Merks Poultry Farms Ltd. v. Wittenberg et al., (2010) 294 N.S.R.(2d) 42 (SC)

• Judge: Warner, J.
• Court: Supreme Court of Nova Scotia (Canada)
• Case Date: February 19, 2010
• Jurisdiction: Nova Scotia
• Citations: (2010), 294 N.S.R.(2d) 42 (SC);2010 NSSC 278

Merks Poultry v. Wittenberg (2010), 294 N.S.R.(2d) 42 (SC);

    933 A.P.R. 42

MLB headnote and full text

Temp. Cite: [2010] N.S.R.(2d) TBEd. AU.025

Merks Poultry Farms Limited, Andre Merks, Janie Merks, Valley Transfer (1990) Limited, and Merks Farms Limited (plaintiffs) v. Richard Wittenberg, Ron teStroete, Wittenberg Poultry Farms Limited, 3058480 Nova Scotia Limited and Synergy Agri Group Inc. (defendants)

(Hfx. No. 296583; 2010 NSSC 278)

Indexed As: Merks Poultry Farms Ltd. v. Wittenberg et al.

Nova Scotia Supreme Court

Warner, J.

July 12, 2010.

Summary:

Andre Merks, Richard Wittenberg and Ron teStroete were chicken farmers. They created Synergy Agri Group Inc. (SAGI) to provide their farms with a consistent supply of reasonably priced, high quality chicken feed. Thereafter, SAGI's activities expanded to include breeder services. Three other chicken farmers became shareholders. Andre and Janie Merks were the first officers and managed SAGI's business. Complaints about the Merks' management of SAGI led to their resignations. The Merks commenced an action against Wittenberg, teStroete and SAGI that included a claim of corporate oppression. The Merks applied for the following interlocutory relief from oppression: liquidation of SAGI, appointment of a receiver, a forced share sale to the Merks, or a buy-sell agreement.

The Nova Scotia Supreme Court dismissed the application.

Company Law - Topic 2170

Shareholders - Shareholders' rights - To rectify oppressive or unfairly prejudicial act - [See all Company Law - Topic 9785 ].

Company Law - Topic 4308

Directors - Duty to company and shareholders - Duty to inform shareholders - Financial and other information - [See ninth Company Law - Topic 9785 ].

Company Law - Topic 9785

Actions against corporations and directors - Action for oppressive conduct - Oppression, prejudice or disregard of interests - The Nova Scotia Supreme Court stated that an oppression claim was to be assessed by two inquiries: (1) whether the expectations of the stakeholders sought to be enforced were, on an objective and contextual basis, reasonable; if so, (2) whether the conduct complained of that breached the reasonable expectations amounted to oppression, unfair prejudice or unfair disregard of a relevant interest - See paragraph 61.

Company Law - Topic 9785

Actions against corporations and directors - Action for oppressive conduct - Oppression, prejudice or disregard of interests - Andre Merks, Richard Wittenberg and Ron teStroete created Synergy Agri Group Inc. (SAGI) - Andre and Janie Merks were the first officers and managed SAGI's business - Complaints about the Merks' management led to their resignations - The Merks brought an action against Wittenberg, teStroete and SAGI that included a claim of corporate oppression - The Merks applied for interlocutory relief from oppression - One of the acts which the Merks submitted breached their reasonable expectations was the failure to pursue the appointment of independent management for SAGI - The Nova Scotia Supreme Court stated that "it has not been shown, even on a prima facie basis, that independent management, in the sense that the officers of SAGI would not be shareholders of SAGI, was a reasonable expectation. It was not part of the Shareholders' Agreement or the constitution of SAGI, nor a past practice, nor a condition of the Merks' resignations" - Further, the professional managers hired after the Merks resigned had acted as independent managers - See paragraphs 68 to 90.

