Struthmann v. Struthmann, 2020 ONSC 759

Court File and Parties

Court File No.: 95/19 and 117/19 Date: 2020-02-04 Superior Court of Justice - Ontario

Re: Lois Struthmann and Tansy Serediak, Applicants And: Aloysius (Al) Struthmann, Respondent

And Re: Aloysius (Al) Struthmann, Applicant And: Lois Struthmann and Tansy Serediak, Respondents

Before: Justice I.F. Leach

Counsel: Jonathan B. Pitblado, for the Applicants and Respondents to Counter-application Richard Macklin, for the Respondent and Applicant in Counter-application

Heard: January 31, 2020

Endorsement

Introduction and overview

1Before me are an application and counter-application, both of which urgently seek relief pursuant to Ontario’s Business Corporations Act, R.S.O. 1990, c.B.16; “the OBCA”.

2The two applications relate to a small group of Ontario corporations, closely held and directed by members of the same family. In particular:

a. the two applicants in the first proceeding - Lois Struthmann and Tansy Serediak – are, respectively, the estranged wife and daughter of Aloysius or “Al” Struthmann, the respondent to that proceeding; and

b. Mr Struthmann has brought a counterapplication of his own, naming his estranged wife and daughter as respondents to that proceeding.

3The two applications seek relief in relation to various related Ontario corporations, informally referred to as “the Tetra group”, which collectively participate in a successful business operation that produces, mixes, sells and distributes chemicals to approximately 30,000 customers located across Canada and in other nations around the world.

4Although four companies are mentioned in the application material, it is common ground that one of them – Tetra-Chem (Toronto) Inc. - is dormant. The parties accordingly focused their attention on the other three “Tetra” companies, and I therefore will do the same.¹ In that regard, and by way of general overview concerning the current nature, financial position, ownership, control and operation of the three companies:

i. Tetra-Chem Industries Ltd. (“TC Industries”), is described as the “main business hub” of the corporate group. It is responsible for staffing, manufacturing and initial inventory holdings of the group’s operations, and also is responsible for sales and distribution of the group’s products within Canada. By way of additional history and particulars:

a. TC Industries was created in 1987, with Al Struthmann (Senior) as its sole shareholder, to continue a business started by Mr Struthmann as a sole proprietorship in or around 1982.

b. Initially, Mr Struthmann was the company’s sole shareholder, and he apparently remained so for the first eight or so years of the company’s existence. Mrs Struthmann became an additional shareholder of the corporation in or around 1995. The company’s current voting share ownership is divided equally between Al Struthmann and Lois Struthmann; i.e., each owns 50 percent of the voting shares.

c. The company has two directors: Al Struthmann and Tansy Serediak.

d. The company has three officers: Al Struthmann (president), Lois Struthmann (secretary), and Tansy Serediak (Treasurer).

e. The company now operates from rented space in a commercial property located in the Town of Ingersoll, Ontario. The relevant commercial property is owned by Tetra-Chem Retail Outlet Ltd.

ii. Tetra-Chem International Inc. (“TC International”) purchases inventory from TC Industries for sale and distribution internationally; i.e., outside the Canadian sales area serviced by TC Industries. By way of additional history and particulars:

a. TC International was created in 2006.

b. The company’s current voting share ownership is divided equally between Mr Struthmann and Mrs Struthmann; i.e., each owns 50 percent of the voting shares.

c. The company has only one director: Mr Struthmann.

d. The company also has only one officer: Mr Struthmann.

e. The company operates from rented space in the same commercial property used by TC Industries; i.e., the commercial property, in the Town of Ingersoll, owned by Tetra-Chem Retail Outlet Inc.

iii. Tetra-Chem Retail Outlet Ltd., (“TC Retail”), is a corporation whose business operations seem limited to the ownership and rental of two commercial properties in southwest Ontario. One of those commercial properties is the one noted above, (in the Town of Ingersoll), from which TC Industries and TC International carry out their respective business operations. By way of additional history and particulars:

a. TC Retail was created in 1997.

b. The company’s current voting ownership is divided equally between Mr Struthmann and Mrs Struthmann.

c. The company has only one director: Mrs Struthmann.

d. The company has only one officer: Mrs Struthmann, who serves as the corporation’s president, secretary and treasurer.

5In the period between 2015 and 2017, the Tetra group of companies also was the subject of an “estate freeze” reorganization; i.e., an estate-planning technique, commonly used in Canada, to “lock in” a current value and corresponding capital gain tax liability of property for certain persons, while attributing future growth in the relevant property’s value to others.

6In this case, the relevant estate freeze arrangement was implemented to set the total value of the Tetra group of companies at $2.5 million in 2017, (with that 2017 value being divided equally between Mr and Mrs Struthmann), and attribute future growth in the value of the corporations to the couple’s four children; i.e., three daughters, (Tansy Serediak, Angela Lekavicius and Amanda Struthmann), and one son, (Aloysius Struthmann junior).

7The relevant estate freeze apparently was accomplished through the creation of a family trust, in respect of which Mr and Mrs Struthmann are the two named decision makers.

8Mr and Mrs Struthmann now are estranged, although apparently not yet divorced, and both have new partners.

9For reasons outlined in more detail below, both spouses have raised concerns about the other, and now are “at loggerheads” in terms of how the Tetra group of corporations should be operated, with their equal voting share ownership of the three relevant corporations, and their equal say in matters concerning the family trust, preventing any effective means for resolving their disputes.

10In particular, it seems that no provisions exist within the relevant corporate structures, or the provisions of the family trust, to move beyond such disagreements.

11In her capacity as a director and officer of TC Industries, Ms Serediak has sided with her mother, Mrs Struthmann.

12The precise relief sought by Mrs Struthmann and Ms Serediak, in their application, is set forth in the notice of application found at Tab 1 of their initial application record, and I will not replicate the relevant details in their entirety here. In essence, and for present purposes:

a. they ask that Mr Struthmann be stripped immediately of any and all rights he has as a shareholder, director, officer and/or employee of TC Industries, and ordered to sell his shares therein to the applicants for fair market value;

b. they ask for various forms of ancillary relief, in the form of additional orders permitting the applicants to run TC Industries while Mr Struthmann is restrained from contacting the applicants, (except through counsel), attending within a certain distance of any place where the applicants live or work, (thereby including the offices and facilities of TC Industries), or retaining any corporate credit or bank access cards; and

c. they request similar relief in relation to the other Tetra companies.

13In support of that requested relief, Mrs Struthmann and Ms Serediak allege that Mr Struthmann has engaged in oppressive conduct and other unfair activities; e.g., open displays of misogyny directed towards females working with and for the corporations, verbal abuse and physical violence, and surreptitious acts of self-dealing that benefit himself at the companies’ expense. In that regard, they say that that such conduct has exposed and will expose corporate personnel to intolerable dangers, subject to the companies to legal complaints and penalties on various grounds, (e.g., based on possible violations of the Ontario Human Rights Code, R.S.O. 1990, c.H.19 and Ontario’s Occupational Health and Safety Act, R.S.O. 1990, c.0.1), and cause the companies to sustain other financial losses. They also emphasize that the situation and resulting disputes have brought about a “deadlock” in management of the companies.

14The precise relief sought by Mr Struthmann is set forth in his notice of counter-application, found at Tab 1 of his initial counter-application record, and I similarly will not replicate the relevant details of that pleading here. For present purposes, Mr Struthmann essentially requests the following:

a. an order compelling Mrs Struthmann and Ms Serediak to sell their shares in the Tetra companies to Mr Struthmann, along with any corollary relief necessary to effect the share transaction and transfer control of the companies – which, (as oral submissions made clear), would include Mrs Struthmann and Ms Serediak being removed from their positions as directors, officers and/or employees of the corporations; and

b. an order – to the extent necessary - requiring Mrs Struthmann and Ms Serediak to produce business, accounting and bank records to Mr Struthmann.

15In support of that requested relief, Mr Struthmann vehemently denies the allegations of misconduct advanced by his estranged wife and daughter, and alleges that they in fact have been the parties engaged in conduct that has oppressed, unfairly prejudiced and/or unfairly disregarded his corporate interests by deadlocking corporate operations, and jeopardizing their viability. In that regard, Mr Struthmann relied on several alleged actions of Mrs Struthmann and Ms Serediak, all of which were said to reflect unjustified, inappropriate and unilateral attempts at “self-help”, usurping Mr Struthmann’s legitimate role as CEO in relation to the corporations.

