Docket: CACV2371 Edyta Sieminska v. Remi Francois Jacques Cousyn, 2013 SKCA 136

THE COURT OF APPEAL FOR SASKATCHEWAN Citation: 2013 SKCA 136 Date: 2013-12-17 Between: Docket: CACV2371 Edyta Sieminska and Remi Francois Jacques Cousyn (Applicants) Appellants - and - Melanie Boldt and Kevin Boldt and Souleio Foods Inc. (Respondents) Respondents Coram: Richards C.J.S., Ottenbreit and Caldwell JJ.A. Counsel: Nancy C. Brown, for the appellants Naheed Bardai, for the respondents Appeal: From: 2013 SKQB 4 Heard: May 27, 2013 Disposition: Allowed Written Reasons: December 17, 2013

By: The Honourable Mr. Justice Caldwell In Concurrence: The Honourable Chief Justice Richards The Honourable Mr. Justice Ottenbreit Caldwell J.A. [ 1 ] The appellants appeal from the final order by which the chambers judge dismissed their originating notice of motion, brought under s. 241 of the

Canada Business Corporations Act , R.S.C. 1985, c. C-44, for oppression remedies, and ordered them to pay solicitor- and-client costs to the respondents (decision indexed as: 2013 SKQB 4 ). I have considered the issues raised by the appellants and, in the result, I would allow the appeal and set aside the chambers judge’s order. [ 2 ] As this matter largely turns on its facts they bear a detailed recitation. Melanie and Kevin Boldt, and Remi Cousyn and his now estranged wife, Janis Hutton, incorporated Souleio Foods Inc. in 2007 under the

Canada Business Corporations Act to carry on a grocery store business. The Boldts own a business which provided ingredients and produce for use and sale in the grocery store business. Mr. Cousyn and Ms Hutton own a restaurant and, through a different corporation, own the premises leased by Souleio. They provided the cooking expertise in the grocery store business, oversaw the day-to-day operations of the business and leased premises to Souleio. At some point, Souleio hired Ms Sieminska as its day-to-day manager to assist in its business operations.

She also acquired shares in the capital of Souleio. [ 3 ] At all material times, Ms Sieminska, the Boldts, Mr. Cousyn and Ms Hutton each held common shares of the same class in the capital of Souleio. None of them had other shareholdings in, and there were no other shareholders of, Souleio. The married couples’ shares were issued representative to their respective non-monetary contributions to the grocery store business. Ms Sieminska paid $50,000 to Souleio to acquire her shares. The Boldts, Mr.

Cousyn and Ms Hutton were also the directors and officers of Souleio and they had guaranteed repayment of third-party financing obtained by Souleio, which was used to effect leasehold improvements and structural repairs to its premises. [ 4 ] To manage their business relationship, the married couple shareholders and Souleio had entered into a unanimous shareholders agreement (the “USA”).

For the purposes of this appeal, the relevant clause of the USA allows shareholders to authorise Souleio to retract a shareholder’s shares and to require the shareholder’s resignation as a director upon the occurrence of a “Marital Action”: 7.5 Share Disposition upon Marital Action 7.5.1 Where a Shareholder is married or living with a person considered, in law, to be a spouse, and that Shareholder and that married spouse, or legally determined spouse, undertake any legal proceedings, or voluntarily execute any agreements, or use any mediator or facilitator to formalize any agreement relating to the separation of their relationship or that concerns their personal or real property (“Marital Action”), the Shareholder may be required to sell their share to the Company.

If the remaining Shareholders, other than the Shareholder affected by the Marital Action, determine that the Company should purchase the shares of the Shareholder affected by the Marital Action, then such Shareholder shall sell their shares to the Company. The Purchase Price shall be determined in accordance with

Schedule “D” hereto. 7.5.2 The Purchase Price for such shares shall be paid by the Company in ten (10) equal annual instalments with interest at the Company’s bank prime rate plus two (2%) percent. The shares shall be held in escrow by the Company’s solicitor until the full Purchase Price is paid.

