Shareholder Disputes


Shareholder rights and remedies are rooted in statutory and common law principles designed to ensure fair treatment and protect the interests of shareholders. These rights are typically enshrined in corporate legislation, such as the Canada Business Corporations Act (CBCA) and Ontario’s Business Corporations Act (OBCA), as well as in the corporation’s own governing documents.


  • Right to Vote: Shareholders can vote on significant corporate matters, including electing directors and approving major transactions. This right ensures that shareholders have a say in the fundamental decisions affecting the company. Voting can be in person at meetings or by proxy, allowing shareholders to delegate their voting power if they cannot attend.

  • Right to Information: Shareholders are entitled to access certain corporate information, such as financial statements and meeting minutes. This transparency is crucial for shareholders to make informed decisions. Information rights also include access to shareholder lists, articles of incorporation, and bylaws, providing a comprehensive understanding of the company’s operations and governance.

  • Right to Dividends: If declared, shareholders have the right to receive their share of dividends. Dividends represent a return on investment and are a way for companies to distribute profits to shareholders. The declaration of dividends is usually at the discretion of the board of directors, depending on the company’s financial health and strategic goals.

  • Right to Sue: Shareholders can take legal action to enforce their rights or address grievances. This can include derivative actions, where shareholders sue on behalf of the corporation, or direct actions for personal harm. Legal recourse ensures that shareholders can hold the company and its directors accountable for any misconduct or breach of fiduciary duties.


Minority Shareholders: Typically hold a smaller portion of the company’s shares and often face challenges in influencing corporate decisions. They are particularly vulnerable to actions by the majority that may unfairly prejudice their interests. Minority shareholders may experience exclusion from decision-making processes and may find it difficult to challenge decisions that negatively impact their investment.

Majority Shareholders: Usually control a larger portion of the company’s shares, giving them significant influence over corporate governance. However, they must exercise their powers responsibly to avoid allegations of oppressive conduct. Majority shareholders have the potential to steer the company’s direction but must balance their interests with those of minority shareholders to ensure fair treatment.


Shareholder disputes often necessitate court intervention when internal resolution mechanisms fail. Common scenarios include:

  • Breaches of Shareholder Agreements: Disagreements over the interpretation or enforcement of shareholder agreements can lead to legal disputes. These agreements often cover voting rights, share transfers, and other governance issues, and breaches can significantly impact shareholder relations.

  • Mismanagement or Abuse of Power by Directors: Directors have fiduciary duties to act in the best interests of the corporation. When directors misuse their positions for personal gain or fail to manage the company effectively, shareholders may need to seek legal remedies to protect their investments.

  • Unfairly Prejudicial or Oppressive Actions by Majority Shareholders: Actions that disadvantage minority shareholders, such as excluding them from important decisions or diluting their shares, can be grounds for legal action. Oppression claims address conduct that violates the reasonable expectations of shareholders.

  • Disputes Over the Valuation of Shares: Share valuation disputes often arise during buyouts, mergers, or acquisitions. Determining the fair market value of shares is critical for ensuring equitable treatment of shareholders, especially in cases involving minority shareholders.

  • Conflicts Arising from Mergers and Acquisitions: Mergers and acquisitions can lead to significant changes in a corporation’s structure and strategy. Shareholders may disagree on the terms or strategic direction of such transactions, necessitating legal intervention to resolve conflicts.


When disputes arise, shareholders (often minority shareholders) can seek remedies through the courts. The broad and flexible nature of these remedies is designed to address a wide range of unfair conduct.


  1. Identify the Harm: Clearly articulate the specific conduct or decision that has caused harm or is in breach of shareholder rights.

  2. Gather Evidence: Collect documentation and other evidence that supports the claim, such as meeting minutes, financial records, and correspondence.

  3. Seek Legal Advice: Consult with a legal expert to determine the most appropriate remedy and the likelihood of success.

  4. File a Claim: Initiate legal proceedings in the appropriate court, outlining the grievances and the desired remedies.

  5. Court Proceedings: Participate in the legal process, including hearings and negotiations, to resolve the dispute.



The oppression remedy is probably the most significant and commonly used remedy in shareholder disputes.

  1. Statutory Framework: The oppression remedy is found in section 241 of the CBCA and section 248 of the OBCA. It provides relief from corporate conduct that is oppressive, unfairly prejudicial, or that unfairly disregards the interests of any security holder, creditor, director, or officer of the corporation. These statutory provisions offer a broad scope of protection and allow courts significant discretion in providing relief.

