IN THE SUPREME COURT OF BRITISH COLUMBIA  
Citation:  
Multiguide GmbH v. Broer,  
2022 BCSC 852  
Date: 20220519  
Docket: S1510213  
Registry: Vancouver  
Between:  
And  
Multiguide GmbH  
Plaintiff  
Rudolf Broer, March Rummeny, Multiguide Technologies Inc.,  
RTB Safe Traffic, Inc.  
Defendants  
Corrected Judgment: The text of the judgment was corrected at  
paragraph 45 on May 25, 2022.  
Before: The Honourable Justice Blake  
Reasons for Judgment  
Counsel for the Plaintiff:  
M.J. Dew  
Counsel for the Defendants,  
A. Crabtree  
Rudolf Broer and Marc Rummeny:  
Counsel for the Defendants, Multiguide  
J.M.S. Woolley  
Technologies Inc. and RTB Safe Traffic, Inc.  
Place and Date of Trial:  
Vancouver, B.C.  
September 20 to 23, 27 to 29,  
October 1, 4, 6 to 8, 2021  
Written submissions of plaintiff:  
November 12, 2021  
November 26, 2021  
Written submissions of defendants, Multiguide  
Technologies Inc. and RTB Safe Traffic Inc.:  
Written submissions of defendants,  
Rudolf Broer and Marc Rummeny:  
November 26, 2021  
Place and Date of Judgment:  
Vancouver, B.C.  
May 19, 2022  
Multiguide GmbH v. Broer  
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Table of Contents  
I. INTRODUCTION................................................................................................. 4  
II. BACKGROUND .................................................................................................. 5  
A. RTB Germany and RTB Technik..................................................................... 6  
B. Formation of Multiguide GmbH ....................................................................... 6  
C. Siemens Sale of PDM Business to RTB Germany.......................................... 7  
D. Problems with Parktoria and Formation of MTI ............................................... 7  
E. Disputes between Mr. Kraus and Mr. Broer .................................................... 9  
F. The April 22, 2015 MTI Shareholder Meeting................................................ 10  
G. The Settlement Agreement ........................................................................... 10  
H. Purchase of Mr. Ziola’s Shares in MTI .......................................................... 12  
III. LITIGATION BACKGROUND........................................................................... 13  
A. The German Litigation................................................................................... 13  
B. The Initial Canadian Litigation....................................................................... 13  
C. Further Canadian Litigation........................................................................... 14  
IV. ISSUES ............................................................................................................. 15  
V. LEGAL ANALYSIS ........................................................................................... 16  
A. Credibility and Reliability ............................................................................... 16  
B. The Alleged Shareholder Loan...................................................................... 18  
C. Disputed Invoices.......................................................................................... 26  
D. The Management Services Agreement......................................................... 30  
a) Incorporation of RTB Canada ................................................................ 35  
b) MTI as at February 2016........................................................................ 35  
c) Management Services Agreement......................................................... 35  
d) MTI AGM December 29, 2016 ............................................................... 41  
e) May 2018 Order..................................................................................... 43  
f) Lack of Timely Disclosure of the Management Services Agreement ..... 44  
E. Special Resolution ........................................................................................ 46  
a) MTI Special Meeting February 12, 2019 ................................................ 46  
b) Multiguide’s Dissent with Respect to the Special Resolution ................. 46  
c) Analysis.................................................................................................. 48  
F. Oppression.................................................................................................... 50  
1. Reasonable Expectations.......................................................................... 55  
Multiguide GmbH v. Broer  
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2. Oppression or Unfair Prejudice.................................................................. 58  
3. Analysis ..................................................................................................... 64  
G. Breach of Fiduciary Duty............................................................................... 66  
VI. REMEDY ........................................................................................................... 68  
Multiguide GmbH v. Broer  
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I.  
INTRODUCTION  
In the fall of 2011 Rudolf Broer (“Mr. Broer”) and Roland Kraus (“Mr. Kraus”)  
[1]  
embarked on a promising business relationship. However, by April 2015 that  
promising relationship had soured and irreconcilable differences had arisen. While  
they managed to separate their German business interests by May 2015, for  
reasons which are set out in detail below, they were not able to separate their  
Canadian business interests at that time. The parties have engaged in acrimonious  
litigation in both Germany and Canada.  
[2]  
As a result of their May 2015 agreement regarding the German businesses,  
Mr. Kraus became the sole shareholder of MultiguideGmbH (“Multiguide”). While he  
resigned as a director and officer of Multiguide Technologies Inc. (“MTI”) in August  
2015, Multiguide remained a 1/3 shareholder of MTI. At that time, Mr. Ziola (through  
his numbered company) and Mr. Broer’s limited partnership of RTB GmbH & Co. KG  
(“RTB Germany”) were the other shareholders. However, Mr. Broer obtained a  
majority shareholder position in MTI by October 2015, by arranging for another one  
of his Germany companies, RTB Technik (defined below) to purchase Mr. Ziola’s  
shares. He then appointed Marc Rummeny (“Mr. Rummeny”) (an employee of RTB  
Germany), as a director of MTI in October 2015. Mr. Broer then orchestrated the  
effective stripping of all of MTI’s assets, contracts and employees to a new company  
he incorporated for that purpose (of which RTB Germany was the sole shareholder,  
see description of legal ownership in para.[6]), in return for an annual commission  
equal to 5% of the total sales generated by the new company (for a period of five  
years following the date on which this new company first generated net profits equal  
to 5% or more of its sales). This denuding of MTI was done effectively as of January  
12, 2016, but the evidence establishes that the actual written contract (called the  
Master Services Agreement or the “MSA”) was not created until February 2018 and  
not executed until sometime later in 2018. The transfer was done in secrecy, and  
Mr. Kraus was not aware of the existence of the MSA, nor of the actions taken by  
Mr. Broer, until some years later.  
 
Multiguide GmbH v. Broer  
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[3] Many of the events underlying this proceeding are not in dispute; rather, it is  
their legal interpretation that lies at the heart of this litigation. The plaintiff’s position  
is that Mr. Broer’s decision to enter into the MSA was oppressive, unfairly prejudicial  
and in breach of the directors’ (and Mr. Broer’s) fiduciary duties to both MTI and  
Multiguide. The plaintiff seeks repayment of unpaid debts and an alleged  
shareholder loan, an order for the purchase of the plaintiff’s shares in MTI, and  
punitive damages. The defendants’ position is that Mr. Broer’s decision was  
eminently reasonable in the circumstances, given the financial difficulties facing MTI  
at the time, and the lack of any realistic possibility that MTI could continue as a  
business. They say the plaintiff’s claim should be dismissed, although they agree  
that Multiguide’s shares in MTI should be purchased to effectively end the parties’  
business relationship.  
II.  
BACKGROUND  
[4]  
This corporate dispute arises out of the business of installing and servicing  
pay and display parking meters, which I shall refer to as PDMs. PDMs are installed  
in parking lots, and drivers who arrive at the lot purchase parking time at the PDM  
(paying by coin or credit card) and obtain a receipt stating the parking time that has  
been purchased which is then placed on the driver’s vehicle dashboard. This  
displayed receipt may then be checked by parking lot attendants patrolling the lot.  
There is a hotline phone number on the PDMs for users to call for support if they are  
having trouble using the PDM, which is operated on a 24 hour a day, 7 day a week  
basis.  
[5]  
PDMs typically have a 10 year lifespan. Once installed, they must be  
maintained on a regular basis. In addition, as payment is possible by credit card,  
credit card clearing services must be provided for each PDM. Credit card clearing  
services ensure that when someone pays, the payment information is securely  
collected and correctly allocated to the right financial account. The credit card  
clearing process occurs instantly as the driver pays for parking and occurs by way of  
wireless technology.  
 
Multiguide GmbH v. Broer  
A. RTB Germany and RTB Technik  
Mr. Broer is the sole limited partner of RTB Germany, which was registered  
Page 6  
[6]  
as a limited partnership pursuant to German law in 1996, to carry on the business of  
developing, producing and distributing traffic light equipment, traffic control radar  
systems as well as parking and parking guidance systems. Their core business was  
traffic management. In the same year RTB Rehabilitations Technik Broer  
Beteiligungs GmbH (“RTB Technick”) was also incorporated pursuant to the laws of  
Germany. RTB Technik is the corporate general partner of RTB Germany, and  
Mr. Broer is the sole shareholder of RTB Technik.  
[7]  
In 2004, RTB Germany entered into a contract with Siemens AG (“Siemens”),  
the largest industrial equipment manufacturing company in Europe, to develop,  
manufacture and supply single space detection parking sensors (SSDs) for use in  
Siemens’ parking business.  
[8]  
Mr. Kraus was an employee of Siemens from 2007 through to the end of  
2011. He met Mr. Broer in approximately late 2010 for the first time.  
B.  
Formation of Multiguide GmbH  
[9]  
Mr. Kraus, in his capacity as the head of the Siemens parking division,  
learned Siemens’ intended to sell its SSD technology and related business, which  
was designed to assist drivers in locating vacant parking spaces. He approached  
Mr. Broer and suggested a potential partnership between himself and Mr. Broer to  
purchase the SSD technology and the related business. They decided to purchase  
the SSD technology and formed Multiguide (a German company) on September 29,  
2011, to acquire the SSD technology and the related business from Siemens. The  
initial shareholders of Multiguide were RTB Germany (owning 25% of the issued  
shares) and Mr. Kraus (owning 75% of the issued shares). Multiguide completed the  
purchase of the SSD business from Siemens effective January 1, 2012 and  
Mr. Kraus resigned from his employment at Siemens the day before.  
     
Multiguide GmbH v. Broer  
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[10] The parties agreed Multiguide was to be responsible for the sales and  
distribution of the SSD sensors, and RTB Germany was to be responsible for  
manufacturing the SSD sensors. Mr. Kraus’ uncontroverted evidence was that he  
was not paid a salary for the first 15 months of his employment at Multiguide.  
C.  
Siemens Sale of PDM Business to RTB Germany  
[11] In 2012, Siemens gave notice it intended to divest its business of selling and  
servicing automated PDMs (which were at that time located in Europe and North  
America).  
[12] Mr. Kraus and Mr. Broer discussed the potential acquisition of this PDM  
business. They began to negotiate a potential sale with Siemens in 2013, and  
agreed that RTB Germany was the appropriate entity to acquire the business from  
Siemens, and that RTB Germany would manufacture the PDMs and Multiguide  
would distribute them. RTB Germany successfully acquired the PDM business from  
Siemens effective as of November 25, 2013. The ultimate agreement was Siemens  
paid RTB Germany €500,000 for purchasing the business, and RTB Germany  
assumed Siemens’ service and warranty obligations for all Siemens PDMs for a  
period of 10 years (until November 2023).  
[13] In early 2014 RTB Germany began manufacturing the PDMs (and necessary  
related equipment to be supplied to Multiguide), who then arranged for the  
distribution. Initially, the distribution and servicing of the PDMs in North America was  
handled by a Canadian partner, APARC Systems Ltd. (“APARC”), which was later  
taken over by a private equity firm who renamed the company Parktoria  
Technologies Ltd. (“Parktoria”).  
D.  
Problems with Parktoria and Formation of MTI  
[14] Mr. Kraus realized in 2014 that Parktoria was promoting the products of a  
competitor. While he had some discussion with the CEO of Parktoria to attempt to  
rectify this situation, he then learned that Parktoria had collaborated with a  
competitor to reverse engineer the PDM and swap out the RTB Germany parts for  
     
Multiguide GmbH v. Broer  
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the competitors’ parts. Mr. Kraus and Mr. Broer discussed this issue and ultimately  
decided to form a British Columbia company to be responsible for the sales, service  
and maintenance of the PDMs.  
[15] As a result, the defendant MTI was incorporated as a British Columbia  
company on November 14, 2014 to carry on the PDM business in North America.  
The initial shareholders of MTI were Multiguide (33.3%), RTB Germany (33.3%), and  
a numbered company (the sole shareholder of which was a man by the name of  
Robert Ziola (“Mr. Ziola”) (33.3%)). The initial directors were Mr. Broer, Mr. Kraus  
and Mr. Ziola. Mr. Kraus was the president and CEO of MTI. The evidence is that  
Mr. Kraus was never paid a salary for his work done for MTI, nor did MTI ever pay  
for his travel expenses for his trips from Germany to Canada. Rather, Multiguide  
incurred significant expenses in setting up MTI, including paying for many of  
Mr. Kraus’ out of pocket expenses in his work done to set up MTI. In Mr. Kraus’  
words “both Multiguide and RTB Germany were providing extra support to MTI  
without reimbursement or compensation”. Mr. Ziola was the former founder and  
CEO of APARC, and provided Mr. Broer and Mr. Kraus with his expertise in the  
North America PDM market.  
[16] When MTI was incorporated the parties agreed that each of the three  
shareholders would have the same number of shares, and that RTB Germany and  
Multiguide would each contribute €100,000 to MTI. Mr. Ziola would not contribute  
any funds but he would contribute office space and administration services (such as  
phones, accounting and invoicing servicing, payment assistance, etc). At this time I  
will not say anything further about the €100,000 contributions from RTB Germany  
and Multiguide, as the nature of those contributions - whether an equity contribution  
or a shareholder loan - is one of the central issues between the parties and is dealt  
with below.  
[17] At the time MTI was incorporated there were approximately 950 PDMs in  
Canada and the United States that required maintenance, spare parts and credit  
card clearing services (as RTB Germany had agreed to do until November 2023).  
Multiguide GmbH v. Broer  
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[18] There was significant work necessary to establish MTI, including setting up  
the necessary infrastructure in British Columbia (such as hiring employees,  
establishing office systems, and drafting service agreements) and dealing with both  
existing and prospective clients.  
[19] After MTI was incorporated in November 2014 the parties established a  
distribution channel whereby RTB Germany manufactured the parking meters, and  
invoiced Multiguide (who provided sales, tender and project management), who in  
turn invoiced MTI (who provided local sales, installation, service and spare parts in  
North America, with offices in Vancouver and Ontario). MTI in turn invoiced the  
clients for the PDMs and the services provided. RTB Germany did a direct delivery  
to MTI, and all logistics and export documentation was done by RTB Germany. The  
long standing payment agreement (which had existed since the foundation of  
Multiguide) was that Multiguide would only pay the outstanding RTB Germany  
invoices once Multiguide’s invoices were paid (whether such payment was directly  
from the client or through MTI). This was so for both product lines - both the PDMs  
and the SSDs.  
[20] Both Mr. Kraus and Mr. Broer testified as to their frustration with Mr. Ziola’s  
contributions to MTI. They both agreed they were disappointed that in their  
respective opinions Mr. Ziola had not provided the necessary office space, furniture,  
and administrative services that he had promised MTI.  
E.  
Disputes between Mr. Kraus and Mr. Broer  
[21] Mr. Kraus and Mr. Broer historically had a good relationship, described by  
Mr. Kraus as “a very good team approach”. Mr. Kraus described Mr. Broer as being  
very interested in business strategies, but not necessarily interested in the small  
organizational details. Mr. Broer did not disagree with this characterization of their  
relationship. However, in early 2015 disputes arose between Mr. Kraus and  
Mr. Broer.  
[22] Mr. Kraus testified the friction arose in March and April 2015. His perspective  
was that Mr. Broer had underestimated the complexity of the parking business and  
 
Multiguide GmbH v. Broer  
Page 10  
was unhappy with the sales of the PDMs. Mr. Broer testified that he was unhappy  
with Mr. Kraus’ business priorities and with his lack of PDM sales.  
[23] In the middle of March 2015 Mr. Broer asked Mr. Kraus for Multiguide to  
make payment for all amounts due and owing to RTB Germany; in other words, to  
fundamentally alter their long-standing financial arrangement. This was a significant  
problem from Mr. Kraus’ perspective for two reasons: Multiguide did not have the  
money for these outstanding invoices as their clients had not yet paid; and in  
Germany, if a company cannot make payments as required then the CEO is obliged  
to go to Court, declare they cannot pay the invoices, and then the company (being  
Multiguide) is likely to go into bankruptcy. If a CEO fails to go to Court, then they  
may be personally responsible for all of the corporate debts. At the same time  
Mr. Broer advised Mr. Kraus that RTB Germany would stop providing goods to  
Multiguide, which posed another large problem for their existing contracts.  
[24] At this point, the relationship between the two quickly broke down, and  
effective communication ceased.  
F.  
The April 22, 2015 MTI Shareholder Meeting  
[25] An annual general meeting for MTI was held in Vancouver, attended by  
Mr. Kraus, Mr. Ziola and Mr. Rummeny (who attended on Mr. Broer’s behalf upon  
his request), which is discussed in greater detail below, in paras. [56] - [63].  
G.  
The Settlement Agreement  
[26] Mr. Kraus called an extraordinary meeting for Multiguide and the Multiguide  
shareholders met in Munich and came to an agreement on terms to resolve the  
dispute between them by way of a settlement agreement dated May 3, 2015 (the  
“Settlement Agreement”). The relevant portions of that Settlement Agreement for the  
purpose of this litigation are as follows:  
Resolutions in regards to Pay & Display Machines (in the following  
named “PDM”)  
4. By the end of day July 31st 2015, Multiguide shall resign from the PDM  
business (incl. spare parts, hosting, PCI; in Germany and in the world).  
   