The shares shall not be used for voting or any other purposes while in escrow. 7.5.3 If the Shareholder is a Director, the Shareholder shall resign the position as a Director. [ 5 ] Ms Sieminska became a party to the USA as part of the transaction in which she acquired her shares in Souleio. [ 6 ] With that general background, I turn to the specific events which brought this matter before the court. [ 7 ] In early October 2010, Mr. Cousyn advised Ms Hutton that he had fallen in love with Ms Sieminska. Mr. Cousyn and Ms Hutton then separated. Ms Sieminska too separated from her husband and she and Mr.

Cousyn began living together. Mr. Cousyn’s and Ms Hutton’s separation quickly proceeded to mediation, sometime in October 2010, and Ms Hutton commenced formal divorce proceedings, sometime in February 2011. Curiously, precise dates as to when these two potential “Marital Action” events occurred are not found in the evidence before the court.

Importantly, Ms Sieminska and her now estranged husband have each averred in their affidavits that they have not commenced any formal legal proceedings, engaged a mediator or facilitator, or entered into any agreements with respect to their separation or that concerns their personal or real property. [ 8 ] As might be expected, the nature of these personal circumstances led to problems at the shareholder and director level of

Souleio. And, after the parties had made some attempts to resolve their issues, the Boldts decided to invoke clause 7.5 of the USA against each of Mr. Cousyn, Ms Hutton and Ms Sieminska. [ 9 ] In early December 2010, the Boldts notified the other shareholders of their intentions and that they had valued the shares to be retracted at $1.00. In mid-December, Mr. Cousyn and Ms Sieminska each received notice that the shareholders of Souleio had resolved to invoke clause 7.5 against them, but neither Mr.

Cousyn nor Ms Sieminska had received notice of a shareholders meeting at which such a resolution could have been passed. At the same time, Mr. Boldt notified Ms Sieminska that Souleio had terminated her employment, but that she remained subject to the non-competition clause of the USA. [ 10 ] While Ms Hutton accepted the fact that she was to be removed as a shareholder and director of Souleio pursuant to clause 7.5, Mr. Cousyn and Ms Sieminska did not accept their own removals from Souleio.

Instead, they challenged the notices they had received on procedural grounds. [ 11 ] Also in December, the Boldts signed directors’ resolutions dated December 22, 2010, which purported to remove Mr. Cousyn as a director and shareholders’ resolutions dated December 23, 2010, which purported to remove him from the office of president . Again, neither Ms Sieminska nor Mr.

Cousyn had received notice of any meeting at which these resolutions might have been passed; nor could they have as the resolutions misapprehend the rights and powers of shareholders and directors. [ 12 ] On January 6, 2011, the Boldts took the position that they had validly invoked clause 7.5 and that the shares subject thereto were not valid for voting purposes. The Boldts also “retracted” the December 13 th and 14 th corporate resolutions. They then sent notice of a directors’ meeting to Mr. Cousyn’s legal counsel. Mr. Cousyn alleges he was improperly served with this notice and that it was served out of time.

The meeting nevertheless occurred on February 4, 2011, but Mr. Cousyn did not attend. At the meeting, the Boldts and Ms Hutton passed a directors resolution implementing clause 7.5 against Ms Hutton, Mr. Cousyn and Ms Sieminska. [ 13 ] The Boldts also “retracted” the December 22 nd and 23 rd corporate resolutions and delivered a notice of an annual meeting of Souleio’s shareholders to certain of the shareholders.

The meeting notice stated that the matters to be addressed included the financial statements, appointment of an auditor, and any other business properly coming before the meeting; but, it did not refer to any special business to be conducted at the meeting. Ms Sieminska did not receive notice of this meeting. Nevertheless, Ms Sieminska became aware of the meeting well in advance of it. The meeting occurred on February 7, 2011, but Ms Sieminska did not attend and Mr. Cousyn, who attended with his legal counsel, was not allowed to vote thereat.

