Executive Summary: Key Legal and Evidentiary Issues

• Alleged large-scale misappropriation of corporate funds by a director/officer through personal use of corporate credit cards and funding a new competing company.
• Disputed breach of fiduciary duties and the unanimous shareholder agreement (USA), including non-competition, non-solicitation, and governance/approval provisions.
• Controversy over diversion of a major corporate opportunity (the Wittur Group distribution business) to a new entity, FTL Distribution Inc., controlled by the same director and his spouse.
• Evidence of unilateral governance maneuvers by the director (forged signing authority resolution, attempts to exclude other shareholders from premises, termination of a shareholder-employee, contact with key customers).
• Determination that there was extraordinary urgency and irreparable harm justifying urgent ex parte injunctive relief, but insufficient proof of a real risk of asset dissipation for a Mareva injunction.
• Resulting interim injunctions restraining use of company funds and solicitation of customers/employees and restraining changes to corporate governance documents, with no monetary award quantified at this stage.

Background and parties

This case arises out of a dispute within a closely held, family-run elevator business in Ontario. March Elevator Limited carries on the business of elevator maintenance, service, repair, upgrading, and modernization, and 1993211 Ontario Inc. (“199”) is its parent company. John Robert (“JR”) Lewis served as President and CEO of both March Elevator and 199 until February 10, 2026, and remains a director and 25% shareholder of 199. The other voting shares are held in three 25% blocks by members of the Sayewich family: Michael and Susan jointly, Matthew, and Jeffrey. JR’s wife, Francine Teresa Lewis, is the Vice-President of FTL Distribution Inc. (“FTL”), a company incorporated on October 1, 2025 by JR and Francine as an elevator parts distributor. The plaintiffs are March Elevator and 199; the defendants are JR, Francine, and FTL.

Shareholder agreement and governance framework

The parties’ relationship is governed in key respects by a unanimous shareholder agreement (“USA”) for 199. Under the USA, Michael, Susan, Matthew, Jeffrey, and JR are directors of 199, and certain shareholders, including JR, must devote their full time and attention to March Elevator’s business. The USA contains non-competition and non-solicitation provisions binding all shareholders for the duration of the agreement and for two years after divesting their shares. Those provisions bar shareholders from soliciting customers or otherwise acting in ways that impair relationships between 199 or March and their customers or suppliers, or that are detrimental to the companies’ business. The USA also restricts banking and spending authority, requiring multiple directors’ approval for certain expenditures, and sets out enhanced approval thresholds (unanimous or 75% shareholder consent) for specified major decisions, such as changes in the number of directors, disposition of assets, non-ordinary course transactions, material changes to the business, significant indebtedness, acquisition of another business, bonuses or distributions, and material increases in compensation. For other matters, a board quorum of four directors is required. Importantly, the USA includes an arbitration clause for disputes arising under it, while expressly preserving the parties’ right to seek injunctive relief in the courts.

Transition in management and emergence of FTL

In the latter half of 2025, the companies underwent a significant transition, prompted in part by a health scare involving Michael. Michael and Susan resigned their operational roles and remained as directors and investors only. JR took the lead in designing and implementing the transition plan. A Transition Agreement effective January 1, 2026 provided that Susan would hand over financial control of the plaintiffs’ affairs to JR. While this transition was underway, March Elevator learned of a major business opportunity: acting as Canadian distributor for the Wittur Group, a large U.S.-based elevator parts manufacturer. Instead of integrating this opportunity into March Elevator, JR proposed to develop it through a separate entity, ultimately incorporating FTL on October 1, 2025. At first, JR discussed involving Matthew and Jeffrey in FTL, and even set up an FTL email account for Jeffrey and indicated he might be a 25% shareholder. In the end, JR proceeded without them, working with his wife and another individual to build FTL.

