COURT FILE NO.: CV-19-00000639-0000

DATE: 2022 01 10

ONTARIO

SUPERIOR COURT OF JUSTICE

B E T W E E N:

ANGELIKI CORMPILAS and ANGELIKI CORMPILAS AS AN ESTATE TRUSTEEE FOR THE ESTATE OF BARBARA IOANNIDIS

T. Evangelidis for the Plaintiffs

Plaintiffs

• and -

1490565 ONTARIO LIMITED, 1490408 ONTARIO LIMITED, 762519 ONTARIO LIMITED, MASTER STEAKS LIMITED, 2009270 ONTARIO LTD., BILL IOANNIDIS, JOHN IOANNIDIS and PETER IOANNIDIS

C. Tonks for the Defendants

Defendants

HEARD: September 22 and 23, 2021

JUDGMENT

Ricchetti J.

THE MOTIONS. 6

THE PLAINTIFFS’ CLAIMS. 7

OVERVIEW... 9

ISSUES. 13

FACTS AND DISCUSSION.. 13

Master Steaks. 13

Master Steaks Holdco. 14

Truckers Haven. 15

Plaza. 15

Truckers Haven Holdco. 16

Barbara’s Estate. 17

Gregory’s Estate. 17

The Events. 18

The Estate Freezes and Mr. Dimakos. 18

Mr. Stamatopoulos. 24

The two Estate Freezes from 2002 to 2012. 25

Barbara’s Death (May 2, 2012)- the Estate Freezes revealed. 26

The 2012/2013 investigation of the Master Steaks estate freeze. 27

Accepting the Master Steaks estate freeze in 2013. 33

Angie Acknowledges the Master Steaks Estate Freeze. 35

Angie’s responsibility for corporate and accounting. 35

Removal of Gregory as Director 37

The 2016 Redemption of Angie’s Preference Shares in Master Steaks Holdco. 37

Dispute over Distribution of the Trucker’s Haven’s VTB proceeds. 39

Gregory’s Death (November 4, 2017) 43

The November 16, 2017 Truckers Haven Directors Meeting. 43

Angie Challenges Gregory’s Will 44

January 16, 2018 Shareholders Meeting. 44

The Continuing VTB distribution dispute. 45

Angie’s Specific Disputed Truckers Haven’s Loans. 45

The Construction Loan. 45

Real Estate Commission. 47

The Master Steaks Loan. 48

Barbara and Gregory’s Loans. 49

Conclusion. 49

Truckers Haven Holdco Dividends post 2017. 50

Declared and Unpaid Dividends. 51

ANALYSIS. 52

Preliminary Issues. 52

Allegations against Mr. Mark Rush. 52

Angie’s Conflict 54

Summary Judgment Test 55

Conclusion on Summary Judgment 58

Conclusion on Partial Summary Judgment 61

Credibility. 62

Mr. Dimakos. 63

Mr. Stamatopoulos. 63

Peter Ioannidis. 65

Angeliki Cormpilas. 65

I. Master Steaks Estate Freeze. 75

The Estate Freeze. 75

Regularizing the Master Steaks Estate Freeze. 78

The Alleged Misrepresentations. 81

The Validity of the Master Steaks Estate Freeze. 88

Redemption of Angie’s Master Steaks Holdco Preference Shares. 89

Lack of Dividends from Master Steaks’ Business. 92

Conclusion Regarding Angie’s Master Steaks’ claims. 94

II. Truckers Haven’s Distribution of VTB.. 94

The Positions of the Parties. 95

The Issues. 96

Overview.. 96

A Reasonable Business Decision. 98

Angie’s Issues with the VTB distribution. 100

(a) The Master Steaks Loans. 103

(b) The Barbara and Gregory Loans. 110

(c) Lack of director resolutions declaring dividends. 116

(d) No declaration of dividends within four months of the Y/E.. 118

(e) Unpaid Real Estate Commissions. 120

(f) Unpaid interest on the $350,000 mortgage. 124

(g) Unpaid Construction Loan. 125

(h) Unpaid Interest on the VTB distribution. 127

(i) Payment of the Additional Probate Tax for Barbara’s estate. 129

(j) Failed to obtain her consent to the distribution. 129

Unpaid 2017 Dividends. 130

Audit to confirm the VTB loans. 130

Conclusion on VTB Distribution. 132

III. Oppression/Unfair Prejudice/Unfair Disregard. 133

Corporate Changes. 137

The Directors’ Approval of the 2017 Financial Statements. 140

Approving the VTB monies payout 141

Other Allegations of Oppression. 142

i) Master Steak’s business. 142

ii) VTB Distribution. 143

iii) Lack of Dividends from Truckers Haven Holdco. 143

iv) Refusal to call an annual general meeting. 147

v) Refusal to appoint an Auditor 148

vi) Refusal to produce bank statements for Master Steaks. 151

vii) Removal as director of Trucker’s Haven companies. 151

Conclusion on Oppression. 152

Other Relief Claimed. 153

i) Inspector and Investigation (s. 161 OBCA) 153

Security Holder 155

A prima facie case. 155

It is not appropriate to appoint an inspector or order an investigation. 157

ii) Manager (s. 246(1) OBCA) 159

iii) Monitor 161

Removal of Mr. Stamatopoulos. 162

Repayment of fees. 163

IV. Removal of Counsel 163

i) Removal of PDC Generally. 163

Lawyer as Witness. 167

Conflict of Interest 169

Prior Retainer 171

Estate Trustee claim for privilege. 172

Conclusion on Removal of PDC.. 173

ii)Removal of PDC for both the Corporate and Individual Defendants. 173

iii) Individual Defendants should pay their own fees. 177

V. Production of all Financial Records from 2017 to trial 180

VI. Communications only Through Counsel 180

CONCLUSION.. 181

COSTS. 183

THE MOTIONS

[1] There were several motions heard during the two-day hearing.

[2] The Plaintiffs brought a motion on March 3, 2021. The Plaintiffs materials were extensive consisting of thousands of pages and hundreds of exhibits. There were cross examinations and a 43-page factum. There was a further 26-page factum to respond to the summary judgment cross motion. The relief in the Plaintiffs’ motion is, by any stretch of the imagination, extensive, and wide ranging as can be seen from the 46 separate claims advanced in the Statement of Claim.

[3] The Defendants brought a summary judgment cross-motion, essentially to dismiss the Plaintiffs claims on April 7, 2021. Again, there were thousands of pages of materials and exhibits. A 33-page factum on its motion, and a 24-page responding factum to the Plaintiff’s motion.

[4] While productions had been made, examinations for discovery have not taken place in this proceeding. Neither party sought an adjournment of these motions until after the discoveries were completed. Both parties were content to rely on the documents in their possession, extensive productions by way of Affidavits of Documents (and several supplementary Affidavits of Documents), their affidavits filed on these motions, and extensive cross-examinations. As such, it is not open to either side to allege that more information or documentation could or would be available later. The parties chose to rely on this evidentiary record for the purpose of these motions.

[5] Angie, in her personal capacity and, purportedly, as an Estate Trustee for Barbara Ioannidis, commenced this proceeding on February 11, 2019.

[6] Angie did NOT have the consent of the two other Estate Trustees to bring this application, nor is there an order permitting her to bring this application in her representative capacity. I have some concerns regarding Angie’s representative capacity set out below and will deal with this issue when dealing with costs and determining how the matter should proceed after this decision is rendered.

THE PLAINTIFFS’ CLAIMS

[7] The Plaintiffs advanced various claims, which can generally be summarized as:

a) Various oppression remedies under the Ontario Business Corporations Act, R.S.O. 1990, c. B.16 ("OBCA");

b) Declaratory relief that the Master Steaks estate freeze (described below) did not occur, was not valid and ancillary relief based on that claim;

c) Damages for “oppression, breach of fiduciary duty, breach of standard of care, fraud and conversion relating to the actions of the Individual Defendants”;

d) Judgment against all the Defendants for:

i. $156,000 for Unpaid Real Estate Commission described below;

ii. $277,000 for Unpaid Construction Loan described below;

iii. $30,114 for unpaid interest on a $350,000 Mortgage described below;

iv. $7,215 for interest in the delay of receipt of her share of the Vendor Takeback Mortgage (“VTB”) distribution described below; and

v. $46,950 on account of a “2017 dividend balance”;

e) Various trust claims based on loans paid by Truckers Haven Limited to Master Steaks Limited, Gregory Ioannidis, Barbara Ioannidis, additional Barbara Ioannidis’ estate taxes and the return of legal fees paid to Prouse, Dash and Crouch LLP (“PDC”); and

f) Removing Peter and Bill Ioannidis as Estate Trustees for Barbara Ioannidis.

OVERVIEW

[8] This is a messy, complicated and highly acrimonious family dispute over a 20-year period, involving several corporations, estate freezes, corporate decisions and authorized transactions.

[9] On one side is Angie Ioannidis, the sole daughter of successful immigrant parents. On the other side is her brothers, Bill Ioannidis (Bill), John Ioannidis (John) and Peter Ioannidis (Peter) (collectively “the Sons”). I will refer to all four as the “Children”.

[10] Unfortunately, at the root of this family dispute is money. Angie challenges the manner her parents chose to deal with the fruits of their hard work during their life and on their death.

[11] The parents of Angie, Peter, John and Bill were Barbara (“Barbara”) and Gregory Ioannidis (“Gregory”). Barbara and Gregory were hard working parents who started a very successful restaurant/butcher shop called “Master Steaks”. Master Steaks permitted them to invest in other business ventures including a gas station, a plaza, and development land through several corporations generally referred to as the Truckers Haven businesses.

[12] Barbara and Gregory ran their businesses as they saw fit until Barbara’s death in 2012.

[13] When Barbara died, the Children learned that their parents had completed two estate freezes in 2001 and 2002 – one for their investment businesses (“Truckers Haven businesses”) and one for the Master Steaks business.

[14] At the heart of one central dispute is that Master Steaks estate freeze was for the benefit the Sons (excluding Angie) and a Truckers Haven estate freeze was for the benefit all four Children.

[15] Part of the Truckers Haven businesses, the gas station that Gregory and Barbara built, was sold in 2007 for almost $4,000,000. The majority of the purchase price was a VTB for approximately $3,400,000 held by Truckers Haven maturing in 10 years. Truckers Haven’s businesses continued to hold other assets – a plaza and vacant lands.

[16] Angie was left out of the Master Steaks’ business. Angie had difficulty accepting that her parents would do this to her. She challenged the Master Steaks estate freeze when she found out about it after her mother’s death in 2012. Investigations were done by lawyers and accountants. Eventually, in 2013, Angie accepted the estate freezes implemented by her parents. Angie, Gregory and her brothers signed documents to retroactively regularize any corporate documentary shortcomings in both estate freezes.

[17] Nevertheless, there remained unresolved issues between Angie and her father, Gregory. The Master Steaks business and the Truckers Haven business continued to carry on business. In 2017, the VTB mortgage matured and was fully repaid in the amount of approximately $3.4 million dollars (“VTB monies”).

[18] Then a significant dispute arose regarding the distribution of the VTB monies. Angie realized that her brothers would get a larger share of the distribution of the VTB monies based on their shareholding in the family companies. Animosity between Angie and her brothers became a very significant problem.

[19] Before the VTB distribution dispute was resolved in 2018, Gregory died. Gregory left his estate to Peter and John. Angie was left out again. Initially, Angie challenged Gregory’s will, then gave up.

[20] Now, in this proceeding and shortly after the death of her father, Angie commenced this action and again challenges the validity of the Master Steaks estate freeze and the consequences of the decisions her parents made in early 2001/2002 and in her father’s will. At the heart of Angie’s claims is to undo Barbara and Gregory wishes, estate planning, the results of their testamentary distribution and the consequences of those decisions.

[21] As for the distribution of the Truckers Haven VTB monies, Angie seeks to challenge long-outstanding loans owed to Master Steak and to her deceased parents. Further, she now makes claims that she is owed unpaid and unrecorded loans dating back to 2007.

[22] Angie claims she is oppressed and advances various claims to remove her brothers from the companies and as trustees of her mother’s estate, appoint herself as the sole director of the companies, have auditors and investigators review the corporate financial records, even seeking an order that a receiver - manager be appointed or that she be bought out by her brothers.

[23] Angie alleges forgery, oppression, fraud, conversion, and breach of fiduciary duty. Angie blames many persons for what happened from the accountants, to the lawyers, to her brothers and so on.

[24] Given that the claims cover multiple companies and issues over 20 years, by necessity the affidavits and documents filed on these motions was extensive, and the allegations many. Hence, regrettably, the need for these long reasons. Many of the claims are based on Angie’s bald statements and speculation. Fortunately, the necessary and material facts are clear from the documentary evidence and uncontradicted evidence of several affiants.

[25] For the following reasons, I am satisfied that Angie’s claims regarding Master Steaks and the VTB monies, along with much of the remaining relief including oppression, is dismissed for the reasons that follow.

ISSUES

[26] There are a number of core issues in these motions:

I. Master Steaks estate freeze.

II. Truckers Haven VTB monies distribution.

III. Oppression and related remedies.

IV. Removal of Counsel.

FACTS AND DISCUSSION

Master Steaks

[27] In the late 70’s, Barbara and Gregory established and operated a restaurant and butcher shop named Master Steaks (“Master Steaks”).

[28] Master Steaks Limited was incorporated in 1986. Barbara and Gregory were its sole shareholders, directors, and officers.

[29] All the children worked at Master Steaks. Peter, John and Bill worked and continue to work at Master Steaks. Angie ceased working at Master Steaks in 1987 having becomes a successful real estate agent.

[30] Master Steaks’ shares are wholly owned by Master Steaks Holdco.

Master Steaks Holdco

[31] 2009270 Ontario Ltd. (“Master Steaks Holdco”) was incorporated in February 2002 by Barbara and Gregory as part of an estate freeze.

[32] The 300 Common Shares in Master Steaks Holdco are currently held by Peter, John and Bill equally.

[33] The 650,000 Preference Shares were held equally by Barbara and Gregory until their deaths. Initially, there was confusion as to whether it was 325,000 or 225,000 shares each, but the confusion was resolved in 2013.

[34] All the Preference Shares in Master Steaks Holdco are currently held by Peter, Bill and John.

Truckers Haven

[35] 762519 Ontario Limited (“Truckers Haven”) was incorporated by Barbara and Gregory in March 1988. Until 2001, Barbara and Gregory were the sole shareholders, directors and officers.

[36] Truckers Haven purchased land. A gas station was built, operated, and sold in 2007.

[37] Truckers Haven shares are wholly owned by Truckers Haven Holdco.

[38] Truckers Haven continues to develop the remaining vacant lands.

Plaza

[39] 1490804 Ontario Limited (“Plaza”) was incorporated in August 2001 by Barbara and Gregory for the purpose of acquiring property and building a retail plaza in Georgetown.

[40] Plaza continues to own the plaza which generates revenue. The Children are currently officers and directors of Plaza.

[41] Plaza’s shares are wholly owned by Truckers Haven Holdco.

Truckers Haven Holdco

[42] 1490565 Ontario Limited (“Truckers Haven Holdco”) was incorporated in August 2001 by Barbara and Gregory for an estate freeze.

[43] As part of the estate freeze, Truckers Haven Holdco became the sole shareholder of Truckers Haven and Plaza.

[44] As will be seen below, given that the estate freeze benefitted all four Children, Angie does not dispute that the Truckers Haven estate freeze took place in 2001.

[45] Each of Peter, John, Bill and Angie hold 100 Common Shares in Truckers Haven Holdco.

[46] The 650,000 Preference Shares in Truckers Haven Holdco were, initially, held equally by Barbara and Gregory.

[47] 325,000 Preference Shares went to the Estate of Barbara and were, eventually, distributed equally to all four children.

[48] The other 325,000 Preference Shares went to the Estate of Gregory and were distributed equally to Peter and John.

[49] Angie currently holds 81,250 Preference Shares in Truckers Haven Holdco while her brothers own cumulatively 568,750 Preference Shares in Truckers Haven Holdco.

Barbara’s Estate

[50] Pursuant to Barbara’s will, her Preference Shares in Truckers Haven Holdco and any other assets were to be divided equally amongst the four Children.

[51] Angie, Peter and Bill are Barbara’s Estate Trustees.

Gregory’s Estate

[52] Peter and John are Gregory’s Estate Trustees.

[53] Under Gregory’s Will, Peter and John each received equal amounts of Gregory’s Preference Shares in Trucker’s Haven Holdco and Master Steaks Holdco.

[54] The result that Peter and John now hold the majority of the voting shares in Truckers Haven Holdco.

[55] Angie submits that there is no distribution provision for Master Steaks’ shares in Gregory’s will. That is correct. Gregory had no such shares in Master Steaks because of the estate freeze. Gregory only held shares in Master Steaks Holdco and did dispose of his Master Steaks Holdco shares to Peter and John.

The Events

The Estate Freezes and Mr. Dimakos

[56] Essentially, an estate freeze is where the shareholders implementing the estate freeze acquire redeemable Preference Shares (at the then current value of the corporation) in a holding company and transfer their Common Shares in the operating company to the holding company. The holding company then issues common shares to the person(s) who will acquire the subsequent appreciation of the operating company. In many cases, the shareholders implementing the estate freeze maintain control through the larger number of voting/redeemable Preference Shares in the holding company. Since the Preference Shares are redeemable at a fixed price, their value does not appreciate. This results in the taxable appreciation only accruing to the common shareholders in the holding company. The Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.), recognizes this as a valid method of estate planning.

[57] In 2001, Strath Dimakos was the accountant for Barbara and Gregory and their companies.

[58] In mid-2001, Mr. Dimakos recommended a s. 85 Income Tax Act estate freeze. Barbara and Gregory started to discuss estate planning for the Master Steaks and Truckers Haven businesses.

[59] Initially, Mr. Dimakos was instructed to proceed with the estate freeze for the Truckers Haven businesses with the beneficiaries of the estate freeze to be all four Children.

[60] Barbara and Gregory’s lawyer incorporated Truckers Haven Holdco in August 2001. There was some urgency to complete this estate freeze prior to the development of a gas station on the property held by Truckers Haven. In 2002, the appropriate T2057 (the necessary form to be filed for an estate freeze with Revenue Canada) was executed by Barbara and Gregory and filed with Revenue Canada. In addition, a rollover agreement for the changes in their shareholdings to affect the estate freeze was also executed by Barbara and Gregory. The Truckers Haven estate freeze resulted in the Common Shares in Truckers Haven Holdco being distributed equally to the four children and the Preference Shares to Barbara and Gregory.

[61] Sometime later, Mr. Dimakos received instructions to proceed with the Master Steaks estate freeze with the “business to go to their sons Peter, John and Bill”. Mr. Dimakos retained Mr. William Tatsiou to do the corporate work. Mr. Dimakos wrote to Mr. Tatsiou on November 16, 2001 setting out his discussions with and instructions from Barbara and Gregory regarding the Master Steaks estate freeze. Mr. Tatsiou incorporated Master Steaks Holdco for the Master Steaks estate freeze.

[62] Angie takes this initial delay by her parents as evidence that the Master Steaks estate freeze did not take place. I reject this speculative and erroneous submission given the overwhelmingly clear evidence from numerous affiants and documentary evidence that Gregory and Barbara eventually came to a decision to proceed with the Master Steaks estate freeze and proceeded to implement and document the estate freeze.

[63] At the time of the estate freezes, Mr. Dimakos created a handwritten chart (“Diagram”) which sets out the two estate freezes, showing that all four children were to participate in the Truckers Haven estate freeze but that only the three sons were to participate in the Master Steaks estate freeze.

[64] Mr. Dimakos testified why Barbara and Gregory implemented the Master Steaks estate freeze in the manner they directed:

I understand that the validity of the Master Steaks Estate Freeze is in issue in the litigation. I can candidly and honestly say that Barbara and Gregory did carry out the Estate Freeze in respect of Master Steaks, and that they deliberately and knowingly chose to exclude Angie from holding any common shares in Master Steaks Holdco. I recall them explaining to me at the time that they made such a decision based on the fact that the boys worked full time for Master Steaks, and that Angie was successful in real-estate and did not work at the restaurant. They indicated that Angie would be involved in the Truckers Haven side of the business and she would be fine.

[65] To obtain the signatures of Barbara and Gregory for the necessary corporate documents for the estate freezes, Mr. Dimakos and Mr. Tatsiou (who is now deceased), met with Barbara and Gregory at the Master Steaks restaurant in or about February 19, 2002 to execute the necessary documents. Mr. Dimakos witnessed the execution of the necessary documents. One of the documents was a “rollover agreement”. Mr. Dimakos prepared a rollover agreement that was signed for both the Master Steaks estate freeze and the Truckers Haven estate freeze at that time. It was Mr. Dimakos’ practice to have multiple copies of documents signed.

[66] Mr. Dimakos also prepared the T2057 for the Master Steaks Holdco estate freeze. The T2057 was signed by Barbara and Gregory at the same meeting. The T2057 for Master Steaks’ estate freeze was then filed by Mr. Dimakos with Revenue Canada in 2002.

[67] Mr. Dimakos testified that both estate freezes were completed in accordance with the wishes of Barbara and Gregory: The Truckers Haven Holdco for the four Children and the Master Steaks Holdco for the Boys.

[68] In 2013, after Barbara’s death, Mr. Dimakos was asked to locate any documents with respect to the estate freezes. Mr. Dimakos could not locate his extra copies of the signed executed rollover agreements. When these motions arose, Mr. Dimakos looked in his storage facility and, on May 15, 2021, he located the original rollover agreements for both the Master Steaks estate freeze (dated February 19, 2002) and the Truckers Haven estate freeze (dated September 17, 2001, although he believes they were both signed at the February 2002 meeting) executed at Master Steaks restaurant and witnessed by Mr. Dimakos and Mr. Tatsiou.

[69] Angie makes certain disparaging remarks regarding this late discovery. However, there is no evidence that these documents are forged, backdated or otherwise fraudulent. In fact, these documents are entirely consistent with other contemporaneous documentary evidence and other testimony, in particular the T2057’s filed with Revenue Canada in 2002, Mr. Tatsiou’s reporting letter in 2002, the tax returns commencing 2002 based on the financial statements, and the testimony of Mr. Stamatopoulos. Angie’s counsel, during the motions expressly confirmed that he was “not suggesting” that the rollover agreements located by Mr. Dimakos in 2021 are forged or backdated. I am satisfied that the rollover agreements located in 2021 are original and were signed by Barbara and Gregory in 2002, as stated by Mr. Dimakos.

[70] As part of the Master Steaks estate freeze in February 2002, Barbara and Gregory also executed three documents which expressly provided that each of the three subscriptions for 100 Common Shares in Master Steaks Holdco were expressly in trust for each of Peter, John and Bill. There is no similar subscription for Angie.

[71] After completing the corporate documents for the Master Steaks estate freeze, Mr. Tatsiou reported, by letter dated February 11, 2002, confirming that Barbara and Gregory now held Preference Shares in Master Steaks Holdco and that they held 100 Common shares in trust for each of their sons. There is no mention in Mr. Tatsiou’s reporting letter of Angie acquiring or holding any shares in Master Steaks Holdco.

[72] There is no dispute that the Trucker’s Haven estate freeze was also completed, whereby the Truckers Haven estate freeze was for the benefit of all four Children. Again, Barbara and Gregory held the Preference Shares in Truckers Haven Holdco and continued to be the sole directors/officers of the Trucker’s Haven businesses, while each of the four children, unknown to them as they were held in trust by Barbara and Gregory, beneficially held 100 Common Shares in Truckers Haven Holdco.

[73] Mr. Dimakos ceased doing any accounting work for Gregory or Barbara shortly after the completion of the estate freezes. Mr. Dimakos has not done any work for the parties or the matters in dispute since that time.

Mr. Stamatopoulos

[74] Mr. Stamatopoulos became Barbara and Gregory’s accountant in late 2002 or early 2003 and continued as their accountant until their death. At the same time, Mr. Stamatopoulos also became the compilation accountant for the Corporate Defendants and continues in that role until today.