At the annual general meeting the Boldts resolved to elect themselves as the only directors of Souleio. [ 14 ] Shortly thereafter, Ms Sieminska advised the Boldts and Souleio that it was her position that she was not subject to a “Marital Action” event which could trigger clause 7.5 of the USA.

She further advised the Boldts that Souleio had not followed the proper procedures, as set forth in the USA and the corporate bylaws, for holding the directors and shareholders meetings and, accordingly, that the Boldts did not have the requisite authority to implement clause 7.5 against her. [ 15 ] Nevertheless, Souleio subsequently took steps to cancel Mr. Cousyn’s, Ms Hutton’s and Ms Sieminska’s shares and to publicly record their removal as shareholders as well as the removal of Mr. Cousyn and Ms Hutton as directors and officers. None of Mr.

Cousyn, Ms Hutton and Ms Sieminska formally contested the valuation of their shares even though a process for doing so is set out in

Schedule “D” to the USA. [ 16 ] It is of passing note that, in addition to the instant matter and the family law proceedings arising between Ms Hutton and Mr. Cousyn, the parties are embroiled in other legal proceedings which pertain to their business relationship. Souleio has sued Mr. Cousyn and its landlord for reimbursement of building repair costs. Mr.

Cousyn has, in turn, third-partied Ms Hutton in that matter, and the landlord has counterclaimed against Souleio for unpaid occupancy costs. [ 17 ] I turn now to review the chambers judge’s fiat in this matter. [ 18 ] Although it now seems not to be the case, the chambers judge said the parties had agreed there was “no dispute as to the facts” (at para. 2) and that “[e]veryone agrees that clause 7.5.1 encompasses [Ms Hutton] and [Mr.

Cousyn]” (at para. 6). [ 19 ] At paras. 13-20 of his reasons, after he had set out the parties’ positions, the chambers judge extracted the salient bits of the unanimous decision in BCE Inc. v. 1976 Debentureholders , 2008 SCC 69 , [2008] 3 S.C.R. 560. With that footing, he turned to interpret clause 7.5.1 of the USA and its application to the circumstances: [24] It is apparent by the fact that the parties inserted clause 7.5.1 in their shareholder agreement that any type of marital dispute between the shareholders would be devastating and extremely detrimental to the future operation of the corporation.

The ending of the relationship between [Mr. Cousyn] and [Ms Hutton] clearly fell within s. 7.5.1. It is obvious as well that the intent of the parties was that if any of the parties had marital issues which affected the operation of the corporation, it was intended to encompass these as well. The fact that [Ms Sieminska] has conveniently not had a separation agreement from her estranged husband in spite of the fact she has been living with [Mr. Cousyn] for almost two years is an unreasonable technicality that she is relying upon.

It is abundantly clear by the use of common sense that this paragraph is intended to include [Ms Sieminska] if for no other reason but because she in fact was a major player in the matrimonial activities which had the potential of being totally destructive to the corporation. For the applicants to expect [Ms Boldt] and [Mr. Boldt] not to resort to clause 7.5.1 was not a reasonable expectation. [25] If however either or both of them had any concerns respecting the valuation of the shares, they were entitled to pursue the matter under

schedule “D” and raise the issue within 30 days. [26] To wait two years and now complain is a totally unrealistic position. If the applicants believed their expectations were reasonable and the actions of the respondents oppressive, they should not have been waiting two years to bring their action. [27] Based on the two-prong test set forth in BCE , because the court has found that the expectations of [Mr. Cousyn] and [Ms

Sieminska] are unreasonable, it is not necessary to proceed to a determination of whether or not the actions of [Ms Boldt] and [Mr.Boldt] were oppressive. [28] However, even if their expectations had been reasonable, the action of the remaining shareholders and directors was clearly inthe best interest of the corporation, for without this action, it is abundantly clear that the personal animosity among the shareholders anddirectors would have totally destroyed the corporation within a very short period of time. [20] Notwithstanding these conclusions, the chambers judge proceeded to brusquely answer the technical question of whether Ms Sieminska had been entitled to notice of and to vote at the February 7th shareholders meeting: [30] [Ms Sieminska] was an active participant in the marital discord affecting the future well being [sic] of the corporation.