Company Law - Topic 9785

Actions against corporations and directors - Action for oppressive conduct - Oppression, prejudice or disregard of interests - Andre Merks, Richard Wittenberg and Ron teStroete created Synergy Agri Group Inc. (SAGI) to provide their farms with a supply of chicken feed - Thereafter, SAGI's activities expanded to include breeder services - Andre and Janie Merks were the first officers and managed SAGI's business - From incorporation, the Merks' trucking companies (VLT and MFL) had provided all of SAGI's transportation needs - Complaints about the Merks' management of SAGI led to their resignations - The Merks brought an action against Wittenberg, teStroete and SAGI that included a claim of corporate oppression - The Merks applied for interlocutory relief from oppression - One of the acts which the Merks submitted breached their reasonable expectations was the purchase of a chick tractor and trailer without shareholder approval - The Shareholders Agreement provided that "any purchase greater than $50,000 per item" had to be approved by a two thirds majority of all shareholders by poll vote - In January 2008, teStroete and Wittenberg had caused SAGI to purchase a trailer to transport eggs and chicks - SAGI's cost was $39,800 - In February 2008, they caused SAGI to purchase a tractor to haul the trailer at a cost of $18,000 - The Nova Scotia Supreme Court stated that "The Shareholders' Agreement speaks of purchases of greater than $50,000 'per item.' The trailer was purchased at a time when the plan was to lease a tractor. The trailer and tractor were purchased from different vendors and a month apart. ... these were good business decisions that have benefited SAGI. It may have violated the Merks' expectation that VLT would fulfill all SAGI's trucking needs. Merks have not established that this expectation was reasonable, or that this action was oppressive, in the context of SAGI interests, or of Merks' interests as SAGI shareholders" - See paragraphs 91 to 101.

Company Law - Topic 9785

Actions against corporations and directors - Action for oppressive conduct - Oppression, prejudice or disregard of interests - Andre Merks, Richard Wittenberg and Ron teStroete created Synergy Agri Group Inc. (SAGI) to provide their farms with a supply of chicken feed - Thereafter, SAGI's activities expanded to include breeder services - Andre and Janie Merks were the first officers and managed SAGI's business - Complaints about the Merks' management led to their resignations - The Merks brought an action against Wittenberg, teStroete and SAGI that included a claim of corporate oppression - The Merks applied for interlocutory relief from oppression - One of the acts which the Merks submitted breached their reasonable expectations was the entering into of an employment contract with McAleer as breeder/feed mill manager at a salary over $50,000 per year without shareholder approval - The Nova Scotia Supreme Court held that the Merks had a reasonable expectation, based on the Shareholders Agreement, that the contract with McAleer would be subject to approval of two thirds of the shareholders by poll vote - However, McAleer's hiring was not oppressive - The appointment of a breeder/feed mill manager was essential to the viability of the business; the budget already provided for a person or persons to do the job at a greater expense; the Merks had the opportunity to object to his hiring but did not do so; there was no basis for suggesting that McAleer had not performed effectively - See paragraphs 102 to 120.

Company Law - Topic 9785

Actions against corporations and directors - Action for oppressive conduct - Oppression, prejudice or disregard of interests - Andre Merks, Richard Wittenberg and Ron teStroete created Synergy Agri Group Inc. (SAGI) to provide their farms with a supply of chicken feed - Andre and Janie Merks were the first officers and managed SAGI's business - Complaints about the Merks' management led to their resignations - The Merks brought an action against Wittenberg, teStroete and SAGI that included a claim of corporate oppression - The Merks applied for interlocutory relief from oppression - One of the acts which the Merks submitted breached their reasonable expectations was causing a significant SAGI customer (Heger Co.) to stop purchasing mink feed from SAGI - The Merks submitted that the respondents unfairly targeted and lost Heger as a customer to damage the Merks, whose trucking company (VLT) had been retained by Heger to truck the feed that Heger purchased from SAGI - SAGI's best interests were also prejudiced by the loss of a profitable customer - The Nova Scotia Supreme Court stated that "Whether Wittenberg's intent was to pressure Heger to change his trucker from VLT is not relevant. VLT was not a shareholder in SAGI. ... SAGI wanted to keep Heger's business. Heger stopped buying feed from SAGI because of SAGI's intent to raise prices, and possibly because of a desire to avoid being entangled in the legal wrangling amongst SAGI's shareholders" - The court was not satisfied that SAGI intentionally targeted and lost Heger as a customer, either to hurt SAGI or to hurt VLT - See paragraphs 121 to 132.