16Mr Struthmann’s formal notice of counter-application also sought an order directing payment of his interim legal costs from an entity within the Tetra group of companies, pursuant to s.294(4) of the OBCA. However, counsel for Mr Struthmann confirmed, during the course of oral submissions, that such relief was no longer being pursued.

17In the course of oral submissions before me, it also was made clear:

a. that the relief being sought by Mrs Struthmann and Ms Serediak should be qualified, by provisions in the requested court-ordered relief, permitting Mr Struthmann to continue receiving his usual income and benefits from the Tetra companies until the court ordered share purchase had been accomplished; and

b. that the relief being sought by Mr Struthmann should be similarly qualified, by provisions in the requested court-ordered relief, permitting Mrs Struthmann and Ms Serediak to continue receiving their usual income and benefits from the Tetra companies until the court ordered share purchase had been accomplished.

18In that regard, both sides otherwise were confident that the court need not make any further orders dealing with more specific transitional arrangements; e.g., to ensure that any unsuccessful party to this litigation would be permitted to withdraw from his or her current office and working arrangements, within the Tetra group of companies, in an orderly and civilized manner. In particular, through counsel, the parties expressed their confidence that the court-appointed monitor currently supervising ongoing business operations within the Tetra group of companies, (i.e., Mr Gary Honcoop), would be able to “keep the peace” and work out such details in co-operation with the parties.

19There was no dispute that there has been an irreparable breakdown in the relationship between the parties, rendering future cooperation between them impossible, in relation to the Tetra companies.

20There also was no dispute that the court had jurisdiction to grant the relief being sought by either side, pursuant to the provisions of s.248(3) and/or s.207(2) of the OBCA.

Further background to complaints

21Each side’s factual contentions were outlined in considerable detail in the application and counter-application material filed in relation to the special appointment hearing before me.

22I had the opportunity to review and consider all of that substantial material in detail the day and evening before the parties appeared before me, and I have gone through the material again in the course of preparing these reasons, after receiving oral submissions from counsel.

23My failure to expressly mention any particular aspects of that material should not suggest otherwise.

24In particular, both sides have emphasized that they require an urgent answer and resolution to their dispute and, in light of corresponding time constraints, my attempts to summarize that material for present purposes should not suggest that I have not considered the evidence in its entirety.

25Through affidavits sworn by Mrs Struthmann, Ms Serediak, Stephanie Goodall, (an office assistant and interim office manager employed or formerly employed by TC Industries), Fletcher Lockwood, (an employee of TC Industries who principally acts as one of its chemical formulators), Martin Mollot, (the current partner of Mrs Struthmann), and Patricia Bedford, (an office receptionist employed by TC Industries), and attached exhibits, Mrs Struthmann and Ms Serediak present evidence of alleged misconduct by Mr Struthmann that includes the following:

a. Mr Struthmann is said to have engaged in blatant misogyny towards female directors, officers and employees of the Tetra group of companies. For example, there are allegations that he:

i. repeatedly demonstrates gender bias in the workplace;

ii. repeatedly makes inappropriate sexist comments to corporate employees and customers;

iii. openly denigrates the women who work with and for the corporations, saying they “do not belong in the workplace”, referring to them disparagingly as “fucking bitches” and “stupid”, and suggesting they lack knowledge, do not know how to do their jobs correctly, and/or otherwise are unable to answer questions properly;

iv. made several “obnoxious” comments, during a Florida vacation in 2016 with Mrs Struthmann, her sister and brother-in-law, “slandering women” generally, while making comments about Mrs Struthmann in particular that were “extremely derogatory”;

v. engaged in “public shaming” of Mrs Struthmann by the sending of an email purporting to cancel the Tetra group’s longstanding financial support of a local teenage girls’ curling team, citing a need to revoke Mrs Struthmann’s “charitable spending habits”;

vi. berated Ms Goodhall for wearing lots of perfume, when she was not wearing any; and

vii. attended a family wedding with his “physically tiny Asian girlfriend”, requiring her to sit on his lap and feed him.

b. Mr Struthmann also is said to have an uncontrollable temper, which in turn has led to him engaging in repeated and increasing acts of intimidating verbal and physical abuse directed towards directors, officers and employees of the corporations. For example, there are allegations that he:

i. repeatedly stood very close to Ms Goodhall, holding on to her chair from behind, while pressing her to work more quickly;

ii. yelled, screamed and swore at Ms Serediak from a very close distance, and similarly yelled at Mrs Struthmann;

iii. raised his fist to Mrs Struthmann;

iv. shook, grabbed and pushed Mrs Struthmann; and

v. committed a “vicious assault” on Mrs Struthmann at a Florida property owned jointly by Mr and Mrs Struthmann, (when both spouses attended at the property accompanied by their new partners, and Mrs Struthmann and her new partner attempted to enter the residence while Mr Struthmann and his new partner were inside), leaving Mrs Struthmann with bruising and abrasions to her arm;

c. Mr Struthmann is said to have no understanding of corporate legal obligations towards employees, and/or has a desire to avoid or evade such obligations. For example, there are allegations that he:

i. has created a “poisoned work environment”;

ii. made attempts to edit and rewrite violence and harassment policies in a manner inconsistent with Ministry of Labour requirements; and

iii. unfairly attempted to terminate the employment of Ms Goodhall during a temporary absence of Mrs Struthmann and Ms Serediak, (to whom Ms Goodall reported), despite Mrs Struthmann and Ms Serediak believing that Ms Goodhall has done nothing wrong and accordingly should return to her position;

d. Mr Struthmann’s conduct is said to have exposed the Tetra group to current and threatened complaints, litigation and legal jeopardy; e.g., because of alleged contraventions of Ontario’s Occupational Health and Safety Act, supra, Human Rights Code, supra, and/or other failings of Mr Struthmann for which the Tetra group may be held vicariously liable. In that regard:

i. Mrs Struthmann fears that her husband will “throw the company under the bus, to save his own skin”, in relation to such complaints;

ii. Mr Lockwood suggests that his life was endangered because of an alleged failure on the part of Mr Struthmann to update chemical mixing instructions, in turn causing a potentially lethal chemical explosion involving sulphuric acid; and

iii. Ms Serediak suggests that Mr Struthmann actually may have endangered the life of Mr Lockwood deliberately, simply because Mr Lockwood swore an affidavit in support of the application brought by Ms Serediak and Mrs Struthmann.

e. Mr Struthmann is said to have engaged in surreptitious and dishonest conduct, including self-dealing and other improper business dealings for his own benefit at the expense of the Tetra group. For example, there are allegations that he:

i. boasted, during the 2016 Florida vacation noted above, that he had immediate access to eight million dollars that Mrs Struthmann could not access;

ii. attempted to sell the Florida property jointly owned with Mrs Struthmann, and changed the locks on that residence, without Mrs Struthmann’s knowledge or consent;

iii. has supplied certain customers with products for free, even when those products sometimes, (as in the case of certain specially built huts), were worth hundreds of thousands of dollars;

iv. has greatly discounted the cost of product supplied to certain customers, to levels that were well below the associated production costs incurred by the Tetra group, and sometimes to zero;

v. has deleted invoices after receiving cash payments from customers, or otherwise accepted cash payments for property belonging to the Tetra company, (e.g., for wooden skids, totes of certain product, and chemical dispensing equipment), pocketing such receipts for himself;

vi. has removed product from corporate inventory knowing the removals were not consistent with the corresponding shipment paperwork, or without ensuring the completion of any corresponding paperwork;

vii. has taken thousands of dollars in advances on corporate credit cards, in relation to expenses for which no receipts were provided, and/or taken numerous flights for which no explanation was given;

viii. has bragged to a distributor in British Columbia that he has set up a “secret account” to divert certain “rent to own” payments to himself that should have gone to the Tetra group instead, that he has been diverting such payments for years, and that he expected to divert “millions of dollars” in that manner over time;

ix. is otherwise diverting corporate opportunities and assets for his own purposes; and

x. has refused to answer questions about suspect business dealings or the workings of the company – for example, by responding to inquiries from Ms Serediak and/or Mrs Struthmann by yelling or screaming indications that they should mind her/their “own fucking business”.