Themarital dispute was among shareholders of Souleio. Being an active participant therein, she was not entitled to vote on the issue.Therefore, [Ms Sieminska] was not entitled to notice of any meeting where the question of invoking clause 7.5.1 would arise. [21] As to the remaining question of whether there had been any procedural irregularity in the redemption of Mr.

Cousyn’s, MsHutton’s and Ms Sieminska’s shares and, if so, whether that fact had any bearing on the oppression action, the chambers judge wrote: [31] Even if [Ms Sieminska] had been entitled to a vote on the issue, it would not have changed the end result of the vote. She was aminority shareholder. Also, as stated previously,

schedule “D” establishes the process for disputing share value assessments. They mustreach an agreement within 30 days on the value or the selling shareholders may at their own expense have the right to get the value ofthe shares determined by a valuator as at the time immediately before the right to purchase arose. Neither [Mr. Cousyn] nor [MsSieminska] made any attempt to proceed with this and obtain a valuation at that time at their own expense. [22] The chambers judge concluded his fiat by dismissing the appellants’ application in its entirety followed by a bare award ofsolicitor-and-client costs against Mr.

Cousyn and Ms Sieminska. [23] With that background, I turn to the issues arising in this appeal. The appellants say the chambers judge’s order should be set asidebecause he erred in at least eight ways, in both fact and in law. At its core, however, the appellants’ appeal asks this Court to determinetwo issues: (1) whether the chambers judge erred in his

interpretation of clause 7.5 of the USA or in its application to the facts of thismatter, or (2) whether he erred in the application of the law of oppression to the facts. As remedy, they seek an order setting aside thechambers judge’s order and granting the relief requested in their originating notice of motion. In the alternative, they ask the Court to setaside the order and direct a trial of the issues. In the further alternative, the appellants seek an order that they are entitled to receive thefair-market value of their shares.

They also seek, in any event, the costs of this appeal and of the proceedings below on terms this Courtmight deem appropriate. [24] Notwithstanding the number and varied of grounds of appeal raised, on the basis of my review, I conclude the appeal turns chieflyon the allegation that the chambers judge has incorrectly interpreted clause 7.5 of the USA. In this respect, the appellants allegeprincipally that the chambers judge unnecessarily relied on extrinsic evidence to interpret an unambiguous contractual provision.

I findmerit in that general submission. [25] As can be seen, clause 7.5.1 provides for a straightforward, compulsory retraction of shares in the circumstances of a “MaritalAction”. By its terms, clause 7.5.1 may be invoked only in the circumstances where a married shareholder has experienced one of thethree triggering events enumerated therein: (

a) the undertaking of any legal proceedings, (

b) the voluntary execution of any agreement, or (

c) the use of any mediator or facilitator, “to formalize any agreement relating to the separation of their relationship or that concerns their personal or real property”. Given itswording, I find nothing complicated, ambiguous or obscure about what constitutes a “Marital Action” under clause 7.5.1 or, accordingly,the circumstances in which the retractions provisions of clause 7.5 may be invoked. [26] As such, the straightforward question before the chambers judge was whether the evidence adduced before him supported aconclusion that a “Marital Action” had occurred with respect to each of Ms Sieminska and Mr.

