2025925 Ontario Inc. v. Maramusche Holdings Inc., 2023 ONSC 3041

COURT FILE NO.: CV-21-00654318-0000

DATE: 20230519

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

2025925 ONTARIO INC. and FIORENZO DI BIASE

Plaintiffs

– and –

MARAMUSCHE HOLDINGS INC., MARANDO PAINTING LTD., SALVATORE MARANDO and MARIA TERESA MARANDO

Defendants

Michael Binetti and Adam Casey, for the Plaintiffs

David Nuri, for the Defendants Maramusche Holdings Inc., Marando Painting Ltd. and Salvatore Marando

James Zibarras, for the Defendant Maria Teresa Marando

AND BETWEEN:

MARAMUSCHE HOLDINGS INC., MARANDO PAINTING LTD., SALVATORE MARANDO and MARIA TERESA MARANDO

Plaintiffs by Counterclaim

– and –

2025925 ONTARIO INC., FIORENZO DI BIASE, ADM ENTERPRISES INC., 2596678 ONTARIO INC., VERA MANI, ROBERT DARDENGO, MERITVIEW DECORATING LTD. and ALLU HOLDINGS INC.

Defendants to the Counterclaim

David Nuri, for the Plaintiffs by Counterclaim Maramusche Holdings Inc., Marando Painting Ltd. and Salvatore Marando

James Zibarras, for the Plaintiff by Counterclaim Maria Teresa Marando

Michael Binetti and Adam Casey, for the Defendants to the Counterclaim 2025925 Ontario Inc., Fiorenzo Di Biase, ADM Enterprises Inc. and 2596678 Ontario Inc.

Allen Gerstl, for the Defendant to the Counterclaim Vera Mani

HEARD: February 15-18, 22-25 and 28, March 1-4 and September 15-16, 2022

VERMETTE J.

[1] This case is centered on a family-run corporation, Marando Painting Ltd. (“Marando”), and its three indirect shareholders: two separated spouses and the wife’s father, who was the founder of the corporation.

[2] For numerous years, they all used Marando as if it were their own personal asset or wallet and proper financial statements were not prepared. A dispute arose among the shareholders at the end of 2020, against the backdrop of the marital dispute. The husband, who had been solely in charge of the day-to-day operations of Marando for numerous years, was terminated and removed from the board of directors. Allegations of oppression were raised by both sides. Breaches of fiduciary duty were also alleged. This litigation ensued, with the husband’s new partner being added as a defendant to the counterclaim by the wife and her father.

[3] This case was factually intensive. The documentary record was deficient and the credibility of the main protagonists was less than stellar.

[4] Ultimately, I dismiss the claim and grant the counterclaim in part.

[5] Unfortunately, because of the intransigent position of the Defendants, the parties will all continue to have a shareholding interest in Marando, which is a recipe for disaster and could see the parties returning to court, potentially with the oppressor having become the oppressed party. It would be in the best interest of all parties and their family to reach an agreement about how to end their business relationship.

A. FACTUAL BACKGROUND

1. The parties and witnesses at trial

[6] The Defendant Marando is a corporation incorporated pursuant to the laws of Ontario. Its office is located in Woodbridge, Ontario. The Defendant Salvatore Marando (“Mr. Marando”) founded Marando around 1970, but Marando was incorporated in 1977. Sadly, Mr. Marando passed away after the evidence portion of the trial was completed, but before the closing submissions were heard.

[7] The Defendant Maramusche Holdings Inc. (“Maramusche”) is a holding company incorporated pursuant to the laws of Ontario. Mr. Marando is the sole shareholder of Maramusche. In 2013, Maramusche was issued 60,000 special voting shares in Marando effective January 2, 2009.

[8] The Defendant Maria Teresa Marando (“Ms. Marando”) is Mr. Marando’s daughter. Over the years, she had a number of different positions working for the Ontario government. At some point prior to 2015, she was suspended with pay. She was terminated in June 2016 and she entered into an agreement that provided that she would not work for the Ontario Public Service again. Following her termination, she remained unemployed until she started working for Marando at the end of 2020.

[9] The Plaintiff Fiorenzo Di Biase (“Mr. Di Biase”) is Ms. Marando’s husband. Mr. Di Biase and Ms. Marando got married in 1995. Around May 2003, Mr. Marando hired Mr. Di Biase as an employee of Marando. Mr. Di Biase started as an estimator. Mr. Di Biase and Ms. Marando separated in 2012 or 2013, but they continued living in the matrimonial home with their three children.

[10] The Plaintiff 2025925 Ontario Inc. (“202”) is a company incorporated pursuant to the laws of Ontario. It holds all of the common shares of Marando. Ms. Marando and Mr. Di Biase each own half of the common shares of 202, i.e. they each hold 101 shares in 202.

[11] The Defendant to the Counterclaim Vera Mani (“Ms. Mani”) is Mr. Di Biase’s new partner. They started dating in 2017.

[12] The Defendant to the Counterclaim ADM Enterprises Inc. (“ADM”) is a company incorporated pursuant to the laws of Ontario. It was incorporated on January 23, 2017. Mr. Di Biase is the sole director and sole officer of ADM and has been since its inception.

[13] The Defendant to the Counterclaim 2596678 Ontario Inc. (“259”) is a company incorporated pursuant to the laws of Ontario. It was incorporated on September 13, 2017. Mr. Di Biase and the Defendant to the Counterclaim Robert Dardengo (“Mr. Dardengo”) are directors and officers of 259 and have been since its inception. 259 is an inactive company.

[14] The Defendant to the Counterclaim Meritview Decorating Ltd. (“Meritview”) is a company incorporated pursuant to the laws of Ontario. Mr. Dardengo is Meritview’s director and president.

[15] The Defendant to the Counterclaim Allu Holdings Inc. (“Allu”) is a company incorporated pursuant to the laws of Ontario. Mr. Dardengo is a director and president of Allu.

[16] The Counterclaim is no longer proceeding as against Mr. Dardengo, Meritview and Allu.

[17] Destra Painting & Coatings Ltd. (“Destra”) is a company incorporated pursuant to the laws of Ontario. It was incorporated on November 17, 2020. Mr. Di Biase is the sole director and sole officer of Destra and has been since its inception.

[18] Andiel 220 Doughton Inc. (“Andiel”) is a corporation incorporated pursuant to the laws of Ontario. Mr. Di Biase directed investments in Andiel through ADM. ADM has received cash distributions from Andiel

[19] At trial, the Plaintiffs and Defendants to the Counterclaim called the following witnesses:

a. Fiorenzo Di Biase;

b. Jeff McKay, Vice-President of EllisDon Corporation (“EllisDon”);

c. Gerald (Gerry) Findlay, a union painter who used to work for Marando;

d. Alessandro (Sandro) Palazzo, Vice-President of TriAxis Construction Limited (“TriAxis”);

e. Vincenzo (Vince) Carnovale, Production Manager of Destra and former Production Manager of Marando;

f. Valerie (Val) Roche, former employee of Marando (office manager from 2009 to 2013, and responsible for contract management from 2013-2021);

g. Joe Valenzano, the former accountant of Marando and Maramusche;

h. Salvatore (Sam) Iannaco, owner of Prism Painting and General Contracting (“Prism”), a non-union painting contractor;

i. Robert Dardengo, owner of Meritview; and

j. Vera Mani.

[20] The Defendants and Plaintiffs by Counterclaim called the following witnesses:

a. Maria Teresa (Teresa) Marando;

b. Elizabeth (Liz) Torres, Marando’s bookkeeper;

c. Salvatore (Sal) Marando;

d. Calvin Stein, a farmer who lives near a property owned by Mr. Di Biase and Ms. Marando;

e. Stanley Turner, Marando’s corporate lawyer; and

f. Mitranand Singh, the owner of PlexxTech Solutions, an IT company providing IT help desk support to Marando and Destra.

2. Evolution of Marando

[21] As stated above, Mr. Marando hired Mr. Di Biase as an employee of Marando around May 2003. Mr. Di Biase started as an estimator. After hiring Mr. Di Biase, Mr. Marando introduced him to Marando’s customers.

[22] Around 2006, Mr. Marando developed health issues and had to undergo surgery. On January 11, 2006, Mr. Di Biase signed an agreement with Marando to become the “managing officer” of Marando. The agreement stated that Mr. Di Biase was to be responsible for supervising the daily operations of Marando and, for that purpose, he was to have full authority managing the day-to-day operations of the business carried on by Marando. At the time this agreement was signed, Mr. Marando held all of the common shares in Marando via Maramusche.

[23] Mr. Di Biase’s evidence is that when Mr. Marando came back after recovering from his health issues, he did not come back in the same capacity as before. In contrast, Mr. Marando’s evidence was that he was doing almost the same thing as he was before, except that he was doing more “desk work” because of physical limitations.

[24] On August 31, 2010, Mr. Marando signed on behalf of Maramusche a “Resolution of the Sole Shareholder of Marando Painting Ltd.”. The resolution increased the number of directors to two and elected Mr. Di Biase as a director of Marando. The resolution did not remove Mr. Marando as a director of Marando. Another resolution of Marando’s shareholders increasing the number of directors to two and electing Mr. Di Biase as a director of Marando was signed by Mr. Marando, Ms. Marando and Mr. Di Biase and dated as of August 31, 2010. At the same time, a resolution was signed by Mr. Marando and Mr. Di Biase as directors of Marando appointing Mr. Di Biase as President of Marando, and Mr. Marando as Vice-President, Secretary and Treasurer of Marando. It is unclear why two resolutions of Marando’s shareholders dealing with the same issue were signed, but this may be related to the asset freeze (discussed below).

[25] From at least 2009 until December 2020, Mr. Di Biase acted as Marando’s director and exercised de facto day-to-day control over Marando.

[26] From at least 2013 until December 2020, Mr. Di Biase acted as Marando’s President and handled all aspects of Marando’s projects, banking, bidding, etc. Starting in 2013, Mr. Marando and his wife spent a lot of time in Florida, where they owned a condominium.

[27] Between 2013 and 2020, Mr. Marando was not actively involved in the day-to-day operations of Marando. For her part, Ms. Marando was not actively involved in the day-to-day operations of Marando until 2020.

[28] On May 28, 2020, the shareholders of Marando passed a resolution electing Mr. Di Biase, Mr. Marando and Ms. Marando as directors of Marando. The resolution was signed by Mr. Marando for Maramusche and Mr. Di Biase for 202. Ms. Marando also became treasurer of Marando.

[29] During the time that Mr. Di Biase was running Marando, Marando’s annual revenues grew from approximately $2.5 million per year to nearly $7 million per year.

[30] The last year for which financial statements were prepared for Marando is the year ending June 30, 2013. After 2013, Marando did not hold an annual shareholder meeting until 2021.

[31] There is no evidence before me that dividends have been formally declared by Marando since 2010.

3. Asset freeze

[32] In 2008, Mr. Marando obtained advice from a chartered accountant, Mr. David Farrell, regarding an estate freeze and succession plans for Marando. The estate freeze that was proposed at the time was described as follows in a letter sent by Mr. Farrell:

With regard to your concerns about the succession plans for Marando Painting Ltd., here are the steps involved in establishing an estate freeze. Basically, the estate freeze holds earnings in the company up to a specific date, and by issuing of new shares, allows future earnings to be allocated to the new shares. Here are the steps involved:

First, the existing common shares are converted to special shares with a value equal to the current value of the company. This would likely be based on the retained earnings for the year ended June 30, 2008, plus an amount for goodwill to be determined. These special shares would still be owned by you, but will not gain in value. The special shares also retain voting rights to control the company.

Then, new common shares would be issued to Teresa or Teresa and Fiorenzo. Future earnings in the company will accrue to the common share holders, so their efforts will be reflected by the future value of the shares.

The special shares can be transferred by bequest in your will to a beneficiary or beneficiaries, for example, Teresa. The bequest will be subject to Capital Gains, and your small business lifetime exemption of $ 500,000.00 should apply.

[33] Steps were taken in 2009 to do an asset freeze. Mr. Marando told Mr. Di Biase about his decision to do an asset freeze to the benefit of Ms. Marando and Mr. Di Biase. However, Mr. Marando indicated many times to Mr. Di Biase that he and his wife did not want to change their lifestyle.

[34] While the implementation of the asset freeze started in 2009, it was not completed until 2013.

[35] On May 29, 2009, Articles of Amendment were filed with respect to Marando. They include the following with respect to special shares:

BE IT RESOLVED:

THAT the Corporation be and is hereby authorized and directed to create an unlimited number of Special shares to form part of its capital. The said Special shares shall have attached thereto the following:

1. The holders of the Special shares shall be entitled to receive in each fiscal year out of the money available for dividends in priority to the declaration for dividends for the holders of all other classes of shares in the Corporation, non-cumulative dividends on the capital for the time being paid thereon, payable when and at such times and in such amounts and at such places in Canada as the Board of Directors may from time to time determine. The dividends on the Special shares are non-cumulative and if in any fiscal year the Board of Directors in its discretion does not declare the dividends or any part thereof on a Special share, then the rights of the holders thereof to such dividends or to any greater dividend than the dividends actually declared for such fiscal year shall be forever extinguished;

2. The holders of the Special shares shall be entitled to one vote for each Special share held by them at all shareholders’ meetings;

3. In the event of liquidation, dissolution or winding up of the Corporation or other distribution of assets of the Corporation among its shareholders for the purpose of winding up its affairs, all of the property and assets of the Corporation available for distribution to the holders of the Special shares shall be paid or distributed equally, share for share, to the holders of the Special shares without preference of distinction;

4. The Corporation may redeem on thirty (30) days’ written notice to the respective holders thereof, mailed to their respective addresses, the whole or any part of the Special shares outstanding on payment of the amount paid up thereon plus all dividends declared thereon and unpaid;

5. Upon the date and the place specified in the said notice to call the holders of the Special shares so called shall present for payment and surrender to the Corporation the certificate or certificates therefor and upon failure to do so shall not thereafter be entitled as such holders to any right whatsoever, except the right to such payment on presentation and surrender of the property certificate or certificates for the Special shares for payment, pursuant to such call, the Corporation may, if deemed expedient, deposit the amount payable thereon upon redemption into a chartered bank, in the City of Toronto or as specified in the notice, to the credit of the holder thereof, and thereupon the said Special shares covered by such deposit shall be redeemed.

[36] By an agreement made as of June 2, 2009, Maramusche sold to Marando certain property having an agreed value of $600,000.00. As consideration for the purchase of the property, Marando issued to Maramusche 60,000 special voting shares in the capital of the corporation. At the same time, Maramusche transferred to Marando 200 common shares in the capital of Marando which it held at the time of purchase. Upon completion of the transfer of the 200 common shares, the shares were cancelled by Marando.

[37] In 2009, the special shares were issued to Mr. Marando personally instead of Maramusche. This was retroactively corrected in 2013, with the special shares going to Maramusche.

[38] Marando did not pay $600,000 to Maramusche (or Mr. Marando) in 2009. Mr. Marando decided to leave the funds within Marando as working capital. This amount was recorded as a loan payable by Marando to Maramusche. Marando reimbursed $237,661 to Maramusche in 2013. On November 19, 2020, Marando paid Maramusche $362,324.00.

[39] Marando’s financial statements indicate that the amount paid up on the 60,000 special shares was $200. As stated in the Articles of Amendment, the special shares can be redeemed on payment of the amount paid up thereon plus all dividends declared thereon and unpaid.

[40] As part of the asset freeze, 202 subscribed for 200 common shares in the capital of Marando as of June 9, 2009. However, this was papered in 2013, after Mr. Di Biase and Ms. Marando purchased the shares of 202, as described below. As stated above, Mr. Di Biase and Ms. Marando each hold an equal number of common shares in 202.

