COURT FILE NO.: CV-20-82646

DATE: 2020/09/04

ONTARIO

SUPERIOR COURT OF JUSTICE

B E T W E E N:

Robert Roppovalente

Applicant

– and –

T’Sheal Danis

Respondent

Andrew Lister, for the Applicant

Wade Smith, for the Respondent

HEARD: July 24 and 29, 2020

REASONS FOR DECISION

RYAN BELL j.

Overview

1This is a motion in Mr. Roppovalente’s oppression application under the Canada Business Corporations Act, R.S.C. 1985, c. C-44 (the “CBCA”). Mr. Roppovalente and Ms. Danis are directors of and the vice-president and president, respectively, of BCO Group Inc. Each party owns 50 per cent of the shares of BCO Group. BCO Group operates the “Brass Club”, a private members’ spa, from premises on Queen Street, in Ottawa.

2The parties were married in September 2016. They separated in June 2019.

3The animosity between the parties is high. Neither trusts the other. They are not on speaking terms. Each party alleges wrongdoing by the other in the management and operation of BCO Group. Each party alleges the other has misappropriated funds from the company. Mr. Roppovalente claims that in December 2019, Ms. Danis broke into “his” residence – she says that it is the matrimonial home – and removed boxes of corporate documents and his personal documents. As a result of this incident, Ms. Danis was charged with mischief to property and theft; these charges were withdrawn in April 2020. In January 2020, Mr. Roppovalente initiated this oppression application. Shortly thereafter, Ms. Danis commenced an application in family court against Mr. Roppovalente.

4On February 7, 2020, I made an interim order (the “Order”) relating to the co-management and general operations of BCO Group pending the hearing of the oppression application in June. The application did not proceed as scheduled because of the COVID-19-related suspension of the court’s regular operations.

5The relationship between the parties has deteriorated further since February. In March, Mr. Roppovalente was charged with publication of an intimate image of Ms. Danis without her consent. On this motion, Mr. Roppovalente claims that Ms. Danis has breached her fiduciary duties as an officer and a director of BCO Group by unilaterally causing BCO Group to lose its right to extend its lease (the “BCO Lease”) and by entering into a lease on her own account for the same premises (the “New Lease”). Mr. Roppovalente requests an order imposing a constructive trust on the New Lease for the benefit of BCO Group. Mr. Roppovalente also says that Ms. Danis has “repeatedly and defiantly” breached the terms of the Order. He asks that I find Ms. Danis in contempt of court.

6Ms. Danis’ position is that the breakdown of the parties’ relationship has resulted in an effective deadlock with no means by which the parties can resolve disagreements relating to the operation and management of the company. There is no shareholders’ agreement. Ms. Danis is unwilling to continue in business with Mr. Roppovalente and she is unwilling to agree to extend the BCO Lease. Ms. Danis denies the contempt allegations levelled against her. She requests the consolidation of the oppression application and the family law proceedings, a timetable for both applications, and the appointment of a business valuator.

7I heard the motion in my capacity as case management judge for both the oppression application and the family law application. I am mindful that I will not be the application judge for either matter. Accordingly, I have restricted my findings of fact to those necessary for the determination of this motion. I address the issues in the following order: (i) the lease extension issue; (ii) the contempt allegations; and (iii) the requests for consolidation, a timetable, and the appointment of a business valuator.

The Right to Extend the Lease

The Evidence

8The BCO Lease commenced on February 22, 2016 and expires on April 30, 2021. Paragraph 17.24 of the BCO Lease provides for a right to extend the term of the Lease:

If the Tenant has duly and regularly and punctually performed its covenants and obligations under this Lease and is not then nor has habitually been in default, the Tenant shall have the right, upon giving to the Landlord notice in writing at least two hundred and seventy (270) days prior to the expiry of the Term but no earlier than three hundred and sixty-five (365) days prior to the expiry of the Term, to extend this Lease for a further period of Five years at a Fixed Minimum Rent to be agreed upon and on otherwise the same terms and conditions as herein set forth, including, without limitation, the provisions in respect of Additional Rent, but without

(a) the right of further renewal,

(b) any free rent, allowances, credits or other inducements provided to the Tenant, and

(c) [t]he Fixed Minimum Rent in the extended term may not be less than that last paid.

If the Tenant and Landlord, within 30 days of the abovementioned Notice given by the Tenant, fail to agree on the Fixed Minimum Rent for the renewal term the Landlord may lease the Premises to another party without any further liability to the Tenant.