Multiguide GmbH v. Broer  
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Existing delivery contracts shall be taken over by RTB at this time. Until July  
31st 2015, invoicing (for PDM) shall continue to be done in the name of  
Multiguide. Multiguide shall make payment of RTB invoices when Multiguide  
will receive payment from its clients. As of August 1st 2015 invoicing (for  
PDM) shall be solely done in the name of RTB. Multiguide’s PDM employees  
shall continue to work on their PDM tasks according to RTB guidance under  
their retirement on July 31st 2015.  
5. A communication to clients shall be defined in a way to not endanger  
outstanding payments to Multiguide.  
6. The suspension of deliveries of RTB [RTB Germany] shall be cancelled as  
soon as Multiguide has registered a new shareholder list according to  
paragraph 9.  
…
8. In case of a shortfall in payments in Canada (Parktoria Technologies Ltd.  
and Multiguide Technologies Inc.), the losses shall be shared between RTB  
and Multiguide.  
9. RTB’s shares in Multiguide shall be acquired by Multiguide pursuant to §  
15 Paragraph 1 of the shareholder and according to RTB’s letter dated April  
20th, 2015. Still it shall remain in force that receives of RTB against  
Multiguide, which result from the execution of the PDM business until July  
31st 2015 (see paragraph 4) shall be paid when Multiguide receives payments  
from its clients.  
…
Resolutions in regards to Multiguide Technologies Inc.  
16. A provision for MTI shall be made at a shareholders’ meeting of MTI.  
[27] In broad strokes the intent of the Settlement Agreement was to clearly  
separate the business of Multiguide from the business of RTB Germany. RTB  
Germany would be solely responsible for the PDM business, and Multiguide would  
be solely responsible for the SSD business. Counsel for Multiguide colloquially  
characterized it as a “divorce” of the German businesses.  
[28] However, the Settlement Agreement specifically did not deal with MTI.  
Mr. Kraus’ evidence on that point was that as Mr. Ziola was not present at the  
Munich meeting, and his numbered company was a 33.3% shareholder of MTI, they  
could not resolve matters until they could discuss it with him. The Settlement  
Agreement did provide that “a provision for MTI shall be made at a shareholders’  
meeting of MTI”.  
Multiguide GmbH v. Broer  
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[29] Pursuant to the terms of the Settlement Agreement, Mr. Kraus became the  
sole shareholder in Multiguide on May 4, 2015. Mr. Kraus then resigned as a  
director, president and CEO of MTI as of August 2, 2015. His explanation was that  
as RTB Germany was going to assume the PDM business, and as he no longer had  
a good relationship with Mr. Broer, he did not see it to be in the best interests of MTI  
that he continue to attempt to be the bridge between MTI and RTB Germany and he  
thought it best someone else assume that job. Mr. Rummeny assumed the role of  
president of MTI, and was appointed a director of MTI shortly thereafter.  
H.  
Purchase of Mr. Ziola’s Shares in MTI  
[30] In 2015 MTI made several efforts to obtain a capital contribution from  
Mr. Ziola. These efforts were unsuccessful. Ultimately on October 9, 2015 RTB  
Technik acquired Mr. Ziola’s shareholdings (owned by his holding company) in MTI  
for $20,000. Mr. Kraus testified he was not involved with the discussions that led to  
this ultimate purchase, just that he knows it took longer than expected. Mr. Broer, on  
the other hand, gave evidence that Mr. Kraus negotiated the purchase price of those  
shares. Mr. Ziola did not give any evidence on how the purchase price for his 33.3%  
shareholding in MTI was arrived at; rather, he testified that he sold the shares “to  
avoid getting caught in the middle of a large potential battle”.  
[31] After the purchase of Mr. Ziola’s shares, RTB Germany and RTB Technik (for  
each of which Mr. Broer was the sole shareholder) owned 2/3 of the shares of MTI.  
Since October 26, 2015 the directors of MTI have been Mr. Broer and  
Mr. Rummeny.  
[32] It is the actions taken by Mr. Broer and Mr. Rummeny in their capacity as  
directors of MTI, after the purchase of Mr. Ziola’s shares, and without consultation or  
notice to Multiguide, which give rise to this litigation. Fundamentally, it is their  
decision to transfer all of the assets of MTI to a new company effectively controlled  
by Mr. Broer, in return for an annual commission equal to 5% of the total sales  
generated by the new company for a period of five years (following the date on  
     
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which this new company first generated net profits equal to 5% or more of its sales)  
which is at the heart of the dispute between the parties.  
III.  
LITIGATION BACKGROUND  
[33] It is necessary to briefly set out the plethora of litigation which has resulted  
from the business dealings of the parties.  
A.  
The German Litigation  
[34] RTB Germany commenced litigation against Multiguide in Germany on  
November 30, 2015. The scope of the German litigation was not dealt with in detail  
at trial. However, the parties agreed that the judgment pronounced on April 26, 2018  
in the German litigation provides:  
a) RTB Germany must pay Multiguide 50% of the losses (if any) that  
Multiguide suffers due to non-payment by MTI of the Disputed Invoices;  
b) Multiguide is liable to pay €62,099.46 to RTB Germany (this amount  
largely unrelated to the Disputed Invoices); and  
c) Multiguide is not required to pay the €62,099.46 to RTB Germany until the  
amount of losses Multiguide suffers due to nonpayment by MTI of the  
Disputed Invoices is determined.  
(the “German Judgment”)  
[35] The parties also agreed the German Judgment did not deal with the alleged  
shareholder loan of €100,000 paid by Multiguide to MTI.  
B.  
The Initial Canadian Litigation  
[36] On August 26, 2015 and November 2, 2015 Multiguide sent letters to MTI  
demanding payment on unpaid invoices due and owing to Multiguide in the amount  
of €172, 778.10 (referred to as the “Disputed Invoices” in the further amended notice  
of civil claim).  
         
Multiguide GmbH v. Broer  
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[37] On December 8, 2015 Multiguide sent out a formal demand for repayment of  
its claimed shareholder loan in the amount of €100,000. On December 9, 2015  
Multiguide filed a notice of civil claim in Action No. S1510213, naming MTI as the  
defendant, seeking repayment of the claimed €100,000 shareholder loan and  
payment of the Disputed Invoices. MTI defended this claim on the basis that the  
initial funds advanced were an equity contribution and not a shareholder loan, and  
that the goods supplied by Multiguide which were the basis of the Disputed Invoices  
were defective.  
C.  
Further Canadian Litigation  
[38] On March 29, 2018 Multiguide filed petition No. S184908 claiming MTI had  
acted in an oppressive manner. On May 29, 2018, Justice Steeves determined that  
oppression had occurred by MTI failing to produce audited financial statements and  
failing to hold annual general meetings, and made orders that audited financial  
statements for 2015 – 2017 be produced, and that an AGM be held.  
[39] Multiguide then filed petition No. S1812245 against MTI, Mr. Broer and  
Mr. Rummeny on November 14, 2018, seeking declarations that MTI had, without  
complying with s. 301 of the Business Corporations Act, S.B.C. 2002, c. 57 [BCA],  
disposed of all or substantially all of its undertakings other than in the ordinary  
course of business, and sought permission to proceed with a derivative action. This  
petition was converted into an action pursuant to a consent order entered on July 12,  
2019.  
[40] Action No. S1510213 was consolidated with Action No. S1812245 by way of  
order of Justice Ross entered January 20, 2020, to continue under action number  
S1510213. The notice of civil claim was later amended to add claims for oppression  
and conspiracy, and to drop the claim for permission to proceed with a derivative  
action. The plaintiff sought and was granted leave during trial to further amend the  
notice of civil claim to add an additional claim that the personal defendants had  
induced MTI to breach its contract with the plaintiff. The defendants accordingly filed  
amended responses to civil claim by the close of trial.  
   
Multiguide GmbH v. Broer  
IV. ISSUES  
Page 15  
[41] The issues in this proceeding are complex and intertwined. The following is a  
summary of the legal issues I will address:  
a) Was the €100,000 contribution from Multiguide to MTI on account of  
equity or a shareholder loan?  
b) Are the Disputed Invoices due and owing to Multiguide?  
c) What was the legal effect of the 2019 special resolution ratifying the  
transfer of the business of MTI to RTB Canada, and what are the legal  
consequences of Multiguide dissenting from that special resolution?  
d) Were the actions of the directors of MTI in entering into the MSA  
oppressive to Multiguide?  
e) Did the directors breach their fiduciary duty to MTI in entering into the  
MSA?  
f) Did Mr. Broer (in his capacity as a director of MTI), breach a fiduciary duty  
to Multiguide (in its capacity as a shareholder of MTI) in entering into the  
MSA?  
g) If any of the alleged causes of actions are proven, is there a basis for  
either the corporate and/or the personal defendants to be personally liable  
to Multiguide for either the Disputed Invoices or the €100,000 contribution  
from Multiguide to MTI?  
h) Is it appropriate to order that Multiguide’s shares in MTI be repurchased,  
and if so, on what terms?  
i) Was the conduct of the defendants such that it merits an award of punitive  
damages against all, or some, of the defendants?  
 
Multiguide GmbH v. Broer  
Page 16  
The plaintiff also advanced additional arguments that either or both of Mr. Broer and  
Mr. Rummeny induced MTI to breach its contract with Multiguide, and that there  
were a number of conspiracies amongst the defendants not to pay the Disputed  
Invoices and to transfer the business of MTI to RTB Canada. Notwithstanding that  
extensive arguments were made on these two additional positions, I find this is a  
case that clearly turns on the alleged oppressive and unfairly prejudicial conduct of  
the defendants and their alleged breach of fiduciary duty. Given my findings (as set  
out below) that oppression and breaches of fiduciary duty occurred, it is not  
necessary to address these additional claims advanced by the plaintiff.  
V.  
LEGAL ANALYSIS  
A. Credibility and Reliability  
[42] The factors to be considered when assessing credibility were summarized by  
Justice Dillon in Bradshaw v. Stenner, 2010 BCSC 1398 at para. 186, aff’d 2012  
BCCA 296, as follows:  
[186] Credibility involves an assessment of the trustworthiness of a witness’  
testimony based upon the veracity or sincerity of a witness and the accuracy  
of the evidence that the witness provides (Raymond v. Bosanquet (Township)  
(1919), 59 S.C.R. 452, 50 D.L.R. 560 (S.C.C.)). The art of assessment  
involves examination of various factors such as the ability and opportunity to  
observe events, the firmness of his memory, the ability to resist the influence  
of interest to modify his recollection, whether the witness’ evidence  
harmonizes with independent evidence that has been accepted, whether the  
witness changes his testimony during direct and cross-examination, whether  
the witness’ testimony seems unreasonable, impossible, or unlikely, whether  
a witness has a motive to lie, and the demeanour of a witness generally  
(Wallace v. Davis, [1926] 31 O.W.N. 202 (Ont. H.C.); Faryna v. Chorny,  
[1952] 2 D.L.R. 152 (B.C.C.A.) [Faryna]; R. v. S.(R.D.), [1997] 3 S.C.R. 484  
at para.128 (S.C.C.)). Ultimately, the validity of the evidence depends on  
whether the evidence is consistent with the probabilities affecting the case as  
a whole and shown to be in existence at the time (Faryna at para. 356).  
[43] Credibility and reliability are separate concepts. Credibility relates to honesty  
whereas reliability relates to accuracy. The starting point in a credibility assessment  
is to presume truthfulness; however, truthfulness and reliability are not necessarily  
the same: Hardychuk v. Johnstone, 2012 BCSC 1359 at para. 10. When a witness’  
evidence is clearly inaccurate “the challenge from an assessment perspective is to  
   
Multiguide GmbH v. Broer  
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identify the likely reason for the inaccuracy in a cautious, balanced and contextually  
sensitive way” (Hardychuk, at para. 10).  
[44] Messrs. Kraus, Broer and Rummeny all testified remotely from Germany, and  
both Mr. Broer and Mr. Rummeny testified through a German translator.  
[45] There was no argument that Mr. Kraus was neither credible, nor reliable, and  
I had no such concerns. Neither was there any argument that Mr. Rummeny was  
neither credible, nor reliable, and I likewise had no such concerns. However,  
Mr. Broer’s evidence raises concerns about both his credibility and reliability.  
Messrs. Kraus, Broer and Rummeny all agreed that Mr. Broer was more of a “big  
picture business man” and left the details of day to day management to others. In  
direct examination, Mr. Broer had difficulty answering the clear questions that were  
being asked by counsel, and frequently set out the narrative he felt it was necessary  
for the court to understand rather than answering the specific question put to him.  
This pattern continued in cross-examination.  
[46] Further, there were a number of instances where Mr. Broer’s evidence was  
directly contrary to that of others. A few examples are sufficient to demonstrate the  
problem. Mr. Kraus testified he was not involved with the buy out of Mr. Ziola’s  
shareholdings in MTI, as he had resigned as a director and officer of MTI effective  
August 2, 2015, and the purchase of Mr. Ziola’s shares occurred October 9, 2015.  
However, Mr. Broer testified that Mr. Kraus conducted the negotiations with  
Mr. Ziola, and he thought he had a meeting with Mr. Kraus about the valuation of the  
shares but he could not say anything about that discussion. Given Mr. Broer’s  
antipathy to Mr. Kraus at that time, their ongoing efforts to separate all of their  
businesses, and Mr. Kraus’ resignation as director and officer, Mr. Broer’s evidence  
is not believable.  
[47] Second, Mr. Broer testified in direct examination that the MSA contract was  
executed early in 2016. When asked by his counsel whether there was an oral  
agreement relating to the MSA before the written contract was prepared and signed,  
Mr. Broer became confused and asked with whom would that oral agreement be.  
Multiguide GmbH v. Broer  
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When asked again if the MSA was conceptualized in 2016 and later written down  
into a contract, he was unable to provide a clear response, and just explained that it  
“went really fast”. Finally, when asked why the MSA was not provided to Multiguide  
for some time, he justified that it must have just been in the rush of things, and was a  
mistake he was sorry for. In cross-examination, Mr. Broer again confirmed that the  
MSA was signed within a few weeks of January 12, 2016. When an email from MTI’s  
counsel (Mr. Woolley) dated February 12, 2020 was put to him (in which Mr. Woolley  
confirmed that there was an oral agreement between the parties on or around  
January 12, 2016, and that the MSA was not executed until sometime in 2018) he  
was asked if he agreed with Mr. Woolley’s email, and he responded “I can’t agree  
with the content of this email because it is not from me, I do not acknowledge it”.  
When asked if he agreed the MSA may have been signed in 2018 Mr. Broer said “I  
don’t know it anymore, I cannot confirm anything”. In the face of the admission by  
MTI’s counsel that the MSA was not executed until 2018, I find Mr. Broer’s evidence  
on the point to lack credibility.  
[48] Mr. Broer, by his own admission, did not have a detailed understanding of  
MTI’s day to day business dealings. While I accept Mr. Broer’s explanation that he  
was “not an integral part of the daily business”, I found his evidence at various times  
to be unresponsive, vague, and contradicted by the evidence of others. While I do  
not reject all of his evidence, where there is a conflict between his evidence and that  
of either Mr. Kraus or Mr. Rummeny, I prefer their evidence: see McPhail v. Ross,  
2019 BCSC 21 at para. 101.  
B.  
The Alleged Shareholder Loan  
[49] The plaintiff alleges that the initial €100,000 contribution from Multiguide to  
MTI was a shareholder loan, which became due and owing upon Multiguide’s  
demand for repayment on December 8, 2015. The defendants take the position that  
this initial advance was not a shareholder loan but rather an equity contribution.  
[50] The facts underlying the initial €100,000 contribution from both Multiguide and  
RTB Germany are not in dispute. Both Mr. Kraus and Mr. Broer are German  
 
Multiguide GmbH v. Broer  
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businesspeople, with experience with German corporate law, but no previous  
experience with Canadian corporate law. They both gave evidence that they initially  
understood that their initial €100,000 contribution was equity, as German law  
required a minimum equity contribution to start a company. The evidence  
demonstrates that each of the three shareholders received 3,000,000 shares in MTI,  
at 0.0001 cents (or CDN $300).  
[51] The contemporaneous documents are consistent with a shared  
understanding that this initial contribution was on account of equity. On December 9,  
2014, Mr. Kraus made arrangements for a wire transfer from Multiguide to MTI and  
identified the transfer as for “initial equity capital Multiguide GmbH”. This contribution  
was initially reported in Multiguide’s ledger as “Participation in stock corporations”.  
[52] On the same day Mr. Kraus wrote to Anja Hagen (RTB Germany’s corporate  
controller), and copied Mr. Broer, with the subject line “Equity contribution for MTI”  
as follows:  
Hi Anja,  
May I ask you to make the EUR 100,000 equity contribution into our joint  
company Multiguide Technologies Inc. on behalf of RTB GmbH & Co. KG? I  
have paid my share [my part] today. It is therefore no longer necessary that  
your payment is made in December, you are also welcome to wait until the  
new year. You can find the banking details on my payment slip (see  
attachment).  
I think the start in Canada is going well so far. However, I expect that we’ll  
need to make another equity contribution in early summer (hopefully for the  
last time then).  
Best regards,  
Roland  
RTB Germany likewise advanced an initial €100,000 contribution.  
[53] However, between late 2014 and July 2015 Mr. Kraus corresponded with  
MTI’s Canadian corporate counsel, Michael Stunden, regarding various corporate  
legal matters related to MTI. The evidence confirms that after the initial advances  
had been made, Mr. Stunden provided Mr. Kraus with multiple drafts of a  
shareholders agreement. These drafts initially referred to the initial advances as an  
Multiguide GmbH v. Broer  
Page 20  
“initial investment”, and later referred to them as a “shareholder loan”. While the  
drafts were circulated, the shareholders never executed a shareholder agreement.  
[54] MTI’s external accountant, Mustafa Ranalawala, prepared MTI’s financial  
statements. On March 3, 2015 Mr. Ranalawala sought clarification from MTI  
regarding the nature of the initial advances from Multiguide and RTB Germany, and  
asked whether he should consider them as a loan or as capital. Mr. Kraus  
responded on the same day as follows:  
100,000 Euro from Multiguide GmbH and 100,000 Euro from RTB GmbH &  
Co. KG  
I thought this was an equity input, but according to our lawyer this may be a  
loan.  
I think this is something we need to clarify in our shareholder meeting in April.  
Can this wait until then??  
Regards,  
Roland  
Mr. Ranalawala responded on the same day with:  
No worries, I will treat this amount as loan as for Dec. 31, 2014 financial  
statement, and we can rectified thereafter.  
And I will show as loan to respective loan acct of Multiguide and RTB.  
[55] Mr. Kraus was candid that as of March 2015 it was still unclear how the funds  
were being characterized. On March 20, 2015 Mr. Kraus sent the directors of MTI  
the 2014 year end financial statements for MTI, to be approved at the April 2015  
AGM. These draft financial statements recorded under Liabilities and Capital, stated  
as at December 31, 2014, “Loan from Shareholders $283,318.17”.  
[56] On April 15, 2015 Mr. Kraus emailed Mr. Broer, Mr. Ziola, Mr. Rummeny and  
Mr. Stunden, the Agenda for the AGM set for April 22, 2015, which included:  
Approve and sign financial statement Year 2014 (see attachment)  
Discuss/Finalize shareholders agreement (see attachment)  
On the same day Mr. Rummeny forwarded the email, with German translations of  
certain portions, and the attachments, to Mr. Broer.  
 