  2. Definition of Oppression: Oppression involves conduct that:

    • Coerces or abuses power.

    • Is burdensome, harsh, and wrongful.

    • Departs visibly from standards of fair dealing.

    • Suggests bad faith.

    The concept of oppression covers a wide range of actions that harm the interests of shareholders. It includes not only direct actions but also omissions and decisions that have a prejudicial effect.

  3. Complainants: Any “complainant” can seek relief, including shareholders, creditors, directors, officers, and other persons the court deems appropriate. The definition of complainant is broad, ensuring that various stakeholders who have a legitimate interest in the corporation’s conduct can seek remedies.

  4. Grounds for an Oppression Claim: The claim must demonstrate a breach of reasonable expectations and that the conduct in question was unfair. Key considerations include:

    • General Commercial Practices: Whether the conduct departs from accepted business norms.

    • Nature of the Corporation: The size, structure, and specific practices of the corporation.

    • Past Practices: Historical conduct and established practices within the corporation.

    • Preventive Steps: Actions the complainant could have taken to mitigate harm.

    • Representations and Agreements: Commitments made to shareholders through agreements or other representations.

  5. Remedies Available: The court has broad discretion to fashion appropriate remedies, including:

    • Restraining Orders: To halt ongoing oppressive conduct.

    • Regulating Corporate Affairs: Including amending by-laws or articles.

    • Director Appointments: Installing new directors to rectify governance issues.

    • Share Purchases: Forcing the buyout of a complainant’s shares.

    • Varying or Setting Aside Transactions: Modifying or annulling agreements that disadvantage shareholders.

    • Compensation: Financial restitution for losses incurred.

Focus on the Oppression Remedy

Statutory Framework and Core Concepts:

  • The oppression remedy is the most powerful tool for addressing unfair corporate conduct. It applies broadly to any conduct that affects the reasonable expectations of stakeholders. The statutory framework under the CBCA and OBCA ensures that the remedy is accessible and effective across various jurisdictions.

  • The BCE Inc. case established a two-pronged test for oppression: breach of reasonable expectations and unfair conduct. This test is pivotal in determining the validity of oppression claims and guiding courts in their decisions.

Complainants Under the Oppression Remedy:

  • Shareholders: Both current and former shareholders can seek relief. This includes those who hold voting and non-voting shares, ensuring comprehensive protection for all types of shareholders.

  • Creditors: Creditors with a legitimate interest in the corporation’s conduct can also be considered complainants. This ensures that creditors can protect their financial interests against oppressive corporate actions.

  • Directors and Officers: Current and former directors and officers can bring claims if they believe their interests have been unfairly prejudiced.

  • Proper Persons: The court has discretion to recognize other individuals or entities as proper complainants, providing flexibility in addressing unique situations.

Reasonable Expectations:

  • Derived from the overall context of the relationship between the corporation and the complainant. Reasonable expectations are shaped by the specific circumstances and interactions within the corporation.

  • Influenced by general commercial practices, the nature of the corporation, past practices, preventive steps, and representations made. Courts consider these factors to determine what a reasonable shareholder could expect under similar circumstances.

Unfair Conduct:

  • Focused on the effects rather than the intent behind the conduct. This ensures that harmful actions are addressed even if there was no malicious intent.

  • Examples include coercion, bad faith, visible departures from fair dealing, and burdensome actions. These examples illustrate the types of conduct that courts consider oppressive and provide guidance for shareholders in identifying actionable grievances.

Common Remedies:

  • Restraining Orders: To halt ongoing oppressive conduct. Restraining orders prevent further harm and maintain the status quo while the dispute is resolved.

  • Regulating Corporate Affairs: Including amending by-laws or articles. This remedy ensures that corporate governance practices align with shareholders’ reasonable expectations and legal standards.

  • Director Appointments: Installing new directors to rectify governance issues. Appointing independent directors can help restore confidence in the corporation’s leadership and ensure fair decision-making.

  • Share Purchases: Forcing the buyout of a complainant’s shares. This remedy provides an exit strategy for shareholders who have been unfairly treated, ensuring they receive fair compensation for their investment.

