Docket: CACV2307 Richard Calvin Martin Appellant - v. -, 2013 SKCA 76

THE COURT OF APPEAL FOR SASKATCHEWAN Citation: 2013 SKCA 76 Date: 2013-06-26 Between: Docket: CACV2307 Richard Calvin Martin Appellant - and - Kenneth Calvin Martin and Always Towing Ltd. Respondents Coram: Lane, Richards and Herauf JJ.A. Counsel: Adam Touet for the appellant Mary Helms for the respondents Appeal: From: 2012 SKQB 294 Heard: June 26, 2013 Disposition: Appeal dismissed (orally) Written Reasons: July 11, 2013

By: The Honourable Mr. Justice Lane In Concurrence: The Honourable Mr. Justice Richards The Honourable Mr. Justice Herauf Lane J.A. [ 1 ] This appeal has its genesis in a dispute over control of a family-owned towing company between the respondent father, Kenneth Martin (“Kenneth”) and his appellant son, Richard Martin (“Richard”), equal shareholders in the company, Always Towing Ltd. (the “Company”). Each of the parties commenced competing oppression applications for relief pursuant to s. 234 of The Business Corporations Act , R.S.S. 1978, c.

B-10 alleging the other acted in a manner which was oppressive and unfairly disregarded the interests of the Company and themselves as shareholders. [ 2 ] The appeal was dismissed orally with brief written reasons to follow and these are the reasons. The facts are complex and are fully set out in the judgment of the trial judge. [ 3 ] Richard’s claims were dismissed after trial and he appeals raising the following three issues:

(1) Did the trial judge err in finding Richard did not prove, on a balance of probabilities, Kenneth misappropriated monies belonging to the Company;

(2) Did the trial judge err in finding Richard did not prove, on a balance of probabilities, Kenneth’s actions constituted oppression, was conduct which unfairly prejudiced or conduct which unfairly disregarded the interests of the Company or Richard;

(3) Did the trial judge err in finding Richard’s conduct was oppressive and unfairly disregarded the interests of the Company or Kenneth? [ 4 ] The grounds articulated by Richard involve findings of fact made by the trial judge. The standard of review in these cases is not in issue and barring palpable or overriding error the appellate court ought not to interfere with the findings of fact by the trial judge. See: Housen v. Nikolaisen , 2002 SCC 33 , [2002] 2 S.C.R. 235.

Similarly, the trial judge’s finding Richard was not credible ought not to be interfered with on appeal (see also: Housen , supra ). [ 5 ] Against the background of the standard of review, it is important in this case to consider the context in which the trial judge was required to determine the issues. He said the following: [2] The business has a significant "cash" aspect to it. Much of the cash revenue of the business has not and cannot now be reliably accounted for.

Whether the pilfered, or merely missing, cash disappeared because of a conspiracy to avoid tax obligations, individual larceny, lack of effective financial controls, inadequate accounting procedures or a combination of the foregoing is uncertain. Each may have played a role. [3] The business and financial records presented to the court are inadequate for a proper accounting. The financial statements presented to the court were so

summary in form that how various transactions were accounted for cannot be determined. This problem is compounded by the disappearance of source records, with each side blaming the other for this disappearance. To further compound the problem, the death of the father, Kenneth Calvin Martin ("Kenneth Martin"), has denied the court the benefit of whatever evidence he could have provided. [4] While logic suggests significant shareholder's advances were made to "start up" the corporation, the accounting records exhibited and evidence presented did not address this topic.

When the preparer of the financial statements presented them to the court, he provided no evidence on the (sic) how the accounting dealt with the issues of reimbursable expenditures or shareholder's loans. He simply presented the financial statements to the court without back-up journals or ledgers and no explanation of the control and accounting procedures in place or the nature and use of source documentation.

The accounting evidence did not address essential issues. [5] From this amalgam of larceny, self-serving actions, lack of effective accounting procedures, and missing documents, coupled with incomplete evidence, the court is asked to decide who wronged whom, to what extent and make a decision as to who is now entitled to what. Given this, all that can reasonably be provided are "big picture" conclusions and a measure of rough justice. [ 6 ] The trial judge was also of the view Richard was not a credible witness. He said as follows: [59] This logic has a number of flaws.

From commencement of operations until the end of July 2011, Richard Martin was continuously present at Always Towing and had access to the cash receipts before deposit. Thus, if he took cash, it would not be there to deposit. The evidence is that he was taking monies from the cash receipts, even during those periods when Natasha Ukrainec attempted to control his access. He acknowledges having taken $12,000 and asks the court to believe that is all he took.

[60] I do not believe Richard Martin when he testifies that he took only $12,000. On this point and others, I did not find him to be a credible witness. There is considerable evidence that he played fast and loose with corporation assets. By way of example, he attempted to offset personal obligations to an auto-body shop by cancelling towing bills the auto-body shop owed to the corporation.

Given his proclivity to take corporation cash when he felt he had a need, without any contemporaneous accounting for it, and the continuing opportunity he had to do so through to August 2011, I am of the opinion that it is at least equally likely that any monies missing from the corporation's cash receipts to August 3, 2011, were taken by Richard Martin as opposed to missing for other reasons. [ 7 ] Richard seeks, on appeal, to reargue the evidence of witnesses.

During argument (and we commended both counsel for their preparation and their argument) it was clear there were simply conflicting views on the evidence. The findings of fact, and credibility, were clearly within the purview of the trial judge and we simply see no basis for appellate intervention. [ 8 ] We noted to counsel that while the issues were crafted, argued, and adjudicated upon, in the context of the oppression remedy we were not called upon to decide whether all of the allegations and issues were properly the subject of an oppression application.

Our decision is not to be taken as necessarily endorsing such a wide application of the oppression remedy. [ 9 ] The appeal is therefore dismissed with costs in the usual manner.