Multiguide GmbH v. Broer  
Page 21  
[57] The AGM was attended by Mr. Kraus, Mr. Rummeny (on behalf of RTB  
Germany), Mr. Ziola, and Mr. Stunden. Mr. Rummeny, an employee of RTB  
Germany, was asked by Mr. Broer to attend the April 22, 2015 annual general  
meeting of MTI in Vancouver. This was his first involvement in the business affairs of  
MTI, and he candidly admitted that he was overwhelmed at the April 2015 AGM and  
struggled with understanding some of the technical business terms in English (it  
being his second language). While Mr. Kraus and Mr. Broer were of the opinion that  
Mr. Rummeny held the proxy for Mr. Kraus for the April 2015 meeting, Mr. Rummeny  
did not believe he did. Whether he did or not is irrelevant as Mr. Rummeny did not  
sign the 2014 financial statements on behalf of Mr. Broer.  
[58] The parties disagree as to whether there was discussion at this AGM relating  
to the characterization on the 2014 financial statements of the initial contribution as a  
shareholder loan. In brief, Mr. Kraus says he presented the 2014 financial  
statements at the AGM, and that in the context of discussion regarding the adequacy  
of Mr. Ziola’s contribution, there was reference to the fact that Multiguide and RTB  
Germany had contributed €200,000 by way of shareholder loan, but that the draft  
shareholder agreement was not discussed. Mr. Rummeny cannot recall any  
discussion at the AGM about a shareholder loan, and testified he did not make any  
agreements on behalf of RTB Germany as to whether the contributions were a  
shareholder loan or equity contribution.  
[59] Mr. Ziola testified that at the AGM he was asked if he would contribute  
additional funds, and he reminded the parties that the shareholder loans would be  
paid back, but that he was not going to personally contribute anything further.  
Mr. Ziola’s contributions were by way of expertise and support, not money, and he  
testified that he noted at the AGM that he would not be repaid for any of these  
contributions.  
[60] Mr. Broer, who was not present at the April 2015 AGM, testified that he had  
no discussions with Mr. Kraus either before or after the AGM as to whether the  
€200,000 contribution should be classified as a shareholder loan. His evidence is not  
Multiguide GmbH v. Broer  
Page 22  
surprising, as communications between them had completely broken down by April  
2015. However, the evidence is clear that Mr. Broer and Mr. Kraus both signed the  
2014 MTI financial statements which characterized the initial start-up capital as  
“Loan from shareholders”. Mr. Broer’s evidence was that at the time he signed what  
was put in front of him, but that notwithstanding his execution of MTI’s financial  
statements, he always believed the initial contributions to have been in the form of  
equity. I do not find this explanation credible, given the level of animosity between  
the two by the end of April 2015, and their mutual intention to separate their  
business interests.  
[61] Likewise, Mr. Broer and Mr. Rummeny both signed the MTI 2015 and 2016  
financial statements, which continued to characterize the initial start-up contributions  
as “Loan from shareholders”.  
[62] Following the April 22, 2015 AGM Mr. Kraus sent an email on April 24, 2015  
to Multiguide’s accountant, confirming that the €100,000 contribution from Multiguide  
to MTI is accounted for as a shareholder loan (and not as equity), and asking him to  
take that into account when preparing Multiguide’s 2014 financial statements.  
Mr. Kraus provided his accountant with MTI’s 2014 financial statements when asked  
for documents confirming this. While the December 2014 ledger of Multiguide initially  
allocated the €100,000 on account of purchase of shares, this allocation was  
promptly amended in Multiguide’s 2014 financial statements.  
[63] There was no evidence that the shareholders executed a resolution at the  
April 22, 2015 AGM, or at any time, in which they purported to “re-characterize” the  
initial contributions as shareholder loans.  
[64] On July 29, 2015, Mr. Kraus sent the email described in para. [95] below  
inquiring as to whether Mr. Broer would purchase his shares in MTI, but he did not  
request repayment of his shareholder loan. Likewise, there was no discussion  
regarding repayment of Multiguide’s shareholder loan when Mr. Kraus resigned as  
director of MTI in August 2015.  
 
Multiguide GmbH v. Broer  
Page 23  
[65] On November 6, 2015, Bushra Walji (MTI’s Financial controller) emailed  
Mr. Broer, Mr. Rummeny, and Greg Jones, following up on an apparent query from  
Mr. Broer. Ms. Walji responded to the query:  
Good evening All,  
I have gone through the Financial Statement as of August 31, 2015, which I  
have attached in this email and it shows that the only Shareholders loan Is in  
the amount of $283,318.17 which is roughly converted to Eur. 200,000.00. As  
per my conversation with Greg Jones this Shareholders loan comes from  
Mr. Broer and Roland [Mr. Kraus] equally investing Eur 100,000.00 each.  
[66] On December 8, 2015 Multiguide made a formal demand for repayment of its  
alleged shareholder loan. It has not been repaid.  
[67] Determining whether an advancement of funds by a shareholder to a  
company is a loan or an investment of capital “is a question of fact to be determined  
by reference to all of the surrounding circumstances”: Glacier Creek Development  
Corporation v. Pemberton Benchlands Housing Corporation, 2007 BCSC 286 at  
para. 59.  
[68] The plaintiff takes the position that the €100,000 was a shareholder loan. The  
plaintiff points to the evidence of the agreement of the directors to record those initial  
advances as shareholder loans in the 2014 through 2016 financial statements as  
compelling evidence of the intention of the shareholders.  
[69] The defendants take the position that the initial contributions made by both  
the plaintiff and RTB Germany were on account of equity, which they say is a  
version of contributed surplus. They argue that courts have recognized that amounts  
contributed to a company by a shareholder can be on account of payment for  
shares, a shareholder loan, or “contributed surplus”. Contributed surplus would  
include “premiums on shares issued, and any other contribution by shareholders in  
excess of amounts allocated to share capital. Contributed surplus is a category of a  
company’s equity capital”.  
[70] The defendants agree that in the absence of agreement or clear  
documentation, the question of whether a contribution is a loan or equity is a factual  
Multiguide GmbH v. Broer  
Page 24  
determination to be made in reference to the surrounding circumstances at the time  
of the advance. They rely upon the decision of Ghassemvand v. Premium  
Weatherstripping Inc., 2017 BCCA 309, in which an accountant had decided to  
reclassify the contributed funds as capital contributions upon realizing that the  
shareholder agreement appeared to preclude shareholder loans. In Ghassemvand  
the Court of Appeal concluded that if funds are initially advanced as a loan or equity  
contribution, and it is later decided that such funds should be recharacterized, then  
the initial transaction must be undone and a new transaction entered into (at  
paras. 39-40). The defendants take the position that both Mr. Broer and Mr. Kraus  
initially believed the funds advanced to MTI were for equity, and not shareholder  
loans, and the contemporaneous documentary evidence confirms this. They say that  
the totality of the evidence of the circumstances following the initial investment into  
MTI cannot, in fact or in law, change the legal character of those initial contributions.  
They stress that there was no evidence, after the initial contributions were made, of  
either a directors’ or a shareholders’ resolution, concerning a shareholder loan.  
[71] Finally, the corporate defendants argue that the description of loans on the  
books of a company may be entitled to little weight, having regard to the whole of the  
evidence, and that the manner in which the transaction is described in the  
company’s books is not conclusive: Ghassemvand at para. 90. They argue that the  
crucial difference between equity and debt “lies in the fundamental nature of their  
respective claims on the assets and cash flow of the company”: Tudor Sales Ltd.  
(Re), 2017 BCSC 119 at para. 36. They point to the recent decision of the Ontario  
Superior Court in YG Limited Partnership and YSL Residence (Re), 2021 ONSC  
4178, in which the Court set out some guidelines that can be distilled from the  
jurisprudence, including: neither the “intention of the parties” (as between non-arm’s  
length parties) nor the formal characterization is conclusive as to the true nature of  
the transaction; the manner in which the transaction was implemented, and the  
surrounding economic circumstances, must be examined to determine the true  
nature of the transaction; and whether the parties had a subjective intent to repay  
principle or interest on the alleged loan and whether that expectation was  
reasonable. The Court also found it helpful to consider the “list of factors courts have  
Multiguide GmbH v. Broer  
Page 25  
examined in such cases” (while not applying them in a mechanical way) which  
relevant factors included: the presence or absence of a fixed maturity date and  
schedule of payments; the presence or absence of a fixed rate of interest and  
interest payment; the source of repayments; the security, if any, for advances; and  
the extent to which the advances were used to acquire capital assets (at para. 41).  
[72] I heard significant arguments from counsel as to the possible legal  
characterization of funds paid by a shareholder to a company. As a starting point, I  
do not find it necessary in these circumstances to determine all of the methods in  
which a shareholder may contribute funds to a company. I accept that at the time the  
initial contributions were made to MTI, both Mr. Kraus and Mr. Broer believed they  
were making equity contributions to MTI, based on their experience in Germany. I  
find they both initially failed to obtain professional advice, nor turn their minds to,  
whether the initial contributions would, or should, be treated differently in Canada.  
[73] However, shortly after making the initial contribution of €100,000 in early  
December 2014, and no later than March 2015, Mr. Kraus realized that the nature of  
those initial advances needed to be clarified. The draft shareholder agreements  
being circulated between the parties between late 2014 and early 2015, drafted by  
their counsel, contain various iterations of clauses attempting to clarify the nature of  
the initial advances, including references to shareholder loans. I accept no  
shareholder agreement was ever executed by the shareholders.  
[74] Notwithstanding there does not appear to have been a substantive discussion  
of the legal character of the initial contributions at the April 22, 2015 shareholder  
meeting, the MTI financial statements for 2014 were signed by both Mr. Kraus and  
Mr. Broer, and clearly characterized the initial contributions as “Loan from  
shareholders”. The 2014 financial statements clearly identify the initial contributions  
as shareholder loans, and that these financial statements were finalized in April  
2015, at a time well before any dispute arose as to the classification of the funds. I  
find the 2014 financial statements recorded the clear agreement of the shareholders  
that the initial contributions were properly characterized as shareholder loans. I also  
Multiguide GmbH v. Broer  
Page 26  
note this occurred at a time when Mr. Broer and Mr. Kraus were in significant  
conflict, and in the process of separating their German business interests, so I do  
not find it believable that Mr. Broer merely signed whatever was put in front of him.  
[75] Likewise, the 2015 and 2016 MTI financial statements, signed by Mr. Broer  
and Mr. Rummeny, recorded the same. This is compelling evidence that even when  
Mr. Broer could have corrected the characterization of the initial contributions, he did  
not take any steps to do so. In all of the circumstances, I find the execution of the  
financial statements to be determinative, and I find the initial contribution of  
€100,000 to be a shareholder loan. I do not accept the defendants’ argument that  
this was a “recharacterization” of the initial contribution; rather, I find it was a  
clarification of the true legal character of the initial contribution after receiving  
professional advice. Similarly, I do not accept the defendants’ argument that  
Mr. Broer’s requests for a capital increase in July 2015 (as set out in paras. [92] -  
[93]) are determinative in these circumstances because that was the language he  
was used to in Germany, his dominant country of business activities. His use of  
language he was familiar with is not conclusive.  
[76] Upon a consideration of all of the evidence, I find the evidence is clear that  
the parties quickly reached the agreement that the contribution of €100,000 by  
Multiguide to MTI was a shareholder loan (the “Shareholder Loan”). Given my  
finding, there is no need to consider nor determine the various categories of financial  
contributions that are possible when funding a company.  
C.  
Disputed Invoices  
[77] On August 26, 2015 Multiguide sent a payment reminder to MTI requesting  
payment of the Disputed Invoices (in the total amount of €172,778.10). Multiguide  
received no response to this payment reminder. Multiguide then sent a further  
payment reminder dated November 2, 2015 to MTI (addressed to Mr. Broer) as  
follows:  
This is the last and final request for payment of open invoices owed by  
Multiguide Technologies Inc. (“MTI”) to Multiguide GmbH.  
 
Multiguide GmbH v. Broer  
Page 27  
Since the payment reminder, dated August 26th, 2015, MTI has made no  
payments whatsoever to reduce its debt or honor its obligations to Multiguide  
GmbH. Additionally, despite multiple efforts by Multiguide GmbH, MTI or its  
directors have failed to propose a payment plan or to propose other  
measures to resolve this delicate situation. It appears that MTI is either not  
capable or not willing to make the overdue payments.  
If payments are not made by November 9th, 2015, Multiguide GmbH will have  
no choice but to commence insolvency proceedings against MTI. Multiguide  
GmbH may also pursue other remedies at its disposal.  
Yours sincerely,  
Dr. Roland Kraus  
[78] Mr. Broer responded to this demand on November 3, 2015. The google  
translation of his response which was tendered at trial is:  
Mr. Kraus,  
You have once again proven your entrepreneurial ineptitude while guiding the  
Multiguide in Canada. You negotiated with companies that no longer existed.  
You have employed people but not properly aligned them. And in the end you  
ran away as a managing director out of cowardice. Your inability to drive  
employees was also a strong theme at PARKEN in Berlin.  
So far we have been able to take over the majority of the Canada business  
and are working on a concept to proceed. That also means that we have to  
invest money in Canada in order to secure the jobs of the local employees.  
If you want to get back the money you invested in darts [there] in the form of  
shares or bills, you will need to develop something like patience. The money  
is not lost. We will not be able to draw up a precise plan for when and how  
the money will flow until January at the earliest.  
Rudolf Broer  
[79] Mr. Broer testified that his reference to “patience” referred to both the  
Disputed Invoices and the €100,000 contribution. There was no allegation in the  
November 3, 2015 email that the products which were delivered, and which were the  
subject of the Disputed Invoices, were defective. Nor was there any communication  
of a plan for the future of MTI provided to Mr. Kraus in late 2015 or early 2016.  
Rather, on November 30, 2015 RTB Germany filed a complaint in Germany against  
Multiguide (the German litigation, the result of which is set out in paras. [34] - [35]).  
[80] Multiguide then filed the within action in British Columbia against MTI on  
December 9, 2015, seeking judgment for the Disputed Invoices and the alleged  
Multiguide GmbH v. Broer  
Page 28  
shareholder loan. In the response to civil claim, filed February 15, 2016, MTI alleged  
that the Disputed Invoices were not being paid due to defects in the equipment  
supplied to MTI.  
[81] Mr. Kraus immediately wrote to Mr. Broer on March 9, 2016, setting out his  
surprise about the alleged defects, and explaining that those defects which were  
identified in the spring of 2015 should have already been rectified as RTB Germany  
had commenced replacing the affected machines at that time. He noted that as  
Multiguide had had no communications with either RTB Germany nor MTI, he could  
not assess the extent to which the deficiencies remained. He also noted that  
pursuant to the terms of the Settlement Agreement, the supply contracts for the  
PDMs were assumed by RTB Germany as at July 31, 2015, and so RTB Germany  
was now directly responsible to MTI for eliminating any defects.  
[82] Multiguide issued a demand for particulars on March 10, 2016 as to the  
details of the nature and extent of the alleged defects, and for immediate payment to  
be made to Multiguide for all product which MTI did not claim to be defective.  
Receiving no response to the demand, Multiguide filed a notice of application on  
August 18, 2019 seeking a court order compelling a response to their March 10,  
2016 demand. MTI responded to the demand for particulars on September 9, 2016.  
The essence of their response was that MTI was alleging that only products worth  
€102,582.94 out of the Disputed Invoices were defective (which meant that  
€70,195.17 accounted for in the Disputed Invoices were not on behalf of defective  
product). No payment was made at this time, nor in fact ever, to Multiguide on  
account of the Disputed Invoices, nor on account of any interest that was alleged to  
be due and owing pursuant to the terms of payment between the parties.  
[83] As already described, RTB Germany supplied certain equipment to  
Multiguide, who supplied it to MTI. Among this equipment were 30 PDMs delivered  
to MTI in early 2015 (for which there were purchase orders only for eight). The  
invoice for the 30 PDMS records the net price as €95,843.28, and the terms of  
payment as “6 months after invoice arrival”. There were defects with respect to these  
Multiguide GmbH v. Broer  
Page 29  
PDMs, including issues relating to water ingress, paint flaking, defective buttons and  
defective credit card readers. These 30 defective PDMs were agreed to be replaced  
by RTB Germany in or about July 2015.  
[84] Mr. Kraus’ evidence was that it was reasonable to have the 30 PDMs in  
Canada, to allow them to be installed in a timely manner. Mr. Broer’s evidence was  
that Mr. Kraus had intentionally brought PDMs to Canada that were not suitable for  
the Canadian market, and did not have the features that Canadians would want. He  
argued that Mr. Kraus wanted to inflate the Multiguide balance sheet by bringing the  
30 PDMs to Canada, knowing they were not suitable for the Canadian market, and  
knowing MTI had no purchase orders for 22 of the PDMs. Mr. Rummeny confirmed  
that the North American market found the RTB Germany PDMs undesirable  
because they lacked features – such as chip and pin option, and tap option, for  
payment by credit card – that the North American market found desirable.  
[85] In the German litigation, Mr. Rummeny testified that MTI took the position that  
the PDMs were unsuitable for the Canadian market. On cross-examination, he  
agreed that his evidence in the German litigation was that the defects had been  
addressed, but that even after doing so, the PDMs were still unsuitable for the  
Canadian market. However, in the within action, MTI maintained there were defects  
and failed to pay any of the Disputed Invoices. As set out above, judgment was  
issued in the German litigation on April 26, 2018.  
[86] Mr. Rummeny testified that the Disputed Invoices were not paid because  
there was ongoing litigation, and confirmed that it was on Mr. Broer’s direction that  
MTI did not pay the invoices. Further, Mr. Rummeny testified that when the decision  
was made to incorporate RTB Canada and enter into the MSA, he gave no  
consideration to the unpaid Disputed Invoices.  
[87] In his evidence at trial Mr. Broer initially said the Disputed Invoices were not  
paid because the PDMs were useless for the Canadian market and should not have  
been sent to Canada as MTI did not have orders for the PDMs. He could not  
remember why MTI did not pay the invoices, nor what had been paid. He opined that  
Multiguide GmbH v. Broer  
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as it was costly for RTB Germany to replace the PDMs it was possible that was an  
additional reason why payment was not made by MTI. Further, he said he could not  
recall what instructions he gave to Mr. Rummeny, nor could he recall doing any  
analysis about which of the Disputed Invoices should be paid. Ultimately, however,  
Mr. Broer agreed that it was his decision not to pay the Disputed Invoices.  
[88] On September 3, 2021, counsel for MTI confirmed that MTI admitted that the  
plaintiff has a valid claim in debt as against MTI on the unpaid invoices on  
€172,778.10. On September 8, 2021, counsel for Mr. Broer and Mr. Rummeny  
confirmed that those defendants agreed that the plaintiff has a valid claim in debt as  
against MTI on the unpaid invoices of €172,778.10. Notwithstanding this admission,  
as MTI is now insolvent, Multiguide seeks an order that MTI, RTB Canada, and  
Mr. Broer and Mr. Rummeny all be held liable for the Disputed Invoices. There was  
significant evidence at trial as to the alleged defects, the difference between  
“defects” and “features”, the efforts made by RTB Germany to rectify the defects, the  
result of these efforts, and the positions taken in the German litigation and the within  
action. Multiguide argued, and I agree, that it is not necessary that I make any  
factual determination on the issue of the alleged defects, as MTI has admitted that it  
owes Multiguide €172,778.10. I find that MTI owes the plaintiff the amount of the  
Disputed Invoices, being €172,778.10, and that as a result of decisions made by  
Mr. Broer, and actions taken by the directors of MTI, MTI is currently insolvent and  
unable to pay any of that amount.  
D.  
The Management Services Agreement  
[89] To understand the MSA, it must be viewed in the appropriate context, that  
being the events leading up to the purchase of the business from Siemens, and the  
events that occurred after the Settlement Agreement was reached in May 2015.  
[90] As set out above in para. [12] when RTB Germany purchased the PDM  
business from Siemens, it agreed to assume Siemens service and warranty  
obligations for all Siemens PDMs for a period of 10 years (until November 2023).  
 