Cousyn such that, if clause 7.5 wereinvoked, they would be compelled to sell their shares to Souleio and, in the case of Mr. Cousyn, resign as a director. However, inaddressing that question, the chambers judge looked well beyond the plain language of the USA to assist in his

interpretation of clause7.5.1. By doing so, while he seems to have accepted that a triggering event had not occurred with respect to Ms Sieminska, he concludedthat fact was “convenient” and an “unreasonable technicality”. [27] There are a number of problems with the chambers judge’s approach. First, it overlooks the simple fact that, at the time the Boldtsfirst invoked clause 7.5 against her, Ms Sieminska had been separated from her husband for a couple of months, not years.

So, althoughthe circumstances may seem “convenient” from a distance, that conjecture belies the requirement that the matter had to be assessed onthe basis of the circumstances at the time of their occurrence. [28] As noted, there is no ambiguity in the wording and intent of clause 7.5.1 of the USA.

Regardless, the clear absence of a triggering“Marital Action” event with respect to Ms Sieminska cannot be minimised by characterising it as an “unreasonable technicality”,particularly when the basis for this characterisation is extrinsic evidence as to the parties’ intentions which has been admitted contrary tothe parol-evidence rule: Prairie Pulse Inc. v. Lacasse, 2005 SKCA 80, and Hawrish v. Bank of Montreal, (SCC), [1969]S.C.R. 515.

Where a document is clear and unambiguous there is no need to resort to extrinsic evidence because it is presumed theparties intended the legal consequences of their words: Eli Lilly & Co. v. Novopharm Ltd., (SCC), [1998] 2 S.C.R. 129,at para. 55.

[ 29 ] Put in another light, given the severity of the

summary expulsion which automatically unfolds against a shareholder upon the invocation of clause 7.5, each of the shareholders had contractually agreed that the other shareholders would be prohibited from invoking clause 7.5 against them in the absence of any of the “Marital Action” events enumerated under clause 7.5.1. Of course, the shareholders were entitled to define “Marital Action” in any way they might chose. And, albeit that clause 7.5.1 could have contemplated a broader range of scenarios than the three it does, it does not do so and that must be taken to have been by choice.

The absence of ambiguity in clause 7.5.1 leaves no room for a retrospective examination, by reference to extrinsic evidence of the subjective intent of parties now adverse in interest, as to whether the parties acted reasonably when crafting such a narrow definition in the first place. Where a contract is clear, the parties’ intention is to be derived primarily from the words they have used in the contract: Eli Lilly & Co. v. Novopharm Ltd.

To do otherwise, on the basis of extrinsic evidence, is to re-write the contract for the parties on the basis of hindsight. [ 30 ] I am, therefore, of the strong opinion that the chambers judge fundamentally erred in his

interpretation of clause 7.5. Specifically, he erred in law when he admitted and relied upon the extrinsic evidence of the Boldts and Ms Hutton as to their intentions with respect to clause 7.5 at the time the USA was made. Ultimately, these errors led the chambers judge to the misapprehension that it was unreasonable for Ms Sieminska or Mr. Cousyn to expect the Boldts not to resort to clause 7.5 in the circumstances of this case.

I am further of the opinion that these errors undercut the whole of the order from which the appellants have appealed and I would, on that basis, set it aside in its entirety. [ 31 ] But, this has broader consequences to the appeal because the foregoing analysis drives two basic conclusions as to the facts, one of which obviously differs from the conclusions drawn by the trial judge. First, it is plain that clause 7.5 does not apply to Ms Sieminska, as no “Marital Action” has occurred with respect to her. Second, it is equally plain that, under the proper

interpretation of it, clause 7.5 still applies to Mr. Cousyn, as two events have occurred with respect to him ( i.e. , mediation and divorce proceedings) each of which is an evident “Marital Action”. In appellate terms, this is to say that the factual matrix upon which the trial judge considered the legal question of whether the appellants had suffered oppression is fundamentally different from that which this Court must now consider.

