In a high-stakes dispute between two entrepreneur brothers, an Ontario court has dismissed claims by the older sibling for an equal share in a successful tech startup, while awarding damages against him for breaching fiduciary duties and contractual obligations to the company.
The plaintiff, D.A., claimed he was entitled to 50 per cent of the combined shares held between himself and his younger brother, M.A., in Bolt Technologies Inc. (formerly Second Closet), based on alleged oral representations. The court rejected this claim, finding D.A. fabricated evidence and breached his fiduciary duties to the company.
The business relationship
The brothers grew up in what the court described as a “volatile and difficult upbringing” but remained close during their teens and early adulthood. M.A. conceived of the business idea for “Second Closet” (later Bolt) while attending university, when he wished for additional storage space in the cramped one-bedroom condo he shared with his older brother.
While both brothers discussed the business idea, the court found Bolt “was clearly Mark’s brainchild, and that its ultimate success was in large measure a product of Mark’s prodigious business acumen and drive.” M.A. had incorporated at least one business while still in high school and was described as “something of a business phenom” at university.
Prior to D.A. joining the company, M.A. had secured $2 million in seed capital through an investor, Michael Hyatt and the Hyatt Family Trust, who were allocated 10 percent of Class A shares. Another 10 percent was set aside for an employee stock option plan.
The brothers’ relationship deteriorated following D.A.’s stint managing Bolt’s Vancouver operations. Upon his return to Toronto, D.A. felt “excluded from the important decision-making” while M.A. believed his brother was “slow to adjust to the new and increased demands of the rapidly expanding business.”
The disputed agreement
Central to the case was a unanimous shareholders agreement (USA) signed by both brothers on May 31, 2017, which explicitly set out their respective shareholdings. The agreement contained an entire agreement clause stating it would “supersede and terminate all prior agreements, understandings, negotiations and discussions, whether oral or written.”
D.A. initially claimed an oral agreement existed between the brothers to split their shares equally. However, during trial, he shifted his position, arguing instead that his brother’s representations created a “reasonable expectation” that their shares would be evenly split, constituting oppressive conduct under the Canada Business Corporations Act.
The court found this claim was undermined by D.A.’s conduct, particularly his production of what was later determined to be a forged document. During litigation, D.A. had produced a photocopied document dated June 9, 2017, purportedly signed by both brothers, stating their shares would be “divided equally (50% each of the combined total).”
However, after a forensic document examiner concluded M.A.’s signature was “highly probably not genuine,” D.A. withdrew his reliance on the document. The court found it was “considerably more probable than not that David prepared the document, not in or around June of 2017 but just prior to the time he produced it in the litigation some years later, and that he signed the document not only for himself, but for Mark, forging his brother’s signature.”
Breach of fiduciary duties
The court also ruled on a counterclaim brought by Bolt regarding D.A.’s conduct following his resignation.
After giving notice of resignation in December 2020, D.A. met with a principal of one of Bolt’s largest competitors. When company leadership learned of this meeting, they temporarily locked D.A.’s account.
In response, D.A. texted a board member stating: “If this is how this is going to be handled, I can assure you it won’t end well.” He then reset his password and, between 1 a.m. and 3 a.m., downloaded approximately 14,000 Bolt files, including proprietary information and private employee data, forwarding them to his personal email account.
Following this incident, Bolt terminated D.A.’s employment for cause, four days before his 60-day notice period would have concluded.
The court also found that D.A. breached his fiduciary and contractual obligations by engaging in competitive activities after leaving Bolt. He took a consulting position with SCI Logistics, which he acknowledged was a “direct competitor” of Bolt, and partnered in businesses called Send Logistics Inc. (Canada) and Send Logistics, Inc. (U.S.), which the court determined were competing with Bolt using “information and strategies known to David from his time as Bolt’s COO.”
D.A.’s claim that the Send companies were merely “software” businesses that didn’t compete with Bolt was described by the court as “disingenuous and unpersuasive.”
The ruling
The court dismissed all of D.A.’s claims against the defendants and awarded damages to Bolt on its counterclaim.
Regarding D.A.’s equity claim, the court noted: “In my view, taking into account the respective contributions that Mark and David made to the creation and early operations of Bolt, the inclusion of David in the business, including the details of David’s role and shareholding, was in fact generous to David.”
The court found D.A.’s conduct, particularly the forged document, disqualified him from equitable relief under the “clean hands” doctrine, stating: “David’s creation and use of this evidence is deceitful and unforgiveable.”
On the counterclaim, the court ordered disgorgement of profits from D.A.’s competitive activities: $45,200 from his SCI consulting fees, $52,649.89 (CAD) from Send Canada’s income, and $114,294.50 (USD) from Send U.S. income.
The court also awarded $100,000 in punitive damages against D.A., noting his conduct had been “unacceptable in many respects” and that punitive damages were “warranted to confirm the court’s condemnation of such conduct and to deter David and any future litigants from engaging in such deceitful behaviour.”
For more information, see Ang v. Ang, 2025 ONSC 2804 (CanLII).