Multiguide GmbH v. Broer  
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[91] On May 18, 2015 Mr. Kraus emailed Mr. Broer attaching an excel  
spreadsheet setting out the status of the monthly revenue/expenditures, and  
summarized that according to that forecast MTI had an anticipated $62,000 in  
monthly recurring revenue and approximately $60,000 in monthly costs.  
[92] On July 2 and 10, 2015, Mr. Broer wrote to Mr. Ziola requesting additional  
capital contributions to MTI. The July 2, 2015 demand was addressed to Mr. Ziola  
solely and read as follows:  
Dear Mr. Ziola,  
After inspecting the “financial statement” and after further examination of the  
current financial situation of MTI, I would like to tell you the following:  
To guarantee a continued existence of MTI, I am asking you for a capital  
increase of 140,000.00$, same as all other shareholders have done  
previously.  
This action is urgent required to pay outstanding invoices and to provide MTI  
a professional administration that you have not delivered.  
If you will not agree with the capital increase, I find myself constrained to  
think of RTB providing PDM deliveries and services to MTI in the future,  
Yours sincerely,  
Rudolf Broer  
[93] Mr. Ziola did not agree to this request, but made a number of alternative  
suggestions to improve MTI’s financial circumstances. On July 10, 2015 Mr. Broer  
wrote to the directors of MTI, Mr. Ziola and Mr. Kraus:  
Dear Sirs:  
Based on the current financial situation I am forced to request a total increase  
in capital amounting to 150.000$ from all of the directors, in order to ensure  
the continuing existence of MTI. Cooperation with Cubic can be a long term  
solution. This does not, however, provide the funding needed to pay  
outstanding bills.  
I view restructuring the salaries of the employees as counter-productive and  
thus definitely the wrong way.  
If there is no agreement on the increase in capital requested here, I shall be  
forced to take the consequences and withdraw as an MTI director. I shall  
clarify the steps necessary for this with my attorney.  
Dr. Roland Kraus as CEO of MTI should move quickly to convene a meeting  
of the partners about this topic because I view the future of MTI as severely  
endangered, unless immediate action is taken.  
   
Multiguide GmbH v. Broer  
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Sincerely,  
Rudolf Broer  
Again, Mr. Ziola declined the request to make a capital contribution.  
[94] On July 24, 2015 Mr. Rummeny sent out an updated list of contacts to MTI  
identifying who they should contact at RTB Germany regarding parking meter  
matters. Mr. Kraus was copied on that email, but had been removed as the contact  
in the sales category (replaced with Mr. Rummeny and Mr. Schuster) and not listed  
as a contact person for anything. Mr. Rummeny confirmed that this contact list was  
consistent with the idea that neither Mr. Kraus nor Multiguide would have any further  
involvement in Multiguide’s PDM business.  
[95] During the summer of 2015 Mr. Kraus attempted to communicate with  
Mr. Broer about methods for resolving their mutual involvement in MTI. Mr. Kraus’  
evidence was that his “first option” was for Multiguide and RTB Germany to become  
equal partners in MTI by each acquiring shares from Mr. Ziola, but that as his  
relationship with Mr. Broer was so strained, they never had any fulsome nor  
satisfactory discussions about this option. Mr. Kraus wrote to Mr. Rummeny on July  
29, 2015 saying:  
If you speak to Mr. Broer, then please ask him for the second option (taking  
over my shares). Then we finally have a clear separation.  
Mr. Broer replied to this email on July 30, 2015, setting out no clear proposal  
for moving forward, and concluded by writing:  
If you want to get rid of your stocks, hire someone to do it for you. We both  
know what the result is. You have lost your last trust.  
[96] At his examination for discovery, Mr. Broer advised that he “was never  
approached with such a question or in those terms” (whether Mr. Kraus had made a  
request that he purchase Multiguide’s shares in MTI). However, at trial Mr. Broer  
agreed that he recalled Mr. Rummeny advising him Mr. Kraus had made a request  
that Mr. Broer purchase the shares of Multiguide in MTI, and explained that the basis  
 
Multiguide GmbH v. Broer  
Page 33  
for the change in his answer was that he is over 60 years old and his memory is not  
that good.  
[97] As set out above in para. [29], Mr. Kraus resigned as a director, and as  
president and CEO of MTI, as of August 2, 2015. The Settlement Agreement  
expressly noted in paragraph 4 that “Multiguide’s PDM employees shall continue to  
work on their PDM tasks according to RTB guidance until their retirement on July  
31st, 2015”. After his resignation, Mr. Broer and Mr. Ziola were the two remaining  
directors of MTI. It is clear that at some point in time Mr. Ziola resigned as a director.  
Mr. Rummeny assumed the role of president and CEO of MTI, and became a  
director of MTI effective October 26, 2015.  
[98] There was no evidence of any requests made by MTI to Multiguide for any  
additional financial contributions to MTI after Mr. Broer’s email of July 10, 2015 to  
the directors of MTI. However, the defendants argue that Mr. Kraus was well aware  
that MTI would need further funds for operations by the summer of 2015, and argue  
that he failed to offer to inject further funds into MTI in the summer or fall of 2015.  
[99] As the defendants argue that Mr. Kraus should be responsible for the  
consequences arising from his resignation as director of MTI (which resulted in his  
lack of information from August 2015 on) it is important to discuss briefly. Mr. Kraus’  
evidence was that he felt he was required to resign as director as a result of the  
Settlement Agreement, and that it was also the best thing for MTI. He explained the  
role of being director and president and CEO of MTI involved close communication  
with RTB Germany, but the relationship with Mr. Broer had become strained and  
dysfunctional, and so he felt it best for MTI that he resign. Mr. Broer opined in his  
evidence that Mr. Kraus may have resigned as a result of the Settlement Agreement,  
but also because Mr. Kraus had failed to be successful in his role as director and  
CEO of MTI. Mr. Broer’s opinion is merely that, his personal opinion.  
[100] After Mr. Kraus resigned, Mr. Rummeny assumed the responsibility of leading  
the MTI team in North America. His evidence was he was shocked when he heard of  
Mr. Kraus’ resignation, and concerned about his own new workload and the impact  
Multiguide GmbH v. Broer  
Page 34  
the resignation would have on the MTI team. Both Mr. Rummeny and Mr. Broer  
testified that the MTI employees were stressed and concerned about the future of  
MTI. Mr. Broer and Mr. Kraus agreed that Mr. Broer made the high-level corporate  
strategy decisions for both MTI and RTB Canada (including when shareholder  
meetings would be called and what information would be provided to shareholders)  
and that Mr. Rummeny focussed on the sales and management and operations of  
MTI. Mr. Rummeny’s evidence, uncontradicted by Mr. Broer, was that Mr. Rummeny  
deferred to Mr. Broer on all corporate matters.  
[101] Mr. Rummeny testified that there had been little to no marketing done by MTI  
with respect to the sale of PDMs prior to Mr. Kraus’ resignation, and that MTI  
required a dedicated sales and marketing manager to secure new clients, but lacked  
the necessary funds. He also testified that MTI sought bank financing in the fall of  
2015, but was not able to secure any, and that Mr. Rummeny met with a potential  
partner for MTI in December 2015, but was advised there was a risk they would  
simply steal MTI’s clients away, so he did not pursue this possibility any further.  
Mr. Broer testified that RTB Germany was not willing to either loan or invest any  
further funds into MTI. It was Mr. Rummeny’s opinion that there were no viable  
investment options available for funding MTI in the fall of 2015, and he and Mr. Broer  
both believed that without an injection of capital, MTI “would likely have gone  
bankrupt”.  
[102] As set out above in para. [30], on October 9, 2015 RTB Technik acquired  
Mr. Ziola’s shareholdings in MTI, for the amount of $20,000. Upon purchasing  
Mr. Ziola’s shares in MTI, Mr. Broer (through RTB Germany and RTB Technik)  
effectively controlled 2/3 of the stock in MTI.  
[103] The original notice of civil claim in this proceeding was filed December 9,  
2015. Due to difficulties in effecting service, an order for substituted service was  
made on January 15, 2016, allowing substituted service by email to Mr. Tepper,  
German counsel for RTB Germany.  
Multiguide GmbH v. Broer  
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a)  
Incorporation of RTB Canada  
[104] RTB Safe Traffic Inc. (“RTB Canada”) was incorporated in British Columbia  
on January 7, 2016. RTB Germany is RTB Canada’s sole shareholder, and  
Mr. Rummeny and Mr. Broer are the directors. As Mr. Broer is the sole limited  
partner of RTB Germany, he benefits indirectly from the potential profits generated  
by RTB Canada. Mr. Rummeny confirmed that Mr. Broer formulated the idea of  
incorporating RTB Canada, and that he did not question Mr. Broer as to the logic  
behind its incorporation but rather simply accepted Mr. Broer’s direction. RTB  
Canada was incorporated for the purpose of managing and carrying on the PDM  
business of MTI in Canada.  
b)  
MTI as at February 2016  
[105] In his examination for discovery, Mr. Broer indicated he did not know how  
many bank accounts MTI had in February 2016. A request was made at his  
examination for discovery for confirmation of the amounts contained in the bank  
accounts of MTI on February 29, 2016, and the response explained that at the end  
of February 2016 MTI held approximately $202,643, and held two additional bank  
accounts, in trust for certain clients. At the same time MTI had offices, inventory, a  
number of employees, expertise, and existing customers (whose contracts ensured  
a stream of revenue for MTI).  
[106] At the end of February 2016, Multiguide was a significant creditor of MTI (as  
set out above under The Alleged Shareholder Loan and Disputed Invoices). Both  
Mr. Broer and Mr. Rummeny confirmed that no creditors other than Multiguide have  
gone unpaid by MTI, and that no creditor other than Multiguide has filed any lawsuit  
against MTI, not even in small claims court.  
c)  
Management Services Agreement  
[107] These are the circumstances in which MTI and RTB Canada allege that they  
orally agreed to the terms of the MSA on or about January 12, 2016, that the MSA  
was effective as of that date, and that the MSA included the following material terms:  
     
Multiguide GmbH v. Broer  
Page 36  
a) MTI appointed RTB Canada to manage and carry on the business of MTI;  
b) RTB Canada agreed to assume all employment agreements with MTI’s  
current employees; and  
c) RTB Canada would pay to MTI an annual commission equal to 5% of its  
total sales, net of all discounts and sales taxes, for a period of five years  
following the date on which RTB Canada first generates net profits equal  
to 5% or more of its sales.  
[108] A significant issue at trial relating to the MSA is when it was effectively  
entered into. Initially, in response to a specific query, Mr. Woolley confirmed by way  
of a letter dated February 7, 2019 that “the Management Service Agreement was  
signed on the effective date i.e. 12 January 2016”.  
[109] However, as document production proceeded, it became clear that the MSA  
document had not been created in 2016 and so could not have been executed then.  
On January 17, 2020, Justice Ross ordered amended lists of documents to be  
produced, including but not limited to documents related to the decision to transfer  
the business of MTI to RTB Canada, including by way of the MSA, and the  
implementation of the transfer of the business of MTI to RTB Canada. Through the  
discovery process it became clear that the terms of the MSA were not reduced to  
writing until some time in 2018. By email dated February 12, 2020, Mr. Wooley  
confirmed to plaintiff’s counsel:  
We have determined, in the course of responding to the Order of Mr. Justice  
Ross, that you were provide with incorrect information a year ago regarding  
the execution of the Management Services Agreement. In my letter to you of  
07 February 2019, I conveyed certain information from my client, including  
that the MSA had been signed on the effective date, i.e. 12 January 2016. I  
understand, however, that the MSA was in fact executed in 2018. I  
understand that the parties made an oral agreement on or about 12 January  
2016, which was not papered until 2018. I was unaware, until now, that the  
information I provided you was incorrect. On behalf of my client, I apologize  
for this error.  
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Page 37  
[110] For trial, the parties agreed:  
The parties all agree that the Word document file “Management Services  
Agreement v4 BRANDI.DOCX” disclosed under cover of the February 7,  
2020 letter {P002674 – Exhibit 10} of Jonathan Woolley has a “content  
created” date of February 5, 2018 and a “date last printed” date of February  
5, 2018.  
[111] However, Mr. Broer maintained at trial that the MSA was signed quite quickly  
after RTB Canada was incorporated in early 2016. He did not give testimony that  
there was initially an oral agreement that was only later reduced to paper in 2018,  
but rather repeatedly testified that the MSA was signed within a few weeks of RTB  
Canada being incorporated. When Mr. Woolley’s February 12, 2020 email (above)  
was put to him on cross-examination, Mr. Broer apologized and testified “I cannot  
make any statement on this”. When asked whether the MSA might only have been  
signed in 2018, Mr. Broer testified he could not confirm anything.  
[112] Likewise, at his examination for discovery Mr. Rummeny said the MSA was  
signed in 2016 and that it was not backdated. He failed to respond to a request  
made at his examination for discovery as to the date the MSA was signed, and said  
he could not determine the date. However, at trial he testified that the MSA was  
backdated, but he could not say by how much.  
[113] I am satisfied that the MSA was not in fact reduced to writing until early 2018,  
and was not executed until some point later in 2018. While Mr. Broer and  
Mr. Rummeny may have had a vague understanding of what they intended to do in  
early 2016, I do not find they have proven that they had an oral agreement in  
January 2016 which was reduced to writing in 2018.  
[114] Mr. Broer and Mr. Rummeny confirmed that all of the assets of MTI were  
transferred to RTB Canada. This included switching all existing employment  
contracts, client contracts, changing contracts with services providers, leases and all  
other services provided to MTI. Mr. Broer testified this took a lot of work, and  
approximately six months to complete.  
Multiguide GmbH v. Broer  
Page 38  
[115] In addition, all assets of MTI (its inventory and business equipment) were  
purchased by RTB Canada. By way of an invoice dated May 31, 2016, MTI set the  
inventory of their stock at an amount of $216,481.84, and applied a discount of  
96.3045% (or $208,481.75) and invoiced RTB Canada for a total of only $9,040.14  
for the inventory (due by December 31, 2016). Neither Mr. Rummeny nor Mr. Broer  
were able to explain how the discount factor of 96.3045% was calculated.  
Mr. Rummeny did provide the following answers in response to questions raised at  
his examination for discovery:  
Request 20: Confirm the book value at this RTB Canada purchased the  
remaining assets of MTI for, and produce all documents that show that book  
value.  
Response 20: In response to request #20, it is Mr. Rummeny’s  
understanding that the value of the inventory was set at $251,688 as outlined  
in the financial statements of MTI for 2015, 2016 and 2017. Mr. Rummeny  
notes that the PDM’s which were not all market ready, are included in this  
figure.  
Request 21: Confirm if any payments have been made by RTB Canada to  
MTI under the MSA, and if so provide particulars (dates and amounts) of  
such payments made by RTB Canada to MTI under the MSA.  
Response 21: There are no payments from RTB Safe Traffic [RTB Canada]  
to MTI under the MSA. There was one profitable year for RTB Safe Traffic in  
2018 where a profit of CDN $12,983.00 was earned.  
Request 24: Provide responses to the two unanswered questions on  
document RUM000162 (a Thursday, January 17, 2019 8:25 AM email from  
Marc Rummeny to Joan Brown) i.e.  
The management prepared financials have $289,927.38 of recorded  
sales of products (inclusive of sales to RTB Safe Traffic in the total  
amount of $216,481.84) and less $208,481.75 of sales refunds  
(netted against sales). The sales refund of $208,481.75 appears to  
have all been provided to RTB Safe Traffic [RTB Canada] pursuant to  
an invoice dated May 31, 2016. Can you please send me support for  
the entry? Can you explain the sales to RTB Safe Traffic [RTB  
Canada]? Were they recorded at cost? Was the discount of  
$208,481.75 intended to reverse the sales?  
Services income of $229,476.11 includes $75,628 in recognized  
deferred income. Can you please send me support for how/why the  
deferred income was recognized in 2016?  
Answer 24:  
In response to request #24, the sales from MTI to RTB Safe Traffic [RTB  
Canada] related to inventory. Mr. Rummeny has been unable to ascertain  
Multiguide GmbH v. Broer  
Page 39  
how the discount was calculated, which is reflected in the financial  
statements, or how the deferred income was recognized in 2016.  
[116] Mr. Broer was also unable to explain how the discount of 96.3045% was  
arrived at.  
[117] The MSA appointed RTB Canada as the manager of MTI. Clause 2 of the  
MSA provides:  
2. Appointment of Manager  
2.1 Appointment by the Company. The Company hereby appoints the  
Manager to manage and carry on the Business for and on behalf of the  
Company (the “Management Services”). The Manager will be responsible  
for all aspects of the management and conduct of the Business.  
2.2 Acceptance of the Manager. The Manager hereby accepts its  
appointment to provide and carry out the Management Services to the  
Company upon and subject to the terms and conditions of this Agreement.  
2.3 Employees. The Manager agrees to assume all employment  
agreements, written or otherwise, with the Company’s current employees (the  
“Employment Agreements”), including all obligations for the payment of  
wages, vacation pay, severance pay, health and dental benefits, and any  
other benefits enjoyed by such employees under their employment with the  
Company. The Company hereby assigns the Employment Agreement to the  
Manager and the Manager accepts such assignment and assumes the  
obligations under the Employment Agreements.  
2.4 Liabilities. The Parties agree that the Manager does not assume any  
liability or obligation of the Company to third parties, including without  
limitation its financial obligations, other than those expressly set forth in  
Section 2.3 of this Agreement.  
2.5 Term of Appointment. The Manager will provide the Management  
Services, at its own cost and expense, to the Company for a period  
commencing on the Effective Date and continuing until terminated in  
accordance with Section 6 hereof.  
[underlining in original]  
[118] I am satisfied that while clause 2.1 purports to appoint RTB Canada to  
manage and carry on the business of MTI, what in actuality occurred was all of the  
assets of MTI were transferred to RTB Canada, but none of the liabilities were.  
Clause 3.1 of the MSA sets out that commissions are payable by RTB Canada to  
MTI, commencing the first year that RTB Canada earns a net profit that is equal to  
5% or more of the total sales for the year, and continuing for four years after that  
Multiguide GmbH v. Broer  
Page 40  
(regardless of whether any profits are earned in the four years following). Clause 3  
of the MSA provides:  
3. COMPENSATION  
3.1 Compensation. For a period of five years (the “Commission Period”)  
following the date that the Manager generates Net Profits equal to 5% or  
more of its Turnover from the Business (the “Profit Date”), the Manager  
shall pay the Commission to the Company. For the purpose of this Section 3,  
the Profit Date shall be the date of the Financial Statements indicating that  
the Manager has generated Net Profits equal to 5% or more of its Turnover  
with the Business.  
3.2 Commission. During the Commission Period, the Manager shall pay the  
Commission to the Company on an annual basis.  
[119] Mr. Rummeny testified that in determining the commission structure in clause  
3.1 there had been communications with consultants to arrive at the 5%  
commission, but that Mr. Broer had those communications with the consultants, not  
Mr. Rummeny. Mr. Broer testified that the “consultants said it was a good number”.  
He did not identify who the consultants were or what the basis of that assertion was.  
No documents were tendered explaining why 5% was a good number. Rather  
Mr. Broer asserted “I was planning on making good profit and for Multiguide to get  
5% without doing any work or having any expenses” was good.  
[120] Mr. Broer and Mr. Rummeny’s evidence at trial did not establish confidence  
that they understood the application of clause 3.1. At trial, Mr. Broer could only  
confirm that MTI would be paid a commission when RTB Canada generated a profit.  
When asked on cross-examination whether there was any specific profit threshold  
RTB Canada needed to reach before commissions would be payable to MTI, he  
responded that “he did not think so”. RTB Canada did make a net profit of  
$12,848.44 in 2018, but Mr. Broer’s evidence was that no profits have been made by  
RTB Canada.  
[121] Mr. Rummeny similarly had a lack of understanding of the terms of the MSA.  
At his examination for discovery he thought that the five year period referred to in the  
MSA had expired in 2021. On cross-examination, he explained that he had  
misunderstood the MSA and when he looked at it after his examination for discovery  
Multiguide GmbH v. Broer  
Page 41  
he realized it had not expired. However, Mr. Rummeny testified that commissions  
are payable as soon as there are profits in RTB Canada for two years in a row. This  
is also not correct.  
[122] Mr. Broer further gave evidence at trial that he considered that revenues from  
future sales of RTB Germany traffic management products might increase the profits  
of RTB Canada, and so result in an increased commission to MTI. However, the  
evidence of Mr. Kraus, Mr. Rummeny and Mr. Broer all confirm it was the intention of  
the parties that once MTI was established, other products (RTB Germany traffic  
management products and Multiguide SSD systems) would also potentially be sold  
through MTI. His justification of the potential profits of the MSA therefore is illogical  
in the historical context of the parties’ initial intentions.  
[123] The parties are in agreement that no commission payments have been made  
by RTB Canada to MTI pursuant to the MSA. The parties are also in agreement that  
after the incorporation of RTB Canada, payments were made out of the MTI bank  
accounts for a variety of purposes (some of which should properly have been paid  
by RTB Canada) and that all of the assets and contracts of MTI were also  
transferred to RTB Canada. Despite efforts to do so, the parties advise they were  
unable to fully trace the flow of funds from MTI to RTB Canada, and the financial  
information necessary to do so is not available. Finally, the parties are in agreement  
that MTI is currently insolvent, and Multiguide is the only unpaid creditor of MTI.  
[124] Although plaintiff’s counsel made substantial submissions on potential  
alternate options open to MTI rather than entering into the MSA, I do not find those  
submissions to be relevant to the critical issues before me.  
d)  
MTI AGM December 29, 2016  
[125] By letter dated September 7, 2016 counsel for Multiguide inquired with MTI  
about the status of an annual general meeting of MTI, and made inquiries regarding  
its current business. On December 5, 2016, MTI provided a notice of an AGM to  
take place on December 29, 2016.  
 