26Responding to such allegations, Mr Struthmann has filed material that generally denies the many allegations made against him, apart from some minor acknowledgements coupled with explanations and clarifications. In that regard:

a. Mr Struthmann expressly and firmly denies having ever verbally or physically assaulted anyone, including anyone working with the Tetra group. He similarly denies having any escalating behavioural problem at work.

b. Mr Struthmann notes and emphasizes that, for more than 30 years prior to the hiring of Ms Goodhall, there were absolutely no complaints about his treatment of women or his management of the Tetra group’s business operations.

c. Mr Struthmann expressly denies having assaulted Mrs Struthmann at the jointly owned Florida property, having inflicted the injuries she claims to have sustained, and any knowledge of how those particular injuries may have occurred. He says that, during a dispute about which spouse was entitled to use the Florida property at the time in question, there was an altercation at the property’s entrance when Mrs Struthmann and her new partner “barged into” the property, kicking the door into Mr Struthmann’s face, while Mrs Struthmann was hitting Mr Struthmann with her fists. Mr Struthmann swears that he nevertheless did not strike Mrs Struthmann in return.

d. Mr Struthmann denies that he engaged in any form of unfair treatment or discrimination in relation to Ms Goodhall. Relying on numerous documented complaints and concerns relating to Ms Goodhall, Mr Struthmann maintains that he had good cause to terminate Ms Goodhall’s employment based on poor performance and insubordination.

e. Mr Struthmann denies any surreptitious or deceitful efforts to sell the Florida property jointly owned with Mrs Struthmann without her approval, and asserts that Mrs Struthmann actually had full knowledge of every step taken in the sale process.

f. Mr Struthmann emphasizes that he has always acted in the best interests of the Tetra group, and firmly denies any improprieties in that regard. In particular, focusing on some of the main allegations against him:

i. Mr Struthmann says the claims of “free” distribution of expensive product to customers reflects an apparent lack of information or proper understanding on the part of the applicants and/or their supporters. For example, the temporary free provision of huts to customers, (for use in sheltering purchased equipment and products before the huts are then returned to the Tetra group), facilitates greater purchases of equipment of products sold by the Tetra group. The actions taken by Mr Struthmann made in that regard accordingly reflect a marketing decision made to increase the group’s profitability.

ii. Similarly, Mr Struthmann says, the occasional distribution of products to certain customers, below production costs, is a common marketing approach which Mr Struthmann has used successfully to interest potential customers in the products offered by Tetra group. He has not been pocketing any price-differential that should have gone to the Tetra group.

iii. Mr Struthmann denies any improper use of corporate credit cards, emphasizing that he has supplied receipts which inadvertently may have gone missing, and that any unsupported expenses, if considered invalid, can and should simply have been booked to his “shareholder’s loan” account within the Tetra group.

iv. Mr Struthmann acknowledges that, in relation to the periodic return of “broken” pallets to a pallet company, he may have received cash payments that he did not formally report. However, he asks that his admitted failure in that regard be viewed in a proper context. In particular, he emphasizes that he engages in more than a thousand transactions each year, far more significant than the total amount of $400 he may have received in relation to the pallet transaction, and that he also failed to formally report or claim reimbursement for similarly minor expenses he personally incurred in relation to operation of the Tetra group. He swears that he will be reporting any and all cash transactions going forward.

v. He notes that a number of other financial improprieties alleged by Mrs Struthmann and Ms Serediak are demonstrably false. For example, one named customer who supposedly received equipment free of charge, (i.e., Doug LePage), has confirmed that he has paid for all his Tetra group transactions through cheques supplied to its accounting department, and that there have been no cash transactions in that regard. Similarly, although Ms Serediak suggested that Mr Struthmann had transferred $330,000 out of the corporate account for TC Industries “into an account or investment vehicle that only he had access to”, correspondence exchanged between counsel, and Mr Struthmann’s sworn evidence, confirms that the account in question actually belongs to TC International, and not to Mr Struthmann.

g. Mr Struthmann vehemently denies any responsibility for the sulphuric acid explosion that may have endangered Mr Lockwood. At some length, Mr Struthmann explains, (consistent with his knowledge of chemistry, and relying to some extent on supporting documentation), that:

i. Mr Lockwood’s training was limited to barreling chemicals, and accordingly did not extend to the relevant mixing procedure, which Mr Lockwood had never carried out or attempted on any previous occasion;

ii. the relevant mixing formula was in fact accurate and properly updated;

iii. pursuant to the long-standing understanding and practice of the chemistry team, Mr Struthmann should have been consulted before the particular mixing operation was undertaken;

iv. Mr Lockwood nevertheless failed to consult Mr Struthmann - which Mr Struthmann attributes to Mr Lockwood having taken sides in this dispute, (e.g., by swearing affidavits supporting the application of Mrs Struthmann and Ms Serediak), thereby making Mr Lockwood reluctant to speak with Mr Struthmann;

v. although Mr Lockwood sought advice by text from another employee, he proceeded without having received any response to that inquiry, and the advice Mr Lockwood received by text after the incident was inaccurate in any event;

vi. in carrying out the mixing procedure, Mr Lockwood in fact failed to add the specified tempering agent required by the updated mixing formula, in turn causing the sulphuric acid explosion; and

vii. Mr Struthmann was not even informed of the explosion when it occurred.

h. More generally, Mr Struthmann contends that the various allegations made by his wife and daughter are not only false, but focus on minutiae of his generally successful and profitable management of the Tetra group.

27Through affidavits sworn by Mr Struthmann, (who emphasizes that he deliberately has chosen to refrain from involving any additional Tetra personnel in this dispute by pressing them to swear affidavits, thereby possibly putting their employment at risk depending on the outcome of the litigation), and attached exhibits, Mr Struthmann presents evidence in support of allegations that his wife and daughter actually are the ones who have engaged in oppressive and unfair conduct in relation to the Tetra group, thereby jeopardizing its operations and existence. In that regard:

a. He notes that Mrs Struthmann and Ms Serediak have used corporate funds to pay their legal fees in relation to this litigation, without attempting to hold a board meeting or otherwise obtain appropriate corporate or court approval in that regard.

b. He notes that Ms Serediak similarly has used corporate funds to pay tuition fees required for her daughter’s education.

c. He emphasizes that Mrs Struthmann and Ms Serediak, in their efforts to usurp his role in the Tetra group, have been jeopardizing relations with employees, distributors and customers by the retention of a private investigator who has engaged in aggressive and off-putting efforts to elicit information that might discredit Mr Struthmann.

d. He says that Mrs Struthmann and Ms Serediak, ignoring their defined and limited roles, have engaged in efforts to usurp Mr Struthmann’s role as chief executive, taking actions well beyond their authority, knowledge and experience that are not in the best interests of the Tetra group, and actually jeopardize its existence. In that regard, Mr Struthmann provides at least seven detailed examples of such conduct. In particular:

i. On a clandestine basis, (i.e., without advising Mr Struthmann), Mrs Struthmann and Ms Serediak effectively reversed Mr Struthmann’s decision to terminate their friend Ms Goodhall on a “without cause” basis, instead placing her on an indefinite leave and keeping her on the Tetra group’s payroll, (at the rate of $1,000 per week since October of 2018), without the Tetra group receiving any services in return.

ii. Mrs Struthmann abruptly terminated a profitable business relationship, between the Tetra group and a distributor of engine rebuilding parts and cleaners; a relationship which Mr Struthmann had forged, and was generating income of approximately $25,000 per year for the Tetra group.

iii. Mrs Struthmann unilaterally increased the price of certain truck wash products by 30 percent, effectively pricing the products out of the market, (leading to an anticipated loss of $200,000 in profit), while simultaneously undermining numerous customer relationships, and significantly disrupting the anticipated commission remuneration of one of Tetra’s key sales persons.

iv. Apparently not understanding the profit dynamics of “rent to own” equipment sale arrangements, Mrs Struthmann terminated that entire line of Tetra’s business, which has generated profits for the Tetra group for approximately 22 years. As a result, Mr Struthmann anticipates a further $300,000 loss in Tetra’s gross profit margins, before fixed overhead is taken into account.

v. In one instance, Mrs Struthmann went so far as to reverse a particular “rent to own” equipment sale that already had been made, attempting to invoice the customer for the full cost of the equipment. At the same time, Mrs Struthmann invoiced the customer for the full amount of delivered chemicals, ignoring or reversing the agreed monthly chemical product payment plan.

vi. Mrs Struthmann and Ms Serediak have been delaying, without explanation, reimbursement of legitimate travel expenses incurred and claimed by Mr Struthmann in the execution of his responsibilities as the principal marketing representative for the TC Industries and TC International.

vii. Mr Struthmann attributes the dangerous sulphuric acid incident, stemming from Mr Lockwood’s mixing of chemicals, to Mrs Struthmann and/or Ms Serediak, (who are not knowledgeable about chemical manufacture, storage and safety practices), authorizing Mr Lockwood to engage in activities beyond his training and experience, without involving Mr Struthmann. In that regard, Mr Struthmann emphasizes, (as noted above), that Mr Lockwood’s training is restricted to barreling chemicals, and that Mr Lockwood accordingly should not have engaged in the relevant and dangerous mixing procedure. Mr Struthmann expresses concern that there may be similar explosions if Mrs Struthmann and Ms Serediak are permitted to continue giving authorizations and/or directions in relation to chemical production matters they simply do not understand.

