Fuentes v. Camino Construction Inc. et al.

[Indexed as: Fuentes v. Camino Construction Inc.]

Ontario Reports

Ontario Superior Court of Justice

Dietrich J.

April 22, 2021

155 O.R. (3d) 345 | 2021 ONSC 2967

Case Summary

Corporations — Oppression — Reasonable expectations — Remedies — Husband and wife founding company to operate concrete forming business — Personal relationship deteriorating and husband forming new company to operate the same business — Wife given no role or ownership in new company — Husband's conduct was oppressive, unfairly disregarded wife's interests, and breached his fiduciary duties to her — Wife had a reasonable expectation that her half interest would be protected and that she would continue to benefit from it — Appropriate remedy was buy-out of wife's shares at fair market value as determined by valuator and compensation for lost income.

In 2002, a married couple founded a company whose business was concrete forming. The wife ran the office for the company out of the couple's home. She took calls, fielded invitations to tender, drafted and submitted bids for jobs, ordered equipment and supplies, delivered equipment to job sites, managed the payroll, and did the bookkeeping. The husband obtained requests for proposals, determined bid pricing, secured contracts, managed construction projects, and worked on the job sites. Over time, the marriage faltered. In 2017, the husband incorporated a new concrete forming company. The new company used the same logo, trades, subtrades, contractors, Workplace Safety and Insurance Board [page346] consultant, suppliers, business methods and techniques as the old company. It also employed many of the same workers, one of whom acquired 35 per cent of the common shares of the new company. The wife was given no role or ownership in the new company. She felt that the husband had taken deliberate steps to exclude her from the family business. The husband did not deny that his conduct toward the wife was oppressive but asserted that it was the only means by which he could save and continue the business because she had stopped communicating with him. He acknowledged that she was entitled to a half share in the original company but contended that it was impossible for her to be a shareholder in the new company because they did not trust each other and could no longer work together. The wife brought an application against both companies, her husband, and the employee shareholder for a declaration that the business of both companies was conducted in an oppressive manner that was unfairly prejudicial to her or unfairly disregarded her interests, and that the husband breached his fiduciary duty and duty of good faith to her.

Held, the application should be allowed.

The husband's conduct was oppressive to the wife, it unfairly disregarded her interests, and constituted a breach of his fiduciary duties. The couple worked together as equal partners and contributed to the growth of the family business for 15 years. That close relationship between family members and shareholders created fiduciary obligations that were breached when the husband created the new company and unilaterally offered shares in it to others. He opened a number of new corporate bank accounts over which he alone had control, and compensated himself from those accounts with no accounting to the wife. The wife had a reasonable expectation that her half interest in the business that she and her husband had built together would be protected by the husband and that she would continue to benefit from it. She also had a reasonable expectation that she would earn income from the business for her efforts and contributions.

The appropriate remedy for the oppressive conduct and breach of trust was a buy-out of the wife's half interest in the family business, formerly operated by the original company and currently operated under its new name. The wife was also to be compensated for lost income as a consequence of having been stripped of her duties without notice, in a lump sum equivalent to 14 months' salary. The husband or the new company, or both, were required to pay fair market value as determined by a valuator. The original company was the one to be valued, with an appropriate valuation date of December 31, 2015, being a date prior to any oppressive conduct. The husband was entitled to continue the business of the new company without any involvement by the wife and with the wife having no share in its profits.

Redekop v. Robco Construction Ltd., 1978 251 (BC SC), [1978] B.C.J. No. 46, 89 D.L.R. (3d) 507, 7 B.C.L.R. 268, 5 B.L.R. 58 (S.C.); Chiu v. Universal Water Technology Inc., 2004 8957 (ON SC), [2004] O.J. No. 2209, 33 C.C.E.L. (3d) 91, [2004] O.T.C. 445, 45 B.L.R. (3d) 313 (S.C.J.); 400280 Alberta Ltd. v. Franko's Heating & Air Conditioning (1992) Ltd., 1995 9014 (AB KB), [1995] A.J. No. 121, [1995] 4 W.W.R. 558, 26 Alta. L.R. (3d) 421, 166 A.R. 241, 22 B.L.R. (2d) 50, consd

Other cases referred to

Naneff v. Con-Crete Holdings Ltd. (1995), 1995 959 (ON CA), 23 O.R. (3d) 481, [1995] O.J. No. 1377, 85 O.A.C. 29, 23 B.L.R. (2d) 286 (C.A.)

