Commissioning report on fair market value contrary to parties’ agreement

Applications arose out of breakdown of relationships between group of companies managed and owned by family. One application sought declaration that certain corporations were in partnership, order dissolving partnership, and ancillary relief, or, alternatively, order winding up corporations. Other application sought declaration of oppressive conduct and compensation, or, alternatively, contribution or indemnity in respect of tax liability. Parties agreed that appropriate remedy arising from breakdown of their relationships was resolution of any amounts outstanding between them and buy-out at fair market value of minority shareholdings. On basis of set-off, respondents were entitled to $587,037, to be held in trust; indemnity issue remained outstanding. Expert evidence on valuation was accepted; opposing submissions were rejected, being based on mere conjecture. Submission that further report on fair market value should be commissioned was contrary to parties’ agreement that issue should be determined in this proceeding. Long term liabilities as shown on balance sheet, less taxes, could be used to determine fair market value. There was no limitation issue for repayment of loans; waiving of repayment had extended start of any limitation period.

Paria Enterprises Inc. v. 829194 Ontario Inc. (2018), 2018 CarswellOnt 883, 2018 ONSC 124, L.A. Pattillo J. (Ont. S.C.J. [Commercial List]).