  • Compensation: Financial restitution for losses incurred. Compensation addresses the financial harm suffered by shareholders and restores their position as much as possible.


While the oppression remedy is the most well-known and widely used remedy in shareholder disputes, there are several other remedies available to shareholders to address various forms of corporate misconduct or disputes. Each of these remedies serves a unique purpose and is designed to address specific issues that may arise within a corporation.



Derivative actions are lawsuits brought by a shareholder on behalf of the corporation against directors, officers, or third parties. This remedy is typically used when the corporation itself, due to its management, fails to take action against wrongdoers who have harmed the corporation. The goal of a derivative action is to rectify wrongs done to the corporation, thereby indirectly benefiting all shareholders.

When to Use:

  • Director or Officer Misconduct: When directors or officers have breached their fiduciary duties, such as engaging in self-dealing, fraud, or gross negligence.

  • Corporate Mismanagement: When there is evidence of mismanagement that is detrimental to the corporation’s interests, such as failure to oversee operations properly, leading to financial losses.

  • Third-Party Harm: When third parties have caused harm to the corporation, such as through breach of contract or tortious actions.


  1. Demand Requirement: Shareholders typically must make a demand on the board to take action before initiating a derivative suit. If the board refuses or fails to act within a reasonable time, the shareholder can proceed with the lawsuit.

  2. Court Approval: The court must approve the shareholder’s right to proceed with the derivative action, ensuring that the claim is brought in good faith and is in the best interest of the corporation.

  3. Litigation Process: The shareholder, as the plaintiff, will litigate the case on behalf of the corporation, seeking remedies such as damages, injunctions, or other equitable relief.


  • Ensures that corporate wrongdoers are held accountable.

  • Protects the corporation’s interests and, by extension, the interests of all shareholders.

  • Provides a mechanism for addressing wrongs that the current management may be unwilling or unable to address.



Shareholders have the right to request a court-ordered investigation into the corporation’s affairs. This remedy is particularly useful when there are suspicions of misconduct, fraud, or other irregularities within the corporation that need to be uncovered and addressed.

When to Use:

  • Suspicion of Fraud: When there are indications that fraud or other illegal activities are being conducted within the corporation.

  • Corporate Misconduct: When there is a lack of transparency or irregularities in corporate governance, financial reporting, or operations.

  • Shareholder Disputes: When shareholders are unable to obtain necessary information through other means, and there is a need for an independent investigation to resolve disputes.


  1. Application to Court: Shareholders must apply to the court, providing evidence that justifies the need for an investigation.

  2. Appointment of Investigator: The court can appoint an independent investigator with the authority to examine the corporation’s books, records, and other relevant documents.

  3. Reporting: The investigator will prepare a report detailing their findings, which may be used to support further legal action or corporate reforms.


  • Provides transparency and accountability within the corporation.

  • Uncovers misconduct and irregularities that may not be apparent through routine oversight.

  • Can lead to corrective actions that improve corporate governance and protect shareholder interests.



Court-ordered meetings ensure that proper governance procedures are followed when there are disputes or irregularities in how meetings are conducted. This remedy is particularly important when the regular process for calling and conducting meetings has broken down, leading to a lack of proper shareholder representation and decision-making.

When to Use:

  • Failure to Hold Meetings: When the board fails to call annual general meetings or other required meetings.

  • Improper Conduct of Meetings: When meetings are conducted in a manner that violates the corporation’s bylaws or statutory requirements.

  • Disputes Over Meeting Outcomes: When there are disputes over the validity of decisions made at shareholder meetings.


  1. Application to Court: Shareholders can apply to the court for an order to call or conduct a meeting.

  2. Court Order: The court may issue an order specifying how the meeting should be called, conducted, and the issues to be addressed.

  3. Conduct of Meeting: The meeting is held in accordance with the court’s order, ensuring that it complies with legal and procedural requirements.


  • Ensures that shareholders can exercise their rights to participate in corporate governance.

  • Rectifies procedural irregularities that may undermine the validity of shareholder meetings.

  • Facilitates the resolution of disputes by providing a clear and legally binding framework for conducting meetings.



The appraisal remedy allows shareholders to demand payment of fair value for their shares in certain circumstances, such as when they dissent from fundamental changes to the corporation. This remedy is particularly relevant in scenarios like mergers, acquisitions, or other corporate restructurings where shareholders may disagree with the terms or believe their shares are undervalued.