Allegations of misuse of corporate funds and competing business

The plaintiffs commenced the action on February 13, 2026, asserting causes of action that include breach of fiduciary duty and misappropriation of corporate opportunities, conversion of corporate funds, conspiracy, unjust enrichment, inducing breach of contract, fraud, and knowing assistance and knowing receipt of funds in breach of trust. Their position is that, in the weeks preceding the motion, they uncovered a scheme led by JR to divert funds and business opportunities away from March Elevator and 199 for his own and FTL’s benefit. The evidence put forward includes a pattern of heavy personal use of a corporate credit card far exceeding the historical tolerance for modest personal expenses. JR’s spending allegedly covered a wide variety of personal items: a large deposit on a high-value boat, hundreds of Amazon purchases, electronics, travel and lodging, retail and luxury goods, entertainment, golf-related expenditures, and home furnishings and housewares, running to substantial totals in each category. Historically, shareholders were allowed limited personal use of corporate credit cards, in the range of $2,000 to $2,500 per year, with a relatively informal oversight approach given the family nature of the business; the plaintiffs argue JR’s charges go far beyond that informal practice. The plaintiffs also rely on evidence that JR used the plaintiffs’ funds to set up and support FTL’s operations, including paying for name search services, software, waste management, printing, marketing, painting, office supplies, and domain names, all for FTL’s benefit. A notable example is a forklift purchase: a purchase agreement for a 2021 Toyota forklift in the amount of $30,510, ordered in March Elevator’s name but shipped to FTL’s headquarters, accompanied by a lease arrangement billed through March Elevator’s account. The plaintiffs intervened with the lessor to halt further payments. They also point to JR’s sharing of the corporate credit card details with Francine, and to Francine’s unauthorized use of that card, as evidence of knowing assistance and receipt. As to corporate opportunities, the plaintiffs say JR diverted the Wittur opportunity to FTL, and that he solicited March Elevator’s customers for this competing venture, including Solucore, March Elevator’s largest customer, which represents about 70% of its business.

Escalating internal conflict and steps taken by JR

The relationship among the shareholders deteriorated rapidly in early 2026. After the shareholders began to review the companies’ finances in January 2026 and discovered the unusual spending pattern, they raised the issues with JR. The evidence before the court describes JR reacting aggressively, referring to himself as “JR Lewis, the King of Elevators” and shouting at Susan. He also sent a cease and desist letter purporting to bar her from the premises and from reviewing company information. On February 8, 2026, JR attempted to terminate Matthew’s employment and delivered a notice requiring document preservation. That same day he retained private security to block members of the Sayewich family from entering the plaintiffs’ premises. The shareholders then called a board meeting for February 10, 2026. JR’s response included contacting key customers, and one such critical customer notified the plaintiffs that it would pause all work with them until the internal governance issues were resolved. The plaintiffs also led evidence that in September 2025 JR falsified corporate records to give himself sole signing authority on bank accounts, without consulting the other directors or shareholders and contrary to the USA, and that in early February 2026 he removed original bank statements from the company file room. The plaintiffs characterize these actions as part of an attempt by JR to isolate control, limit oversight, retaliate against questioning shareholders, and leverage his role with customers to destabilize the business.

The urgent motion and legal framework for relief

In this procedural posture, the plaintiffs brought an urgent ex parte motion seeking multiple injunctions. They asked for: (1) an urgent Mareva injunction freezing JR’s assets, and (2) injunctions restraining JR, Francine, and FTL from using the plaintiffs’ funds or credit cards, soliciting or contacting the plaintiffs’ customers and employees, and JR from refusing to comply with his fiduciary duties and from making changes to corporate governance documents such as bylaws, signing authorities, and minute books. The court’s jurisdiction for such relief is rooted in section 101 of the Courts of Justice Act, which authorizes interlocutory injunctions and related orders where “just or convenient,” and in Rule 40 of the Rules of Civil Procedure, which allows interlocutory injunctions, including on a without-notice basis for up to ten days. The judge recited the principles governing ex parte injunctions, emphasizing that they are justified only in circumstances of “extraordinary urgency,” including where there is reason to believe defendants, if warned, might act to frustrate the court process before a motion can be heard. For Mareva relief specifically, the court applied the familiar RJR-MacDonald interlocutory injunction test, combined with additional Mareva elements: a strong prima facie case, irreparable harm, a balance of convenience favouring the plaintiff, assets in the jurisdiction, and a serious risk that the defendant will remove or dissipate assets before judgment. The court also noted that, for ex parte Mareva orders, full and frank disclosure of all material facts is required, and that Mareva injunctions are an extraordinary remedy, given they operate as a form of prejudgment execution. Finally, the judge distinguished between prohibitory injunctions (which restrain action and require only a serious issue to be tried) and mandatory injunctions (which compel positive action and require a strong prima facie case), and summarized the concept of irreparable harm, with loss of an irreplaceable business relationship as a key example.

