drag along than would a requirement that the price be fair market value.
[47] As set out in BCE, reasonable expectations are not mere wish lists. Nor are they a basis to amend agreements with 20:20 hindsight. It is not enough for Mr. Ettinger to say that he expected a sale at fair market value, the expectation has to be a reasonable one in all of the circumstances as drawn from the factors identified by the Supreme Court of Canada or other relevant factors.
[48] The judge below found that the $300,000 offer bore no relationship to the actual value of the shares i.e. that it was an arbitrary number. Moreover, he found that:
Maple’s sale of the shares at $300,000 was inconsistent with the reasonable exercise of the contractual rights in the agreement.
[49] This finding, that the sale was inconsistent with the reasonable exercise of Maple’s contractual rights, is not a finding of oppression. Rather, it is a finding of breach of contract. The judge effectively interpreted the contract to find that the limitation to arm’s length buyers was intended by the parties to be a proxy for or an assurance of a bona fide sale at fair market value. Once the contract was so interpreted, it then forms the basis of the reasonable expectation that the judge found to have been breached:
The sale of the shares for $300,000 was unreasonable. I am satisfied that the applicants’ expectation that the shares would be sold for fair market value, not at fire sale value, was reasonable.
[50] In Sattva Capital Corp. v. Creston Moly Corp., [2014] 2 SCR 633, 2014 SCC 53 at paras. 50 and 52, the Supreme Court of Canada confirmed that interpretation of a contract is a question of mixed fact and law and is entitled to deference on appeal
[51] The judge weighed the evidence concerning the relationship of the parties, the contractual context, and application of the practical, common sense approach to contractual interpretation established by the Supreme Court. I am unable to find a palpable error in the judge’s conclusion. While I am hesitant to inflict the cost of a valuation process on this modestly sized corporation, civil litigation always involves a balancing of costs and benefits. If any party concludes that the apparent cost exceeds the benefit, it remains free to adjust its settlement position accordingly.
[52] I would not allow the appeal on the first issue. The application judge’s finding that the reasonable expectation of the parties was that the drag along right would not apply in a sale below fair market value therefore stands.
The Fair Market Value
[53] The second and third issues are really the same. The question is whether the judge made a palpable and overriding error in concluding that on the evidence that was before him, the sale from Maple One to Gio Rail was not at fair market value or “bore no relationship to the actual value of the shares.” I reluctantly conclude that he did err as contended.
[54] The judge is a very experienced civil litigation judge. His reasons show that he was very comfortable balancing and sorting the various inputs – the liabilities assumed, a multiplier on revenues, the effect of the possibility of renewal of the CN contract, the accrued and accruing arrears of taxes etc. But, after looking at all the various inputs that were before him, he found that he did not have enough information to fashion a remedy i.e. to establish what 15% of the fair market value would have been. I note, for example, there was no evidence before the judge of an appropriate revenue multiplier of this type of business. There was no evidence of an appropriate discount for the speculative nature of the CN renewal or, even if the renewal is treated as being assured, the proper discount rate for this small business to allow calculation of the value of the company’s future income stream on a current basis.
[55] While the judge perhaps can be thought to have said that while he cannot assess the fair market value to the penny, he knows it is far more than what was paid. But he did not make that finding. Rather, he found that since Maple One simply set the price, it bore no relationship to the fair market value of the assets. Mr. Gionet’s evidence was that in taking the price, he did indeed consider the $300,000 asked and he factored-in the value of the liabilities that he was assuming. The fact that the owner stated a number that it would accept does not mean that the number has no relationship to the fair market value of the business. Over-simplified, fair market value is the price negotiated between arm’s length willing parties. Expert valuators may apply all manner of mathematical and business theories to come up with a sensible valuation. That does not mean that any vendor will accept it or any buyer will pay it.