If the Tenant fails to exercise its right to extend within the period provided therefore in this Section 17.25 [sic], the option shall be forever extinguished.

9The parties agree that the last day upon which BCO Group could provide notice to the landlord of the company’s intention to extend the BCO Lease was August 3, 2020. For this reason, Mr. Roppovalente’s motion was scheduled to be heard on an urgent basis.

10Ms. Danis’ evidence is that she is unwilling to continue in business with Mr. Roppovalente after the BCO Lease expires on April 30, 2021; she would like to see BCO Group dissolved at that time. In addition to her claims that Mr. Roppovalente has misappropriated funds from the company, she says that he has bullied, sexually harassed, and verbally abused the company’s employees. The parties cannot communicate regarding the company; Ms. Danis describes their relationship as “toxic.” In the absence of a shareholders’ agreement, there is no mechanism to address the deadlock between the parties. I note that the Order reflects the parties’ agreement to undertake to negotiate and sign a shareholders’ agreement that includes a “shotgun clause.” Given the high level of distrust between the parties, it is not surprising that the parties were unable to fulfill this undertaking.

11On April 8, Ms. Danis emailed BCO Group’s landlord. In her email, Ms. Danis stated, “I know the lease for BCO is coming up”, and she asked the landlord to give her a call. Several hours later, Ms. Danis’ counsel emailed Mr. Roppovalente’s former lawyer in the family law application, Any Mayer, stating:

I have not heard from you as regards the valuator for the business or next steps. My understanding is that the commercial lease is ending this month. I need to hear from you regarding your client’s position.

12No response was received to the email sent to Ms. Mayer. Ms. Mayer has provided an affidavit in which she states that she never received the email. There is evidence that the other recipients of the email received a copy.

13Ms. Danis concluded that Mr. Roppovalente did not respond to the email because he was not interested in continuing the business on his own. On April 21, she emailed the landlord and asked, “[w]hat will you need from me to sign a new lease at 246 Queen St. Suite 400 under a different corporation?” On May 19, Ms. Danis, through a numbered company, entered into the New Lease for the Queen Street premises from May 1, 2021 to April 30, 2026. Ms. Danis’ evidence is that the new business will not be affiliated with BCO Group and that she intends to change the name of the business to make it clear that it is no longer the “Brass Club.”

14Mr. Roppovalente’s evidence paints a very different picture of events. On May 27, Mr. Roppovalente’s counsel wrote to Ms. Danis’ counsel to advise that Mr. Roppovalente intended to extend the BCO Lease on behalf of the company and to seek Ms. Danis’ consent. Having received no response, Mr. Roppovalente’s counsel wrote again on June 18. Again, no response was received. Mr. Roppovalente first learned of the New Lease during the June 30 case conference. Mr. Roppovalente’s evidence is that the premises represent BCO Group’s largest asset and that he has invested approximately $189,000 in the premises. He says that, by securing the New Lease for her numbered company, Ms. Danis will be the sole beneficiary of his investment in the premises. Mr. Roppovalente maintains that he is ready to “undertake” the BCO Lease.

The Letter from the Landlord

15On the second day of the hearing, Mr. Roppovalente sought to introduce a letter regarding the landlord’s position in relation to the relief sought by Mr. Roppovalente on this motion. The letter was from the landlord’s counsel, and appeared to be an accepted settlement offer. The letter was not sworn evidence.

16Mr. Roppovalente’s request to admit the letter into evidence is denied. Mr. Roppovalente was keenly aware of the relevancy of the landlord’s evidence in relation to the relief sought on this motion. In his affidavit, Mr. Roppovalente states that “[s]ince BCO, as tenant, holds the right for renewal, I am unaware of the representations Danis may have made to the landlord towards securing the New Lease.” Moreover, in his notice of motion, Mr. Roppovalente included a request for an order permitting him to examine the landlord regarding the formation of the New Lease. However, at no time prior to the hearing did Mr. Roppovalente seek to obtain the landlord’s evidence. It would be unfair and prejudicial to Ms. Danis to admit unsworn evidence at such a late stage.