When to Use:

  • Mergers and Acquisitions: When shareholders dissent from a proposed merger or acquisition and believe the offered consideration does not reflect the fair value of their shares.

  • Fundamental Changes: When there are significant changes to the corporation’s structure, such as amendments to articles of incorporation, that materially affect shareholder interests.


  1. Notice of Dissent: Shareholders must provide written notice of their intention to dissent from the proposed transaction.

  2. Demand for Payment: After the transaction is approved, dissenting shareholders can formally demand payment of the fair value of their shares.

  3. Valuation Process: If the corporation and the dissenting shareholders cannot agree on the fair value, the matter may be referred to the court, which will determine the fair value based on expert evidence and other relevant factors.


  • Protects minority shareholders from being forced to accept unfair terms in corporate transactions.

  • Ensures that dissenting shareholders receive fair compensation for their investment.

  • Provides a legal mechanism for resolving valuation disputes in an equitable manner.



The rectification of registers allows shareholders to correct errors or omissions in the corporation’s official records. This remedy ensures that the corporation’s registers accurately reflect its ownership and governance structure, which is essential for maintaining corporate transparency and integrity.

When to Use:

  • Incorrect Entries: When there are mistakes in the register of shareholders, directors, or other corporate records.

  • Omissions: When shareholders or other stakeholders have been wrongly excluded from the records.

  • Disputes Over Ownership: When there are disputes regarding the rightful ownership of shares or the validity of entries in the registers.


  1. Application to Court: Shareholders can apply to the court for an order to rectify the corporate registers.

  2. Court Order: The court may issue an order directing the corporation to correct the records, ensuring that they accurately reflect the true ownership and governance status.

  3. Implementation: The corporation must comply with the court’s order and make the necessary corrections to the registers.


  • Ensures the accuracy and integrity of the corporation’s official records.

  • Protects the rights of shareholders and other stakeholders by ensuring that their interests are properly documented.

  • Provides a legal mechanism for resolving disputes over corporate records.



Challenges to the validity of elections or appointments of directors or auditors can be brought to court for review. This remedy ensures that the process of electing directors and appointing auditors is fair, transparent, and compliant with legal requirements.

When to Use:

  • Irregularities in Elections: When there are allegations of procedural irregularities or misconduct during the election process.

  • Disputes Over Validity: When there are disputes regarding the validity of the election or appointment of directors or auditors.

  • Compliance Issues: When the election or appointment process fails to comply with statutory or bylaw requirements.


  1. Application to Court: Shareholders can apply to the court for an order reviewing the election or appointment process.

  2. Court Review: The court will examine the evidence and determine whether the election or appointment process was conducted fairly and in accordance with legal requirements.

  3. Court Order: If irregularities are found, the court may issue an order to rectify the situation, which could include nullifying the election results and ordering a new election.


  • Ensures the legitimacy and integrity of the corporate governance process.

  • Protects shareholders’ rights to a fair and transparent election process.

  • Provides a mechanism for addressing and correcting procedural irregularities.



Restraining orders or compliance orders are court-issued directives to prevent certain actions or compel compliance with legal obligations. These orders are essential for stopping ongoing harmful conduct or ensuring that corporate actions align with legal and governance standards.

When to Use:

  • Ongoing Harmful Conduct: When there is a need to immediately halt conduct that is harmful to the corporation or shareholders.

  • Non-Compliance with Legal Obligations: When the corporation or its directors fail to comply with statutory or bylaw requirements.

  • Preventive Measures: When there is a risk of future harmful conduct that needs to be prevented.


  1. Application to Court: Shareholders can apply to the court for a restraining or compliance order.

  2. Court Hearing: The court will consider the evidence and determine whether an order is necessary to prevent harm or ensure compliance.

  3. Issuance of Order: If the court is satisfied that an order is warranted, it will issue a restraining or compliance order, specifying the actions that must be taken or ceased.


  • Provides immediate relief from ongoing harmful conduct.

  • Ensures that the corporation and its directors comply with legal and governance standards.

  • Prevents future harm by setting clear legal boundaries for corporate actions.



As a last resort, the court can order the liquidation and dissolution of the corporation. This remedy is used in extreme cases where the corporation’s continued existence is not feasible or equitable. Liquidation involves winding up the corporation’s affairs, selling its assets, and distributing the proceeds to shareholders and creditors.