Statutes referred to

Business Corporations Act, R.S.O. 1990, c. B.16 [as am.], s. 248 [as am.], (2) [page347]

APPLICATION for an oppression remedy.

Robert H. Waddell, for applicant.

Brian Jenkins, for respondents Camino Construction 2016 Incorporated, Juan Fuentes (aka John Fuentes) and Marat Pan.

DIETRICH J.: —

Overview

[1] This matter involves a relationship breakdown between two shareholders who are also spouses of one another. Cristina Fuentes (the "applicant") and the respondent Juan Fuentes ("Mr. Fuentes") have been husband and wife for over 20 years. In 2002, they founded Camino Construction Inc. ("Camino"), a company whose business was concrete forming. They worked in the business together.

[2] In March 2017, Mr. Fuentes incorporated a new concrete forming company, known as Camino Construction 2016 Incorporated ("2016 Camino"). 2016 Camino employed many of the employees who had worked at Camino, used the same logo, trades, subtrades, contractors, Workplace Safety and Insurance Board consultant, suppliers, business methods, and techniques as Camino. It did work for the same customers as Camino had done work. The applicant was given no role or ownership in 2016 Camino.

[3] The applicant brings this application seeking a declaration that any one or more of the respondents conducted the business of Camino and 2016 Camino in a manner that was oppressive or unfairly prejudicial to or unfairly disregarded her interests, and that Mr. Fuentes breached his fiduciary duty as a representative of both Camino and 2016 Camino, and betrayed his statutory fiduciary obligation and duty of good faith to her. She also seeks other relief as a result of this alleged oppressive conduct.

[4] For the reasons that follow, I find that Mr. Fuentes conducted the business of Camino and 2016 Camino in a manner that was oppressive or unfairly prejudicial to or unfairly disregarded the applicant's interests. In so doing, he breached his fiduciary duty to Camino and his duty of good faith to her. Accordingly, the applicant is entitled to one-half of the value of Camino, prior to the oppressive conduct, and to compensation for lost income.

Factual Background

[5] Each of Camino and 2016 Camino is a corporation for the purposes of the Ontario Business Corporations Act, R.S.O. 1990, c. B.16 (the "OBCA"). [page348]

[6] Each of the applicant and Mr. Fuentes served as a director and officer of Camino, and they owned the shares of Camino equally. They did not enter into a shareholders' agreement.

[7] The applicant ran the office for Camino out of their family home in the City of Toronto. She took calls, fielded invitations to tender, drafted and submitted bids for jobs, ordered equipment and supplies, delivered equipment to the job sites, managed the payroll and workers' compensation issues, handled the accounts receivable and payable, and did the bookkeeping, among other tasks. Mr. Fuentes obtained requests for proposals, determined bid pricing, secured contracts, managed construction projects (including budgeting and labour) and worked on the job sites.

[8] Camino was successful and the shareholders shared the profits.

[9] Over time, the marriage between the applicant and Mr. Fuentes faltered and the business relationship soon followed. Each party blames the other for the breakdown in the communication between them.

[10] The respondent Marat Pan worked for Camino as an employee and independent contractor for about five years. Soon after 2016 Camino was formed, he paid US$1 million for 35 per cent of the common shares of 2016 Camino pursuant to a shareholders' agreement, dated August 9, 2017, between Mr. Fuentes and him.

[11] Vladimir Tyan purchased a 10 per cent share of 2016 Camino pursuant to a shareholders' agreement dated September 18, 2017.

Positions of the Parties

[12] The applicant submits that Mr. Fuentes conducted the business of Camino and 2016 Camino in an oppressive manner that was unfairly prejudicial to her or unfairly disregarded her interests, and that he breached his fiduciary duties in the following ways:

-- On March 9, 2017, using Camino's address without the applicant's knowledge, Mr. Fuentes opened a bank account at the CIBC (the "2016 CIBC account") in the name of Camino, over which he had sole control and signing authority.