[41] Although all of the common shares of Marando are held by 202, the effective control of Marando rests with Maramusche by virtue of its holding 60,000 special voting shares in the capital of Marando.

[42] After looking for a “shelf company” that existed prior to 2009 to hold their shares in Marando, Mr. Di Biase and Ms. Marando purchased all of the shares of 202 in 2013 by a share purchase agreement made as of May 1, 2003. Mr. Di Biase was the sole director and officer of 202 from 2013 to 2020.

[43] By letter dated July 30, 2013, Stanley Turner, Marando’s solicitor, reported to Mr. Di Biase and Ms. Marando with respect to the corporate transactions resulting in the restructuring of the shareholdings in 202, Marando and Maramusche. In that letter, he indicated that Mr. Di Biase was the sole director and officer of Marando. However, at trial, Mr. Turner’s evidence was that he never received instructions from Mr. Marando to remove him as a director and to appoint Mr. Di Biase as the sole director. Mr. Turner stated that the sentence in his letter regarding Mr. Di Biase being the sole director of Marando was an error.

[44] In 2020, Ms. Marando, with the knowledge of Mr. Di Biase, purported to become a director of 202. No formal resolution was signed. The Articles of Incorporation of 202 state that the corporation’s minimum and maximum number of directors is one.

[45] I note that while Mr. Di Biase argues that the intent of the asset freeze was that all future profits were to accrue to Ms. Marando and him, this is not the case. The Articles of Amendment are clear that dividends were payable to the holders of the special shares in priority to the declaration for dividends for the holders of all other classes of shares. However, the Articles of Amendment do not provide that the holders of special shares have a right to any specific amount or percentage vis-à-vis the holders of common shares. The amounts of dividends are in the discretion of the board of directors.

[46] Mr. Di Biase’s argument that all future profits were to accrue to Ms. Marando and him appears to be based on Mr. Farrell’s letter dated September 5, 2008, on which the asset freeze was based. Mr. Farrell’s letter states that the special shares will not gain in value and “[f]uture earnings in the company will accrue to the common share holders, so their efforts will be reflected by the future value of the shares.” I note that Mr. Farrell’s letter was the beginning of the asset freeze process and that various conversations and steps subsequently took place in order to implement the asset freeze. It is my view that the sentence in issue in Mr. Farrell’s letter does not mean that “all future profits were to accrue” to Ms. Marando and Mr. Di Biase. In light of the Articles of Amendment and Maramusche’s right to receive dividends in priority, I interpret Mr. Farrell’s letter as meaning that the future growth of the company would go to the common shareholders through the value of their shares since the special shares were not going to gain in value.

4. Salaries

[47] The following table shows the amounts reflected in Mr. Di Biase’s reported T4 income from Marando:

Year	Income
2009	$80,181.87
2010	$94,028.10
2011	$80,199.80
2012	$107,817.57
2013	$85,174.80
2014	$85,086.70
2015	$75,199.80
2016	$136,483.02
2017	$138,296.58
2018	$104,858.86
2019	$368,207.92
2020	$103,207.92
Total for 2009-2020	$1,458,742.94

[48] In addition, Mr. Di Biase made additional drawings from Marando between February 2014 until December 2015 totalling $28,287.56. In 2014, Marando provided Mr. Di Biase with $20,000 for use as a RSP contribution.

[49] The following table shows the amounts reflected in Mr. Marando’s T4 income from Marando:

Year	Income
2009	$159,800.00
2010	$62,100.00
2011	$52,800.00
2012	$48,184.60
2013-2020	$47,799.96 per year Total of $334,599.72
Total for 2009-2020	$705.284.28

[50] Mr. Marando’s wife, Constandina Marando, also received an annual salary of $12,000.00 from Marando from 2011 to 2020 (except for 2011 where she received $7,000.00) for a total of $115,000.00. Constandina Marando had no involvement in Marando.

[51] At the request of Constandina Marando, her son Domenic Marando (i.e., Mr. Marando’s son and Ms. Marando’s brother) also received a salary from Marando for some time. Domenic Marando had no involvement in Marando.

[52] Ms. Marando started receiving a salary from Marando in 2018. Her reported T4 income from Marando was $65,769.00 in 2018, $365,000.00 in 2019 and $90,000.00 in 2020.

[53] Mr. Valenzano, Marando’s accountant, gave two reasons for the significantly higher amount of salary received by Mr. Di Biase ($368,207.92) and Ms. Marando (approximately $365,000.00) in 2019: (1) Marando made considerable money in 2019 and, in order to bring the amount down, the decision was made to “bonus out” an amount that would be shared equally by Mr. Di Biase and Ms. Marando; and (2) the funds could be used by Mr. Di Biase and Ms. Marando to repay shareholder’s advances. The evidence before me is that Ms. Marando did receive the amount reflected on her 2019 T4, but that she did not return it to repay shareholder’s advances. I do not have evidence as to whether Mr. Di Biase used the funds to repay any shareholder’s advance.

5. Expenses

[54] Marando’s funds were used to pay a huge number of personal expenses of Mr. Di Biase, Mr. Marado and Ms. Marando. The following are examples only.

[55] Tax liabilities. Between 2010 and 2016, Marando paid approximately $185,982.60 towards Mr. Marando and Constandina Marando’s tax liabilities with the Canada Revenue Agency.

[56] Insurance. Between 2009 and 2020, Marando paid approximately $27,783.00 to cover travel insurance for Mr. Marando and his wife, as well as $9,526.57 towards home insurance for their benefit.

[57] Renovations of Florida condominium. In 2013, Marando paid at least $81,000.00 for renovations of a condominium in Florida owned by Mr. Marando and his wife.

[58] Renovations and maintenance of matrimonial home and property taxes. Since 2007, Marando has paid at least $153,884.00 for renovations and maintenance at the matrimonial home of Mr. Di Biase and Ms. Marando in Woodbridge. Marando has also paid at least $7,963.00 in property tax liabilities for that home.

[59] Tuition fees and nanny salaries. Marando has paid at least $185,523.00 in tuition for Mr. Di Biase and Ms. Marando’s children to attend a private school. Marando has also paid at least $40,000.00 in nanny salaries to care for the children.

[60] Vehicle leases. Marando has paid for vehicle leases for four different Mercedes Benz vehicles for Mr. Marando between 2007 and 2018. Between 2009 and 2020, Marando also paid for a Mercedes Benz vehicle for Ms. Marando.

[61] Accounting fees. Between 2013 and 2017, Marando paid approximately $16,215.00 to cover Maramusche’s accounting fees.

[62] Legal fees. In 2015-2016, Marando paid more than $20,000.00 to a few law firms with respect to Mr. Di Biase’s private legal fees. Marando also paid approximately $10,000 with respect to private legal fees incurred by Ms. Marando in 2014-2015.

[63] Motorcycles and bicycles. In 2019, Marando paid more than $23,000 with respect to expenses incurred by Mr. Di Biase in relation to motorcycles or bicycles.

[64] Jewelry and watches. Marando paid for expenses incurred by Mr. Di Biase in the approximate amount of $20,000 with respect to watches and jewelry. Marando also paid for a $15,000.00 tennis bracelet for Ms. Marando.

6. Credit cards

[65] From at least 2013 to 2020, Mr. Di Biase, Ms. Marando, Mr. Marando, and Constandina Marando all maintained credit cards for which the monthly payments were made by Marando.

[66] Between September 2013 and December 2020, Mr. Marando processed approximately $217,000.00 of credit card charges on Marando’s credit card.

[67] Between September 2013 and December 2020, Ms. Marando processed approximately $557,769.00 of credit card charges not relating to the business of Marando on Marando’s credit card. The charges for the years 2018, 2019 and 2020 were $90,528.44 (2018), $112,063.67 (2019) and $103,041.11 (2020). Ms. Marando stated in her testimony that the charges on the credit card were “in lieu of” spousal and child support that Mr. Di Biase was to give her. However, she acknowledged that there was no agreement that the monies that she was expensing to Marando were in lieu of support.

[68] Between September 2013 and December 2020, charges to Mr. Di Biase’s Marando credit card totaled approximately $7,062,389.00. Mr. Di Biase used his Marando credit card for purchasing materials for painting jobs on which Marando was hired (e.g., paint), as well as personal charges. The parties dispute how much of Mr. Di Biase’s charges are personal. The Defendants’ position is that approximately $900,000 of Mr. Di Biase’s charges on Marando’s credit card are personal expenses. Mr. Di Biase disagrees, but he did not calculate the amount of personal expenses that he charged on Marando’s credit card. He said that he would often make a note on receipts to indicate what the expense was for or related to. The Defendants did not produce the receipts and Mr. Di Biase did not have access to them.

[69] In 2016, Mr. Di Biase set up a personal credit card with BMO. Between 2016 and 2020, he charged approximately $71,948.00 to this card. Ms. Torres’ evidence was that Mr. Di Biase sometimes had to use his personal credit card for Marando expenses, for instance, when he had put large amounts on Marando’s credit card and it got blocked. She said that Mr. Di Biase would sometimes pay for his personal credit card, and sometimes Marando would pay.

[70] Ms. Torres’ evidence was that every month, Mr. Di Biase and Mr. Marando would give her their receipts for the expenses charged to the Marando credit card issued to them. Ms. Marando would not always provide receipts. Mr. Di Biase usually indicated a job number on the receipts. If receipts did not have a job number on it, Ms. Torres would allocate the expense in the way that she thought was the most appropriate in the accounting system.

7. Rebate agreements

[71] Mr. Di Biase entered into rebate agreements with paint suppliers on behalf of Marando. Beginning around 2015, Mr. Di Biase redirected certain rebates from Marando’s paint suppliers to be paid to himself personally or to 202 or ADM. Mr. Di Biase did not disclose to Mr. Marando or Ms. Marando that he was having rebates from paint suppliers redirected away from Marando.

[72] Of the rebates from Marando’s paint suppliers that Mr. Di Biase redirected to himself or to 202, Mr. Di Biase admits receiving rebates from the following paint suppliers: (a) PPG in the amount of $79,000.00; and (b) Sherwin William in the amount of $96,000.00.

8. Cash jobs

[73] During Mr. Di Biase’s tenure at Marando, the company completed painting jobs (mostly residential painting jobs) for which certain clients paid in cash in lieu of obtaining an invoice from Marando. At Mr. Di Biase’s direction, Marando painters worked on such projects and Marando paid for supplies. However, Mr. Di Biase took the cash.

[74] Mr. Di Biase did not disclose to Mr. Marando or Ms. Marando that he was having Marando do cash jobs, and that he privately received the benefits of such jobs.

[75] Commencing around July 2014, Ms. Torres maintained records of jobs on which Marando failed to issue invoices in what is known as the “Cost Details Report”. According to the Defendants, the Cost Details Report shows that, between July 2014 and the end of 2020, Marando paid approximately $264,057.49 for labour and supplies for jobs on which it failed to issue invoices. However, a review of the Cost Details Report shows that it includes expenses that are related to the attendance at a conference in addition to expenses that appear to relate to specific jobs. It also includes expenses for work done at the matrimonial home of Mr. Di Biase and Ms. Marando. If one adjusts the Cost Details Report to remove the expenses related to the conference and the matrimonial home, for which Mr. Di Biase would not have received cash, the total of the Costs Details Report decreases to approximately $256,000.00.

[76] Mr. Di Biase admits that he received cash from clients totalling $250,000.00. He saw cash jobs as supplementing his compensation. His evidence is that on cash jobs, he only charged clients for the cost of the jobs, without a mark-up or profit.

[77] Mr. Marando admitted doing at least two cash jobs while he was running Marando.

9. Transfers to and from 202’s bank account

[78] Mr. Di Biase opened a bank account for 202 in 2013. He was the only signing officer on that account. Ms. Marando became a signing officer on August 12, 2020.

[79] In 2018, Marando transferred a total of $420,642.16 to 202’s bank account. Mr. Di Biase withdrew a total of $396,798.50.

[80] In 2019, Marando transferred a total of $643,000.00 to 202’s bank account. Mr. Di Biase withdrew a total of $102,938.85.

[81] While the initial transfers to 202 were relatively modest, the amounts that were transferred became significant starting in October 2018, as shown in the table below:

Date of Transfer to 202	Amount Transferred
October 5, 2018	$100,000.00
October 17, 2018	$50,000.00
December 5, 2018	$80,000.00
February 21, 2019	$200,000.00
March 11, 2019	$343,000.00
June 25, 2019	$100,000.00

[82] According to Mr. Di Biase, the transfers from Marando to 202 occurred because Marando had a lot of money in its operating account and, after having a conversation with Marando’s bookkeeper (Ms. Torres), he decided to transfer the money to 202. Mr. Di Biase did not advise Ms. Marando or Mr. Marando about the transfers to or from 202’s bank account.

[83] On July 27, 2020, Mr. Di Biase returned $261,449.00 to 202’s bank account. The funds came from ADM’s bank account.

[84] In November 2021, approximately $850,000.00 was transferred from 202 to Marando. This transfer returned the remaining money in 202’s account back to Marando.

10. ADM’s bank account

[85] Between January 2017 and December 2020, Fiorenzo made several deposits into ADM’s bank account. The deposits into the account totaled approximately $682,881.70. During the same period, a total of approximately $523,229.63 was withdrawn from the account.

[86] ADM has made the following investments:

a. ADM invested approximately $242,500.00 in Andiel, a real estate development;

b. ADM invested approximately $68,750.01 into a property in King, Ontario; and

c. ADM invested approximately $84,285.00 into a property located in Whitby, Ontario.

11. Meritview and Clarington tower project

[87] Meritview is located next door to Marando. It is also in the painting business. Mr. Di Biase and Mr. Dardango became friends over the years.

[88] Marando and Meritview worked on one project together: the Clarington Tower project, which was a high-rise condominium project with three towers. Mr. Dardengo was approached to do the project by one of his friends who is a partner in the company that was building the project. However, Meritview could not do the job by itself due to the fact that it does not have union certification for residential buildings. Mr. Dardengo then asked Mr. Di Biase if he would be interested in doing the job. Mr. Di Biase accepted.

[89] After completing the first tower, Mr. Di Biase was no longer interested in Marando being involved in the work to be done at the other two Clarington towers. Mr. Dardengo’s evidence was that the project did not go very well as the contractor was a first-time condominium builder. Mr. Dardengo felt obligated to continue with the project because of his relationship with the contractor. However, because Meritview was not a signatory to the residential union, Mr. Dardengo asked Mr. Di Biase whether he could help him out and keep the project under Marando’s name, with the agreement that Meritview would supply all the material and manpower to do the project. Mr. Di Biase agreed.

[90] Thus, between 2016 and 2019, Marando provided invoices for the work done on the other two Clarington Towers, which work was completed entirely by Meritview. Marando collected payment for these jobs, then transferred the entirety of the revenues to Meritview.

[91] In total, Meritview billed Marando and was paid $915,722.34. Among other things:

a. On the Clarington Tower 2 project, Marando billed $300,000.00, and was then billed $300,000.00 by Meritview.

b. On the Clarington Tower 3 project, Marando billed $425,373.00, and was then billed $425,373.00 by Meritview.

[92] There is no evidence that Mr. Di Biase received any payments as a result of the invoicing assistance provided by Marando to Meritview with respect to Towers 2 and 3.

12. 259

[93] In 2017, 259 entered into an agreement of purchase and sale for a condo located in Brampton, Ontario for $329,990.00. On January 15, 2020, 259 assigned the agreement of purchase and sale to a third party for $505,000.00. In January 2020, 259 received approximately $208,000.00 from the assignment of the agreement of purchase and sale. ADM received $104,000 from these proceeds.