Given that circumstance, I will say no more about the trial judge’s thoughts on oppression; rather, I will now turn to address the question of oppression afresh. [ 32 ] In BCE Inc. v. 1976 Debentureholders (at para. 56 ), the Court called for a combined approach to s. 241(2) of the

Canada Business Corporations Act which instructs a court to first examine the principles underlying the oppression remedy and, in particular, the concept of reasonable expectations. That is to say, the court must first determine whether a complainant’s expectation is reasonable having regard to the facts, the relationships at issue, and the entire context of the case, including the fact that there are conflicting claims and expectations, and, if so, then whether the conduct complained of has breached that reasonable expectation. This is a highly fact-specific initial inquiry.

Second, if a breach of a reasonable expectation is established, the court must then consider whether the conduct complained of amounts to “oppression”, “unfair prejudice” or “unfair disregard” of the complainant’s interests. This secondary inquiry is highly fact-specific too. The Court in BCE Inc. v. 1976 Debentureholders framed the second prong of the combined approach in these terms: [67] Having discussed the concept of reasonable expectations that underlies the oppression remedy, we arrive at the second prong of the s. 241 oppression remedy.

Even if reasonable, not every unmet expectation gives rise to claim under s. 241 . The

section requires that the conduct complained of amount to “oppression”, “unfair prejudice” or “unfair disregard” of relevant interests. “Oppression” carries the sense of conduct that is coercive and abusive, and suggests bad faith. “Unfair prejudice” may admit of a less culpable state of mind, that nevertheless has unfair consequences. Finally, “unfair disregard” of interests extends the remedy to ignoring an interest as being of no importance, contrary to the stakeholders’ reasonable expectations: see Koehnen [M. Koehnen, Oppression and Related Remedies (Toronto: Thomson/Carswell, 2004)], at pp. 81-88.

The phrases describe, in adjectival terms, ways in which corporate actors may fail to meet the reasonable expectations of stakeholders. [ 33 ] On this basis, I would examine first Ms Sieminska’s expectations as a shareholder. To begin, I conclude each shareholder of Souleio, which includes Ms Sieminska, would seem to have held an expectation that the other shareholders would not invoke clause 7.5 in the absence of a “Marital Action”.

This universal expectation is easily discerned from the language of clause 7.5 itself and is a prima facie reasonable expectation given that all of the parties, shareholder and corporation alike, have agreed to the terms of clause 7.5. I say this because a unanimous shareholders agreement is simply a contract by and among shareholders and their corporation by which they agree to alter their statutorily prescribed relationships in accordance with their expectations. A unanimous shareholders agreement is therefore perhaps the best evidence of shareholder expectations at the time of its making.

Moreover, the shareholder expectations it evidences must be presumed to have been reasonable because they received the unanimous agreement of the shareholders and the corporation. [ 34 ] With respect to Ms Sieminska, the respondents’ actions in this case have clearly and profoundly breached her reasonable expectation that clause 7.5 would not be invoked against her to remove her from Souleio in the absence of a “Marital Action” pertaining to her.

Although I am not prepared to conclude, on the evidence, that the respondents’ actions carry a sense of conduct which is coercive or abusive or suggests bad faith, I readily conclude that it amounts to “unfair prejudice” and, more particularly, that it otherwise utterly ignores Ms Sieminska’s interests as a security holder, contrary to her reasonable expectations.

Ms Sieminska’s improper removal from Souleio pursuant to a provision of the USA which plainly does not apply to her gives rise to a fundamental unfairness which renders the resulting prejudice of her removal and the resulting disregard of her rights unreasonable in the circumstances and which, therefore, calls out for remedy under s. 241(2) of the

Canada Business Corporations Act . [ 35 ] Similarly, given the intention and purpose of a unanimous shareholders agreement, and the specific relationship issues which the USA in this case addresses, each of the shareholders of Souleio would seem to have held an expectation that the powers of the directors would not be capriciously or intentionally exercised in a manner which is in violation of the shareholders’ administration rights, as established by the USA, the bylaws of Souleio and the

Canada Business Corporations Act . By administration rights, I mean to say each shareholder’s right to notice of, to attend at and to vote at shareholder meetings, right to nominate, elect and remove directors, right to financial information, as well as that class of shareholder rights known generally as “minority rights”. This expectation is sufficiently described in those general terms and need not be particularised to an expectation of adherence to any specific procedural notice or other requirement as may be set forth in Souleio’s constating documents or its governing statute.

