CITATION: Bhangal v. Singh, 2017 ONSC 3511

COURT FILE NO.: CV-11-1648

DATE: 20170606

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Jagdish Bhangal

Plaintiff

– and –

Ramandip Singh and 2038915 Ontario Inc., c.o.b. as PL Truck & Trailer Repair

Defendants

Mark Klaiman, for the Plaintiff

Amandeep Sidhu, for the Defendants

HEARD: May 24, 25, 26 and 29, 2017

REASONS FOR JUDGMENT

SPROAT J.

INTRODUCTION.. 2

THE SHARE PURCHASE TRANSACTION.. 3

THE FINANCIAL STATEMENTS OF PL. 4

THE PL EXPENSES THE PLAINTIFF CHALLENGES.. 5

OTHER TESTIMONY.. 6

Introduction. 6

Jagdish Bhangal 6

Sukhdev Barring. 10

Palwinder (“Paul”) Bhangal 10

Sucha Bhangal 10

Sudagar Singh. 11

Ramandip Singh. 12

Gurinder Chhina. 14

Hardeep Singh. 15

FINDINGS OF FACT. 15

Introduction. 15

TD Signing Authority. 16

The Plaintiff’s Health and Attendance at Work. 17

Whether the Defendant Disclosed That PL was Paying Kickbacks. 19

Whether the Defendant Converted Funds from PL to His Personal Use. 19

Whether the Defendant Removed Business Records and Valuable Assets of PL from the Premises at and Around the Time PL Ceased to Carry on Business. 20

Whether the Plaintiff Collected any of the Accounts Receivable of PL. 21

Whether the Defendant Paid Certain Debts of PL. 22

THE LAW... 22

ANALYSIS AND CONCLUSION.. 24

INTRODUCTION

1On June 10, 2010 the plaintiff purchased 50% of the shares of the corporate defendant (which I will refer to as “PL”) from the personal defendant Ramandip Singh (who I will refer to as “the defendant”).

2PL was started by the defendant and carried on the business of repairing tractors and trailers. The parties agree that the plan was for the defendant, a licensed mechanic, to concentrate on running the shop while the plaintiff would assume administrative, financial and marketing responsibilities.

3The plaintiff claims an oppression remedy under s.248 of the Business Corporations Act (“BCA”). In brief the position of the plaintiff is that he was initially denied access to the financial and banking records of PL and assigned menial tasks. He was finally given bank signing authority and access on January 18, 2011 and discovered what he believed were improper expenditures authorized by the defendant. The plaintiff pressed the defendant for answers resulting in a confrontation on January 28, 2011 at which the defendant threatened to break the plaintiff’s legs if he returned to the PL premises. By March, 2011 PL had closed its doors and was out of business.

4The position of the defendants is that the plaintiff had health problems and was injured in a motor vehicle accident on January 24, 2011 and never worked on a daily basis as expected. The defendant denies making any improper withdrawals or payments from PL. In January, 2011 PL lost a major customer named Epic that represented 30% of its sales. The defendant in fact wanted the plaintiff to return to PL but he would not. The business deteriorated quickly and in March, 2011 the landlord evicted PL on account of unpaid rent.

5The plaintiff, his father, his uncle, an employee of the uncle and a former PL employee testified at trial. The defendant, his ex-wife and a former employee also testified at trial