[75] At the time of the transition, Mr. Dimakos forwarded to Mr. Stamatopoulos a copy of the Diagram. To repeat, the Diagram showed that Angie was not a Common shareholder in Master Steaks Holdco, whereas her brothers were. The Diagram also showed that all four Children were equal Common shareholders in Truckers Haven Holdco.

[76] Shortly after taking over the accounting work, Mr. Stamatopoulos asked Barbara why there was a difference in the shareholdings in Master Steaks Holdco and Truckers Haven Holdco. Mr. Stamatopoulos stated under oath:

Barbara advised me at that time, that they (she and Gregory) wanted the “Master Steaks” business to go to “the boys”, being Peter, John Ioannidis (“John”), and Bill Ioannidis (“Bill”), as they all worked at the restaurant for a very long time and were paid very little in wages. She seemed genuinely worried about her sons when she told me this.

Barbara told me that Angie did not work for Master Steaks and was doing very well for herself as a real-estate agent, and that Angie was “fully aware of the arrangement”. Barbara further advised me that Angie did not have an issue with it.

Thus, I can attest to the fact that both Gregory and Barbara presented themselves to me as being wholly aware that they had carried out estate freezes in respect of both Master Steaks and Truckers Haven, and that they were explicitly aware that Angie would not be having any common shares in the Master Steaks HoldCo.

[77] Mr. Stamatopoulos’ evidence is clear, Gregory and Barbara were “wholly aware” of the details of both estate freezes and were “explicitly aware” that Angie would not have any shares in Master Steaks Holdco.

[78] I reject Angie’s speculative evidence that Barbara didn’t agree, know, or participate in the Master Steaks estate freeze. There is simply no evidence to support this statement and overwhelming evidence to the contrary.

The two Estate Freezes from 2002 to 2012

[79] From 2002 to 2012, Barbara signed tax filings on behalf of Master Steaks Holdco. These tax filings were consistent with the existence and validity of the Master Steaks estate freeze.

[80] Mr. Stamatopoulos filed corporate taxes since 2003 on the basis that the two estate freezes, Truckers Haven and Master Steaks, had been implemented and were in effect. The tax filings have been accepted by Revenue Canada since that time. Neither estate freeze has been challenged by Revenue Canada, including when Revenue Canada audited the businesses in 2008.

[81] There is no direct evidence that any of the Children knew that Barbara and Gregory had implemented estate freezes for the Master Steaks and Truckers Haven businesses (although Mr. Stamatopoulos suggested he was told by Barbara that Angie was aware of and “ok” with the Master Steaks estate freeze). In the end, Mr. Stamatopoulos’ suggestion makes no difference to the court’s decision on these motions.

Barbara’s Death (May 2, 2012)- the Estate Freezes revealed

[82] Barbara and Gregory continued to be the sole directors and decision makers of all the family businesses until Barbara’s death in 2012.

[83] Upon Barbara’s death, the four children found out about the two estate freezes. The Children then commenced to take a more active role in the various family businesses.

[84] Angie is one of Barbara’s Estate Trustees (“Estate Trustee”). Peter and Bill are the other Estate Trustees.

[85] After Barbara’s death and finding out that she had been “cut out” of the Master Steaks business, Angie states in her affidavit, “In 2012, I questioned the validity of the 2002 Estate Freeze.”

The 2012/2013 investigation of the Master Steaks estate freeze

[86] When incomplete corporate documentation for the Master Steaks estate freeze was discovered, Angie continued to challenge the validity of the Master Steaks estate freeze.

[87] Angie wanted documentary proof that the Master Steaks estate freeze had been implemented. Interestingly and understandably, Angie took no such issue with any shortcoming in the documentation for the Truckers Haven Holdco estate freeze.

[88] In 2012, Angie, Peter and Bill retained Mark Rush as solicitor for the Estate Trustees and to act as corporate solicitor for the various corporations. Mr. Rush was to investigate whether the two estate freezes had been implemented in 2001/2002.

[89] Mr. Rush reviewed the corporate Minute Book for the companies and reported that not all the necessary corporate documentation for the estate freezes was in the Minute Books or could be located.

[90] Mr. Rush enquired of Mr. Dimakos and Mr. Stamatopoulos. Specifically, by letter dated October 9, 2012, Mr. Rush enquired of Mr. Dimakos for confirmation that the estate freeze documentation, the T2057’s had been filed with Revenue Canada.

[91] On October 14, 2012, Mr. Rush wrote to Barbara’s beneficiaries (including Angie) as follows:

The corporate records are incomplete. In particular, I noticed that there is no rollover agreement in the file for the reorganization of the ownership of Truckers Haven Limited into a holding company: 2009270 Ontario Ltd. There is no evidence in the Minute Books of either of those corporations confirming that the 225,000 each in Preference Shares in that holding company issued to your father and mother at the time that holding company was incorporated and organized were issued in exchange for the transfer to that holding company of their shares in Truckers Haven Limited [which would have to have been part of a rollover transaction]. The minute book for Truckers Haven Limited still records that your mother and father remain the owners of their original issued Common Shares, which ought to have been transferred to the holding company in exchange for the Preference Shares. When I spoke with Mr. Stamatopoulos, I asked him about his knowledge concerning the 2001 and 2002 rollover transactions. He does not have documentation confirming that rollover elections were filed with Canada Revenue Agency as required, following the reorganization of the ownership of the shares of the operating companies: Truckers Haven Limited by 2009270 Ontario Ltd. in 2002 and Master Steaks Ltd. by 1490665 Ontario Limited in 2001. As you know, those transactions occurred before he became the accountant for those corporations. He always has assumed that the rollover elections were filed for those transactions.

(Emphasis added)

[92] Mr. Dimakos confirmed the T2057s had been filed and provided to Mr. Rush copies of the T2057 filed with Revenue Canada for both the Master Steaks estate freeze and the Truckers Haven estate freeze.

[93] On October 14, 2012, Mr. Rush wrote to Mr. Stamatopoulos (copied to Angie) as follows:

I have written and spoken to Mr. Dimakos, who has a clear recollection of the filing of rollover elections both for the 2009270/Master Steaks transaction and for the earlier 1490565/Truckers Haven transaction. He is checking his files and he will send me copies of the elections if he still has those. The 1490565/Truckers Haven transaction appears to be adequately documented in the minute books for those corporations. I am recommending to the Estate Trustees that the minute books for 2009270/Master Steaks be updated at least to the point of fully and accurately recording all the steps in that rollover transaction.

(Emphasis added)

[94] Angie remained unsatisfied. Angie requested Mr. Rush to obtain confirmation from Revenue Canada that the T2057 documents had in fact been filed with Revenue Canada at the time of the estate freezes.

[95] Although the unsigned copies were located, the signed Rollover agreement for both estate freezes could not be located by Mr. Dimakos. Angie was provided unsigned copies from Mr. Rush on April 3, 2013. Mr. Dimakos advised Mr. Rush he would look again for the signed agreements but advised Angie that:

“my recollection was that copies of the documentation in respect of the Master Steaks Estate Freeze were provided to her parents to have their lawyers include in the corporate minute books, and that the Estate Freeze in respect of Master Steaks did in fact happen.”

(Emphasis added)

[96] On April 4, 2013, Mr. Stamatopoulos wrote to Mr. Rush that evidence was uncovered that Gregory and Barbara had disposed of their Common Shares and acquired Preference Shares at the adjusted cost base of the business (i.e. the essence of an estate freeze):

On or around April 4, 2013, I sent a fax to Mr. Rush, informing him that I located a copy of Barbara and Gregory’s 2001 tax return, which showed that they had disposed of 1000 common shares in Master Steaks Limited and 1000 common shares in Truckers Haven for proceeds equal to the adjusted cost base of $1.00 and $5.00 respectively.

(Emphasis added)

[97] On April 27, 2013, Mr. Rush reported to Angie, that:

I have reviewed the work that Bert Arnold did in 2002. There is no doubt that the entire rollover transaction is documented the Minute Books for Truckers Haven Limited, 1490804 Ontario Limited and 1490565 Ontario Limited.

I have reviewed the work that William Tatsiou did in 2002. That ls the work that ls the problem. According to the Minute Books for Master Steaks Limited, your parents are still the owners of one common share each in Master Steaks Limited, and those are all the shares issued by that corporation. There is nothing in the Minute Books for Master Steaks Limited or 2009270 Ontario Limited to evidence a transaction in which your parents transferred their shares in Master Steaks Limited in return for Preference Shares in 2009270 Ontario Limited. There is nothing in the Minutes Books to document that 2009270 became the owner of the shares of Master Steaks Limited. There is nothing in the reporting letter from William Tatsiou to your parents, that suggest that any such transactions were completed. The documentation and the reporting letter suggest that your parents paid $225,000.00 each for their 225,000 each in Preference Shares. The documentation and the reporting letter do not indicate how your parents paid that $225,000.00 each.

There would have been no good reason to have done the transactions [2002] unless a rollover transaction was involved to “freeze” the accumulated value of the existing Master Steaks Limited shares into the newly issued preference shares in the newly incorporates 2009270 Ontario Limited.

I understand from Mr. Stamatopoulos that ever since 2001/2002, tax returns have been filed on the basis that 2009270 Ontario limited did become the owner of the Common Shares in Master Steaks Limited, and that your parents then become the owners of preference shares in 2009270 Ontario Limited; however, the Minute Books for both those corporations do not actually records those transactions. I do not know what the potential tax consequences might be if those transactions for which the rollover elections were filed [assuming the rollover elections were flied], or at least the Master Steaks rollover transactions, did not actually occur.

I have mentioned to you that Mr. Stamatopoulos has requested me, in a telephone conversation I had with him [on April 19th], to confirm that the documentation recorded in the Minute Books agrees with the rollover elections, so that he can complete the tax filings due for your mother's final taxation year (2012] on April 30th/ May 1st. I have proceeded to complete the rollover agreements and related resolutions that Mr. Tatsiou should have prepared, and those are ready to be signed. I also have prepared a memorandum to our corporate legal assistant to complete the required share certificates for issue by Master Steaks Limited [the Share Certificates for 2009270 Ontario Limited were issued in February 2002]; but, I will not be having her complete those or the other work needed to update the Minute Books to February 20021 pending receipt of the mutually agreed upon instructions of you, Peter and John, as Estate Trustees of your mother's estate, and from your father, who has his own interest in these transactions.

(Emphasis added)

[98] Angie continued to resist accepting and executing the “regularizing” documents until Revenue Canada confirmed that the T2057 forms for Master Steaks estate freeze had in fact been signed by her parents and filed with Revenue Canada in 2002.

[99] In the late summer of 2013, Revenue Canada finally provided Mr. Stamatopoulos copies of the T2057’s which had been filed for both estate freezes in 2002. Copies were sent to Mr. Rush. Angie was provided copies of the of the T2057’s, signed by her parents and filed with Revenue Canada.

[100] It was now beyond dispute that Barbara and Gregory had both signed and sent the necessary T2057 forms to Revenue Canada in 2002 for both estate freezes.

[101] As a result, Mr. Rush wrote on September 7, 2013 to the three Estate Trustees as follows:

The 2002 Rollover Elections filed by your parents and 20099270 for the transfer of your parents’ Common Shares in Master Steaks Limited to 2009270 Ontario Limited in exchange for 325,000 Class A Special Shares each issued by 2009270 Ontario Ltd.

For your information, at the instance of the holder of the special shares, 2009270 Ontario Ltd [ which owns Master Steaks Limited] can be required to redeem those shares for $1.00 each, and at the instance of 2009270 Ontario Ltd., it can compel the redemption of the special shares from the holders of those shares.

I will be having our corporate assistant revise and complete the records in the Minute Books for Master Steaks Limited and for 2009270 Ontario Ltd.

(Emphasis added)

[102] Angie also received additional documents in 2013 or early 2014, namely the Master Steaks Holdco’s Subscription and Resolution Documents dated February 19, 2002, executed by her parents, which also show that the Master Steaks estate freeze had taken place excluding her from having any Common Shares in Master Steaks Holdco. Angie took these documents home. Angie never questioned them. Now, Angie states that she didn’t review these important documents until 2016 when she “discovered” and now alleges that Barbara’s signatures were forged. There is no real explanation why this allegation hadn’t surfaced earlier. There is no expert evidence as to whether Barbara’s signatures are forgeries. All Angie states is that, in her real estate business, husbands and wives sometimes forge each others’ signatures. That is not evidence that these signatures are forgeries. I reject Angie’s bald statement that Barbara’s signature is a forgery on these documents. What is apparent is that these Subscription and Resolution Documents are typical corporate documents required to implement the Master Steaks estate freeze and are consistent with all the other evidence that the Master Steaks estate freeze had been implemented in 2002. Interestingly, Angie took no steps when she discovered this alleged forgery in 2016 for more than two years until after she commenced this proceeding and more than four years after receiving the documents. She didn’t raise the question with her father or her brothers in 2016 or anyone until this proceeding.

Accepting the Master Steaks estate freeze in 2013

[103] On September 20, 2013, Mr. Rush forwarded to Angie, Peter and Bill copies of the necessary corporate documents including amended rollover agreements, and director’s resolutions for Master Steaks Holdco and Master Steaks to ratify that the Master Steaks estate freeze had occurred in 2002.

[104] Gregory, Peter, Bill and Angie met at Estate Trustee’s lawyer’s office on approximately October 1, 2013, to execute the necessary documents.

[105] Angie accepted and participated in, as Barbara’s Estate Trustee, the execution of all the necessary documentation for both the estate freezes despite knowing that she was excluded from the Master Steaks estate freeze. One key document executed by Angie, on behalf of the Estate of Barbara, was the Master Steaks estate freeze rollover agreement.

[106] In 2013, as part of the regularizing the two estate freezes, resolutions were passed approving all the corporate transactions and dealings by the companies.

[107] It is important to note that Gregory, one of the two principals directing and implementing the two estate freezes, also in 2013 signed all the agreements and resolutions to regularize the Master Steaks estate freeze as well as the Trucker’s Haven estate freeze.

[108] Even Angie does not suggest that Gregory, at any time, disputed the fact that the Master Steaks estate freeze had been carried out in 2002.

[109] These executed documents “regularized” or affirmed the Master Steaks estate freeze as of 2002. By the end of 2013, the shareholdings in Master Steaks Holdco were now clearly established:

• Gregory – 325,000 Preference Shares;

• Angie, Bill, John and Peter – 81,250 Preference Shares EACH (from Barbara’s estate); and

• Bill, John and Peter – 100 Common Shares EACH.

Angie Acknowledges the Master Steaks Estate Freeze

[110] After executing the regularizing documentation, Angie acknowledged the existence and validity of the Master Steaks estate freeze for years. For example, in an email to Peter from Angie dated January 9, 2015, Angie acknowledged that the 300 Common Shares in Master Steaks, “since their Creation back in 2001 those shares belonged to you, Bill and John,… Mother held them in trust for you 3 until she passed…she never owned them….”

Angie’s responsibility for corporate and accounting

[111] Angie had, since the early 2000’s, been responsible for the accounting and financial records of the Truckers Haven businesses. She dealt with Mr. Stamatopoulos and provided him “with the financial information and instructions for the purposes of preparing financial statements and tax returns”. Angie continued in this role until 2018.

[112] In November 2013, Bill, John and Peter, on behalf of Master Steaks Holdco, authorized Angie, to also be responsible for Master Steaks business’ corporate matters, regulatory authorities, financial institutions and accounting matters. Again, Angie dealt with and instructed Mr. Stamatopoulos on these accounting matters until approximately 2017.

[113] Angie’s role in the corporate and accounting records, over the many years, is significant. Angie alleges that Truckers Haven’s loans repeatedly recorded in the Truckers Haven financial records are not owed to her parents or to Master Steaks. Angie also alleges that several loans owed to her were that never recorded in the Truckers’ Haven’s financial records. All of this during despite the fact Angie was responsible for the financial records of Truckers Haven and Master Steaks businesses including “signing off” on the 2015 and 2016 financial statements and tax filings for Truckers Haven Holdco and Truckers Haven.

[114] Angie’s response that she relied on Mr. Stamatopoulos’ advice and recommendations is hardly a satisfactory answer from the person having responsibility for the corporate and financial records, especially since Mr. Stamatopoulos was only a “compilation” accountant – meaning he relied on the financial information provided to him. No doubt Angie would have known what loans were recorded and what loans were not recorded in the financial records of Truckers Haven while the financial records were her responsibility. In fact, as set out below, she eventually admitted that the VTB distribution amounts came from the Truckers Haven financial records in 2017.

Removal of Gregory as Director

[115] The reasons are not particularly relevant, but sadly, one of the two persons who created and grew the businesses and the wealth now enjoyed by his Children, at Angie’s insistence, she, Bill, Peter and John removed Gregory as a director of the family corporations in 2013, except for Master Steaks.

[116] Peter says that Angie spearheaded this movement because she had been “cut out” of Master Steaks. Angie denies it but her denial is inconsistent with her authored documents, the actions she took and the comments she makes in her affidavits in these motions towards her father. Nevertheless, this fact has no bearing on the outcome of these motions.

The 2016 Redemption of Angie’s Preference Shares in Master Steaks Holdco

[117] In 2015, Peter, Bill and John decided to redeem Angie’s Preference Shares in Master Steaks Holdco, consisting of those 81,250 Preference shares Angie inherited from Barbara.

[118] Angie wanted to negotiate a higher price for her 81,250 Preference Shares and wanted an indemnity. This was not acceptable to Peter, Bill and John. The impasse could not be resolved.

[119] In early 2016, Peter, Bill, John and Gregory proceeded to call a formal corporate meeting to redeem Angie’s Preference Shares in Master Steaks Holdco. A notice of a meeting for this purpose was circulated in February 2016.

[120] Eventually, on March 3, 2016, Angie advised her brothers in writing that she agreed to relinquish her Master Steaks Holdco Preference Shares, either by redemption or transfer to John, Bill and Peter.

[121] Angie forwarded a signed full and Final Release in favour of Master Steaks Holdco before the meeting.

[122] The meeting took place on March 8, 2016. At the meeting, a resolution was passed redeeming Angie’s preference shares. Angie was given a cheque for $100,000. Angie presented her Preference Share certificate and signed the back of her Preference Share certificate as an acknowledgement of the redemption of her Preference Shares.

[123] Angie now alleges that the $100,000 she received at the meeting came from Gregory (although this is denied by her brothers with some evidence that they contributed to the $100,000 payout to Angie). In the final analysis, it makes no difference where the money came from to redeem Angie’s shares. Angie’s Preference Shares in Master Steaks Holdco were redeemed.

[124] What happened to Master Steaks Holdco after her only shares were redeemed, and she got her money, should have been of no consequence to Angie. Yet, it was. Angie subsequently attempted to recharacterize what had occurred at the March 8, 2016 meeting as a “transfer” of shares to her brothers. Why? Because her father, Gregory, sought to take over as sole director of Master Steaks Holdco, eventually calling a meeting to attempt this. Angie’s obvious concern was that, with the redemption of her 81,250 shares, Gregory’s 325,000 Preference Shares had voting control. This is plain and obvious from Angie’s February 25, 2016 email. Angie suggested “changing” what happened (as described in her emails), amending the reverse side of her share certificate to make it appear it was a transfer of the shares to her brothers equally and, subsequently, sending a back-dated Notice of Objection to the redemption.

[125] The evidence is overwhelming that Angie’s Preference Shares had been redeemed and I so find.

Dispute over Distribution of the Trucker’s Haven’s VTB proceeds

[126] As stated above, Truckers Haven sold the Gas Station in 2007 for $3.9 million dollars with a VTB of approximately $3.4 million. The VTB matured and was paid in 2017. The amount received by Truckers Haven from the VTB was $3,387,205.99.

[127] The distribution of the VTB monies is the second major issue raised by Angie.

[128] On October 20, 2017, Mr. Stamatopoulos sent the Children a draft distribution where he set out the loan amounts owed by Truckers Haven businesses and to whom they were owed, as reflected in the corporate financial records at year end.

[129] The problem for Angie was that the proposed distribution would favour her brothers, in particular:

a) Any loans repaid to Master Steaks - Angie would not share in that repayment; and

b) Any loans paid to Gregory - Angie, would not share in that repayment distribution.

[130] Angie had her own ideas as to how the VTB monies should be distributed - one that would result in a higher payout to her and potentially an opportunity to enhance her shareholder’s position in the family businesses.

[131] On October 23, 2017, Angie made a proposal for the VTB monies’ distribution, one which would not recognize all loans in Truckers Haven’s books and records, and would restructure the shareholdings in Truckers Haven Holdco by retracting all Preference Shares (including those of Gregory), making the four children equal Common shareholders. In return, Angie would agree to repayment of a loan to Master Steaks provided that those monies be used to redeem the Preference Shares (especially those of Gregory so he could not dispose of them through his will), and her brothers agree to a restriction on the removal any director/officer.

[132] Mr. Stamatopoulos’ recommendation was that the corporate loans owed by Truckers Haven businesses, dating back years, be repaid in priority from the VTB monies.

[133] This was the end of the amicable relationship between Angie and Mr. Stamatopoulos. Eventually, resulting in Angie lodging a complaint against Mr. Stamatopoulos to the accounting regulatory authorities alleging fraud, falsification of documents and negligence against Mr. Stamatopoulos (which complaint was eventually dismissed).

[134] Peter would not support Angie’s proposed distribution.

[135] With her proposal rejected, Angie decided to advance claims that she had outstanding unrecorded loans owed by Truckers Haven going back many years. These alleged loans were not and had not been reflected in the books and records of Truckers Haven.

[136] I expressly reject Angie’s allegation that the Master Steaks loan miraculously or suspiciously appeared in the Truckers Haven financial records or that it was the first time that Angie had heard of the Master Steaks Loan to Truckers Haven. Why?

a) Angie previously agreed in writing on February 25, 2016, that Master Steaks should be paid first from the VTB monies; or

b) Angie admitted in writing on December 30, 2017, that there was an outstanding to Master Steaks from Truckers Haven and should be paid first; and

c) Angie admitted in writing on July 24, 2015, that Master Steaks was owed $500,000 from Master Steaks from Truckers Haven.

[137] Angie also disputed that her parents were entitled to the “outrageous” dividends, which were unpaid and resulting in the large debt owed to them from Truckers Haven.

[138] When agreement could not be reached, a Truckers Haven director’s meeting was called for November 16, 2017 to approve the Truckers Haven financial statement and to resolve to pay the outstanding loans.

Gregory’s Death (November 4, 2017)

[139] There were already significant stressors in the relationship between Angie and her brothers in 2017 – the Master Steaks estate freeze, the redemption of her Preference Shares in Master Steaks Holdco, and the dispute over the distribution of the VTB monies.

[140] Then came Gregory’s death. Gregory died on November 4, 2017.

[141] Gregory’s estate went to Peter and John. Angie was again “cut out”.

The November 16, 2017 Truckers Haven Directors Meeting

[142] By email dated November 15, 2017, Angie suggested she wanted to work out “some kind of agreement”.

[143] The meeting went ahead. Angie did not attend the meeting.

[144] At the meeting, Angie was removed as treasurer, signing authority with the bank for Truckers Haven, and Angie’s home was removed as the home address for the corporation.

[145] Also, at that meeting, the remaining directors approved the July 31, 2017 draft financial statement of Truckers Haven and passed a resolution that the debts and liabilities of Truckers Haven and Truckers Haven Holdco be paid out from the VTB monies.

Angie Challenges Gregory’s Will

[146] On December 12, 2017, Angie retained counsel and challenged Gregory’s will.

[147] Eventually, Angie withdrew her objection.

January 16, 2018 Shareholders Meeting

[148] It is evident from what Angie wrote, her actions in 2017 and early 2018, that the friction with her brothers had gotten out of control. For example, at one point, Angie threatened to report Peter, John and Bill to the Canada Revenue Agency (“CRA”) for tax evasion (not reporting cash monies) and request an audit - if they didn’t accept her proposed resolution on the VTB distribution.