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[126] In the preparations leading up to the AGM, counsel for MTI advised counsel  
for Multiguide:  
a) they did not have copies of the December 2014 or December 2015  
financial statements, and “as such presented the waiver of presentation of  
those financial statements” as motion to be voted on at the AGM;  
b) Mr. Kraus was CEO and president of MTI (which was clearly incorrect);  
c) there had been no change in shareholders and directors of MTI; and  
d) MTI did not intend to present a management report at the AGM.  
[127] Mr. Kraus sent Mr. Broer and Mr. Rummeny, in their role as directors of MTI,  
a letter dated December 22, 2016, enclosing a letter from his counsel, which sought  
answers to a number of questions, including information about the current  
operations of MTI and the financial outlook for MTI for 2017, and queried:  
a) Why would MTI seek to waive production of financial statements for the  
year ended December 31, 2014 when financial statements for that period  
were already presented to the shareholders and approved in 2015?  
b) Why would MTI seek to waive production of financial statements for the  
year ended December 31, 2015? Surely production of such documents is  
essential to understanding the business and status of MTI?  
[128] Mr. Broer testified that he did not know why MTI sought to waive production of  
financial statements for 2014 and 2015, but opined it must have been a  
communication issue. He also could not say why there was no management report  
provided.  
[129] Notwithstanding Mr. Kraus’ direct email to Mr. Broer and Mr. Rummeny, there  
was no response. The December 29, 2016 AGM proceeded, and no financial reports  
nor any other management report was presented. The directors unsuccessfully  
attempted to obtain approval to waive the requirement to produce any financial  
Multiguide GmbH v. Broer  
Page 43  
statements for 2014 and 2015. Unaudited financial statements as at December 31,  
2016 were produced, labelled “For Management Purposes Only”.  
[130] There is no evidence that there was any discussion of the MSA at the  
December 29, 2016 meeting. On cross-examination, when asked why he did not  
respond to Mr. Kraus’ December 22, 2016 letter, and take the opportunity to inform  
him of the current state of affairs of MTI, Mr. Broer said he was sorry, he did not  
know why he did not respond, and that that was a mistake. Mr. Broer could not recall  
ever providing a management report to Multiguide about the status of MTI, in  
response to Mr. Kraus’ email. Mr. Rummeny testified that he left responding to  
Mr. Kraus’ December 22, 2015 email to Mr. Broer.  
[131] I find that as of December 22, 2016, when presented with a request for  
information about the ongoing business of MTI, its directors failed to advise  
Multiguide of the existence of the MSA, and its impact on MTI’s business. I also find  
clear that as of the end of 2016, the written MSA had not yet been created, nor  
executed, notwithstanding MTI’s assets had been transferred to RTB Canada.  
e)  
May 2018 Order  
[132] On May 19, 2018 Justice Steeves, in Action No. S184908, determined that  
the affairs of MTI had been conducted in a manner oppressive and unfairly  
prejudicial to Multiguide (in failing to produce and deliver audited financial  
statements and failing to hold an AGM at least once each calendar year). Justice  
Steeves ordered that audited financial statements in respect of 2015 and 2016 be  
produced within 30 days (unless the requirement was waived by all shareholders of  
MTI), that audited financial statements for 2017 be produced (unless the  
requirement was waived by all shareholders of MTI on or before July 1, 2018) and  
that an AGM be held. Justice Steeves also awarded Multiguide the costs of the  
proceeding (collectively the “May 2018 Order”).  
[133] Mr. Broer testified that he was not aware of the May 2018 Order, and that MTI  
had no business activities. Mr. Rummeny likewise testified he was not aware of  
which years the May 2018 Order had required audited financial statements and  
 
Multiguide GmbH v. Broer  
Page 44  
AGMs for. Neither Mr. Broer nor Mr. Rummeny were able to give an explanation as  
to why audited financial statements had not been produced and an AGM had not  
occurred. The evidence shows that by email dated July 17, 2018 MTI provided  
unaudited 2017 financial statements to Multiguide, which showed zero revenue for  
2017. By email dated September 17, 2021 MTI provided unaudited draft financial  
statements for 2015 and 2017 to Multiguide.  
[134] MTI attempted to prepare audited financial statements for 2015, 2016 and  
2017, and by email dated September 17, 2021 Mr. Woolley, as counsel for MTI,  
attached an updated set of financial statements for those years (for which 2016 was  
audited but 2015 and 2017 were unaudited), clarifying:  
As to your question, I’ve been informed by the auditor that MNP attempted to  
audit the financial statements for 2015 and 2017, but was unable to give an  
audit opinion for those years. The reason, I’m told, is because of the absence  
of the accounting personnel and systems within MTI that would have made  
an audit feasible (which is not uncommon with small businesses), along with  
the lapse of time between the audit years and when the audit was carried out.  
Mr. Wooley then clarified on September 19, 2021 that there was a typing error on  
the statement of cash flow, and that the net loss for the year ended 2017 should be  
$17,741 not $177,410.  
f)  
Lack of Timely Disclosure of the Management  
Services Agreement  
[135] Only on August 13, 2018 did counsel for MTI inform counsel for Multiguide  
that in early 2016 MTI had entered into the MSA with RTB Canada. In that letter  
counsel wrote:  
We are informed that the relevant facts are as follows. The business of MTI  
was not profitable, generating substantial losses in both 2014 and 2015. MTI  
required an investment of additional capital from its shareholders, which  
Multiguide GmbH was unwilling or unable to provide. By the end of 2015, MTI  
was in a financial position in which it could not continue carrying on business  
and retain its employees.  
Effective early 2016, MTI executed a Management Services Agreement with  
Safe Traffic [RTB Canada], whereby Safe Traffic [RTB Canada] agreed to  
provide certain management services to MTI and effectively carry on MTI’s  
business on its behalf. In association with that transaction, MTI’s furniture,  
machinery, and spare parts were transferred to Safe Traffic [RTB Canada],  
 
Multiguide GmbH v. Broer  
Page 45  
for consideration. Under the Management Services Agreement, Safe Traffic  
[RTB Canada] will pay MTI a commission on turnover, for a period of five  
years, once Safe Traffic [RTB Canada] generates a sufficient level of profit.  
Safe Traffic [RTB Canada] has not yet generated sufficient profit to pay a  
commission. However, a modest profit is anticipated in 2018 and, therefore, a  
commission payment should be made to MTI in 2019.  
[136] I accept Mr. Kraus’ uncontroverted evidence that he did not know about the  
existence of the MSA until he received a copy of this letter. In response, he  
instructed his counsel to obtain a copy of the MSA. His response was rejected by  
way of an August 21, 2018 email from counsel for MTI stating that MTI would not  
provide Multiguide with a copy of the MSA and explaining:  
Our client has declined your client’s request. As you know, the records you  
requested are not among those that a shareholder is entitled to review as of  
right.  
[137] Mr. Broer testified that the MSA was not disclosed to Multiguide due to the  
rush of things, and apologized. However, even two and a half years after the MSA  
was allegedly entered into, Mr. Kraus was still unable to obtain a copy. On  
cross-examination Mr. Broer admitted he should have disclosed the MSA to  
Mr. Kraus and that it was a mistake not to do so, but that he thought Mr. Kraus  
would not agree with the MSA. Mr. Rummeny confirmed that he did not inform  
Multiguide of the MSA, but left that to Mr. Broer.  
[138] As set out in para. [39] above, petition No. S1812245 was filed November 14,  
2018 seeking a declaration that MTI had, without complying with s. 301 of the BCA,  
disposed of all or substantially all of its undertaking other than in the ordinary course  
of business, and for an order granting permission to proceed with a derivative action.  
By letter from counsel dated February 5, 2019, Multiguide was provided with a filed  
response to petition of Mr. Rummeny and Mr. Broer, and sworn affidavits from both.  
The first time Mr. Kraus saw a copy of the MSA was when he received a copy of  
Affidavit #1 of Mr. Broer, to which it was attached as an Exhibit.  
Multiguide GmbH v. Broer  
E. Special Resolution  
a) MTI Special Meeting February 12, 2019  
Page 46  
[139] On February 1, 2019, MTI provided its shareholders (including Multiguide)  
notice of a special meeting of shareholders to take place on February 12, 2019 (the  
“Special Meeting”) for the purpose of ratifying the MSA pursuant to s. 301(3)(b) of  
the BCA.  
[140] In advance of the Special Meeting, in response to requests from Multiguide’s  
counsel, MTI provided Multiguide with copies of all available financial statements of  
MTI and RTB Canada, and confirmed that the 2018 financial statements of RTB  
Canada were unavailable.  
[141] The Special Meeting took place on February 12, 2019, with each of MTI’s  
three shareholders attending by proxy. A special resolution was duly adopted by the  
shareholders of MTI (with the proxyholder representing Multiguide voting against it)  
which provided:  
In accordance with section 301(3)(b) of the British Columbia Business  
Corporations Act and section 11.2 of the Articles of the Company, the MSA  
and the related transfers are hereby ratified.  
(the “Special Resolution”)  
[142] By letter dated February 19, 2019, pursuant to s. 240(3) of the BCA, MTI  
gave notice to Multiguide of its right to dissent in respect of the Special Resolution  
and to have its share repurchased by MTI for their fair value.  
b)  
Multiguide’s Dissent with Respect to the Special  
Resolution  
[143] By letter dated February 25, 2019, Multiguide raised a number of objections  
on matters related to the Special Meeting and the Special Resolution, and on a  
without prejudice basis also gave notice to MTI, pursuant to s. 242 of the BCA, of  
Multiguide’s dissent with respect to the Special Resolution. The dissent notice was  
provided without prejudice to Multiguide’s right to argue that the Special Resolution  
was invalid.  
     
Multiguide GmbH v. Broer  
Page 47  
[144] By letter dated March 21, 2019, pursuant to s. 243 of the BCA, MTI gave  
notice to Multiguide that MTI intended to act on the authority of the Special  
Resolution, and for Multiguide to complete its dissent pursuant to s. 244 of the BCA.  
In turn Multiguide (while maintaining that the adoption of the Special Resolution was  
invalid) gave notice to MTI by letter dated April 12, 2019 that Multiguide required MTI  
to repurchase all of Multiguide’s shares in MTI.  
[145] By letter dated July 18, 2019, MTI then informed Multiguide that:  
a) MTI disagreed with Multiguide’s position regarding the validity of the  
Special Resolution;  
b) pursuant to s. 244(3) of the BCA, Multiguide was deemed to have sold to  
MTI all its shares in the company;  
c) pursuant to s. 245(1) of the BCA, MTI and Multiguide may agree on the  
amount of the payout value of Multiguide’s shares in MTI;  
d) having regard to the definition of “payout value” in s. 237 of the BCA,  
MTI’s position was that the proper payout value for Multiguide’s share is  
the fair value that those shares had immediately before the execution of  
the MSA (i.e. as of January 11, 2016), excluding any appreciation or  
depreciation in anticipation of the execution of the MSA; and  
e) MTI proposed $10,000 as the payout value of Multiguide’s shares.  
[146] There was no evidence of any different payout value being proposed for  
Multiguide’s shares once it was revealed that the MSA was not executed in January  
of 2016 but rather sometime in 2018. There was no valuation evidence of the value  
of Multiguide’s shares in MTI, either as of January 11, 2016, some time in 2018, or  
at the time of trial. The parties are in agreement that there has been no agreement  
reached regarding the repurchase of Multiguide’s shares in MTI.  
Multiguide GmbH v. Broer  
Page 48  
c)  
Analysis  
[147] Section 301 (1) through (3) provides:  
301(1) A company must not sell, lease or otherwise dispose of all or  
substantially all of its undertaking unless  
(a) it does so in the ordinary course of its business, or  
(b) it has been authorized to do so by a special resolution.  
(2) If the company contravenes subsection (1) in respect of a disposition  
of all or substantially all of a company’s undertaking, the court, on the  
application of any shareholder, director or creditor of the company,  
may, unless subsection (3) applies, do one or more of the following:  
(a) enjoin the proposed disposition;  
(b) set aside the disposition;  
(c) make any other order the court considers appropriate.  
(3) A disposition of all or substantially all of the undertaking of a company  
is not invalid merely because the company contravenes subsection  
(1), if the disposition is  
(a) for valuable consideration to a person who is dealing with the  
company in good faith, or  
(b) ratified by a special resolution.  
[148] The plaintiff takes the position that while the forms of notice, and other  
technical requirements under the BCA were complied with in relation to the Special  
Meeting, the Special Resolution and the dissent procedure, the purported ratification  
of the MSA is not valid and the Special Resolution should be declared null and void.  
In oral argument plaintiff’s counsel acknowledged they do not want the MSA set  
aside, but rather they want the plaintiff to be compensated for the value of their  
shares in MTI. They argue that ratification pursuant to s. 301 of the BCA cannot  
occur as there was insufficient evidence of an oral agreement in 2016, and that it is  
not possible to ratify a contract that did not exist at the time of the transfer. Further,  
they say that the transfer was not capable of ratification as Mr. Broer was in a  
conflict of interest position by virtue of his self dealing. In the alternative, even if the  
ratification is valid, they argue the ratification itself is oppressive on account of  
violating the reasonable expectations of the plaintiff (this argument is further dealt  
with below under Oppression). Their fundamental position is that the ratification by  
way of special resolution does not block the oppression remedy they seek.  
 