28In their responding material, Mrs Struthmann and Ms Serediak generally do not deny many of Mr Struthmann’s allegations. They instead tender further evidence in support of their allegations of misbehaviour by Mr Struthmann, and emphasize that, to the extent they may have intervened in affairs of the Tetra group normally managed by Mr Struthmann, they have done so to safeguard what they consider to be the group’s best interests; e.g., by trying to ensure that the Tetra group supplies all items on an “above cost” basis, thereby hopefully preserving the value of the corporate group until the court rules on the matter.

29In my view, there were some factual matters that essentially were not the subject of any serious dispute, including the following:

a. There apparently is no dispute that Mr Struthmann is a talented chemist, that he started the Tetra business, and that - to use the words of Mrs Struthmann - “the Tetra group has essentially been run by Al, [Mr Struthmann], despite any corporate titles in any of the companies”, and the shareholdings distributed to family members. Ms Serediak agrees that, “historically”, her father “has simply run things in the Tetra group despite corporate titles”. All of this seems consistent with Mr Struthmann’s assertions that he has built and controlled the day-to-day operations of the Tetra group, before and during the existence of the various Tetra companies, regardless of formal titles.

b. Nor was any real effort made, in the evidence tendered by Mrs Struthmann and Ms Serediak, to question or challenge Mr Struthmann’s account and detailed description of the extensive and extremely multi-faceted role he has played and continues to play in supervising all aspects of the Tetra group’s operations and management. In that regard, the non-exhaustive list of Mr Struthmann’s job duties extends well beyond chemistry, and includes the following:

i. formulating, producing and selling new products;

ii. ordering parts and inventory, along with research and development material;

iii. designing equipment;

iv. overseeing quality control and testing of new products;

v. conducting health and safety testing;

vi. supervision of worksites and staff, frequently on a daily basis;

vii. logistical planning for deliveries and installations;

viii. general property management and leasing;

ix. ensuring compliance with Ministry of Transportation and Ministry of Environment standards;

x. general marketing, sales and customer relations;

xi. the hiring and firing of staff; and

xii. general “troubleshooting”.

c. No one disputed the very strong indications, in the most recently available financial statements, that the Tetra group companies have been operated - at least until recently - in a successful and profitable manner. For example:

i. TC Industries has almost $1.7 million in retained earnings and a low debt-equity ratio of 0.6 to 1, paying approximately $253,000 in management salaries while still generating additional net income of approximately $230,000 per year;

ii. TC International has almost $440,000 in retained earnings, and an even lower debt-equity ratio of 0.18 to 1, while generating net income of approximately $130,000 per year; and

iii. TC Retail has a net book value of approximately $560,000.

d. There was no evidence whatsoever to contradict Mr Struthmann’s assertion that the Tetra group has a long track record of productive and safe operations – at least prior to the dangerous sulphuric acid incident involving Mr Lockwood, which Mr Struthmann attributes to Mr Lockwood’s failure to follow the appropriately updated mixing instructions, and Mr Lockwood’s failure to contact Mr Struthmann before embarking on such an operation, as he usually did before the current litigation encouraged him to “take sides” in the dispute.

e. There seems to be a general consensus that there were no complaints or serious concerns about Mr Struthmann’s behaviour until somewhat recently. For example:

i. Mrs Struthmann indicated in her affidavit evidence that Mr Struthmann’s behaviour would not matter or concern her, if her husband’s behaviour “had not rapidly deteriorated over the last few years”. In that regard, Mrs Struthmann says that her husband has “always been misogynistic and domineering”, but that his assaultive behaviour began only a few years ago, and “until recently consisted simply of slapping, pushing and in-your-face yelling”.

ii. Ms Goodhall indicated in her affidavit that she initially had “no concerns” in dealing with Mr Struthmann, and described a generally positive relationship with him throughout 2017 and into the early part of 2018. However, she feels that her relationship with Mr Struthmann “suddenly changed” and became negative from approximately February of 2018 onwards.

iii. Mr Lockwood indicated in his affidavit evidence that he feels gratitude to Mr Struthmann for hiring him, but began noticing “major mood swings” with Mr Struthmann by the late summer of 2016. Concerns about Mr Struthmann’s removal of inventory and disregard for proper paperwork were also said to have started in 2016, although they later became more pronounced.

iv. Ms Serediak says that her father’s behaviour has “become more abusive” towards herself, her mother and employees of the Tetra group as time has gone on, but that “matters have reached a point” where she and her mother felt their application was required.

f. Everyone agrees that the current situation is preventing the companies from operating, or operating effectively.

30Again, these are only some of the considerations put forth by the parties in their extensive material, and I have described them, in some cases, only in broad terms. I nevertheless had the entirety of the parties’ filings in mind when engaging in my analysis.

Analysis

31As I indicated to counsel when I necessarily reserved my decision late Friday afternoon, the urgency emphasized by the parties and time constraints noted above may prevent me from rendering reasons as expansive or elegant as they otherwise might have been. The comments that follow nevertheless hopefully will suffice to indicate how and why I have arrived at my decision set forth below.

32I start by indicating my view that, although the parties have devoted considerable time and effort documenting and outlining and addressing the allegations of inappropriate conduct advanced by each side, it is neither necessary nor appropriate for me to adjudicate or comment further upon the merits of those individual complaints.

33I say that for a number of reasons.

34First, I do not think detailed determinations of those individual allegations of oppressive and unfair misconduct are necessary because the circumstances, and relevant provisions of the OBCA capable of alternate application, make it clear the court has the ability to address and deal fairly with the parties’ dispute, and the relief each side seeks, without making such determinations. In particular:

a. In this case, there is no dispute whatsoever that the relationship between the parties has irreparably broken down, and that the breakdown prevents all future cooperation between them in relation to operation of the Tetra companies. There similarly is no dispute that the management of the companies is currently being frustrated by a “deadlock” or “log jam” of conflicting views that realistically cannot be resolved without one side or the other being removed from all director, officer and employee responsibilities, and the “removed side” being forced to sell their or his shares for fair market value to the other side. In my view, the law is clear that, in such circumstances, a finding of oppressive and/or unfair conduct is unnecessary to grant the relief requested by the parties, in that sections 248 and 207 of the OBCA are both available to resolve the parties’ dispute.

b. Amongst other things, subsections 248(1) and (2) of the OBCA provide that, where the business or affairs of a corporation or any of its affiliates are, have been or are threatened to be carried on or conducted in a manner that is oppressive or unfairly prejudicial to the interests of any security holder, director or officer of the corporation, or unfairly disregards such interests, (or the powers of directors of the corporation or any of its affiliates are, have been or are threatened to be exercised in such a manner), a complainant may apply to the court for relief. Pursuant to s.248(3) of the OBCA, such relief includes “any interim or final order it thinks fit”, and is not limited to the wide but non-exhaustive list of particular examples set forth in s.248(3); a list which expressly includes the power to order that the corporation “or any other person” purchase securities of a security holder.

c. However, section 207 of the OBCA, which ostensibly deals with the “winding up” of a corporation by the court in a broad range of circumstances, also applies in the circumstances of this particular case. In that regard:

i. Section 207 has application in various situations, including those where the court is satisfied that it would be “just and equitable for some reason, other than the bankruptcy or insolvency of the corporation, that it should be wound up”, and expressly provides that, in dealing with an application under section 207, the court may make such order under section 207 or section 248 “as it sees fit”.

ii. If the relationship of trust and confidence between partners in corporate guise has broken down and the continuation of the business between them operating as equal partners is not possible, such a situation is enough to trigger the courts powers under section 207.²

iii. While the wide range of discretionary remedies under the “oppression” provisions of section 248 are therefore available under section 207, it is not necessary that there be oppression for an order to be made under section 207.³

iv. Nor is it necessary, if section 207 is engaged, that the remedy be a complete winding up; e.g., through liquidation or dissolution. While that could be the appropriate solution, a court is not limited to ordering such drastic results.⁴

d. In the particular circumstances of this case, the undisputed reality of an irreparable breakdown in the parties’ relationship, preventing continued operation of the Tetra group’s corporate affairs because of a resulting “deadlock” or “log jam” in the making of corporate decisions, accordingly is sufficient to grant the relief requested by either side if I find it “just and equitable” to do so. Findings of oppressive conduct are unnecessary.