The Corporate Opportunity Argument

17Mr. Roppovalente submits that Ms. Danis engaged in secret negotiations with the landlord, abused her position as an officer, director, and fiduciary of BCO Group, and placed herself in a conflict of interest for the purpose of usurping a corporate opportunity – the lease extension – properly belonging to the company. Mr. Roppovalente submits that Ms. Danis has breached the duty set out by the Supreme Court of Canada in Canadian Aero Service Ltd. v. O’Malley, 1973 23 (SCC), [1974] S.C.R. 592. In Canaero, at pp. 606-7, Laskin J., as he then was, described the fiduciary relationship as follows:

O’Malley and Zarzycki stood in a fiduciary relationship to Canaero, which in its generality betokens loyalty, good faith and avoidance of a conflict of duty and self-interest. Descending from the generality, the fiduciary relationship goes at least this far: a director or a senior officer like O’Malley or Zarzycki is precluded from obtaining for himself, either secretly or without the approval of the company (which would have to be properly manifested upon full disclosure of the facts), any property or business advantage either belonging to the company or for which it has been negotiating; and especially is this so where the director or officer is a participant in the negotiations on behalf of the company.

18There is no question that Ms. Danis and Mr. Roppovalente are both fiduciaries of the company. As such, they owe the company the duties set out in s. 122 of the CBCA and described in Peoples Department Stores Inc. (Trustee of) v. Wise, 2004 SCC 68, [2004] 3 S.C.R. 461, at para. 35 and Salesco Limited v. Lee Paige, 2007 37463 (Ont. S.C.J.), at paras. 237-239. The issue in this case is whether the lease extension was a corporate opportunity that Ms. Danis appropriated in breach of her fiduciary duty.

19I have concluded that Ms. Danis did not breach her fiduciary duty to BCO Group in pursuing the New Lease. In my view, the lease extension was not a maturing corporate opportunity.

20At the time Ms. Danis signed the New Lease on May 19, 2020, BCO Group was not pursuing the lease extension. There had been no discussions between the parties or negotiations with the landlord. Ms. Danis had reached out to Mr. Roppovalente on April 8, asking him about his intentions regarding the BCO Lease. She did not receive a response. I accept that Mr. Roppovalente’s counsel did not receive the April 8 email; at the same time, I accept that the email was sent. When Ms. Danis did not receive a response to the email, she was entitled to proceed on the basis that Mr. Roppovalente was apparently not interested in the lease extension. The fact that Ms. Danis did not follow up with Mr. Roppovalente does not alter my finding that Ms. Danis proceeded in good faith. Both parties were equally aware of the lease extension provisions in the BCO Lease.

21I also find that the lease extension was not an opportunity that was open to BCO Group to pursue given that the parties have been deadlocked on all issues relating to the management and operation of the company for months. Just as the parties were unable to negotiate and agree upon a shareholders’ agreement, neither party could force the other to negotiate and agree to a lease extension on behalf of BCO Group. The evidence in the record is that the landlord was very much aware of the breakdown in the parties’ marital relationship and business relationship. There is no evidence that the landlord would have been prepared to negotiate with BCO Group in the present context. A director is precluded from obtaining for herself, directly or beneficially, a “maturing” or “ripe” business opportunity, immediately available to the corporation, for which the company has been negotiating; conversely, a director may pursue a business opportunity that the corporation has rejected, or that the corporation is unable or unwilling to pursue: Pizza Pizza Ltd. v. Gillespie (1990), 1990 4023 (ON SC), 75 O.R. (2d) 225 (Gen. Div.), at pp. 246-7; Peso Silver Mines Ltd. (N.P.L.) v. Cropper, 1966 75 (SCC), [1966] S.C.R. 673. I find that because of the parties’ deadlock, BCO Group was both unwilling and unable to pursue the lease extension.

The Conflict of Interest Argument

22On July 30, in advance of BCO Group’s August 3 deadline to notify the landlord of its intention to extend the Lease, I provided the parties with a brief endorsement, with reasons to follow, in which I denied Mr. Roppovalente’s request for an order voiding the New Lease and an order compelling BCO Group to extend the BCO Lease.

23These are my reasons for denying the request for an order voiding the New Lease.

24First, I find that Ms. Danis was not in a conflict of interest when she negotiated and concluded the New Lease. I reach this conclusion for the same reasons that I find she did not appropriate a maturing corporate opportunity in breach of her fiduciary duty.