Multiguide GmbH v. Broer  
Page 49  
[149] The corporate defendants argue that MTI observed the requirements of  
s. 301 of the BCA, and its articles of incorporation, with respect to the calling of the  
special meeting and the adoption of the Special Resolution. They say that the totality  
of the evidence supports that there was some form of a verbal agreement in 2016  
pursuant to which the assets of MTI were transferred to RTB Canada, that such an  
agreement can be inferred from the totality of the evidence, and as such it is capable  
of being ratified. They argue that s. 301(3)(b) does not have any time restriction for a  
ratification to occur, and there is no authority supporting such a time restriction. They  
cite Nixon v. Trace, 2012 BCCA 48, in which the Court of Appeal considered a  
disposition pursuant to s. 301(1) that was ratified by a special resolution two years  
after the board had entered into the agreement in question, and there was no  
suggestion that the ratification was invalid on account of the delay. They say that the  
resulting ratification of the MSA was valid. Multiguide has exercised its dissent rights  
under Division 2 of Part 8 of the BCA, and subject to the court ordering otherwise,  
Multiguide is deemed to have sold its shares in MTI to MTI, and MTI is deemed to  
have purchased those shares. The corporate defendants say the plaintiff should not  
be granted a remedy under s. 301(2)(c) of the BCA, and they seek an order for the  
repurchase of Multiguide’s shares in MTI, under Division 2 of Part 8 of the BCA.  
They acknowledge that MTI has no financial ability to repurchase Multiguide’s  
shares.  
[150] I find that the Special Resolution ratifying the MSA and related transfers to  
RTB Canada is a valid special resolution, approved by the necessary majority of the  
shareholders. In those circumstances, the consequences of the plaintiff’s dissent to  
that special resolution is that MTI must repurchase their shares. Failing agreement  
by the parties on the payout value of those shares (pursuant to s. 245(1) of the BCA)  
then the court may determine the payout value of Multiguide’s shares, or may refer  
that question to an arbitrator or registrar (s. 245(2) of the BCA). The payout value for  
those shares is the fair value the shares had immediately before the passing of the  
Special Resolution, excluding any appreciation or depreciation in anticipation of the  
execution of the MSA. The parties agreed, given the lack of financial information  
Multiguide GmbH v. Broer  
Page 50  
available, it would not be proportionate for this question to be posed to an arbitrator  
or the registrar.  
[151] The only evidence before this Court on the value of Multiguide’s 1/3  
shareholding in MTI is the price that RTB Germany paid to Mr. Ziola’s holding  
company for his 1/3 shareholding in MTI in October 2015 (three months before the  
transfer of assets to RTB Canada commenced) of $20,000. I accept this is the only  
available evidence, and I find it reasonable to conclude that the value of Multiguide’s  
shares in MTI is $20,000.  
[152] However, s. 245(5) of the BCA prohibits payment to a dissenting shareholder  
if there are reasonable grounds for believing that the company is insolvent, which  
MTI is. I will deal with this issue under the Remedy section below.  
[153] Finally, I accept the plaintiff’s argument, that the ratification of the MSA by  
way of special resolution does not block their claims for oppression and breach of  
fiduciary duty, nor the remedies they seek. I note the corporate defendants agreed  
that ratification under the BCA could not operate to bar a successful claim for  
oppression.  
F.  
Oppression  
[154] The plaintiff alleges that the actions of the directors of MTI in entering into the  
MSA with RTB Canada, whereby MTI transferred all of its assets and business to  
RTB Canada in return for a potential commission, was not reasonable, and violated  
their reasonable expectations as a minority shareholder of MTI in a manner that was  
oppressive and unfairly prejudicial to Multiguide. They say this transfer was done  
without regard for the interests of the plaintiff as either a minority shareholder or a  
creditor of MTI, without advising the plaintiff it was occurring, and without transferring  
the debts owing to the plaintiff by MTI to RTB Canada. The plaintiff further claims  
that as a result of these allegedly oppressive actions, there is a basis for not only the  
corporate defendants to be liable to Multiguide, but also for the personal defendants  
to be personally liable for both the Disputed Invoices and the Shareholder Loan.  
 
Multiguide GmbH v. Broer  
Page 51  
[155] Both the personal and corporate defendants say their decision to enter into  
the MSA was a legitimate business decision made with the best interests of MTI and  
Multiguide in mind. Their position is that the PDM business in North America had  
always had issues, both for Siemens and for MTI, and that it was a complex and  
difficult business with no hope of financial success. They say there were no  
oppressive actions, and no basis upon which to find either the corporate defendants  
or the personal defendants liable.  
[156] The plaintiff applies for relief pursuant to s. 227 of the BCA. Section 227  
authorizes shareholders to apply to the court for remedies to address conduct that is  
alleged to be oppressive or unfairly prejudicial, and provides:  
227 (2) A shareholder may apply to the court for an order under this section  
on the ground  
(a) that the affairs of the company are being or have been  
conducted, or that the powers of the directors are being or  
have been exercised, in a manner oppressive to one or more  
of the shareholders, including the applicant, or  
(b) that some act of the company has been done or is  
threatened, or that some resolution of the shareholders or of  
the shareholders holding shares of a class or series of shares  
has been passed or is proposed, that is unfairly prejudicial to  
one or more of the shareholders, including the applicant.  
[157] Section 227(3) provides broad remedial powers for the Court, with a view to  
remedying or bringing to an end the conduct complained of, to make any interim or  
final order it considers appropriate, including:  
(a) directing or prohibiting any act,  
(b) regulating the conduct of the company’s affairs,  
…
(g) directing the company, subject to subsections (5) and (6), to  
purchase some or all of the shares of a shareholder and, if  
required, to reduce its capital in the manner specified by the  
court,  
(h) directing a shareholder to purchase some or all of the shares  
of any other shareholder,  
(i)  
directing the company, subject to subsections (5) and (6), or  
any other person, to pay to a shareholder all of any part of  
Multiguide GmbH v. Broer  
Page 52  
the money paid by that shareholder for shares of the  
company,  
(j)  
varying or setting aside a transaction to which the company is  
a party and directing any party to the transaction to  
compensate any other party to the transaction,  
…
(m) directing the company, subject to subsections (5) and (6), to  
compensate an aggrieved person,  
…
[158] The BCA distinguishes between oppressive (s. 227(2)(a)) and unfairly  
prejudicial (s. 227(2)(b)) conduct. Section 227(3) provides the court with broad  
discretion in terms of a remedy should oppression be found.  
[159] The leading authority on the oppression remedy is BCE Inc. v. 1976  
Debentureholders, 2008 SCC 69 [BCE], in which the Supreme Court addressed the  
oppression remedy in the context of the Canada Business Corporations Act, R.S.C.  
1985, c. C-44 [CBCA], which contains an analogous provision to s. 227 of the BCA.  
[45]  
… Unlike the derivative action, which is aimed at enforcing a right of  
the corporation itself, the oppression remedy focuses on harm to the legal  
and equitable interests of stakeholders affected by oppressive acts of a  
corporation or its directors. This remedy is available to a wide range of  
stakeholders – security holders, creditors, directors and officers.  
…
[56]  
In our view, the best approach to the interpretation of s. 241(2) is one  
that combines the two approaches developed in the cases. One should look  
first to the principles underlying the oppression remedy, and in particular the  
concept of reasonable expectations. If a breach of a reasonable expectation  
is established, one must go on to consider whether the conduct complained  
of amounts to “oppression”, “unfair prejudice” or “unfair disregard” as set out  
in s. 241(2) of the CBCA.  
[57]  
We preface our discussion of the twin prongs of the oppression  
inquiry by two preliminary observations that run throughout all the  
jurisprudence.  
[58]  
First, oppression is an equitable remedy. It seeks to ensure fairness –  
what is “just and equitable”. It gives a court broad, equitable jurisdiction to  
enforce not just what is legal but what is fair: Wright v. Donald S.  
Montgomery Holdings Ltd. (1998), 39 B.L.R. (2d) 266 (Ont. Ct. (Gen.Div.)), at  
p. 273; Re Keho Holdings Ltd. and Noble (1987), 38 D.L.R. (4th) 368  
(Alta.C.A.), at p. 374; see, more generally, Koehnen, at pp. 78-79. It follows  
that courts considering claims for oppression should look at business  
 
Multiguide GmbH v. Broer  
Page 53  
realities, not merely narrow legalities Scottish Co-operative Wholesale  
Society, at p. 343.  
[59]  
Second, like many equitable remedies, oppression is fact-specific.  
What is just and equitable is judged by the reasonable expectations of the  
stakeholders in the context and in regard to the relationships at play. Conduct  
that may be oppressive in one situation may not be in another.  
[160] The Supreme Court set out a two-step analysis the court must undertake to  
determine the merits of an oppression claim. First, the court must determine what  
the reasonable expectations are that the claimant asserts about how the company’s  
business would be conducted: BCE at paras. 56, 60 – 66; Jaguar Financial  
Corporation v. Alternative Earth Resources, 2016 BCCA 193 at para. 112 [Jaguar].  
The reasonable expectations must be assessed on an objective and contextual  
basis: BCE at paras. 62, 68; Jaguar at para. 112; Canex Investment Corporation v.  
0799701 B.C. Ltd., 2020 BCCA 231 at paras. 14 - 15 [Canex]. While this analysis is  
necessarily fact specific, the Supreme Court set out a number of considerations that  
may be of assistance in determining whether a reasonable expectation exists,  
including: general commercial practice; the nature of the corporation; the  
relationship between the parties; past practice; steps the applicant could have taken;  
representations and agreements; and the fair resolution of conflicts between the  
shareholders: BCE at paras. 72 – 84. The reasonable expectations of the parties  
are also to be considered contextually, viewed in the specific circumstances, and  
guided by the considerations described above: BCE at para. 72; Canex at para. 15.  
It is the reasonable expectations of the claimant, and not the intent to harm of the  
alleged oppressor, that is relevant: Wilson v. Alharayeri, 2017 SCC 39 at para. 42 .  
What is oppressive in one factual context may not be oppressive in another.  
[161] Second, the court must determine if the claimant has established that their  
reasonable expectations were violated. This requires the court to consider whether  
the conduct complained of was “oppressive” or “unfairly prejudicial”. Oppressive  
conduct is “coercive and abusive, and suggests bad faith”: BCE at para. 67.  
Oppressive conduct is “generally associated with conduct that has variously been  
described as ‘burdensome, harsh and wrongful’, ‘a visible departure from standards  
of fair dealing’, and an ‘abuse of power’ going to the probity of how the corporation’s  
Multiguide GmbH v. Broer  
Page 54  
affairs are being conducted”: BCE at para. 92. Unfairly prejudicial conduct is a “less  
culpable state of mind, that nevertheless has unfair consequences”: BCE at  
para. 67. Unfair prejudice is considered to not be as severe or offensive as  
oppressive conduct: BCE at para. 93; Canex at para. 16.  
[162] In many if not most cases, proof of a claimant’s reasonable expectations will  
be intertwined with either or both of the concepts of oppression and unfair prejudice,  
and the two prongs will merge. They “do not represent watertight compartments, and  
often overlap and intermingle”: BCE at paras. 90-91.  
[163] The claimant has the onus to demonstrate that the failure to meet these  
reasonable expectations constitutes oppressive conduct or unfair prejudice: Jaguar  
at para. 113; BCE at paras. 70, 89.  
[164] Our Court of Appeal considered the decision of BCE in Canex:  
[11]  
Conduct that is oppressive or unfairly prejudicial is conduct that  
violates the reasonable expectations of shareholders, causing them harm. It  
often has its genesis in actions taken by the company, but can also arise from  
actions taken by one or more of the company’s directors or other actors,  
including shareholders: BCE Inc. v. 1976 Debentureholders, 2008 SCC 69 at  
para. 65 [BCE].  
[12]  
Oppression is a statutory remedy available to shareholders who have  
suffered, in their capacity as shareholders, a harm that is typically (but not  
necessarily) separate and distinct from a harm to the corporation: see, for  
example, Dubois v. Milne, 2020 BCCA 216 [Dubois]. There is arguably an  
unresolved question about whether it is necessary for a claimant to show  
direct and special harm in their capacity as shareholder in a manner distinct  
from all other shareholders before an oppression remedy is available: see  
Radford v. MacMillan, 2018 BCCA 355 at para. 61. This question relates to  
the relationship between the circumstances in which an oppression remedy  
may properly be sought, as opposed to the requirement to commence a  
derivative action in the name of the company: see Jaguar Financial  
Corporation v. Alternative Earth Resources Inc., 2016 BCCA 1934 [Jaguar]  
and 1043325 Ontario Ltd. v. CSA Building Sciences Western Ltd., 2016  
BCCA 258 [CSA Building sciences Western Ltd.], leave to appeal ref’d [2016]  
S.C.C.A. No. 383 …  
[165] However, in Jaguar the Court of Appeal concluded that the authorities  
establish that a shareholder must show “it suffered harm that is ‘direct and special’,  
‘peculiar’, or ‘separate and distinct’ from the harm suffered generally by all of the  
Multiguide GmbH v. Broer  
Page 55  
shareholders” (at para. 179). In the case of a closely held corporation, a minority  
shareholder may be able to demonstrate particular harm which, had it occurred in  
the case of a more widely held corporation may not in fact be oppressive: Jaguar at  
paras. 181-184.  
1.  
Reasonable Expectations  
[166] Multiguide, as a shareholder and creditor of MTI, has the necessary standing  
to seek a remedy pursuant to s. 227 of the BCA: BCE at para. 45.  
[167] The plaintiff argues that the defendants disregarded the interests of  
Multiguide as a creditor and shareholder of MTI, when they intentionally and  
unjustifiably refused to pay the Disputed Invoices, and when they secretly  
transferred the entire business of MTI to RTB Canada. They say both of these  
actions were contrary to the reasonable expectations of Multiguide. In the amended  
notice of civil claim filed September 28, 2021, the plaintiff plead in Part 1 the  
following reasonable expectations:  
133  
…
Were oppressive to, unfairly prejudicial to, and contrary to the reasonable  
expectation of, Multiguide as a shareholder and creditor of MTI, including  
because:  
f.  
the terms of the MSA were not reasonable;  
g.  
the MTI Business Transfer impacted Multiguide differently, and  
more adversely, than the other shareholders of MTI because:  
o Whereas the other shareholders of MTI had interests,  
directly or indirectly, in RTB Canada, Multiguide did not; and  
o Through their relationships with each other, with Mr. Broer,  
and with RTB Canada, the other shareholders of MTI had  
more complete access to information about the MSA, the  
Ongoing Business, and all matters involving the MSA and  
the business of RTB Canada.  
h.  
Multiguide is vulnerable to Mr. Broer and Mr. Rummeny (who  
have been and are in conflict of interest as managers of both  
MTI and RTB Canada) manipulating amounts charged and other  
accounting variables such that RTB Canada has reduced  
revenues, or never makes a meaningful profit, including due to  
RTB Canada paying RTB Germany for goods and services at  
rates that result in RTB Canada never making a meaningful  
 
Multiguide GmbH v. Broer  
Page 56  
profit, and the accounting recording of MTI and RTB Canada will  
show such manipulation occurred; and  
i.  
unlike the persons controlling the other shareholders of MTI,  
Multiguide was not provided access to the information needed to  
verify the accuracy of information provided by RTB Canada to  
MTI, only Mr. Broer and Mr. Rummeny have ever had the ability  
to control or influence the information provided by RTB Canada  
to MTI but given their relationships with RTB Canada they are in  
a position of conflict of interest.  
134. Multiguide has suffered loss and damage related to the MTI Business  
Transfer and the oppressive conduct of Mr. Broer, Mr. Rummeny and MTI,  
such loss and damage including, without limitation:  
a.  
MTI having not paid and now not having the financial means to  
pay the Disputed Invoices to Multiguide in its capacity as creditor  
of MTI;  
b.  
c.  
MTI not having the financial means to repay the 100k€  
shareholder loan due to Multiguide as creditor of MTI; and  
Loss of value of Multiguide’s shares in MTI.  
[168] The defendants argue that the amended notice of civil claim fails to expressly  
set out the plaintiff’s reasonable expectations as they related to the repayment of the  
Shareholder Loan and payment of the Disputed Invoices. While the pleading could  
have been crafted more succinctly, I find that the plaintiff has set out their  
reasonable expectations in all of the circumstances.  
[169] The defendant directors admit that the plaintiff could reasonably expect that  
MTI would follow applicable corporate procedures and that as a creditor the plaintiff  
could reasonably expect that MTI would not take steps to put its assets out of reach  
of a legitimate creditor. However, they argue that Multiguide was not a non-arm’s  
length debtor, and so this reasonable expectation would be impacted by:  
a) Mr. Kraus’ knowledge of MTI’s cash flow, in his capacity as director and  
president and CEO of MTI; and  
b) Mr. Kraus’ knowledge that when he ordered the PDMs from RTB  
Germany, which were ultimately delivered to MTI, he knew of the existing  
and potential future purchase orders for those PDMs.  
Multiguide GmbH v. Broer  
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[170] They further argue that any reasonable expectation Multiguide had as a  
creditor of MTI (with specific reference to the €100,000 Shareholder Loan) must be  
affected by:  
a) the terms of the draft shareholder’s agreement (including the fact they  
were not demand loans, required unanimous consent to be repaid, and  
could not be repaid until MTI was profitable);  
b) the fact those funds were required for operating expenses and cash flow  
purposes; and  
c) at the time they were advanced, MTI was expected to need that initial  
capital and additional capital in the future.  
[171] In all of the circumstances described above, the shareholders of MTI had  
legitimate shareholder expectations which had not been reduced to paper. As set  
out by Justice Farley in 820099 Ontario Inc. v. Harold E. Ballard Limited, [1991] O.J.  
No. 266 (Gen. Div.), 3 B.L.R. (2d) 113:  
Shareholder interests would appear to be intertwined with shareholder  
expectations. It does not appear to me that the shareholder expectations  
which are to be considered are those that a shareholder has as his own  
individual ‘wish list’. They must be expectations which could be said to have  
been (or ought to have been considered as) part of the compact of the  
shareholders. Expectations were discussed in Welling, Corporate Law in  
Canada: The Governing Principles (Toronto: Butterworths, 1984), pp. 535-5:  
Thwarted shareholder expectation is what the oppression remedy is  
all about. Each shareholder buys his shares with certain expectations.  
Some of these are outlandish. But some of them, particularly in a  
small corporation with few shareholders, are quite reasonable  
expectations in the circumstances. It is not unusual for three or four  
individuals to go into business together with shared expectations of  
mutual profits, to use a corporate form as a convenient organizing  
vehicle, and to have a subsequent falling out. Individuals in such a  
situation are like the parties to a decaying marriage relationship: they  
cannot be expected to operate by friendly compromise in search of  
mutually satisfactory or “fair” settlements of the many routine  
disagreements that can arise. The corporate vehicle that was once a  
convenience now becomes a mere set of rigid rules, a frame of  
reference for bad tempered dispute settlement. These rules are like all  
legalistic rules … tools for dictatorship of the majority, oppression of  
the minority.  
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When this occurs, some measure of disinterested judicial activism can  
be useful. As the situation will usually (though not always) arise in  
small corporations one assumes that the oppression remedy was  
essentially designed for these corporations, where legitimate  
shareholder expectations are highly likely to exist, are just as unlikely  
to be set out on paper, yet are, because only a few parties are  
involved, susceptible of objective proof in the usual legal manner.  
This, we suggest, is the place for the oppression remedy. And there is  
ample authority for judicial intervention in aid of shareholder  
expectations in such situations.  
[172] I find that in all of the circumstances, including but not limited to reaching the  
Settlement Agreement in May 2015, which provided that in furtherance of the  
separation of the business interests of Mr. Broer and Mr. Kraus, “provision for MTI  
shall be made at a shareholders’ meeting of MTI”, the plaintiff could reasonably  
expect that MTI’s directors would further MTI’s financial interests in good faith, would  
follow applicable corporate procedures, would notify Multiguide of material  
developments (such as the transfer of the business to RTB Canada), and would not  
denude MTI of its assets for less than fair market value. Likewise, I find that  
Multiguide as a creditor could reasonably expect that MTI would not take steps to  
put its assets out of reach of a legitimate creditor. The reasonable expectation was  
not that the plaintiff was guaranteed payment of the Disputed Invoices or the  
Shareholder Loan, but rather, that the directors would not take steps to effectively  
strip MTI of its assets for less than reasonable compensation, putting its assets out  
of reach of its shareholders and legitimate creditors. See Salesco Limited v. Lee  
Paige, 2007 CanLII 37463 (Ont. S.C.J) at paras. 227-229, 36 BLR (4th) 229.  
2.  
Oppression or Unfair Prejudice  
[173] Conflicts may arise between the interests of corporate stakeholders inter se,  
and between stakeholders and the corporation itself. In BCE the Supreme Court  
described the fair resolution of conflicting interests between corporate stakeholders  
as follows:  
[81]  
As discussed, conflicts may arise between the interests of corporate  
stakeholders inter se and between stakeholders and the corporation. Where  
the conflict involves the interests of the corporation, it falls to the directors of  
 