35Second, in my view the law is clear that, even in the context of considering the appropriate remedy for established oppression, a determination of which side should “buy out the other” is not governed by who may or may not have been the oppressor. In that regard:

a. While some courts have indicated that it is ordinarily the party committing the oppression that buys the innocent party’s shares, and others have held that the tendency is to give the innocent party the right to buy out the other, both statements are overbroad. Where both sides want to buy out the other, the court must make the order that is most equitable in the circumstances, and it is the reasonable expectations of the parties, not the size of their respective shareholdings, nor determinations of guilt or innocence, that should determine who buys out whom.⁵

b. In the particular circumstances of this case, where both sides say the necessary and appropriate solution is for one side to buy out the other, the determination of which outcome might be appropriate accordingly will not turn on whether Mrs Struthmann and Ms Serediak are able to establish some or all of the alleged oppressive and unfair conduct said to have been undertaken and/or threatened by Mr Struthmann, or whether he is able to establish that he has engaged in no such conduct and his instead been the victim of oppressive and unfair conduct on the part of Mrs Struthmann and/or Ms Serediak.

c. In short, if the parties essentially agree that there has been oppressive and unfair conduct by one or more of the parties, and that a “buy out” of one side by the other is the necessary and appropriate solution in this case, (with ancillary relief to ensure control of the companies by the side buying out the other), the parties effectively agree that the court has jurisdiction to grant the requested relief pursuant to section 248, (if section 207 did not grant that jurisdiction in any event), and further determinations as to whether any party may be guilty or innocent of specifically alleged misconduct are unnecessary to determining which of the two alternative outcomes may be appropriate.⁶

36Third, in my view, the nature of the complaints of misconduct, and the manner in which they have been presented, makes it inappropriate to determine the merits of the complaints in a summary fashion. In that regard:

a. Many and indeed most of the allegations of oppressive and unfair misconduct involve very serious matters; e.g., matters which include but go well beyond conduct in the nature of self-dealing and corporate theft, and extend to blatant misogyny, threatened and actual violence, and negligent if not deliberate failings endangering life. Nothing in these reasons should be taken as suggesting, in any way, that the misconduct alleged in the applications should not be regarded as a very serious matter.

b. However, in my view, it is also important to recognize that most of the allegations of misconduct – particularly in relation to the allegations concerning Mr Struthmann - are supported primarily if not exclusively, in many cases, by witness accounts, without supporting objective documentation. Moreover, a number of those witness accounts rely implicitly and/or explicitly on a degree of hearsay, while also making reference to incidents of alleged misbehaviour lacking in detail as to time and place. Furthermore, many of the allegations of misbehaviour – particularly those levelled against Mr Struthmann - are adamantly denied. All of this inherently gives rise to serious issues of credibility and reliability.

c. In such circumstances, I think arguments based on paper records put forward by the parties, extensive in some respects but lacking in others, (especially insofar as both sides apparently chose to forego cross-examination on affidavits, to ensure a more expedited hearing), provide a poor and inadequate vehicle for making such necessary credibility and reliability determinations.

d. It also bears emphasizing that I am dealing with applications brought pursuant to the OBCA, and Rules 14.05(2) and 38 of the Rules of Civil Procedure, and not motions for summary judgment giving rise to the expanded powers of review and determination available to the court pursuant to Rule 20 of the Rules of Civil Procedure. Where material facts are in dispute, in relation to applications for oppression remedies, the appropriate course of action of action frequently will be conversion of the applications to actions, (pursuant to the provisions of Rule 38.10), which in turn would allow the disputes to be fairly and satisfactorily resolved through a trial, or possibly by way of summary judgment motions.⁷

e. In the circumstances, had it been necessary to make determinations as to the guilt or innocence of the parties, in respect of the particular allegations of oppressive and unfair conduct, I would have been inclined – albeit with reluctance, given the desire of all concerned for a prompt resolution of their disputes - to direct a trial of those issues. For present purposes, suffice it to say that, in my view, a just and meaningful assessment and determination of whether the various allegations of misconduct have merit is not really possible on the hotly contested paper record before me, in turn making such determinations inappropriate without resort to further procedures normally used to address such concerns.

37Fourth, I think it important to note and emphasize that the two applications before me are not being advanced in a self-contained litigious vacuum. To the contrary, they are being brought against a backdrop of numerous other disputes that are, or likely will be, the subject of additional proceedings in this court and elsewhere. In my view, that makes it advisable to exercise judicial restraint, and deliberately refrain from making determinations and comments in this context that are unnecessary for a just resolution of the particular applications before me. In that regard:

a. As a Superior court judge with a general patent, sitting in a region were such judges routinely are required to address all lines of the court’s work, (i.e., civil and administrative law disputes, criminal charges, and family law proceedings), I am very mindful of the reality that judicial rulings and comments generated in one context frequently have implications, and give rise to collateral leverage, in one or more other contexts.

b. In my view, the potential for such collateral implications is very pronounced in this case. To provide just a few examples, in that regard:

i. It seems that Mr and Mrs Struthmann, while estranged and now committed to new partners, remain married. That in turn suggests that matrimonial proceedings in the family law context, to address issues such as spousal support, (including issues of possible income imputation), and equalization of property, (including issues of possible exclusive possession orders in relation to jointly owned properties, as well as possible allowances being made for hidden and sequestered assets), have yet to run their course. I have little doubt that judicial determinations made in the immediate context of these applications, addressing the merits of complaints that Mr Struthmann has verbally and physically abused Mrs Struthmann repeatedly, (at home, at work and at the couple’s Florida property), and has hidden income and assets, would be cited and relied upon in such matrimonial proceedings.

ii. Ms Goodall may or may not lose her employment with TC Industries, depending on the outcome of these applications, but evidence before me makes it clear that she feels she has been treated quite unjustly by Mr Struthmann, with serious and long-term implications for her well-being. She has retained counsel, has attempted to pursue a complaint with the Ministry of Labour, and has pursued an Ontario Human Rights Code complaint, relying on Mr Struthmann’s alleged misconduct but also alleging vicarious liability of TC Industries. Without formally deciding the matter, there also would seem to be strong grounds for arguing that, on any view of the matter, the time for Ms Goodall to pursue a claim for wrongful dismissal and punitive damages has not yet expired.

iii. To the extent the material filed on behalf of Mrs Struthmann and Ms Serediak alleges that the negligence or deliberate failings of Mr Struthmann created a potentially lethal situation endangering the health and safety of Mr Lockwood, (a sentiment apparently shared by Mr Lockwood), the Tetra group arguably has been exposed to the possibility of a corresponding health and safety complaint pursuant to Ontario’s Health and Safety Act, supra.

iv. In her affidavit material, Ms Serediak emphasizes that the Tetra group is currently the subject of numerous formal complaints to the Ministry of Labour; e.g., with Ms Goodhall, Mr Lockwood and Ms Bedford complaining of alleged misogynistic and abusive behaviour on the part of Mr Struthmann, and a driver named Dan Burton complaining of generally abusive behaviour by Mr Struthmann.

v. As Mrs Struthmann and Ms Serediak emphasize in their material, there are also concerns that the alleged conduct of Mr Struthmann already may have exposed the Tetra group to the prospect of numerous formal complaints of sexual discrimination, capable of being advanced pursuant to Ontario’s Humans Rights Code, supra.

c. None of these comments are meant to suggest a lack of jurisdiction, in this court, to address and determine the merits of allegations concerning possible oppressive and unfair misconduct where that is necessary to deal with applications seeking relief pursuant to s.248 of the OBCA.

d. However, where such determinations are unnecessary, and would have collateral implications in other litigious contexts, I think it advisable to exercise judicial restraint and refrain from making such determinations; i.e., leaving them to be addressed if and as necessary in other contexts where such issues may be the primary focus of other proceedings, allowing for exploration and presentation of such concerns, and resolution of credibility and reliability issues, in a more thorough manner. In my view, the advisability of such restraint is even stronger in relation to particular concerns where the Legislature has created administrative tribunals, (such as the Ontario Labour Relations Board and the Ontario Human Rights Tribunal), with special expertise to address such issues.

