SUPREME COURT OF NOVA SCOTIA
Citation: Giffin v. Soontiens, 2011 NSSC 404
Date: 20111031
Docket: Hfx No. 292594
Registry: Halifax
Between:
Gordon Giffin Plaintiff
and
Nicole Soontiens, Ilona MacAlpine, XL Electric
Limited, a body corporate, Huntec Limited, a body
corporate, and CNCA Holdings Limited,
a body corporate Defendants
LIBRARY HEADING
Judge: The Honourable Justice Gerald R. P. Moir
Heard: January 11, 12, 13, 18, 19, and 20, 2010, January 17, 18, 19, 20, 24, 25, 26, 27, and 31, February 1, 2, 3, 4, 8, 9, and 16, 2011
Last Written Submissions: September 14, 2011
Subject: Shareholder oppression; other pleas of breach of fiduciary duty, misrepresentation, promissory estoppel
Summary: Three principals started an electrical contracting company. After some years of hard work, the company became very profitable. A shareholder agreement gave much preference to two of the three principals. They received a disproportionate share of the real profits. The third shareholder alleged that he was promised equal treatment. He left the company and sued for shareholder oppression and the other pleas.
It appears that a term in the agreement crucial for valuing the minority shareholder's interest is ambiguous. The ambiguity also had to be resolved.
Issues: (1) Whether the plaintiff established shareholder oppression? (2) Whether the other pleas were established?
(3) Remedy.
Result: (1) When the ambiguity is correctly resolved the agreement is not as one-sided as the majority shareholders assert. Inequalities remain apparent. Despite the inequalities, the minority shareholder had a reasonable expectation of equal treatment. Actions by the company, including payment of unequal dividends and a purported unilateral amendment of the share terms to resolve the ambiguity against the minority shareholder, were oppressive. (2) The other pleas were not established. (3) The appropriate remedy involves a valuation of the company, and a related company, as of the day Mr. Giffin left the company and an order for purchase of his shares by the defendants.
THIS INFORMATION SHEET DOES NOT FORM PART OF THE COURT'S DECISION. QUOTES MUST BE FROM THE DECISION, NOT THIS LIBRARY SHEET.