Multiguide GmbH v. Broer  
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the corporation to resolve them in accordance with their fiduciary duty to act  
in the best interests of the corporation, viewed as a good corporate citizen.  
[82]  
The cases on oppression, taken as a whole, confirm that the duty of  
the directors to act in the best interests of the corporation comprehends a  
duty to treat individual stakeholders affected by corporate actions equitably  
and fairly. There are no absolute rules. In each case, the question is whether,  
in all the circumstances, the directors acted in the best interests of the  
corporation, having regard to all relevant considerations, including, but not  
confined to, the need to treat affected stakeholders in a fair manner,  
commensurate with the corporation’s duties as a responsible corporate  
citizen.  
[83]  
Directors may find themselves in a situation where it is impossible to  
please all stakeholders. The “fact that alternative transactions were rejected  
by the directors is irrelevant unless it can be shown that a particular  
alternative was definitely available and clearly more beneficial to the  
company than the chosen transaction”: Maple Leaf Foods, per Weiler J.A., at  
p. 192.  
[84]  
There is no principle that one set of interests – for example the  
interests of shareholders – should prevail over another set of interests.  
Everything depends on the particular situation faced by the directors and  
whether, having regard to that situation, they exercised business judgment in  
a responsible way.  
[174] The plaintiff argues that the directors of MTI, by transferring the entirety of the  
business to RTB Canada as they did, oppressed and/or were unfairly prejudicial to  
Multiguide, in its capacity as a creditor of MTI and minority shareholder of MTI. Their  
position is that Mr. Kraus did not expect the business of MTI to be transferred in the  
manner in which it was, and the totality of the evidence supports a finding of  
oppression. They stress that the directors of MTI did not sell the business at fair  
market value but rather transferred the entirety of the business to a company under  
the effective control of Mr. Broer, for his benefit and the benefit of RTB Germany, for  
significantly less than reasonable compensation.  
[175] The plaintiff points to the following which they say support the finding of  
oppression:  
a) Multiguide was not a shareholder of RTB Canada, and so could not obtain  
any financial compensation through RTB Canada arising from the  
business that had been started, built, and formerly operated by MTI;  
Multiguide GmbH v. Broer  
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b) as a result of the transfer of the entirety of MTI’s business and assets  
being transferred to RTB Canada, MTI will never earn sufficient income to  
either repay the Disputed Invoices, the €100,000 advance, nor repurchase  
the shares Multiguide holds in MTI;  
c) the transfer of the business adversely impacts the plaintiff and Mr. Kraus,  
but does not adversely impact Mr. Broer as he is, through RTB Germany,  
the sole owner of RTB Canada; in fact, the transfer is to Mr. Broer’s  
benefit as it leaves the debts due and owing to the plaintiff unpaid;  
d) the evidence establishes that the MSA was not signed until 2018,  
notwithstanding Mr. Broer’s assertions it was signed early in 2016, and the  
MSA itself does not state that it is documenting a prior oral agreement;  
they argue there was no oral agreement to transfer the business of MTI to  
RTB Canada but rather that Mr. Broer unilaterally chose to do so, and  
tried to cover up that decision a couple of years later;  
e) the defendants were secretive in transferring the business without  
advising the minority shareholder, failed to provide the plaintiff with  
financial statements, and when they did finally advise the plaintiff about  
the MSA in 2018 they refused to disclose it to the plaintiff until after legal  
proceedings had been commenced; and  
f) as Mr. Broer effectively controls both RTB Germany and RTB Canada,  
Mr. Broer was in a conflict of interest position, clearly engaged in self  
dealing, and notwithstanding his allegation that the MSA was fair and  
reasonable, in his position could manipulate the profits of RTB Canada to  
ensure it never needs to pay any profits to MTI pursuant to the terms of  
the MSA.  
[176] The plaintiff also argues that Mr. Broer had other reasonable business options  
available to him other than entering into the MSA. They suggest MTI could have  
changed its name to RTB Canada, could have issued further shares, could have  
Multiguide GmbH v. Broer  
Page 61  
looked for additional funding or entered into arrangements with another partner.  
They say the totality of the evidence supports a finding that Mr. Broer wanted to own  
and control the entire business, and so simply took all of MTI’s assets to ensure that  
Multiguide could no longer be involved in the business. They argue that the path  
Mr. Broer chose, and which Mr. Rummeny agreed to proceed with, ensured that the  
plaintiff could not recover any of the funds owing to it as a shareholder or a creditor.  
[177] The defendant directors argue that entering into the MSA was a reasonable  
business decision in all of the circumstances that were facing MTI at the time. They  
argue that “fairness has to be judged in all of the circumstances, including the  
necessity of the action for the health or survival of the company”: Casey v.  
CopperLeaf Technologies Inc., 2010 BCSC 417 at para. 156. They say the  
authorities establish that courts should give deference to the decisions of directors,  
so long as their business judgment has resulted in a decision that lies within a range  
of reasonable alternatives: Kerr v. Danier Leather Inc., 2007 SCC 44 at para. 57.  
This is known as the “business judgment rule” and reflects the reality that directors  
are often better suited than the courts to determine what is in the best interests of  
the corporation: BCE at para. 40. They argue that a court should not review  
directors’ decisions under a microscope; should look only for reasonableness, not  
perfection, in those decisions; and should avoid intervention where decisions made  
were honest, prudent, reasonable and done in good faith: see Peoples Department  
Stores Inc. (Trustee of) v. Wise, 2004 SCC 68 at para. 67; CW Shareholdings Inc. v.  
WIC International Communications Ltd., [1998] O.J. No. 1886, 39 O.R. (3d) 755,  
(Gen. Div.) at para. 57..  
[178] The defendants submit the options available in early 2016 were to maintain  
the status quo; declare bankruptcy; or enter into the MSA. They say Mr. Broer chose  
not to “simply let MTI wither away” but rather made a reasonable business decision  
in the circumstances and sought to “preserve the remaining value left in MTI” by  
transferring the business to RTB Canada and entering into the MSA. They argue this  
benefitted both Mr. Kraus and Multiguide by avoiding the reputational damage  
resulting from a bankruptcy. While that may not have been a perfect option, they say  
Multiguide GmbH v. Broer  
Page 62  
it was a reasonable one at the time given the economic challenges that were facing  
MTI and should be shown deference. They further argue that with the benefit of  
hindsight, and the fact that notwithstanding the efforts and capital RTB Germany has  
put into RTB Canada it has not yet generated significant profits, it is clear the MSA  
was a reasonable option and advantageous to MTI. They argue there is no evidence  
the MSA was unfair in all of the circumstances.  
[179] The defendants argue that MTI was a precarious business with inherent risks,  
including that the PDM business was dying. Their position is that the sales of new  
PDMs to new and existing customers was virtually non-existent, and that the  
technology was not designed for the North American market and was not keeping  
pace with consumer preferences. They point to the fact that Mr. Broer would not  
have purchased the North American market from Siemens if he had the choice, but  
that it was required by Siemens. They argue that Mr. Broer had no obligation as a  
director or shareholder of MTI to either buy more shares or invest further capital into  
MTI. They say that the MSA must be looked at in context, which is that it was  
created as a reactionary measure to the problems with Parktoria and losing  
customers. They argue that MTI was never a financially successful business, and  
that the evidence supports the finding that staying the course was not a feasible one.  
They say that in the absence of new PDM sales (which were non-existent in 2015,  
and minimal thereafter, even with the sales person RTB Canada employed) MTI had  
no additional revenue sources available after it had secured the contracts it was able  
to after Parktoria.  
[180] Fundamentally they argue that the MSA was a reasonable option, that it  
ensured that the assets of MTI were “deployed in a different manner”, and was  
entered into to try to preserve value for MTI. They argue that:  
a) RTB Germany could have satisfied its contractual obligations to Siemens  
in the event MTI went bankrupt without a dedicated company in North  
America;  
Multiguide GmbH v. Broer  
Page 63  
b) the MSA allows MTI to profit from a broader revenue base than MTI  
previously had;  
c) MTI’s value as at January 2016 was minimal, as seen by the price  
Mr. Ziola sold his shares for; and  
d) they say the plaintiff has presented no evidence to demonstrate the terms  
of the MSA were inadequate or did not reflect fair value given MTI’s  
circumstances at the time.  
They stress that RTB Germany has invested further time and money into RTB  
Canada, and sells additional products through RTB Canada, all of which may be to  
the ultimate benefit of MTI in due course.  
[181] Both Mr. Broer and Mr. Rummeny testified that they believed the commission  
rate under the MSA was fair. Mr. Broer testified that in advance of the MSA, he knew  
MTI had to be properly compensated if the business was transferred to RTB Canada  
and an “equilibrium” had to be agreed upon. His evidence was that he consulted with  
some professionals who advised him the rate was fair for the industry. He argued  
that “the commission is based on the revenue of both the sale and servicing of  
PDMs, as well as the sale of other RTB products, thus giving MTI additional income  
streams that it was unable to integrate based on its existing resources in 2015”.  
There was no evidence from the professionals Mr. Broer consulted with. Further,  
both Mr. Broer and Mr. Rummeny were unclear in their understanding of the terms of  
the MSA, and when profits would be due and owing to MTI. Finally, there was no  
financial audit of MTI as of January 2016, at the time before the transfer of the  
assets to RTB Canada began.  
[182] The defendants attempt to put the blame on Mr. Kraus, and argue that  
Mr. Kraus knew all of the above, and even with all of this knowledge, he chose to  
resign as president and CEO and also as a director. They argue:  
The resignation was done with full knowledge of the financial circumstances  
that were facing the company at that time and the existential risk facing MTI  
at that time. He could have remained as a director to offer strategic guidance  
Multiguide GmbH v. Broer  
Page 64  
(or financing) but he chose not to. Like Mr. Ziola’s departure, this decision is  
telling.  
They say that Mr. Kraus knew MTI would need additional funds for operation by the  
summer of 2015, and that he failed to offer to inject further funds into MTI but rather  
voluntarily resigned as director.  
3.  
Analysis  
[183] In these circumstances, I find that the plaintiff has proven that MTI, Mr. Broer  
and Mr. Rummeny have violated Multiguide’s reasonable expectations and acted in  
an oppressive and unfairly prejudicial manner to the plaintiff, by entering into the  
MSA. Mr. Broer formed a plan to strip Multiguide of all of its assets and value, and  
convinced Mr. Rummeny to participate in his plan. RTB Canada, through Mr. Broer  
and Mr. Rummeny, participated in his plan. As set out above, the parties were in the  
middle of separating their worldwide business assets, had effectively accomplished  
this in Germany and had agreed in their Settlement Agreement they would do so at  
a shareholder’s meeting of MTI. Rather than calling such a shareholder’s meeting,  
once he had purchased Mr. Ziola’s shares, Mr. Broer used his de facto control as the  
majority shareholder of MTI to transfer all of its assets, but none of its liabilities, to a  
company effectively controlled by him, for clearly less than fair market value.  
Notwithstanding the defendants attempt to argue the terms of the MSA were  
reasonable, in the circumstances I find it was not a reasonable business decision,  
and entering into it was oppressive and unfairly prejudicial to the plaintiff. I say this  
for the following reasons:  
a) the defendants failed to provide any evidence corroborating their bald  
statements that the 5% commission structure was reasonable in the  
circumstances, other than hearsay evidence that unnamed professionals  
had deemed it reasonable;  
b) failed to ascribe any value to the ongoing business opportunity RTB  
Canada took from MTI, other than the bald allegation that the business  
was a failing one with no chance of financial success;  
 
Multiguide GmbH v. Broer  
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c) were unable to provide a satisfactory explanation for the discount of  
96.3045% applied to MTI’s inventory;  
d) provided no evidence of any value ascribed to MTI’s other assets, namely  
employees, service contracts, goodwill, etc.; and  
e) provided no reasonable justification for why RTB Canada was entitled to  
use MTI’s financial assets to pay some of RTB Canada’s invoices, when  
the terms of the MSA when it was eventually executed provided RTB  
Canada was not responsible for any of MTI’s liabilities.  
[184] I also find that the defendants violated Multiguide’s reasonable expectations  
and acted in an oppressive and unfairly prejudicial manner to the plaintiff, by  
entering into the MSA in secrecy. The directors entered into, and implemented, the  
MSA without calling a shareholder’s meeting, without advising the plaintiff, and  
without documenting their decision to do so. Notwithstanding Mr. Broer’s  
protestations that there was an oral agreement to do so, it is clear the MSA was not  
formalized until sometime in 2018. It is also clear that any oral agreement to strip  
MTI of all of its assets was orchestrated by Mr. Broer - in his capacity as a director of  
MTI, in his capacity of control of the majority of shareholders of MTI, and as a  
director of the newly formed RTB Canada. RTB Canada stands to benefit from the  
terms of the MSA, and so Mr. Broer stands to benefit from the terms of the MSA,  
through his sole control of RTB Germany, which is the sole shareholder of RTB  
Canada. As set out in para. [6], Mr. Broer is the sole limited partner of RTB  
Germany, and the sole shareholder of RTB Technick (the corporate general partner  
of RTB Germany).  
[185] What is oppressive in one factual context may not be oppressive in another,  
and in these circumstances I find the conduct to be clearly oppressive and unfairly  
prejudicial. This conduct was a visible departure from the standards of fair dealing,  
and was an abuse of Mr. Broer’s position of effective control of MTI which went to  
the probity of how he conducted MTI’s corporate affairs.  
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[186] While Mr. Rummeny was not the orchestrating mind of the oppressive events,  
in his capacity as a director of both MTI and RTB Canada he accepted Mr. Broer’s  
instructions and requested and acquiesced in his plan. His conduct is likewise  
oppressive and unfairly prejudicial to the plaintiff.  
[187] I find the plaintiff has proven that its reasonable expectations were breached  
by the defendants in an oppressive and unfairly prejudicial manner.  
G.  
Breach of Fiduciary Duty  
[188] The parties agree that directors owe a fiduciary duty to their company. As  
summarized in BCE:  
[36]  
The directors are responsible for the governance of the corporation. In  
the performance of this role, the directors are subject to two duties: a  
fiduciary duty to the corporation under s. 122(1)(a) (the fiduciary duty); and a  
duty to exercise the care, diligence and skill of a reasonably prudent person  
in comparable circumstances under s. 122(1)(b) (the duty of care). The  
second duty is not at issue in these proceedings as this is not a claim against  
the directors of the corporation for failing to meet their duty of care. However,  
this case does involve the fiduciary duty of the directors to the corporation,  
and particularly the fair treatment component of this duty, which, as will be  
seen, is fundamental to the reasonable expectations of stakeholders claiming  
an oppression remedy.  
[37]  
The fiduciary duty of the directors to the corporation originated in the  
common law. It is a duty to act in the best interests of the corporation. Often  
the interests of shareholders and stakeholders are co-extensive with the  
interests of the corporation. But if they conflict, the directors’ duty is clear – it  
is to the corporation: Peoples Department Stores.  
[38]  
The fiduciary duty of the directors to the corporation is a broad,  
contextual concept. It is not confined to short-term profit or share value.  
Where the corporation is an ongoing concern, it looks to the long-term  
interests of the corporation. The content of this duty varies with the situation  
at hand. At a minimum, it requires the directors to ensure that the corporation  
meets its statutory obligations. But, depending on the context, there may also  
be other requirements. In any event, the fiduciary duty owed by directors is  
mandatory; directors must look to what is in the best interests of the  
corporation.  
[189] BCE makes clear that directors, in most circumstances, owe their duty to the  
corporation, and the reasonable expectation of shareholders is simply that directors  
will act in the best interests of the corporation. However, in exceptional  
circumstances where there is a special relationship of trust and dependency  
 
Multiguide GmbH v. Broer  
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between a minority shareholder and a director, the courts have found directors to  
owe a fiduciary duty to other shareholders: Valastiak v. Valastiak, 2010 BCCA 71 at  
paras. 46-51; Canex at paras. 97-102.  
[190] The plaintiff argues that the defendant directors breached their fiduciary duty  
to MTI, and that Mr. Broer owed a personal fiduciary duty to Multiguide (in its  
capacity as a minority shareholder to MTI) which he likewise breached.  
[191] The defendant directors argue that they fulfilled their fiduciary duty to MTI.  
They argue that in their capacity as directors they owed a fiduciary duty to MTI, and  
a duty to exercise the care, diligence and skill of a reasonably prudent person in all  
of the circumstances: see BCE at paras. 37-39, 66. Further, Mr. Broer says he had  
no fiduciary duty to Multiguide in its capacity as a minority shareholder and creditor  
of MTI. He argues that the imposition of a fiduciary duty owed directly to Multiguide  
can only occur in very limited, “exceptional” circumstances, which were not present  
in this case: Canex at para. 102. Mr. Broer argues that Mr. Kraus was in charge of  
the operations of MTI until he voluntarily resigned on August 2, 2015, and he chose  
to resign; and that upon doing so, he did not seek as a condition of his resignation  
as a director and officer of MTI that Mr. Broer “would specifically look out for  
Mr. Kraus’ interests”.  
[192] I find, for the reasons set out above, that in entering into the MSA, on terms  
that were neither reasonable nor in the best interests of MTI, the directors breached  
their fiduciary duty to act in MTI’s best interests.  
[193] Further, in these circumstances, whereby Mr. Broer and Mr. Kraus had  
separated their German businesses, and agreed they needed to make  
arrangements to separate the interest in MTI, I am satisfied that Mr. Broer was in a  
special relationship of trust and dependency with MTI, and that he owed the plaintiff,  
in its capacity as a minority shareholder of MTI, a fiduciary duty. I do not accept  
Mr. Broer’s argument that Mr. Kraus chose to resign as a director and officer of MTI,  
and that the consequences of that choice are Mr. Kraus’ to bear. I find Mr. Broer  
breached his fiduciary duty to Multiguide by taking advantage of Mr. Kraus’  
Multiguide GmbH v. Broer  
Page 68  
resignation as a director of MTI to take actions to effectively take all value out of MTI  
without his knowledge. He further breached that duty by failing to disclose his  
actions, failing to produce financial statements that would have disclosed his actions,  
failing to hold shareholder meetings, and refusing to produce a copy of the MSA.  
VI.  
REMEDY  
[194] As I have found that MTI, Mr. Broer and Mr. Rummeny engaged in oppressive  
and unfairly prejudicial conduct with the full cooperation of RTB Canada, that  
Messrs. Broer and Rummeny breached their fiduciary obligations to MTI, and  
Mr. Broer breached his fiduciary obligations to Multiguide, I must next determine the  
appropriate remedy.  
[195] As set out in para. [159], oppression is an equitable remedy which seeks to  
ensure fairness. Pursuant to s. 227(3) of the BCA, the court has broad remedial  
authority when it determines that the claimant has established either oppression or  
unfairly prejudicial conduct has occurred. Determining an appropriate remedy  
requires a flexible and discretionary approach: Wilson at para. 57. The authorities  
establish at least four general principles that should guide the courts in fashioning a  
fit remedy, including in determining whether an order of personal liability against the  
directors is “fit” in all of the circumstances:  
a) the remedy requested must be a fair way of dealing with the situation;  
b) the order should go no further than is necessary to rectify the oppressive  
conduct;  
c) the order should only serve to vindicate the reasonable expectations of  
shareholders, creditors, directors or officers in their capacity as corporate  
stakeholders, and not in any personal capacity; and  
d) the court should consider the general corporate law context when  
exercising its remedial discretion.  
 