When to Use:

  • Insolvency: When the corporation is insolvent and cannot continue its operations.

  • Irreparable Breakdown: When there is an irreparable breakdown in the relationship between shareholders or in the governance of the corporation.

  • Fraud or Misconduct: When there is extensive fraud or misconduct that makes the continued operation of the corporation untenable.


  1. Application to Court: Shareholders or creditors can apply to the court for an order to liquidate and dissolve the corporation.

  2. Court Order: The court will assess the situation and determine whether liquidation and dissolution are necessary and appropriate.

  3. Liquidation Process: A liquidator is appointed to wind up the corporation’s affairs, sell its assets, and distribute the proceeds to shareholders and creditors according to their rights and interests.


  • Provides a definitive resolution to extreme corporate conflicts or insolvency.

  • Ensures an orderly wind-up of the corporation’s affairs and fair distribution of assets.

  • Protects the interests of shareholders and creditors in situations where the corporation can no longer operate effectively.


Understanding shareholder rights and remedies is essential for protecting your interests and ensuring fair treatment within a corporation. If you are facing issues related to shareholder disputes, having the right legal representation can make all the difference. For businesses in Toronto and throughout Ontario, Grigoras Law is the premier choice for handling shareholder dispute cases.

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Expertise in Shareholder Dispute Law: Our legal team, led by experienced lawyers Denis Grigoras and Rachelle Wabischewich, brings extensive knowledge and experience to every case. Shareholder disputes are complex and require detailed understanding and strategic insight. We navigate these complexities with precision, ensuring comprehensive legal guidance and effective advocacy across Ontario.

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Proven Track Record: Our history of successful outcomes speaks to our ability to effectively represent clients in shareholder dispute cases. We have consistently helped clients protect their rights and interests. Our reputation as litigation lawyers in Toronto is built on a solid foundation of successful cases. We consistently achieve favourable outcomes for our clients, demonstrating our commitment to excellence.

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Tailored Legal Strategies: At Grigoras Law, we understand that every shareholder dispute case is unique. We take the time to understand the specifics of your situation and tailor our legal strategies accordingly. Whether you are dealing with breaches of shareholder agreements, mismanagement, or valuation disputes, we develop a customized approach to achieve the best possible outcome for you.

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Protecting Your Interests: In today’s competitive business environment, protecting your interests as a shareholder is vital. We understand the importance of safeguarding your rights and take a proactive approach to protect them. Our team works diligently to address any shareholder dispute issues promptly and effectively, minimizing the impact on your investment and its future.

Navigating Complex Legal Challenges: Shareholder dispute cases can be complex, often involving multiple legal issues. Our team’s holistic understanding of the law allows us to navigate these challenges with ease. We are adept at handling cases where shareholder disputes intersect with other areas of commercial litigation, ensuring that no detail is overlooked.

Take Control of Your Legal Situation

Protecting your interests and ensuring fair treatment within a corporation is crucial. When facing shareholder disputes, seek the guidance of Grigoras Law, your trusted ally in commercial litigation. We are here to represent you, ensuring you have the advocacy and expertise needed to navigate your legal challenges. Take control of your legal situation with confidence, knowing that you have a dedicated and skilled legal team by your side.

Contact Grigoras Law Today

If you believe your rights as a shareholder have been compromised or if you are facing allegations of misconduct, don’t hesitate to reach out to our qualified Toronto litigation lawyers. We proudly represent clients across Ontario. Our team is dedicated to offering bespoke solutions, attentively crafted to suit your distinct needs. Choose Grigoras Law for a dedicated and skilled legal team ready to stand by your side every step of the way. We prioritize delivering a high standard of professional service, ensuring every aspect of your case receives focused and expert attention.

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Disclaimer: The answers provided in this FAQ section are general in nature and should not be relied upon as formal legal advice. Each individual case is unique, and a separate analysis is required to address specific context and fact situations. For comprehensive guidance tailored to your situation, we welcome you to contact our expert team.

Reasonable expectations in the context of shareholder disputes and potential oppression claims are a complex and multifaceted concept. They are assessed through a combination of factors that may differ significantly depending on the circumstances:

  1. Commercial Practice: The common commercial practices play a crucial role in defining reasonable expectations. If a company departs from normal business practices in a way that undermines a shareholder’s legal rights, it may give rise to a remedy. This departure must, however, be significant enough to affect the complainant’s rights.

