Executive Summary: Key Legal and Evidentiary Issues

• Two related oppression applications were brought by Kirk Guttin and his holding companies against Brian Creber and the respondent corporations, B-Con Engineering Inc. and BCE Realty Ltd., under s. 248 of the Ontario Business Corporations Act.
• Mr. Guttin's constructive dismissal claim was dismissed as statute-barred, as his last employment income was received in 2016 and his application was not commenced until December 2019, beyond the two-year limitation period.
• Dividends paid to shareholders from BCE Realty in 2018 and 2019 were found not to be oppressive, as B-Con was financially unable to issue dividends and the accountant recommended the payments be made through the related company.
• Denial of timely access to financial information — including bank statements, QuickBooks access codes, and corporate records — was found to constitute unfair disregard of Mr. Guttin's rights under s. 248 of the OBCA.
• Allegations of oppression relating to interest on shareholder loans, the delay in selling the Capella property, and the employment of Mr. Creber and his son were all dismissed.
• Appointment of a receiver-manager was refused as a disproportionate remedy; the court instead ordered the sale of the Capella property to proceed with proceeds distributed according to a specified priority scheme.

Facts of the case

This case concerns two related oppression applications arising from a prolonged business dispute between Kirk Guttin and Brian Creber, the principal shareholders of B-Con Engineering Inc. ("B-Con") and BCE Realty Ltd. ("BCE"). B-Con was originally founded by Mr. Creber as a sole proprietorship in 1988 and incorporated in 1997. At incorporation, Mr. Creber contributed assets valued at $405,748 while Mr. Guttin contributed $15,000. Mr. Guttin's holding company, 1259086 Ontario Inc., holds 22.8% of the voting shares in B-Con, while Mr. Creber's holding company, 1230320 Ontario Inc., holds 77.2%. In BCE, Mr. Guttin's holding company holds 41.2% and Mr. Creber's holding company holds 58.8% of the voting shares. BCE was incorporated in 2004 as a holding company and owner of the property located at 14 Capella Court, Ottawa (the "Capella property"), intended to serve as a retirement fund for the shareholders and as landlord to B-Con.

B-Con's principal business is the manufacturing of optics, and much of its growth from 2009 to 2016 was attributable to a substantial United States military contract secured in 2008. In 2016, B-Con lost that contract following changes in U.S. policy under the Buy American Act, 41 U.S.C. §§ 8301–8305 (2018), which requires U.S. federal agencies to give preference to domestic contracts. Financial difficulties followed. From 2007 to 2016, both shareholders were paid salaries structured to take advantage of the Scientific Research and Experimental Development ("SR&ED") tax credit program. After 2016, SR&ED credits were no longer available and salary payments ceased, with shareholders reverting to draws offset by year-end dividends. Tensions between the parties intensified during this period, and Mr. Guttin alleges he was progressively excluded from the financial management of the companies. He has not worked at B-Con since March 2020 and commenced employment at Nordion in January 2021. He was removed from the BCE board of directors on August 16, 2022, after refusing to sign a directors' resolution in connection with a Forbearance Agreement already executed by both shareholders.

In Court File No. CV-19-82291, Mr. Guttin commenced an oppression application in December 2019, alleging breach of fiduciary duty, oppression under s. 248 of the OBCA, and constructive dismissal in the amount of $167,455.67, representing dividends issued by BCE in 2018 and 2019 that he alleges were intended to compensate him for labour performed for B-Con. In Court File No. CV-23-91904, Mr. Guttin's holding companies brought a further oppression claim in April 2023 seeking, among other things, an independent review of corporate books and records and the appointment of a receiver to oversee the winding up of B-Con and BCE.

Shareholder agreement and contractual clauses at issue

The shareholders entered into a B-Con unanimous shareholder agreement dated December 31, 1997. Key provisions included Article 2.05, requiring shareholders to lend money to the corporation in proportion to their respective shareholdings if additional funds were needed; Article 2.06, stipulating that such loans would be repayable without interest; Article 2.07, providing that if a shareholder failed to advance required funds, the non-defaulting shareholder could advance the shortfall and charge interest at the prime rate plus 5% per annum; and Article 3.03, giving the remaining shareholders the right to purchase a departing shareholder's shares if either Mr. Creber or Mr. Guttin ceased to be an employee. No signed shareholder agreement for BCE Realty was produced in evidence. The corporate minute book for BCE noted that no such agreement existed, and Mr. Guttin's previous counsel had acknowledged that a shotgun notice could not be issued for the same reason. The court therefore declined to rely on the draft BCE shareholder agreement as a binding contract between the parties.

The lease dated June 4, 2004 required B-Con to pay rent to BCE for the Capella property, comprising annual base rent, municipal realty taxes, property improvements, utility expenses, and HVAC costs. BCE's sole source of income was the rent received from B-Con, making B-Con's financial health directly relevant to BCE's ability to service its obligations.

Court's reasoning and analysis

On constructive dismissal, the court found that Mr. Guttin failed to satisfy the two-part test in Potter v. New Brunswick Legal Aid Services Commission, 2015 SCC 10. No employment contract was produced, and the evidence established that Mr. Guttin's last salary — confirmed by a T4 slip — was received in 2016. The reversion to shareholder loans offset by dividends was a practice long established between the parties, predating the SR&ED compensation arrangement. The shift to dividends paid through BCE rather than B-Con was made on professional accounting advice, given B-Con's financial position, and the court found that a reasonable person in Mr. Guttin's circumstances would not have perceived this as a substantial change to an essential term of any employment contract. Further, the claim was in any event barred by the two-year limitation period under the Limitations Act, 2002, S.O. 2002, c. 24, as it was not commenced within two years of 2016, when Mr. Guttin was last employed.