This universal expectation is not displaced by the language of the USA, which enhances, rather than abrogates from, the default procedural safeguards set forth in Souleio’s bylaws

and, generally, as exist under the

Canada Business Corporations Act itself. The expectation is reasonable by reason that the parties have unanimously agreed to certain procedural obligations under the USA, and to vote and act so as to bring about compliance therewith (clauses 2.2 and 11.6), and, as they have not contracted out of same, the parties are required to adhere to certain procedures under Souleio’s bylaws and the

Canada Business Corporations Act . [ 36 ] With respect to Ms Sieminska and Mr. Cousyn, the Boldts have either ignored or misapprehended the corporate procedural requirements for calling and holding directors meetings and shareholders meetings, and for voting at same, etc., whether such requirements arise under the terms of the USA or under the corporate bylaws and the governing statute. Perhaps this was borne of a sense of expediency brought about by their perception that they needed to act quickly because the relationship issues were adversely affecting Souleio’s business.

Regardless, the fact remains that they pushed procedural safeguards to the side in the course of ousting Ms Sieminska and Mr. Cousyn. In this respect, the Boldts’ actions in December 2010 and after were presumptuous and disrespectful of the contractual and statutory shareholder rights of Ms Sieminska and Mr. Cousyn as well as Mr. Cousyn’s status as a director and officer of Souleio. In effect, the Boldts hi-jacked Souleio to serve their own end of removing Ms Sieminska and Mr. Cousyn without proper regard for the interests of Ms Sieminska and Mr. Cousyn, whether qua shareholder, director or officer.

And, that circumstance is, presumably, exactly why the parties had bargained to enhance the procedural safeguards in the USA. In my assessment then, in the context of a hostile shareholder removal, such action clearly breached Ms Sieminska’s and Mr. Cousyn’s reasonable expectations with respect to their administration rights ( i.e. , notification of meetings, attendance at meetings, voting at meetings, election and removal of directors, access to information, etc.).

In this respect the evidence is sufficient to impute to the respondents’ actions a sense of conduct which is coercive and abusive and suggests bad faith. That is, it was oppressive. Moreover, I also conclude that it amounts to “unfair prejudice” and otherwise ignores Ms Sieminska’s and Mr. Cousyn’s respective interests as security holders, director and officer, as the case may be, contrary to their reasonable expectations. The shareholders plainly and unanimously bargained in the USA to enhance certain procedural safeguards which already existed in the Souleio’s bylaws and the

Canada Business Corporations Act and, in that context, the Boldts’ expedient disregard for those safeguards resulted in procedural unfairness to Ms Sieminska and Mr.

Cousyn which was, in my assessment, not reasonable in the circumstances. [ 37 ] And so, for all of these reasons, I would set aside the chambers judge’s order in its entirety and enter in its place a declaration that the acts of Souleio of which the appellants complain have effected a result, and that the powers of the directors of Souleio have been exercised in a manner, that is oppressive, unfairly prejudicial and unfairly disregards the interests of Ms Sieminska and Mr.

Cousyn. [ 38 ] As to remedy, in Ms Sieminska’s case, she shall have an order of this Court setting aside the purported retraction of her shares pursuant to clause 7.5 of the USA and declaring that she continues to own 18 Class “A” common shares in the capital stock of Souleio. That said, as alternative relief, Ms Sieminska sought an order that she receive fair market value for her shares. It is clear to me that Ms Sieminska no longer has a place as a shareholder or employee of Souleio. But, in fairness, given the effluxion of time, a remedy of imposing a shotgun buy-out is impractical and, likely, inequitable.

