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Corporations - Winding-Up. Wegmart Ltd. v. Meier
In Wegmart Ltd. v. Meier (Ont Div Ct, 2026) the Ontario Divisional Court dismissed an appeal, this brought against an order which "granted the oppression application .... to enforce [SS: the respondent's] rights as shareholders ... under the Ontario Business Corporations Act".
Here the court considers 'winding-up' as an oppression remedy:Winding Up
[12] There is no issue that the remedy of a winding up is discretionary, as set out in s. 207 of the OBCA. The appellants submit that the application judge erred in failing to order a winding up due to the animosity between them and their sisters. More specifically, they submit that the application judge erred in relying on the decision in Animal House Investments Inc. v. Lisgar Development Ltd. (2007), 2007 CanLII 82794 (ON SC), 87 O.R. (3d) 529 (S.C.), aff’d (2008) 2008 CanLII 27471 (ON SCDC), 237 O.A.C. 261 (Div. Ct.).
[13] The application judge cited the above decision for the proposition that “quarrelling and incompatibility even to the point of a breakdown of the personal relationships between the shareholders of a private company, are not, by themselves sufficient grounds for an equitable winding-up of the corporation.”
[14] The appellants submit that Animal House is distinguishable. Yet Animal House also arose from a dispute among family members who were the shareholders of two corporations. Further, it was the family member who precipitated the conflict between them who then applied for the winding up. It was in that similar context that Justice Wilton-Siegel addressed the role of irreconcilable differences. The factual differences do not justify a conclusion that the application judge improperly applied the reasoning in Animal House.
[15] The application judge not only relied on the above principle from Animal House but also considered other relevant principles and authorities regarding the remedy of a winding up, including the following:(i) The “court is to use a scalpel to tailor carefully the relief ordered to do no more than is necessary to remedy the oppressive conduct. The court is not wielding a battle axe to cleave the parties”: Basegmez v. Akman, 2018 ONSC 812 (Div. Ct.), at para. 8;
(ii) A winding up is an equitable remedy and the court will not reward those who come to court with unclean hands: 790668 Ontario Inc. v. D’Andrea Management Inc., 2017 ONCA 1019, at para. 14.
(iii) The remedy of a winding up is only considered as a last resort when other less drastic remedies will not suffice: Basegmez, at para. 8. [16] The application judge made no appealable error in the exercise of his discretion to refuse a winding up. The application judge found that the sisters reasonably expected to see Wegmart operated in a fair and business-like manner and that the remedies they sought may assist in moving to that result. The appellants are attempting to reargue the facts to seek a winding up, without showing either a legal error or palpable and overriding error in the application judge’s exercise of his discretion. This ground of appeal fails. . Foglia v. Grid Link Corp.
In Foglia v. Grid Link Corp. (Div Court, 2024) the Ontario Divisional Court dismissed an appeal, this from an interlocutory OBCA order that required the appellant to purchase the respondent's interest in a corporation.
Here the court considers the range of winding-up orders under s.207 OBCA:[23] Under s. 207(1) of the Act, the court may order that a corporation be wound up where it is satisfied that it is just and equitable to do so. However, the remedies available under s. 207(1) are not limited to a winding up order. Pursuant to s. 207(2), on an application under s. 207, the court may make a winding up order or such order under s. 248 as it thinks fit. Under s. 248(3), the court may make any interim or final order it thinks fit, including, an order directing a corporation or any other person to purchase securities of a security holder.
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