[94] The condominium unit purchased by 259 was located in Clarington Tower 3 where Meritview did a painting job and Marando invoiced for Meritview’s work. The condominium was not part of the payment received from the job, but it was purchased at a reduced rate, i.e. a “friends and family” price. Mr. Dardengo was approached by his friend who is a partner in the company that was building the project. He asked Mr. Dardengo whether he would be interested in purchasing a condominium as an investment to “flip”. At that time, Mr. Dardengo did not have the necessary resources to purchase the condominium so he asked Mr. Di Biase whether he would be interested in purchasing the condominium with him. Mr. Di Biase accepted. Mr. Dardengo and Mr. Di Biase each paid 50% of the required deposit.

13. Providence Care Hospital project

[95] Marando was involved in the Providence Care Hospital Project around 2017. This project related to a mental health hospital in Kingston. EllisDon was the general contractor and Jeff McKay was the senior project manager on the project. Marando was the original painting contractor on the project and Gerry Findlay was the foreman for this job.

[96] Mr. McKay’s evidence is that Marando completed the job with the assistance of another firm. He stated the following during his testimony:

This was a very difficult project for everybody involved. Um, Marando was given the contract to be the, thee [sic] painting contractor, so he would be responsible for the entire scope of work of painting inside and outside of the building. As the result of some difficulties we had in the construction and um, rework that was required, we had – he could not provide sufficient resources to finish the project in a timely manner and we brought in another subcontractor to do the – to assist in the painting portion of his contract. So, he was back-charged so that the cost of that other contractor was deducted from Marando’s contract.

[97] In a contemporaneous e-mail dated March 8, 2017 to Mr. Di Biase and Ms. Roche, Jeff McKay stated that “[g]iven the circumstances and additional costs incurred by EllisDon to complete your work, there are no further funds to be released to Mirando [sic]”. Mr. McKay confirmed that the funds were used to pay the other painting subcontractor.

[98] At trial, Mr. McKay expressed the opinion that Marando had overbilled for the job based on the work that was done, i.e., the bill did not match the work that was completed. While Marando had claimed that some of the work was rework, EllisDon’s view was that some of it was just poor workmanship. In short, Marando and EllisDon disagreed on how much Marando’s work was worth.

[99] Ms. Roche’s evidence was that this job was “overbilled” because Marando was anticipating getting purchase orders, but they were never received. She said that at that time, Marando was working on a time and materials basis, which was work over and above a purchase order. Ms. Roche stated that for work on a time and materials basis, purchase orders were given after the submission of the time and material, i.e., at the time of invoicing.

[100] Marando’s records show that it was paid $1,879,377 for this project and incurred costs of $1,531,683. Ms. Torres’ evidence was that $416,651 was written off on this project.

14. Tree farm in Madoc, Ontario

[101] Through an entity called FMMT Holdings Ltd. (“FMMT”), Mr. Di Biase and Ms. Marando purchased a farm property in Madoc, Ontario in 2018. The parties referred to this property as a “tree farm”. Mr. Di Biase and Ms. Marando became aware of this opportunity through a neighbor, Mr. Paul Savo. Mr. Savo owns the property that is north to the tree farm.

[102] The funds used to purchase the farm came from a mortgage on Mr. Di Biase and Ms. Marando’s matrimonial home in Woodbridge. The mortgage payments are funded by Marando.

[103] Mr. Di Biase’s position in the litigation is that no profits have been earned from the tree farm. Ms. Marando disagrees. One of the Defendants’ witnesses, Calvin Klein, lives near the tree farm and testified that he had seen logging operations on the property. Mr. Klein only knows Mr. Savo. He has never met Mr. Di Biase and Ms. Marando, although he has spoken to Ms. Marando on the phone. Mr. Stein’s evidence was that he saw logging on the south property (i.e., Mr. Di Biase and Ms. Marando’s property) and the logs were brought and piled on the north property (i.e., on Mr. Savos’ property). Mr. Stein did not have any knowledge about any money received for any logs removed from the property.

[104] Paul Savo was not called as a witness. Text messages between Mr. Savo and Mr. Di Biase, as well as Mr. Di Biase’s evidence at trial and a document located by Ms. Marando all suggest that there was a plan to build log homes on the properties which involved Mr. Salvo, Mr. Di Biase and maybe others.

15. Other Investments

[105] Either directly or through another entity, Mr. Di Biase has made a $125,000.00 investment in a company known as Kronic Relief Inc. Mr. Di Biase paid for this investment from funds on deposit with 202. Ms. Marando also holds a $125,000.00 investment in Kronic Relief Inc. Her portion was paid with funds from the severance package that she received from her previous employment with the Ontario public service.

[106] Either directly or through another entity, Mr. Di Biase has made a $10,000.00 investment in the shares of an entity known as Canafuentes.

16. Events of 2019-2020

[107] In February 2019, Mr. Di Biase and Ms. Marando resumed efforts to finalize their divorce.

[108] In early 2020, Ms. Marando became increasingly involved with the operations of Marando. Around March 2020, Ms. Marando and Mr. Di Biase had a meeting during which they discussed completing Marando’s financial statements since 2011.

[109] On May 14, 2020, Stanley Turner, in his capacity as Maramusche’s lawyer, sent to Mr. Di Biase a Requisition to call a Special Shareholders’ Meeting of Marando to be held on May 28, 2020. The letter enclosed other documents, including a Notice of the Special Meeting signed by Mr. Marando as secretary of Marando.

[110] On May 28, 2020, Ms. Marando became a director and the treasurer of Marando. The resolutions that were signed on that day show that, as of May 28, 2020: (a) Marando’s directors were Mr. Di Biase, Mr. Marando and Ms. Marando; and (b) Marando’s officers were Mr. Di Biase (President), Mr. Marando (Secretary) and Ms. Marando (Treasurer).

[111] In an email to Mr. Di Biase dated August 31, 2020, Ms. Marando informed Mr. Di Biase that, as part of her new role as Treasurer, she would need to approve all expenses on Marando’s credit cards.

[112] On November 4, 2020, Mr. Di Biase received a letter by e-mail from Mr. Marando’s lawyer, David Nuri. In the letter, Mr. Nuri requested that Mr. Di Biase repay any funds that had allegedly been wrongfully removed from Marando. The letter read, in part:

As a result of the asset freeze, my client became a creditor to Marando Painting Ltd. in the amount of $600,000.00. In 2012, he received approximately $237,000.00 but the full balance is still owing. Over the last eight years, you appear to have taken no steps whatsoever to pay down this debt.

Instead of paying down this debt, you have conducted affairs in a most high-handed manner, treating Marando Painting’s resources like your personal bank account. This appears to have been triggered by marital difficulties between you and Teresa Marando around 2013.

Since that time, you have diverted funds, misused funds, or simply acted in a conflict and contrary to the corporation’s best interests. This has all been extremely prejudicial to my client, who still owns 60,000 preferred shares in Marando Painting through his holding company, Maramusche Holdings Inc..

Some examples of your questionable conduct include the following.

1. You refused to complete financial statements for Marando Painting since 2012. You refused to provide my client with any updates whatsoever about the status of projects or developments. It is only through the involvement of my client’s daughter that he recently found out about your indiscretions since 2012.

2. You spent company resources on personal expenditures that had nothing to do with generating profit for Marando Painting.

a. In 2019, you spent $113,58.73 on the company’s VISA. You purchased items like flights to the US, Europe, the Caribbean, over $7,749.69 on concert tickets, $3,839.00 on groceries.

b. In March of 2019, you paid $6,987.87 on personal airline travel including two first class airline tickets to Texas. You and your guest attended a client appreciation trip at a five-star resort in Bahamas, and purchased spa treatments along with approximately $10,000.00 for a watch at a store called John Bull for a single total trip expenses of $11,696.74.

c. You used the company to pay off your personal BMO Card ending in 3390.

d. You spent over $17,000 at Food Emporium, an adult entertainment establishment.

e. Around Valentine’s weekend this year, you took a trip to the Niagara region and spent over $4,500.00 on food and wine. Over the past eight months, you spent $5,829.42 on restaurants and $4,567.75 on a 5-week Muskoka vacation.

f. You also spent $3,127.39 on women’s designer clothing including Lovely Lingerie a high-end intimate apparel store, and $5,750.01 at Damiani Jewelers in November 2018.

3. You wrongfully diverted funds into private accounts without any notice to the other shareholders of the business.

a. You funnelled $1,150,000.00 into a RBC account held by 202. It appears that only you had knowledge of this and not my client’s daughter.

b. You removed another $300,000.00 to buy and invest in property in your own name.

4. Over the last seven years, you have also made unusually large contributions to your RRSP despite the fact that this does not form part of your remuneration. You entered something called the Manulife Corporate Insured Retirement Program, binding Marando Painting and through same approved approximately $6,008.00 monthly out of MPL's accounts. This amounts to $72,096.00 annually.

Beginning in 2017, you also redirected rebates from long established paint suppliers of Marando directly into your RBC account rather than deposit same into company accounts. The cheques my client has found total $23,481.66 for 2017 alone. In 2020, Sherwin Williams gave you a $24,370.62 cheque, while Pittsburg Paints Group gave you a cheque of $4,000.00. None of these funds were deposited into Marando Painting’s accounts. This was contrary to company practice since Marando Painting has always tried to reduce material costs and increase net income.

Given the details and precision of the above allegations, it is unlikely to be of any utility for you to deny what unfolded. We have all the documents, bank statements, corporate profiles, and invoices to substantiate the above assertions. This does not even encompass the entirety of what occurred under your watch. We are simply interested in moving as swiftly as possible to preserve our client’s interests. The legal implications of what unfolded are serious: you breached your fiduciary duty to the company, acted contrary to Marando Painting’s best interests, preferred your private interests over that of the company, misappropriated and embezzled corporate funds, and acted in a manner totally prejudicial to my client.

Mr. Marando’s [sic] wishes to immediately remedy the above and ensure the continued successful operation of Marando Painting Ltd. as a legacy for his grandchildren. This opportunity came to you because of Mr. Marando’s commitment to family and his grandchildren. Although the family relation that brought you into the business has changed, Mr. Marando did not change how he treated you. Notwithstanding your corporate abuses, he still appreciates and respects the hard work and dedication you have demonstrated at Marando Painting.

In that vein, please provide to my client the sum of $518,798.94 in two equal payments on November 20th, 2020 and December 4th, 2020. This sum is calculated by taking into account the $600,000.00 loan, calculating compound interest at the fluctuating Bank of Canada interest rate, and accounting for the sums that were already paid. See attached figure.

In addition, please return to Marando painting all transfers that were made to 2025925 Ontario Inc. – specifically $1,150,000.00. Those transfers were made without my client’s knowledge, and it appears, without the knowledge of Teresa Marando, a 50% shareholder in 2025925 Ontario Inc.. [sic] Please do this by December 4th, 2020.

Please also return all the funds that you wrongfully removed since 2012. To be clear, what I mean by this is all funds that you redirected to yourself in addition to your salary, all funds that were redirected away from Marando Painting from which you benefited, and all personal expenses that were wrongfully paid out of Marando Painting’s accounts. I will provide to you a full accounting shortly. Nevertheless, you can begin by returning the expenses identified above.

If we do not hear from you by November 13, 2020, I have instruction to take more drastic measures, including but not limited to: commencing a court proceeding without further notice to you and seeking any and all remedies available. [Emphasis in the original.]

[113] On November 17, 2020, Mr. Di Biase incorporated Destra.

[114] On November 19, 2020, Marando paid $362,324.00 to Maramusche. Mr. Di Biase admits that there was no intention to redeem Maramusche’s special shares when this payment was made.

[115] A meeting of Marando’s directors took place on December 29, 2020 at 10:00 a.m. Mr. Di Biase did not attend the meeting. At the meeting, Mr. Di Biase was removed as President of Marando. A special shareholders meeting was scheduled for January 14, 2021 at the offices of Marando’s solicitor, Stanley Turner. The main item of business for the special shareholders meeting was to remove Mr. Di Biase as director of Marando.

[116] On December 29, 2020, Mr. Marando sent a letter to Mr. Di Biase on Marando letterhead in which he advised Mr. Di Biase that his employment with Marando was terminated effective immediately. The letter read as follows:

I am writing to inform you that your employment with Marando Painting Ltd. is terminated effective immediately. The decision is based on the uncovering of misconduct, misappropriation of funds, and your failure to meet your fiduciary responsibilities and act in the best interest of the company and its shareholders.

At today’s Board of Directors meeting, you will be removed as President and Manager. Your phone and other property of Marando Painting shall be returned immediately, and your personal possessions in the office will be packed and brought to your home. Your vehicle can be used for no longer than one month and shall be returned to Marando Painting by January 28, 2021 in its current condition, or you will be responsible for any repair/restoration costs.

Given your role as President and access to confidential trade and business information, you are reminded that effectively immediately, you are no longer to make any representations on behalf of Marando Painting: you are prohibited from accessing or releasing any confidential business or trade information; and you are accountable for any solicitation or loss of company business.

I regret to make this decision but given your failure to adequately address the issues in my counsel’s letter dated November 4, 2020, I have been left with no choice.

Please note that a special meeting of the shareholders is called for January 14th, 2021 at 10 am in the offices of Turner, Brooks, Ste. 15, 4220 Steeles Avenue West, Woodbridge, ON L4L 358. You are entitled to attend.

[117] In late December 2020, Mr. Di Biase had a meeting with the painters who were doing work for Marando. He let them know that he would not be back in the new year. Mr. Di Biase’s evidence was that he did not solicit anyone as he did not have work for anyone.

17. The litigation and events in 2021

[118] On January 6, 2021, Mr. Di Biase began this action seeking, among other things, relief from oppression. Mr. Di Biase also sought interim and interlocutory relief subsequent to his termination.

[119] On January 7, 2021, Mr. Di Biase contacted Ms. Roche to ask her to send him some “take-off documents”, i.e., documents used to make a quote. Ms. Roche did not send him anything as she did not want to be fired.

[120] On January 11, 2021, Mr. Marando and Maramusche served Mr. Di Biase with their own Statement of Claim and a Motion Record for a Mareva injunction against Mr. Di Biase, his companies, and Ms. Mani. The motion also sought to bar Mr. Di Biase from competing with Marando.

[121] On January 13, 2021, the parties entered into a Consent Order that was signed by Justice Diamond. The Order read, in part:

1. THIS COURT ORDERS THAT a motion seeking a determination of the status of Maramusche Holdings Inc. as a shareholder of Marando Painting Ltd. and relief related thereto as contained within the Plaintiffs’ Statement of Claim shall be heard on February 16, 2021 for a two hour hearing […].

2. THIS COURT ORDERS THAT until the Plaintiffs’ motion is heard:

a. Marando Painting Ltd. shall compensate Fiorenzo Di Biase his usual compensation as it existed per the last six months of his employment, plus a pre-paid Visa in the amount of $150.00 for gas, and use of the company vehicle.

b. The shareholders of Marando Painting Ltd. may proceed with their special meeting on January 14, 2021 to remove Fiorenzo Di Biase as a director of Marando Painting Ltd. without prejudice to the rights of the Plaintiffs to take the position that if Maramusche Holdings Inc. is determined not to be a shareholder of Marando Painting Ltd., any meetings or decisions taken while Maramusche Holdings Inc. was not a shareholder of Marando Painting Ltd are void.

c. The Defendants shall not take any steps to dilute any of Marando Painting Ltd.’s shares; pay any dividends; destroy any emails from Fiorenzo Di Biase’s Marando Painting Ltd. email account, except as provided in 2)d); or read or remove any privileged documents belonging to Fiorenzo Di Biase.

d. Within 3 business days of this Order, Marando Painting Ltd. shall provide to Mr. Fiorenzo Di Biase an image of his Marando Painting Ltd. email account as it existed on the date of his termination, December 29, 2020. After the image is provided above, the Defendants shall engage a third party to destroy any emails from or to emails addresses at the following domains of legal counsel for the Plaintiffs: karolcorp.com, torlaw.org, and agmlawyers.com.

e. Neither party shall take any steps to change the corporate structure of 2025925 Ontario Inc. or attempt to act on its behalf outside of court.