-- On April 26, 2017, Mr. Fuentes depleted the only bank account Camino had prior to him opening the 2016 CIBC account by transferring its balance of $89,943.07 to the 2016 CIBC account. [page349]

-- Mr. Fuentes opened or closed a number of bank accounts for Camino and 2016 Camino to hide from the applicant business revenue, profits, and the sale of shares in 2016 Camino.

-- Mr. Fuentes wrongfully solicited work for 2016 Camino from Camino, embezzled funds from Camino, stole business opportunities from Camino by collecting funds and payments unknown to the applicant from various trades and contractors, owing to Camino, which he deposited into covert accounts for Camino or 2016 Camino that he had opened.

-- Mr. Fuentes billed Camino for products and services, and moved equipment from Camino's construction and storage yard to job sites operated by 2016 Camino at the expense of Camino to wrongfully divert revenue from Camino to 2016 Camino.

-- 2016 Camino took on projects for which invoices for transport and other related services for these projects were billed to Camino.

-- Mr. Pan and Mr. Fuentes opened a Royal Bank of Canada bank account into which 2016 Camino revenue was deposited.

-- Mr. Fuentes assumed authority for the Camino website and made himself the contact person with the result that the applicant was no longer the contact person for website and e-mail services.

-- 2016 Camino implemented the same business techniques and quotation and estimate initiatives as Camino.

-- Mr. Pan and Mr. Fuentes took deliberate steps to ensure that the applicant did not receive any wages or financial benefit from 2016 Camino.

[13] The applicant seeks a broad range of remedies for the alleged oppressive conduct, including that she become an equal shareholder in 2016 Camino, and that she receive compensation for lost income.

[14] Mr. Fuentes claims that the applicant deliberately attempted to sabotage the family business. He asserts that she refused to provide financial information directly related to managing the construction projects, and that he did not have the computer skills to access that information himself. He further asserts that as a result of her failure to provide the information, a legal action was brought against Camino. He also asserts that the applicant unilaterally cancelled a lucrative contract, withdrew hundreds of thousands of dollars from the Camino bank account, [page350] and interfered with business operations by terminating employees and failing to pay them on a timely basis.

[15] Mr. Fuentes does not deny that he incorporated 2016 Camino to continue the business that had been done by Camino.

[16] Mr. Fuentes also does not deny that his conduct toward the applicant was oppressive. He asserts that the action he took was the only means by which he could save and continue the business because the applicant had ceased communicating with him. He acknowledges that the applicant is entitled to her one-half share of Camino, but contends that it is not possible for them to be shareholders in 2016 Camino because they do not trust each other and can no longer work together.

Evidence

The applicant

[17] The applicant testified that Mr. Fuentes took deliberate steps to exclude her from the family business by transferring the business from Camino, in which she was an officer, director and equal shareholder, to 2016 Camino, in which she had no role or shareholding.

[18] The precise timing of the transition of the business by Mr. Fuentes away from Camino and to 2016 Camino is unclear. The applicant testified that one of Camino's employees, Sergei Dobriak, admitted to her that Mr. Fuentes had asked him to bid on projects, which Camino had been invited to bid on, through Mr. Dobriak's own company, MEST Inc. The applicant testified that Mr. Dobriak made this admission one day when she went to a job site trailer and found him there at a computer with invitations that were addressed to Camino. According to the applicant's testimony, Mr. Dobriak told her that despite the fact that the invitations were addressed to Camino, Mr. Fuentes had asked Mr. Dobriak to price the jobs and provide a quotation for MEST Inc. to do the work. The applicant could not recall precisely when she had had this discussion with Mr. Dobriak, but believed that it took place in late 2016.

[19] The applicant also testified that Mr. Fuentes wanted her to train an employee, Edgar, to become familiar with all aspects of the office work that the applicant did. She believed that Mr. Fuentes made this request so he could open a new business without her. The applicant testified that Edgar received some training, but left Camino before completing that training.

[20] The applicant also testified that Mr. Fuentes took a trip with Mr. Pan to explore possible business opportunities in Mr. Pan's home country, Kazakhstan. The applicant saw this as [page351] a possible business opportunity from which she might be excluded, but admitted that there is no evidence that Mr. Fuentes pursued any business opportunity in Kazakhstan.