Company Law - Topic 9785

Actions against corporations and directors - Action for oppressive conduct - Oppression, prejudice or disregard of interests - Andre Merks, Richard Wittenberg and Ron teStroete created Synergy Agri Group Inc. (SAGI) to provide their farms with a supply of chicken feed - Thereafter, SAGI's activities expanded to include breeder services - Andre and Janie Merks were the first officers and managed SAGI's business - The Merks' shares in SAGI were held by Merks Poultry Farms Limited (MPFL) - Complaints about the Merks' management of SAGI led to their resignations - The Merks brought an action against Wittenberg, teStroete and SAGI that included a claim of corporate oppression - The Merks applied for interlocutory relief from oppression - One of the acts which the Merks submitted breached their reasonable expectations was refusing to allow MPFL to pick up its own eggs at the SAGI breeder barn, despite the longstanding practice of allowing shareholders to "opt out" of SAGI services, and thereby cutting MPFL off from purchasing from SAGI - The Nova Scotia Supreme Court referred to s. 1 of the Broiler Chick and Feed Contracts entered between SAGI and each of the shareholders' chicken producing corporations, which clearly stated that SAGI "shall deliver day old broiler chicks to the Producer at the Producer's facilities" - There was no reasonable expectation that shareholders would be entitled to pick up eggs at the barn for delivery to the hatchery or to pick up day old chicks from the hatchery for delivery to the shareholders' farms - It was clear that the Merks decided to discontinue purchasing broiler chicks from SAGI - SAGI did not stop the Merks from purchasing broiler chicks - See paragraphs 133 to 148.

Company Law - Topic 9785

Actions against corporations and directors - Action for oppressive conduct - Oppression, prejudice or disregard of interests - Andre Merks, Richard Wittenberg and Ron teStroete created Synergy Agri Group Inc. (SAGI) - Andre and Janie Merks were the first officers and managed SAGI's business - Complaints about the Merks' management led to their resignations - The Merks brought an action against Wittenberg, teStroete and SAGI that included a claim of corporate oppression - The Merks applied for interlocutory relief from oppression - One of the acts which the Merks submitted breached their reasonable expectations was the failure to grant the Merks' request for an audit of SAGI's finances - The Nova Scotia Supreme Court stated that "It is a reasonable expectation of shareholders in SAGI that a shareholder is entitled to an independent audit upon request. But the applicants have not established on a prima facie basis, on the evidence in this application, that the failure to obtain an audited financial statement before September 2009 arose by reason of any oppressive conduct of the respondents" - See paragraphs 149 to 167.

Company Law - Topic 9785

Actions against corporations and directors - Action for oppressive conduct - Oppression, prejudice or disregard of interests - Andre Merks, Richard Wittenberg and Ron teStroete created Synergy Agri Group Inc. (SAGI) to provide their farms with a supply of chicken feed - Thereafter, SAGI's activities expanded to include breeder services - Andre and Janie Merks were the first officers and managed SAGI's business - Complaints about the Merks' management led to their resignations - The Merks brought an action against Wittenberg, teStroete and SAGI that included a claim of corporate oppression - The Merks applied for interlocutory relief from oppression - One of the acts which the Merks submitted breached their reasonable expectations was the preparation of incorrect or misleading financial statements - The Merks said that the income statement and balance sheet of SAGI for the nine months ending November 30, 2008, showed "fines" claimed by SAGI against the Merks for breaching the Broiler Chick and Feed Contracts that had been entered between SAGI and each of the shareholders' chicken producing corporations - The Merks argued that this claim was a contingent receivable and it should not have been shown as a trade receivable on SAGI's financial statements - The Nova Scotia Supreme Court held that the Merks had no reasonable expectation that SAGI's claim against the Merks for liquidated damages would not be shown on SAGI's working statements as receivable so long as the claim was still unresolved - The inclusion of such entries in internal financial statements had a different purpose than the audited or externally reviewed final year-end financial statements, or income tax statements - The inclusion of SAGI's claim against the Merks in its working financial statements was not incorrect, improper, unreasonable, or oppressive - See paragraphs 168 to 179.

