A company founder left the company after the other two founders prevented him from preforming his job as CTO and unduly terminated him from his position as a director. At a later stage, he was offered to return to the company but refused and demanded compensation for his shares.
The Court held that, although the founders amended their breach, their actions amount to oppression and loss of trust between the parties in a way that establishes the right of the founder to receive compensation instead of enforcement of the agreement. Ordinarily, when an injured party contends a breach of a contract demands the enforcement of the agreement, if the breaching party responds to the demand, the injured party no longer has the ability to terminate the agreement and claim damages. Regardless, in circumstances where an injured shareholder is being oppressed by the breaching shareholder and a loss of trust arises between the parties, there may be no point in enforcement and he may demand damages instead of enforcement. Here, the prevention of the founder from performing his work as CTO and his unduly dismissal from his position as a director amount to oppression that created a crisis of trust between the parties. Therefore, the founder's refusal to return to the company and his demand to sell his shares to the other two founders is a legitimate demand under the circumstances.