Executive Summary: Key Legal and Evidentiary Issues

• The appellant challenged his removal as director and CEO of a private corporation under the oppression remedy provision of the OBCA.

• The court found that the application judge had properly concluded the appellant engaged in oppressive conduct, including unauthorized governance actions and disruptive behaviour.

• Arguments raised for the first time on appeal, including complainant standing and clean hands doctrine, were rejected as procedurally improper or meritless.

• The court upheld that removal of a director is a discretionary and extraordinary remedy, but justified when dysfunction and harm to the corporation are evident.

• The application judge gave appropriate weight to shareholder expectations and corporate fairness in determining oppression.

• The appeal was dismissed and costs of $10,000 were awarded against the appellant.

Background and corporate conflict
Douglas Evashkow appealed his removal as director and Chief Executive Officer of blueRover Inc., a privately held technology company, under an order made by a judge pursuant to section 248 of the Ontario Business Corporations Act (OBCA). The order followed a lengthy corporate dispute involving two shareholder factions—referred to as the Saccucci Parties and the Smith Parties. Although Mr. Evashkow was not a shareholder himself, he had been nominated to the board by Korona Group Limited, one of the Saccucci Parties, and was aligned with their interests.

Trial decision and findings of oppression
In the original proceeding, Justice Osborne had resolved multiple competing oppression claims and ultimately found that Mr. Evashkow’s conduct as director and CEO had caused or contributed to significant dysfunction within the company. Examples included attempting to terminate fellow officers without authority, issuing confrontational communications, improperly asserting power before formally being appointed, and resisting cooperation with a court-appointed Monitor. These actions were found to violate the reasonable expectations of other board members and stakeholders. Justice Osborne removed Mr. Evashkow from his roles but permitted Korona to nominate his replacement, maintaining balance on the board.

Issues raised on appeal
Mr. Evashkow appealed solely his removal, arguing that the application judge erred by:

1. Misclassifying the respondents as eligible “complainants” under the OBCA.

2. Making unsupported or incorrect findings regarding oppressive conduct.

3. Misjudging the respondents’ reasonable expectations under corporate governance norms.

4. Overlooking the equitable doctrine of clean hands, given alleged misconduct by the respondents.

5. Improperly resorting to the extraordinary remedy of director removal.

Court’s analysis and findings
The Divisional Court rejected all grounds of appeal. The judges found that the respondents were properly recognized as complainants under the broad discretionary definition in the OBCA. The alleged oppressive actions were well-documented in the record and supported the lower court’s findings. The court emphasized that assessing reasonable expectations and whether they were violated is a fact-specific inquiry in oppression cases, and that Mr. Evashkow’s conduct clearly undermined the interests of other board members.

As to the clean hands argument, the court found this had not been raised at trial and, even if considered, was without merit since the application judge had acknowledged and addressed the conduct in question. On the issue of removing a director, the court affirmed that such a remedy, though exceptional, is available under section 248(3)(c) of the OBCA and may be warranted where a director's presence contributes to dysfunction. The judge had correctly exercised discretion, balancing corporate realities and allowing the nominating shareholder to retain representation.

Final outcome
The Divisional Court dismissed the appeal and upheld the removal order, finding no legal error or unjust result. The judges concluded that the application judge acted within his discretion, responded proportionally to the circumstances, and based his decision on sound principles of corporate law and stakeholder fairness. Costs of $10,000 were awarded against Mr. Evashkow, marking the end of the dispute at the appellate level.