25Second, s. 120 of the CBCA, upon which Mr. Roppovalente relies in support of the relief requested, does not apply to the facts before me. Section 120 provides in part:

(1) A director or an officer of a corporation shall disclose to the corporation, in writing or by requesting to have it entered in the minutes of meetings of directors or of meetings of committees of directors, the nature and extent of any interest that he or she has in a material contract or material transaction, whether made or proposed, with the corporation, if the director or officer

(a) is a party to the contract or transaction;

(b) is a director or an officer, or an individual acting in a similar capacity, of a party to the contract or transaction; or

(c) has a material interest in a party to the contract or transaction.

(8) If a director or an officer of a corporation fails to comply with this section, a court may, on application of the corporation or any of its shareholders, set aside the contract or transaction on any terms that it thinks fit, or require the director or officer to account to the corporation for any profit or gain realized on it, or do both those things.

26Section 120(1) captures material contracts or transactions, or proposed material contracts or transactions, with the corporation – in this case, BCO Group. The s. 120 conflict of interest regime applies where a director or officer has an interest in a material contract with the corporation. Mr. Roppovalente submits that s. 120(8) provides this court with authority to set aside the New Lease because Ms. Danis did not comply with the disclosure requirements. I disagree. Read in the context of the section as a whole, it is plain that the “contract or transaction” referred to in s. 120(8) that may be set aside must be (a) material, (b) with the corporation, and (c) one in which the director or officer is, directly or indirectly, a party, or has a material interest. The New Lease is not a contract to which BCO Group is a party.

27Third and finally, I would not have made an order “compelling” BCO Group to extend the BCO Lease. At most, such an order could only require the company to negotiate with the landlord. The landlord is not a party to these proceedings and the court has no jurisdiction to make orders affecting the landlord. There is no evidence before the court as to the landlord’s position.

28An extension of the BCO Lease would require not only the landlord’s agreement but also that of both parties as equal shareholders. The evidence before the court is overwhelming that these parties cannot agree on any aspect of the company’s operation and management. Counsel acknowledged this fact during their submissions. With respect, even if I had the jurisdiction to make the order requested, it would be pointless to compel these deadlocked parties to continue in a long-term relationship beyond the expiry of the current Lease.

The Constructive Trust Remedy

29Given my finding that Ms. Danis did not breach her fiduciary duty by entering into the New Lease, it is not necessary for me to address in detail Mr. Roppovalente’s primary request for an order imposing a constructive trust on the New Lease for the benefit of BCO Group. I do, however, make the following observations.

30The remedy of constructive trust treats the person holding the property as a trustee of it for the wronged party’s benefit, even though there is no “true trust” created by intention. A constructive trust is “imposed by law not only to remedy unjust enrichment, but also to hold persons in different situations to high standards of trust and probity and prevent them from retaining property which in ‘good conscience’ they should not be permitted to retain”: Soulos v. Korkontzilas, 1997 346 (SCC), [1997] 2 S.C.R. 217, at para. 17. In this manner, justice in the case before the court is served and the “relationships of trust and the institutions that depend on these relationships” are protected: Soulos, at para. 17.

31As the Supreme Court of Canada held in Soulos, at para. 45, the requirements to impose a constructive trust for wrongful conduct are the following:

(i) the defendant must have been under an equitable obligation, that is, an obligation of the type that courts of equity have enforced, in relation to the activities giving rise to the assets in her hands;

(ii) the assets in the hands of the defendant must be shown to have resulted from deemed or actual agency activities of the defendant in breach of her equitable obligation to the plaintiff;

(iii) the plaintiff must show a legitimate reason for seeking a proprietary remedy, either personal or related to the need to ensure that others like the defendant remain faithful to their duties; and

(iv) there must be no factors which would render imposition of a constructive trust unjust in all the circumstances of the case; e.g., the interests of intervening creditors must be protected.

32Mr. Roppovalente relies on Keech v. Sandford (1726), 25 E.R. 223 (Ch. D.) and Quong v. Pong (1925), 1925 11 (ON CA), 56 O.L.R. 616 (S.C. App. Div.), aff’d 1927 2 (SCC), [1927] S.C.R. 271, where the courts imposed a constructive trust over a contract or legal right that was wrongfully diverted or assumed by a fiduciary.

