award the appellant its costs fixed in the amount agreed between
the parties, $55,000, inclusive of disbursements and applicable
Appeal allowed; cross-appeal dismissed.
Wilfred et al. v. Dare et al.
[Indexed as: Wilfred v. Dare]
2018 ONSC 2532
Superior Court of Justice, Divisional Court, Marrocco A.C.J.S.C.,
Thorburn and Mulligan JJ. April 23, 2018
Corporations — Oppression — W and her two brothers being shareholders in family holding company — Shareholder agreement containing right of first offer and permitting shareholder to sell shares to third
party on equal or better terms if other shareholders declined offer —
Brothers rejecting W’s offer to sell her shares to them and W unable to
find third party purchaser — W applying unsuccessfully for order compelling brothers to value and purchase her shares — Application judge
not erring in finding that W did not have reasonable expectation of
liquidity for her shares.
W and her two brothers were the shareholders of a family holding company.
They received the shares as a result of a 1980 estate freeze by their father. The
shares were initially issued to a family trust, and were distributed equally to the
siblings in 2001. W and her brothers entered into a shareholders’ agreement which
required any shareholder who wished to sell his or shares to first offer them to the
other two shareholders. If the others declined the offer, the shares could be sold to
a third party on the same terms. W offered to sell her shares to her father. He
redeemed only 25 per cent of her shares, and it was agreed that she would receive
dividends on her remaining shares for five years. In 2014, W offered to sell her
shares to her brothers. They rejected her offer, and she was unable to find a third
party purchaser. W applied for an oppression remedy under s. 248 of the Ontario
Business Corporations Act, R.S.O. 1990, c. B.16, seeking a court-ordered sale of her
shares to her brothers. The application was dismissed. W appealed.
Held, the appeal should be dismissed.
The application judge did not err in finding that, in all of the circumstances,
W did not have a reasonable expectation of liquidity for her shares. While he was not
persuaded by the evidence that W’s shares were unmarketable at any price, the fact
that W advanced that position caused the application judge to consider whether it
was reasonable for her to expect her brothers to buy her shares. He concluded that it
was not. On the evidence, he was entitled to reach that conclusion.
The application judge did not err in finding that W’s interest as a shareholder
was not unfairly disregarded. Even if the dividend arrangement was unfair,
a court-ordered buyout was well beyond what would be required to rectify any