[21] The applicant also testified that she had a meeting with Mr. Pan and her office assistant Joyce Liu around April 2016 after Mr. Fuentes had told her that he had told the employees to find other work. Her evidence was that Mr. Pan told the applicant that he would not discuss the matter while he was still working for Mr. Fuentes.

[22] Mr. Fuentes went to Bolivia for a number of months in late 2016 and early 2017. The applicant testified that, during his absence, she continued to manage the business and attend at the job sites even though there was not a lot of activity at that time. In her view, Mr. Fuentes had abandoned Camino around this time.

Mr. Fuentes

[23] Mr. Fuentes testified that the marriage was in serious trouble by June of 2016. At that time, according to his testimony, the applicant was no longer speaking to him and she had lost control of the Camino office. She was no longer paying the employees on time. He testified that it was around that time that he went to the CIBC and withdrew funds so that he could pay the employees.

[24] Mr. Fuentes also testified that the payment of the employees was a constant issue between the applicant and him. He would want to incentivize them by paying pay them more, while the applicant preferred to conform with all of the rules relating to paying unionized employees.

[25] Mr. Fuentes also testified that he and the applicant could not agree on which projects to price, and that she was interfering with the bidding process. He was concerned that there would not be enough work to support themselves and their son if they did not bid on projects.

[26] Mr. Fuentes testified that around mid-2016, he left the matrimonial home and lived with his brother for three months. In December 2016, he left for Bolivia for three months to spend time with family and to contemplate the future.

Bodhan (Bob) Nebeluk

[27] Bodhan (Bob) Nebeluk testified that he was an estimator who was hired by Camino, both as a general manager and to provide estimates for pricing projects on which Camino might bid. He testified that Camino was the successful bidder on a $10 million project in downtown Toronto in 2009. There were problems with [page352] the project, which resulted in Camino's termination. The termination was followed by a lawsuit that ended well for Mr. Fuentes, but not until 2012. Mr. Nebeluk testified that this termination and lawsuit were devastating for the applicant and that she perceived that there was a conspiracy against Mr. Fuentes. Mr. Nebeluk testified that, around this time, the applicant had a nervous breakdown, which made his job as an estimator much more difficult because she could not provide the back-up support that she had been providing previously. Mr. Nebeluk testified that, in 2016, the applicant told him not to price any more projects, and that he had tried to explain to her, as a friend, that her conduct was compromising Camino's success. He told her that by not providing information, back charges were accumulating on projects.

[28] Mr. Nebeluk testified that he had also provided the applicant with an estimate on a project to which she was not responding and that the deadline was imminent. Within an hour of the deadline for submitting the bid, the applicant told him not to submit it. Mr. Nebeluk testified that he then sent the bid to Mr. Fuentes, who submitted it. The applicant then terminated Mr. Nebeluk with two weeks' severance notwithstanding he had been working for Camino for seven years. He testified that he then successfully sued for greater severance, but commented that around that time the applicant had "willy-nilly" terminated nine employees.

Law

[29] Section 248 of the OBCA provides that if the court is satisfied that the business affairs of a corporation are conducted in a manner that is oppressive or unfairly prejudicial to or that unfairly disregards the interests of any shareholder, the court may make an order to rectify the matters complained of. In particular, the court may make an order winding up the corporation, or an order compensating an aggrieved person, among a variety of other remedies.

[30] When determining whether there has been oppressive conduct, the court must determine what the reasonable expectations of the aggrieved person were according to the arrangements which existed between the principals: Naneff v. Con-Crete Holdings Ltd. (1995), 1995 959 (ON CA), 23 O.R. (3d) 481, [1995] O.J. No. 1377 (C.A.), at para. 19.

Analysis

[31] Based on the evidence, I am satisfied that Mr. Fuentes formed 2016 Camino with a view to excluding the applicant from [page353] having any role, whether as director, officer, employee or shareholder, in what was the family business. Once he formed 2016 Camino, the applicant no longer received any income from the business and had no part in its management. This conduct was oppressive to the applicant, it unfairly disregarded her interests, and it constituted a breach of Mr. Fuentes' fiduciary duties.