[149] As a result of the increased tension and allegations, Peter, John and Bill decided to remove Angie as a director of the Truckers Haven companies.

[150] On January 16, 2018, a shareholders meeting was called for the purpose of removing Angie as a director of Truckers Haven Holdco, Truckers Haven and Plaza.

[151] Angie attended the meeting and tendered a written resignation as a director of Truckers Haven, Truckers Haven Holdco, and Plaza. The contents of the accompanying “resignation” letter clearly set out many complaints and allegations by Angie.

The Continuing VTB distribution dispute

[152] Angie continued to challenge the VTB distribution.

[153] To appease Angie, Peter requested Mr. Stamatopoulos to review the VTB distribution again and report back to him and to Angie.

[154] Mr. Stamatopoulos did so, using only bank document verified transactions on account of dividends and withdrawals to establish the loan amounts on the Truckers Haven financial records. Mr. Stamatopoulos sent the updated revisions to Peter and Angie.

[155] Angie commenced these proceedings in February 2019.

Angie’s Specific Disputed Truckers Haven’s Loans

The Construction Loan

[156] Angie alleges that between 2002 and 2006 she loaned Truckers Haven $688,000 as a Construction Loan (for the construction of the gas station sold in 2007), of which $350,000 was secured by a mortgage. Angie acknowledges that she was repaid the mortgage amount of $350,000 in 2007 and later repaid $61,000 by her parents.

[157] Angie claims that the balance of her $688,000 Construction Loan ($277,000) loan was not reflected in the proposed VTB distribution.

[158] Angie also claims unpaid interest on the $350,000 mortgage which was repaid and discharged in 2007.

[159] To avoid a limitations issue, Angie states that she was to be repaid her Construction Loan when the Truckers Haven Gas Station was sold in 2007 but there weren’t sufficient funds from the down-payment. Angie alleges that, as a result, it was agreed that the outstanding balance of the Construction Loan would become a Truckers Haven shareholders’ loan. I reject Angie’s evidence that the Construction Loan was converted into a shareholder’s loan:

a) There is a question whether this was a “real loan” or had been done simply to “save Gregory tax” – as set out in an email written by Angie which suggests this (which makes no sense if it was a real loan) and makes no mention of there being an outstanding loan.

b) Angie’s alleged agreement to convert her loan to a shareholder’s loan is without detail – as to who, when, or why.

c) There are no documents to support this alleged agreement to convert her alleged Construction Loan to a shareholder’s loan.

d) There is no record of this of this Construction Loan or as a shareholder’s loan in the Truckers Haven books and records, particularly troubling since Angie was involved and responsible for Truckers Haven’s business records and books for years without raising this issue.

e) And then there is a fundamental flaw with Angie’s allegation. In 2007 Angie believed that Truckers Haven was owned entirely by her parents (she didn’t know about either estate freeze until 2012) so she couldn’t possibly have agreed in 2007 to convert this alleged Construction Loan into a shareholder’s loan owing to her – she didn’t know she was a shareholder!

[160] Mr. Stamatopoulos’ clear and uncontroverted evidence is that no such loan to Angie was reflected in the Truckers Haven’s books and records or “summary of loans per books of the company” which Angie had in her control until 2017. No evidence has been produced to the contrary. I accept Mr. Stamatopoulos’ evidence.

Real Estate Commission

[161] Angie also alleges that she continues to be owed unpaid real estate commissions from the sale of the Truckers Haven Gas Station in 2007. Again, to deal with the limitations period, Angie alleges there was an agreement to convert this outstanding loan into a shareholder’s loan.

[162] For the same reasons I rejected Angie’s alleged outstanding Construction Loan, I reject Angie’s evidence on the alleged outstanding real estate commission.

[163] Further, as will be set out below, there is also a written document by Angie (prior to advancing this claim) where Angie acknowledged that the listing agreement for this sale had been cancelled by her to avoid any commission being payable to her and the seller’s broker on the sale of the Gas Station. Angie’s position now is entirely inconsistent with what she wrote prior to this claim.

The Master Steaks Loan

[164] Angie alleges there was no outstanding loan from Truckers Haven to Master Steaks and states it “suspiciously” appeared in the Truckers Haven books and records. I reject Angie’s evidence on this issue. I accept the uncontroverted evidence of Mr. Stamatopoulos is that the Truckers Haven and Master Steaks books and records recorded this indebtedness in their financial records for years.

[165] Eventually and contrary to her earlier statement under oath that this loan was not in the Truckers Haven financial records and it was the first time she saw this Master Steaks loan in 2017, Angie acknowledged that the numbers from the VTB distribution came from the Truckers Haven’s books and records, but she disputes “everything”.

[166] As set out above, I reject Angie’s evidence on this issue as Angie acknowledged in writing on several occasions that Master Steaks indeed had a loan to Truckers Haven going back many years.

Barbara and Gregory’s Loans

[167] The largest shareholder loans owing by Truckers Haven Holdco, were accumulated based on declared and unpaid dividends to Barbara and Gregory, obviously before their respective deaths and in Barbara’s case prior to 2012 and in Gregory’s case most of the unpaid dividends were also prior to 2012.

[168] To address Angie’s allegations, Mr. Stamatopoulos produced balance sheets for Truckers Haven’s businesses from 2001 to 2019, showing the amounts due to shareholders and amounts due to affiliated companies. Aside from Angie’s bald statement that these were falsified or “suspiciously appeared”, there is no evidence to the contrary that these loans were not reflected in the appropriate financial records annually.

Conclusion

[169] I accept that the Trucker’s Haven and Truckers Haven Holdco’s financial records, approved by the directors, showed and had shown the loans in its financial statement approved on November 16, 2017 for many years.

[170] I also accept that the Truckers Haven financial records did not show the alleged unpaid portion of the Construction Loan nor the Real Estate Commission as loans or as shareholder loans.

Truckers Haven Holdco Dividends post 2017

[171] As stated above, Gregory’s will created a trust - any monies owed or payable to his shares within 5 years from the date of his death by any of the Corporate Defendants were to be used to develop land owned by Truckers Haven.

[172] Angie holds 81,250 Preference Shares of Truckers Haven Holdco (approx. 14%) while her brothers hold, collectively, 568,750 Preference Shares of Truckers Haven Holdco.

[173] After Barbara’s death, dividends were paid out by the directors of Truckers Haven Holdco as follows: 50% were paid to the Gregory Preference Shares, and 50% to the Barbara Preference Shares (now equally to the four Children). During this period Angie was responsible for the Truckers Haven businesses financial affairs and instructed Mr. Stamatopoulos to so provide for the dividends in this manner.

[174] I find that dividends from Truckers Haven Holdco have continued in this manner after 2017. There is no evidence to the contrary. There continued to be dividends declared 50% to Barbara’s former Preference Shares and 50% to Gregory’s former Preference Shares.

Declared and Unpaid Dividends

[175] The shareholders loans generally arose from the decision to pay dividends (for tax saving purposes) but for which dividends were not paid and were recorded as owing to the recipients as a shareholder loan. The shareholder would immediately pay a lower tax rate on the dividends but would later be able to take out the monies from the shareholders’ loan account tax free.

[176] Angie now alleges that she knew nothing about declared but unpaid dividends. I reject her evidence on this issue. It is clear from Mr. Stamatopoulos’ evidence and documents that:

a) Angie received T5’s from Truckers Haven Holdco since 2012 for dividends that at times had been declared but not paid and recorded as shareholder loans. In fact, Angie reported the dividends on her income tax returns and at one point complained about having to pay tax on amounts not received;

b) Angie was responsible for the books and records of Truckers Haven businesses and Mr. Stamatopoulos included, in his evidence, a handwritten document from Angie instructing him to declare dividends for 2014 and 2015.

c) Angie signed the 2015 and 2016 T2 returns for Truckers Haven and Truckers Haven Holdco, where the dividends were declared and reported to Revenue Canada.

d) Angie signed the 2015 Trucker’s Haven’s financial statements which showed the amount of money due to shareholders and the dividends paid.

[177] I conclude that Angie was fully aware of and participated in the practice of dividends being declared, and when unpaid, being recorded as shareholder loans.

ANALYSIS

Preliminary Issues

Allegations against Mr. Mark Rush

[178] Angie alleges that Mr. Rush’s advice and document preparation was negligent and fraudulent, and that he was complicit to deliberately harm her interests when he had Angie sign the 2013 documents regularizing the Master Steaks estate freeze.

[179] Specifically, Angie alleges that Mr. Rush “made misrepresentations to me that the new paperwork was required to regularize the estate freeze by creating the necessary documents missed by William [Tatsiou]. I trusted my brother Peter, I trusted our lawyer Mark, and I trusted our long-time accountant Nick and believed these misrepresentations.” Angie continued:

“because of the negligent and/or fraudulent Representations of Peter and Mark outline above and in detail in my Statement of Claim, upon which I detrimentally relied when I signed the documents on Barbara’s behalf….”

“I verily believe that Peter, Mark and Nick knew their representations were false when they made them, or in Mark’s and Nick’s instances, their representations were made negligently or recklessly for the benefit of Peter, John and Bill and in furtherance of the fraudulent conveyance and benefitting themselves.”

[180] Angie goes on to say “The only reason that I executed the above referenced documentation to regularize and validate the Fraudulent 2002 Estate Freeze was because of the negligent and/or fraudulent representations of Peter and Mark outlined above and in detail in my Statement of Claim.”

[181] I will deal with the alleged misrepresentations below but, for the reasons set out, they were not misrepresentations, not material, did not constitute negligence or fraud.

[182] As evidence of Mr. Rush’s complicity, Angie refers to Peter and John having known Mr. Rush since high school and that he has represented them in various unrelated matters. However, in selecting Mr. Rush, Angie along with Peter and Bill, made the decision to retain Mr. Rush in September 2012 on behalf of Barbara’s Estate Trustee. And Angie raised no such concerns about Mr. Rush until this proceeding.

[183] There is no evidence that Mr. Rush did or said anything improper as alleged. Angie has no evidence to support such serious and vague allegations against Mr. Rush. Mr. Rush is not a party to this proceeding. Mr. Rush has no way to defend himself from these reputationally damaging statements. I am satisfied there is absolutely no evidence to support the serious, disparaging and bald allegations about Mr. Rush’s conduct.

Angie’s Conflict

[184] Angie commenced this proceeding in two capacities – her personal capacity and representative capacity for Barbara’s Estate.

[185] When challenging the VTB distribution, Angie disputes the loan owed to Barbara and therefore payable to Barbara’s estate.

[186] Angie challenges the Master Steaks estate freeze decided upon and implemented by Barbara and Gregory.

[187] The conflict with Angie’s positions is obvious. However, this issue was not raised by the Defendants and, as such, for the purpose of this motion, I have not considered or dealt with this issue.

Summary Judgment Test

[188] The test on summary judgment motions is not in dispute.

[189] Rule 20.04 (2) permits a court to grant summary judgment where:

(a) the court is satisfied that there is no genuine issue requiring a trial with respect to a claim or defence.

[190] Rule 20.04 (2.1) confers powers on a judge in summary judgment motion:

In determining under clause (2) (a) whether there is a genuine issue requiring a trial, the court shall consider the evidence submitted by the parties and, if the determination is being made by a judge, the judge may exercise any of the following powers for the purpose, unless it is in the interest of justice for such powers to be exercised only at a trial:

1. Weighing the evidence

2. Evaluating the credibility of a deponent.

3. Drawing any reasonable inference from the evidence.

[191] The approach for summary judgment motions was summarized by Corbett J. in Sweda Farms Ltd. v. Egg Farmers of Ontario, 2014 ONSC 1200, at paras. 33 and 34:

As I read Hryniak, the court on a motion for summary judgment should undertake the following analysis:

1. The court will assume that the parties have placed before it, in some form, all of the evidence that will be available for trial;

2. On the basis of this record, the court decides whether it can make the necessary findings of fact, apply the law to the facts, and thereby achieve a fair and just adjudication of the case on the merits;

The Supreme Court is clear in rejecting the traditional trial as the measure of when a judge may obtain a “full appreciation” of a case necessary to grant judgment. Obviously greater procedural rigour should bring with it a greater immersion in a case, and consequently a more profound understanding of it. But the test is now whether the court’s appreciation of the case is sufficient to rule on the merits fairly and justly without a trial, rather than the formal trial being the yardstick by which the requirements of fairness and justice are measured.

[192] As stated by Corbett, J., the fundamental question is whether the summary judgment process, in the circumstances of a given case, will permit the court to make a fair and just determination of the issues before the court. The question is not whether the procedure on the motion would be as exhaustive as a trial, but rather whether the evidentiary record and the process gives the judge confidence to find the necessary facts and apply the relevant legal principles to decide the issued in a fair and just manner: Hyrniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87, at para. 50.

[193] In Hryniak, Karakastanis J. considered the interrelationship between r. 20.04 (2) (a) and r. 20.04 (2.1) at para. 66:

On a motion for summary judgment under Rule 20.04, the judge should first determine if there is a genuine issue requiring trial based only on the evidence before her, without using the new fact-finding powers. There will be no genuine issue requiring a trial if the summary judgment process provides her with evidence required to fairly and justly adjudicate the dispute and is a timely, affordable and proportionate procedure under rule 20.04(2)(a). If there appears to be a genuine issue requiring a trial, she should then determine if the need for a trial can be avoided by using the new powers under Rules 20.04 (2.1) and (2.2). She may, at her discretion, use those powers provided that their use is not against the interest of justice. Their use will not be against the interest of justice if they will lead to a fair and just result and will serve the goals of timeliness, affordability and proportionality in light of the litigation as a whole.

(Emphasis added)

[194] Mere allegations, bald statements or assertions of belief, even under oath, on a summary judgment motion does not raise a genuine issue requiring a trial.

[195] Alleging that further or new evidence will or may be available at trial generally does not create a genuine issue for trial. The parties have an obligation to “put their best foot forward” and, unless there are clear, cogent and compelling reasons, the motion’s judge is entitled to accept that the summary judgment motion evidence is the evidence that would be called at trial.

[196] In Malik v. Attia, 2020 ONCA 787, at para. 62, the Court of Appeal articulated the test to consider a motion for partial summary judgment. The test is as follows:

When faced with a request to hear a motion for partial summary judgment, a motion judge should make three simple requests of counsel or the parties:

(i) Demonstrate that dividing the determination of this case into several parts will prove cheaper for the parties;

(ii) Show how partial summary judgment will get the parties’ case in and out of the court system more quickly;

(iii) Establish how partial summary judgment will not result in inconsistent findings by the multiple judges who will touch the divided case.

[197] Angie submit that there is conflicting evidence, credibility issues and a lack of evidentiary records as the primary reasons why the summary judgment motion should be dismissed in its entirety. Additionally, and alternatively, Angie submits that granting partial judgment would be inappropriate in these circumstances.

Conclusion on Summary Judgment

[198] Angie throws up many impediments to granting summary judgment on all issues: many claims, allegations, and submissions most with no evidentiary foundation and no law to support.

[199] Bald statements or expressing belief by Angie in an affidavit, a factum or counsel’s submissions does not result in there being “insufficient evidence” or “material complex legal issues” or “material factual discrepancies” thereby creating material credibility issues or a genuine issue requiring a trial.

[200] Angie also submits there are insufficient facts to make a fair and just judicial determination. I disagree. The relevant and material facts are undisputed, clear based on overwhelming documentary evidence.

[201] Angie alleges that information and evidence might be garnered from the appointment of an inspector and/or auditor “to shed light on some of the discrepancies and issues”. This is entirely speculative. Whether or what an inspector or auditor might find is unknown. More importantly, Angie does not explain why, in the two and a half years since this action was commenced, she hasn’t retained their own accounting expert to review the books and records of the various companies to support her statements or beliefs or to have a forensic account provide an opinion on the matters at issue or an opinion on what might be obtained during a complete and thorough investigation.

[202] Angie submits that the limitations issue cannot be decided because of “discoverability”. A discoverability issue may very well prevent a summary judgment motion from succeeding where a limitation defence has been raised. It depends on the issue, the facts, the circumstances, issues to be decided and whether, based on those factors, the court can determine whether there is a genuine limitation’s issue requiring a trial. However, bald statements that “I didn’t know until __” or “I didn’t look at the documents until _____’ will not get very far to establish a genuine discoverability issue requiring a trial. For example, Angie alleges that her alleged unpaid loans were only “discoverable” when the VTB monies distribution was decided on October 20, 2017 without including her alleged real estate commission and construction loans. That is not the law. The limitation period does not start to run when the borrower says I am not paying you. The limitation period runs from the time the debt is payable.

[203] Angie also alleges that because she seeks a declaration that the Master Steaks estate freeze didn’t occur, there is no limitation period. The relief sought by Angie isn’t a simple declaration but to set aside the Master Steaks estate freeze that occurred many years ago and the corporate and financial consequences that flow from that.

[204] Alternatively, Angie alleges that because Master Steaks operated out of a property, the 10-year limitation period under the Real Property Limitations Act applies. I reject this submission. Owning and operating out of a property has nothing to do with the issues before this court.

[205] For the reasons set out below, I find that summary judgment can be granted dismissing most of the claims advanced by Angie.

Conclusion on Partial Summary Judgment

[206] Angie submits that granting partial summary judgment will not benefit the court or the parties on timeliness, affordability and proportionality. I disagree.

[207] Angie submits that there is a “high likelihood” of inconsistent findings without the benefit of the inspector/auditor’s review. I reject this submission.

[208] I am satisfied that this is an appropriate case to grant partial summary judgment because:

a) The allegations cover a period of more than 20 years and it will be many years before a trial (even if immediately ready for trial, the earliest dates will be in early/mid 2024 trial dates or dates in 2025);

b) There are very discrete substantial factual and legal issues which are clearly severable. For example, the determination that the Master Steaks estate freeze was validly effected in 2002 will remove a very substantial, complex, historical, and documentary intensive issue in this proceeding. The Master Steaks estate freeze is entirely separate and distinct from the VTB distribution.

c) Resolving one or both of the mains issues will substantially reduce examinations and trial time, saving a considerable expense to all parties and judicial resources.

d) Resolving one or both of these issues will eliminate much of the interim relief sought by Angie and reduce expert evidence at a trial; and

e) The issues are so distinct, there is no likelihood of inconsistent findings. Again, as an example, eliminating the Master Steaks estate freeze will not impact on the VTB distribution issue or visa versa.

Credibility

[209] I have carefully reviewed the lengthy and voluminous affidavits filed on these motions and the cross-examinations. The documentary evidence is extensive, in many cases going back many years, some as many as 20 years.

[210] I recognize that the first step in a summary judgment motion is to determine whether there is a genuine issue requiring a trial without recourse to the courts additional powers under r. 20.04(2.1).

[211] In this case, several issue can be decided without the court utilizing these additional powers. In other separate issues, the court has relied upon its additional powers, namely, weighing the evidence, considering the credibility of the deponents, and drawing inferences where appropriate.

[212] I will identify where this court has relied on its powers under r. 20.04 (2.1) to make a fair and just determination of the issue.

[213] Let me make a few comments about credibility.

Mr. Dimakos

[214] Mr. Dimakos is an impartial witness in this case. His last accounting work for Barbara and Gregory was some 20 years ago. He has no reason to be biased one way or the other. His evidence is largely based on documents prepared by him or his personal and direct involvement.

[215] I have no reason to doubt the accuracy or reliability of his evidence. I accept the evidence of Mr. Dimakos. There is no evidence inconsistent with Mr. Dimakos’ evidence except for Angie’s bald assertions of disbelief or disagreeing with Mr. Dimakos’ evidence.

Mr. Stamatopoulos

[216] Mr. Stamatopoulos worked as a “compilation accountant” for the family business since 2002. There were no issues raised regarding his accounting work or favouring one side or the other, including over the years when Angie was responsible for financial dealings of the family corporations and dealing directly with Mr. Stamatopoulos.

[217] That abruptly changed when Mr. Stamatopoulos wouldn’t support Angie’s proposed settlement for the distribution of the VTB monies. Angie perceived this as against her interests because it reduced her share of those monies. Then, and only then, did Angie allege that Mr. Stamatopoulos created fictitious documents, was negligent and/or was biased.

[218] Angie alleged in this proceeding (as she did in her complaint to the regulatory accounting authorities) that Mr. Stamatopoulos created documents which Angie said she had never seen before or “suspiciously appeared”. The regulatory accounting authorities did not find that Mr. Stamatopoulos engaged in any such conduct. Angie admitted, in her cross-examination, that the amounts used by Mr. Stamatopoulos in his draft VTB distribution came from the financial records of the companies. But then Angie resorts to “its all-in dispute” with no detail and no supporting evidence.

[219] There is no evidence that Mr. Stamatopoulos was negligent or biased in his accounting work or engaging in back-dating the financial records. We only have Angie’s bald assertions to support her allegations.

Peter Ioannidis

[220] No doubt, Peter has an interest in these matters – a financial interest.

[221] There were several instances where Peter engaged in speculation about Angie, such as suggesting a motive for Angie retaining the corporate books and records. Such speculation is inappropriate and not reliable evidence. It too is a bald assertion.

[222] However, on most matters, I found Peter’s evidence to be consistent with contemporaneous documents. Peter relied heavily on lawyers and accountants for his actions and much of what he did is confirmed by other witnesses such as Mr. Dimakos, Mr. Stamatopoulos, Mr. Rush, and the many documents he received from Angie or sent to Angie.

Angeliki Cormpilas

[223] I find that Angie’s evidence is neither credible nor reliable.

[224] Angie’s evidence is full of bald, unsubstantiated statements and beliefs, even when those statements and beliefs are clearly inconsistent with contemporaneous documentary evidence, even when authored by her. Several examples:

a) Angie states in her affidavit that, when the VTB distribution was proposed in 2017, it was the “first time I had ever heard of and learned of the Master Steak loan”. This is completely false. As will be detailed below, Angie had, on at least three prior occasions, acknowledged in her own emails the existence and quantum of the Master Steak Loan.

b) Angie alleges her mother did not intend nor agreed to the Master Steaks estate freeze. During Angie’s cross examination, she admitted that she didn’t know about the Master Steaks estate freeze until after Barbara’s death in 2012. Angie’s support for such a statement? Nothing more than a belief Barbara wouldn’t have agreed to “cutting Angie out” of the Master Steaks business. That itself would be a very speculative and bald statement, but then Angie goes further to state that Gregory and Mr. Dimakos improperly “got” Barbara to sign the Master Steaks estate freeze documents.

c) Angie attended the meeting on March 8, 2016, received $100,000 for her Preference Shares in Master Steaks Holdco, and signed over the Preference Share certificate. There is no dispute she did so from her own emails after the redemption. But Angie goes on to state “I verily believe that I never sold or agreed to sell any of my shares in the Corporate Defendants”. Angie makes an unsupported statement that the monies came from Gregory at some unspecified point in time and that she never agreed to sell her Preference Shares in Master Steaks Holdco.

d) Angie states that Peter told her he was present when her parents signed the estate freeze documents. Peter denied this, stating instead he was present when Mr. Dimakos first raised the idea of an estate freeze. This is not a critical piece of evidence. But, Angie goes on to state: “Moreover, knowing Peter, if he was not at the table then he was close by and involved and exercising his influence.” There is no evidence for this self serving, and bald statement. Angie wasn’t there.

e) Many of Angie’s contemporaneous emails are entirely contrary to her current evidence or position. When Angie’s emails are clear and there is no basis to deny what happened or what she said, Angie attempts to explain her prior inconsistent behaviour and statements on the basis of “misrepresentations” or “bad advice”, or her conclusion that she “now understands” or “believes”.

f) Angie makes statements drawing various conclusions about the validity of the estate freezes. How? Angie testified in her cross-examination that her understanding and belief on s. 85 Income Tax Act rollovers (i.e. estate freezes), was “self taught” and comes from her extensive “googling” on “s. 85 and how they work”. As a result, she states as a fact the necessary accounting and legal requirements for an estate freeze.

