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Corporations - Oppression Remedy (3). Evashkow v. Melia [oppression remedies/director removal]
In Evashkow v. Melia (Div Ct, 2025) the Divisional Court dismissed an OBCA oppression [s.248] appeal, here brought against a court order that removed a joint corporate CEO/director.
Here the court considers remedies allowed under OBCA s.248(3) ['Oppression remedy - Court order']:Issue 5 – Did the Application Judge err in removing Mr. Evashkow as an officer and director?
[39] The Appellant submits that his removal as officer and director was an extraordinary remedy that the Application Judge granted without sufficient factual and legal basis for doing so.
[40] Section 248 of the OBCA gives the Court broad discretion to make “any interim or final order it thinks fit.” Section 248(3)(c) [SS: sic, should be '248(3)(e)'] of the OBCA expressly authorizes the Court to make an order “appointing directors in place of or in addition to all or any of the directors then in office.”
[41] The choice of an appropriate remedy is a discretionary decision that attracts a high degree of deference. Absent a reviewable error of fact or law, a reviewing court generally will not interfere if the judge below “has given sufficient weight to all relevant considerations and the exercise of discretion is not based on an erroneous principle”: Canada (Attorney General) v. Fontaine, 2017 SCC 47, [2017] 2 S.C.R. 205, at para. 36.
[42] Having said that, removal of a director is an extraordinary remedy that should be imposed sparingly. However, an order for removal of a director “could be suitable where the continuing presence of the incumbent directors is harmful to both the company and the interests of the corporate stakeholders, and where the appointment of a new director would remedy the oppressive conduct”: Stelco Inc. (Bankruptcy), Re (2005) 2005 CanLII 8671 (ON CA), 75 O.R. (3d) 5 (C.A.), at para. 55 citing Catalyst Fund General Partner I Inc. v. Hollinger Inc., 2004 CanLII 40665 (ON SC), at para. 68.
[43] Where an oppression remedy is found to be warranted to correct an oppressive situation, “the surgery should be done with a scalpel, not a battle axe”. An important consideration is that the court must, in granting a remedy, “even up the balance not tip it in favour of the hurt party”: Naneff v. Con-Crete Holdings Ltd.,1995 CanLII 959 (ONCA), at pp. 490-491.
[44] The circumstances at blueRover Inc. under Mr. Evashkow’s leadership as CEO, were of the nature contemplated by the Court of Appeal in Re Stelco. Having found that Mr. Evashkow’s conduct had “exponentially” increased the level of dysfunction and acrimony in the corporation, the Application Judge concluded that his removal was required:I pause to observe that Evashkow himself is not a shareholder of blueRover. He has no stake in the equity of the company. He became involved, as described above, as the nominee of Kozar [of Korona Group] to the Board. I am satisfied that it would be inappropriate for him to continue as a Director or officer: Disposition Reasons, at para. 136. [45] Courts often exercise caution in removing a director when doing so interferes with the will of the shareholders. That was not a factor in this case. Mr. Evashkow was not elected by a vote of the shareholders. He was appointed by one of the shareholders, the Korona Group. To the extent that Mr. Evashkow’s removal interfered with the authority of the shareholder who nominated him, that shareholder (Korona Group Ltd.) took no part in this appeal. Korona Group also retained its authority to appoint a new CEO following Mr. Evashkow’s removal.
[46] We conclude that the Application Judge considered and applied the relevant principles to the record before him. The remedy of Mr. Evashkow’s removal was responsive and proportionate to the business realities. Further, his order for removal does not disturb the Board’s balance of power, as the party that nominated Mr. Evashkow was able to nominate his replacement.
[47] We give no effect to this ground of appeal.
D. Conclusion
[48] The Application Judge made orders within his discretion that were supported by findings on the evidence before him. The Appellant has failed to establish that he erred in doing so. We find the Application Judge’s orders were informed by appropriate considerations of business realities and that the remedies appealed – including removal of Mr. Evashkow as director – were ordered only after the Application Judge was satisfied, following court-monitored interim operation of blueRover, that such orders were necessary. . Evashkow v. Melia [oppression remedy is equitable]
In Evashkow v. Melia (Div Ct, 2025) the Divisional Court dismissed an OBCA oppression [s.248] appeal, here brought against a court order that removed a joint corporate CEO/director.