  2. Nature of the Corporation: Courts will take into consideration the size, structure, and nature of the corporation. Small, closely held corporations may be allowed more leeway by directors in deviating from strict formalities compared to larger public companies.

  3. Personal Relationships: If there are personal relationships between the claimant and other corporate actors, such as family or friendship ties, different standards may apply. In close corporations, the relationship between shareholders might be considered beyond legal rights.

  4. Past Practice: The past practices of the corporation, particularly in a closely-held corporation, can create reasonable expectations among shareholders. These may concern profit participation and governance. A breach of these expectations, especially if not justified by valid commercial reasons or if undermining the complainant’s rights, may constitute grounds for a claim.

  5. Preventative Steps: Courts may also assess whether the claimant could have taken steps to protect themselves against the claimed prejudice. For instance, whether a secured creditor could have negotiated protections against the oppressive conduct.

  6. Corporate Documents and Agreements: The legitimate expectations of a shareholder can also be affected by the provisions in the corporation’s articles of incorporation, by-laws, or any shareholders’ agreements. These legal documents must be considered in conjunction with the size, nature, and commercial practices of the corporation.

  7. Oppression Remedy and Burden of Proof: The complaining shareholder must prove that oppression exists. Unlike other legal claims, evidence of fraud or bad faith is not necessary. Instead, conduct must be demonstrated to be burdensome, harsh, and wrongful.

  8. Court Intervention: Under section 248(3) of the OBCA, the court has broad powers to intervene, from restraining conduct and appointing directors to winding up the corporation. The court may also award interim costs if the applicant has a meritorious case and genuinely cannot afford to pursue the claim.

  9. Interlocutory Orders: In proceedings under section 248(3) of the OBCA, interim relief may be granted under certain conditions, even if the traditional considerations associated with an interlocutory injunction are not met. Fairness may dictate such an approach, consistent with the broad nature of the oppression remedy.

In conclusion, determining reasonable expectations in a potential oppression claim involves careful consideration of commercial practices, the nature of the corporation, relationships between shareholders, past practices, and various legal and equitable factors. It may require a detailed examination of the facts and legal documents, and possibly legal consultation to properly understand and assess a shareholder’s specific rights and expectations. It’s advisable to consult with a legal professional who specializes in corporate law if you believe you may have a claim.

Here are some specific cases examples:

  1. Oppressive Conduct: Three couples owned shares in a corporation, and one wife, who worked largely without compensation, faced pressure not to sell her Class B shares after her marriage broke down. The company’s financial position allowed further dividends, but the other directors were pressured not to declare dividends beyond $0.05, forcing the applicant to sell her shares. The company also proposed a reorganization that would limit the applicant’s rights.

    1. Outcome: The Court found the actions oppressive and unfairly prejudicial and prohibited the corporation from reorganizing its capital.

  2. Oppressive Conduct: Substantial dividends, high directors’ fees, and other payments were made without proper authorization.

    1. Outcome: The Court found this unfairly prejudicial to a minority shareholder and ordered either the corporation or the directors to purchase the applicant’s shares at fair value without a minority discount.

  3. Oppressive Conduct: Majority shareholder issued new class shares to himself for a nominal price and declared a dividend equal to all retained earnings.

    1. Outcome: The Court found this as oppression and ordered the majority shareholder to pay the minority shareholder his share of the dividend.

  4. Oppressive Conduct: A corporation changed its dividend policy in a way that disregarded the interests of Class A shareholders. The corporation and directors failed to consult or inform the Class A shareholders or properly consider their interests.

    1. Outcome: The Court found unfair disregard for the interests of the Class A shareholders and upheld an order for a forced purchase of the Class A shares.

  5. Oppressive Conduct: The controlling shareholder of a corporation treated the business and assets as his own, failing to keep proper records and resulting in legal issues.

    1. Outcome: The Court ordered the father to be removed as a director, and that his shares be made non-voting and redeemed.

  6. Oppressive Conduct: A corporation in financial difficulty declared and paid a dividend when its liabilities exceeded its assets, affecting its ability to meet its liabilities.

    1. Outcome: The Court found this conduct oppressive and ordered the dividend payment to be set aside and repaid to the corporation.

  7. Oppressive Conduct: Payment of dividends to shareholders left the corporation unable to pay its tax liabilities, and the directors were held responsible.