33In this case, however, Ms. Danis did not wrongfully divert a contractual or legal right. The factual circumstances before me are entirely different than those in Bedard v. James (1986), 1986 7644 (ON SC), 10 C.P.R. (3d) 339 (Ont. Dist. Ct.), aff’d 1986 7615 (ON SCDC), 14 C.P.R. (3d) 288 (Ont. Div. Ct.), upon which Mr. Roppovalente relies. In awarding damages for loss of goodwill, the court in Bedard found that the plaintiff would have had no difficulty in renewing the lease and that the defendant knew it was the plaintiff’s intention to renew the lease. The same cannot be said in this case.

34In addition, even if I had found that Ms. Danis breached her fiduciary duty to BCO Group, Mr. Roppovalente has not shown why damages (as in Bedard) or an accounting for profits (as in Canaero) would not have been a sufficient remedy. Returning the parties to their prior position – effectively, a state of deadlock in relation to the operations of BCO Group – would serve no practical purpose. Mr. Roppovalente says that Ms. Danis’ company will reap the benefit of the investments he made to improve the premises. The extent to which each party contributed to the success of BCO Group, including through financial investments, will be a matter for the application judge to determine.

Contempt Allegations

The Requirement for Personal Service

35Mr. Roppovalente asks that I find Ms. Danis in contempt based on her breach of “virtually every condition of the Order (sometimes repeatedly).” Ms. Danis was not served personally with Mr. Roppovalente’s motion materials as required by Rule 60.11(2) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. “Procedural protections on motions for civil contempt are generally strictly enforced”: Susin v. Susin, 2014 ONCA 733, 379 D.L.R. (4th) 308, at para. 28. However, as the Court of Appeal for Ontario stated in Susin, at para. 28: “[p]rocedural protections that are meaningless in a particular case ought not to trump substantive compliance where the purpose of personal service has been met in the circumstances and there has been no substantial wrong or miscarriage of justice.”

36The rationale underlying the requirement for personal service in contempt proceedings stems from the quasi-criminal nature of the proceedings. I am satisfied that the rationale has been satisfied in this case. Ms. Danis had full knowledge of the Order. She had full knowledge of Mr. Roppovalente’s motion and filed her own affidavit in response. She was cross-examined in connection with the motion, and she was present throughout the hearing. In short, Ms. Danis knew what she was facing and was provided with a full opportunity to respond and to be heard.¹

The Test for Contempt and the Terms of the Order

37The criteria which apply to a finding of guilt of contempt of court are well-established. As set out by the Supreme Court of Canada in Carey v. Laiken, 2015 SCC 17, [2015] 2 S.C.R. 79, at paras. 32-35, civil contempt has three elements, each of which must be established beyond a reasonable doubt:

(i) the order alleged to have been breached must state clearly and unequivocally what should and should not be done;

(ii) the party alleged to have breached the order must have had actual knowledge of it; and

(iii) the party allegedly in breach must have intentionally done the act that the order prohibits or intentionally failed to do the act that the order compels.

38The Order incorporated 14 terms. The specific terms engaged on this motion are the following:

1. THIS COURT ORDERS that the parties shall jointly manage the day-to-day business operations of BCO Group Inc. (the “Business”) in the manner described hereinafter unless otherwise agreed in writing or until further order of this Court;

2. THIS COURT ORDERS that the Respondent provide keys to permit access to the Business Premises to the Applicant (through his lawyer) forthwith, and the Respondent shall restore the Applicant’s access to all accounts relating to the Business including, but not limited to, all email accounts, all social media accounts, the security system (and any related camera system), the banking, the electronic credit care processing services, the safe on the Business Premises, and the appointment booking application by February 10, 2020 at 5:00 PM. Neither party shall impede the other in having access to the accounts relating to the Business, nor will either party change any password to limit access to any said accounts;

3. THIS COURT ORDERS that the Applicant shall pay from the Business’ bank account all reasonable and necessary expenses of BCO Group Inc. from the corporate revenues in the usual and ordinary course of business, including but not necessarily limited to the following expenses:

a. Employee salaries;

b. Bookkeeping costs;

c. Tax liabilities, including source deductions and HST;

d. Utilities;

e. Rent;

f. Cleaning of the Business Premises;

g. Inventory;

h. Business supplies;

i. The Respondent’s dividend of $7,000 per month; and

j. The Applicant’s dividend of $3,000.00 per month.