3. THIS COURT FURTHER ORDERS THAT until the Plaintiff’s motion is heard:

a. Fiorenzo Di Biase shall not directly or indirectly compete with Marando Painting Ltd.

b. Fiorenzo Di Biase shall not actively solicit clients, prospective clients, or employees of Marando Painting Ltd.

c. Within 3 days of this Order, Mr. Fiorenzo Di Biase shall provide on behalf of the businesses: ADM Enterprises Inc., and 2596678 Ontario Inc.:

i. statements for all bank accounts held by these entities for the months of September 2020 through to December 2020;

ii. statements of all expenses incurred by these entities for the months September 2020 through to December 2020.

d. Fiorenzo Di Biase is allowed to pay the following expenses from ADM Enterprises Inc: legal fees and an upcoming VISA bill of $3,667.31 to be paid in February.

e. Other than the amounts listed in 3(d), above, the Plaintiffs will not transfer any other funds or assets out of bank accounts or otherwise remove or dissipate assets of ADM Enterprises Inc., 2596678 Ontario Inc., or 2025925 Ontario Inc..

4. THIS COURT ORDERS THAT the Judge hearing the Plaintiff’s motion on February 16, 2021 shall have the ability to provide direction including but not limited to:

a. extending the duration of the provisions under section 3 of this Order above on an interim basis;

b. scheduling a motion on the merits of the terms under section 3 as well as other related relief.

[122] At the special meeting of Marando’s shareholders held on January 14, 2021, Mr. Di Biase was removed as a director of Marando. Mr. Di Biase did not attend the meeting.

[123] The matter came back before the Court on February 16, 2021. Justice Lederer wrote the following endorsement:

The parties are fighting over the participation in, and conduct of, a commercial painting business, Marando Painting Ltd. There were competing motions before the Court. At present one has been withdrawn, the other is ongoing and is scheduled to be heard on March 3, 2021. On January 13, 2021, a standstill agreement was entered into and is now the subject of an order of the Court.

Although its purpose has changed over time, in the end, the appointment today was set to consider whether the standstill agreement should be set aside or left in place until the hearing on March 3, 2021. The parties were both prepared to make submissions on the applicability of the three-part test found in RJR-MacDonald Inc. v. Canada (Attorney General) […].

The plaintiffs wish the standstill agreement to be set aside. The defendants believe it should be left in place.

There is a problem. The defendants have not complied with the Order that puts the standstill agreement in place. They have not released, to the individual plaintiff, his emails that are in the possession of Marando Painting Ltd. The defendants say this is because, on review, it has been discovered that that [sic] this email record contains material that should not be there – that is material that is confidential to the personal defendants.

It is also the case that the individual plaintiff has not been paid as the Order undertook, he was to be.

After some discussion with the Court the parties acknowledged the following as an appropriate resolution for today:

1. The order of Justice Diamond, dated January 13, 2021 will remain in place until March 4, 2021.

2. The defendants will provide to the plaintiffs an undertaking as to damages should they (the defendants) be unsuccessful in the hearing now scheduled for March 3, 2021.

3. By Friday, February 19, 2021, at 5:00 PM, the defendants will pay to the individual plaintiff any amount outstanding on account of his income as contained in the order of Justice Diamond dated January 13, 2021.

4. It follows that the individual plaintiff is not to seek out, solicit or accept any commercial painting work or contract from current or former customers of Marando Painting Ltd, at any time before March 4, 2021.

5. By Friday, February 19, 2021 at 5:00 PM, the defendants will provide to the individual plaintiff his email record presently in the possession of Marando Painting Ltd. To the extent that material is held back as confidential to the defendants, a list of those documents is to be provided to the plaintiff, again, no later than Friday, February 19, 2021 at 5:00 PM.

Costs for today: this appearance should not have been necessary. On the one hand the plaintiffs could have foreseen that the standstill order would be left in place. On the other hand, the defendants did not comply with that order. In particular, they insisted that the individual plaintiff not compete with Marando Painting Ltd, but they did not pay him as they said they would.

No costs.

[124] On March 11, 2021, Mr. Di Biase returned his Marando phone and computer. On the same day, the parties appeared before Justice Belobaba. Justice Belobaba ordered the following, on consent:

1. THIS COURT ORDERS THAT Fiorenzo Di Biase, ADM Enterprises Inc., 2596678 Ontario Inc., and Destra Painting & Coatings Ltd. shall maintain complete financial and sales records until trial and preserve all communications with customers and Marando’s current employees. If the Defendants wish to obtain these records prior to and at trial in order to quantify damages, failing consent, they can address requests for the release of the records with the court.

2. THIS COURT FURTHER ORDERS THAT for a period of seven (7) months from the date of this Order, Fiorenzo Di Biase, ADM Enterprises Inc., 2596678 Ontario Inc., and Destra Painting & Coatings Ltd., shall not directly or indirectly bid on painting jobs operated by the following entities in Ontario:

(a) Broccolini;

(b) Collaborative Structures Limited (CSL);

(c) Eastern Construction Co. Ltd.;

(d) Graham Construction;

(e) Leeswood Construction;

(f) Lisgar Construction;

(g) Pomerleau;

(h) Reliance Construction Toronto;

(i) Toronto District School Board.

3. THIS COURT FURTHER ORDERS THAT for a period of seven (7) months from the date of this Order, ADM Enterprises Inc., 2596678 Ontario Inc., and Destra Painting & Coatings Ltd. shall not use, misuse or disclose any confidential or proprietary information of Marando Painting Ltd.

4. THIS COURT FURTHER ORDERS THAT for a period of seven (7) months from the date of this Order, Fiorenzo Di Biase, ADM Enterprises Inc., 2596678 Ontario Inc., and Destra Painting & Coatings Ltd. shall not directly or indirectly solicit or enter into employment agreements with Marando Painting Ltd.’s salaried employees, and shall not enter into any employment agreements with any foremen or subcontractors of Marando Painting Ltd. with whom Fiorenzo has already spoken and solicited.

5. THIS COURT FURTHER ORDERS THAT for a period of seven (7) months from the date of this Order, Fiorenzo Di Biase shall not hold himself out to be a representative or owner of Marando Painting Ltd. and shall remove all social media references to owning Marando Painting Ltd. He shall also redirect communications meant for Marando Painting Ltd. to Marando Painting Ltd.

6. THIS COURT FURTHER ORDERS THAT, Fiorenzo Di Biase shall continue to preserve all information, including documents and data relevant to this matter.

[125] On September 3, 2021, Justice Stinson made the following order on consent at the pre-trial conference:

1. THIS COURT ORDERS THAT the Order of Justice Belobaba dated March 11, 2021 shall continue until the commencement of the trial of this action, scheduled to commence on February 14, 2022, with the exception of Sections 2 and 4 thereof. Sections 2 and 4 thereof shall expire and be of no force and effect as of November 1, 2021. Such expiry of Sections 2 and 4 of Justice Belobaba’s Order shall not prejudice the Defendants/Plaintiffs by Counterclaim’s ability to pursue relevant remedies for non-solicitation.

2. THIS COURT FURTHER ORDERS THAT all funds held in the RBC account […] of 2025925 Ontario Inc. shall be released to Marando Painting Ltd. as of November 1, 2021 to fund the ongoing operations of Marando Painting Ltd. Fiorenzo Di Biase agrees to sign a direction to RBC to that effect by September 17, 2021, which direction shall be provided by counsel for the Defendants/Plaintiffs by Counterclaim. Once transferred, such funds shall not be transferred by way of dividend or otherwise to any of Marando’s shareholders for their personal use. The parties acknowledge that the release of the funds contemplated by this paragraph are deemed to occur on a without prejudice basis vis-à-vis the Plaintiffs/Defendants by Counterclaim and that the release of such funds are neither an admission of liability nor a waiver of rights to those funds on the part of the Plaintiffs/Defendants by Counterclaim, as the case may be.

[126] Ms. Roche went on a medical leave in June 2021. Her employment with Marando ended on January 31, 2022.

[127] On December 16, 2021, Mr. Carnovale resigned from Marando. He started working at Destra in January 2022.

18. Mr. Di Biase Marando laptop and phone

[128] Mr. Di Biase lost access to his Marando e-mails the day after he was terminated. On December 29, 2020, Marando’s IT consultant changed the password to Mr. Di Biase’s account. This was confirmed in an e-mail to Ms. Marando:

Hi Teresa,

As discussed earlier, we changed the password to Fiorenzo’s account on December 29th. Emails that were setup on a phone/laptop would still be accessible until the day that the password was changed. (History preserved)

All account access was removed as a part of the password change and hence no new emails would have gone through.

Thank you

[129] At trial, Mr. Singh explained that the words “History preserved” in his e-mail only applied to a device that did not have a network connection or access to Wi-Fi. If the device had a connection, then the procedure used by Mr. Singh would have resulted in Mr. Di Biase being signed out of all his e-mail accounts and having all of his e-mails removed from the devices.

[130] Mr. Singh gave the following evidence at trial:

Q. And what did you do with his email account? I should say, what was the state of his email account?

A. Um, at the time, Teresea mentioned that she would like to check if anything has been deleted. I personally dealt with that I believe, just because of the confidential nature of the matter and the urgency. I had logged into Fiorenzo’s account on Office 365. There were – I’m not too sure how to quantify it, but there were deleted items in there. Again, it could have been from, you know, a few days before, it could have been a month before. There were some deleted items and I restored – at the time I didn’t take, um, I didn’t take note of if it was either contacts or emails or what. More than likely it’s a combination of all of that. I just basically restored everything what – that was deleted from that time. What I do recall is that some of the items were in the deleted items, which you can easily recover, and some of the items were in the, it’s like a cache of deleted items. It’s like a secondary deletion. And there was quite a few items in there and I just basically recovered everything back to Fiorenzo’s mailbox whether it was junk, contacts, any sort of communication. Again, I usually don’t pay attention to the emails, I just do a recovery as was instructed at the time.

[131] Mr. Singh’s evidence was that he recovered everything, but he did not check when the various items had been deleted. He stated that it was not odd to see many e-mails in a deleted folder or in the cache.

[132] Mr. Di Biase testified at trial that while he was trying to set up his new phone in late December 2020 with his e-mail address at Destra and a new Apple iCloud account, he inadvertently wiped the information on the phone, i.e., he did something that resulted in the deletion of all his contacts and text messages. Mr. Di Biase stated that he did not have access to the iCloud account associated with his Marando phone.

[133] Mr. Di Biase also testified that he had his Marando laptop “wiped” at an Apple store before he gave his phone and laptop to his lawyer on March 8, 2021. When working at Marando, Mr. Di Biase was using his laptop as a “dummy terminal” to access the contents of his Windows desktop in Marando’s office. After his termination and his access to Marando’s account was removed, he used the laptop for personal purposes. Before returning the laptop, he wanted to make sure that personal information and passwords on it would be irretrievable. Mr. Di Biase had privacy concerns given that, since his termination, Ms. Marando had accessed some of his social media accounts and had reviewed e-mails he had exchanged with his lawyers. Mr. Di Biase gave evidence to the effect that Ms. Marando had sent text messages to certain people pretending to be him. Further, he found out in mid-January 2021 that GPS trackers had been attached to the underside of his and Ms. Mani’s vehicles.

19. 2021 projects

[134] I discussed below some of the projects in issue in this litigation.

a. Pomerleau / Canada Post

[135] On November 11, 2020, Mr. Di Biase, on behalf of Marando, submitted a bid to Pomerleau with respect to a project at a Canada Post facility. A few e-mails were subsequently exchanged in 2020, but there was no confirmation that Marando’s bid had been accepted.

[136] On January 20, 2021, Ms. Marando sent an e-mail to Marando’s contact at Pomerleau for this project to advise that she was Marando’s new President and to follow up on the project. On January 21, 2021, she received the following e-mail:

Thank you for your interest and follow-up with respect to the painting scope. Unfortunately, we have already made our recommendation to our Director to proceed with another bidder, as time was of the essence and we needed to finalize this contract. We are now proceeding on that basis.

The timing of ownership change is unfortunate but Marando Painting is well-regarded by POM and can look forward to future opportunities.

[137] Mr. Di Biase’s evidence is that he did not contact Pomerleau to advise them of any “ownership change”. There is no evidence that Mr. Di Biase tried to sabotage Marando in relation to this job.

b. Amazon Nugget Project

[138] On June 8, 2021, Destra provided a quotation for this project, which was managed by TriAxis. The proposed price was based on drawings dated May 7, 2021. On June 16, 2021, Destra received an Initial Work Authorization from TriAxis. The description of the initial work was as follows:

Painting work (excluding painting of precast and columns in LATP #5) in accordance with the Revision to Permit / Bid Drawings issued by AECOM on May 20, 2021 as per the attached quotation from Destra Painting & Coatings Ltd. dated June 8, 2021.

[139] The amount for this initial work was $512,105.00.

[140] On May 19, 2021, Destra had provided another quotation for a different/narrower scope of work. On June 7, 2021, Destra received an invoice from a subcontractor, Linares Painting Services, regarding the Amazon Nugget project.

[141] On January 29, 2021, Marando had sent a tender form to TriAxis for the Amazon Nugget project with a price of $710,070.00. However, the tender form that was produced at trial did not include any of the appendices. As a result, it was not possible to determine the scope of work for Marando’s bid.

[142] Mr. Palazzo’s evidence at trial was that the Amazon Nugget project was put out for tender at least three times because of changes that were made, with the final tender issued in May 2021. He stated that Marando was not in the running for this project in May 2021. He said that he had never worked with anyone at Marando other than Mr. Di Biase and that he did not have the required comfort level to deal with somebody new on a job of this significance. Mr. Palazzo thought that Marando was probably not invited to bid after the first tender.

[143] Mr. Palazzo confirmed that no work was done on this project in early 2021 because the tenant did not move out until the middle of May 2021. He stated that construction started in June 2021.

c. Northern Pines

[144] This project was with respect to a house in Woodbridge. There is some evidence that Marando had a painter working there in December 2020 for approximately two weeks. Prism subsequently worked at that location. Mr. Iannaco’s evidence is that he got a lead from Mr. Di Biase with respect to this job in January 2021, and he ultimately did the job. Mr. Iannaco stated that he did not pay anything to Mr. Di Biase with respect to this job. Mr. Iannaco started working on this job in February 2021. He said that there had been another paint company doing work before he started and after Marando was there.

[145] While counsel for the Defendants suggested in their questions of some of the witnesses that Marando had put a bid on this project, that one of its painters worked on the project for 150 hours and that paint was allocated to this project, no documentary evidence was provided to support these assertions.

B. DISCUSSION

1. Credibility

[146] As stated above, the credibility of the main protagonists – Mr. Di Biase, Mr. Marando and Ms. Marando – was problematic in many ways. The following findings of credibility have informed my assessment of the evidence in this case.

[147] When faced with questions on topics that were problematic for him, Mr. Di Biase had a hard time responding to questions directly and would regularly obfuscate with lengthy and confusing answers. In addition, on such topics, his answers were general and at a very high level.

[148] There were also issues with Mr. Marando’s reliability and credibility. He did not have any personal knowledge of what happened, and appeared to rely on information provided to him by Ms. Marando. His answers to some questions also generally undermined his credibility. Among other things:

a. His answer that he had no knowledge about Ms. Marando having a relationship with another man was not credible, especially in light of the evidence of the other witnesses, in particular Ms. Roche’s.

b. His evidence that he had some suspicions back in 2012-2013 about Mr. Di Biase and did not trust him completely was not credible. Mr. Marando’s statements about his “suspicions” were very general, unclear and not well articulated. Further, these alleged suspicions took place at the time when Mr. Marando stopped his involvement in the company and Mr. Di Biase took over the management, which does not make sense.

c. Mr. Marando’s evidence about the request for a salary for his son was not disingenuous.