Company Law - Topic 9785

Actions against corporations and directors - Action for oppressive conduct - Oppression, prejudice or disregard of interests - Andre Merks, Richard Wittenberg and Ron teStroete created Synergy Agri Group Inc. (SAGI) - Andre and Janie Merks were the first officers and managed SAGI's business - Complaints about the Merks' management led to their resignations - The Merks brought an action against Wittenberg, teStroete and SAGI that included a claim of corporate oppression - The Merks applied for interlocutory relief from oppression - One of the acts which the Merks submitted breached their reasonable expectations was the withholding of financial information from SAGI shareholders - The Merks submitted that the reasonable expectations of a shareholder included an entitlement to receipt of relevant financial information available to the officers and management - The Nova Scotia Supreme Court stated that "As a general precept of corporate law, I am not aware of any entitlement of shareholders of a corporation, private or public, to receive all of the financial information available to the officers and management. Since the analysis of corporate conduct is contextual, I assess Merks' claim that shareholders are entitled to all the financial information available to the officers and management in the specific context of SAGI's past practice (including under Merks' management until 2007), Shareholders' Agreements, and the nature of this corporation and the relationships between the parties" - The court concluded that the quarterly financial statements provided to the directors and shareholders in a timely manner throughout 2008 satisfied the respondents' obligation for disclosure of financial information to the Merks - See paragraphs 180 to 196.

Company Law - Topic 9785

Actions against corporations and directors - Action for oppressive conduct - Oppression, prejudice or disregard of interests - Andre Merks, Richard Wittenberg and Ron teStroete created Synergy Agri Group Inc. (SAGI) to provide their farms with a supply of chicken feed - Thereafter, SAGI's activities expanded to include breeder services - Andre and Janie Merks were the first officers and managed SAGI's business - Complaints about the Merks' management led to their resignations - The Merks brought an action against Wittenberg, teStroete and SAGI that included a claim of corporate oppression - The Merks applied for interlocutory relief from oppression - One of the acts which the Merks submitted breached their reasonable expectations was allowing unexplained deductions and credits, financially favourable to teStroete or his associates - The Merks raised two business practices of SAGI that they believed benefited teStroete at the expense of SAGI and its shareholders: a writing off of inventory from a discontinued farm equipment business and a credit to D & M Lightfoot Farms Ltd., whose principal was a close friend of teStroete - The Nova Scotia Supreme Court stated that the explanations for both the writing off of the parts inventory and the credit to Lightfoot Farms were credible - Both were reasonable acts - The evidence did not provide any factual basis to conclude that the two actions were carried out in bad faith or other than in the normal course of business - No evidence suggested that the actions might somehow have benefited teStroete - The actions breached no reasonable expectation of any shareholder and were not oppressive to SAGI and its shareholders - See paragraphs 197 to 207.

Company Law - Topic 9785

Actions against corporations and directors - Action for oppressive conduct - Oppression, prejudice or disregard of interests - Andre Merks, Richard Wittenberg and Ron teStroete created Synergy Agri Group Inc. (SAGI) - Andre and Janie Merks were the first officers and managed SAGI's business - Complaints about the Merks' management led to their resignations - The Merks brought an action against Wittenberg, teStroete and SAGI that included a claim of corporate oppression - The Merks applied for interlocutory relief from oppression - One of the acts which the Merks submitted breached their reasonable expectations was SAGI's failure to hold regular meetings - The Nova Scotia Supreme Court stated that "Merks had a reasonable expectation that when the directors voted to hold quarterly meetings, such meetings would be held. Whether this reasonable expectation was violated by conduct that constitutes oppression, unfair prejudice or unfair disregard of a relevant interest requires a contextual analysis" - There was no evidence that the failure to hold the September 2008 directors meeting was oppressive or conduct that unfairly disregarded the Merks' interests as directors or shareholders - Because of the litigation, little more than absolutely necessary was being done to keep SAGI operating, and anything that might have been dealt with at the missed directors meeting was discussed at the August 2008 shareholders meeting - See paragraphs 208 to 226.