The court considers a test for corporate oppression, here noting it's equitable nature and focussing on the factor of 'reasonable expectations':Issue 3 – Did the Application Judge err in assessing the Respondents’ reasonable expectations?
[29] The Appellant submits that the Application Judge erred in identifying the Respondents’ “reasonable expectations” and thus erred in concluding that his conduct had violated those expectations.
[30] The Application Judge succinctly set out the test for assessing reasonable expectations in the context of an oppression remedy application at para. 101 of the Disposition Reasons:101. The oppression remedy is an equitable remedy that gives the Court a broad jurisdiction to enforce not just what is legal, but what is fair corporate conduct. In assessing a claim for oppression, a court must answer two questions:
a. does the evidence support the reasonable expectation the claimant asserts; and
b. 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: The Investment Administration Solutions Inc. v. Pro-Financial Asset Management Inc., 2018 ONSC 1220, at para. 85, citing with approval BCE Inc. v. 1976 Debentureholders, 2008 SCC 69. [31] The Disposition Reasons give a detailed review of the facts found to constitute oppressive conduct by Mr. Evashkow. Justice Osborne reviewed in detail the positions advanced by Mr. Evashkow and by the Respondents.
[32] Justice Osborne referenced the shareholders’ reasonable expectations as including the expectation that a director will work for the common good of the company and all of its shareholders, as required by section 134 of the OBCA; and that the director’s actions will be consistent with what the Supreme Court of Canada describes as the “fair treatment that is most fundamentally what stakeholders are entitled to reasonably expect”: BCE Inc. v. 1976 Debentureholders, 2008 SCC 69, at para. 64. . Evashkow v. Melia
In Evashkow v. Melia (Div Ct, 2025) the Divisional Court dismissed an OBCA oppression [s.248] appeal, here brought against a court order that removed a corporate CEO/director.
The appeal court illustrates behaviours found by the application judge, and accepted by itself on a 'palpable and overriding error' challenge, as constituting OBCA 'oppression':Issue 2 – Did the Application Judge err in finding that Mr. Evashkow caused the business to be carried out oppressively?
[20] The Appellant argues that the Application Judge’s conclusion that Mr. Evashkow engaged in oppressive conduct was based on several palpable and overriding factual errors, specifically his findings that:(1) Mr. Evashkow improperly demanded information and documents prior to being appointed a director and officer;
(2) Mr. Evashkow’s communications were confrontational or sarcastic;
(3) Mr. Evashkow required Mr. Smith to attend a clinical or mental fitness evaluation;
(4) Mr. Evashkow purported to terminate officers;
(5) Mr. Evashkow improperly voted for himself as CEO; and that
(6) Mr. Evashkow engaged in actions that caused disfunction and disharmony in the company after the court appointed a Monitor. [21] We would not give effect to this ground of appeal because the record and the reasons provide a basis for each finding.
[22] For example, the Appellant disputes that he “improperly demanded information and documents prior to being appointed a director and officer.” However, the Application Judge noted and relied on the fact that Mr. Evashkow conceded that his demands were made “before he held any office or authority at blueRover whatsoever”.
[23] Regarding the Appellant’s argument that he did not purport to terminate two directors, the Application Judge found that Mr. Evashkow suspended the directors and concluded that “the effect is the same, and whether they were called terminations or suspensions, the actions of Evashkow were oppressive in the circumstances”. The Application Judge made no error in making those findings.
[24] With respect to the sixth alleged error – that the Application Judge erred in finding that Mr. Evashkow caused dysfunction and disharmony – the Appellant argues that the Application Judge relied on some conduct that occurred after, rather than before, the Monitor’s appointment in November 2022.
[25] We agree that Mr. Evashkow’s behaviour referenced by the Application Judge at paragraph 126 of the Disposition Reasons occurred prior to the Monitor’s appointment. While the Application Judge was mistaken about the timing of Mr. Evashkow’s conduct, the timing of the behaviour was not the “linchpin” of the Application Judge’s conclusion as to the overall oppressive character of Mr. Evashkow’s conduct. The Application Judge made a clear finding that Mr. Evashkow’s conduct was oppressive and the timing of his conduct does not undermine those findings.
[26] Justice Osborne’s reasons also reference oppressive actions by Mr. Evashkow that did occur after the Monitor’s appointment in November 2022. This includes Mr. Evashkow’s failure to comply with or work cooperatively with the Monitor, which continued to cause dysfunction in the company: see, for example, Disposition Reasons, at paras. 129 and 160.