[149] In my view, the least credible witness was Ms. Marando. She very often gave non-responsive answers and/or answers that were disingenuous. She constantly deflected questions. Even if irrelevant to the question asked, she would take every opportunity to say negative things about Mr. Di Biase and make long speeches in response to simple questions. She refused to acknowledge obvious points (e.g., mortgage payments made with respect to the matrimonial home protected her interest in that home) and preferred to speculate and/or provide irrelevant and non-responsive answers. As she was trying to justify the expenses that she and her father charged to Marando, she frequently gave answers that made no sense. She also took ridiculous positions: for instance, she said that Mr. Di Biase, as President of Marando, could not access financial statements of Marando that predated his appointment as President (e.g., 1998 financial statements) without first asking for permission. Vindictiveness permeated her answers.

[150] Some of Ms. Marando’s evidence was contradicted by her own witness, Mr. Singh. Ms. Marando also repeatedly referred to alleged documents or e-mails that she had not produced, including a USB stick that was found in a Marando vehicle used by Mr. Di Biase that Ms. Marando had repossessed. According to Ms. Marando, the documents on the USB stick allegedly pertained to the Amazon Nugget project, but she did not produce the documents in the litigation.

[151] I also note that despite the fact that her theory of the case was based in part on Mr. Di Biase’s actions being caused by their separation, Ms. Marando refused to provide an answer with respect to when the separation occurred. She said that there was no clear date of separation and even suggested that it could be after 2017.

2. Requests to draw adverse inferences for failure to produce documents and/or answer proper questions

[152] The Defendants asked the Court to draw adverse inferences based on alleged non-production of documents by the Plaintiffs and Ms. Mani or refusals to answer questions on discovery.

[153] Drawing adverse inferences from failure to produce evidence is discretionary: see Parris v. Laidley, 2012 ONCA 755 at para. 2.

[154] I am not prepared to draw adverse inferences against any party in this case, principally for the following reasons:

a. With respect to most requests, I was not provided with the wording of the precise questions that were asked and, as a result, I could not determine whether the questions were proper and the refusals unjustified. See Raponi v. Olympia Trust Company, 2022 ONSC 4481 at para. 80. That this is a real issue is demonstrated by the following example, which is a refusal contained in the read-ins filed during the trial. Counsel for Ms. Marando asked Ms. Mani to produce her bank statements for her chequing, savings, personal line of credit and credit card for the years 2017 to the end of 2020. In my view, this was an overreaching question.

b. With respect to some requests, the argument was that there had to be more documents that were not produced, but the actual existence of such documents was not necessarily established.

c. While the Defendants complained about non-production by the Plaintiffs and Ms. Mani, it was clear at trial, as noted above, that Ms. Marando and Marando had been selective in their production of documents and had failed to produce relevant documents. This is significant because the Plaintiffs no longer have access to Mr. Di Biase’s e-mails for the period when he was at Marando and, as a result, they entirely depended on the Defendants complying with their production obligations under the Rules of Civil Procedure. Thus, all sides engaged in non-compliant conduct. On this basis, I decline to draw adverse inferences as against any party and rely on the burden of proof. See 2788610 Ontario Inc. v. Bhagwani, 2022 ONSC 905 at para. 35.

3. General principles regarding the oppression remedy

[155] Section 248 of the OBCA gives the court broad powers to remedy oppressive conduct in respect of a corporation. Subsection 248(2) states as follows:

Where, upon application under subsection (1), the court is satisfied that in respect of a corporation or any of its affiliates,

(a) any act or omission of the corporation or any of its affiliates effects or threatens to effect a result;

(b) the business or affairs of the corporation or any of its affiliates are, have been or are threatened to be carried on or conducted in a manner; or

(c) the powers of the directors of the corporation or any of its affiliates are, have been or are threatened to be exercised in a manner,

that is oppressive or unfairly prejudicial to or that unfairly disregards the interests of any security holder, creditor, director or officer of the corporation, the court may make an order to rectify the matters complained of.

[156] Oppression is an equitable remedy. It seeks to ensure fairness and what is just and equitable. It gives a court broad, equitable jurisdiction to enforce not only what is legal but what is fair. Therefore, courts considering claims for oppression should look at business realities, not merely narrow legalities. Given that oppression is fact-specific, conduct that may be oppressive in one situation may not be in another. What is just and equitable is judged by the reasonable expectations of the stakeholders in the context and in regard to the relationships at play. See BCE Inc. v. 1976 Debentureholders, 2008 SCC 69 ay paras. 58-59 (“BCE”).

[157] In assessing a claim of oppression, a court must answer two questions: (1) Does the evidence support the reasonable expectation asserted by the claimant? and (2) Does the evidence establish that the reasonable expectation was violated by conduct falling within the terms “oppression”, “unfair prejudice” or “unfair disregard” of a relevant interest? See BCE at paras. 68, 95.

[158] With respect to the first question, the claimant must identify the expectations that they claim have been violated by the conduct at issue and establish that the expectations were reasonably held. Factors that are useful in determining whether a reasonable expectation exists include: general commercial practice; the nature of the corporation; the relationship between the parties; past practice; steps the claimant could have taken to protect itself; representations and agreements; and the fair resolution of conflicting interests between corporate stakeholders. See BCE at paras. 70. 72.

[159] The business judgment rule is relevant when assessing whether the directors of the corporation have achieved a fair resolution of conflicting interests between corporate stakeholders that is in accordance with their duty to act in the best interests of the corporation. Under this rule, deference should be accorded to business decisions of directors taken in good faith and in the performance of their functions, so long as they lie within a range of reasonable alternatives. See BCE at paras. 40, 81-84, 87, 99.

[160] To complete a claim for oppression, the claimant must show that the failure to meet their reasonable expectation involved unfair conduct and prejudicial consequences within section 248 of the Act. Not every failure to meet a reasonable expectation will give rise to the equitable considerations that ground actions for oppression. The court must be satisfied that the conduct falls within the concepts of “oppression”, “unfair prejudice” or “unfair disregard” of the claimant’s interest, within the meaning of section 248 of the Act. See BCE at para. 89.

[161] In BCE, the Supreme Court of Canada stated the following with respect to these three concepts (at paras. 91-94):

[91] The concepts of oppression, unfair prejudice and unfairly disregarding relevant interests are adjectival. They indicate the type of wrong or conduct that the oppression remedy of s. 241 of the CBCA [Canadian Business Corporations Act, R.S.C. 1985, c. C-44] is aimed at. However, they do not represent watertight compartments, and often overlap and intermingle.

[92] The original wrong recognized in the cases was described simply as oppression, and was generally associated with conduct that has variously been described as “burdensome, harsh and wrongful”, “a visible departure from standards of fair dealing”, and an “abuse of power” going to the probity of how the corporation’s affairs are being conducted: see Koehnen, at p. 81. It is this wrong that gave the remedy its name, which now is generally used to cover all s. 241 claims. However, the term also operates to connote a particular type of injury within the modern rubric of oppression generally — a wrong of the most serious sort.

[93] The CBCA has added “unfair prejudice” and “unfair disregard” of interests to the original common law concept, making it clear that wrongs falling short of the harsh and abusive conduct connoted by “oppression” may fall within s. 241. “Unfair prejudice” is generally seen as involving conduct less offensive than “oppression”. Examples include squeezing out a minority shareholder, failing to disclose related party transactions, changing corporate structure to drastically alter debt ratios, adopting a “poison pill” to prevent a takeover bid, paying dividends without a formal declaration, preferring some shareholders with management fees and paying directors’ fees higher than the industry norm: see Koehnen, at pp. 82-83.

[94] “Unfair disregard” is viewed as the least serious of the three injuries, or wrongs, mentioned in s. 241. Examples include favouring a director by failing to properly prosecute claims, improperly reducing a shareholder’s dividend, or failing to deliver property belonging to the claimant: see Koehnen, at pp. 83-84.

4. General principles regarding breach of fiduciary duty

[162] Subject to any unanimous agreement, the directors of a corporation are responsible for managing or supervising the management of the business and affairs of a corporation: see subsection 115(1) of the OBCA and Peoples Department Stores Inc. (Trustee of) v. Wise, 2004 SCC 68 at para. 31 (“Peoples”). The directors may designate the offices of the corporation, appoint officers, specify their duties and delegate to them powers to manage the business and affairs of the corporation: see subsection 133(a) of the OBCA.

[163] Pursuant to subsection 134(1)(a) of the OBCA, every director and officer of a corporation, in exercising their powers and discharging their duties to the corporation, must act honestly and in good faith with a view to the best interests of the corporation. This has been described as a “statutory fiduciary duty”: see Peoples at para. 32.

[164] The Supreme Court described the contents of the statutory fiduciary duty of directors as follows in Peoples at para. 35:

35 The statutory fiduciary duty requires directors and officers to act honestly and in good faith vis-à-vis the corporation. They must respect the trust and confidence that have been reposed in them to manage the assets of the corporation in pursuit of the realization of the objects of the corporation. They must avoid conflicts of interest with the corporation. They must avoid abusing their position to gain personal benefit. They must maintain the confidentiality of information they acquire by virtue of their position. Directors and officers must serve the corporation selflessly, honestly and loyally: see K. P. McGuinness, The Law and Practice of Canadian Business Corporations (1999), at p. 715. [Emphasis in the original.]

[165] The “best interests of the corporation” are not the same as the “best interests of shareholders”. While it may be legitimate, given all the circumstances of a given case, for directors and officers to consider the interests of shareholders, employees, suppliers, creditors, consumers, governments and the environment, the interests of the corporation are not to be confused with the interests of any stakeholder(s). At all times, directors and officers owe their fiduciary obligation to the corporation. See Peoples at paras. 42-43.

[166] Ultimately, all the circumstances of the case need to be scrutinized to determine whether the directors and officers have acted honestly and in good faith with a view to the best interests of the corporation: see Peoples at para. 39.

[167] Fiduciary relief is equitable in nature. The remedies for breach of fiduciary duty are discretionary. They are dependent on all the facts before the court, and designed to address not only fairness between the parties, but also the public concern about the maintenance of the integrity of fiduciary relationships. Fiduciary relief is aimed at two goals: restitution and deterrence. Restitution is aimed at returning a beneficiary to the position he would have been in but for the fiduciary’s breach. The goal of deterrence is to prevent fiduciaries from benefitting from their wrongdoing and maintain the integrity of the fiduciary relationship. A remedy for breach of fiduciary duty can be aimed at one or both of these purposes. The role each one plays is a function of the particular facts of the case. See Mady Development Corp. v. Rossetto, 2012 ONCA 31 at paras. 18-19 (“Mady”).

5. Directorship and shareholding of Marando

[168] Based on the evidence, I find that Mr. Marando was never removed as a director of Marando and that he never intended to resign as a director. While he utterly failed to manage or supervise the management of the business and affairs of Marando for numerous years prior to 2020, contrary to subsection 115(1) of the Business Corporations Act, R.S.O. 1990. c. B.16 (“OBCA”), this is a separate issue and does not change the fact that he remained as a director of Marando. One erroneous sentence in Mr. Turner’s letter dated July 30, 2013 cannot alter the composition of the board of directors. I accept, however, that Mr. Di Biase may have believed that he was the sole director of Marando after 2013 until 2020 given Mr. Marando’s total lack of involvement.

[169] I also find that Maramusche’s shares in Marando have not been redeemed, contrary to Mr. Di Biase’s argument. The fact that Marando paid to Maramusche the monies that were owed to it does not amount to a redemption of Maramusche’s shares. The process set out in the Articles of Amendment for the redemption of the special shares was not followed: the required notice was not given and Marando did not pay to Maramusche the amount paid up on the special shares ($200). Mr. Di Biase admitted during his testimony that he did not have the intent to redeem Maramusche’s shares in 2020, in particular when Marando made the payment of $362,324.00 to Maramusche. In any event, no decision to redeem Maramusche’s shares could have been made without the participation of Mr. Marando, who was a member of the board of directors.

[170] I disagree with Mr. Di Biase’s argument that it would be “manifestly unjust” to allow Mr. Marando to retain control of Marando now that Maramusche has been paid $600,000. The $600,000 amount has no connection with the redemption of Maramusche’s special shares. This amount should have been paid to Maramusche when Marando and Maramusche entered into the agreement made as of June 2, 2009 in the context of the asset freeze. The fact that Mr. Marando agreed to lend these monies to Marando and leave them in the company as working capital is neither here nor there. Under the June 2, 2009 agreement, Marando issued the 60,000 special shares to Maramusche as consideration for the purchase of certain property by Marando from Maramusche at the agreed value of $600,000. Given that the issuance of the special shares was tied to the $600,000 payment, the making of this payment cannot result in the elimination/redemption of the special shares.

[171] As part of the asset freeze, Mr. Marando was to retain control of Marando through the voting rights attached to the special shares. This never changed and it would be unjust to deprive Mr. Marando of such control without notice. While Mr. Di Biase relies on the case Mennillo v. Intramodal Inc., 2016 SCC 51, this case does not support his position as it was found that the shareholder alleging oppression did not want to be a shareholder and had expressly demanded not to be treated as such. This is not the situation before me. Mr. Marando/Maramusche never asked not to be a shareholder of Marando.

6. Mr. Di Biase’s credit card expenses

[172] Ms. Marando and Ms. Torres prepared a chart which purports to summarize and categorize Mr. Di Biase’s Visa charges from 2013 to 2020. As stated above, the Defendants produced credit card statements for the relevant years, but they did not produce the receipts that Mr. Di Biase provided at the relevant time to support the expenses processed on Marando’s credit card.

[173] The chart includes categories that are unlikely to include legitimate business expenses, including the following: bicycles, jewelry and lingerie,[^1] Sporting Life, garden center, groceries, gym, home services, clothing (including Harry Rosen and Hugo Boss), legal fees for family proceeding, medical expenses (including dentist and glasses), Netflix, haircuts, mortgage insurance, veterinarian and pet-related expenses, kids-related expenses, tuition fees, family trips to various destinations (including Italy and Florida), cottage and boat-related costs. This list is not exhaustive.

[174] The chart also includes categories that could include legitimate business expenses,[^2] including the following: gas, parking, office supplies, Best Buy, Amazon, restaurants, travel expenses (including for out-of-town jobs and industry conferences), tickets/entertainment, golf-related expenses, storage rental, dry cleaners (as confirmed by Ms. Torres during her testimony), florist (Ms. Torres testified that floral arrangements would be sent when people passed away), courier services, car rental and repair, campground (for Gerry Findlay), Internet and phone, and Canadian Tire and Home Depot. This list is not exhaustive. Further, while the names of most categories were self-explaining, some were not and no clear explanation was provided by any witnesses as to the type of expenses that they contained (e.g., mte mobile). In the absence of more detailed evidence, I cannot find that the amounts associated with these categories are purely personal expenses.

[175] In light of the foregoing, and based on the evidence before me and my analysis of the numbers included in the chart, I infer that the total of personal, non-business expenses processed by Mr. Di Biase on Marando’s credit card from 2013 to 2020 is between $200,000 and $300,000. I note that: (a) this amount is significantly less than the charges processed by Ms. Marando on Marando’s credit card during the same period of time, which were approximately $557,769.00 and which did not relate to the business of Marando; and (b) this amount is similar to the amount of charges processed by Mr. Marando on Marando’s credit card during the same period, i.e. approximately $217,000.00, which did not relate to the business of Marando.