Findings on the merits of the injunction request

On the evidentiary record, the court held that the plaintiffs had established a strong prima facie case on several pleaded causes of action. The judge accepted that there was substantial evidence of unauthorized personal spending by JR on the corporate credit card and expenditures that appeared to fund the setup and operation of FTL. As an officer and director, JR owed fiduciary duties to March Elevator and 199, and the court found there was credible evidence that he misused corporate funds, diverted corporate opportunities, and acted in ways that harmed or risked harming the plaintiffs, including by contacting major customers and soliciting business for FTL. The judge concluded there was a strong prima facie case of breach of fiduciary duty, conspiracy, inducement, knowing assistance and knowing receipt, and breach of the USA. Specific USA breaches identified included entering into significant indebtedness without the required 75% shareholder consent, making unilateral material changes to the business (such as terminating Matthew’s employment and altering bank signing authority) in violation of the approval thresholds, failing to devote full time and attention to the companies’ business while devoting time to FTL, and breaching non-competition and non-solicitation obligations by setting up a competing business and soliciting Solucore and other relationships. On irreparable harm, the court accepted that March Elevator faced a serious risk of non-compensable loss. JR oversaw relationships with key consultants and contractors, tied to an estimated $20–$23 million in annual revenue. Solucore alone accounted for about 70% of March Elevator’s revenue, and the relationship had already been paused following JR’s communications. The judge accepted the plaintiffs’ evidence that losing this customer would likely cause irreversible damage to the business, a harm not readily remediable by damages. The court also found extraordinary urgency supporting the use of an ex parte motion. JR’s reaction to oversight—issuing cease and desist letters, attempting to terminate Matthew, installing security to exclude other shareholders, sending threatening correspondence about diminishing the value of the companies, and calling customers to highlight the dispute—supported a conclusion that, if alerted, he might further undermine the business before the court could intervene.

Denial of Mareva relief and assessment of risk of dissipation

Despite finding a strong prima facie case of serious misconduct, the court declined to grant a Mareva injunction. The missing element was a demonstrated serious risk that JR would remove his assets from the jurisdiction or dissipate them in order to thwart enforcement of any future judgment. The court acknowledged that, in fraud cases, such a risk can sometimes be inferred from the nature of the misconduct and surrounding circumstances. However, here the judge found the record insufficient to support that inference. Regarding the Wittur and FTL arrangement, the court noted that Jeffrey initially engaged with JR about establishing FTL to pursue the Wittur opportunity, having extensive discussions about an independent company and even being given an FTL email account and told he might become a 25% shareholder. The FTL-related expenses charged to the plaintiffs occurred between October 2025 and early February 2026, and it was not clear when, if at all, JR first intended to exclude the plaintiffs or other shareholders from the FTL venture. The judge emphasized that this analysis did not condone the use of the plaintiffs’ funds to set up FTL or suggest that such conduct was necessarily non-fraudulent; rather, the evidence did not show the type of clandestine movement or concealment of personal assets typically underpinning a Mareva order. Similarly, although JR’s use of corporate funds for personal purchases was seriously troubling and might ultimately be found to be misappropriation, the judge took into account the historically lax oversight and tolerance of some similar conduct by another shareholder, Matthew, in assessing whether it justified an inference of likely asset flight or dissipation. The court also highlighted that there was no evidence JR had taken steps to move his own assets out of the jurisdiction or place them beyond the plaintiffs’ reach. On this record, the judge was not satisfied there was a serious risk of removal or dissipation of assets, and therefore refused the Mareva injunction.

The granted injunctions and overall outcome

While Mareva relief was denied, the court concluded that, with respect to the non-Mareva injunctive relief, the balance of convenience clearly favoured the plaintiffs. The requested orders were aimed at preserving the status quo and compelling JR’s adherence to his existing contractual and fiduciary obligations, rather than conferring new advantages. The court therefore granted interim injunctions for a ten-day period: first, restraining JR from making any changes to the corporate bylaws, signing authorities, minute books, or any other corporate documents of either plaintiff and from breaching his fiduciary duties as a director and officer; and second, restraining the defendants and any employees of FTL from making purchases on the plaintiffs’ credit or otherwise using their funds, and from soliciting or otherwise contacting the plaintiffs’ customers and employees. The plaintiffs were directed to seek an extension of these injunctions by a specified date, failing which they would lapse. The successful party on this motion is March Elevator Limited and 1993211 Ontario Inc., who obtained extensive interim injunctive relief securing their business and governance position, although their request for a Mareva asset-freezing order was refused; at this stage, the court did not grant or quantify any damages, costs, or other monetary award, and the total amount ordered in their favour cannot presently be determined.