[27] We conclude that the Application Judge’s error in describing the timing of Mr. Evashkow’s oppressive actions was not significant to his analysis or conclusion. It does not warrant appellate intervention and does not rise to the level of palpable and overriding error.
[28] We give no effect to this ground of appeal. . Evashkow v. Melia
In Evashkow v. Melia (Div Ct, 2025) the Divisional Court dismissed an OBCA oppression [s.248] appeal, here brought against a court order that removed a joint corporate CEO/director.
Here the court cites the definition of a 'complainant' under OBCA s.245:Issue 1 – Did the Application Judge err in treating the Respondents as “complainants” under the OBCA?
[14] Under s. 248 of the OBCA, “a complainant” may seek an oppression remedy. The term “complainant” is defined in s. 245 to mean:(a) a registered holder or beneficial owner, and a former registered holder or beneficial owner, of a security of a corporation or any of its affiliates,
(b) a director or an officer or a former director or officer of a corporation or of any of its affiliates,
(c) any other person who, in the discretion of the court, is a proper person to make an application under this Part. . 1417217 Ontario Inc. v. River Trail Estates Inc. [accounting]
In 1417217 Ontario Inc. v. River Trail Estates Inc. (Ont CA, 2024) the Ontario Court of Appeal allowed an appeal from a ruling involving oral real estate joint venture and several related issues.
Here, in a corporation oppression context, the court supports an 'accounting of profits' order where the oppression harm lay in "deficiencies in ... accounting records":ISSUE 1 - The trial judge did not err in ordering an accounting to remedy the oppression she found
[35] A trial judge has a broad discretion to make “any interim or final order it thinks fit” to remedy a finding of oppression: Business Corporations Act, R.S.O. 1990, c. B. 16, at s. 248(3). An appellate court reviewing that exercise of discretion, may interfere only where it has been established that the lower court erred in principle or its decision is otherwise unjust: Naneff v. Con-Crete Holdings Ltd. (1995), 1995 CanLII 959 (ON CA), 23 O.R. (3d) 481, at pp. 486-87; Murray v. Pier 21 Asset Management Inc., 2021 ONCA 424, 156 O.R. (3d) 197, at para. 34. The purpose of the oppression remedy is to rectify the oppression as found by the trial judge.
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[38] As for the accounting remedy, I see no basis justifying appellate intervention with it. In this case, the trial judge found that deficiencies in Mr. Suleman’s accounting records post-2008 created prejudice for the Joint Venture and, therefore, were oppressive. She ordered an accounting to rectify the oppression that she had found. She made no error in principle nor is the remedy unjust. Without an accounting, the claim and counterclaim cannot be fairly decided. This point is underscored by that fact that, at trial, both the Respondents and the Appellants sought an accounting. In the circumstances, it scarcely lies in the Appellants’ mouths to find fault with the trial judge for ordering an accounting. . Crescent Limited v. Jones
In Crescent Limited v. Jones (Div Court, 2024) the Divisional Court considered the nature of the oppression remedy [here under BCA s.248]:[42] The second problem with Crescent’s argument is that it fails to adequately recognize that the point of the oppression remedy is to validate the reasonable expectation of the parties. Further, where the parties have turned their minds in an agreement to those reasonable expectations, that is the appropriate remedy. As put in Itak International Corp. v. CPI Plastics Group Ltd., [2006] O.J. No. 2637 (Ont. Sup. Ct.):[45] The touchstone used by the courts for identifying conduct that satisfies the language of s. 248 and oppression remedy has been the “reasonable expectation of the shareholder”.
