He Sued the Company That Fired Him and Ended Up Owing It Over $1 Million
Over 14 years, the president and a director of a closely held family company quietly drained more than $800,000 from it, paying himself and his family unearned and excessive wages, covering personal expenses with company money, and taking undisclosed loans. When the other shareholders finally uncovered the scope of it and removed him, he sued the company for wrongful dismissal. The company turned the litigation around: it counterclaimed, recovered every dollar, and secured punitive damages, pre-judgment interest, and special costs on top. Vassilakaki v. Vassilaki & Sons Investments Ltd. is a roadmap for any business or shareholder confronting a director, officer, or insider who has been taking from the company. The lesson is not about how he was fired. It is that a faithless fiduciary can be made to pay it all back, and then some, often through a counterclaim in the very suit he started.
The company here did not simply defend the wrongful dismissal claim. It counterclaimed for breach of fiduciary duty under the Business Corporations Act and recovered $814,681.99, then obtained a further $100,000 in punitive damages for 14 years of deliberate, concealed misconduct, pre-judgment interest, and special costs for being forced to defend a claim the plaintiff knew was doomed. For a business facing an insider who has taken its money, the takeaway is that the strongest move is often offensive, not defensive.
Discovered a director, officer, or partner taking company funds?
What you do first matters. Secure the financial records and get advice before confronting the person, because evidence can disappear quickly and early steps shape what you can recover. Where funds are still at risk, urgent orders to preserve assets or compel an accounting may be available.
Call: 1-800-771-7882 Speak With a Litigation LawyerBackground: a family company drained from the inside
Vassilaki & Sons Investments Ltd. (VSI) is a closely held company that operates a liquor store in Penticton, BC, owned among family members. The plaintiff was its president, a director, and the store manager. Over a period running from 2009 to 2023, he caused VSI to pay excessive and unearned wages to himself, his wife, his son, and his daughter-in-law, used company funds for personal expenses ranging from home insurance to a personal collectibles habit, drew undisclosed interest-free loans, paid his personal income taxes with company money, and charged a $5,000 retainer for his own shareholder dispute to the company credit card. An independent expert calculated that the four family members had been overpaid by $631,269 alone.
None of this was disclosed to the company's other director, and a written warning in 2020 to stop and to seek board approval did not change his conduct. After the other shareholders discovered the credit-card retainer in 2023, the company commissioned a workplace investigation, removed him as a director, and ultimately terminated his employment. He sued for wrongful dismissal. On the second day of trial he conceded the company had cause to dismiss him, and the case turned to the company's counterclaim for the money he had taken.
What the court decided
Breach of fiduciary and statutory duty
As a director and officer, the plaintiff owed VSI fiduciary and statutory duties under the Business Corporations Act, including the duty to avoid undisclosed conflicts of interest and to obtain board approval for benefits paid to himself and related parties. The court found he breached those duties by keeping the payments secret and treating company funds as a personal backstop.
Full recovery through the counterclaim
The court awarded VSI $814,681.99 payable forthwith: $631,269 in diverted excess wages, $108,500 in salary paid while he was not working, $56,850 wrongly paid to his wife, vacation-period wages for two family members, an unpaid loan balance, and the $5,000 retainer. The plaintiff did not contest the quantum once condonation was off the table.
Punitive damages for concealment
Applying Whiten, the court added $100,000 in punitive damages. Recent BC Court of Appeal awards for breach of fiduciary duty involving concealment and persistent misconduct cluster around $100,000. The company had sought $200,000, but the figure was moderated because the conduct involved a family company rather than arm's length investors, and the plaintiff's admissions were a mitigating factor. Pre-judgment interest of $137,067.43 was also added.
Special costs for a meritless claim
The court found the plaintiff pursued a wrongful dismissal claim he knew was meritless, having admitted his misconduct in the investigation, on discovery, and in a notice to admit, and having filed an affidavit making specious allegations. That crossed the threshold beyond a merely weak case, and the company was awarded special costs for defending the claim, assessed at 33.3% of its trial costs.
Key lessons for businesses and shareholders
Diverting funds is a fiduciary breach, not just a contract issue
A director, officer, or senior insider who takes company money breaches duties that exist independently of any contract. Framing the claim in breach of fiduciary duty opens the door to equitable remedies that ordinary contract claims do not.
The counterclaim is your recovery vehicle
When a departing insider sues, the response is not only to defend. A counterclaim can recover what was taken in the same proceeding, converting a defensive posture into a path to judgment.
Recovery does not require a matching loss
Where a fiduciary profits from the breach, the company can pursue an account of those profits and equitable compensation. The focus is on what the wrongdoer took and concealed, not only on a precisely matched corporate loss.
Concealment invites punitive damages
Secrecy, falsified records, and ignoring a clear warning push a case beyond compensation. Punitive damages target the quality of the misconduct, and breach of fiduciary duty can support them without a separate actionable wrong.
A meritless claim can cost the claimant
A party who litigates a claim they know is baseless can be ordered to pay special costs, well above the ordinary scale. Documented admissions are powerful evidence that a claim was pursued without merit.
Move quickly and secure the records
Evidence disappears fast. An investigation and an independent accounting built the proof here. Where funds remain at risk, urgent asset-preservation orders may be available, so get advice before confronting the insider.
Facing an insider who has taken from your company?
Whether you are defending a claim brought by a departing director or pursuing one who drained the business, the recovery often lives in a fiduciary-duty counterclaim. A focused assessment early can protect the evidence and the value of your claim.
Get a Case Assessment Or call us: 1-800-771-7882How Achkar Law's litigation team helps
We act for businesses and shareholders in British Columbia and Ontario in disputes involving directors, officers, and insiders who have misused their positions. Our work spans commercial litigation, shareholder disputes, directors and officers liability, breach of fiduciary duty, and corporate fraud, from urgent asset-preservation applications through to trial and recovery.
Pursuing or defending a fiduciary-duty claim?
Tell us about your situation and we will follow up promptly to discuss your options, including how a counterclaim or urgent relief might apply. We act for businesses and shareholders across BC and Ontario.
Call us at 1-800-771-7882 or contact our litigation team for a confidential consultation.
For the employer and HR side of this case, including how the investigation defeated the condonation argument and preserved just cause, see our companion article on the employment law site.