[225] When a witness gives evidence contrary to Angie’s position, Angie attacks the credibility and reliability of that witness. According to Angie, these witnesses are not believable, incompetent, fraudulent, misrepresenting, gave wrong advice, are biased, or are simply doing “Peter’s bidding”. Angie blames Gregory, her brothers, Mr. Rush, the accountants, Mr. Sopov, and even her estate lawyer Caroline Abela (for failing to discover that the estate freeze had not occurred when Angie challenged Gregory’s will). A few examples:

a) Angie alleges Mr. Dimakos’ evidence is biased in favour of Peter, despite the fact that Mr. Dimakos stopped working for Barbara and Gregory 20 years ago, never worked for Peter, John or Bill and has not worked for any member of the family or the companies since 2002. Angie states “It is unclear how Strath [Mr. Dimakos] can believe this to be true given that the Fraudulent 2002 Estate Freeze did not occur”. She suggests that Mr. Dimakos’ statements are “biased and argumentative”. Angie conveniently ignores that she wasn’t there, didn’t know about the estate freeze until 2012, and the overwhelming documentary evidence to the contrary. And, Angie ignores that Mr. Dimakos’ evidence is entirely supported by the contemporaneous documents.

b) Angie states that the financial records showing loans payable by Truckers Haven businesses “suspiciously appeared” or were manipulated by Mr. Stamatopoulos “at Peter’s insistence”. Angie says this despite the fact she was responsible for the accounting and financial affairs for Truckers Haven businesses until at least 2017, dealt with Mr. Stamatopoulos, and had possession of the financial records (and refused to return them) until not long before she commenced this action. Angie filed a complaint with the Chartered Professional Accountants of Ontario (“CPA”) in 2020 against Mr. Stamatopoulos alleging that Mr. Stamatopoulos fabricated documents (the financial records). After a review by the CPA’s Committee, they found “no evidence presented to indicate that financial records were fabricated or manipulated to provide false or misleading financial reports by allocating corporate debts in contravention of the Income Tax Act or producing dividend allocation not in accordance with CRA rules or Articles…” I recognize this finding is not binding on this court, but, I add this comment because this finding is consistent with the fact that Angie’s bald statements and allegations that the financial records were fabricated or manipulated continue to have no evidentiary support, including the evidentiary record before this court.

c) Angie alleges that Gregory forged Barbara’s signature on various documents and produces other documents to suggest the signatures are not the same – thereby disparaging her father - with no evidence to support this statement. Angie makes this serious allegation of forgery with no handwriting expert and no explanation as to why one was not retained in the past two and half years. Then Angie agrees that some of the alleged forged documents are irrelevant, leaving the court to wonder why such speculative and unsupported statements were made in the first place. On other relevant documents (Master Steaks estate freeze Subscription and Resolutions document), Angie now claims she received these critically important documents in 2013 but didn’t review them, and only years later discovered (and now alleges) that her mother’s signature was forged – by her father – again without a handwriting expert. And like so much of Angie’s evidence, she takes this speculation to new heights by suggesting that Gregory forged Barbara’s signatures “at Peter’s insistence” with no evidentiary support.

[226] Angie’s evidence is full of inconsistencies and taking inconsistent positions. A few examples:

a) Angie states she was told the only forms required to effect an estate freeze were the T2057 forms, and she proceeded to sign necessary Master Steaks estate freeze documents in 2013 based on legal advice she received that additional documents were needed to regularize the 2002 Master Steaks estate freeze. However, Angie readily accepts that the Truckers Haven Holdco estate freeze occurred despite the fact it too didn’t have complete corporate documentation (such as the original executed rollover agreement for Truckers Haven found in 2021). The only difference is that Angie participates in the Truckers Haven estate freeze but does not participate in the Master Steaks estate freeze.

b) Angie complains that her brothers didn’t continue the Master Steaks Holdco’s past dividend policy to her detriment for the brief time she held some Preference Shares in Master Steaks Holdco. However, Angie also complains that her brothers didn’t (and shouldn’t) continue the Trucker’s Haven Holdco’s past dividend policy. It depends on what financially benefits Angie.

c) While Angie now takes issue with the resolutions passed in 2013 to rectify corporate record deficiencies in the Master Steaks estate freeze, she had no hesitation suggesting to her brothers in writing that they “create resolutions to effect” significant alterations to the corporate legal obligations to implement her proposed settlement of the VTB monies distribution.

[227] Some of Angie’s statements clearly make no sense or appear to be more akin to legal submissions. For example, she says that the sole director, Gregory, as a result of Barbara’s death, could not sign the Master Steaks regularizing resolutions in 2013 despite the resolutions being prepared by Mr. Rush, counsel retained by her. Angie has led no evidence or make any legal argument that Gregory, as the sole surviving director, could not sign the resolutions. By law, when a director dies, they cease to hold office and the remaining directors can manage the corporation until a new one is elected (if required by the by-laws).

[228] While Angie makes statements as though factual, they need to be carefully scrutinized because often they are based on her belief, her speculation, or her misunderstanding. For example, during cross examination she testified that “Preference shareholders are not real shareholders. They’re investors. They’re the guys who infuse the initial capital. They are non-participant. They don’t participate in any of it. They don’t own any of it. All they own is a debt owed to them by the holding company for the money they put into it…” This demonstrates her lack of a proper understanding of shareholdings, debt and corporate management.

[229] And then there is Angie’s improper conduct which demonstrates the length Angie will go to advance her financial position:

a) Angie altered negotiated cheques prior to giving them to the CRA during its audit to support her alleged construction loan by writing after the fact reasons for the cheque on its face. The altered cheques were given to the CRA as proof of Angie’s loan.

b) Attempting to after-the-fact amend the redemption of her shares in Master Steaks Holdco into a share transfer to “block” Gregory’s voting interest. This included altering the back of the share certificate and creating an after the fact Notice of Objection. Angie in an email dated May 28, 2016 (after the redemption) actually told Bill to get the Minute Book from Mr. Rush and “take out anything in there that refers to the redemption and my Shareholder’s certificate and keep that out of the books..”;

c) Admitted, in writing, to cancelling a real estate listing agreement to defeat the selling agent’s entitlement to a commission and to deprive her own broker of the real estate commission; and

d) Wanting her brothers to accept her proposed resolution or she would report them to CRA for tax evasion.

[230] Angie’s anger over having been excluded in the Master Steaks estate freeze and later her lack of inheritance from her father, colours her motives, beliefs, and statements in her claims and statements. A few examples:

a) Angie believes her parents would not have excluded her from Master Steaks, leading her to make such statements as “it is not believable that the Parents were unanimously in agreement to exclude me from ownership of Master Steaks”. She makes this statement despite the overwhelming evidence to the contrary. This belief leads Angie to make statements such as suggesting that Gregory in 2002 “purported to proceed with the fraudulent estate freeze by forging Barbara’s signature” but then goes further to suggest that the forgeries may have been done in 2013 “at my brother Peter’s insistence”.

b) Angie denies that the estate freeze documents were signed at the restaurant as stated by Mr. Dimakos because she believes there would have been no private place for the accountant, the lawyer, and her parents to sign documents.

[231] I reject any evidence of Angie where it was inconsistent with the evidence of another deponent or a contemporaneous document.

I. Master Steaks Estate Freeze

The Estate Freeze

[232] Angie alleges that the Master Steaks estate freeze occurred without Barbara’s knowledge or consent and Barbara remained a 50% shareholder in Master Steaks. I reject each of these submissions. There is no evidentiary support for this claim. More importantly, it is entirely inconsistent with the vast and overwhelming evidentiary record, both documentary and testimony, to the contrary.

[233] When confronted with the evidence of Mr. Dimakos and the 2002 signed rollover agreement and the CRA 2002 filed T2057, Angie states she believed that Gregory “ultimately aborted the idea” of the Master Steaks estate freeze. Now, did Gregory forge documents to make the estate freeze occur or did he change his mind? Angie alleges both. They are inconsistent.

[234] Besides, I reject that Angie didn’t look at the Subscription and Resolution Documents in 2013 when she had been challenging the Master Steaks estate freeze. But even accepting her evidence that she didn’t look at these documents until 2016 and then believed that Barbara’s signature had been forged (something that was never raised until this proceeding in 2019 and without expert proof), Angie does not explain why she did nothing, including moving to set aside the Master Steaks estate freeze in 2016 based on this evidence. It raises a very serious limitation issue regarding her challenge to the Master Steaks estate freeze.

[235] Angie also fails to explain why, if Gregory had aborted the idea of the Master Steaks estate freeze, why would Gregory not raise this issue in 2012 or 2013 before the regularizing documents were signed? Or why Angie didn’t advance this claim before Gregory died?

[236] Angie also alleges that Barbara and Gregory did not give up their respective 50% shareholding in Master Steaks. Presumably, this was based on the contents of the Minute Books in 2012. There is a serious fundamental flaw with this speculation. The only shares Barbara and Gregory had in Master Steaks before the estate freeze were Common Shares. Had they kept their Common Shares, it would not have been a valid or effective estate freeze. More importantly, the T2057 filed with the CRA actually shows that Barbara and Gregory disposed of their Common Share at fair market value and received Preference Shares with a redemption of that same fair market value – that is the essence of an estate freeze. Then there are the 2002 signed Subscription and Resolution Documents that documented the various share transactions by Barbara and Gregory to implement the Master Steaks estate freeze. Then there is the 2002 Rollover Agreement signed by her parents. When all considered, there is no basis to suggest or conclude that Barbara and Gregory continued to hold 50% each of the common shares in Master Steaks after 2002.

[237] The above facts clearly establish that Barbara and Gregory intended to and did implement the Master Steaks estate freeze in 2002. All the contemporaneous evidence, documentary and testimonial evidence, establishes that Barbara and Gregory intended the Master Steaks estate freeze to occur in 2002; their accountants proceeded to implement that estate freeze; the documents to implement the estate freeze were signed and filed with CRA; and everyone relied on the fact that estate freeze had been implemented.

[238] I reject Angie’s position that the Master Steaks estate freeze did not occur in 2002 or that it wasn’t affected then.

[239] Perhaps, if that was the end of the story, this court might have to get into the issue whether the effect of any missing or incomplete documentation in 2012 resulted in the Master Steaks estate freeze not being legally implemented or effective in law. However, even that issue was put to rest in 2013.

Regularizing the Master Steaks Estate Freeze

[240] In 2012, when Barbara died, not all the necessary corporate documentation for the Master Steaks estate freeze could be found; some perhaps because they were not completed; others because they were missing at the time.

[241] Mr. Rush was retained by Angie, Peter and Bill. Accountants were questioned. The CRA was questioned. Financial Statements were reviewed and to quote the CPA (from their decision in Angie’s complaint against Mr. Stamatopoulos) and Mr. Stamatopoulos for the years leading up to 2012, “the CRA accepted the estate freeze throughout including their audits”.

[242] The investigations and enquiries were done at Angie’s insistence because Angie challenged that the Master Steaks estate freeze had occurred.

[243] In 2012 and 2013, Gregory did not dispute that the Master Steaks estate freeze had taken place in 2002. Surely, if one of the key persons who controlled Master Steaks and decided to proceed with the Master Steaks estate freeze, and who instructed the lawyers and the accountants to implement the Master Steaks estate freeze in 2002 and executed the necessary documentation in 2002, had disputed the existence or validity of the Master Steaks estate freeze, it would have become an issue in 2012-2013. Yet, the only evidence is that in 2013 Gregory signed all the corporate documents needed to regularize the Master Steaks estate freeze reconfirming the estate freeze had occurred in 2002.

[244] Angie was given copies by Mr. Rush of the Subscription and Resolution Documents (Subscription and Resolution Documents) signed by her parents in 2002, which clearly show that Angie was excluded from the Master Steaks estate freeze. Given the significance of the Master Steaks estate freeze to Angie and her desire to challenge its validity, if necessary, I would reject Angie’s evidence that she didn’t look at these documents in 2013 when given to her.

[245] After the investigations, everyone, including Angie, accepted that the Master Steaks estate freeze had occurred in 2002 and proceeded to complete the missing and needed documentation in 2013 to regularize the 2002 Master Steaks estate freeze. Angie attended the corporate meeting to sign, and did sign, the necessary documents. Angie knew and understood, after leaving the meeting, that she was not a shareholder of Master Steaks Holdco or Master Steaks, except to the extent Angie would inherit some Master Steaks Holdco Preference Shares through Barbara’s Estate.

[246] Upon executing all the regularizing documents in 2013, the Master Steaks estate freeze now had all the necessary documents duly completed.

[247] Even without the regularizing documentation, rectification at law would have been available if become necessary. In dealing with a tax transaction, the Court of Appeal in Attorney General of Canada v. Juliar, 2000 CanLII 16883 (ON CA), 50 O.R. (3d) 728, upheld the rectification of the transaction where the court found clear and convincing evidence that the applicants had a common and continuing intention from the inception of the transaction:

[33] In Re Slocock's Will Trust, [1979] 1 All E.R. 358 (Ch. D.) the court was concerned with an application for rectification of a deed designed to reduce or avoid payment of tax on the death of a party, but which deed mis-described the property involved due to a solicitor's error. In granting rectification, Graham J. said the following at pp. 361 and 363:

The general principle in regard to rectification is clearly stated in Snell's Principles of Equity [now Snell's Equity, 30th ed. p. 693] in the following words:

"If by mistake a written instrument does not accord with the true agreement between the parties, equity has power to reform, or rectify, that instrument so as to make it accord with the true agreement. What is rectified is not a mistake in the transaction itself but a mistake in the way in which that transaction has been expressed in writing. `Courts of Equity do not rectify contracts; they may and do rectify instruments purporting to have been made in pursuance of the terms of contracts'."

The true principles governing these matters I conceive to be as follows. (1) The court has a discretion to rectify where it is satisfied that the document does not carry out the intention of the parties. This is the basic principle.

(Emphasis added)

[248] After the execution of the regularizing documents, the accountants, CRA and the parties continued to rely on the fact the Master Steaks estate freeze had occurred in 2002.

[249] Angie continued to believe and assert until 2018 that the Master Steaks estate freeze had in fact occurred, that is, until Gregory’s death – the one person who could, with authority and knowledge, put an end to any such challenge by Angie as to the validity of the Master Steaks estate freeze.

[250] I conclude that, if necessary, the regularizing documents did what everyone expected and intended them to do – complete the necessary documentation to ensure that the Master Steaks estate freeze had occurred in 2002.

The Alleged Misrepresentations

[251] Now, Angie has several significant hurdles to overcome in any challenge to the Master Steaks estate freeze – the 2002 clear and compelling evidence; the documents she executed in 2013; and a course of conduct that she (and everyone else) acknowledged the Master Steaks estate freeze for years.

[252] Angie alleges that she “discovered the fraud committed while having Gregory’s will reviewed by her solicitor because she had questions and concerns arising from the Individual Defendants’ distribution VTB Mortgage Payout which led to Angie’s discovery that the Representations made by Peter were false…” Angie does not go into any detail as to what it was regarding Gregory’s will that uncovered this “fraud” regarding the Master Steaks estate freeze. Angie states that she “discovered” the alleged “fraud” on March 31 or April 1, 2018.

[253] Angie seeks to overcome the documents signed by Gregory, her brother, and herself in 2013 by alleging that she would not have signed the documentation but for “fraudulent misrepresentations”. The alleged misrepresentations are set out in the Statement of Claim and Angie’s first affidavit at paragraph 60-70.

[254] This court, for the reasons set out herein, finds there were no misrepresentations, negligence, or fraud as alleged or otherwise by Peter, Mr. Rush, Mr. Stamatopoulos or anyone to get Angie to sign the corporate documents in 2013. The allegations of “fraudulent misrepresentations” by Angie is a misconceived attempt to circumvent her exclusion in the Master Steaks business.

[255] Let me deal with each of the alleged misrepresentations:

a) Angie alleges the following misrepresentation: Peter said he was present and witnessed the estate freeze documents being signed by Gregory and Barbara. This is denied by Peter who states he was only present when Mr. Dimakos raised the possibility of the estate freeze with Gregory and Barbara. In any event, even if Peter’s statement was true, this was not a material misrepresentation nor one which would have induced Angie to execute the regularizing documents in 2013. Given all the evidence of what occurred in 2002, even if Peter made this misrepresentation, it would not have changed the fact the Master Steaks estate freeze was affected in 2002.

b) Angie alleges the following misrepresentation: The Estate Freeze was Mr. Dimakos’ idea. It is not clear why this would be a material “misrepresentation”. Mr. Dimakos acknowledges it was his idea and he suggested it to Barbara and Gregory. Therefore, the representation was true. In any event, I see no connection between this allegation and why Angie would be improperly induced to sign the 2013 documents because of this statement.

c) Angie alleges the following misrepresentation: Mr. Dimakos incorporated Master Steaks Holdco. Mr. Dimakos attested that he retained a corporate lawyer (Mr. Tatsiou) to do incorporate a holding company and Mr. Tatsiou did so. I see no connection between this allegation and why Angie would be improperly induced to sign the 2013 documents because of this statement.

d) Angie alleges the following misrepresentation: Peter told her that the Master Steaks estate freeze was what Barbara wanted. Despite the various inconsistent statements made by Angie, all the other evidence, including the evidence Mr. Dimakos, Mr. Stamatopoulos, Barbara’s signature on the T2057, and subsequent tax filings and other signed documents before Mr. Dimakos and Mr. Tatsiou in 2002, Barbara’s unchallenged and undisputed signatures on the Rollover Agreement and the T2057, all demonstrates that Barbara intended to and did proceed with the Master Steaks estate freeze. In addition, there is the direct evidence of Mr. Stamatopoulos, who specifically questioned Barbara on this issue and Barbara confirmed to him that she understood and agreed to the Master Steaks estate freeze without Angie’s participating in that estate freeze. Even if Peter made this statement, I do not view it as a misrepresentation.

e) Angie alleges the following misrepresentation: the finding of the T2057 or other needed documentation “had nothing to do with hurrying up to update” the corporate records. The fact is that Angie didn’t agree to “regularizing” the corporate records until after the T2057 filings with the CRA, with Barbara and Gregory’s signatures on them, were confirmed and copies obtained from the CRA as to what had been filed in 2002. The T2057 with her parent’s signatures was the last key document, at least for Angie, to her decision that the Master Steaks estate freeze had actually occurred in 2002, and she then, and only then, agreed to execute the 2013 documentation. Nevertheless, there was then (and still is) a considerable amount of additional overwhelming documentary and other evidence of the implementation of the estate freeze in 2002. I do not consider this a misrepresentation or a false statement. The investigations took almost a year, resulting in legal advice from Mr. Rush and acceptance of that advice by Angie. Given this court’s finding that the Master Steaks estate freeze had occurred in 2002, there was nothing wrong about the advice Mr. Rush provided.

f) Angie alleges the following misrepresentation: if the Minute Books were not updated, they would not be able to probate Barbara’s will and distribute shares. This is not a misrepresentation. It is true. Angie took issue with what was included in Barbara’s estate. Until the issue of whether the Master Steaks estate freeze had been resolved, probating Barbara’s will and a distribution to the beneficiaries could not occur.

g) Angie alleges the following misrepresentation: the filing in 2002 of the executed and filed T2057 with Barbara and Gregory’s signatures with the CRA was sufficient “proof” that the Master Steaks estate freeze took place. To Angie, this was significant evidence that the Master Steaks estate freeze had taken place. But that should not be taken in isolation. I will not repeat the rest of the documentary and testimonial evidence that was clear, cogent and overwhelming that the Master Steaks estate freeze had been implemented in 2002.

h) Angie alleges that the following misrepresentation: Peter told her she was “crazy” to think that Barbara wanted her to have any of Master Steaks. Whether true or not, this is not a misrepresentation. It was not material nor would it be such as to induce Angie to sign the 2013 documents. The evidence establishes and the fact is that Barbara understood, knew and decided that Angie was to be excluded from the Master Steaks estate freeze.

[256] Angie admits that she continued to recognize the Master Steaks estate freeze right up until March 2018. But if she discovered the “fraud” in 2018, why did she not challenge the validity of the Master Steaks estate freeze until 2019? The answer is simple – Gregory was still alive and would have been able to testify as to the Master Steaks estate freeze. It was only after Gregory died that Angie brought forward allegations of fraud, misrepresentations, and conspiracy to set aside the Master Steaks estate freeze.

[257] One last issue. Angie takes the position that there was a failure to comply with the closing requirements under Article 11 of the roll-over agreement. This argument comes too late. Once the regularized corporate documents were signed in 2013, including by Angie, the failure to complete any documents in 2002 became irrelevant. This claim has no merit:

a) Any non-compliance with the closing requirements (ie. formal delivery of documents) became moot, when the transaction was completed and all parties to it, proceeded on the basis that the Master Steaks estate freeze had occurred and was effective.

b) One of the resolutions passed in 2013 included one that adopted and confirmed all prior corporate acts. As such, any non-compliance became moot.

c) Article 11.4 expressly provides that all “personal representatives, successors and assigns” are to do such other acts necessary and desirable to give effect to the Rollover Agreement. As such, Barbara’s estate is required to execute any documents to regularize the estate freeze, if necessary, by virtue of this provision in the signed Rollover Agreement found in 2021 which agreement is not disputed by Angie or her counsel.

d) By everyone’s conduct and corporate reporting from 2002 to date, the parties and companies are now be estopped from denying the validity and existence of the Master Steaks estate freeze in 2002.

[258] There is no genuine issue requiring a trial on the alleged misrepresentations or that Angie relied on these alleged misrepresentations.

The Validity of the Master Steaks Estate Freeze

[259] There is no need for me to rely on the court’s additional powers to make this determination.

[260] Eliminating Angie’s bald statements, speculation and unsupported belief, the documents, direct evidence of the accountants and the parties as to what occurred from 2002 to date, is more than sufficient for this court to conclude that a determination can be made that is fair and just to the parties.

[261] I find that the Master Steaks estate freeze in 2002 was valid, enforceable, and occurred in 2002. Alternatively, any deficiency was rectified in 2013. In the further alternative, Angie, the Individual Defendants, and the companies are now be estopped from raising any technical deficiency to challenge the validity that the Master Steaks estate freeze occurred in 2002.

[262] If necessary, I would have concluded that Angie’s claim is statute barred by the Limitations Act. The limitation period for any challenge to the validity of the Master Steaks estate freeze commenced in 2012 when Angie first became aware of the documentary deficiency and could have challenged the Master Steaks estate freeze.

[263] There are several additional issues raised by Angie relating to the Master Steaks businesses which I will deal with next:

a) The redemption of Angie’s Master Steaks Holdco Preference Shares; and

b) The lack of dividends from Master Steaks Holdco from 2012 to 2016.

Redemption of Angie’s Master Steaks Holdco Preference Shares

[264] Upon Barbara’s death in 2012, Angie inherited 81,250 Preference Shares in Master Steaks Holdco, as did each of her brothers (for a total of 243,750 Preference Shares held by her brothers, who also held a total of 300 Common Shares).

[265] Angie was aware that these Preference Shares could be redeemed for $1 per share as provided for in the Articles of Incorporation. She was told this in writing by Mr. Rush in his letter of September 13, 2013, before the execution of the 2013 regularizing corporate documents for the Master Steaks estate freeze.

[266] Peter, Bill and John decided to redeem Angie’s Preference Shares in Master Steaks Holdco in 2015.

[267] Angie did not dispute the right to redeem those shares but wanted an indemnity as a condition of the redemption. Peter, John and Bill disagreed that an indemnity was needed. Negotiations led nowhere. Peter, John and Bill scheduled a meeting for March 8, 2016, to redeem Angie’s Preference Shares in Master Steaks Holdco.

[268] On February 25, 2016, in anticipation of the redemption of Angie’s Preference Shares, Angie sent Peter a copy of a signed release in favour of Master Steaks Holdco and her brothers.

[269] The meeting proceeded on March 8, 2016. Angie attended the meeting. Angie’s Preference Shares were redeemed for $100,000 (more than the $1 per share) on March 8, 2016. Angie signed the back of the Preference Share certificate as evidence of the cancellation and handed in her Preference Share certificate at the meeting. Angie accepted the $100,000.