Company Law - Topic 9785

Actions against corporations and directors - Action for oppressive conduct - Oppression, prejudice or disregard of interests - Andre Merks, Richard Wittenberg and Ron teStroete created Synergy Agri Group Inc. (SAGI) to provide their farms with a supply of chicken feed - Thereafter, SAGI's activities expanded to include breeder services - Andre and Janie Merks were the first officers and managed SAGI's business - Complaints about the Merks' management led to their resignations on October 1, 2007- Immediately upon acceptance of their resignations, the Merks submitted to SAGI two invoices totalling $566,238, claiming fees for the Merks' services, which were in addition to fees for the same services which had already been invoiced and paid - The Merks then unilaterally offset those invoices against purchases of feed and chicks from SAGI by various Merk farms - The Merks brought an action against Wittenberg, teStroete and SAGI that included a claim of corporate oppression - The Merks applied for interlocutory relief from oppression - One of the acts which the Merks submitted breached their reasonable expectations was the implementation of a credit policy targeted at the Merks - The Nova Scotia Supreme Court considered that the credit policy was created and implemented in response to the Merks' act of offsetting the two substantial retroactive invoices against their account with SAGI - It was not unreasonable for SAGI's management to develop the credit policy - It would have been preferable if the directors had approved the policy before the Merks were told that it was a policy; however, the attempt by SAGI to solve the problem created by the Merks' action in setting off their retroactive services claim was not unreasonable nor oppressive - See paragraphs 227 to 244.

Company Law - Topic 9785

Actions against corporations and directors - Action for oppressive conduct - Oppression, prejudice or disregard of interests - Andre Merks, Richard Wittenberg and Ron teStroete created Synergy Agri Group Inc. (SAGI) to provide their farms with a supply of chicken feed - Thereafter, SAGI's activities expanded to include breeder services - Andre and Janie Merks were the first officers and managed SAGI's business - From incorporation, the Merks' trucking companies had provided all of SAGI's transportation needs - Complaints about the Merks' management of SAGI led to their resignations - The Merks brought an action against Wittenberg, teStroete and SAGI that included a claim of corporate oppression - The Merks applied for interlocutory relief from oppression - One of the acts which the Merks submitted breached their reasonable expectations was the discontinuance of the use of the Merks' transport companies without giving a fair opportunity for them to retain SAGI's business - The Nova Scotia Supreme Court stated that "If the evidence at trial establishes that, despite wearing two hats, the Merks' transport services to SAGI were reasonable and at reasonable rates, then they had a reasonable expectation that they would continue to provide those trucking services. However, the evidence in this application does not establish transparency or reasonableness of these rates and services. Even if Merks transport services are eventually shown to have been provided at reasonable or market rates, the process followed by the respondents in reviewing transport services does not appear to have been carried out in unfair disregard to the interests of Merks. Clearly the process was not oppressive" - See paragraphs 245 to 266.