[176] As pointed out above, Ms. Marando tried to justify the magnitude of her credit card charges by taking the position that the charges on the credit card were “in lieu of” spousal and child support that Mr. Di Biase was to give her. However, as noted above, she acknowledged that there was no agreement that the monies that she was expensing to Marando were in lieu of support. Further, I find that Ms. Marando could not reasonably believe that a court would have awarded spousal and child support in an amount similar to the amount that she processed on Marando’s credit card. Ms. Marando’s position in this litigation was that she did not know that Mr. Di Biase was taking money out of Marando in excess of his annual salary. Based on the amounts reflected in Mr. Di Biase’s T4s, his average salary between 2013 and 2020 was approximately $137,000. By comparison, the annual amounts that Ms. Marando processed on Marando’s credit card in 2018, 2019 and 2020, as noted above, were very close to or exceeded $100,000. These charges are out of proportion with Mr. Di Biase’s salary. In addition, I note that after being terminated in June 2016, Ms. Marando chose not to work even though she was capable of earning an income, which raises the issue of imputed income.

[177] The manner in which Mr. Marando and Ms. Marando used Marando’s credit card negates any reasonable expectation on their part that Mr. Di Biase would not process personal expenses on Marando’s credit card. Since, based on the evidence, the amount of personal expenses processed by Mr. Di Biase on Marando’s credit card is less than the personal expenses processed by Ms. Marando on Marando’s credit card during the same period of time and similar to the personal expenses processed by Mr. Marando during the same period, I conclude that the amount processed by Mr. Di Biase is not contrary to the reasonable expectations of the Defendants.

[178] I find it unnecessary to analyze whether the processing of personal expenses on Marando’s credit card constitutes a breach of fiduciary duty as I would decline to order any remedy in this regard. As stated above, fiduciary relief is equitable in nature and the remedies for breach of fiduciary duty are discretionary. Such remedies are dependent on all the facts before the court, and designed to address fairness between the parties, among other things. See Mady at para. 18. In this case, it would be unfair to order a remedy against Mr. Di Biase only in circumstances where Mr. Marando and Ms. Marando, as directors and officers of Marando, were also using Marando’s credit card for personal expenses.[^3]

[179] Thus, I reject the Defendants’ request for an order that Mr. Di Biase “pay to Marando $400,000 to compensate it for the funds that [Mr. Di Biase] processed on his credit card in excess of what Teresa Marando processed on her credit card”. This request is based on an amount of expenses charged by Mr. Di Biase that has not been proven in court.

[180] In addition to their request for $400,000 in relation to the use of Marando’s credit card, the Defendants also seek an order that Mr. Di Biase “pay to Marando $330,000 to compensate it for personal expenses that [Mr. Di Biase] had Marando cover in addition to his salary”. The Defendants have not provided a list of the expenses included in the $330,000 figure, and it has not been established before me that such an amount has been paid by Marando in addition to the personal expenses processed on Marando’s credit card. The Agreed Statement of Facts includes a list of disputed expenses, but it does not indicate how these expenses were paid. However, based on the chart regarding the credit card expenses referred to above, it is obvious that most of the expenses listed in the Agreed Statement of Facts were paid for using Marando’s credit card. Given the overlap and the lack of cogent evidence, I decline to make the requested order regarding alleged personal expenses in the amount of $330,000.

7. Redirection of rebates and cash jobs

[181] I find that by doing cash jobs and redirecting rebates to himself, Mr. Di Biase breached his statutory fiduciary duty to Marando.

[182] By doing cash jobs, Mr. Di Biase had Marando incur costs for labour and supplies for his own personal benefit as he took the customers’ cash payments and did not reimburse Marando for its costs. Similarly, by redirecting certain rebates from paint suppliers away from Marando and having them paid to him personally (or to 202 or ADM), Mr. Di Biase deprived Marando from a benefit that it could have used to generate more profit on jobs. The rebates and cash jobs were opportunities that belonged to Marando, not to Mr. Di Biase personally. Thus, Mr. Di Biase abused his position to gain a personal benefit and put himself in a situation of conflict of interest with the corporation. He failed to manage the assets of the corporation selflessly, honestly and loyally, and in a manner that was consistent with the pursuit of the realization of the objects of the corporation. He did not disclose the cash jobs and redirection of rebates to the other shareholders and officers.

[183] In my view, doing cash jobs and redirecting rebates are actions that are different in nature than charging personal expenses to the corporation. Personal expenses will be paid out of the bottom line, i.e., the money available to the corporation after it completed jobs and (hopefully) made a profit. In contrast, cash jobs and redirection of rebates reduce the corporation’s bottom line even before personal expenses are paid, and prevent the corporation from increasing its bottom line and profit.

[184] The fact that Mr. Marando may have done a few cash jobs while he was in charge of Marando and the fact that others in the construction industry may be doing cash jobs do not have any impact on the analysis above. Mr. Marando admitted to doing two cash jobs over the years. There were probably more. However, at the time such cash jobs were performed, Mr. Marando was the only shareholder of Marando, which makes the situation different than the one before me.[^4] Further, there is no evidence as to whether Mr. Marando (or others in the construction industry) kept the entire amount of cash received from customers or whether the corporation was reimbursed for its costs and the corporation’s principal only kept the amount of cash exceeding the costs incurred. My conclusion regarding breach of fiduciary duty is based on the specific facts of this case.

[185] Mr. Di Biase has admitted redirecting to himself or to 202 rebates in the amount of $175,000.00. Marando is entitled to damages in this amount.

[186] With respect to cash jobs, the starting point is the amount in the Cost Details Report as adjusted above, i.e., approximately $256,000. As stated above, Mr. Di Biase’s evidence is that he only charged clients for the cost of the jobs, without a mark-up or profit. The Defendants argue that Marando’s profit on jobs was approximately a 30% mark-up on the cost of labour and supplies and that such a mark-up should be added to the costs set out in the Cost Details Report.

[187] The evidence before me includes a 2019 exchange of e-mails between Mr. Di Biase and a customer in which Mr. Di Biase wrote that if the customer paid in cash and not by cheque, she would save the HST and obtain a 10% discount on the contract price.[^5] It appears from the e-mail that this particular customer chose to pay by cheque and not cash. However, the e-mail shows that Mr. Biase was using the same contract price (presumably including a mark-up) as a starting point whether the customer paid by cheque or in cash, but he was giving a 10% discount on cash jobs. It is possible, however, that the contract price that was the starting point included a mark-up that was lower than Marando’s usual mark-up. Mr. Di Biase submitted that cash jobs were mostly small residential jobs that, if not done for cash, were unlikely to have been awarded to a unionized painting company like Marando. The fact that Marando may not have been awarded the job is irrelevant to the issue of diversion of corporate opportunities (see Can. Aero v. O’Malley, 1973 CanLII 23 (SCC), [1974] S.C.R. 592 at 621-622 (“Can. Aero”), discussed further below), but it is relevant to the issue of a potential mark-up charged by Mr. Di Biase on cash jobs.

[188] I do not accept Mr. Di Biase’s evidence that he never charged any mark-up on cash jobs. While I can accept that he may not have charged a mark-up on jobs done for family members or friends, it is not credible that no mark-up would be charged on jobs done for “regular” customers. Mr. Di Biase was not operating a charitable organization. Further, an analysis of the 2019 exchange of e-mails referred to above suggests that at least some mark-up was included in the contract price.

[189] Ultimately, I conclude that the amount received by Mr. Di Biase for cash jobs is approximately $295,000.00. Marando is entitled to damages/disgorgement in that amount.

[190] I reject the Defendants’ claim that Mr. Di Biase redirected time and materials from the Providence Care Hospital project to cash jobs. This allegation is wild speculation. There is no evidence supporting such a conclusion. Further, I agree with the Plaintiffs that the alleged scope of this redirection is implausible.

[191] It is clear that Marando lost money on the Providence Care Hospital project. However, this does not mean that there was any breach of duty. It was acknowledged by all involved that this project ended up being a very difficult one, and I am prepared to accept that a job can “go bad”, for a variety of reasons. The evidence before the Court was wholly insufficient to allow the Court to rule on whether any duty of care was breached in relation to this project.

[192] The word “overbilling” was used with respect to this project by some witnesses and by the Defendants’ lawyers. In my view, the lawyers asking the questions on this issue and the different witnesses using this word did not all attribute the same meaning to it. Ultimately, after considering the evidence as a whole and the entirety of Mr. McKay’s testimony, I agree with the Plaintiffs’ submission that the “overbilling” issue raised with respect to this project is based on a disagreement between Marando and EllisDon as to who was responsible for the need for rework. I reject the suggestion that Marando billed for hundreds of thousands of dollars of work that it had not done.

8. Wrongful dismissal

[193] In my view, Mr. Di Biase was not wrongfully dismissed as Marando had just cause to dismiss him based on his dishonest conduct and breaches of fiduciary duty.

[194] Whether an employer is justified in dismissing an employee on the grounds of dishonesty is a question that requires an assessment of the context of the alleged misconduct: see McKinley v. BC Tel, 2001 SCC 38 at para. 48. In Dowling v. Ontario (Workplace Safety & Insurance Board), 2004 CanLII 43692 at paras. 49-50 (Ont. C.A.) (“Dowling”), the Court of Appeal explained the three-part test for determining whether termination for cause was justified:

[49] Following McKinley, it can be seen that the core question for determination is whether an employee has engaged in misconduct that is incompatible with the fundamental terms of the employment relationship. The rationale for the standard is that the sanction imposed for misconduct is to be proportional – dismissal is warranted when the misconduct is sufficiently serious that it strikes at the heart of the employment relationship. This is a factual inquiry to be determined by a contextual examination of the nature and circumstances of the misconduct.

[50] Application of the standard consists of:

1. determining the nature and extent of the misconduct;

2. considering the surrounding circumstances; and,

3. deciding whether dismissal is warranted (i.e. whether dismissal is a proportional response).

[195] At the first step, the nature and extent of the misconduct must be determined, and the employer is entitled to rely on wrongdoing by the employee that is discovered both before and after the termination. The second step considers the employee within the employment relationship, including the employee’s age, employment history, seniority, role and responsibilities, and for the employer, the type of business, any relevant policies or practices, and the employee’s position in the organization, including the degree of trust reposed in the employee. The third step assesses whether the misconduct is reconcilable with sustaining the employment relationship, and whether the misconduct is sufficiently serious that it would give rise to a breakdown in the employment relationship. See Dowling at paras. 51-53 and Hucsko v. A.O. Smith Enterprises Limited, 2021 ONCA 728 at para. 34.

a. Nature and extent of misconduct

[196] I have already discussed above the breaches of fiduciary duty committed by Mr. Di Biase in relation to cash jobs and redirection of rebates.

b. Surrounding circumstances

[197] While Mr. Di Biase’s age, employment history and seniority at Marando should be considered, his position within the organization and the degree of trust reposed in him are very important considerations, as well as the fact that Mr. Di Biase owed a fiduciary duty to Marando.

c. Proportionality

[198] I conclude that Mr. Di Biase’s misconduct was sufficiently serious that it warranted dismissal. His misconduct cannot be reconciled with his fiduciary obligations as an officer of Marando. His actions were intentional and numerous, and occurred over a long period of time. Mr. Di Biase knew or ought to have known that his actions were in conflict with the best interest of Marando. The shareholders and board of directors of Marando reposed a very high degree of trust in Mr. Di Biase, but his self-dealing destroyed this trust which was essential to the effective performance of the functions of President.

[199] Therefore, I find that Mr. Di Biase was not wrongfully dismissed.

9. Alleged oppression against Mr. Di Biase

[200] Since I have found that Marando had just cause to terminate Mr. Di Biase’s employment, Mr. Di Biase’s termination does not constitute oppression. This leaves the question of whether the removal of Mr. Di Biase as director of Marando and the appointment of Ms. Marando as President of Marando constitute oppressive conduct or conduct that is unfairly prejudicial or that unfairly disregards the interests of Mr. Di Biase.

[201] Mr. Di Biase argues that it was unreasonable for Mr. Marando and Ms. Marando to: (a) fire the only person with recent experience running the company at a time when the company was doing well; and (b) appoint as President someone (i.e., Ms. Marando) who does not have the requisite knowledge and experience to run Marando.

[202] A person who commits significant breaches of fiduciary duties owed to a corporation cannot reasonably expect to remain as an officer and director of that corporation: see Strauss v. Wright, 2017 ONSC 5789 at para. 25 (Div. Ct.) and Walker v. Betts, 2006 BCSC 1096 at paras. 24-25. This is especially the case if the person is not the majority shareholder of the corporation.

[203] Further, I find that the appointment of Ms. Marando as President of Marando did not constitute oppressive conduct or conduct that is unfairly prejudicial or that unfairly disregards the interests of Mr. Di Biase. There is no evidence before me that someone else could have been found on a timely basis to operate Marando after Mr. Di Biase’s termination on December 29, 2020. Mr. Carnovale’s evidence was that he was offered Mr. Di Biase’s former position, but he turned it down. Marando had experienced staff on whom Ms. Marando could rely and from whom she could seek assistance, including Mr. Carnovale, Ms. Roche and Ms. Torres. Ms. Marando also had access to her father, the founder of the company. In addition, based on the business judgment rule, deference should be accorded to the directors’ decision to appoint Ms. Marando as President, which I find was made in good faith and in the performance of their functions. In the absence of evidence, I cannot find that there were other reasonable alternatives. I also reject the suggestion that Ms. Marando was appointed because of a desire to inflict harm on Mr. Di Biase.

10. Alleged breaches of fiduciary duties in relation to Destra’s activies

[204] Without disclosure and consent, a fiduciary cannot compete with their employer during the course of their employment. After their employment ends, the fiduciary employee generally cannot directly solicit the employer’s customers for the reasonable period of time necessary to enable the former employer to retain the loyalty of the customers and ameliorate the disruption caused by the end of the employment of the fiduciary. However, the fiduciary is free to otherwise compete once their employment ends, provided that they do not do so unfairly. See Veolia ES Industrial Services Inc. v. Brulé, 2012 ONCA 173 at para. 33 (“Veolia”); and Cosolo v Geo. A. Kelson Limited, 2017 ONSC 4150 at paras. 11, 13 (“Cosolo”); aff’d by 2018 ONCA 318.

[205] The restriction on solicitation in this context is generally limited to active or direct solicitation. A fiduciary is entitled to accept business from the customers of the former employer, provided the fiduciary did not directly entice the customers away from the former employer. If the customers approached the fiduciary, mere acceptance of an invitation is not equivalent to soliciting or recruiting customers. There is no breach if the fiduciary accepts unsolicited business. See GasTOPS Ltd. v. Forsyth, 2009 CanLII 66153 at para. 113 (Ont. S.C.J.); aff’d by 2012 ONCA 134.

[206] It has been found that submitting a tender or bid at the invitation of a customer does not constitute solicitation: see Veolia at para. 44; Computer Enhancement v J.C. Options, 2016 ONSC 452 at para. 88; PureFacts Financial Solutions Inc.et al. v. Cheung, 2022 ONSC 961 at paras. 20-22; and Jardine Lloyd Thompson Canada Inc. v. Patterson, 2018 ONSC 444 at paras. 30-31.

[207] The mere fact that clients of the former employer become clients of the fiduciary, or that they become clients very quickly after the fiduciary’s departure, is insufficient to establish solicitation: see Aquafor v. Whyte, Dainty and Calder, 2010 ONSC 2733 at para. 52.

[208] In Can. Aero at 606-607, 620, 621-622, the Supreme Court of Canada stated the following with respect to the fiduciary duties of senior officers and corporate opportunities:

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

An examination of the case law in this Court and in the Courts of other like jurisdictions on the fiduciary duties of directors and senior officers shows the pervasiveness of a strict ethic in this area of the law. In my opinion, this ethic disqualifies a director or senior officer from usurping for himself or diverting to another person or company with whom or with which he is associated a maturing business opportunity which his company is actively pursuing; he is also precluded from so acting even after his resignation where the resignation may fairly be said to have been prompted or influenced by a wish to acquire for himself the opportunity sought by the company, or where it was his position with the company rather than a fresh initiative that led him to the opportunity which he later acquired.

