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September 30-November 6, 2002 |
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| Woodley vs. Edwards |
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Between
Bruce Woodley and Jeanette Woodley, plaintiffs, and Ken Edwards, Karen Edwards, Diversified Building Services Inc., Diversified Rental Services Inc., Diversified Specialty Services Inc. and Diversified Display Services Inc., defendants |
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[2002] O.J. No. 5085
Court File No. 99-CV-162552 |
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Ontario Superior Court of Justice
Ewaschuk J. |
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Heard: September 30-November 6, 2002.
Judgment: December 11, 2002.
(52 paras.) |
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James F. Diamond and Messod Boussidan, for the plaintiffs.
Benjamin Salsberg, for the defendants, Ken Edwards, Diversified Building Services Inc., Diversified Rental Services Inc., Diversified Specialty Services Inc., and Diversified Display Services Inc.
Ernst Ashurov, for the defendant, Karen Edwards. |
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| Company law — Actions against corporations and directors — Action for oppressive conduct — When available (incl. time for) — Oppression, prejudice or disregard of interests — Order for compensation. |
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| This was an application by Woodley for an order to rectify oppressive conduct by Edwards. The parties started a window cleaning business together in 1977 called Diversified Building. The business expanded. Diversified Rental was incorporated to include rental of tables, skirting for sidewalk sales and the installation of Christmas decorations at malls. Woodley and Edwards were equal shareholders inf Diversified Building and Rental. Edwards formed two new companies, Diversified Display and Diversified Specialty, with Sebanek to manufacture and install Christmas decorations for the Eaton Centre. This job was already done by Diversified Rental. Edwards eventually told Woodley about the two new companies, but did not explain the full ramifications of the company or the magnitude of the project with the Eaton Centre. Woodley wished to terminate his relationship with Edwards and rejected offers to become involved in the new companies. Both parties thought they had reached an agreement to sever their relationship as of October 31, 1995, but each had a different idea of what the basic terms of the agreement were. As a result of the purported agreement, Woodley assumed all of the Diversified Building accounts and Edwards assumed all of the Diversified Display and Diversified Specialty accounts. Woodley argued that Edwards misappropriated business opportunities that belonged to Diversified Building and Rental and breached his fiduciary duty to those existing companies by diverting those opportunities to the newly created companies. |
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| Held, Application allowed. |
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| Woodley was entitled to one-half the profits generated by Diversified Display and Specialty until October 31, 1995 when they parties ceased to be partners. He was entitled to be the sole shareholder in Diversified Building and Edwards the sole shareholder in Diversified Rental. Diversified Building or Rental could have done the installation of Christmas decorations at the Eaton Centre. By not offering the increased installation business to Diversified Building or Rental, Edwards breached his fiduciary duty to his companies. Edwards did not make full fair and frank disclosure of the extent of the business opportunities to Woodley. |
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 Download PDF of full case |
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