[270] In Angie’s responding affidavit, she states she would not have signed the release but for Peter’s misrepresentations. For the reasons set out above, there were no such misrepresentations.

[271] Another position taken by Angie is that she alleges, during her cross examination, that she was told by her father (at a time that she couldn’t remember) that the $100,000 had come from Gregory. So, Angie states:

It turns out it never came from the company. It turns out it was my father’s money. And nobody signed the instructions of what we gave him. It wasn’t done. There was no share for share transfer. There was no purchase. There was no redemption. Nothing happened. All this went down the tubes. This whole deal died.

[272] In response, Bill produced a document which shows that he contributed 1/3 of the $100,000 from his bank account for the money used for the redemption of Angie’s Master Steaks Holdco shares. Peter states he and John also contributed their share of the $100,000 but had not located the bank documents at the time of swearing the affidavits.

[273] I am not persuaded that the source of the $100,000 is material to the validity of the redemption or Angie’s Preference Shares. Angie agreed to the redemption of her shares before the meeting and before she knew where the money was coming from or came from. Wherever the money came from is a corporate accounting issue, even if it came from Gregory.

[274] The redemption of Angie’s Preference Shares in Master Steaks was a valid transaction, duly authorized and properly carried out. The right to redeem was known to Angie and accepted by Angie. There was nothing improper or oppressive with the redemption of Angie’s Master Steaks Holdco Preference Share.

[275] Another position taken by Angie is that Barbara continued to own 50% of the common shares of Master Steaks (not Master Steaks Holdco). For the reasons set out above, there is no merit to this allegation.

[276] Lastly, Angie would have known about any claim she would have regarding the redemption of her Preference Shares in Master Steaks Holdco on March 6, 2016, more than two years prior to the commencement of this action. Having rejected Angie’s “misrepresentation”, “fraud”, and “conspiracy” arguments, there is no discoverability issue. This claim is statute barred by the Limitations Act.

[277] This court can fairly and justly determine without a trial and has determined that the redemption of Angie’s preference shares in Master Steaks Holdco was valid and were not oppressive to Angie’s interests. This determination can be made without the court needing to use its additional powers.

[278] Angie’s claim in this regard is dismissed.

Lack of Dividends from Master Steaks’ Business

[279] Given this court’s determination that the 2002 Master Steaks estate freeze was valid and enforceable, Angie was not entitled to dividends from this business except to the extend any dividends were declared after Barbara’s death in 2012, when Angie inherited and held 81,250 Preference Shares in Master Steaks Holdco until their redemption in 2016.

[280] There is no evidence that any dividends were declared to any of the shareholders during this period.

[281] Angie suggests that the dividend policy was changed during this period. Yet, Angie does not set out what the dividend policy was or how it changed.

[282] Angie alleges that monies were paid out as “management fees” to her brothers. Yet, she puts forward no evidence to support this allegation.

[283] The details and evidence supporting Angie’s allegations on this claim. None.

[284] It is also important to remember that from late 2013 until at least early 2016, Angie was responsible for the financial matters for the family companies (including Master Steaks companies) and dealing with Mr. Stamatopoulos. Angie would have had knowledge of the corporate and financial affairs of the Master Steaks business. Angie raised no complaint regarding dividends or anything else during the period in question.

[285] In these circumstances, Angie’s claim for any dividends from Master Steaks Holdco would have been known to Angie during the period of 2013 to 2016. This claim is brought more than two years prior to the commencement of this proceeding. Accordingly, this claim is barred by the Limitations Act.

[286] I am satisfied that this court can fairly and justly determine Angie’s claim for dividends from the Master Steaks Holdco Preference Shares without requiring a trial. This court can make this determination in a fair and just manner without resorting to the use of its additional powers.

[287] Any clam Angie has for any dividends from the Master Steaks Holdco after the redemption is dismissed. This includes any claim that this alleged conduct was oppressive to Angie.

Conclusion Regarding Angie’s Master Steaks’ claims

[288] A great deal of Angie’s claims in this proceeding, both monetary and oppression related claims, relate directly or indirectly to her rejected claim that the 2002 Master Steaks estate freeze did not occur or her allegations of “misrepresentation”.

[289] All claims advanced by Angie, financial or allegations of oppression, regarding or relating to Master Steaks, are hereby dismissed. A trial is not required for a fair and just determination of these issues.

II. Truckers Haven’s Distribution of VTB

[290] The second major claim advanced by Angie relates to the distribution of the Truckers Haven’s VTB monies.

The Positions of the Parties

[291] Angie takes issue with the following payouts from the VTB distribution:

(a) revealed a journal entry from the financial statements of 762 for $574,204, as an intercompany debt payable to Master Steaks (the “Master Steaks Loan”). This was the first I had ever heard of and learned of the Master Steaks Loan;

(b) revealed loans allegedly made by the Parents to 762 in the amount of $2,723,034 (the “Parents’ Loan”), which was never previously documented or listed in the minute books, records or financial statements of 762; and

(c) did not account for the repayment of the balance owed on the Gas Station Construction Loan, the Realtor Commission or any of the declared and unpaid dividends to the credit of the common shareholders and retained in 762.

(d) Did not adhere to Holdco’s Dividend policy for distribution of corporate assets paid to each Class of shareholders; and

(e) The Individual Defendants, distributed the $3,387,205.99 VTB money belonging to Holdco out from the 762 bank account, 20 days after the death of my father, without my consent or input as, their sister, Director, Officer or Shareholder for the two Classes of Shares.

(Emphasis added)

[292] The Individual Defendants state that repayment of the Truckers Haven’s loan was a reasonable business decision by the directors to Truckers Haven. The Individual Defendants also state that the financial records of Truckers Haven had previously recorded the outstanding loans questioned by Angie for years as legitimate corporate loans; the financial records of Truckers Haven did not and had never shown the alleged loans Angie claims for the Construction Loan or the Real Estate Commission; and the historical dividend policy continued to be carried out in exactly the same manner before and during the time Angie was responsible for financial affairs of the Truckers Haven businesses. The Defendants also raise the Limitations Act.

[293] The draft payout by Mr. Stamatopoulos is set out in an email to all the Children dated October 20, 2017. It explains and sets out the various intercompany debts which resulted in the draft VTB distribution to Gregory, to Barbara (i.e. to the four Children as the inheritors of Barbara’s Preference Shares), the Master Steaks Loan and the unpaid dividends of 2017. This was approved by the directors.

The Issues

[294] The two issues to be decided are:

a) Did the directors of Truckers Haven businesses make a reasonable business decision that the corporate liabilities of Truckers Haven businesses be paid first?

b) Can this court make a fair and just determination on the validity and quantum of Truckers Haven business loans which have been questioned by Angie?

Overview

[295] As stated above, on November 16, 2017, the directors passed, among other resolutions, a resolution that the debts and liabilities of Truckers Haven’s businesses be paid out from the VTB monies first. The decision to pay out Truckers Haven business outstanding liabilities was a reasonable corporate decision made by the directors at a director’s meeting. I am satisfied that the decision cannot and should not be interfered with by this court as there is no good reason to do so.

[296] I am satisfied that any issues of the loans raised by Angie can be fairly and justly determined on the motion materials before me, without requiring a trial. Some require the use of the court’s additional powers, and I will identify when that is necessary.

[297] The VTB distribution breakdown approved by the Truckers Haven businesses’ directors was as follows:

a) $17,565 paid as the additional probate tax on the increase in the value of Barbara’s Estate, since her death in 2012 to the Ministry.

b) $1,361,067 to the Estate of Gregory as repayment of the alleged Parents Loan, and then to be distributed according to and for the benefit of Peter and John, as per Gregory’s Will;

c) $1,385,383 to the Estate of Barbara as repayment of the alleged Parents Loan, which was then divided equally amongst the four Ioannidis Children, as per Barbara’s Will in the amount of $346,345.75 each as inheritance and, the total amount now subject to the additional Estate Probate Tax;

d) $574,204 to Master Steaks on account of repayment of the Master Steaks Loan;

e) $41,157 as retained unpaid dividends for 2017 to the Holdco bank account; and

f) $7,534 for legal fees to Mark for his services.

A Reasonable Business Decision

[298] I turn to the question of Angie’s submission that dividends should have been paid out in priority to the Truckers Haven’ business’ outstanding loans.

[299] Section 38 of the OBCA provides as follows:

38 (3) The directors shall not declare and the corporation shall not pay a dividend if there are reasonable grounds for believing that,

(a) the corporation is or, after the payment, would be unable to pay its liabilities as they become due; or

(b) the realizable value of the corporation’s assets would thereby be less than the aggregate of,

(i) its liabilities, and

(ii) its stated capital of all classes.

[300] Whether the amount of debts and loans in Truckers Haven or Truckers Haven Holdco, and paying dividends in priority, may have created a breach of this section is unclear. What is clear, is that payment of liabilities in priority to dividends is not an unreasonable corporate decision.

[301] It should also be remembered that Angie had an opportunity to raise her objection at the November 16, 2017 directors meeting but she didn’t attend the director’s meeting and now seeks to attack the corporate decision made at that meeting.

[302] The Truckers Haven businesses’ directors made several enquiries of Mr. Stamatopoulos even to the point of having him only review the loans substantiated based on actual documented tax filings and bank statements. Angie doesn’t explain why Mr. Stamatopoulos’ detailed review is incorrect. She points to no specific details. So, eventually, Angie alleges that the loans “suspiciously” appeared or were falsified, but again without any detail or supporting evidence to these bald statements.

[303] I am satisfied that the director’s decision to firstly pay out recorded loans as of 2017, was a reasonable corporate decision. Court will not and ought not to interfere with business decisions made by directors unless it is established that the decision was not done honestly, in good faith and in the best interests of the corporation. See Brunt Investments Ltd. V. KeepRite (1991) 3. O.R. (3d) 289 at 320 (C.A.).

[304] Here there is no evidence of bad faith or that the decision was not in the best interests of the Truckers Haven businesses other than Angie’s allegations that the loans were not recorded or suspiciously appeared without any support for such bald allegations despite previously having and continuing to have access to the corporate and financial records in this proceeding and the direct evidence of Mr. Stamatopoulos to the contrary. And eventually agreeing that the amounts do come from the corporate financial statements.

[305] Nevertheless, let me go on to review whether the issues raised by Angie regarding the VTB distribution monies raise an issue requiring a trial.

Angie’s Issues with the VTB distribution

[306] Initially, Angie’s position, in an email from her in the summer of 2017, was that Mr. Stamatopoulos review the books and records to determine the appropriate payout of the VTB monies and that a meeting should be held to discuss the payout. That is exactly what occurred.

[307] However, Angie’s position changed when Mr. Stamatopoulos reviewed the books and records and produced the draft VTB payout to the four Children on October 20, 2017.

[308] Angie didn’t like that draft VTB payout as she would only get ¼ of $1,361,967 (her share of preference shares previously held by Barbara).

[309] Angie then put forward her own proposal for the VTB payout, but it included major changes to the corporate organization of all the family businesses and essentially a shareholders’ agreement. Angie sought to overcome the corporate structure her parents had created in the early 2000s and the consequences of Barbara’s estate to protect her interests going forward.

[310] In the motion materials, Angie disputes the following specific Truckers Haven Loans:

a) The existence and validity of the Master Steaks Loans.

b) The existence and validity of the Barbara and Gregory Shareholder Loans.

c) The lack of director resolutions for the declaration of dividends (which became shareholders loans).

d) The failure to declare dividends within four months of the fiscal year end; and

e) The failure to include her unpaid Real Estate commissions;

f) The failure to include the outstanding interest on her $350,000 Mortgage;

g) The failure to include payment of her unpaid Construction Loan,

h) The failure to pay her interest for the delay in paying her entitlement of the VTB distribution monies;

i) The inclusion of the additional probate tax for Barbara’s estate; and

j) The failure to obtain her consent to the VTB distribution.

[311] In an effort to blunt criticisms of her prior inconsistent emails on her challenge to the VTB distribution, Angie admitted in her affidavit, that on these issues, her position is and has been inconsistent with her past written statements:

To the extent I sent any e-mails to Mark, Peter, Nick, and/or Mr. Sopov prior to April of 2018 that are inconsistent with the position I am taking this lawsuit, those communications reflect my being under the spell of Peter’s 2013 Misrepresentations, as well as the incomplete and incorrect information they all provided to me during the years 2012 to March 30, 2018.

[312] As stated above, I have rejected that there were any misrepresentations by Peter or others. Further, while Angie alleges “incomplete and incorrect information” was provided to her, there are no details as to what she refers to. It is just a bald statement.

[313] One serious problem that runs through Angie’s allegations regarding the distribution of the VTB monies is that, like many other allegations, they are vague allegations, without specifics, without reference to any documents which support her position. And there are many documents, including authored by Angie, which are inconsistent with her current allegations. For example, Angie alleges that the Master Steaks loan to Truckers Haven businesses did not exist, suspiciously appeared, and was not real. However:

a) Angie had the financial books and records of the companies until not long before this action;

b) Angie had productions of/access to financial books and records from the companies in this proceeding;

c) Angie knew Mr. Stamatopoulos’ statement under oath that the Master Steaks loan had been on the books since July 31, 2012 and remained so recorded for years; and

d) Angie’s counsel cross-examined Mr. Stamatopoulos.

Yet, Angie puts forward nothing to support her challenge to the existence or amounts of the loans or to show that these loans to Master Steak or to Barbara and Gregory were not recorded in the books. When pressed on this during the cross-examination, she eventually acknowledged the loans were reflected in the books but disputes “everything”.

[314] Let me deal with each of these specific allegations:

(a) The Master Steaks Loans

[315] Included in the VTB distribution were loans from Master Steaks to Truckers Haven businesses from 2001 to July 31, 2012.

[316] Angie alleges that the “Master Steaks Loan was not documented or reflected” in the records and books of the companies. Angie also alleges the distribution of the VTB monies was made based on “questionable inter-company debts and alleged Parent Shareholder loans that suspiciously “appeared” when the Gas Station was sold in 2007 and the proceeds of the VTB Mortgage related to the Gas Station were distributed in November 2017…”.

[317] I reject Angie’s denial of the existence of Master Steaks loan and its recording in the corporate books and records:

a) If the Master Steaks loan appeared in 2007, then surely Angie would have known about this loan when she took over responsibility of the Master Steaks financial records in 2013. Her references to the Master Steaks loan for years before 2017 confirms her knowledge of it.

b) Angie knew of or had access to the corporate and financial records of the Master Steaks loan to Truckers Haven prior to 2017. Angie also had seen the 2013 Master Steaks financial statement which showed an amount owing to affiliated companies of $561,765. In response to questions about her knowledge of this information, Angie stated “Everything was based on misrepresentations to me”. This is not an answer that explains Angie’s now completely contradictory position.

c) Angie “signed off” on the 2015 Truckers Haven financial statement which continued to show the Master Steak loan.

d) As described above, Angie admitted on several occasions in her emails predating 2017, the existence and need to pay the outstanding Master Steaks loan by Truckers Haven. Yet, Angie now alleges that she never knew about the Master Steaks loan to Truckers Haven or that they are not “real debts” of Truckers Haven.

e) Angie acknowledge that the amounts (including the Master Steaks loan) come from the financial statements. During cross examination, Angie admitted that at the time “..I believed that Master Steaks was owed by the holding company and I believed the debt to Master Steaks was real from 762”. Angie admitted that her prior admissions of the Truckers Haven business’ debt to Master Steaks was based on “The financial statements that Nick had prepared.” BUT, now Angie disputes everything:

“So we have to look at the financial statements of 2’16 and 2’17. Because that’s where that number probably – that number came from financial statements, which I now know were all in – they’re all in dispute. Everything that Nick did is in dispute…”

(Emphasis added)

[318] It is also important to note that the Truckers Haven’s business’ books and records were kept by Angie from the beginning (approx. 2001) until 2018, and Angie directed Mr. Stamatopoulos for Truckers Haven businesses financial matters and approved statements and returns. But, in 2019, Angie takes the position that the Master Steaks loan was not real or “suspiciously” appeared. But she doesn’t put forward a single document from a financial statement or record to support her allegation that the Master Steaks loan was not previously recorded on any prior financial records of Truckers Haven businesses.

[319] Angie’s evidence on this is simply not believable or reliable.

[320] On the other hand, Mr. Stamatopoulos states that the intercompany loans, including the Master Steaks loan, was recorded in the Truckers Haven and Master Steaks corporate records starting in 2001 until July 31, 2012, as Master Steaks loaned monies or paid expenses to Truckers Haven for the construction of the gas station. The records are available to the parties. They were put before Mr. Stamatopoulos during his cross-examination. Yet, there is no evidence contrary to Mr. Stamatopoulos’ evidence.

[321] During Mr. Stamatopoulos cross examination, he described that the financial records that showed the Master Steaks loan: “the numbers were taken from the books and records of the companies.” He went on to say:

A. Let’s take one, Master Steaks. Master Steaks, the balance on the books and records of the company was 574,204 and that’s that. This figure was accumulated over the years from literally from day one and that was what was shown on the records in 2017.

A . In terms of Master Steaks, I would only look at the final figure because the figure hadn’t changed for two years, I believe. And it was the accumulation of all those transactions that went into Master Steaks from day one to 2017.

Q. Okay and what was that comprised of, that figure? So are you telling me that Master Steaks advanced monies to 762?

A. Advanced money as well as paid expenses.

A. I was doing, for example, both corporations, Master Steaks as well as 762, Truckers Haven was the name, the name before it was changed to 762. There were expenses paid on behalf o the truck stop. Those expenses would be allocated in the records of Master Steaks as a loan to 762519 Ontario. If there was an advance, a straight advance, it would be a loan as well. If they paid for the utilities, the taxes, anything like construction, architects, loan them some money to buy the land. I didn’t of course – I wasn’t there when they did that. That would be in that account and the total of that account amounted to 574,204.

A. the expenses paid will be – when your prepare the financial statements for Master Steaks, for example, you see Steaks – cheques were payments that do not belong to the operation of the restaurant and then you ask questions. Any question asking and being informed that, oh no, this is for the truck stop. This is the utilities for the truck stop. This is for the architect of the truck stop. Or whatever other expenses that were paid.

Q. Okay. So I just want to understand how you understood those expenses and what I mean by that is the number 574 that accumulated over the years, that was based on you seeing cheques and ledger expenses on the Master Steaks that were attributed to non-Master Steaks business

Q, So to the extent that you assembled and accumulated that number of 574,000 over the years, that was based on cheques and ledger entries on the Master Steaks payments not related to Master Steaks. Do I –

A. Yes

Q- have that right

A. Not related to Master Steaks but related to the truck stop.

(Emphasis added)

[322] Angie alleges that there are no written loan documents, promissory notes, or director’s resolutions approving loans, so she now denies the validity or existence of the Master Steaks loan (and other loans except her alleged loans). Admittedly, there are no written documented loan agreements, or promissory notes, or director’s resolutions approving the loans from Master Steaks to Truckers Haven. The lack of documentation does not mean in law that the loans weren’t valid and enforceable loans. When asked why there was no loan documentation described by Angie, Mr. Stamatopoulos said:

A. Because we’re talking about a family who is not well-educated. They’re immigrants. They are husband and wife. They have a different philosophy in life about husband and wife. They live together until they die and it would be ludicrous for to be asked to – every time- they do anything to put it in writing. They never used writing. They couldn’t communicate in writing, especially Gregory. He could hardly speak English.

Q. In your experience, is it common in small family corporations to find or to be papering such debts through promissory notes and loan agreements? In your general experience?

A. I almost can say that in my 42 years or 42 years of practice, never encountered. And I’m dealing with only small clients and none of them has ever done that.

[323] Again, the inconsistency of Angie’s position is obvious. She disputes the Master Steaks loan on this basis, but she advances her own claims for loans (the real estate commission and the construction loan) when no such documents exist for her loans either AND, unlike the Master Steaks loan, her loans were never set out in the financial records of Truckers Haven under her responsibility and control.

[324] There was simply no wavering or uncertainty in Mr. Stamatopoulos’ evidence on the issue. His evidence was that Master Steaks’ loan was recorded and had been so recorded in the Master Steaks and Truckers Haven business’ books for years, including when Angie was responsible for the books and records of Truckers Haven businesses. I accept this evidence and find this as a fact.

[325] There is a further problem. That is the unchallenged evidence of Mr. Stamatopoulos was that the Master Steaks loan entry in Truckers Haven business’ financial records had existed unchanged for at least two years (actually stating that the Master Steaks loan was on the books from July 31, 2012). This raises a valid limitations defence to any challenge to the validity of Trucker’s Haven’s debt.

[326] I am satisfied, based on the evidence before me, that a fair and just determination can be made dismissing Angie’s claim.

[327] In this case, I do rely on this courts additional powers and make credibility findings. I reject Angie’s evidence for the reasons set out above. I accept Mr. Stamatopoulos’ evidence and the financial documentation.

[328] Equally, this court could have determined that the Master Steaks Loan was on the books and records of Truckers Haven businesses going back to the construction of the gas station and this was known or ought to have been known to Angie for more than two years prior to the commencement of this claim, thereby such a claim by her as a shareholder of Truckers Haven Holdco is barred by the Limitations Act.

[329] Given the above, I am satisfied that recognition of and resolution to pay the Master Steaks loan from the VTB monies is not evidence of oppression.

(b) The Barbara and Gregory Loans

[330] Included in the VTB distribution are the shareholder loans for Gregory and Barbara to Truckers Haven from 2001 until 2012.

[331] Angie takes the position that her parents, the ones that created the corporate wealth, Barbara and Gregory, had “no legal entitlement to such outrageous dividends” from Truckers Haven. A very surprising and telling commentary explains much of the motivation in the claims advanced by Angie.

[332] As with the Master Steaks loan, Angie alleges that the shareholder loans to Barbara and Gregory “were never previously documented or listed as shareholder loans” in the books and records of Truckers Haven. Angie states:

I verily believe that the inter-company loans did not occur and were not contemporaneously and properly recorded as The Parents’ gift contributions for the benefit or their four children and more particularly described at paragraphs 114-119 of My First Affidavit.

[333] I have reviewed the specified paragraphs from Angie’s first affidavit and find no support for or evidentiary basis for the allegation that her parents intended that their shareholders loans were gifted or intended to be gifted to the four children. There is no evidence supporting this bald allegation. It is just a fanciful and speculative statement, not supported by any evidence.

[334] Angie also submits that Gregory and Barbara intended that their shareholder loans were to be equity in the company or be forgiven. I reject this. Again, there simply is no evidence in support of such a bald allegation. In fact, the evidence is to the contrary – if the loans appeared as shareholders loans in the name of Barbara and Gregory in the books and records of Truckers Haven businesses, clearly, they were neither equity nor forgiven, nor a gift to the Children.

[335] Having submitted that the shareholder’s loans, were gifts, or forgiven or equity, Angie goes on to allege that her parent’s shareholders loans never existed.

[336] Angie’s suggestion that the Barbara and Gregory shareholder loans “suspiciously appeared” has no factual basis or other evidentiary support. As to the existence of the shareholder loans to Barbara and Gregory, Mr. Stamatopoulos gave similar answers under oath regarding the existence and recording of these shareholder loans as he gave on the Master Steaks loan. That is, the shareholder loans to Barbara and Gregory were accumulated over the years and were recorded in the yearly financial records of Truckers Haven businesses. In Barbara’s case, the loans were accumulated and recorded up to 2012 and in Gregory’s case accumulated and recorded up to 2016.

[337] On the other hand, Mr. Stamatopoulos’ evidence is clear, documented and could be easily and clearly verified by looking at the books and records. Angie, the person responsible for the books and records of Truckers Haven businesses, fails to put forward a single book or record from 2017 or prior showing that these shareholder loans were not recorded as described by Mr. Stamatopoulos.

[338] Angie’s current allegations ignore that Angie was responsible for the Truckers Haven business’ books and records until at least approximately 2018 and her current position is inconsistent with her previous written comments in emails where she acknowledged there were outstanding loans to her parents.