Oppression

[32] The applicant and Mr. Fuentes worked together as 50/50 partners and they both contributed to the growth of Camino, the family business, between 2002 and 2016. The courts have held that a close relationship between family members who are shareholders creates fiduciary obligations. The conduct of Mr. Fuentes in creating 2016 Camino to take over the business of Camino and to unilaterally offer shares in the family business to Mr. Pan and to Mr. Tyan constitutes a breach of that fiduciary duty.

[33] Mr. Fuentes opened a number of new corporate bank accounts for both Camino and 2016 Camino over which he alone had control, and he compensated himself from these accounts with no accounting to the applicant. As was found in Redekop v. Robco Construction Ltd., 1978 251 (BC SC), [1978] B.C.J. No. 46, 89 D.L.R. (3d) 507 (S.C.), oppression occurs if the director and majority shareholder forms a new body corporate for a major customer and becomes actively involved in the affairs of the new body corporate to serve his own interests, and where he improperly uses his position as the controlling force in the corporation. Although Mr. Fuentes was not the majority shareholder, he nonetheless seized control of Camino's bank account, assets and customers, and formed a new body corporate for the purposes of taking on the work that Camino had been doing.

[34] The establishment of a competing business by a director and controlling shareholder of a corporation, leading to the financial ruin of that corporation, and the transfer, for nil consideration, of its inventory, customer list and business premises to the competing business is oppressive of the other shareholder: Chiu v. Universal Water Technology Inc., 2004 8957 (ON SC), [2004] O.J. No. 2209, 33 C.C.E.L. (3d) 91 (S.C.J.).

[35] In 400280 Alberta Ltd. v. Franko's Heating & Air Conditioning (1992) Ltd., 1995 9014 (AB KB), [1995] A.J. No. 121, 26 Alta. L.R. (3d) 421 (Q.B.), the court held that the diversion of work from the joint venture corporation to the secret personal corporation constituted a breach of fiduciary duty and oppression. [page354]

Reasonable expectation

[36] The applicant testified that she had a reasonable expectation that she would be an equal partner in 2016 Camino, or any successor company to the family business operated by Camino. Her evidence was that Mr. Fuentes misappropriated funds belonging to Camino and business opportunities that would have been available to Camino had Mr. Fuentes not taken advantage of them through 2016 Camino. As examples, the applicant explained how, when Mr. Fuentes returned from Bolivia, he withdrew all of the funds from Camino's only bank account and deposited them into another bank account unknown to her. He also collected a cheque for $74,590.32 from a general contractor relating to one of Camino's projects, referred to as "BECC", and deposited that cheque into a bank account unknown to her. The applicant testified that Mr. Fuentes had opened a number of bank accounts at a number of different banks, in the names of both Camino and 2016 Camino. Mr. Fuentes did not offer a good explanation for this conduct. I am prepared to infer that he created a variety of accounts at a variety of banks with a view to hiding funds and making it more difficult for the applicant to locate those funds.

[37] The applicant testified that she did not expect that Mr. Fuentes would direct business opportunities available to the family business operated by Camino to a successor corporation, 2016 Camino, and intentionally try to shed her, his 50 per cent partner. As a specific example, the applicant cited a $1,281,054 bid that Camino made to Ashbridges Bay Water Treatment Plant in 2016, the contract for which was ultimately signed by 2016 Camino, at a lower bid price, and the work in respect of that lower bid was ultimately carried out by 2016 Camino in 2017.

[38] The applicant also testified that it was not within her reasonable expectation that Mr. Fuentes would, without her knowledge, first, sell a 25 per cent interest in the family business to Mr. Pan within months of incorporating 2016 Camino, and then months later, sell an additional 10 per cent interest in the business to Mr. Tyan.

[39] The applicant further testified that she never expected that 2016 Camino, founded by her business partner, would assume control over everything that she and Mr. Fuentes had built as a team, including all of Camino's assets and goodwill. She did not expect that it would carry on a concrete forming business offering identical products and services, using the same logo and a very similar name, and the same suppliers and contractors, that it would hire many of the same employees, and that it would participate in the same bidding and employ the same [page355] office administration processes. The applicant testified that she did not expect that Mr. Fuentes would draw a similar weekly income from 2016 Camino as he had from Camino, while she would receive no income from the family business, now carried on by 2016 Camino.

