Executive Summary: Key Legal and Evidentiary Issues

• Mr. Jivan, the majority shareholder and former CEO, alleges oppression by co-founders who excluded him from management and undermined the company's fair market sale before dissolving it.

• Company valuation is highly contested, with estimates diverging from less than $100,000 to $12 million across multiple valuations and other indicators of value.

• Respondents deny wrongdoing, claiming Mr. Jivan ceased cooperating, abandoned his duties, and left them to wind up the business and personally shoulder its debts.

• Allegations of intellectual property misappropriation arise from the respondents' new consulting business, which Mr. Jivan claims uses TMP's former software platform and client lists.

• The court identified numerous credibility issues requiring witness testimony and a full trial rather than summary determination by petition.

• Both parties agreed the matter was suitable for petition determination, yet the court dismissed the application and referred it to trial, with costs in the cause.

The formation of TMP and the parties' roles

Qaid Gabriel Jivan, Steven Richard Stewart Ruggles, and Scott Michael Hirsch met as students at Simon Fraser University in British Columbia. After graduation, they incorporated Talentmarketplace Inc. (TMP) in February 2016 as a technology start-up based on a business concept conceived by Mr. Jivan. TMP operated as an online recruitment platform—a self-serve marketplace for pre-screened candidates that allowed employers to search for and place interview requests directly with candidates, without the need for recruitment services. Revenue came from customers either paying a commission upon hiring someone off the platform or larger corporations paying a monthly user fee.

Mr. Jivan held approximately 60% of TMP shares and served as CEO, in charge of strategy, project management, recruitment, sales, account management and public relations. Mr. Ruggles, a CFA, held approximately 20% and acted as chief financial and operations officer. Mr. Hirsch held the remaining approximately 20% as chief technology officer. All three signed shareholder and employment agreements.

Company growth and valuation disputes

TMP's gross revenues grew steadily: $28,678 in 2017; $124,505 in 2018; $282,761 in 2019; $529,321 in 2020; and $1,168,285 in 2021. A central dispute in the case involves TMP's market value, with estimates diverging dramatically. The first valuation, by a consultant, valued TMP at no less than $2.5 million as of mid-2018. In early 2021, Mr. Ruggles led a valuation that estimated TMP at $10 million. Mr. Jivan's evidence is that this led to a private equity investment in April 2021 by Level One Global Fund I, a New York based venture capital fund, of $250,000 for just under 2% of the total shares. The respondents characterize this investment as unrealistic and non-arm's length, alleging the investor was a friend of Mr. Jivan who treated the investment like a gift.

Breakdown of the parties' relationship

In March 2021, the parties launched an aggressive sales effort. They hired two experienced salespeople to help market their services, managed by Mr. Jivan. The two sides disagree about whether the initiative showed signs of success. The breakdown of the parties' relationship began shortly after the sales initiative. Mr. Jivan alleges he was squeezed out of management, while the respondents say he stopped participating and cooperating.

In the fall of 2021, Messrs. Hirsch and Ruggles terminated Mr. Jivan's employment as CEO and offered to buy his shares for $80,000, which he refused as grossly inadequate. In a board meeting in June 2022, Messrs. Hirsch and Ruggles announced their intention to sell TMP and introduced a valuation of the business by Smythe LLP at $136,000–$156,000. In August 2022, the respondents put forward a formal offer from 1373223 B.C. Ltd. ("1373 Ltd.") to purchase the respondents' shares for $46,114, corresponding to a total value of $78,335. Only through his own investigations did Mr. Jivan ascertain that Messrs. Hirsch and Ruggles owned 1373 Ltd. No monetary award, costs, or damages were granted or ordered.

Failed acquisition attempts and dissolution

Later in August 2022, Mr. Jivan obtained a signed LOI from Univest Securities Canada, which proposed purchasing TMP for $2 million. The parties disagree about why this did not progress. Mr. Jivan found another potential buyer, Torus Talent, which initially estimated TMP's value at $3 million. Again, the parties disagree about whether this was a serious enquiry and why it did not proceed. Mr. Jivan then sent an LOI to the respondents, offering $85,000 for their shares. The respondents accepted the offer, but Mr. Jivan later revoked it.

On February 27, 2023, Mr. Jivan received a certificate of dissolution showing that TMP was dissolved on February 23, 2023. He alleges that the respondents appropriated TMP's customer list, source code and other intellectual property, all of which they deny. The respondents now run a consulting business under the name "Shinden Consulting". Mr. Jivan's evidence is that Shinden provides services previously provided by TMP and uses its same software platform. This too is denied by the respondents.

Governing legal framework

The case involves a claim for oppression under s. 227 of the Business Corporations Act, S.B.C. 2002, c. 57. Oppression is an equitable remedy analyzed in two stages: first, whether the evidence supports the reasonable expectation asserted by the claimant, and second, whether the evidence establishes that the reasonable expectation was violated by conduct falling within the terms "oppression", "unfair prejudice" or "unfair disregard" of a relevant interest. The court must also consider whether determination by petition is appropriate, taking into account factors including the need for credibility assessment, the need for a full grasp of the evidence, and whether justice will more likely be served by pleadings and discovery in the usual way.

Ruling and outcome

Justice Coval dismissed the application for judgment and referred the matter to the trial list. Despite both parties taking the position that the matter was suitable for determination by petition, the court found that the case cannot be fairly decided on the merits without a trial. Virtually every allegation underlying the claims of oppression is disputed, and disputed in ways that requires credibility assessments based on a full grasp of the evidence. The court noted that the amount of the claim—$780,000 in equitable damages and $100,000 in punitive damages—means a trial is not disproportionate. Additionally, given that TMP is dissolved, the standard reasons for an expedited oppression decision do not apply, and the associated delay of a trial does not prejudice ongoing operation of the company or the value of Mr. Jivan's stake in it. Since both parties took the position that the matter was suitable for determination in the hearing, costs of the hearing are in the cause. No monetary award was determined at this stage, as the substantive merits of the oppression claim remain to be decided at trial.