[339] Angie also states that “investigations” showed no outstanding loans owed to Barbara or Gregory after Barbara’s death. However, Angie does not state what “investigations” she made or relied on to draw her conclusion that neither Barbara nor Gregory were owed shareholder loans from Truckers Haven as of 2017.

[340] Angie points to her complaint against Mr. Stamatopoulos to the CPA in 2020 alleging negligence and misconduct, including falsification of documents, as evidence supporting her allegation. I have carefully reviewed Mr. Stamatopoulos’ response and the CPA report and find nothing supporting Angie’s allegations that these loans were falsified or incorrectly recorded.

[341] Angie’s also alleges that the VTB distribution required a special meeting of shareholders of Trucker’s Haven. However, no law or authority was advanced to support this submission. I reject this submission.

[342] Angie also submits that Barbara and Gregory, after 2001, didn’t own shares in Truckers Haven but rather only held Preference Shares in Truckers Haven Holdco. So, as the submissions go - there could be no shareholder loans from “Truckers Haven” to Barbara and Gregory. The evidence of Mr. Stamatopoulos is that the loans were in fact recorded in Truckers Haven Holdco and reflected in the respective income tax returns. Mr. Stamatopoulos testified during his cross-examination as follows:

Q. Okay. I’m going to share my screen with you again, sir. Paragraph 79 of your May 20^th affidavit you indicate, “As previously mentioned, the practice of Gregory and Barbara was that such dividends were declared but not paid out as money was left in Truckers Haven for the purpose of financing the construction of the Plaza. The unpaid dividends owed by Truckers Haven Holdco to the shareholders were recorded as amounts owing to the shareholders on Truckers Haven financial statements as Truckers Haven Holdco did not produce financial statements nor did it have its own bank account”. Do you see that?

A. Yes.

Q. So do I understand it correctly that although Holdco was allegedly declaring dividends, they weren’t recording in Holdco’s financial statements because none were prepared. They were recorded on 762’s financial statements, correct?

A. No. That’s not correct. You have to follow the process.

Q. well, you said the unpaid dividends---

A. In order- in order for 762 to declare dividends, they were declared from their financial statements. And then on the tax return of 1490565 Holdco, you would have a receipt and a payment of dividends on their financial statements, on their T2, in other words, the tax return. Nothing else was prepared for – in those years for the Holdco.

Q. Well, how could your record- how could you record shareholder loans on 762 financial statements to Barbara and Gregory as shareholders when there weren’t shareholders in 762 anymore, when they were really truly debts of Holdco.

A. If you – if you include the transactions of 1490565, then it would the net result and it would be true.

Q. 762 never declared any dividends in favor of Barbara and Gregory as shareholders, correct?

A. Correct.

Q. Right. So they couldn’t be shareholder loans payable to Barbara and Gregory by 762 because they never declared dividends and they weren’t shareholders in 762.

A. They declared to 1490565. But 1490565 now had a credit from 762519 and did not – and a debit because it did not pay anything to the shareholders.

(Emphasis added)

[343] In light of the very serious credibility issues with Angie’s evidence and her prior acknowledgement of these shareholder loans, her statement that this was the “first time” she had heard about the loans, is simply not believable or reliable. The only credible evidence is that the loans to Gregory and Barbara were recorded and had been so recorded for years – Barbara’s going back to 2012 and Gregory’s the same as Barbara’s at 2012 but increasing to 2016.

[344] Accordingly, I am satisfied that, this court can make a fair and just determination on the evidence before it that the shareholder loan and amount of the loans to Gregory and Barbara were properly recorded, due and owing from Truckers Haven businesses in 2017 without requiring a trial. In order to come to this result, I do rely on the additional powers of the court, namely the finding of the lack of credibility and reliability of Angie’s evidence, and the credibility and reliability of Mr. Stamatopoulos’ evidence and documentary evidence.

[345] Accordingly, Angie’s claim relating to this issue is dismissed. Further, the decision to pay these amounts out to the Estate of Gregory and 4 Children (as the inheritors of Barbara’s Preference Shares) was not oppressive to Angie’s interest.

(c) Lack of director resolutions declaring dividends

[346] Angie alleges that there were no director’s resolutions in the corporate Minute Books declaring dividends (which became shareholders loans when not paid).

[347] Section 38(1) of the OBCA provides:

38 (1) Subject to its articles and any unanimous shareholder agreement, the directors may declare and a corporation may pay a dividend by issuing fully paid shares of the corporation or options or rights to acquire fully paid shares of the corporation and, subject to subsection (3), a corporation may pay a dividend in money or property.

(Emphasis added)

[348] Barbara’ outstanding shareholder loans pre-date 2012. Any challenge to these dividends would be barred by the Limitations Act.

[349] Gregory’s outstanding shareholder loan as of July 31, 2012 was $1,170,167. Any challenge to these dividends would be barred by the Limitations Act.

[350] The dividends to Gregory from 2013 to 2016 amounted to $351,000 less the amount of $159,200 paid to Gregory during those years (a similar amount was declared/paid to the Children).

[351] The total shareholder loan to Gregory to 2016 was therefore $1,361,967 and this was included in the VTB distribution authorized by the directors of Truckers Haven.

[352] As both Barbara and Gregory’s shareholders loans included in the VTB distribution pre-date 2016, Angie’s claim are barred by the Limitations Act.

[353] There is a further fundamental problem with this claim. In 2012/2013 a resolution was passed approving all the previous corporate transactions and actions by the directors. Angie participated in and executed this resolution as part of the regularizing the past acts of the companies including the estate freezes.

[354] Accordingly, any such failure to comply with corporate requirements prior to 2013 had been approved. Almost the entirety of the shareholders loans to Barbara and Gregory of $2,723,034, except for the $191,800, were approved by the shareholders.

[355] But there are more reasons to reject this claim:

a) First, for many years, Angie accepted and included declared and unpaid dividends in her income tax statements over the years which were not expressly authorized by way of a written director or shareholder’s resolution.

b) Second, Angie was a director of Truckers Haven Holdco until January 16, 2018 and never questioned previous dividend declarations, and she never asked for a resolution for the dividends declared while she was a director (and she kept the money for the dividends when declared and paid to her);

c) Angie instructed Mr. Stamatopoulos for years on dividends to be declared knowing there was no director’s resolution(s) specifically in 2015 and 2016 where she approved the dividends!

d) Angie advances a claim for payment of 2017 unpaid dividends. Yes, Angie claims dividends are improper if not formally declared but Angie seeks a judgment for dividends also not formally declared.

[356] Angie is estopped from advancing such a claim.

[357] Accordingly, I reject and dismiss this as a basis to challenge the VTB monies distribution or as evidence of oppression.

(d) No declaration of dividends within four months of the Y/E

[358] Angie was a director for years, and it would have been part of her responsibility to have ensured this was done (assuming that is a legal requirement).

[359] In my view, Mr. Stamatopoulos makes an accurate statement, regarding when Angie did not accept his final reconciliation on April 9, 2019:

“I saw that she was trying to use the fact that there was a lack of adherence to corporate governance procedure by her parents in the past, as well as denying her own voluntary participation in such matters, in order to invalidate her parents loans and unpaid dividends over the years, in order to advance a better outcome for herself as it relates to the Mortgage proceeds.”

[360] For the same reasons above, all past corporate acts of Truckers Haven Holdco, Truckers Haven and Plaza were ratified and approved in 2013. This alone eliminates almost all of the dividends declared in the parent’s shareholder loans challenged by Angie.

[361] Accepting Mr. Stamatopoulos’ evidence, dividends were declared and reflected in the income tax returns of the various individuals, corporations and on the financial records of the companies. This includes Angie’s tax returns – at one point complaining in writing that she had to pay taxes on monies she didn’t receive.

[362] There is a significant limitation issue. Any dividends declared prior to February 11, 2017 would be statute barred. Not to mention that in 2016, it was Angie who instructed Mr. Stamatopoulos to declare dividends.

[363] Angie had the corporate records for Truckers Haven businesses until 2018. Like so many claims advanced by Angie, Angie does not point to a single dividend not declared within 4 months of the fiscal year end of either Truckers Haven or Truckers Haven Holdco.

[364] Accordingly, I reject and dismiss this as a basis to challenge the VTB monies distribution or as evidence of oppression.

(e) Unpaid Real Estate Commissions

[365] Angie worked as an agent for ReMax at the time of the sale of the Truckers Haven Gas Station in 2007.

[366] Angie states there was a listing agreement for 4%. Angie was asked to produce the listing agreement or a “termination” of the listing agreement, or any other documents relating to her entitlement to the commission. None was produced.

[367] In all likelihood, the listing agreement would be signed by ReMax as the listing broker NOT Angie personally. You must be a registered broker or employed by a broker to sell land. See sections 4 and 5 of the Real Estate and Business Broker’s Act.

[368] Angie now claims there are unpaid real estate commissions owing to her from the sale of Truckers Haven’s lands in 2007. In 2007, an offer was made to Truckers Haven for approximately $3,900,000 and the gas station was sold.

[369] The first problem with this claim is that, even if valid, it is not clear how much would Angie be ultimately entitled to receive from her broker, ReMax. Angie claims the entire 4% commission – the entire listing and vendor’s commission payable on the transaction.

[370] The second problem is the selling agent’s portion of the commission. In the Plaintiffs’ factum, Angie expressly states she was the selling and listing agent: “On August 14, 2017, the Gas Station was sold by Re/Max Performance Realty Inc. Angie was the listing broker and fortunate enough to be the selling broker as well.” However, like so many other areas, Angie’s evidence is entirely contrary to what she wrote years ago regarding:

a) Whether were any commission payable on the sale,

b) Whether there existed a listing agreement at the time of the sale, and

c) Whether the purchaser was introduced through another brokerage/selling agent.

[371] Angie’s email dated January 9, 2015, acknowledges she had “given up” her commissions for the sale of the Truckers Haven lands and that of another agent, Royal City, was the selling agent:

“I marketed and sold Drumbo [Truckers Haven]… Balram was brought in with a Royal City realtor… And I terminated the listing so we could sell it without dad paying commissions, and I gave up my $80,000 share.. and 80,000 for Royal City….”

(Emphasis added)

[372] Without getting into the fraudulent nature of the termination to deprive the selling agent or Angie’s broker any commission or part of a commission, Angie now claims the entire real estate commission is payable to her as though the listing agreement had continued, as though she was the broker, as though she was the listing and selling agent, and as though she would get the entire commission.

[373] To summarize, before the VTB monies became an issue, Angie acknowledged that no commission was payable, and none was paid because Angie had cancelled the listing agreement to specifically avoid payment of a commission to her and the selling agent. Once the VTB monies became available some 10 years later, she claims she is owed for the unpaid real estate commissions which was not and had never been recorded as an outstanding debt of Truckers Haven businesses.

[374] But Angie’s difficulties on this claim does not end there. None of the Truckers Haven corporate or financial records show this alleged real estate commission as an outstanding debt to her from Trucker’s Haven, even during the many years Angie was responsible for the Truckers Haven books and records. Angie was told this was not recorded in writing on May 19, 2010.

[375] This alleged loan was not disclosed or raised with Mr. Stamatopoulos until after the issue of the distribution of the VTB monies in 2017.

[376] Lastly, this claim was advanced in 2019, 12 years after the commission was payable. There is an obvious limitation issue. To overcome the limitation issue, in her responding affidavit, Angie takes the position that it is not a debt for unpaid commission, because it “was turned into a shareholder loan…”. As stated above, the problem with this new position is that there is no documentation to support a conversion of this debt into a shareholder loan, or a valid tolling agreement of the limitation period. Of course, in these circumstances, Angie doesn’t complain about the lack of documentation or approvals which she so vigorously raises in other areas. Secondly, as stated above, Angie didn’t know in 2007 that she was a shareholder of Truckers Haven, so she couldn’t have agreed to convert this alleged debt into a shareholder’s loan of a company she did not know she was a shareholder.

[377] I reject Angie’s evidence as not credible, self serving, and inconsistent on this claim.

[378] The evidence is that no such outstanding loan for real estate commission existed to Angie personally or, at the very least, is clearly statute barred as of the date this claim was advanced.

[379] I am satisfied that, in the above circumstances, no genuine issue requiring a trial arises regarding Angie’s personal claim for payment of the entire or part of the real estate commission for the sale of Truckers Haven’s property in 2007.

[380] Excluding this claim from Truckers Haven’s VTB distribution is not evidence of oppression.

[381] The court does not need to rely on its additional powers to dismiss this claim. However, if necessary, those additional powers would, without doubt, result in a dismissal of this claim.

(f) Unpaid interest on the $350,000 mortgage

[382] In 2005, Angie loaned $350,000 for the construction of the gas station on the Trucker’s Haven property. This was secured by way of a registered mortgage on July 8, 2005 against the property. This mortgage debt was recorded in the books of Truckers Haven. The mortgage was repaid on the sale of the property in 2007. There is no dispute about this loan or its repayment.

[383] Angie alleges that she was NOT repaid interest owed under the mortgage of $30,114. She offers no explanation why she would not have been repaid interest owing when her mortgage was discharged. She was told in 2010 that the financial records did not show any interest for the $350,000. Angie did nothing to change or follow up on this. She didn’t dispute it. She offers no explanation why she didn’t advance this claim many years ago.

[384] There is also no evidence or explanation why such a claim for unpaid interest under the mortgage would not be statute barred in 2019.

[385] I find this claim statute barred.

[386] This claim is dismissed.

(g) Unpaid Construction Loan

[387] Angie alleges she loaned additional money to Trucker’s Haven for the construction of the Gas Station and the “loan was to be repaid once the corporation was financially able to do so, through leasing the Gas Station or by selling it”.

[388] As with Angie’s alleged unpaid real estate commissions, this claim for an unpaid portion of the Construction Loan was NOT recorded in the books of Truckers Haven businesses, even during the years Angie was the primary person responsible for their books and records.

[389] What is evident is that a $688,000 loan from Truckers Haven was reported to the CRA in the years prior to 2008. As part of responding to a CRA audit of Truckers Haven in 2008, there is an email from Angie to Mr. Stamatopoulos dated September 17, 2008, confirming that she loaned her parents from 2002 to 2007 a total of $688,000 for the construction of the gas station. Angie’s position now is that the monies were lent to Trucker’s Haven or are owed to her by Truckers Haven. Some of the cheques provided to Revenue Canada were payable to her parents, but most are to Truckers Haven.

[390] Angie believes her loan was recorded in Truckers Haven’s books as a shareholder’s loan to her because she saw a generic title on some unknown and undescribed document “due to Shareholder” entry – not because of any specific reference to her loan or this construction loan or this amount was owing to her in the Trucker’s Haven businesses’ records. She simply saw a heading “due to Shareholders”.

[391] Mr. Stamatopoulos states there is no and has not ever been such loan recorded owing to Angie in the Truckers Haven businesses’ financial records. I accept this evidence as there is no evidence to the contrary except Angie’s bald vague statement.

[392] As stated above, any suggestion that Angie believed or alleges that such a loan had been converted to a shareholder’s loan to her is simply not believable since she didn’t know or believe she was a shareholder in either Truckers Haven company until 2012 when her mother died.

[393] I am satisfied that Angie’s claim in 2019 for an unpaid construction loan made between 2002 - 2007 is outside the limitation period, without an agreement tolling the limitation period. No such agreement is alleged. Simply a vague belief, that it might have be shown in the books and records, is not sufficient to toll the limitation period nor create a genuine issue requiring a trial.

[394] If necessary, using the additional powers, I am satisfied such a claim can be determined in a just and fair manner without requiring a trial. I reject her unsubstantiated allegation. I accept the evidence of Mr. Stamatopoulos that such a loan was never recorded.

[395] Accordingly, Angie’s claim for this amount is dismissed.

(h) Unpaid Interest on the VTB distribution

[396] Angie was paid $346,345.75 from the VTB distribution of which she complains was not paid until April 23, 2018. Angie claims interest during this period.

[397] It is important to note, Angie admitted she had the books for Truckers Haven, Plaza and Truckers Haven Holdco at the time of the November 16, 2017 Director’s Meeting and did not turn them over to her brothers until after a threat of litigation and not until 2018.

[398] I reject Angie’s claim regarding interest on the VTB distribution paid to her. I reject that the delay was the fault of or any indication of oppression by Peter, Bill or John but rather was caused by Angie’s refusal to turn over the corporate books as requested and required. A shareholder has no entitlement to keep the books and records of a company.

[399] Peter, John and Bill had to retain counsel to recover the books before Angie returned them to the companies. But even then, the Truckers Haven businesses’ minute books was not returned until December 2018.

[400] Angie’s excuse was that she was worried her brothers would alter the books and records, despite the fact there was no evidence that they had done so in the past or reasonable basis to believe they would have done so. Besides, Angie could have kept copies!

[401] Nevertheless, and notwithstanding that Angie had not turned over the books and records, her brothers delivered to Angie the $346,345.75 cheque on April 23, 2018 and a further $38,346.53 in December 2018.

[402] I reject Angie’s claim for interest on the delay in receiving this money. The delay was caused entirely by Angie’s actions and her actions alone. Angie’s claim in this regard is dismissed.

(i) Payment of the Additional Probate Tax for Barbara’s estate

[403] Angie also disputes the $17,565 paid for additional probate tax for Barbara’s Estate. Having found that the shareholder loan to Barbara is valid, there appears to be no doubt that the value of Barbara’s estate went up significantly as resulting in additional estate tax payable.

[404] Angie’s personal interest and her obligation as an Estate Trustee appear to be at odds with these claims.

[405] For the reasons set out herein, I find that the outstanding loan to Barbara was valid and owing. Besides, even if this claim was valid, then the money comes out of Barbara’s estate which is ¼ Angie. The end financial result is the same.

(j) Failed to obtain her consent to the distribution

[406] Angie also alleges that Peter, Bill and John did not obtain her consent to the VTB monies distribution.

[407] Angie’s consent is not required. A director’s resolution is required. One was passed. Angie failed to attend the director’s meeting and raise any objection. Now she complains about the decision made at that meeting.

[408] To now complain that Angie didn’t consent to the VTB monies distribution is not evidence of oppression or that an unreasonable corporate decision was made.

Unpaid 2017 Dividends

[409] Angie is claiming judgment for “$46,950 owed to the Plaintiff, Angeliki Cormpilas, on account of the actual 2017 divided balance owed to the Plaintiff”. See para. 1 (jj) of the Statement of Claim.

[410] There is little information or detail regarding this claim.

[411] This court cannot justly and fairly determine this claim on this record.

Audit to confirm the VTB loans

[412] Angie seeks an “audit” to determine the exact amount of the loans owed by Truckers Haven.

[413] An audit is generally defined as an objective examination and evaluation of the financial statements by reviewing source and independent documentation to ensure that the financial records fairly and accurately represent the transactions recorded.

[414] There are several difficulties. The first is the age of the records required for this. The loans which Angie seeks to have audited go back to 2001. Obtaining independent verification, to audit standards, would likely be an impossible task:

a) Barbara’s shareholder’s loan arose from 2001 to 2012 for Barbara.

b) The vast majority of Gregory’s loans are outside the limitations period.

c) Master Steaks loans were made from 2001 to 2012.

d) Complete bank records will not be available for an auditor to review.

[415] These difficulties are evident from Angie’s own claims when she could not produce documents to support her real estate commission claims or all the relevant records for her construction loan claim.

[416] The only clear, consistent evidence on the existence and quantum of the loans is Mr. Stamatopoulos’ testimony, the financial statements, records, and income tax returns prepared over the years.

[417] In my view, an audit would be extremely expensive, and highly unlikely to produce a clear “audit opinion” given the time period covered, the death of Barbara and Gregory, and the lack of complete documentation.

[418] Then there is a limitation period problem. Angie cannot challenge the financial statements going back more than two years before the claim was commenced. She cannot. The Limitation Act would prevent a claim to an audit going back more than two years from the commencement of this claim.

[419] In the circumstances of this case, nothing would be achieved except a very expensive invoice to Truckers Haven companies, which would cost Angie only 14%.

[420] I conclude that an audit should NOT be ordered as requested by Angie.

[421] Below, I will deal with the appointment of an auditor for Truckers Haven businesses.

Conclusion on VTB Distribution

[422] Angie’s claims on this issue are vague, unspecified, and statutory barred. I have no hesitation concluding that there is no genuine issue to be tried except for the claim with respect to the 2017 dividends claimed by Angie. A trial is not required for a fair and just determination on the issues regarding the VTB distribution.

III. Oppression/Unfair Prejudice/Unfair Disregard

[423] Markus Koehnen (now J. Koehnen) in Oppression and Related Remedies, Thompson Carswell 2004, describes oppression as follows:

Oppression is conduct that is coercive or abusive. It is the most serious of the three statutory categories. Courts have described oppression as,

conduct that is burdensome, harsh and wrongful;18

a visible departure from standards of fair dealing;19 and

an abuse of power which results in an impairment of confidence in the probity with which the company's affairs are being conducted.20

[424] And J. Koehnen describes unfair prejudice/unfair disregards as “injury to a complainants rights or interests that is unfair or inequitable or conduct that is unjust and inequitable.”

[425] I will refer to “oppression” below, but this reference includes oppression as defined above and also includes conduct that is unfairly prejudicial or unfairly disregards.

[426] Oppression cases are fact driven. In Ferguson v. Imax Systems Corp. (1983), 1983 CanLII 1646 (ON CA), 43 O.R. (2d) 128 (Ont. C.A.), at page 727, Brooke J.A. made it clear that “[w]hat is oppressive or unfairly prejudicial in one case may not necessarily be so in the slightly different setting of another.”

[427] Bad faith or lack of probity in the impugned conduct is not essential to a finding of oppression under the OBCA. See Brant Investments Ltd. v. Keep-Rite Inc., 1991 CanLII 2705 (ON CA), 80 D.L.R. (4th) 161, at pages 173-181 (Ont. C.A.)

[428] The burden of proof lies with the complainant to establish oppression on a balance of probabilities.

[429] I agree that the oppression remedy is designed to protect the objective and reasonable expectations of all security holders, such as shareholders in the context of the circumstances at issue. Even where a shareholder establishes that the conduct did not meet their reasonable expectations, the shareholder must still establish that their reasonable expectations were objectively reasonable in the circumstances AND the conduct was oppressive, unfairly disregards or is unfairly prejudicial to the security holder: BCE Inc. v. 1976 Debenture holders, 2008 SCC 69, [2008] 3 S.C.R. 560.

[430] All shareholders are entitled to expect that the officers and directors will manage the company in accordance with their legal obligations and the legal entitlements of the security holders. Some of these obligations are specifically prescribed by statute. Others are derived from the common law.

[431] However, all shareholders must be aware of the rights and obligations associated with their shareholdings or corporate positions. Such rights and obligations cannot be disregarded, otherwise, these rights and obligations become meaningless. Those rights and obligations help identify what is the objective reasonable expectations of the shareholders. For example, where a company has a right to redeem shares at a prescribed price, the redemption of such shares, absent other oppressive conduct, does not amount to oppression of that shareholder.

[432] Turning to what is prejudicial or disregards a security holder’s rights or expectations, the OBCA does not make any act that is prejudicial or disregards a security holder subject to s. 161 of the OBCA. It is only where the prejudice or disregarded rights of the security holder are “unfairly” prejudiced or disregarded.

[433] The Limitations Act applies to claims of oppression. The limitation period begins from the time the complainant knows or ought to know of his/her cause of action.

See Maurice v. Alles, 2016 ONCA 287, 130 O.R. (3d) 452, at para. 3:

An oppression remedy claim must be commenced within two years of the discovery of a potential claim. The alleged oppressive conduct in this case is not ongoing. However, where, as here, a party engages in conduct that is in furtherance of, or based upon, earlier oppressive conduct, this is a new cause of action because it is new oppressive conduct.