[40] I find that the applicant had a reasonable expectation that her 50 per cent interest in the business that she and Mr. Fuentes had built together would be protected by Mr. Fuentes and that she would continue to benefit from it. I find that the applicant also had a reasonable expectation that she would earn income from the business for her efforts and contributions.

Remedy

[41] In addition to seeking a declaration of oppressive conduct by Mr. Fuentes and 2016 Camino, and other relief, the applicant seeks an order directing the respondents to assign to her 50 per cent of the shares in 2016 Camino, or, alternatively, to pay her the fair market value of those shares in a manner as determined by this court.

[42] Section 248(2) of the OBCA permits the court, where it has found that the business or affairs of the corporation have been carried on in a manner that is oppressive or unfairly disregards the interests of a shareholder, to make an order to rectify the matters complained of. The court is given a broad discretion in this regard.

[43] Mr. Fuentes does not dispute that there are many similarities between Camino and 2016 Camino. He submits that he was required to act to preserve the value in Camino at a time when the applicant was no longer engaged in running the business and was interfering with the bidding process, the employment of employees, and the timely payment of their wages. He submits that he had no intention to harm her; rather, he was trying to save the family business and to provide for their son.

[44] Mr. Fuentes does not dispute that the applicant is entitled to receive her one-half of the company. He submits that she should be entitled to receive one-half of the value of Camino or one-half of the value of 2016 Camino, and that she should decide which of the two options she prefers so that one or the other of the companies may be valued. He further submits that she should not be entitled to a valuation of both companies.

[45] Given the testimony of each of the applicant and Mr. Fuentes, it is apparent that there is a lack of trust between them. Each of them conceded that they can no longer work together. It is not realistic to think that the applicant can become a 50 per cent shareholder in 2016 Camino. As it stands, the lawyer [page356] retained to deal with a contentious matter relating to a Camino project cannot get instructions from them. They are currently engaged in family law proceedings that will ultimately result in an equalization of their net family property. A remedy for Mr. Fuentes' oppressive conduct and breach of trust relating to the family business, practically speaking, cannot include a role for the applicant in 2016 Camino.

[46] In my view, the appropriate remedy for the oppressive conduct and breach of trust is a buy-out of the applicant's one-half interest in the family business, formerly operated by Camino, and now being operated as 2016 Camino. In addition, the applicant should receive compensation for lost income as a consequence of having been stripped of her duties at Camino without notice.

[47] The applicant submits that if the court requires a valuation of 2016 Camino, the valuation formula used in the 2016 Camino shareholder agreement made in 2017 should be applied. That is, the valuation should be based on a finding that a 35 per cent interest in 2016 Camino has a value of US$1,220,000, being the amount Mr. Pan paid to acquire that 35 per cent interest. Further, the applicant submits that the value so calculated should be "topped up" to include any increase in revenue in 2016 Camino since its incorporation. She further asserts that she should be paid an equivalent annual salary to the salary that Mr. Fuentes was drawing from 2016 Camino in 2017 to 2018. According to the corporate records in evidence, Mr. Fuentes' salary was approximately $145,000 for ten months of work, or approximately $174,000 annually.

[48] The applicant further submits that a valuation of Camino at the end of 2017 would be unfair because all of its assets and goodwill had by then been transferred to 2016 Camino.

[49] I find that a fair and appropriate remedy for the oppressive conduct and breach of fiduciary duty is one in which the applicant is put in the position of a 50 per cent shareholder of the family business, Camino, prior to her interest in it having been misappropriated by Mr. Fuentes and transferred to 2016 Camino.

[50] Accordingly, Mr. Fuentes or 2016 Camino, or both, shall be required to pay fair market value for the applicant's 50 per cent share in the family business, and to pay the applicant compensation for her loss of income. Mr. Fuentes is entitled to continue the business in 2016 Camino without any involvement by the applicant. As between them, he is the one with the interest and the skills to successfully carry on the concrete forming business. The applicant testified that she and Mr. Fuentes could no longer work [page357] together in the business. Accordingly, it is not appropriate that she share in the profits of 2016 Camino, if any, to which she did not contribute and, by her own admission, to which she could not have contributed.