In holding that on the facts found by the trial judge, there was a breach of fiduciary duty by O’Malley and Zarzycki which survived their resignations I am not to be taken as laying down any rule of liability to be read as if it were a statute. The general standards of loyalty, good faith and avoidance of a conflict of duty and self-interest to which the conduct of a director or senior officer must conform, must be tested in each case by many factors which it would be reckless to attempt to enumerate exhaustively. Among them are the factor of position or office held, the nature of the corporate opportunity, its ripeness, its specificness and the director’s or managerial officer’s relation to it, the amount of knowledge possessed, the circumstances in which it was obtained and whether it was special or, indeed, even private, the factor of time in the continuation of fiduciary duty where the alleged breach occurs after termination of the relationship with the company, and the circumstances under which the relationship was terminated, that is whether by retirement or resignation or discharge.

Liability of O’Malley and Zarzycki for breach of fiduciary duty does not depend upon proof by Canaero that, but for their intervention, it would have obtained the Guyana contract; nor is it a condition of recovery of damages that Canaero establish what its profit would have been or what it has lost by failing to realize the corporate opportunity in question. It is entitled to compel the faithless fiduciaries to answer for their default according to their gain. Whether the damages awarded here be viewed as an accounting of profits or, what amounts to the same thing, as based on unjust enrichment, I would not interfere with the quantum.

[209] I will now apply the principles set out above to the jobs/projects that took place after Mr. Di Biase’s termination and for which the Defendants are seeking damages or disgorgement. Before doing so, I note that evidence must always be sufficiently clear, convincing and cogent to satisfy the balance of probabilities test: see F.H. v. McDougall, 2008 SCC 53 at para. 46.

[210] Pomerleau / Canada Post: Destra and/or Mr. Di Biase did not do this job. Therefore, there has been no diversion of a corporate opportunity. The suggestion that Mr. Di Biase tried to sabotage Marando in relation to this job is based on speculation and not on evidence. It is understandable that Pomerleau would decide to proceed with another bidder after not hearing from Marando for a number of weeks (Ms. Marando sent an e-mail on January 20, 2021). Further, the comment about the “change in ownership” in Pomerleau’s e-mail may well have been based on Ms. Marando’s own e-mail in which she indicated that she was the new President of Marando.

[211] Ajax Harwood: Mr. Di Biase’s evidence was that Destra bid on this project managed by TriAxis in May 2021. Marando had previously done some work at the same location, but on a different project with a different call for tenders. This evidence has not been contradicted and the Defendants failed to: (a) ask questions of Mr. Palazzo regarding this project; and (b) adduce in evidence the work done by Marando at this location. Given that the evidence before me is that Destra submitted a bid at the invitation of a customer several months after Mr. Di Biase’s termination, there was no unfair solicitation.

[212] Amazon Nugget: Similarly, the evidence before me is that Destra submitted a bid at the invitation of a customer several months after Mr. Di Biase’s termination. Therefore, there was no unfair solicitation. I also note that Marando has failed to show that the scope of work in its bid was the same as in Destra’s bid as Marando failed to produce a complete copy of its bid.

[213] Northern Pines: The Defendants did not present cogent evidence regarding this job. As noted above, there is no documentary evidence before me supporting the allegations that Marando put a bid on this project, that one of its painters worked on the project for 150 hours and that paint was allocated to this project. I have no evidence as to when Marando started working at that location, what the scope of work was, how long the work was expected to take, how much Marando was supposed to be paid for this project, and whether Marando was paid for any work it did at this location. There is insufficient evidence to enable the Court to conclude on a balance of probabilities that Destra or Mr. Di Biase did any work at that location or that Mr. Di Biase diverted any opportunity belonging to Marando in relation to this location.

[214] In addition, the Defendants seek an order that Mr. Di Biase disgorge his share of the profits made by 259 when 259 assigned the agreement of purchase and sale of the condominium unit that it purchased in Clarington Tower 3. In my view, there is no basis to order disgorgement with respect to this condominium unit. The purchase of the condominium unit was not a corporate opportunity that belonged to Marando. The opportunity belonged to Mr. Dardengo, who was friends with one of the partners in the company that was building the project. Once Mr. Dardengo became aware of the opportunity, he approached Mr. Di Biase in his personal capacity about investing in the condominium unit with him. I also note that: (a) Marando is not in the business of buying real estate properties and reselling them for a profit; and (b) I do not have evidence before me as to the source of the funds used by Mr. Di Biase to pay his share of the deposit for the condominium unit.

[215] The Defendants also seek damages for work that Mr. Di Biase allegedly redirected to Prism or Meritview.

[216] Prism. There is no clear, convincing and cogent evidence supporting the Defendants’ allegation that Mr. Di Biase was running projects through Mr. Iannaco’s company, Prism. Among other things, the Defendants rely on an e-mail from Mr. Di Biase attaching a quote on Prism’s letterhead with respect to the repainting a the head office of a client, Janick Electric, during the Christmas shutdown.

[217] Mr. Di Biase admitted referring Prism to clients when Marando could not do the work, e.g., if Marando could not be competitive as a result of the rates that it had to pay to unionized painters. Mr. Di Biase did that to preserve relationships with clients. He knew that Prism would satisfy the client, but would not try to steal the client.

[218] I note that there is no evidence that Mr. Di Biase ever received any compensation from Prism.

[219] In my view, Mr. Di Biase’s decisions: (a) not to pursue a particular job because he thought that it would not be profitable for Marando or Marando did not have the resources to do the job, and (b) to make a referral in such circumstances that would allow Marando to maintain its relationship with the client, are business decisions protected by the business judgment rule as they are reasonable business decisions in light of all the circumstances. The business judgment rule accords deference to a business decision so long as it lies within a range of reasonable alternatives: see BCE at para. 40 and Kerr v. Danier Leather Inc., 2007 SCC 44 at para. 54.

[220] In any event, with respect to the job for Janick Electric, Mr. Di Biase testified that he thought that, ultimately, Marando did the work. Mr. Iannaco’s evidence was that he never did work for that company. Marando did not adduce evidence contradicting this evidence.

[221] Both Mr. Di Biase and Mr. Iannaco gave evidence that Mr. Iannaco would sometimes seek advice or input from Mr. Di Biase about quotes and other business issues. The fact that Mr. Di Biase would have such general discussions with Mr. Iannaco does not breach any of his duties to Marando.

[222] Another issue was raised with respect to an invoice issued by Prism in relation to work done at the first tower of the Clarington Project. While Prism billed the client, Mr. Iannaco’s evidence was that Prism gave all the money to Marando and Meritview and did not keep any. Mr. Iannaco agreed to do the invoicing as a favour to Mr. Di Biase and at his request, given that Marando was using non-unionized painters on the job. Prism lent some painters to Marando to help on the Clarington job, but they were paid by Marando. There is no evidence contradicting Mr. Iannaco’s evidence on this point. It was not demonstrated that this invoicing arrangement caused any harm to Marando.

[223] Meritview. As stated above, after completing the work on the first Clarington tower, Mr. Di Biase was no longer interested in Marando being involved in the work to be done at the other two Clarington towers. He found it very challenging to work with the contractor who was a first-time condominium builder. In my view, Mr. Di Biase’s business decision not to be involved with the other two Clarington towers is protected by the business judgment rule.

[224] There is no evidence of any payment of Meritview to Mr. Di Biase with respect to the invoicing arrangement for towers 2 and 3 or with respect to anything else.

[225] Thus, there is no basis to order Mr. Di Biase to compensate Marando for work done by Prism or Meritview.

[226] I also note that, based on the evidence before me, the terms of the Orders of Justice Diamond, Justice Lederer, Justice Belobaba and Justice Stinson regarding competition and solicitation were complied with by Mr. Di Biase, Destra and his other companies. Aside from Mr. Carnovale, there is no cogent evidence before me that Mr. Di Biase solicited salaried employees of Marando. Mr. Carnovale was solicited in November 2021, after the expiry of the prohibition contained in the Orders of Justices Belobaba and Stinson. While the expiry of the Orders was without prejudice to the Defendants’ ability to pursue relevant remedies for non-solicitation, I agree with the Plaintiffs’ submission that the fact that the Defendants consented to the time periods in these Orders goes a long way to show that solicitation after these periods was fair, not unfair.

[227] The solicitation of Mr. Carnovale took place more than ten months after Mr. Di Biase’s termination. In my view, ten months was a sufficient period of time to enable Marando to take steps to retain the loyalty of its employees and to ameliorate the disruption caused by Mr. Di Biase’s departure: see Cosolo at para. 11.

11. Additional salary amounts

[228] Marando, Maramusche and Mr. Marando also seek an order that Mr. Di Biase pay to Marando $100,000 to compensate it for bonus payments that Mr. Di Biase made to himself. The Defendants’ closing submissions do not elaborate on this request.

[229] The Agreed Statement of Facts refers to certain deposits into Mr. Di Biase’s bank account which were not salary payments. However, for most of these deposits, the Agreed Statement of Facts does not specify who made the deposits and the source of these funds. Where the source of the funds is mentioned, it is not Marando, with one exception (discussed below). Mr. Di Biase’s bank account statements were not adduced in evidence at trial so the only information available to the Court on this point is the Agreed Statement of Facts.

[230] The Agreed Statement of Facts states that on or about April 8, 2020, there was a deposit of $105,000.00 into Mr. Di Biase’s bank account, which was a bonus from Marando, paid with Ms. Marando’s knowledge. The Agreed Statement of Facts also states that at or around the same time, Ms. Marando was provided with a similar payment from Marando. Given Ms. Marando’s knowledge and receipt of an equivalent bonus, I am not prepared to make an order with respect to the repayment of this bonus.

[231] The Agreed Statement of Facts also states that between February 2014 until December 2015, Mr. Di Biase made additional drawings from Marando totalling $28,287.56. Nine payments are identified over this period of time, ranging from $282.50 to $7,000. Mr. Di Biase was not asked about these drawings during his cross-examination and I cannot determine whether they are legitimate or not. For instance, the payment of $282.50 and some of the other payments could be for the purpose of reimbursing Mr. Di Biase for an expense he incurred on behalf of Marando.

[232] Given the absence of submissions and evidentiary support for the request that Mr. Di Biase be ordered to pay to Marando $100,000 to compensate it for bonus payments that Mr. Di Biase made to himself, I decline to grant it.

[233] Ms. Marando alleges that Mr. Di Biase committed a breach of fiduciary duty by unilaterally paying himself additional salary amount over and above his stipulated annual salary. What the “stipulated annual salary” is supposed to be is not mentioned and is not in evidence before me. There is no evidence that Mr. Marando and Ms. Marando ever approved a salary for Mr. Di Biase. I note that for the period of time where she received a salary without working at Marando, Ms. Marando’s salary appears to have been different every year. As stated above, it is admitted that she received a $100,000 bonus in 2020.

[234] In the absence of evidence of what Mr. Di Biase’s annual salary is supposed to be and what specific additional salary amounts he paid to himself and when, the Defendants have failed to prove that they had any reasonable expectation in this regard or that any duty has been breached.

12. Transfers to 202

[235] In my opinion, the significant transfers of money from Marando to 202 which were made at the instruction of Mr. Di Biase were unfairly prejudicial to the other shareholders of Marando and constituted a breach of fiduciary duty.

[236] While the transfers were made to 202 and not to Mr. Di Biase’s personal bank account, it is undisputed that Ms. Marando was not aware of the transfers and did not benefit from them. Contrary to the Plaintiffs’ submission, Mr. Di Biase at times used more than 50% of the funds available in 202’s account. Thus, these transfers should be considered as transfers that were made for Mr. Di Biase’s benefit only.

[237] In my view, Mr. Marando – as a director of Marando with a shareholding interest through Maramusche – and Ms. Marando – as a person with a shareholding interest through 202 – had a reasonable expectation to be advised of the existence of large amounts of excess cash in Marando and to participate in the decision of how this cash should be used.

[238] Although Marando’s general practice had been to pay significant expenses of its shareholders without any formal process being followed and to pay other benefits to them (e.g., salaries), there is no support in Marando’s past practice for very large amounts of excess cash to be transferred to one shareholder without the knowledge of the other shareholders. Mr. Di Biase could not reasonably expect to benefit alone from a significant increase in Marando’s profitability. I note that while Mr. Marando and Ms. Marando did not insist on formal meetings being held and formal procedures being followed, and while they seemed happy to take Marando’s money and let Mr. Di Biase deal with the operation of the business, there were limited steps they could take to protect themselves against such large unilateral transfers in the prolonged absence of financial statements.

[239] The transfers were unfairly prejudicial to Mr. Marando / Maramusche. The transfers were, in effect, payments of dividends without a formal declaration. Because of its special shares, Maramusche was entitled to receive dividends in priority to the holders of common shares, i.e., Mr. Di Biase and Ms. Marando through 202.

[240] The transfers were also unfairly prejudicial to Ms. Marando as they were done in a way that prevented her from having access to, or use of, her share of the “dividends”.

[241] The transfers were also a breach of the fiduciary duty that Mr. Di Biase owed to Marando. The fact that the transfers to 202 did not prevent Marando from meeting its expenses or functioning effectively does not mean that the transfers were made with a view to the best interests of the corporation. At the time of the transfers, proper financial statements for Marando had not been prepared for many years, raising concerns about financial and tax exposure. It was not in the best interest of the corporation to start transferring very large amounts of cash to a shareholder in a very informal way and without following proper procedures while the corporation’s real financial situation was uncertain and while the funds transferred could have become unavailable. As a result of the transfers, Mr. Di Biase gained an exclusive personal benefit, but Marando became more vulnerable.

[242] In my view, it is appropriate in this case, in addition to order the complete return to Marando of the funds transferred to 202, to order Mr. Di Biase to disgorge the profits he (or corporations that he controls) made using the funds transferred to 202. Such a remedy is necessary in this case to meet the goal of deterrence, i.e., to prevent fiduciaries from benefitting from their wrongdoing and maintain the integrity of the fiduciary relationship. See Mady at paras. 18-19. An accounting is necessary in order to determine the amount to disgorge.

[243] I decline to grant the Defendants’ request for a constructive trust over the investments made by Mr. Di Biase using the funds transferred to 202. I find that a constructive trust is not an appropriate remedy in this case as a personal remedy/monetary order is adequate in the circumstances of this case: see Moore v. Sweet, 2018 SCC 52 at para. 91.

13. Tree farm

[244] Ms. Marando seeks a declaration that she is the beneficial owner, on the basis of a constructive, resulting or implied trust, of Mr. Di Biase’s shares in FMMT, the owner of the tree farm in Madoc.

[245] I note that:

a. FMMT is not a party to this litigation.

b. The funds used to purchase the tree farm came from a mortgage on Mr. Di Biase and Ms. Marando’s matrimonial home in Woodbridge. The mortgage payments are funded by Marando, to the knowledge of both of them.

c. The alleged issues experienced by Ms. Marando with respect to this investment appear to have nothing to do with Marando. Rather, they arise out of the manner in which FMMT is being operated.

d. The evidence of Mr. Stein was indirect, at best, and Ms. Marando chose not to call Mr. Savo as a witness.

e. There was no clear, convincing and cogent evidence that Mr. Di Biase is secretly taking money from the tree farm to the exclusion of Ms. Marando.

f. The documents produced by Ms. Marando suggest that there was a plan to build log homes on the properties. If this plan is being pursued, any funds obtained from logging may not have gone to the shareholders, but may be used in this project. This issue was not addressed in the evidence, which again highlight the lack of cogent evidence.

g. There is no support for the position that a constructive trust, as opposed to a personal remedy, would be an appropriate remedy with respect to this investment: see Moore v. Sweet, 2018 SCC 52 at para. 91.