38For all of these reasons, I think it sufficient and appropriate to address the applications before me pursuant to section 207 of the OBCA.

39In that regard, I think it helpful to set forth the complete text of s.207(1)(b) and s.207(2) of the OBCA, which read as follows:

207. (1) A corporation may be wound up by order of the court …

(b) where the court is satisfied that …

(iv) it is just and equitable for some reason, other than the bankruptcy or insolvency of the corporation, that it should be wound up.

(2) Upon an application under this section, the court may make such order under this section or section 248 as it thinks fit.

40As noted above, the authorities confirm that if the relationship of trust and confidence between partners in corporate guise has broken down, and the continuation of the business between them operating as equal partners is not possible, such a situation is enough to trigger the courts powers under section 207 of the OBCA.

41I find that there has been such a breakdown in this case, and that finding is sufficient to engage the court’s section 207 jurisdiction.

42As also noted above, the authorities confirm that, where section 207 is engaged, the remedy ordered by the court need not be a complete winding up of the relevant company or companies. While that could be the appropriate solution, a court is not limited to ordering such drastic results. As the legislation itself makes clear, a court exercising its jurisdiction under section 207 of the OBCA may make any order “it thinks fit” in the circumstances, including a combination of the less Draconian remedies mentioned in section 248 of the Act.

43In this case, both sides agree that the current situation is both unworkable and intolerable, and realistically can be remedied only by an order requiring one side to buy out the other sides shares in the relevant companies, with ancillary orders removing the side to be bought out from any further involvement in the companies as directors, officers and/or employees.⁸

44I independently share that view.

45The record before me makes it clear that, whatever their respective merits, allegations of misconduct levelled against each side, and resulting conflict between the parties, have been escalating. So too have the number of disagreements about the manner in which corporate affairs should be managed.

46Again, both sides agree that the breakdown in their relationship is irreparable, and it accordingly seems clear that the conflicts and disagreements between the parties will continue to fester and escalate until one side or the other is effectively removed from further involvement in the affairs of the Tetra group of companies.

47In the circumstances, I therefore think it fit and appropriate, for the benefit of the companies and the parties themselves, to make an order requiring one side to buy out the other, with ancillary orders terminating the further involvement of the “bought out” side – subject to qualifications ensuring that the “bought out” side continues to receive remuneration and benefits from the Tetra group at the usual rate and frequency until the court ordered share sale/purchase has been completed.

48The real question for determination centres on who should be required to buy out whom.

49In my view, general principles in that regard include the following:⁹

a. As noted above, where both parties to a dispute wish to buy out the other, the court must make the order that is most equitable in the circumstances. In that regard, the reasonable expectation of the parties, rather than the size of their respective shareholdings or determinations of guilt or innocence, should determine who buys out whom.¹⁰

b. As denoted by the adjective “reasonable”, the concept of “reasonable expectations” is objective and contextual. The actual expectation of a particular stakeholder is not conclusive. The question is whether the expectation is reasonable having regard to the facts of the specific case, the relationships at issue, and the entire context, including the fact there may be conflicting claims and expectations.¹¹

c. It is impossible to catalogue exhaustively situations where a reasonable expectation may arise, due to their fact-specific nature. However, useful factors for determining whether reasonable expectations exist include: general commercial practice; the nature of the corporation; the relationship between the parties; past practice; steps the claimants could have taken to protect themselves; representations and agreements; and the fair resolution of conflicting interests between corporate shareholders, bearing in mind there are no absolute rules.¹²

d. However, absent some expectation to the contrary, the founder of a business who remains active in it, or the party who has put more time and effort into the business, will have a prima facie right to buy out the other party’s shares, even if the founder behaved oppressively.¹³ In circumstances where the founder of a company has devoted decades of his or her life to creating, nurturing and building a business into a very significant enterprise, (e.g., leaving profits in a business to finance its growth and expansion), and the contributions of other stakeholders to the corporation’s business pale in significance when compared to those of the founder, it would be unjust to deprive that founder of the company’s ownership and control.¹⁴

e. Generally, where the founder of a corporation extends shareholdings to family members for estate planning purposes, without intending to part with control of the corporation, the family members thereafter should not be permitted to exercise control over the company through the granting of an oppression remedy, even if the family members are unhappy with the way the founder is operating the business. Such family members otherwise would receive something they could not reasonably have expected to receive when they obtained their shares. ¹⁵

f. Where one party is demonstrably the better manager, that party usually will be the preferable purchaser.¹⁶

50Applying those principles to the particular circumstances of this case, I find that an order should go requiring Mr Struthmann to purchase the shareholdings of Mrs Struthmann and Ms Serediak, with ancillary orders to go removing Mrs Struthmann and Ms Serediak from their director, officer and employee roles in the Tetra group – subject to their receiving their same rates and frequency of compensation until the court-ordered purchase and sale of shares has been completed.

51My reasons in that regard are multi-faceted, but include the following:

a. In my view, Mr Struthmann being permitted to continue in his current role is consistent with the reasonable expectations of the parties prior to the dispute – as opposed to what outcome the parties on each side of the dispute respectively now may wish because the dispute has materialized. In that regard:

i. Commercial practice plays a significant role in forming the reasonable expectations of parties, and a departure from normal business practices that has the effect of undermining or frustrating such reasonable expectations. In my view, it would not be normal commercial practice for those charged primarily with internal accounting and office management to engage in decisions regarding production, marketing and sales normally entrusted to a chief executive officer, and such a departure would not be consistent with reasonable expectations. Before the present impasse, the parties reasonably expected such authority to be exercised by Mr Struthmann, as the group’s chief executive officer, and not by Mrs Struthmann and/or Ms Serediak.

ii. The nature of the business carried out by the Tetra group is focused on chemical production, mixture, sales and distribution on a national and international scale. In my view, one naturally and reasonably would expect that the operational decisions relating to such matters, (as opposed to the internal accounting and office systems created to support such activities), would be entrusted to someone knowledgeable about chemistry and markets for chemical products, who also has experience dealing with distributors and customers in that particular industry. Amongst the parties to this litigation, that person clearly is Mr Struthmann.

iii. There appears to be no dispute that, at least until the present dispute, the familial and personal relationship between the parties has been such that Mr Struthmann has always been the dominant, (and at times domineering and difficult), personality and decision maker. Until quite recently, it seems, neither Mrs Struthmann nor Ms Serediak have questioned or challenged his decisions, even in relation to significant matters such as implementation of the “estate freeze” arrangements. Until the present dispute, the accepted pattern of interaction accordingly created and reinforced a reasonable expectation that, as between the parties, Mr Struthmann would continue to be the primary decision maker.

iv. As far as past practice in relation to the Tetra group is concerned, it is not disputed that Mr Struthmann is the one who founded the business, and that his skills and business acumen primarily have been responsible for its successful and profitable growth. Based on the evidence before me, I think it fair and reasonable to conclude that, until the parties’ recent dispute, all concerned recognized and accepted that Mr Struthmann’s ongoing contributions to the group’s business operations have been and would continue to be vital to the continued existence and success of the various corporations. Based on past practice, that was the reasonable expectation of the parties.

v. In terms of steps the parties could have taken to protect themselves, I think it striking that none of them apparently thought it necessary to ensure the creation of shareholding arrangements, or some other corporate mechanism, that would formally confirm one side’s control over the other, or resolve an impasse such as the one the parties now face, and that the parties were content to let that situation evolve and continue against the acknowledged backdrop of Mr Struthmann retaining de facto control of the company, regardless of formal corporate titles. In my view, the natural inference is that all concerned thought there would be no need for such mechanisms because that status quo of Mr Struthmann having de facto control of the companies was acceptable, with no expectation that would change.

vi. Based on the evidence before me, this is not a case where there were or are any relevant express representations or agreements to indicate or reflect the parties’ reasonable expectations concerning control and ownership of the Tetra group in the event of a breakdown in the relationship between the parties.

vii. In terms of a fair resolution of the conflicting interests between the parties:

1. There was no evidence to contradict Mr Struthmann’s assertion that he really has made the founding and building the successful operations of the Tetra group his life’s work for approximately 38 years.