[51] In my view, Camino, the company that the applicant and Mr. Fuentes built together, is the company to be valued. The valuation of the applicant's 50 per cent share in Camino is not a straightforward exercise owing to the state of the accounting records, the timing of the alleged oppressive conduct, and at least one overlapping bid/project, among other issues.

[52] The valuation date should be chosen based on the particular facts of this case. I agree with the applicant that a valuation of Camino as of December 31, 2017 would not be fair, because it had been essentially gutted at that time.

[53] In my view, the appropriate valuation date for Camino is December 31, 2015, being a date prior to any evidence of oppressive conduct. The applicant should be well-positioned to contribute information with respect to the value of Camino at that time. She would not likely be in a good position to provide information relevant to the current value of 2016 Camino. However, there may well be information that is only available from 2016 Camino, the successor company, to properly value Camino as of December 31, 2015. To diminish the need for further court attendances, the valuator shall be given access to such information as he or she deems relevant, including information related to 2016 Camino that the valuator deems relevant to the task of valuing Camino as of December 31, 2015. Projects bid on by Camino and carried out by 2016 Camino, projects completed by Camino for which 2016 Camino received payment, and 2016 Camino's profit profile are a few examples of information that could be relevant to the valuator. If the valuator considers it appropriate or necessary to the valuation of Camino, he or she shall be permitted to test projected trends seen in Camino in 2016 Camino.

[54] Each of Mr. Fuentes and the applicant shall co-operate in the valuation process and provide to the valuator all relevant corporate and accounting records in his or her possession.

[55] The valuator to be retained to undertake the valuation of Camino shall be jointly selected by the applicant and Mr. Fuentes. If they cannot agree on a valuator within 14 days of these reasons, the valuator shall be selected by the applicant no later than May 28, 2021. The fees of the valuator shall be paid by 2016 Camino upfront on an interim basis. If there is a dispute regarding the valuation, the responsibility for the payment of [page358] the valuator's fees may be reconsidered by the judge who determines the valuation issue.

[56] To compensate the applicant for lost employment income following the transfer of the business from Camino to 2016 Camino, 2016 Camino shall pay the applicant a lump sum payment that is equivalent to 14 months' salary, based on an average of the annual salary paid to her by Camino in each of 2015 and 2016. If the applicant and Mr. Fuentes do not agree on the amount paid to the applicant as salary in those years, the valuator shall review the financial statements for Camino, as well as the relevant tax returns of the applicant, to determine what portion of the total compensation paid to the applicant by Camino in those years, if less than the whole, is properly allocated to the applicant's salary.

[57] If there is no dispute between the parties regarding the valuation of Camino or the determination of the applicant's compensation for loss of income, the parties should be able to finally resolve the amounts owing by Mr. Fuentes or 2016 Camino, or both, to the applicant resulting from this application in the context of their family law proceedings. Further involvement of a judge on the Commercial List should not then be necessary.

[58] Should a dispute arise with regard to either or both of the valuation of Camino and the determination of the applicant's compensation, the parties may arrange to attend at a 9:30 a.m. chambers appointment to schedule a case conference before me.

Disposition

[59] For the foregoing reasons, I declare that Mr. Fuentes and 2016 Camino have engaged in oppressive conduct that unfairly disregarded the interests of the applicant and breached their fiduciary duties. One or both of Mr. Fuentes and 2016 Camino is therefore required to purchase the applicant's 50 per cent interest in Camino, at the fair market value, as determined by the valuator, and to pay the applicant a lump sum payment of compensation for loss of income equivalent to 14 months' salary.

Costs

[60] If the parties are unable to resolve the matter of costs, the applicant may make written submissions (not exceeding three pages, excluding a costs outline and offers to settle, if any) within 14 days. The respondents may make responding similar written submissions within 14 days thereafter. If so advised, the applicant may make brief reply submissions, not exceeding one page, within five days thereafter.

Application allowed.

End of Document