7. THIS COURT ORDERS that all cheques drawn on the Business’s bank account shall be countersigned by both parties;

8. THIS COURT ORDERS that any revenue or expenses of the Business shall be recorded so that it can be provided to a bookkeeper agreed to by the Parties so that the bookkeeper can prepare a summary on a weekly basis for the parties, until the parties otherwise agree in writing or until further order of this Court;

9. THIS COURT ORDERS that any extraordinary business expenses, which are not in the usual and ordinary course of business, exceeding $2,500 shall not be incurred by either party without the other party’s prior written consent, which consent shall not be unreasonably withheld;

10. THIS COURT ORDERS that the Respondent will deposit all cash in the Term account for any cash taken from the daily cash by using “daily sheets” to be left with the cash) at the end of each night and the Applicant will pick-up the cash from the safe at the Business Premises in the morning and deposit it in the Company’s bank account on a daily basis, until the parties otherwise agree in writing or until further order of this Court;

11. THIS COURT ORDERS the Respondent to return all documents and personal items which were taken from the Applicant’s residence to the Applicant’s lawyer’s offices by no later than 5:00 PM on February 14, 2020. The originals are to be returned to the Applicant, and the Respondent may make copies of all documents relating to the Business.

39It is not necessary for me to address each of the contempt allegations in detail to dispose of the motion. I am mindful that some of these same allegations may be raised at the hearing of the oppression application and that the application judge will be required to make the necessary findings of fact on a complete record. The evidence before me falls far short of establishing civil contempt. I find Ms. Danis not guilty of contempt of court.

Inability to Jointly Manage the Company

40Mr. Roppovalente submits that Ms. Danis has wilfully breached term 1 of the Order by “purposefully excluding and circumventing [his] role with the Company.” The record before me demonstrates, overwhelmingly, that the parties are unable to work together. Neither party is blameless in their inability to jointly manage the operations of the company.

Changing Passwords

41Mr. Roppovalente alleges that Ms. Danis has changed passwords to corporate email accounts, modified the security alarm system, and changed the locks at the premises, contrary to term 3 of the Order. Ms. Danis’ evidence is that she provided Mr. Roppovalente with access to all corporate email addresses, social media accounts, and the appointment booking system; she has not provided him with access to non-company accounts. Ms. Danis admits that she discontinued Mr. Roppovalente’s access to the security cameras after he was charged with publication of an intimate image of her without her consent. Although her conduct in this regard may have been contrary to the Order, it was not, in the circumstances, contemptuous of the Order.

Cleaning the Premises

42Mr. Roppovalente alleges that Ms. Danis breached term 6 of the Order by “completing the Applicant’s designated duties, such as the cleaning of the Premises.” Ms. Danis alleges that it is Mr. Roppovalente who has failed to perform his obligations as set out in the Order. Ms. Danis’ evidence is that Mr. Roppovalente has failed to regularly clean the premises since February 7 and that she left him cleaning checklists to encourage him to do so. Ultimately, Ms. Danis resorted to a cleaning contract for the premises, conduct that Mr. Roppovalente claims is a breach of term 9.

43Term 6 provides that Mr. Roppovalente is to pay from the company’s account all reasonable and necessary expenses of the company incurred in the usual and ordinary course of business. Those expenses include cleaning of the business premises. Ms. Danis’ conduct does not constitute a breach of term 6 of the Order.

44With respect to the cleaning contract and term 9 of the Order, Ms. Danis asserts – not unreasonably – that the cleaning of business premises is an expense incurred in the usual and ordinary course of business. Mr. Roppovalente suggests that it was an extraordinary expense because cleaning had never before been addressed through an external contract. The wording of term 6 supports Ms. Danis’ position. In any event, in order for there to be a finding of contempt, the order must be clear and unequivocal as to what must be done or not done. The Order does not unequivocally address the specific circumstances that arose in this case.

Failure to Countersign Cheques

45Mr. Roppovalente submits that I should find Ms. Danis in contempt for her failure to countersign cheques as required by term 7. I reject this submission. Ms. Danis did not deliberately breach the Order: she admitted that it was a mistake for her to have failed to countersign the rent cheques and she explained that the cheques payable to employees were already in sealed envelopes which she did not want to open.

Daily Cash Sheets and a Second Safe

46Ms. Danis is said to have breached term 10 of the Order by “defacing” the daily cash sheets and introducing a second safe to the company’s premises. Ms. Danis’ evidence is that she and a staff member have signed the daily cash sheets used to report to Mr. Roppovalente. She purchased a second safe to store float money, the key to which is in the safe’s door. None of this behaviour is prohibited by term 10.