2. For all the reasons identified above, Mr Struthmann’s position within the Tetra group also is quite unique, and the implicit if not explicit suggestion that Mr Struthmann could find or recreate comparable employment at his advanced stage in life, if “banished” from the successful corporate operation he has created, seems entirely unrealistic.

3. Moreover, based on the history and circumstances outlined in the evidence before me, I have little doubt that, despite the arrangements made to involve his wife and daughter in the business operations, and provide his wife and children with ownership interests in the business for estate planning purposes, Mr Struthmann and his family members expected his role as CEO and de facto controller of the Tetra group to continue for the balance of his life.

4. In contrast, there is nothing in the evidence before me to suggest that, prior to the recent dispute and breakdown in relationships, Mrs Struthmann and Ms Serediak ever envisioned or expected that they would assume primary control over the operations of the Tetra group - at least while Mr Struthmann was still alive.

5. Moreover, compared to the difficulties Mr Struthmann would encounter in trying to find or build a professional position comparable to the one he currently enjoys, I think it likely that Mrs Struthmann and Ms Serediak would have a much easier time locating comparable accounting and office management roles elsewhere, if they were inclined to pursue them.

b. As between the parties, I think Mr Struthmann is demonstrably the best person to manage the Tetra group of companies. In that regard:

i. Ms Serediak and Mrs Struthmann attempt to minimize Mr Struthmann’s importance to the Tetra group; e.g., noting that their products “have existed for years now”, and that Mr Struthmann is a talented chemist who nevertheless can be “easily” replaced by the hiring of a new chemist. They similarly express confidence in their ability to manage the Tetra Group successfully without Mr Struthmann; e.g., by relying on their own experience, and by calling on further input and assistance from others. In that regard, reference is made to additional resources such as:

1. the replacement chemist Mrs Struthmann and Ms Serediak intend to hire;

2. Dan Lekavicius, the husband of Mrs Serediak’s sister Angela, who has been with the Tetra group for a year as a general manager;

3. Angela Lekavicius herself, who will soon be completing her MBA studies; and

4. Sean Dinn, (Ms Serediak’s former husband, who has continued to serve with the Tetra group as an operations manager for the past 15 years.

ii. However, in my view the evidence offered in support of such assertions is somewhat weak, and necessarily speculative. In that regard:

1. With no intended disrespect to Mrs Struthmann and Ms Serediak, who by all accounts have performed well in their internal accounting and officer managerial roles, nothing in their training or experience as mid-level managers seems likely to have equipped them to be knowledgeable about matters such as chemical manufacturing, marketing, sales and/or customer relations on a national and international level.

2. I agree, in particular, with Mr Struthmann’s assertion that activities such as operating a booth at trade fairs a number of years ago, and carrying out human resource functions, realistically does not equip Mrs Struthmann and/or Ms Serediak with the skills necessary to continue the successful overall management demonstrated by Mr Struthmann in relation to these particular companies and their somewhat complex national and international operations.

3. I think it striking that there really was no effort made to respond, in any meaningful way, to Mr Struthmann’s allegations that Mrs Struthmann and Ms Serediak have intervened in the management of the corporations by actions that are ill-advised, counterproductive, and reflect a superficial or inadequate knowledge of the Tetra group’s business operations.

iii. While there are suggestions that Mr Struthmann can be replaced effectively by an amalgam of various individuals, (i.e., with each individual stepping in to assume responsibility for a more limited subset of tasks previously performed by Mr Struthmann, along with all of his other duties), it seems to me that there is an obvious and substantial premium to Mr Struthmann’s decades of experience seamlessly fulfilling all of those roles, and his ability to master and deploy all of the skills and experience acquired in relation to those various roles interchangeably, without the need for delayed communication between various managers, and the corresponding possibility of misunderstandings and/or disagreements. In other words, this is a case where the whole of Mr Struthmann’s CEO role clearly seems to exceed the sum of its various parts. In that regard, there really was no evidence to contradict Mr Struthmann’s assertion that he is the only employee of the Tetra group who has the expertise to run all aspects of the companies’ operations. The corresponding reality is that Mr Struthmann himself accordingly is a very valuable asset of the Tetra group – as reflected in the “key person” insurance arrangements that remain in place for the corporations.¹⁷

iv. In my view, abruptly depriving the Tetra group of Mr Struthmann’s talents and experience, and attempting to fill the resulting void over time with a collection of individuals, stepping into divided aspects of Mr Struthmann’s formerly unified role, while lacking his experience and established personal contacts with sales personnel, distributors and customers, almost certainly would be detrimental to the continued success of the corporations – in turn jeopardizing the interests of the Tetra group’s employees and customers.

v. In stark contrast to the limited experience and speculative hopes of Mrs Struthmann and Ms Serediak, Mr Struthmann has long-standing and broad-based experience in owning and managing the Tetra group, and an established track record of success in that regard.

c. The suggestion that Mr Struthmann may be engaging in misogynistic or abusive behaviour towards Tetra group employees, or jeopardizing their safety, obviously remains a matter of serious concern. However, leaving Mr Struthmann in his current role does not abandon any such employees to such risks without protection. If anything, the material filed by Mrs Struthmann and Ms Serediak makes it abundantly clear that multiple known mechanisms are in place, through legislation such as Ontario’s Occupational Health and Safety Act, supra, and Human Rights Code, supra, to protect such employees. As noted above, any established misconduct by Mr Struthmann also exposes him, (and the companies in which his ownership will be increasing), to civil claims. Of course, the provisions and protections of the Criminal Code also extend to any assaultive or criminally negligent behaviour in a workplace.

52Having regard to all the circumstances of the case, I accordingly think it clear that the sensible resolution of the parties’ dispute, in accordance with the principles governing such determinations, is for Mr Struthmann to buy out the interests of Mrs Struthmann and Ms Serediak, and for him to retain control of the Tetra group’s business in their absence.

Conclusion

53For the reasons outlined above, an order shall go dismissing the application brought by Lois Struthmann and Tansy Serediak.

54For the reasons outlined above, another order shall go, in relation to the counter-application brought by Aloysius Struthmann senior, as follows:

a. Lois Struthmann and Tansy Serediak are ordered to sell, and Aloysius Struthmann Senior is ordered to buy, (at a time and fair market value negotiated and agreed upon by the parties, or as determined by this court upon further application to the court by any party), their shares in Tetra-Chem Industries Ltd., Tetra-Chem International Inc., and Tetra-Chem Retail Outlet Ltd.;

b. Lois Struthmann and Tansy Serediak are removed from their director, officer and employee positions in relation to each of the aforesaid companies, and shall co-operate in the execution of any documentation required to effect changes in banking or other signing authority in that regard;

c. Pending completion of the share sale and purchases ordered herein, (including full payment of all agreed or court-determined compensation in that regard), Lois and Tansy Serediak shall continue to receive their current remuneration and benefits from each of the three companies, (including but not limited to salary, bonus payments, dividends and benefits), at the same rate and frequency; and

d. Pending further order of the court, Lois Struthmann and Tansy Serediak shall provide, through the court-appointed monitor of the corporations, any business, accounting and bank records of the aforesaid corporations that Aloysius Struthmann senior may identify and request in writing, and/or execute and provide any requested authorizations and releases that may be required in that regard.

55For the sake of clarity, I emphasize that nothing in the aforesaid orders is intended to alter the existing court-ordered monitor arrangement in relation to the aforesaid companies, pending further order of the court.

Costs

56Because my decision was reserved, the parties were unable to make any submissions regarding costs, having regard to the substantive outcome of the application and counter-application.

57It is always preferable for parties to discuss and agree on cost resolutions acceptable to all concerned.

58However, if the parties are unable to reach an agreement on entitlement and/or quantum in relation to outstanding cost issues:

a. Mr Struthmann may serve and file written cost submissions, not to exceed five pages in length, (not including any bill of costs, settlement offers, authorities or other necessary attachments), within two weeks of the release of this decision;

b. Mrs Struthmann and Ms Serediak then may serve and file responding written cost submissions, also not to exceed five pages in length, (not including any necessary attachments similar to those described in the previous sub-paragraph), within two weeks of the time specified for delivery of Mr Struthmann’s written cost submissions; and

c. Mr Struthmann then may serve and file, within one week of receiving any responding cost submissions from Mrs Struthmann and Ms Serediak, reply cost submissions not exceeding two pages in length.

