Court Rules in Favour of Applicants in Family Business Dispute

On January 21, 2025, the Honourable Justice Kimmel of the Superior Court of Justice released her reasons in Dhaliwal v. Cheema, 2025 ONSC 382, in which Aird & Berlis’ clients prevailed in a complex dispute over the rightful ownership of a successful trucking and logistics business, World Wide Carriers Ltd. (“WWC”).

Family members Harchand Dhaliwal, Paramjit Cheema, Swaranjit Jhajj (the “Applicants”) and Sukhdev Dhaliwal (the “Respondent”) had collectively managed WWC for 18 years until the summer of 2023, when the Respondent suddenly claimed to be WWC’s sole shareholder, seeking to capitalize on the fact WWC’s corporate records reflected him to be the sole registered shareholder. The Respondent purported to remove the Applicants from WWC’s Board, and over the ensuing months, shut the Applicants out of the business completely.

The Applicants argued that WWC’s corporate records did not accurately reflect WWC’s shareholdings because there was an oral agreement between them and the Respondent that they were equal shareholders of WWC. This required the Applicants to rebut the common law and statutory presumption that entries in corporate records are presumptive proof of share ownership by providing compelling evidence to the contrary.

In considering the Applicants’ evidence, the Court remarked that there is little law on this issue. Ultimately, Justice Kimmel found in favour of the Applicants, noting that the evidence that they put forward, including evidence with respect to the manner in which WWC had historically operated, references in company documents and financial statements to the corporation having multiple shareholders, and the fact it was a closely held business, supported the Applicants’ assertion that they were equal beneficial shareholders with the Respondent.

This significant decision provides important guidance on how to rebut the presumption afforded to corporate records in the context of shareholder disputes.

The Aird & Berlis team representing the Applicants was comprised of Max Muñoz, Sanj Sood, and Josh Suttner, with assistance from Aaron Bains, Patrick Copeland, Bardia Jalayer, Kristen Shorer and Roula Khairalla*.

* Roula is currently working as a judicial law clerk at the Federal Court. Her work on this matter was completed during her articling term at Aird & Berlis