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[47] Agreements between the parties tend to constitute the best evidence of the parties’ reasonable expectations. Oppression proceedings that are based on the enforcement of the prior contractual arrangements tend to be clearer than other such proceedings in that such contracts may inform the Court’s decision as to the reasonable expectation of the parties. . Crescent Limited v. Jones
In Crescent Limited v. Jones (Div Court, 2024) the Divisional Court considered the SOR applicable to corporate oppression remedies [under OBCA s.248(3)]:[38] In assessing Crescent’s position on this point, it is important to keep in mind the standard of review that is applicable to a trial judge’s oppression remedy decisions. As put by the Ontario Court of Appeal in Naneff v. Con-Crete Holdings Ltd., 1995 CanLII 959 (ON CA), 23 O.R. (3d) 481, at para. 18:[18] Before discussing the merits of the challenge to this remedy, I wish to make a brief reference to the principles which guide an appellate court in its review of a remedy ordered under s. 248(3) of the O.B.C.A. Section 248(3) empowers a court upon finding of oppression to make any order “it thinks fit”. When that broad discretion is given to a court of first instance, the law is clear that an appellate court’s power of review is quite limited. In Mason v. Intercity Properties Ltd. (1987), 1987 CanLII 173 (ON CA), 59 O.R. (2d) 631 at p. 636, 38 D.L.R. (4th) 681 (C.A.), Blair J.A. set out the governing principle: The governing principle is that such a discretion must be exercised judicially and that an appellate court is only entitled to interfere where it has been established that the lower court has erred in principle or its decision is otherwise unjust. . 1261271 B.C. Ltd. v. Hanover PV Limited Partnership
In 1261271 B.C. Ltd. v. Hanover PV Limited Partnership (Ont CA, 2024) the Ontario Court of Appeal dismissed an appeal against the granting of oppression relief:[1] The appeal is dismissed. The application judge did not commit a reversible error, in our view, in finding that the granting of the impugned security interest was oppressive to the respondents.
[2] In FNF Enterprises Inc. v. Wag and Train Inc., 2023 ONCA 92, at para. 31, this court summarized the two requirements for an oppression remedy claim. Although the experienced commercial application judge did not cite caselaw on oppression, his findings show he was alive to these requirements.
[3] As stated in FNF Enterprises, a party seeking an oppression remedy must first “identify the expectations it claims have been violated by the conduct at issue and show that those expectations were reasonably held.” The application judge found that the respondents put the appellant’s predecessor in interest on notice that it did not have “carte blanche to do as it wished” with respect to the respondent entities. This amounts to a finding of an expectation that the appellant’s predecessor would not engage in conduct that was prejudicial to them. Given Gilmore J.’s 2022 order and the findings underlying it, this expectation was reasonable.
[4] Second, a party claiming an oppression remedy must show that its reasonable expectations were “violated by corporate conduct that was oppressive or unfairly prejudicial to or that unfairly disregarded the interest of any security holder, creditor, director, or officer” (FNF Enterprises, at para. 31). The application judge found that the impugned security was granted “in admitted self-interest”, “with a view to prejudicing” the parties which rightfully should have controlled the respondents at the time, by making already-existing debt “secured and subject to the rights granted … pursuant to the terms of the 2021 Security”.
[5] Based on the application judge’s findings, he had a sufficient basis to conclude that the granting of the impugned security was oppressive. This was in turn a sufficient ground to grant the application, independent of the application judge’s other bases for doing so. . Baylin Technologies Inc. v. Gelerman
In Baylin Technologies Inc. v. Gelerman (Ont CA, 2021) the Court of Appeal considered a corporate oppression remedy:(3) Oppression
[47] The application judge moved from his conclusions regarding the Baylin majority voting policy to the issue of oppression. He concluded that both Gelerman and Spacebridge had a reasonable expectation that Gelerman would be a director for the two-year period of the earn-out. He then concluded that Baylin’s actions in adopting the majority voting policy were “misleading and false” and that the policy was drafted for the purpose of removing Gelerman as a director.
[48] The application judge’s finding regarding the reasonable expectations of Gelerman and Spacebridge are findings of fact that are entitled to deference from this court. They may only be interfered with if a palpable and overriding error is demonstrated.
[49] In my view, Baylin has demonstrated such an error. I begin with the fact that reasonable expectations are to be viewed on an objective, not subjective, basis. As the Supreme Court of Canada said in BCE Inc. v. 1976 Debentureholders, 2008 SCC 69, [2008] 3 S.C.R. 560, at para. 62:As denoted by "reasonable", the concept of reasonable expectations is objective and contextual. The actual expectation of a particular stakeholder is not conclusive. In the context of whether it would be "just and equitable" to grant a remedy, the question is whether the expectation is reasonable having regard to the facts of the specific case, the relationships at issue, and the entire context, including the fact that there may be conflicting claims and expectations. ....
[51] .... As a general proposition, it will be difficult for a party to advance that it had a reasonable expectation regarding a particular result that is above and beyond that for which the party negotiated: Casurina Limited Partnership v. Rio Algom Ltd. (2004), 2004 CanLII 30309 (ON CA), 181 O.A.C. 19, at para. 26.
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