59If no written cost submissions are received within four weeks of the release of this decision, there shall be no costs awarded in relation to the application or counterapplication.

“Justice I.F. Leach”

Justice I.F. Leach

Date: February 4, 2020

• I acknowledge that there are similarities in wording between the provisions of [s.135(2)](https://www.canlii.org/en/on/laws/stat/so-1998-c-19/latest/so-1998-c-19.html) of the [Condominium Act](https://www.canlii.org/en/on/laws/stat/so-1998-c-19/latest/so-1998-c-19.html), 1998, S.O. 1998, c.19, and the provisions of [s.248(2)](https://www.canlii.org/en/on/laws/stat/rso-1990-c-b16/latest/rso-1990-c-b16.html) of the [OBCA](https://www.canlii.org/en/on/laws/stat/rso-1990-c-b16/latest/rso-1990-c-b16.html). Both deal with the availability of remedies to address situations of perceived oppression and unfair prejudice or disregard of interests addressed by each Act.

• However, in my view context is important, each Act obviously is focused on the protection of different interests, and it seems to me that the drawing of analogies between remedial outcomes directed in one context, and situations arising in the other, may very well be unsafe and inappropriate.

• To identify just a few of the many ways in which the dynamics involved in the two contexts may differ, in very significant ways: 

    o In many if not most situations, it seems to me that, compared to condominium corporations, (in which individual residential owners purchase units within a complex and organization created by others, and the focus of corporate affairs generally is limited to concerns relating to property maintenance and the preservation of harmony between residential neighbors), business corporations are, by their nature, likely to have histories, goals, operations and management structures that are quite varied, complex and specialized., if not unique. 

    o I find it difficult to imagine situations where the success or survival of a condominium corporation depends on continued ownership of a particular condominium unit by a particular individual. Like other residential properties, condominium units are created with a view to their inevitably being sold and passed on to successive owners and residents. In contrast, the profitability and survival of a business corporation may very well depend on the continued involvement of one or more specific individuals, whose personal contributions are vitally important and incapable of being easily replaced. This highlights the reality that reasonable expectations involved in the two contexts are likely to be markedly different.

    o Similarly, while the forced deprivation of someone’s home invariably should be regarded as a serious matter, it seems to me that someone being forced to sell a condominium unit in a residential complex he or she played no part in creating, especially in situations where a similar residential unit may be readily available elsewhere in the community, bears little comparison to the forced deprivation of shares and further involvement in a unique corporation the deprived person has founded and devoted a lifetime to building. Once again, the reasonable expectations of involved parties will be fundamentally different.

• For such reasons, I accordingly think it more appropriate, when determining the general principles to be applied to this dispute, to seek guidance from authorities which have focused on oppression remedies, (and court-ordered purchase and sale in particular), in the specific context of business corporation shareholder disputes. 

Footnotes

1. 1For the sake of completeness, I note that the fourth company is “Tetra-Chem (Toronto) Inc.”, which apparently has only one director and officer; i.e., Angela Lekavicius, another daughter of Mr and Mrs Struthmann. Its current shareholdings seem to be divided equally between the couple’s four children.
2. 2See, for example, Osborne v. Bucci, [1998] O.J. No. 3736 (Gen.Div.), at paragraph 4.
3. 3See Muscillo v. Bulk Transfer Systems Inc., 2009 38508 (ON SC), [2009] O.J. No. 3061 (S.C.J.), at paragraph 22.
4. 4See Clarfield v. Manley, [1993] O.J. No. 878 (Gen.Div.), at paragraph 41; Wittlin v. Bergman (1995), 1995 790 (ON CA), 25 O.R. (3d) 761 (C.A.), at paragraph 5; Muscillo v. Bulk Transfer Systems Inc., supra, at paragraph 22; and Balofsky v. Balofsky, [2018] O.J. No. 4070 (S.C.J.), at paragraphs 9, 67-68, 71 and 82.
5. 5See Koehnen, M., (2004), Oppression and Related Remedies, Toronto: Toronto Carswell, a p.356, and the many authorities cited therein.
6. 6In that regard, I note that such an approach was taken in Jansezian v. Holoyan, [1999] O.J. No. 4486 (C.A.), wherein Justice Molloy noted that, because the matter came before her by way of application rather than a trial, she was not in a position to resolve the majority of issues raised by the parties in their application material. In particular, without a trial, it was not possible to determine, on the conflicting record, which of the parties might bear primary responsibility for any oppressive or unfair conduct – although there seemed to be blame on both sides of the dispute. In the circumstances, and having regard to the reality that the parties were completely unable to cooperate in the continued operation of the business, Justice Molloy found it unnecessary to apportion blame in order to grant a remedy. The only realistic solutions were sale of the business and division of the resulting proceeds, (which neither party wanted), or for one party to buy out the other; i.e., the solution both sides wanted - although they could not agree on who should buy out whom. In the result, Justice Molloy proceeded to address and resolve the question of which side should buy out the other, without making any attempt to determine guilt or innocence in relation to the parties’ various allegations of misconduct.
7. 7See, for example: West v. Edson Packaging Machinery Ltd. (1993), 1993 5477 (ON SC), 16 O.R. (3d) 24 (Gen.Div.); and Metropolitan Toronto Condominium Corp. No. 965 v. Metropolitan Toronto Condominium Corp. (2014), 69 C.P.C. (7th) 152 (S.C.J.).
8. 8In the material filed before me, and during the course of oral submissions, there was a suggestion, advanced with evident reluctance and tepidity, that Mr Struthmann’s continued involvement in corporate operations as an employee would be tolerated by Mrs Struthmann and Ms Serediak, if it was accompanied by restrictions preventing Mr Struthmann from having any decision making authority, physical attendance at corporate offices, or interactions with other corporate employees – and female employees in particular. In my view, however, such a scenario would be unrealistic and unworkable, and essentially reduce Mr Struthmann to a salaried but ignored and effectively sidelined employee; i.e., an employee in name only.
9. 9Despite the submissions of counsel for Mrs Struthmann and Ms Serediak, I am not persuaded that cases dealing with court-ordered sale and purchase of condominium units provide any relevant or authoritative guidance as to how the court should approach mandated sale and purchase of shares in a corporation. Without limiting the generality of the foregoing:
10. 10Again, see Koehnen, supra, at p.356, and the numerous authorities cited therein.
11. 11See BCE Inc. v. 1976 Debentureholders, 2008 SCC 69, [2008] 3 S.C.R. 560, at paragraph 62. See also 82009 Ontario Inc. v. Harold E. Ballard Ltd., [1991] O.J. No. 266 (Gen.Div.), affirmed [1991] O.J. No. 1082 (Div.Ct.), at paragraph 129, emphasizing that the expectations to be considered are not those on a stakeholder’s subjective “wish list”, but the expectations which were considered or ought to have been considered as part of the “compact” of stakeholders prior to their dispute.
12. 12See BCE Inc. v. 1976 Debentureholders, supra, at paragraphs 71-72 and 82.
13. 13Again, see Koehnen, supra, at p.356, and the numerous authorities cited therein.
14. 14See Naneff v. Con-Crete Holdings Ltd., 1995 959 (ON CA), [1995] O.J. No. 1377 (C.A.), at paragraph 37.
15. 15See, for example: Naneff v. Con-Crete Holdings Ltd., supra, at paragraphs 9-10 and 33; and Lemoine v. Lecours (2017), 73 B.L.R. (5th) 302 (Ont.S.C.J.), at paragraph 59, affirmed (2017) 77 B.L.R. (5th) 67 (Ont.Div.Ct.).
16. 16See Koehnen, supra, at pp.356-357.
17. 17The Tetra Group currently holds $1.5 million in “key person” insurance on Mr Struthmann’s life, $250,000 on Mrs Struthmann’s life, and no “key person” insurance on Ms Serediak’s life. Although it was suggested that the arrangements do not necessarily reflect realities, insofar as Mr Struthmann was the one who put such arrangements in place, I think it noteworthy that changing such arrangements obviously has not been something Mrs Struthmann and Ms Serediak have thought necessary to address, in their professed efforts to safeguard the interests of the Tetra group.