Elite Accounting

47The parties are at odds over Ms. Danis’ retainer of Elite Accounting to manage BCO Group’s bookkeeping. Ms. Danis retained Elite in January 2020 and continued to work with Elite until June 2020. Although Mr. Roppovalente characterizes Ms. Danis’ conduct in contracting with Elite as “unilateral”, I find that at the time she retained Elite, Ms. Danis was acting in accordance with the company’s by-law which authorizes any director or officer alone to execute contracts.² Term 8 of the Order requires that the company’s revenues and expenses be recorded so that they can be “provided to a bookkeeper agreed to by the Parties.” Mr. Roppovalente’s position is that under term 8, the parties agreed to consider retaining Elite on a go-forward basis, conditional on his review and approval of Elite’s costs and the quality of their work. He says that despite his requests, no sample of Elite’s work was provided.

48Mr. Roppovalente’s assertion that he could not communicate with Elite is contradicted by email correspondence in the record expressly stating that he and his counsel could contact Elite directly. The retainer agreement with Elite was included as an exhibit to Ms. Danis’ affidavit sworn February 4, 2020. On June 5, Mr. Roppovalente terminated BCO Group’s contract with Elite. Ms. Danis says that he did so unilaterally and without implementing any plan for the company’s bookkeeping and payment of the company’s tax liabilities.

49Mr. Roppovalente states that term 8 of the Order remains “unfulfilled” due to Ms. Danis. I disagree. Ms. Danis is not solely, or even predominantly, responsible for the parties’ issues with Elite. It follows that I make no finding of contempt against Ms. Danis on this basis.

Misappropriation Allegations

50Mr. Roppovalente alleges that Ms. Danis has transferred company funds to her personal account without his consent, in breach of terms 6 and 9 of the Order. Ms. Danis maintains that she has not used cash revenues from the company for her personal benefit. Each party has made allegations of misappropriation of company funds against the other. These allegations are matters that will be determined on the application, based on a complete record.

The Return of Documents and Personal Items

51Finally, Mr. Roppovalente alleges that Ms. Danis has wilfully breached term 11 because she has not returned any of his personal documents or documents relating to his other business ventures. Mr. Roppovalente asserts that there remains a “large discrepancy” between the items returned and the items Ms. Danis was seen on video taking from his residence in December. Ms. Danis’ evidence is that she did not take any of Mr. Roppovalente’s personal belongings, most of the items she took were her personal items, and she has returned all items, other than her personal belongings, in accordance with the Order. Mr. Roppovalente’s assertions do not establish beyond a reasonable doubt that Ms. Danis breached term 11.

Remaining Issues

Consolidation and Timetable

52Ms. Danis renews her request that her family law application and Mr. Roppovalente’s oppression application be consolidated. She also seeks a timetable for the conduct of both proceedings.

53Under the Order, the parties were required to prepare a timetable order. They have not done so. In my view, the issues of consolidation and timetabling are better addressed at a joint case management conference.

Business Valuator

54The sole matter on which the parties agree is the appointment of a business valuator. The Order already requires the parties to retain an independent business valuator to assist in the valuation of BCO Group’s business. The parties agree that J.C. Plonte should be retained. Subject to Mr. Plonte’s agreement and availability, the parties are directed to finalize his retainer by no later than the joint case management conference.

Conclusion

55For these reasons, Mr. Roppovalente’s motion is dismissed. The parties are directed to schedule a joint case management conference before me through the Trial Coordinator’s Office.

56If the parties are unable to agree on costs of this motion and Ms. Danis’ motion to remove Mr. Lister as lawyer of record for Mr. Roppovalente, they may make written submissions limited to a maximum of three pages. Ms. Danis shall deliver her costs submissions by September 18, 2020. Mr. Roppovalente shall deliver his responding submissions by October 2, 2020. If no submissions are received within this timeframe, the parties will be deemed to have settled the issue of costs between themselves.

Footnotes

1. 1In her written submissions, Ms. Danis also asked that I find Mr. Roppovalente in contempt. During oral submissions, counsel confirmed that Ms. Danis was not pursuing the contempt allegations against Mr. Roppovalente at the present time.
2. 2Mr. Roppovalente makes similar arguments concerning Ms. Danis’ retainer of Toptal, an online booking software and management system. The retainer of Toptal, like that of Elite, predated the Order.