(Emphasis added)

[434] Only acts within the two-year limitation period (or those which could only reasonably be discoverable within two years) can be relied upon for oppression. See Zhao v. Li, 2020 ONCA 121, 149 O.R. (3d) 353, at para. 29:

Although not expressly stated in Maurice, it follows that claims arising from singular discrete acts of oppression (in a series of such acts) that are discoverable more than two years before an action are statute-barred. As a result, a series of singular discrete acts of oppression that stretches over a period of time may result in some claims for oppression arising from earlier acts in the series being statute-barred while claims arising from later acts in the series are not.

(Emphasis added)

[435] Accordingly, in this case, alleged acts prior to February 11, 2017 that Angie knew or ought to have known, would be statute barred in a claim for oppression unless it was a continuing course of conduct in the last two years in which case the acts within the last two years would not be statute barred.

[436] Angie seeks to exploit this discoverability principle by making allegations such as she “didn’t know”, was misled by “misrepresentations”, “only discovered” the fraud, “didn’t look at” documents only to later find a forgery, all to justify an attempt to bring her claims within the limitation period. I will not repeat why I reject these claims, they are set out in detail herein.

[437] Turning to the concrete examples of oppression advanced, Angie submits that shareholder oppression occurred at the Truckers Haven Director’s Meeting on November 16, 2017 by her brothers’ actions in:

a) Angie’s removal as Treasurer of Truckers Haven,

b) Angie’s removal as an authorized bank signing authority,

c) The appointment of Peter as Treasurer of Truckers Haven,

d) changing the head office,

e) approving the 2017 draft financial statements, and

f) approving the VTB monies payout.

Corporate Changes

[438] The first four items are corporate changes and can be dealt with together.

[439] Angie did not have any agreement, guarantee, or right to any of the positions from which she was removed. She also did not have an entitlement or right to have her home designated the company’s head office.

[440] A shareholder has no “right” to be appointed as a treasurer of a company. Absent a shareholder’s agreement, that is determined by the directors at a directors meeting. In this case, there was no collateral purpose to Angie not continuing as a treasurer. In fact, the decision must be considered in light of Angie’s sharp and serious criticism of the past financial dealings (including tax evasion), the escalating threats and communications and complaints about the historical accuracy of the financial statements.

[441] Angie knew of the purpose of the meeting, was entitled to participate as a director and chose not to attend. I do not find her removal as a treasurer as evidence of oppression.

[442] Similarly, the directors determine the location of the head office of a corporation. There is no right to have a particular address as a head office. Angie knew of the purpose of the meeting, was entitled to participate as a director and did not attend. I fail to see how this is oppressive conduct.

[443] Absent something more, the mere fact that Angie was removed as a bank signatory, or that her home is no longer the head office, is not evidence of oppression.

[444] Clearly, by 2017, it had become a high conflict situation between Angie and her brothers. Both the Plaintiffs’ and Defendants’ counsel acknowledge that the high conflict and vitriol between Angie and her brothers had become a serious problem because of their inability to communicate civilly, thereby impeding the ability of the businesses to be properly carried on. Both counsel agree, to various degrees, as to the inability of the parties to communicate civilly – hence the non-communication order – and the only difference between the respective positions is whether a court order should be made.

[445] Let me deal with the objective reasonable expectations to maintain these positions. In these circumstances, where Angie did not attend the meeting, disputed the accuracy of the historical financial statements while she was Treasurer, made threats of reporting to CRA for tax evasion, threatened litigation, fraud and other misfeasance unless they agreed to extensive corporate changes to the family businesses, I do not find that, objectively, her expectation to remain as a Treasurer and these other corporate changes in these circumstances, amounts to an objectively reasonable expectation.

[446] I do not accept it was oppressive to remove Angie as Treasurer or a bank signing officer or removing her home as the corporate head office, after she failed to attend the meeting, giving up her voice on the board of directors.

[447] Given the high conflict and acrimonious disputes going on, I see nothing unfairly prejudicial or that unfairly disregards Angie’s rights as a shareholder in these corporate changes.

[448] I reject Angie’s explanation that this meeting occurred so soon after Gregory’s death she “was still grieving and not in a position to make impactful financial decisions”. From the emails immediately before and after this period, it is clear Angie remained sharply focused on her financial interests and the dispute with her brothers. For example, in her contemporaneous email just before the director’s meeting, she wanted a delay to work “something out” with her brothers – not that she needed time to grieve over her father’s death as she now alleges.

[449] These corporate changes, in these circumstances, do NOT demonstrate oppression. Angie fails to put forward any evidence that the directors did not consider the best interests of the Truckers Haven or that these corporate decisions unfairly disregarded or were unfairly prejudicial to Angie’s interests in the Truckers Haven business.

The Directors’ Approval of the 2017 Financial Statements

[450] It is the responsibility of the directors to approve draft financial statements.

[451] Angie requested that the Truckers Haven financial statement be approved at a director’s meeting. Her brothers called a directors meeting for this purpose. Angie knew that the financial statements were coming before the board for approval on November 16, 2017. Angie did not attend the directors meeting. Angie must have known that, by not attending, she would have no opportunity to address issues she had with the financial statements or participate in the decision whether to pay and which debts of Truckers Haven should be paid in priority.

[452] Angie cannot now complain that the approval of the draft financial statements by the remaining directors were done in an oppressive manner without some more – bad faith, self interest… - something.

[453] More importantly, Angie does not point to anything in the approved draft financial statements that were wrong, oppressive, or unfairly disregarded her interests except the distribution of the VTB monies on the issues discussed above – which are all rejected for the reasons set out.

[454] Given the court’s determinations set out above with respect to the VTB distribution, there was no oppression.

Approving the VTB monies payout

[455] Essentially, this is a repeat of Angie’s complaint regarding the financial statements approved by the Directors on November 16, 2017.

[456] For the reasons set out above, I reject this submission as evidence of oppression. The only clear and compelling evidence is that these loans were and had been in the financial records of Truckers Haven and Truckers Haven Holdco for years.

[457] Essentially, Angie would have this court find that the directors should have ignored Truckers Haven’s businesses’ liabilities in favour of paying dividends. That is exactly what Angie requested in writing – that the vast majority of the VTB monies be paid to the common shareholders in Truckers Haven Holdco equally, meaning that she would get ¼ of the monies. I reject this. This would have ignored the fact that dividends are to be paid with priority to the Preference Shareholders. Why? If the monies went to the Preference Shareholders, Angie would get 14% rather than 25% she wanted.

[458] I do not find that the directors’ approval of the VTB monies to pay loans first was an oppressive act.

Other Allegations of Oppression

[459] Angie raises several other allegations against her brothers as constituting evidence of “oppression”.

i) Master Steak’s business

[460] The alleged oppression by Angie relates to monies she believed she was entitled to from Master Steaks.

The decision to not properly account for Master Steaks income and profits and to not declare any dividends with respect to Master Steaks including, paying out any of the profits of the company to all shareholders of the company (including me), constitutes oppressive conduct on the part of Peter and John whose actions have unfairly prejudiced and unfairly disregarded my interests as a minority shareholder in preference of their own, from which I have sustained damages.

[461] To the extent these “other” allegations relate to Master Steaks business, they are dealt with above and are rejected as oppressive, or unfairly prejudicial or disregarding of Angie’s shareholdings.

ii) VTB Distribution

[462] Angie also relies heavily on the VTB distribution as “oppressive” or unfairly prejudicial or disregarding of her shareholdings. For the reasons set out above, I reject that the director’s actions in approving payment of Truckers Haven businesses’s long recognized and recorded loans in its financial records is not “oppressive” or unfairly prejudicial or disregarding of Angie’s shareholdings or claims to loans for unpaid commissions or construction loan.

iii) Lack of Dividends from Truckers Haven Holdco

[463] Angie alleges that Peter, John and Bill have oppressed her through their dividend practices in Truckers Haven Holdco, by continuing to declare dividends of 50% paid to Gregory’s former Preference Shares:

Regarding the issue of the continued declaration and payment of dividends by the Individual Defendants to Gregory’s Trust at the rate of 50% of all of the Corporate Defendants profits annually, the Plaintiffs submit that this is completely unreasonable given the intention and rationale behind an estate freeze rollover transaction.

(Factum para. 83)

[464] Angie suggests that Gregory’s Preference Shares (now held by Peter and John) should no longer be entitled to dividends. This submission makes no sense since the Preference Shares continue to exist, and the rights associated to those shares continue to the benefit of the holders of those shares.

[465] First, the Truckers Haven estate freeze rollover transaction allowed Gregory and Barbara to continue to control Truckers Haven Holdco given their larger number of voting shares – their Preference Shares – which had priority to dividends payable to the Common Shares by their children. The dividends were, for years before their deaths and continued after their deaths, paid 50% to each of the Preference Shares formerly held by Gregory and Barbara.

[466] Second, the dividend clause in the Articles of Truckers Haven Holdco provides that the Preference Shares are to receive dividends, in priority to other shares, when dividends are declared by the directors.

[467] Third, there is nothing in the Rollover Agreement or any other document requiring the Preference Shares to be redeemed upon the death of the holder. After Barbara’s death and up until Gregory’s death, as holder of 50% of the Preference Shares, Gregory received 50% of the dividends declared by Truckers Haven Holdco. The other 50% went to the other Preference Shareholders – the four Children equally. There is no provision cancelling Gregory’s Preference Shares on his death. They were inherited by Peter and John.

[468] Fourth, from 2013 until 2017, Angie, the corporate Treasurer, instructed and authorized dividends on the basis of 50% to the four children (Barbara’s former Preference Shares) and 50% to Gregory. Angie benefitted by taking her share of the dividends as a result of inheriting and now holding Barbara’s Preference shares. She wouldn’t and didn’t object to this when Gregory was alive. Now, Angie disputes that Gregory’s preference shares, should continue to get 50% of the dividends to its inheritors. Angie’s position is entirely inconsistent and without merit.

[469] Angie disputes Mr. Stamatopoulos’ description that she instructed him on the declaration and payout of dividends “but rather, relied on Nick’s advice and recommendations that he provided in emails beginning February 19, 2014 and subsequent material times with respect to the declaration and payout of dividends, upon my request. Nick advised me on how to pay out profits through dividends and I listened to his professional advise.” Whether Angie instructed Mr. Stamatopoulos or accepted his advice and told him to proceed, makes no difference.

[470] Why is it important is that the practice of paying 50% of the dividends to Gregory’s Preference Shares be changed after Gregory’s death? Because Angie does not share in the dividends paid to Gregory’s former Preference Shares.

[471] Gregory’s former Preference Shares (now held by Peter and John) continue to receive 50% of the declared dividends from Truckers Haven Holdco in accordance with the long standing and continuing dividend practice at Truckers Haven Holdco to declare shares proportionally in accordance with the number of Preference Shares they hold. This is not evidence of oppression.

[472] Angie also goes on to allege that dividends were never and could not be declared because there were no resolutions or meeting. I reject this. Angie relied on and reported the dividends to Revenue Canada over the years. She relied on and accepted that the dividends in Truckers Haven Holdco actually took place. She instructed Mr. Stamatopoulos to declare dividends for a number of years up to 2017. She seeks judgment for dividends declared in 2017, but not paid, in this proceeding

[473] I see no basis for Angie’s claim for oppression based on the continued declaration of dividends from Truckers Haven Holdco in accordance with the past practice and in proportion to the Preference Share holdings.

iv) Refusal to call an annual general meeting

[474] Angie submits that Peter’s refusal to call an Annual General Meeting for the Corporate Defendants, and for Truckers Haven and Truckers Haven Holdco is oppressive.

[475] To be clear, financial statements have been prepared, distributed, and approved by the directors but Angie submits she has not had an opportunity to discuss the financial statements and received little information. Angie does not point to anything in the financial statements erroneous or prejudicial to her.

[476] Nevertheless, I am satisfied that an annual shareholder meeting is required under part VII of the OBCA, unless a written resolution is signed by all shareholders.

[477] Clearly, Angie is a shareholder of Truckers Haven Holdco and has not agreed to waive the annual shareholder meetings. Truckers Haven is an affiliate.

[478] The current high conflict environment is not a valid reason or excuse for not holding the annual shareholders meeting.

[479] Accordingly, the directors of Truckers Haven Holdco and Truckers Haven are ordered to call an annual general meeting within 120 days of the release of these reasons and, thereafter, to comply with the OBCA regarding annual shareholder meetings.

v) Refusal to appoint an Auditor

[480] Angie requests that an auditor be appointed to conduct a financial audit of the Corporate Defendants under s. 149(8) of the OBCA. Angie’s counsel candidly admitted during the hearing that, given the historical period, the lack of corporate compliance, lack of separate bank accounts (acknowledged by Angie in the 2013 Resolution), there is a question whether or not an audit opinion could ever be given by an accountant.

[481] Angie refers to this as the appointment of an “independent auditor”:

To date, the Corporate Defendants have never had their Financial Statements audited or produced audited financial statements to me even after requests. In preparing the annual financial statements, Nick has based all financial records and statements on compilation accounting records provided by the Defendants which include carry over errors. There was no attempt made by the corporations to verify the numbers provided. As a result, I believe that the financial statements and other accounting records are incorrect and, among other discrepancies, where Master Steaks is concerned, the financial statements do not account for sales or revenues generated by cash sales.

Master Steaks has a high volume of cash sales, which easily can, and as has been historically demonstrated, have been misappropriated and undeclared. To date, the Defendants have refused to produce the bank statements for Master Steaks. As a result, it is unknown how much cash has been or has not been deposited on a weekly/daily basis.

[482] Angie executed a resolution for Truckers Haven Holdco that ratified “the adoption of unaudited financial statements” from July 31, 2002 to July 31, 2012. Accordingly, the lack of an audit during this period becomes moot.

[483] Angie seeks an audit to deal with the Parent’s Shareholder’s Loans, Intercompany Loans, and Unpaid Dividends. This would require going back over 20 years where admittedly by all, corporate and financing documents were not always fully or properly documented. Most is statute barred.

[484] Further, the audit would cover years where all the prior financial statements of the Truckers Haven companies approved by all, including Angie.

[485] Angie seeks to have the Truckers Haven corporate defendants pay for the cost of an audit. It is clear from Angie’s statement and submissions at the hearing that what the Plaintiffs really seek is a forensic auditor or a forensic accountant to satisfy “whether this distribution was correct” and to determine “what debts existed”.

[486] From this court’s decision above on the VTB distribution and the Master Steaks business, including the serious limitation issues, I am not persuaded a forensic audit is required on these issues.

[487] The OBCA provides that non-offering corporations are exempt from having their financial statements audited if all the shareholders consent in writing to the exemption for that year.

[488] Peter, John and Bill do not oppose an audit nor the hiring of an auditor, the sole issue being the scope of the audit and the costs associated thereto.

[489] I am satisfied that Truckers Haven Holdco and Truckers Haven should appoint an auditor. The audit should commence from fiscal Y/E 2019 to date. No specific request for an auditor by Angie was made prior to the commencement of this action (although requests for another accountant were made when disputes arose regarding the loans in the financial statements). Hence, the starting point for any audit will be 2019 and every year thereafter in accordance with the provisions of the OBCA unless ALL shareholders consent otherwise in writing.

[490] An auditor will be selected in accordance with s. 149 of the OBCA within 120 days. If there is a dispute over the selection of an auditor with no prior connection with the Truckers Haven businesses or any of the parties, either party can bring this matter back before me, and I will select an independent auditor which has not had any involvement with these businesses or these parties and fix the auditor’s remuneration under s. 149(8) of the OBCA. Hopefully, the court’s further intervention will not be necessary.

[491] An audit is properly a corporate expense. There is no basis for me to order that the shareholder (any of them) should bear this cost.

[492] No auditor need be appointed by Master Steaks or Master Steaks Holdco since Angie has no shareholdings in these companies.

vi) Refusal to produce bank statements for Master Steaks

[493] Angie alleges that much of Master Steaks profits have been taken out in cash or not deposited. Hence, she requested the bank statements for Master Steaks, which request has been rejected by her brothers.

[494] Angie is not a shareholder of Master Steaks or Master Steaks Holdco. She has no entitlement to review the bank statements (even if a shareholder were entitled to review such statements) or to exercise any other shareholder rights.

vii) Removal as director of Trucker’s Haven companies

[495] Angie alleges that she was oppressed due to her removal as a director of Trucker’s Haven Holdco and Truckers Haven.

[496] Angie acknowledges having signed a written resignation and tendered the resignation in these companies.

[497] For the reasons above and her resignation, I reject this position. I am not persuaded that given the current vitriol and high conflict between the family members that it was an oppressive decision or one which unfairly disregarded Angie’s right or unfairly prejudiced her by accepting her resignation.

[498] I find no oppression on this basis.

Conclusion on Oppression

[499] Essentially, Angie’s position on the need for annual shareholders’ meetings and appointment of an auditor for Truckers Haven and Truckers Haven Holdco are the two areas she succeeded with her claims.

[500] Taking these two areas into account, and other actions such as her removal as the treasurer (which I found were not oppressive), the question is whether the conduct of her brothers which Angie raises as oppression, individually or collectively, establish oppression or unfairly prejudices Angie or unfairly disregards Angie’s interests requiring court intervention.

[501] I am not persuaded it does.

[502] Angie’s most significant claims, setting aside the Master Steaks estate freeze, challenge to the VTB distribution, and advancing claims for her historical loans have been dismissed.

[503] Truckers Haven Holdco and its affiliate, Truckers Haven, are amid an acrimonious family dispute. Not calling a shareholders meeting or a disagreement over who is to pay for an auditor, in these circumstances, does not amount to oppression requiring the intervention of this court or triggering resort to the oppression remedies currently.

[504] There is no need for a trial to arrive at a fair and just determination of this issue.

Other Relief Claimed

i) Inspector and Investigation (s. 161 OBCA)

[505] Angie seeks to have an inspector appointed to investigate of all the Corporate Defendants, including Master Steaks. Further, she wants the inspector appointed before discovery as it “will be beneficial to the parties from a fact gathering and informational perspective to assist in understanding what has happened in this matter.”

[506] Section 161 and s. 248 of the OBCA permits an order for an investigation of a corporation or its affiliates where:

a. the business of the corporation or any of its affiliates is or has been carried on with the intent to defraud any person;

b. the business or affairs of the corporation or any of its affiliates are or have been carried on or conducted, or the powers of the directors are or have been exercised, in a manner that is oppressive or unfairly prejudicial to, or that unfairly disregards, the interests of a security holder;

c. the corporation or any of its affiliates was formed for a fraudulent or unlawful purpose or is to be dissolved for a fraudulent or unlawful purpose; or

d. persons concerned with the formation, business or affairs of the corporation or any of its affiliates have in connection therewith acted fraudulently or dishonestly.

[507] For the reasons set out herein, there is no proof of any corporate actions were carried out with the intent to defraud Angie or that anyone acted fraudulently or dishonestly.

[508] Having determined that there has been no oppression and the corporate actions complained of have not unfairly disregarded or unfairly prejudiced Angie, this relief is hereby denied.

[509] However, let me go on to state, why in any event, this relief would not be granted.

[510] The three part test to be met in determining whether to order an investigation was set out in Khavari v. Mizrahi, 2016 ONSC 4934, 61 B.L.R (5th) 313, at para. 35, as follows:

a) the applicant must be a security holder;

b) the judge must be satisfied that one of the situations listed in s. 161(2) has been established prima facie; and

c) the judge must consider the appropriateness of the investigation, bearing in mind its usefulness and reasonableness under the circumstances, with due consideration to its expected costs and benefits.

Security Holder

[511] Angie is a security holder for Truckers Haven Holdco and Truckers Haven is an affiliate.

[512] This relief could not be granted for any of the Master Steaks companies as it relates to the two Master Steaks’ companies since Angie is NOT a security holder in these companies.

A prima facie case

[513] Angie expressly states she seeks to have “an inspector to be appointed to investigate the business operations and financial affairs and documentation of the Corporate Defendants, so that a report can be prepared for the benefit of the parties and the court in deciding the issues in this proceeding.” What Angie wants is a forensic accounting ordered by this court. Angie states that:

“The financial irregularities, questionable inter-company debts, alleged parent shareholder loans, accounting entries and general lack of financial transparency, among other things, necessitate the appointment of an inspector and auditor to get to the bottom of things.”

[514] In Urbisci v. 2388095 Ontario Ltd., 2018 ONSC 2678, at para. 36, the court stated that an investigation is not intended to assist the court in making findings of oppressive conduct nor should it be used to assist parties to prepare for litigation:

The appointment of an inspector to conduct an investigation of a corporation is an extraordinary remedy. An investigation should not be ordered to assist the court in making a finding of oppressive conduct (Re Ferguson and Imax Systems Corp. et al. (1984), 1984 CanLII 2021 (ON SC) , 47 O.R. (2d) 225 (Div. Ct.), at pp. 232-33). Section 161 is not a device to assist parties to prepare for litigation (Brown v. Maxim Restoration Ltd. (1998), 68 O.T.C. 372 (Gen. Div.), at para. 15); as a fact finder, the inspector should deal with the gathering of information, not determine rights (Catalyst Fund General Partner I Inc. v. Hollinger Inc. (2004), 2004 CanLII 66299 (ON SC), 48 B.L.R. (3d) 194 (Ont. S.C.), at para. 50).

(Emphasis added)

[515] Essentially, I view this as an attempt by Angie to have the court order a forensic accounting at the company’s expense or her brothers’ expense. This is not an appropriate use of s. 161 of the OBCA. See Brown v. Maxim Restoration Ltd, 1998 CanLII 14811 (Ont. S.C.), at paras 15 and 16. And See Urbisci v. 288095 Ontario Ltd., 2018 ONSC 2678.

[516] It is not enough that an applicant merely allege misconduct or raise suspicion. Such allegations can be rebutted by the respondent. It is incumbent on the court to examine the entire record before determining whether a prima facie case of oppression has been made out. See Ferguson v. Imax Systems Corp. et al (1984), 1984 CanLII 2021 (ON SC), 47 O.R. (2d) 225 (Div. Ct.) at para. 22.

[517] I recognize that the evidentiary threshold for the appointment of an inspector/investigation is low. But contrary to the submission by Plaintiff’s counsel, more than mere allegations of oppression have not “easily satisfied the first two legs of the three-part test”. Angie does not meet this part of the test. Despite the low standard, Angie has not established a prima facie case based on bald statements and speculation.

[518] But let me go on.

It is not appropriate to appoint an inspector or order an investigation

[519] In any event, I am not persuaded it is reasonable and appropriate to appoint an inspector in the circumstances of this case. In considering the issue of whether it is appropriate to appoint an inspector/investigation, the courts have had regard to several factors, including:

a) Whether the applicant needs access to the information;

b) Whether there are better and less expensive means to acquire the information;

c) Whether the proposed investigation would give a tactical advantage to the applicant; and

d) The expense of the investigation as compared to the benefits.

[520] As to the information, aside from general and bald statements, Angie has not pointed to any specific document she needs to make her claim that has not been provided. It is important to remember that Angie had the financial and corporate records of the Truckers Haven business until approximately July 2018, and for a number of years, also those of the Master Steaks business. Accordingly, it is difficult for Angie to make this submission for anything prior to 2018.

[521] No motion has been brought for additional documents, except for bank statements of Master Steaks, which has been denied for the reasons set out above. No adjournment was sought to obtain further production or discoveries.

[522] Angie could have retained a forensic accountant to review the books and records of the Truckers Haven business, but she instead chose to commence this proceeding instead seeking to have the court order what she could have done and have either the companies or her brother pay for the review.

[523] Then there is a further problem. All of the issues that Angie complains and wants investigated are statute barred, being the loans and other matters going back beyond two years from the date this proceeding. In such circumstances, the court has precluded the inspector from looking into those barred issues. See Jones v. Mizzi, 2016 ONSC 4907, 61 B.L.R. (5th) 95. I would have done likewise.

[524] Hence, there is no value to Angie or this court of an inspector/investigator, on the issues she raises.

[525] And it would likely be prohibitively expensive.

