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CORPORATIONS - Oppression remedy - Powers of the court

Wednesday, October 09, 2019 @ 6:16 AM  

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Appeal by the plaintiff Bitton Estate from findings regarding an option in Bitton’s favour and a share valuation date. Bitton acquired a property with the intention of developing a condominium project. Bitton and Checroune negotiated an agreement pursuant to which Checroune would acquire a 50 per cent beneficial interest in the property by discharging a mortgage. The agreement also stated that Bitton could elect to have Checroune fund Bitton's share of the project costs (Bitton Option). The relationship between the parties broke down and the intended joint venture did not proceed. Bitton commenced legal proceedings against Checroune. The trial judge found that the parties failed to reach enforceable agreements regarding the funding and development of the project, and held that Checroune was not obligated to fund Bitton’s 50 per cent of any project costs. He also found that Checroune conducted the affairs of the company in a manner oppressive to Bitton, and ordered that Checroune sell his shares to the Estate of Bitton at a price to be valued. In a supplementary decision, the trial judge held that the fairest date to value the common shares was April 21, 2017, the date of the reasons of the trial judge. On appeal, Bitton sought a declaration that the Bitton Option was legally enforceable, and that the valuation date of Checroune’s shares should be the date of the commencement of the proceedings, being December 15, 2010.

HELD: Appeal dismissed. There was no palpable and overriding error in the trial judge’s determination that the Bitton Option was unenforceable. While the language of the Bitton Option was clear, in the absence of a development agreement, there was no agreement on the costs that were to be funded on a 50/50 basis and, therefore, on the costs for which Checroune was to be liable under the Bitton Option. The trial judge established the valuation date on the basis of her assessment of the fairest date on the particular facts in the absence of evidence that Checroune’s oppressive conduct affected the value of the company or the property. The trial judge adopted the correct approach and there was no palpable and overriding error in the determination of the valuation date.

Bitton Estate v. Checroune, [2019] O.J. No. 4106, Ontario Superior Court of Justice, Divisional Court, K.E. Swinton, N.L. Backhouse and H.J. Wilton-Siegel JJ., August 8, 2019. TLD-October72019007