[56] Moreover, if the valuators discount future profits with a high discount rate due to risks in the industry or this particular business and/or accept Mr. Gionet’s view that the price is properly calculated net of the liabilities for which the Ettinger’s indemnity will no longer be available to Trillium, then it is possible that the price paid may be equal to or even more than fair market value to be calculated under the valuation ordered by the judge. That outcome would be inconsistent with the judge’s finding of oppression.
[57] In my respectful view, it is an error in principle to conclude that this sale has been conducted at less than fair market value in the absence of evidence of that fair market value. The judge recognized that he had some inputs in a disaggregated way. He did not have a comprehensive valuation. None of the inputs were current as at the date of the sale. Moreover, his finding that because Maple One just picked a number that it would accept for the assets meant that the price bore no relationship to value was also a palpable and an overriding error. It is open to the valuator to find that in the absence of other realistically acceptable or available buyers, and given Maple One’s extraordinary obligation to divest itself of the shares, the amount that it was willing to accept in an arm’s length sale is a proper factor on the vendors’ side of the fmv equation.
[58] Under s.248(3) the judge was authorized to make any interim order that he thought fit. In my view, once he recognized that he could not calculate the fair market value, he could not make the finding that the Mr. Ettniger’s reasonable expectation that the sale would be priced at fair market value had been violated. In fact, he risked inconsistent findings in making the finding of fact before the valuation was in hand. Instead, he ought to have ordered the valuation on an interim basis and then dealt with the questions of breach and remedy (if necessary) once he had the valuation in hand.
[59] In addition, there was no basis identified by the judge for making Mr. Gionet personally liable for the costs of the valuation. While individuals can be found liable for oppression, the judge made none of the necessary findings to justify imposing relief against Mr. Gionet personally.
[60] Finally, I note that even if the valuation of the business calculated on business valuation principles is near the price agreed upon by Maple One and Gio Rail, payment by way of an unsecured promissory note is not an equivalent value. Nor does the payment offered take into account the 15% value to Mr. Ettinger that Trillium gave away when it released its rights as a third party beneficiary of the Ettingers’ indemnity. That piece of “deal structuring” benefited Maple One at the expense of the Ettingers. Mr. Gionet was in the position of President of the corporation and buyer when he chose to give up a corporate asset to benefit Maple One. On the return of the application to the judge to consider whether the drag along right was exercised at less than fair market value, I would expect both of these issues to be considered in the oppression equation as well.
[61] Order to go to vary the order of Sweeny J. dated November 2, 2018 as follows:
a. Para. 1 is deleted;
b. Para. 2 is amended by inserting after the words “THIS COURT ORDERS that” the words “pending the return of this application”; and
c. Para. 3 is amended by deleting the word “remedies” and in its place inserting the words, “whether the sale of shares of Trillium Railway by Maple One to Gio Rail was made in breach of the applicants’ reasonable expectation that for the drag along right to apply the sale price would be at least the fair market value of the shares sold and if so, what remedy is appropriate.”
[62] In my view, success in this appeal has been mixed. I would make no order as to costs.
___________________________ F.L. Myers J.
I agree
R.B. Fitzpatrick J.
Date of Reasons for Decision: December 17 , 2019
CITATION: Ettinger v Trillium Railway Co. Ltd., 2019 ONSC 7321
COURT FILE NO.: DC-18-984 and DC-18-985
DATE: 20191217
ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT
D.L. CORBETT, R.B. FITZPATRICK, and F.L. MYERS, JJ..
BETWEEN:
WAYNE ETTINGER and MARJORIE ETTINGER
Respondent
- and -
TRILLIUM RAILWAY CO. LTD., MAPLE ONE RAIL CORP., GIO RAIL HOLDINGS INC., and GERRY GIONET
Appellants
REASONS FOR DECISION
D.L. Corbett J. and F.L. Myers J.
Date of Decision: December 17, 2019
[^1]: It is common ground that Ms. Ettinger did not participate in this offer and that Mr. Ettinger holds the full 15% of the shares of Trillium. Ms. Ettinger sold all her shares to Maple One in the 2016 share purchase agreement.