Multiguide GmbH v. Broer  
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[196] A remedy for oppressive conduct is available to address the objective and  
substantive reality of the conduct of the affairs of a company. As set out in Canex:  
[13]  
Several observations may assist in structuring the analytical  
framework to be brought to bear in assessing whether a remedy is available  
for oppressive conduct. It is not limited by mere formalities of corporate  
structure. What matters is substance, not form. Hence, courts are entitled to  
examine the realities of how a company is controlled and by whom, and the  
trust nature of relationships within and between related companies. Doing so  
does not displace the importance of legal structures and corporate law  
principles which inform the analysis. This is the approach the judge took in  
this case, and rightly so. The judge was entitled to look past corporate  
formalities to determine who truly controlled the Company, and who benefited  
from the transactions that were impugned in these proceedings: BCE at  
para. 58. The judge’s finding of liability against the personal defendants was  
rooted in this approach, and does not reflect an error in principle.  
The court is entitled to look past corporate formalities (but not ignore the legal  
principles of corporate law) to determine who controlled the company and who  
benefited from the impugned transactions: Canex at paras. 13, 69; BCE at para. 58.  
The remedy should bring an end to the conduct complained of, but should go no  
further than necessary to correct the injustice of unfairness between the parties:  
Wilson at para. 27; 63833 Manitoba Corp. v. Cosman’s Furniture (1972) Ltd., 2018  
MBCA 72 at paras. 43-47.  
[197] Further, the authorities establish that in certain circumstances personal orders  
against directors are appropriate: Wilson at paras. 32-33. These circumstances  
include where directors: obtain a personal benefit from their conduct; have increased  
their control of the corporation by the oppressive conduct; have breached a personal  
duty they have as directors; have misused a corporate power; or where a remedy  
against the corporation would prejudice other security holders. They may also  
include cases involving closely held corporations where a director has virtually total  
control over the corporation: Wilson at paras. 32-33. Some of these cases “have  
involved small, closely held corporations, where the director whose conduct was  
attached has been the sole controlling owner of the corporation and its sole and  
directing mind; and where the conduct in question has redounded directly to the  
benefit of that person”: Pitney Bowes of Canada Ltd. v. Belmonte, 2011 ONSC 3755  
at para. 28 [Pitney]; citing Sidaplex-Plastic Suppliers Inc. v. Elta Group Inc., 1995  
Multiguide GmbH v. Broer  
Page 70  
CanLII 7419 (Ont. S.C.J (Gen. Div.)), 131 DLR (4th) 399, at para. 22. The focus is  
on the fairness of the remedy in the circumstances. The court must consider whether  
the oppressive conduct is properly attributed to the individual director, and whether  
the imposition of liability is “fit in all of the circumstances”: Wilson at paras. 47-50.  
The remedy crafted should be commensurate “with rectifying the breach of the  
plaintiffs’ reasonable expectations”: Canex at para. 78.  
[198] Courts have also granted oppression remedies against corporate directors  
when the company has ceased to do business and has an inability to pay any  
judgment: Pitney; Downtown Eatery (1993) Ltd. v. Ontario, 2001 CanLII 8538, 200  
D.L.R. (4th) 289 (C.A.).  
[199] Section 227(5) of the BCA provides that if an order is made pursuant to  
subsection (3)(g), (i) or (m), the company must pay the full amount of the order  
unless there are reasonable grounds for believing that the company is insolvent, or  
the payment would render the company insolvent. If so, s. 227(6) of the BCA  
provides a scheme for payments which can be made, effectively only to the extent  
that they would not render the company insolvent. Here, the evidence is clear that  
MTI is insolvent, and has no ability to make any payments ordered.  
[200] Counsel for the plaintiff made clear in closing arguments that notwithstanding  
his position that the Special Resolution is invalid, the plaintiff does not seek to have  
the MSA set aside and the resulting transactions undone. The financial records from  
the time are wholly inadequate to allow that to happen. Further, given the  
acrimonious plethora of litigation that has occurred between Mr. Broer and  
Mr. Kraus, they have no ability to function as business partners. Fundamentally, the  
plaintiff seeks the defendants to be jointly and severally liable for payment of the  
Disputed Invoices, the Shareholder Loan, and for payment of the plaintiff’s shares in  
MTI. The plaintiff also set out a complicated decision tree of potential alternate  
remedies dependent upon my findings of fact.  
[201] The defendant companies take no position on the claims arising between the  
plaintiff and Messrs. Broer and Rummeny, including those claims where the plaintiff  
is seeking orders which would affect the companies. In that regard, they say MTI  
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and RTB Canada will abide by whatever orders this Court makes. The defendant  
companies admit that the plaintiff is entitled to a judgment against MTI in the amount  
of the Disputed Invoices, along with pre-judgment interest calculated in accordance  
with the contractual payment terms on those invoices, but they admit that MTI is  
currently insolvent and so unable to pay any such order. The defendant companies  
say that the plaintiff’s claim for judgment in respect of the shareholder loan and for a  
remedy under s. 301(2)(c) of the BCA should be dismissed, and that there should be  
an order for the repurchase of Multiguide’s shares in MTI, under Division 2 of Part 8  
of the BCA.  
[202] The defendant directors argue that notwithstanding their admission the  
Disputed Invoices are due and owing, they say that a majority of that amount was  
due to PDMs that the plaintiff ordered for the North American market, that Mr. Kraus  
should have known did not possess the requisite technology for the market, and that  
the plaintiff had failed to secure purchasers for those units before they were ordered.  
They say the order for payment of the Disputed Invoices should only be made as  
against MTI, which they acknowledge is insolvent, but they say may make money in  
the future through the MSA.  
[203] The defendant directors also argue that they should not face personal liability  
for any remedy, as they had no intent to harm Multiguide, and the plaintiff had no  
reasonable expectation of the guaranteed repayment of the Disputed Invoices or the  
Shareholder Loan. They say as a creditor and shareholder of MTI, the plaintiff will be  
entitled to repayment once MTI begin to realize profits through the MSA, and any  
remedy ordered should only be made as against MTI.  
[204] In the alternative, they say that in February 2016 MTI had only $200,000 in its  
bank accounts, and those are the only funds that would have been available to  
satisfy Multiguide as a creditor or shareholder, and any remedy should be limited to  
that amount. They argue this is not a situation where valuable assets were  
appropriated by RTB Canada and Multiguide as a creditor or shareholder was  
deprived of its rights. However, this argument ignores the fact that in February 2016  
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MTI also had service contracts with existing clients, offices, inventory, and  
employees, all of which were transferred to RTB Canada for minimal compensation,  
in accordance with the terms of the MSA.  
[205] Finally, the defendants argued that the plaintiff seeks a 100% return on its  
investment in an industry that was clearly not a safe investment, and had  
considerable risks which Mr. Kraus had knowledge and awareness of. That  
argument, however, ignores the fact that Mr. Broer clearly wanted to maintain his  
investment in the industry, and orchestrated events so that he could personally  
benefit from the work that had been done by MTI to establish itself in North America.  
His oppressive and unfairly prejudicial actions eliminated the possibility of the  
plaintiff sharing in any future success created by MTI, and eliminated the plaintiff’s  
ability to receive partial repayment for the Disputed Invoices and the Shareholder  
Loan had decided to allow MTI to pursue bankruptcy. It is clear that the potential  
future 5% payment by RTB Canada to MTI pursuant to the terms of the MSA (which  
has yet to have any payments made on it) would never result in MTI receiving any  
significant profits, and so Multiguide would likewise never receive any significant  
profits. It is telling that since January 2016 no commission has been paid by RTB  
Canada to MTI.  
[206] Given the conduct which has occurred, which was orchestrated by Mr. Broer  
and in which Mr. Rummeny participated, and from which RTB Canada profited, I find  
this is a case where it is appropriate to find the directors of both MTI and RTB  
Canada, together with the two companies, to be jointly and severally liable. While  
Mr. Broer and Mr. Rummeny may not have personally benefited from the MSA, both  
RTB Canada and RTB Germany received the potential to benefit from the MSA,  
which indirectly benefits Mr. Broer. As I have found that both Mr. Broer and  
Mr. Rummeny have breached their fiduciary duty as directors of MTI to MTI, that  
Mr. Broer has breached his fiduciary duty to Multiguide, and both have misused their  
powers to benefit RTB Canada, personal liability is appropriate and fair. Accordingly,  
I order:  
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a) MTI, RTB Canada, Mr. Broer and Mr. Rummeny are jointly and severally  
liable to pay the amount of the Disputed Invoices to the plaintiff, within 60  
days of these reasons for judgment, with pre-judgment interest calculated  
in accordance with the contractual terms of the invoices; and  
b) MTI, RTB Canada, Mr. Broer and Mr. Rummeny are jointly and severally  
liable to pay the Shareholder Loan, within 60 days of these reasons for  
judgment, together with pre-judgment interest in accordance with the  
Court Order Interest Act, R.S.B.C. 1996, c. 79, from the date of demand  
for repayment, being December 8, 2015.  
[207] With respect to the purchase of Multiguide’s shares in MTI, the plaintiff seeks  
judgment against all of the defendants for $20,000 on account of those shares, in  
return for which it will surrender its shares in MTI. In the alternative, they proposed a  
complicated remedy by which Multiguide became a 1/3 shareholder of RTB Canada,  
and surrendered its shares in MTI. Counsel for the defendants vehemently objected  
to any remedy which would require a continuing business relationship between the  
parties, as it is clear that Mr. Broer and Mr. Kraus no longer have the ability to work  
together, and such a result (even if it were available at law, which I do not accept it  
is) would not be equitable in the circumstances. They argued that the goal of any  
remedy should be to create a full and final resolution between the shareholders of  
MTI. I agree.  
[208] Notwithstanding that the parties had not agreed on the amount of the payout  
value of Multiguide’s shares (pursuant to s. 245(1) of the BCA), none of the parties  
believed it was proportionate to refer the question of the value of the shares to an  
arbitrator or the registrar (pursuant to s. 245(2) of the BCA). Counsel for MTI  
acknowledged that the best and only evidence before the court on the value of  
Multiguide’s 1/3 shareholding in MTI was the price RTB Germany paid to Mr. Ziola  
for his 1/3 shareholding, three months before the allegedly effective date of the  
MSA, namely $20,000. Counsel for MTI agreed I could conclude that Multiguide’s  
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Page 74  
1/3 shareholder in MTI was worth $20,000. Counsel for the plaintiff sought a  
payment for the plaintiff’s shares in MTI of $20,000.  
[209] In all of the circumstances, I order that Mr. Broer and/or RTB Canada are to  
purchase Multiguide’s shares in MTI within 60 days of these reasons for judgment  
for $20,000, and upon payment for those shares Multiguide is to relinquish its shares  
in MTI to the purchaser.  
[210] Finally, the plaintiff seeks an award of $100,000 for punitive damages against  
the defendants. Punitive damages are limited to exceptional circumstances where  
defendants engage in “malicious, oppressive and high handed” misconduct that  
“offends the court’s sense of decency”. Awards of punitive damages are limited to  
circumstances where there is a “marked departure from the ordinary standards of  
decent behaviour”: Whiten v. Pilot Insurance Co., 2002 SCC 18 at para. 36. The  
objective of punitive damages is to punish the defendants rather than to compensate  
a plaintiff: Whiten at para. 36. In Whiten (at para. 113) the Supreme Court of  
Canada identified a number of factors to consider when assessing the level of  
blameworthiness, including:  
a) whether the misconduct was planned and deliberate;  
b) the intent and motive of the defendant(s);  
c) whether the defendant persisted in the outrageous conduct over a lengthy  
period of time;  
d) whether the defendant concealed or attempted to cover up the  
misconduct;  
e) the defendant’s awareness that what he or she was doing was wrong;  
f) whether the defendant profited from the misconduct; and  
g) whether the interest violated by the misconduct was known to be deeply  
personal to the plaintiff, or was something that was irreplaceable.  
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[211] The parties both rely upon the Canex decision, in which the Court of Appeal  
confirmed that punitive damages can be awarded concurrently with a remedy for  
oppression, and in those circumstances awarded punitive damages of $100,000.  
They both quote the following paragraph in support of their position:  
[106] I agree that on the facts found by the judge, an award of punitive  
damages was called for. I agree that the defendants engaged in a  
coordinated effort to misappropriate the plaintiffs’ investment. They did so by  
using the Company to their personal financial benefit. They used the  
Company as if it were their own personal asset. They took money from the  
Company for their own personal benefit. They attempted to justify their  
conduct by falsifying financial records. They advanced defences the judge  
effectively found to be bogus, such as that the plaintiffs had not made their  
required contributions, that they should pay interest on their under-  
contributions, and that they owed money on other projects. Ms. Familamiri  
effectively admitted that the financial records were falsified to allow collection  
on these other debts without having to prove them or pursue proper  
processes to establish them.  
[212] The plaintiff says this is an appropriate case in which to award punitive  
damages over and above damages for oppression and breach of fiduciary duty.  
They argue that the conduct of the defendants to strip MTI of all of its assets was  
clearly intentional, and that the intent of the participants “was to deprive the plaintiff  
of a fair corporate divorce”. They argue that the defendants hid the transfer of the  
business of MTI from the plaintiff, and then refused to provide information upon  
request about the transfer and the MSA without court order. They say this impugned  
conduct persisted until trial (pointing to the fact that the admission the Disputed  
Invoices were due was not made until September 2021).  
[213] The defendants say there is no basis for an award of punitive damages. They  
argue that if oppression is found, the evidence does not support going further than  
the remedy imposed for the oppressive or unfairly prejudicial conduct. They argue  
that punitive damages should only be awarded where compensatory damages are  
insufficient: Churchill v. Aero Auction Sales Inc., 2019 ONSC 4766 at para. 45. They  
stress that the imposition of personal liability for oppressive conduct is meant to  
achieve the same purpose as punitive damages, and is sufficient to deter future  
conduct: Churchill at para. 45. They acknowledge the evidence establishes that  
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Page 76  
certain corporate procedures were not followed – such as the holding of an AGM  
and the disclosure of financial statements – but they say that failure is not sufficiently  
reprehensible conduct to warrant punitive damages. They say there is no evidence  
that any of the directors personally benefitted from their actions, and they say that  
there is no evidence that RTB Germany has benefitted from the MSA, but rather,  
that RTB Germany has continued to invest money into RTB Canada. Messrs. Broer  
and Rummeny argue that the evidence of Mr. Rummeny made it clear RTB  
Germany could have fulfilled its service obligations in North America without either  
MTI or RTB Canada. They say this is not a case like Canex, where the director and  
related companies had received monetary benefits from the oppressive acts (which  
included manipulation of financial statements and misappropriation of assets).  
[214] For the reasons set out above, I find that the behaviour of Mr. Broer, when  
viewed in light of the totality of the evidence, was high handed and very poor  
conduct. However, in the circumstances, I am satisfied that my award for the  
oppressive and unfairly prejudicial conduct, and the breaches of fiduciary duty, and  
in particular the imposition of personal liability upon Messrs. Broer and Rummeny, is  
sufficient penalty for his impugned conduct. In my view it is neither necessary nor  
appropriate to also impose punitive damages.  
[215] All counsel agreed that given the broad scope of potential remedies, it was  
most proportionate that they be given leave to argue costs after reviewing these  
reasons for judgment. Accordingly, the plaintiff is to make written submissions (of no  
more than 15 pages double spaced, 12 point font) on the issue of costs within 35  
days of these reasons, and the defendants are to respond within 21 days thereafter  
in the same manner. Should counsel need to set down a hearing on the issue of  
costs after the exchange of written materials, they are to contact scheduling to  
advise of that fact and to schedule a hearing, as required.  
[216] Finally, all counsel are commended for making significant efforts before and  
during trial to streamline the complicated evidence of corporate events by way of an  
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Agreed Statement of Facts, a Chronology, and two further Agreements as to  
Evidence during the trial.  
“Blake J.”  


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