Where the relationship between the parties resembles a partnership more than arm’s length shareholders, such that it can be said that the entity is, in substance, a partnership in the guise of a private company, courts have been prepared in certain circumstances to liquidate on the same grounds that would justify the winding-up of a partnership: Vivian v. Firth, 2012 BCSC 517 at paras. 72 and 74. If a partnership analogy is found to be apt, it is still necessary to identify the circumstances that would justify intervention on equitable grounds and a winding-up order. Those circumstances encompass: a) a breakdown of the mutual trust and confidence upon which the original undertaking was founded; b) a destruction of the mutual confidence between the members or a breach of the original agreement, and of the good faith which underlay it; c) a justifiable lack of confidence in the conduct of the company's affairs by the directors, where that lack of confidence grounded in a lack of probity, good faith, or other improper conduct, on the part of a majority of directors; d) a refusal to meet on matters of business, continued quarreling, and such a state of animosity that all reasonable hopes of reconciliation and friendly cooperation are precluded; and e) a situation where it is impossible for the partners to maintain the reasonably expected confidence in each other necessary to continue the affairs of the business, and such impossibility has not been caused by the person seeking to take advantage of it. See Vivian at paras. 72 and 77-78.
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