On the oppression claims, the court applied the two-part test from BCE Inc. v. 1976 Debentureholders, 2008 SCC 69, asking first whether the applicants held a reasonable expectation and second whether that expectation was violated by conduct amounting to oppression, unfair prejudice, or unfair disregard under s. 248 of the OBCA. The payment of dividends from BCE in 2018 and 2019 was found not to be oppressive. Mr. Guttin's holding company received $80,000 in dividends in 2018 and $88,000 in 2019 from BCE. The court found it was not a reasonable expectation that dividends would continue to be issued exclusively from B-Con given the company's financial difficulties, and that even if such an expectation existed, the conduct did not rise to the level of oppression, unfair prejudice, or unfair disregard.

The court did find, however, that Mr. Creber unfairly disregarded Mr. Guttin's rights regarding timely disclosure of financial information. Until 2017, Mr. Guttin received the companies' unaudited financial statements annually and had access to bank statements. After the companies changed banks to RBC in 2014, Mr. Creber withheld the code generator necessary for real-time bank account access, changed QuickBooks passwords without providing them, and was inconsistent in allowing access to financial records. Mr. Guttin ultimately had to attend the bank in person and pay fees to obtain bank statements. On January 24, 2023, the court ordered that functional versions of QuickBooks be provided to Mr. Guttin. The court found this pattern of delayed and denied access to corporate financial information — including bank statements, QuickBooks, and passcodes — constituted conduct that unfairly disregarded Mr. Guttin's rights within the meaning of s. 248 of the OBCA.

On interest charged on shareholder loans, the court was not satisfied that Mr. Guttin had a reasonable expectation that no interest would be charged, noting that while Article 2.06 of the B-Con shareholder agreement prohibited interest on standard shareholder loans, Article 2.07 permitted interest at prime plus 5% in cases of default in lending. Moreover, Mr. Guttin's own holding company received $36,021.20 in interest payments in 2015 representing the years 2006 to 2015, and did not object at the time. The court found the 7% interest rate was not shown to be commercially unreasonable. On the delay in selling the Capella property, the court accepted that the sale did not proceed in 2022 because Mr. Guttin would not provide the litigation release demanded by Mr. Creber as a condition of the sale at $3.5 million, and not because Mr. Creber acted oppressively. Mr. Creber's subsequent decisions — including arranging for his holding company 204 to assume the RBC debt at 11% interest in October 2022, and obtaining the Lafrance loan of $465,000 at 12.99% in August 2025 to pay outstanding municipal tax arrears of $465,193.79 — were found to be proper exercises of business judgment in circumstances where Mr. Guttin took no steps himself to address the mounting debt. On the employment of Mr. Creber and his son Bobby Creber, the court found no oppression. Mr. Creber entered into employment with B-Con in July 2020 at a rate of $51.68 per hour, formalizing professional engineering services and enabling the company to access SR&ED tax credits. Bobby Creber had been employed by B-Con from 2008 onward, including throughout the years when Mr. Guttin was present, and no issue was raised about his employment until the litigation.

On the issue of appointing a receiver-manager, the court declined to do so. The court noted that B-Con had pivoted into nuclear waste management, secured lucrative contracts, employed seven staff with four more being hired, and had projected pre-tax profits of $340,000 for the 2025 fiscal year. A receiver-manager was found to be a disproportionate and draconian remedy where the property was already being sold, the core dispute concerned the allocation of sale proceeds, and there was no evidence of asset dissipation or insolvency. Additional practical obstacles existed: B-Con is registered with Professional Engineers of Ontario and holds a Certificate of Authorization, and any replacement manager would need to be a licensed professional engineer. The court further noted that a receiver-manager would need to be certified under the Canadian Controlled Goods Program, and that failure to obtain such certification would put B-Con in non-compliance with s. 37(2) of the Defence Production Act, R.S.C., 1985, c. D-1.

Ruling and overall outcome

Justice Doyle dismissed the constructive dismissal claim and the majority of the oppression allegations, finding only that Mr. Creber unfairly disregarded Mr. Guttin's rights by restricting his timely access to the companies' financial information. The court declined to appoint a receiver-manager and instead fashioned a targeted remedy. The sale of 14 Capella Court was ordered to proceed, with proceeds distributed in the following priority: real estate commissions, fees, and closing costs; payment of the first mortgage; payment of the 204 mortgage and the Lafrance loan; with the balance to be held in trust by the real estate lawyer pending an accounting and determination of each shareholder's entitlement based on their shareholdings. Mr. Guttin was also granted entitlement to all information relevant to the sale and permitted to utilize the buy-sell provisions in the respondent companies. If the parties cannot agree on the value of shares in B-Con or BCE, the matter is to be referred to independent accountants and, failing agreement, to an Associate Justice for a reference. No specific monetary award or damages figure was ordered at this stage; the costs issue was reserved, with submissions due from the applicants by June 30, 2026, the respondents by July 17, 2026, and a reply from the applicants by August 14, 2026. The result represents divided success: the respondents, Brian Creber and the respondent corporations, were substantially successful, though the court found one instance of unfair disregard in Mr. Guttin's favour.