Company Law - Topic 9785

Actions against corporations and directors - Action for oppressive conduct - Oppression, prejudice or disregard of interests - Andre Merks, Richard Wittenberg and Ron teStroete created Synergy Agri Group Inc. (SAGI) to provide their farms with a supply of chicken feed - Thereafter, SAGI's activities expanded to include breeder services - Andre and Janie Merks were the first officers and managed SAGI's business - Complaints about the Merks' management of SAGI led to their resignations - The Merks brought an action against Wittenberg, teStroete and SAGI that included a claim of corporate oppression - The Merks applied for interlocutory relief from oppression - One of the acts which the Merks submitted breached their reasonable expectations was SAGI's withdrawal from an agreed upon mediation/arbitration concerning invoices issued to SAGI by the Merks - The Nova Scotia Supreme Court concluded that when SAGI agreed to mediate the invoices, it did so "with the understanding that the Merks business would be resumed in full as it was before" - All Merks' farms were customers of SAGI before the dispute - It was unreasonable for the Merks to take the position that they had a reasonable expectation that SAGI would continue to mediate when the Merks' farms ceased buying from SAGI - See paragraphs 267 to 286.

Company Law - Topic 9785

Actions against corporations and directors - Action for oppressive conduct - Oppression, prejudice or disregard of interests - Andre Merks, Richard Wittenberg and Ron teStroete created Synergy Agri Group Inc. (SAGI) to provide their farms with a supply of chicken feed - Thereafter, SAGI's activities expanded to include breeder services - Andre and Janie Merks were the first officers and managed SAGI's business - Complaints about the Merks' management led to their resignations - The Merks brought an action against Wittenberg, teStroete and SAGI that included a claim of corporate oppression - The Merks applied for interlocutory relief from oppression - The Merks claimed, inter alia, that they were suffering ongoing losses by reason of being cut off from purchasing from SAGI and that SAGI was also suffering continuing losses - The Merks noted that since voting rights changed annually according to each shareholder's contribution to SAGI's profits, the Merks' voting rights in SAGI were being adversely prejudiced pending trial - The Nova Scotia Supreme Court stated that "it was Merks who ceased purchasing feed and chicks from SAGI. On its face, Merks' conduct appears to be contrary to the Shareholders Agreement and the supply contracts each farm signed with SAGI. Merks have not satisfied the Court, even on a prima facie basis, that any losses incurred by them are the result of any oppressive conduct, unfair prejudice or unfair disregard of their interests as shareholders and directors" - See paragraphs 287 to 292.

Company Law - Topic 9796.1

Actions against corporations and directors - Action for oppressive conduct - Interim relief - Andre Merks, Richard Wittenberg and Ron teStroete created Synergy Agri Group Inc. (SAGI) - Andre and Janie Merks were the first officers and managed SAGI's business - Complaints about the Merks' management led to their resignations - The Merks brought an action against Wittenberg, teStroete and SAGI that included a claim of corporate oppression - The Merks applied for the following interlocutory relief: liquidation of SAGI, appointment of a receiver, a forced share sale to the Merks, or a buy-sell agreement - The Nova Scotia Supreme Court dismissed the application - Of the 13 claims on which the Merks based their claim of oppression, unfair prejudice or unfair disregard of their interests as shareholders, the court found a breach by SAGI of only two of the Merks' reasonable expectations: the hiring of an employee at a salary of over $50,000 a year without the approval of a two-third majority of all shareholders and the failure to hold a quarterly directors meeting - The breaches were neither oppressive nor unfairly prejudicial to the shareholders nor unfairly disregarded the Merks' interests as shareholders - Neither breach was such that it should lead to any interim remedy - See paragraphs 293 to 294.

Company Law - Topic 9796.1

Actions against corporations and directors - Action for oppressive conduct - Interim relief - The Nova Scotia Supreme Court stated that "The purpose of an interim order is to attempt, if possible, to preserve balance, and to encourage the parties to resolve the issues themselves without damaging the business. When parties are so focussed on their own interests, and fail to see their common interest in the success of their joint enterprise, the responsibility of the Court is to take only measures that are absolutely necessary to preserve the status quo until trial" - See paragraph 297.

Cases Noticed:

Aegon Capital Managment Inc. et al. v. BCE Inc. et al. (2008), 383 N.R. 119; 2008 SCC 69, consd. [para. 4].

BCE Inc. v. 1796 Debentureholders - see Aegon Capital Management Inc. et al. v. BCE Inc. et al.