Given that reality, pursuant to s. 241(3) (

f) of the

Canada Business Corporations Act , I order the respondents to buy out Ms Sieminska’s interest as a shareholder of Souleio ( i.e. , her shares and shareholder loan, if any) at its fair market value as at December 1, 2010. To be clear, this buy-out shall not occur pursuant to the terms of clause 7.5 of the USA and is not, therefore, subject to the provisions of

Schedule “D” to the USA. I leave the determination of the fair market value of Ms Sieminska’s interest as at December 1, 2010 to be negotiated by Ms Sieminska and the respondents but, if they cannot reach agreement, they may ask the Court of Queen’s Bench to determine the matter. [ 39 ] As to Mr. Cousyn, clause 7.5 of the USA still applies to him and he is properly removable from Souleio pursuant to its terms. As such, and regardless of improprieties in the way in which the Boldts caused clause 7.5 to be invoked against him, I would not set aside the retraction of Mr.

Cousyn’s shares nor would I reinstate him as a director and officer of Souleio. However, I would re-set the clock such that Mr. Cousyn and the respondents might avail themselves of the fair market value determination process set forth in

Schedule “D” to the USA, which is the manner in which the parties have unanimously agreed to determine the buy-out price under clause 7.5. [ 40 ] I have purposely refrained from fixing the value of the appellants’ respective interests in Souleio as I do not find sufficient evidence before the Court for that purpose. [ 41 ] As to remedy for the breach of Ms Sieminska’s and Mr. Cousyn’s administration rights, I find that an order under s. 241(3) (

a) restraining the conduct complained of or an order of similar nature would be pointless in these circumstances. It would serve no purpose to put the parties back in their pre-2011 positions only to have the parties revisit the removal of Mr. Cousyn or Ms Sieminska from Souleio at properly called and held shareholder and director meetings and then end up in the same net position. As I see it, the compensable prejudice which has befallen Ms Sieminska and Mr.

Cousyn by reason of the trampling of their administration rights is largely confined to the costs they each bore of obtaining legal advice to address that circumstance. As such, pursuant to s. 241(3) (j), I would order the respondents to pay each of Ms Sieminska and Mr. Cousyn compensation in the amount of their respective out-of-pocket costs for having their respective lawyers deal with this matter after December 12, 2010; however, I recognise that practicality must interject itself here.

I lack the evidence to ascertain an exact amount for each appellant and I doubt it would be worth counsel’s time and effort to conduct an exact accounting of the costs and to extricate costs recoverable in court, or otherwise dealt with, so as to avoid double recovery. That is to say, the award covers the cost of their respective counsel’s preparation for and attendance at shareholder and director meetings, as the case may be, and advice throughout that process. Accordingly, using a rough measure, I would fix the amount of compensation at $1,000 for Ms Sieminska and $1,500 for Mr.

Cousyn; the latter being the larger amount by reason that the conduct complained of also affected Mr. Cousyn’s status as a director and officer of Souleio, which his lawyer had to address. [ 42 ] Finally, this judgment also sets aside the order as to solicitor and client costs made in the court below. Even had the appellants not met with success in this Court, I would have moved to set aside the order for solicitor and client costs. I say this because the chambers judge gave no reason at all for the award and I can see no basis whatsoever for it on the facts of this matter.

Moreover, the respondents did not seek solicitor and client costs in the court below. On this basis, in my assessment, the award would not seem to have been the subject of the proper exercise of judicial discretion and, therefore, must be set aside. In the circumstances, each party shall bear its own costs in the proceedings already taken before the Court of Queen’s Bench. [ 43 ] The appellants shall have one set of costs in this Court, which I fix at $3,000, payable forthwith.

DATED at the City of Regina, in the Province of Saskatchewan, this 17 th day of December, A.D. 2013. “Caldwell J.A.” _____________________ Caldwell J.A. I concur. “Richards C.J.S.” Richards C.J.S. I concur. “Ottenbreit J.A.” Ottenbreit J.A.