Executive Summary: Key Legal and Evidentiary Issues

• Court found a binding agreement was formed for the share sale despite the defendant corporation not signing the agreement.

• Plaintiff’s application for summary judgment was partially granted; defendant’s application for summary dismissal was dismissed.

• Evidence supported performance of the agreement, including signed documents via DocuSign and share transfers.

• Defendant alleged plaintiff breached the agreement by acting as a director of a competitor, but the Court ruled the presumption was rebutted.

• Plaintiff was confirmed entitled to 51.84% of fixed share consideration; “Earn Out” shares remain in dispute due to insufficient record.

• Remaining issues, including remedy for “Earn Out” shares, will proceed in further litigation.

Background and parties involved

This case concerns a dispute between William Gaskey (plaintiff) and Up In Code Inc., carrying on business as Showpass (defendant), over the sale of shares in Token Mobile Solutions Inc. Gaskey claimed that a share purchase agreement was formed and executed via DocuSign. The defendant denied an agreement was reached or, alternatively, asserted that Gaskey disqualified himself from entitlement to shares.

The agreement and proof of acceptance

The Court determined that an agreement was indeed reached. Mr. McCarthy, representing the defendant, sent a share purchase agreement to the sellers via DocuSign. Signatures were obtained from the vendors. A contemporaneous August 19, 2019 text exchange included Mr. Gaskey saying, “Gabe says it’s done. Can you confirm,” to which Mr. McCarthy replied, “Deal’s done.”

Although the defendant did not sign the agreement, the Court held that their actions—sending the agreement prepared by its counsel for signatures, obtaining those signatures, and proceeding with performance—confirmed a binding agreement. Evidence included a shareholders ledger showing cancellation of the subject shares and issuance of new shares to the defendant within weeks. A trade publication also featured the acquisition.

Dispute over performance and share issuance

While the cash portion of the transaction was paid, the defendant did not issue the shares Gaskey claimed under the agreement. The agreement contemplated:

1. A fixed issuance of 101,698 Class B Purchaser’s shares. Gaskey, owning 51.84% of the sold shares, was entitled to 51.84% of this amount.

2. An “Earn Out” issuance, dependent in part on events related to the Client Service Ticketing Agreement.

Due to insufficient evidence in the record, the Court could not resolve the quantum of “Earn Out” shares and left that issue for continued litigation.

Alleged breach of noncompete provisions

The defendant argued that Gaskey breached the agreement by remaining a director of Get Tickets E-Solutions Inc., a competitor. The Ontario corporate registry still listed him as a director. Gaskey responded that he disposed of his interest and ceased being a director in 2017.

The Court accepted corroborative evidence from Mr. Davidson, a former co-owner of Get Tickets, and noted there was no evidence Gaskey attended meetings or engaged with Get Tickets after 2017. The Court found Gaskey successfully rebutted the statutory presumption and was not in breach of the agreement.

Relief granted and unresolved matters

Gaskey sought entitlement to 100% of the shares but was found only entitled to his 51.84% share. The Court held that other vendors’ rights could not be claimed by Gaskey, especially due to possible limitation issues.

Gaskey is entitled to:

• 51.84% of the 101,698 Class B Purchaser’s shares under the agreement.

• 51.84% of any “Earn Out” shares earned, subject to further determination.

The fixed shares are deemed to have been issued as of September 4, 2019. The effective date for “Earn Out” shares remains to be determined.

The defendant’s application for summary dismissal was dismissed. Gaskey’s application for summary judgment was partially allowed. Remaining remedy issues will proceed either by application or assessment hearing. The judge retained jurisdiction, provided further applications are brought within 18 months of the March 18, 2025 decision.

Conclusion

The Court affirmed that a binding agreement existed, established through signed documents and conduct, and that Gaskey is entitled to a defined share of the transaction. Allegations of breach were rejected based on rebutted presumptions. Final resolution of “Earn Out” share entitlements and any collateral claims will proceed in future proceedings.