Argo Protective Coatings Inc., Re (2006), 248 N.S.R.(2d) 127; 789 A.P.R. 127; 2006 NSSC 283, consd. [para. 4].

Delcue Holdings v. Air Canada, 1992 CarswellOnt 154 (Gen. Div.), refd to. [para. 24].

Keating et al. v. Bragg et al. (1996), 158 N.S.R.(2d) 241; 466 A.P.R. 241; 1996 CarswellNS 582 (S.C.), refd to. [para. 24].

Ellins et al. v. Coventree Inc. et al., [2007] O.T.C. Uned. 335; 2007 CarswellOnt 1725 (Sup. Ct.), refd to. [para. 25].

Harbert Distressed Investment Master Fund Ltd. et al. v. Calpine Canada Energy Finance II ULC et al. (2005), 235 N.S.R.(2d) 297; 747 A.P.R. 297; 2005 NSSC 211, refd to. [para. 25].

Nystad v. Harcrest Apartments Ltd., 1986 CarswellBC 123 (S.C.), refd to. [para. 25].

Abraham v. Inter Wide Investments Ltd., 1985 CarswellOnt 1643 (H.C.), refd to. [para. 25].

719946 Alberta Ltd. v. Alberta's B.E.S.T. Inc. et al., [2005] A.R. Uned. 836; 2005 ABQB 771, refd to. [para. 25].

SCI Systems Inc. v. Gornitzki Thompson & Little Co. et al. (1997), 29 O.T.C. 148; 1997 CarswellOnt 1769 (Gen. Div.), refd to. [para. 25].

Rivers v. Denton, 1992 CarswellOnt 134 (Gen. Div.), refd to. [para. 26].

Cheung v. Forgen Computer Systems Ltd. et al. (1991), 123 A.R. 357; 1991 CarswellAlta 211 (Q.B.), refd to. [para. 26].

Paley v. Leduc et al., [2002] B.C.T.C. 1757; 2002 BCSC 1757, refd to. [para. 26].

Goft et al. v. 1206468 Ontario Ltd. et al., [2001] O.T.C. Uned. 474; 2001 CarswellOnt 93 (Sup. Ct.), refd to. [para. 26].

Fernando v. Francis et al., [2007] O.T.C. Uned. 726; 2007 CarswellOnt 2619 (Sup. Ct.), refd to. [para. 26].

Stallabrass v. Holt, 1997 CarswellYukon 63 (S.C.), refd to. [para. 26].

Journet v. Superchef Food Industries Ltd., 1984 CarswellQue 28 (S.C.), refd to. [para. 26].

Mahood v. High Country Holdings Inc. et al., [1994] B.C.T.C. Uned. D16; 1994 CarswellBC 1944 (S.C.), refd to. [para. 26].

Walker et al. v. Betts et al., [2006] B.C.T.C. 128; 2006 BCSC 612, refd to. [para. 26].

Millar v. McNally, 1991 CarswellOnt 140 (Gen. Div.), refd to. [para. 26].

Banque Nationale du Canada v. Titley, 2004 CarswellQue 10132 (S.C.), refd to. [para. 26].

Classic Organ Co. v. Artisan Organ Ltd. et al. (1997), 43 O.T.C. 38; 1997 CarswellOnt 1773 (Gen. Div.), refd to. [para. 26].

Whiteside v. 1188683 Ontario Inc. et al., [2008] O.T.C. Uned. R16; 2008 CarswellOnt 5891 (Sup. Ct.), refd to. [para. 26].

Patheon Inc. v. Global Pharm Inc. et al., [2000] O.T.C. 461; 2000 CarswellOnt 2268 (Sup. Ct.), refd to. [para. 26].

Chisholm v. Antigonish Construction Ltd. et al. (2008), 261 N.S.R.(2d) 232; 835 A.P.R. 232; 2008 NSSC 12, refd to. [para. 28].

Themadel Foundation et al. v. Third Canadian General Investment Trust Ltd. et al. (1998), 107 O.A.C. 188; 1998 CarswellOnt 691 (C.A.), refd to. [para. 29].