[246] Accordingly, I decline to grant any relief with respect to FMMT / the tree farm.

14. Spoliation

[247] The Defendants ask that an adverse inference be drawn from the deletion of data on Mr. Di Biase’s phone and laptop and on the phones of Mr. Findlay and Mr. Carnovale. To the extent that the Defendants are unable to establish the other torts claimed, especially as it relates to damages flowing from Mr. Di Biase’s post-termination conduct, the Defendants rely on the tort of spoliation.

[248] The general principles governing the doctrine of spoliation of evidence were summarized as follows by the Alberta Court of Appeal in McDougall v. Black & Decker Canada Inc., 2008 ABCA 353 (“McDougall”) at para. 18:

Spoliation in law does not occur merely because evidence has been destroyed. Rather, it occurs where a party has intentionally destroyed evidence relevant to ongoing or contemplated litigation in circumstances where a reasonable inference can be drawn that the evidence was destroyed to affect the litigation. Once this is demonstrated, a presumption arises that the evidence would have been unfavourable to the party destroying it. This presumption is rebuttable by other evidence through which the alleged spoliator proves that his actions, although intentional, were not aimed at affecting the litigation, or through which the party either proves his case or repels the case against him.

[249] When the destruction is not intentional, it is not possible to draw the inference that the evidence was destroyed because it would have been damaging to the litigant, but other remedies may be available. See McDougall at paras. 24, 25 and 29.

[250] A finding of spoliation requires that the following four elements be established on a balance of probability (see Nova Growth Corp. v. Kepinski, 2014 ONSC 2763 (“Nova Growth”) at para. 296):

a. the missing evidence must be relevant;

b. the missing evidence must have been destroyed intentionally;

c. at the time of destruction, litigation must have been ongoing or contemplated; and

d. it must be reasonable to infer that the evidence was destroyed in order to affect the outcome of the litigation.

[251] In order to draw a spoliation inference, there must be evidence of a particular piece of relevant evidence that was destroyed because the inference only applies to that particular piece of evidence and not at large: see Nova Growth at paras. 297-298.

[252] In Spasic Estate v. Imperial Tobacco Ltd., 2000 CanLII 17170 at para. 21 (Ont. C.A.), in the context of a motion to strike, the Court of Appeal found that the tort of spoliation could be pleaded as an additional or alternative claim to be considered only if it were established that the destruction or suppression of evidence by the defendant resulted in the inability of the plaintiff to establish the other nominate torts pleaded in the statement of claim. However, the Court of Appeal left open the question of whether there was an independent tort of spoliation, and the question remains unanswered in Ontario.

[253] I do not need to decide whether there is a tort of spoliation in Ontario in this case. In my view, the elements of such a tort would have to include, at a minimum, the elements that are required to draw an adverse inference and these elements have not been established in this case.

[254] I can deal summarily with the issue of the phones of Mr. Findlay and Mr. Carnovale. Mr. Findlay and Mr. Carnovale are not parties to this litigation and there is no evidence that litigation as against them was contemplated when they deleted data on their respective phones. There is also no evidence that Mr. Di Biase asked them to delete any documents on their phones. It is more likely than not that, as departing employees, they simply wished to protect their privacy vis-à-vis their former employer. In my view, it would not be reasonable to infer that they deleted data on their phones to affect the outcome of this litigation, to which they are not parties.

[255] With respect to Mr. Di Biase’s laptop, the data destruction was intentional as Mr. Di Biase had his laptop “wiped” at an Apple store. This took place while the litigation was ongoing. However, the Defendants have not established that any particular piece of relevant evidence is missing as a result of the laptop being wiped. Before his termination, Mr. Di Biase was using his laptop to access the contents of his Windows desktop in Marando’s office. The documents and correspondence he was working on were on Marando’s systems, not on his laptop. I accept Mr. Di Biase’s evidence that after his termination, he used the laptop for personal purposes. Any personal e-mails would be stored in an online account, not on the laptop.

[256] The Defendants have failed to establish that there was a particular piece of relevant evidence that was missing. The following passage of Nova Growth at para. 314 applies to this case:

The inference requested by the plaintiffs is that some destroyed document would have helped the plaintiffs’ case. Speculating about what might have been destroyed is not good enough for an inference to be raised. There must be a particular piece of evidence that has been destroyed that is relevant. Without knowing that it would not be possible to make any meaningful inference.

[257] I am also not prepared to conclude that Mr. Di Biase had his laptop wiped in order to affect the outcome of the litigation. I accept his evidenced that he had it wiped because of privacy concerns triggered by Ms. Marando’s conduct.

[258] In addition, I note that there is no evidence to support the allegation that Mr. Di Biase deleted e-mails from his e-mail account at Marando other than in the normal course prior to his termination. In any event, based on Mr. Singh’s evidence, any such deleted e-mails would have been restored by Mr. Singh on December 29, 2020.

[259] Mr. Di Biase’s evidence regarding what happened to his phone was unclear, confusing and not always consistent. However, I note that Mr. Di Biase stated that he had inadvertently done something on his phone that resulted in the loss of the data both during his examination for discovery (although it could have been said in a clearer way) and at trial. Mr. Di Biase also stated that he obtained a new iCloud account after his termination and that he did not have access to the iCloud account for his Marando phone as this was dealt with by staff at the office.

[260] The Defendants did not adduce any expert evidence in support of their claim for spoliation. In my view, this is fatal to their claim of spoliation regarding Mr. Di Biase’s phone. Among other things, there is no evidence regarding:

a. the cause of the removal of the data from the phone;

b. the impact, if any, of changing one’s Apple or iCloud password on the data on one’s phone; and

c. whether Marando took any steps to check whether what was on Mr. Di Biase’s Marando phone could still be stored online in Marando’s iCloud account.

[261] With respect to Mr. Di Biase’s contacts, there is no evidence before me as to how he stored his contacts. If they were stored in his Outlook account on Marando’s servers, Marando would have access to them. I note that Mr. Singh did refer to contacts in his evidence and said that if any had been deleted, they would have been restored as a result of the steps that he took on December 29, 2020.

[262] Ultimately, the Defendants had the burden to prove spoliation with respect to Mr. Di Biase’s Marando phone. I find that they have failed to establish on a balance of probabilities that: (a) there was a particular piece of relevant evidence that was missing (as opposed to general speculation as to what might have been destroyed); (b) any missing evidence was destroyed intentionally as opposed to inadvertently; and (c) the evidence was destroyed in order to affect the outcome of the litigation.

[263] Accordingly, I reject the Defendants’ claim for spoliation.

15. Punitive damages

[264] To obtain an award of punitive damages, a plaintiff must meet two basic requirements. First, the plaintiff must show that the defendant’s conduct was reprehensible; other descriptions include “malicious, oppressive and high-handed”, and “a marked departure from ordinary standards of decent behaviour”. Second, the plaintiff must show that a punitive damages award, when added to any compensatory award, is rationally required to punish the defendant and to meet the objectives of retribution, deterrence and denunciation. Punitive damages are the exception rather than the rule. Compensatory damages also punish and, in many cases, they will be all the punishment required. See Boucher v. Wal-Mart Canada Corp., 2014 ONCA 419 at para. 79 and Whiten v. Pilot Insurance Co., 2002 SCC 18 at paras. 36, 94, 123.

[265] The first requirement is met in this case. I have found that certain aspects of Mr. Di Biase’s conduct were oppressive. Self-dealing is reprehensible. Diverting hundreds of thousands of dollars from a corporation and its shareholders for one’s personal benefit over a period of many years constitutes a marked departure from ordinary standards of decent behaviour.

[266] With respect to the second requirement, I find that an award of punitive damages in addition to the award of compensatory damages/disgorgement is rationally required to punish Mr. Di Biase and to meet the objectives of retribution, deterrence and denunciation. The extent of Mr. Di Biase’s self-dealing is unclear, and it is important to deter Mr. Di Biase and other fiduciaries from similar conduct in the future and to mark the community’s collective condemnation of what happened. However, I must take into consideration the compensatory damages/disgorgement ordered in this case and the fact that Mr. Di Biase has already experienced some “punishment” for his conduct, including his termination and his removal as a director.

[267] In light of the circumstances of this case, including the extent of Mr. Di Biase’s misconduct, his exclusion from the corporation and the compensatory damages ordered, I have come to the conclusion that an appropriate quantum of punitive damages is $75,000.00.

16. Claim against Ms. Mani

[268] The Defendants argue that Ms. Mani committed the tort of knowing assistance in the breach of Mr. Di Biase’s breach of fiduciary duty. The constituent elements of the tort of knowing assistance in a breach of a fiduciary duty are that: (a) there must be a fiduciary duty; (b) the fiduciary must have breached that duty fraudulently and dishonestly; (c) the stranger to the fiduciary relationship must have had actual knowledge of both the fiduciary relationship and the fiduciary’s fraudulent and dishonest conduct; and (d) the stranger must have participated in or assisted the fiduciary’s fraudulent and dishonest conduct. See Extreme Venture Partners Fund I LP v. Varma, 2021 ONCA 853 at para. 74. The tort of conspiracy was also pleaded.

[269] None of the claims advanced by the Defendants against Ms. Mani can succeed because she was unaware of the sources of funds that Mr. Di Biase used to buy things. I accept her evidence on this point, which is uncontradicted.

[270] The Defendants spent some time questioning Ms. Mani about a boat that she purchased with funds allegedly provided to her by her father. I note that even if the funds did not, in fact, come from her father, there is still no evidence before me that: (a) the funds came from Marando; or (b) if Mr. Di Biase paid for the boat, she knew that the funds he provided had been obtained through dishonest conduct.

[271] As a result, the claim against Ms. Mani is dismissed.

17. Transfer or redemption of Mr. Di Biase’s shares in 202

[272] Ms. Marando asks that Mr. Di Biase be ordered to transfer his shares in 202 to her without any requirement that she pay anything for these shares. The other Defendants request that 202’s common shares be redeemed for nil consideration (which would negatively impact Ms. Marando).

[273] I am not prepared to grant these remedies. In my view, the payments that are ordered to be made in these reasons are sufficient and adequate to compensate the Defendants and deter Mr. Di Biase. Mr. Di Biase spent many years growing and managing Marando’s business, and providing an income to Mr. Marando, his wife, and Ms. Marando while they were not working and not doing anything for Marando. There is no reasonable justification for depriving him of his shareholding interest in Marando through 202 without any compensation for his shares.

18. Wind-up

[274] I agree with Mr. Di Biase’s submission that there is no hope of reconciliation between the parties. In his Amended Statement of Claim, Mr. Di Biase seeks in the alternative an order that Marando and 202 be wound up.

[275] Subsection 207(1)(b)(iv) of the OBCA provides that a corporation may be wound up by order of the court where the court is satisfied that it is just and equitable for some reason, other than the bankruptcy or insolvency of the corporation, that it should be wound up. Under subsection 207(2), the court may make such order under section 207 or section 248 of the OBCA as it thinks fit. Thus, while the wide range of discretionary remedies under the oppression provisions of section 248 are available under section 207, it is not necessary that there be oppression for an order to be made under section 207. Nor is it necessary if section 207 is engaged that the remedy be winding-up. See Muscillo v. Bulk Transfer Systems Inc., 2009 CanLII 38508 at para. 22 (Ont. S.C.J.) (“Muscillo”).

[276] If the relationship of trust and confidence between partners in corporate guise has broken down and the continuation of the business between them operating as equal partners is not possible, such a situation is enough to trigger the court’s powers under section 207: see Muscillo at para. 23 and Wittling v. Bergman, 1995 CanLII 790 (Ont. C.A.). However, the Court will usually only exercise its discretion to order a “just and equitable” winding-up if the disharmony has resulted in a sufficiently serious failure of the reasonable expectations of the parties to warrant such equitable relief: see Falus v. Martap Developments 87 Limited, 2012 ONSC 2301 at paras. 45-47 and Animal House Investments Inc. v. Lisgar Development Ltd., 2007 CanLII 82794 at paras. 56-61 (Ont. S.C.J.). Further, if the impossibility for the partners to place confidence in each other was caused by the person seeking relief, relief should not be granted: see Muscillo at para. 26 and Tilley v. Hails, 1992 CanLII 7563 (Ont. Gen. Div.).

[277] Given the findings that I have made regarding Mr. Di Biase’s conduct, it is not open to this Court to grant his request for a wind-up order in the context of this proceeding as he is the cause of the breakdown in trust and confidence between the parties.

[278] However, this Court is dismayed by the Defendants’ intransigent position that unless Mr. Di Biase is ordered to give up his interest in Marando without any compensation, no other order can be made without a finding of oppression on the Defendants’ part and, as a result, the status quo has to be maintained. This reflects a total lack of recognition that, in the absence of any hope of reconciliation between the parties, the status quo is a recipe for disaster. As stated above, it is foreseeable that the parties may have to return to Court in the near future, with Mr. Di Biase in the position of the minority shareholder this time (now that Mr. Marando has passed away). While Mr. Di Biase may not be able to obtain relief this time, he may well be in a different position in the next piece of litigation. It would be in the best interest of all parties and their family to reach an agreement about how to end their business relationship.

C. CONCLUSION

[279] The Plaintiffs’ action is dismissed.

[280] The Counterclaim is dismissed as against Vera Mani.

[281] Mr. Di Biase is ordered to:

a. pay $175,000 to Marando to compensate it for the rebates that he redirected to himself;

b. pay $295,000 to Marando to compensate it for the cash jobs that were directed away from Marando;

c. refund to Marando the balance of the funds that were transferred to 202 and have not been returned yet;

d. provide an accounting of the profits that he (or corporations that he controls) made using the funds transferred to 202 by Marando;

e. pay to Marando the amount of the profits that he (or corporations that he controls) made using the funds transferred to 202; and

f. pay punitive damages in the amount of $75,000 to the Defendants.

[282] If costs cannot be agreed upon, both sides shall deliver submissions of not more than five pages (double-spaced), excluding the bill of costs, by June 5, 2023. Both sides can deliver responding submissions of not more than three pages by June 19, 2023.

Vermette J.

Released: May 19, 2023

[^1]: While Ms. Torres stated that Mr. Di Biase may have bought jewelry for employees, it is my view based on the evidence that the great majority of the expenses in this category are not legitimate business expenses.

[^2]: I note that the questions asked by the Defendants’ counsel with respect to the categories of expenses in the chart appeared to be based on the false premise that every expense had to be attached to a job or recovered from a client. This ignored the fact that: (a) Marando was usually invoicing its customers based on a contract price; and (b) a business like Marando would have legitimate overhead expenses and business development expenses that would not be directly associated with a specific job. This false premise / misunderstanding caused a lot of confusion during counsel’s examination of Ms. Torres.

[^3]: I note, for instance, that based on the credit card statement for the period November 16 to December 15, 2020 (i.e. the last credit card statement before Mr. Di Biase’s termination), it appears that Ms. Marando made numerous personal purchases using Marando’s credit card, including a purchase of $1,276.90 on Gucci.com and a purchase of $1,950.00 at Modern Optical. At that time, she was a director and officer of Marando and, consequently, she owed a fiduciary duty to Marando.

[^4]: The same can be said about any cash jobs that Mr. Iannaco may have done since he is the only owner of Prism.

[^5]: The Defendants also relied on text messages exchanged between Mr. Di Biase and Mr. Carnovale regarding an alleged cash job. However, I find these text messages inconclusive. The exchange between Mr. Di Biase and Mr. Carnovale is not clear and it refers to Astrid, a subcontractor (i.e., not a customer). Mr. Di Biase argued that the Defendants’ submissions based on these text messages were conflating scenarios where customers would pay in cash for small residential jobs and situations where Marando would pay subcontracted painters, like Astrid, in cash. Because the exchange of text messages is not clear, I do not rely on it to draw any conclusions with respect to cash jobs.