[526] Even if I had not dismissed Angie’s claims, I would have denied this relief in the motion on this basis.

ii) Manager (s. 246(1) OBCA)

[527] Angie seeks the appointment of an “independent third-party litigation manager to instruct counsel for the Defendant Corporations and act in their best interests for the duration of the litigation.”

[528] Angie points to the failure of Master Steaks to declare all its income. This is irrelevant to Angie since she has no interest in the Master Steaks businesses. I dismiss this claim as it relates to the Master Steaks business.

[529] As for the Truckers Haven businesses, Angie concedes this is a novel relief being requested. No authority was provided for this relief sought.

[530] Angie points to Barbara’s cheque, which she alleges is forged, which she “believes” this was done by Peter and then submits it is “clear evidence “ that the directors are prepared to commit fraud and, hence, will not act in the best interests of the Corporate Defendants. As stated above, I do not accept Angie’s statement that the cheque was “forged” or that there is any basis to conclude the other shareholders, officers and directors are “prepared to commit fraud”. I am not persuaded that Angie’s allegations and speculation are a sufficient basis to take the company’s control over the litigation away from the Trucker Havens’ corporations.

[531] Angie also points to the lack of a cross-claim advanced by the Corporate Defendants against the Individual Defendants. Based on the evidence before me, and my determinations herein, I am at a loss to understand what cross-claim Angie believes should have been brought.

[532] If Angie had wanted to, she could have sought to bring a derivative action on behalf of the Corporate Defendants against the Individual Defendants for the claim she envisages could have been brought as a cross claim. But, obviously she chose not to.

[533] In my view, Angie does NOT seek or want to have a receiver manager appointed but rather just take away control over the litigation from her brothers and perhaps get a litigation manager that will side with her in this litigation, or to cause financial hardship to the companies in which her brothers hold a majority interest. This is clear from the various claims she advances in this proceeding. In my view, this is entirely an improper motive for the appointment of a litigation manager absent cogent evidence that such exceptional relief is necessary.

[534] I will deal with this relief further below as to whether the Corporate Defendants are adverse in interest to the Individual Defendants.

[535] I find no basis to take control over the management of Truckers Haven Holdco from management based on the evidence.

iii) Monitor

[536] Angie seeks the appointment of a monitor over the operations of the Master Steak’s business:

I am also requesting that a monitor be placed in the Restaurant for four weeks to ensure that the accounting numbers are accurate and to assess any cash sales not deposited in the bank account of Master Steaks, along with generating a report on the financial activity observed. I am requesting that any costs associated with the auditor and inspector/investigator and the on-site supervisor(s) be paid by the Individual Defendants.

[537] This relief is easily disposed of since Angie is not a shareholder or has any interest in Master Steaks or Master Steaks Holdco.

Removal of Mr. Stamatopoulos

[538] Angie seeks to have Mr. Stamatopoulos removed as accountant for the defendant corporations. She alleges he is biased on behalf of the Individual Defendants.

[539] This relief is denied on behalf of the Master Steaks companies since Angie has no interest in the Master Steaks businesses.

[540] I am satisfied that there is no basis for this court to remove Mr. Stamatopoulos as the compilation accountant for the Truckers Haven companies.

[541] Angie has not put forward any credible evidence (or pointed to any document) which raises a question regarding the accounting work performed by Mr. Stamatopoulos.

[542] Angie believes Mr. Stamatopoulos has falsified documents but there is no proof of that. Angie believes he favours her brothers. There is no credible proof of that. Neither is an appropriate basis for this court to intervene in the management of the Truckers Haven companies.

[543] Further, given that I have ordered that an audit be performed, this relief is not necessary.

Repayment of fees

[544] Angie submits that the Corporate Defendants should not “pay for the personal accounting fees of the Individual Defendants”. I agree.

[545] There is no evidence that Mr. Stamatopoulos is being paid by the Truckers Haven companies for the personal accounting of the Individual Defendants.

[546] However, this is an issue I cannot determine on this motion. Angie is free to pursue this claim.

IV. Removal of Counsel

i) Removal of PDC Generally

[547] PDC was retained by Gregory in 2013. PDC has continued to act for the Corporate Defendants since then. Mr. Sopov and Mr. Tonks are partners in PDC.

[548] Angie seeks the removal of PDC from acting for either the Corporate or Individual Defendants. Angie alleges that the involvement of PDC as counsel for the Corporate and Individual Defendants raises a conflict of interest.

[549] Much of the complaint by Angie is that the law firm, PDC, was involved in the “decisions and actions” against her.

[550] The fact PDC was acting for all the Defendants in this proceeding had been known to Angie for some time. This motion to remove PDC was brought when this proceeding was approximately two years old.

[551] While PDC was solicitor of record, a discovery plan was agreed, productions exchanged (including a third Supplementary Affidavit), and discoveries were in the process of being scheduled. Only then did Angie indicate she would seek to remove PDC as solicitor of record for the defendants.

[552] Equally important, in 2018, PDC acted on behalf of some of the Corporate Defendants in an application against Angie for the return of the Minute Books of the corporations. Angie raised no issue, at that time, that PDC had a conflict of interest.

[553] What is troubling is that Angie did not object to PDC acting on behalf of the Defendants, all of them, in these motions. That was confirmed at the beginning of the hearing. It is surprising that Angie would have no difficulty with PDC acting on these motions, which cover all the issues in great detail, but then request this court order that PDC cannot continue to act in this action resulting in a great expense to the Individual and Corporate Defendants.

[554] Counsel for Angie submits that with respect to “Mr. Sopov’s evidence”, it could lead “a reasonably informed member of the public would believe could be used by PDC to suppress the release of that evidence to the benefit of the Individual Defendants and to the detriment of the Corporate Defendants and the administration of justice.” That is an inflammatory submission about a law firm, based on nothing but conjecture. There is no evidence to suggest or support such a serious allegation against PDC. Further, a reasonably informed member of the public would not and could not believe, based on the evidence in this motion, that PDC would suppress the release of relevant evidence.

[555] What Angie does not do is point to any confidential information that PDC has or had, nor how Angie could or would be prejudiced by the continued retainer of PDC.

[556] The courts do have an inherent supervisory jurisdiction of the administration of justice which includes removal of solicitors from the record. However, courts should be slow to exercise this jurisdiction and thereby deprive a party of their counsel of choice. The court should consider all factors and balance the hardship to a litigant of denying them their counsel of choice and any injustice and prejudice to the opposing party seeking removal of counsel.

[557] The court in Forsyth v. Blue Rock Wealth Management Inc., 2015 ONSC 6666, at para. 31, described the overriding test in such motions:

The overriding test for removal of counsel of record has been stated as follows:

The test for the removal of a solicitor of record is whether a fair-minded and reasonably informed member of the public would conclude that the removal of counsel is necessary for the proper administration of justice.

[558] Delay is a significant factor in the balancing. When the party seeking approval does not move quickly, the hardship of removal of counsel to the opposing party increases as does the expense and delay to the court proceeding.

[559] Angie explains the delay in bringing this motion at the commencement of this proceeding. She alleges did not have “full particulars as to the extent of the prejudice that PDC’s involvement would have on the Plaintiffs as well as on the Corporate Defendants.” In addition, Angie claims that she did not know the Corporate Defendants would not advance a cross-claim. Therefore, Angie decided on a “wait and see approach to ascertain whether it was necessary to bring the within motion”. But she told no one, letting the Defendants continue to retain and expend money on PDC’s fees in this proceeding. Knowing that there was a potential conflict and saying nothing about it for almost 2 years, makes this a significant factor to deny the motion.

[560] The fact that the cross-claim was not brought would have been known to Angie when the Statement of Defence was delivered on May 20, 2019, and no cross-claim or third party claim was advanced.

[561] There is nothing to suggest there was a significant change in circumstances in the two intervening years that results in a new or increased prejudice or conflict.

[562] I am satisfied, this motion is brought by Angie primarily for tactical reasons.

[563] Where the motion to remove opposing counsel is done “predominantly or solely for the purpose of obtaining a tactical advantage in the proceeding”, this is a significant factor to dismiss the motion. See Forsyth, at para 80. The courts should not condone such litigation tactics.

[564] Let me deal with other specific grounds Angie raises regarding PDC.

Lawyer as Witness

[565] Angie alleges that Mr. Sopov may be called as a witness. That is not the appropriate test. The test is whether there is a real likelihood that counsel will be called as a witness who has material, relevant evidence to give to the court on the issues to be tried.

[566] The factors to be considered were summarized in Rice v. Smith et al., 2013 ONSC 1200, at para. 20:

However, rather than approach the general “lawyer as witness” conflict of interest concern and prohibition as an absolute rule, our courts adopt a flexible approach and consider each case on its own merits, having regard to a variety of factors that, according to the circumstances of the case, may include the following:

a. the stage of the proceedings;

b. the likelihood that the witness will be called;

c. the good faith (or otherwise) of the party making the application;

d. the significance of the evidence to be led;

e. the impact of removing counsel on the party’s right to be represented by counsel of choice;

f. whether trial is by judge or jury;

g. the likelihood of a real conflict arising or that the evidence will be “tainted”;

h. who will call the witness; and

i. the connection or relationship between counsel, the prospective witness and the parties involved in the litigation.

[567] In this case, many of these factors favour not granting the motion to remove PDC.

[568] I am satisfied there has been excessive delay in bringing this motion, it is done for tactical reasons, the likelihood Mr. Sopov will be called as a witness is extremely low, his evidence is available through other witnesses and documents, and the defendants have incurred very significant costs to date in the proceeding.

[569] I am not persuaded this is a ground to remove PDC as the Defendants’ solicitor of record.

[570] Further, given this court’s decision on the corporate issues above, I see little possibility that Mr. Sopov will be called as a witness on the remaining issues.

Conflict of Interest

[571] Angie goes on to allege that Mr. Sopov, a partner in the Defendants’ solicitor of record, has a conflict because of:

(i) his review of the corporate Minute Books in 2014 and purported confirmation that the Master Steaks 2002 Estate Freeze was valid,

(ii) the preparation of corporate resolutions for Holdco2 and shareholders meetings in 2014 that he was present for and participated in as corporate counsel, purporting to validate the estate freeze,

(iii) his participation in and presence for the 2016 purported redemption dispute pertaining to my alleged Class A shares at his office,

(iv) participating in the November 16, 2017 Directors’ Meeting and

(v) participating in the January 16, 2018 Shareholders’ Meeting.

[572] The first four allegations do not arise since this court has dismissed the claims arising from those events.

[573] What occurred at the January 16, 2018 is beyond controversy. Angie recorded the meeting. There are minutes of the meeting. It is difficult to imagine what relevant and direct evidence Mr. Sopov could add to the events of the night. The fact that the evidence of what occurred at this meeting can be adduced through Angie and the recording is a significant factor weighing against the need for Mr. Sopov to testify. See Manzinani v. Bindoo, 2013 ONSC 4744, at para. 60.

[574] Many of the areas which Angie alleges Mr. Sopov may assist the court are not “direct” evidence. For example, Angie suggests that Mr. Sopov might testify on what Barbara and Gregory’s intentions were in 2001 and 2002. That was 11 years before Mr. Sopov became involved as Gregory’s attorney. In any event, I don’t see how Mr. Sopov could give hearsay testimony on this issue.

[575] Angie submits that Mr. Sopov “should have” discovered, on behalf of Gregory, the deficiencies in the Master Steaks estate freeze. There are several problems with this. Mr. Sopov became Gregory’s lawyer after the estate freeze was regularized in 2013. I do not see how what Mr. Sopov “should have” done for Gregory is relevant to Angie’s claims.

[576] Angie submits that Mr. Sopov may have evidence regarding the alleged forgery of Barbara’s signature on certain documents. So, how could Mr. Sopov’s evidence on this allegation (which occurred more than a decade before his involvement with the family and after Barbara’s death) be within his knowledge?

[577] I am not persuaded that Mr. Sopov has relevant evident for a trial.

Prior Retainer

[578] Angie also relies on the fact Mr. Tonks previously acted for the Corporate Defendant with respect to a proceeding against her in 2018, when she failed to turn over the Minute Books and corporate records. This application did not proceed.

[579] Apparently, no conflict issue was raised by Angie when that proceeding was commenced. More importantly, Angie was the opposite party, which is not a basis to remove counsel for conflict of interest. There is no suggestion or evidence that Mr. Tonks received any confidential information or documents during that proceeding which would prejudice Angie in this proceeding.

[580] Further, Angie relies on the fact that Mr. Tonks acted for the Defendants “for the duration of this litigation to date and as such has knowledge of confidential and privileged information and litigation strategy which may be used to the benefit of the Individual Defendants at the cost of the Corporate Defendants and by extension to the detriment of the Plaintiffs.” I know of no prohibition of one defendant disclosing its “strategy” to another defendant thereby entitling the Plaintiff to obtain a removal of one party’s counsel.

[581] I am not persuaded that Angie seeks this relief in good faith.

[582] I am not persuaded that PDC’s prior retainer is a ground for removal of PDC.

Estate Trustee claim for privilege

[583] Peter and John, as Gregory’s Estate Trustees, claimed solicitor-client privilege over communications between Gregory and Mr. Sopov.

[584] The difficulty faced here is that Angie does not put forward any evidence regarding what communications are sought. It is simply a blanket statement. It is entirely unclear what documents Angie seeks to have produced or what information may or may not exist that passed between Gregory and Mr. Sopov.

[585] More importantly, Gregory’s Estate Trustee is not a party to this proceeding. No claim has been made against Gregory’s Estate or the Estate Trustees. And, there is no motion before this court for the production of third-party records. Angie has not brought a motion for the disclosure from Gregory’s Estate Trustee where the issue of privilege could be properly dealt with a complete evidentiary record.

[586] The mere fact that Angie is a beneficiary (albeit a very indirect beneficiary because of the trust monies being used to develop lands for Truckers Haven Holdco) does not mean that ALL confidential legal communications on all matters between PDC and Gregory are no longer privileged.

[587] Again, this appears very much like a “fishing expedition” to find something to advance or an excuse to remove PDC.

Conclusion on Removal of PDC

[588] I am not persuaded that any of the above grounds, individually or collectively, are grounds for the removal of PDC as solicitor of record for the Defendants.

ii)Removal of PDC for both the Corporate and Individual Defendants

[589] Angie seeks the removal of PDC for both the Corporate and Individual Defendants.

[590] Further, Angie, does not want the corporate defence counsel being appointed by the current directors and officers of the corporations – her brothers. Instead, she seeks to have this court appoint counsel and somehow provide directions as to how and who instructs counsel in these circumstances.

[591] No suggestion as to how this could possibly work was put forward. Having the court appoint counsel and then have the court determine any issues is extremely problematic and the appearance of impartiality would be seriously challenged.

[592] Angie submits that if her allegations are adjudged to be true, then the Corporate and the Individual Defendants are adverse in interest.

[593] There is merit in the submission that the Corporate Defendants might, on some issues, require independent counsel, and therefore, should have separate counsel from the Individual Defendants. The court in Rice stated the following on this issue:

[24] However, authorities repeatedly have identified corporate shareholder disputes as situations involving inherent conflicts of interest that effectively restrict a lawyer’s ability to extend joint representation.

[25] In particular, as emphasized by the professional codes of conduct, a lawyer representing a corporate organization must remember at all times that the corporation has a legal personality distinct from its individual directors and shareholders, and that those interests may very well diverge, thereby preventing a lawyer’s continued involvement in an internal corporate dispute.[9]

[26] In matters of legal representation, it accordingly is a fundamental error to regard a corporation as being synonymous with its majority directors and shareholders.

[27] Doing so almost inevitably leads to a corporate lawyer’s disregard of obligations owed to the corporate body and structure as a whole, in favour of a particular corporate faction. Most notably, the corporate lawyer effectively may ignore his or her obligation to seek litigation instructions from the corporation’s entire board of directors, and/or the lawyer’s corresponding obligation to share otherwise confidential and privileged litigation information with all of the corporation’s directors.

[28] It also ignores possible and probable distinctions between the interests of the corporation and such a majority. For example, where conduct of the director or shareholder majority is the real focus of a litigation dispute with a director or shareholding minority, (rather than any conduct of the corporation per se), corporate payment of the majority’s legal representation benefits the majority directors and shareholders but not the corporation. It also results in a situation where the minority shareholders effectively are being compelled to pay, at least in part, the legal fees of opposing legal counsel.

[29] The above concerns have been highlighted in numerous cases emphasizing a lawyer’s inability to jointly represent both a corporation and individual majority directors and shareholders in litigation focused on an internal corporate dispute. See, for example: Mottershead v. Burdwood Bay Settlement Co., 1991 CanLII 2284 (BC SC), [1991] B.C.J. No. 2554 (B.C.S.C.), (“Mottershead”); Alles v. Maurice, [1992] O.J. No. 331 (S.C.J.); Edwards-MacLeod Properties Ltd. v. 1037661 Ontario Ltd., [2001] O.J. No. 145 (S.C.J.); and Canadian Arctic Trading House Ltd. v. Bronstein, [2007] O.J. No. 3278 (S.C.J.).

[30] The following comments from Mottershead case, at paragraphs 8-10, (expressly cited with approval by a number of the Ontario authorities noted above)[10], exemplify the underlying concerns and conflict of interest rationale for restricting and preventing such joint representation:

In my view, it is clear that Mr Davies and his law firm are in a conflict of interest. As corporate solicitor and counsel for the Company, Mr Davies’ duty is to the Company; as counsel for the three personal defendants, who are also the majority shareholders, his duty is to those individuals. The best interests of the Company are not necessarily those of the majority shareholders and directors. The Company is a separate legal entity and it is no answer for Mr Davies to say that his instructions are from the individual majority shareholders as personal defendants are one and the same as those instructions which they provide as majority directors of the Company. The duty of the solicitor for the Company is to advise all of the directors so that they may make an informed decision as a board with respect to the interests of the Company.

In shareholder litigation, there exists a potential conflict of interest between the personal interests of the individual parties both plaintiffs and defendants as shareholders and their fiduciary duties as directors of the Company. A solicitor acting both for the majority shareholders and for the Company on the sole basis of the instructions of that same majority personifies that conflict.

Moreover, a solicitor owes a duty of confidentiality to his or her client and information received from the majority shareholders in their capacity as personal defendants would be privileged. Sure a conflict arises when that solicitor receives privileged information in his capacity as solicitor for the majority shareholder defendants and declines to advise the board of directors which includes the minority shareholders of that information notwithstanding his role as corporate solicitor and counsel for the defendant Company.

[Emphasis added.]

[31] In the same case, the court expressly noted, in paragraph 14, the following examples of “an actual conflict of interest, and not simply the appearance of a conflict”, arising from such joint representation:

a. payment of the majority shareholders’ legal costs as a corporate expense effectively then assessed against all of the corporation’s shares;

b. provision of legal opinions to the majority shareholders and not to the minority shareholders, who are also directors; and

c. refusal to disclose litigation-related documents and information to minority directors and shareholders of the corporation, on the basis of purported solicitor-client privilege.

[32] Where such conflict of interest concerns arise, the proper course is to require legal representation for the corporation, (if such representation is required), that is separate and distinct from the legal representation of the majority directors and shareholders. Ideally, such representation should be chosen independently of the litigating individuals. However, if no agreement in that regard is possible, and no acceptable means is found to make such an appointment, any shareholder should be given leave to make an appropriate application to the court. Similarly, if no means is found whereby corporate counsel may be properly instructed, the lawyer or lawyers in question may apply to the court for instructions.[11]

[594] The need for independent counsel is supported by the failure of the Truckers Haven corporations to hold a shareholders meeting and appoint an auditor.

[595] Based on the above authorities, I am satisfied that this claim is dismissed with respect to the Master Steaks companies but is granted with respect to the Truckers Haven companies. The Truckers Haven companies should have separate and independent counsel if this proceeding goes forward on any remaining issue(s).

[596] Truckers Haven and Truckers Haven Holdco shall have 120 days from the release of these reasons to appoint such counsel. To be clear, Truckers Haven and Truckers Haven Holdco can have the same separate and independent counsel.

iii) Individual Defendants should pay their own fees

[597] Angie’s complaint is set out in para 93 of Angie’s counsel’s factum:

Furthermore, the Individual Defendants are paying their legal fees from Dividend Income to Holdco.

[598] Essentially, the complaint is that Truckers Haven Holdco is paying the legal fees of both the Corporate and Individual Defendants, thereby reducing the amount of dividends available to Angie.

[599] Each of the defendant corporations provide, in their bylaws, that the officers and directors are indemnified for legal fees provided that they have acted honestly and in good faith with a view to the best interests of the corporation.

[600] The relevant provisions of the OBCA are as follows:

36 (1) A corporation may indemnify a director or officer of the corporation, a former director or officer of the corporation or another individual who acts or acted at the corporation’s request as a director or officer, or an individual acting in a similar capacity, of another entity, against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by the individual in respect of any civil, criminal, administrative, investigative or other proceeding in which the individual is involved because of that association with the corporation or other entity.

(2) A corporation may advance money to a director, officer or other individual for the costs, charges and expenses of a proceeding referred to in subsection (1), but the individual shall repay the money if the individual does not fulfil the conditions set out in subsection (3).

(3) A corporation shall not indemnify an individual under subsection (1) unless the individual acted honestly and in good faith with a view to the best interests of the corporation or, as the case may be, to the best interests of the other entity for which the individual acted as a director or officer or in a similar capacity at the corporation’s request.

[601] Interestingly, the above provision allows the company to advance monies for the proceeding, subject to repayment pursuant to subsection (3).

[602] Most of Angie’s claims are dismissed. Angie’s allegations of the tortious conduct alleged against the Individual Defendants has been dismissed. There is no finding that Peter, John and Bill did not act in the best interests of the companies. There is no evidence they acted in bad faith.

[603] Hence, there is no basis to make an order that Peter, John and Bill repay any monies to the Truckers Haven companies.

[604] Besides, even if the Individual Defendants had paid their own fees, Truckers Haven Holdco would have had to retain sufficient funds from its dividend payments to ensure that its financial obligation to pay the Individual Defendants could be honoured. The result in this case would have been additional legal costs and even less available for dividends.

[605] There are two exceptions – calling shareholders meetings and appointing an auditor. In these two specific situations, while the reason for not complying with corporate law may be understandable, that is no excuse for failing to do so. There should be some reduction in the legal fees of Peter, John and Bill to reflect this, but only for the Truckers Haven companies.

[606] I cannot determine the extent of the reduction in the indemnification based on the evidence before me. If the parties cannot resolve this issue, I will order a mini-trial (before another judge) on the issue of the reduction of the indemnification of Peter, John and Bill by Truckers Haven corporations. I can be spoken to if counsel cannot agree on a mechanism and timetable to ensure that both parties have the necessary and relevant documents to make full submissions on this issue.

V. Production of all Financial Records from 2017 to trial

[607] Angie seeks the financial records from all the Corporate Defendants from 2017 to trial. She claims she has been denied access. This is denied by her brothers.

[608] As for the Master Steaks’ companies, this relief is denied.

[609] Angie is entitled to receive, in this proceeding, all relevant documents for any remaining issues. I can only assume those documents have been provided as there are no production requests and no adjournment request to obtain further productions

[610] As for the Truckers Haven companies, Angie as a shareholder, is entitled to receive the documentation from these companies, that she is a shareholder, as prescribed available by the OBCA or as permitted by the directors.

VI. Communications only Through Counsel

[611] I agree that the communications in the past have been unnecessarily caustic between the parties directly.

[612] Given this court’s decision, hopefully, many of the issues have been put to rest.

[613] I am not prepared to make such an order.

[614] If such communications continue in the future, the Criminal Code, R.S.C. 1985, c. C-46, includes the offence of harassment. The parties may have to avail themselves of such remedies, if necessary.

CONCLUSION

[615] This court’s determination on the various issues are set out above.

[616] Many of the claims necessarily fail, directly or indirectly, as a result of the above findings and determinations.

[617] Angie’s claims are dismissed except for:

a) Angie’s claim regarding the Truckers Haven Holdco 2017 dividend account balance (see below for clarification);

b) The Truckers Haven companies shall, within 120 days, engage an auditor for its