Westfair Foods Ltd. v. Watt et al. (1991), 115 A.R. 34; 1991 CarswellAlta 63 (C.A.), refd to. [para. 29].

Naneff v. Con-Crete Holdings Ltd. et. al. (1995), 85 O.A.C. 29; 1995 CarswellOnt 1207 (C.A.), refd to. [para. 34].

Scottish Co-operative Wholesale Society Ltd. v. Meyer, [1959] A.C. 324 (H.L.), refd to. [para. 43].

Ballard v. Ballard Estate (1991), 50 O.A.C. 254; 3 B.L.R.(2d) 113 (Div. Ct.), refd to. [para. 43].

820099 Ontario Inc. v. Ballard (Harold) Ltd. - see Ballard v. Ballard Estate.

Stern v. Imasco Ltd. et al., [1999] O.T.C. Uned. C80; 1999 CarswellOnt 3546 (Sup. Ct.), refd to. [para. 44].

Krynen v. Bugg et al., [2003] O.T.C. 252; 2003 CarswellOnt 1138 (Sup. Ct.), refd to. [para. 47].

Hillcrest Housing Ltd., Re (1998), 165 Nfld. & P.E.I.R. 181; 509 A.P.R. 181; 1998 CarswellPEI 62 (T.D.), refd to. [para. 49].

Fromm Estate v. Barsh, 1990 CarswellOnt 3377 (H.C.), refd to. [para. 51].

Fisher Investments v. Nusbaum, 1988 CarswellOnt 180 (S.C.), refd to. [para. 51].

Woodford v. Johnston et al., [2001] N.B.R.(2d) (Supp.) No. 53; 2001 NBQB 50, refd to. [para. 52].

Ebrahimi v. Westbourne Galleries Ltd., [1972] 2 All E.R. 492 (H.L.), refd to. [para. 56].

Peoples Department Stores Inc. (Bankrupt) v. Wise (2004), 326 N.R. 267 (S.C.C.), refd to. [para. 58].

Authors and Works Noticed:

Crête, Raymonde, Dealing with Unfairness: Some Observations on the Role of the Courts in Designing a Fair Solution (2003), 36 U.B.C. L. Rev. 519, p. 540 [para. 55].

Khimji, Mohamed F., Case Comment on Peoples v. Wise - Conflating Directors' Duties, Oppression and Stakeholder Protection (2006), 39 U.B.C. L. Rev. 209, p. 232 [para. 55].

Melchers, Sophie, and Bradley, T. Gillett, Liability of Directors in Canada under Corporate Legislation and the Statutory Remedies Available to Stakeholders, 2005 Annual Review of Civil Litigation (2006), pp. 189 to 222 [para. 55].

Morritt, David S., Bjorkquist, Sonya, and Coleman, Allan, The Oppression Remedy (2009 Looseleaf Update, Release 5), generally [para. 54]; p. 3-2 [para. 33].

Wardle, Peter C., and Bernstein, Daniel, Recent Developments Regarding the Oppression Remedy, The Law Society of Upper Canada Special Lectures 2004: Corporate and Commercial Law (2005), pp. 421 to 448 [para. 55].

Counsel:

Michelle C. Awad and Daniel Watt, for the applicants, Merks Poultry Limited, Andrew Merks, Janie Merks, Valley Transfer (1990) Limited and Merks Farms Limited;

John T. Rafferty, Q.C., and Brian Stilwell, for the respondents, Richard Wittenberg, Ron teStroete, Wittenberg Poultry Farm Limited and 3058480 Nova Scotia Limited;

S. Bruce Outhouse, Q.C., and Adrienne Bowers, for the respondent, Synergy Agri Group Inc.

This application was heard on September 8, October 13-15, 2009, and February 19, 2010, at Kentville, Nova Scotia, before Warner, J., of the Nova Scotia Supreme Court, who delivered the following decision on July 12, 2010.