    1. Outcome: The oppression remedy was invoked, and the directors were held personally liable for the unpaid corporate tax.

  8. Oppressive Conduct: In a family-owned corporation, conflicts led to the exclusion of one son from the business, dismissing him from his employment and altering voting control.

    1. Outcome: The Court found these actions oppressive and integrally intertwined with the son’s interests as a shareholder. The resolution to delete the “twilight voting” attribute was also found oppressive.

  9. Oppressive Conduct: Unilateral removal of a corporate director by the remaining directors after he demanded transparency and compliance with legal provisions.

    1. Outcome: The Court found the conduct oppressive and unfairly prejudicial and ordered the director to be reinstated.

  10. Oppressive Conduct: Refusal to provide audited financial statements preventing a shareholder from selling his shares.

    1. Outcome: The court ordered the corporation to provide the financial statements, holding that the refusal was an oppressive act.

  11. Oppressive Conduct: While applicant was ill, the respondents terminated his employment and removed him from management.

    1. Outcome: The court found this as oppression and ordered the respondents to purchase the applicant’s shares, with a trial ordered for wrongful dismissal damages.

  12. Oppressive Conduct: Directors controlling a corporation voted against desperately needed refinancing proposal.

    1. Outcome: The court held that this was an act of oppression and that a remedy was available.

  13. Oppressive Conduct: Directors declared dividends to themselves, causing the corporation to have a negative net worth, and executed other intra-corporate transfers to benefit personally.

    1. Outcome: The court found this to be oppressive and held the directors personally liable for the debt.

  14. Oppressive Conduct: An individual increased his compensation while the corporation was in financial difficulty, effectively stripping the corporation of its cash assets.

    1. Outcome: The court ordered the individual to pay the increased compensation as it was found to be an act of oppression.

  15. Oppressive Conduct: A director who fraudulently transferred assets to another corporation to avoid paying rent.

    1. Outcome: The director was found to have acted oppressively and was held accountable.

  16. Oppressive Conduct: A director transferred valuable assets to other corporations for self-interest, disregarding the interests of shareholders and creditors.

    1. Outcome: The court imposed personal liability on the director and awarded substantial damages for the oppressive acts.

  17. Oppressive Conduct: M acquired B’s interest and failed to make payments, withdrew money, and sold the assets to a new company, acting oppressively towards B.

    1. Outcome: The court found M’s conduct to be oppressive and ordered personal redress.

  18. Oppressive Conduct: Failure to provide financial statements, keep adequate records, pay GST, and pay dividends to applicant, acting as though the business was owned solely by the individual respondent. Outcome: Both the corporation and the individual respondent were found liable for oppressive conduct and were ordered to pay arrears of dividends and repurchase applicant’s shares.

  19. Oppressive Conduct: Failure to pay discretionary dividends in line with the will of a deceased owner.

    1. Outcome: The court found this to be oppressive and ordered payment of the dividends.

  20. Oppressive Conduct: Directors took substantial managerial and consulting fees without disclosure, depleting working capital.

    1. Outcome: The court found this to be oppressive conduct.

  21. Oppressive Conduct: After a change in control, reports ceased, minority shareholders were denied information, and profits were not distributed fairly.

    1. Outcome: Minority shareholders were successful in obtaining an oppressive remedy, with the court considering the reasonable expectations of shareholders.

  22. Oppressive Conduct: Stopping the payment of dividends without valid justification, contrary to the reasonable expectations of the minority shareholder.

    1. Outcome: The court ordered the payment of the dividends, finding the conduct oppressive.

  23. Oppressive Conduct: An employee sued his corporate employer for wrongful dismissal. The corporate employer was restructured, leaving it as a non-operating entity. The reorganization unfairly disregarded the employee’s interests.

    1. Outcome: The employee was entitled to recover his judgment from the individual directors.

  24. Oppressive Conduct: Minority shareholders were denied access to audited financial statements. The majority shareholder failed to provide audited statements, claiming financial difficulties.

    1. Outcome: The court ordered that audited statements be prepared and delivered to the minority shareholders.

  25. Oppressive Conduct: Majority shareholders failed to provide copies of bylaws, minute books, and other corporate records to minority shareholders.

    1. Outcome: The court ordered the majority shareholders to rectify deficiencies in financial reports and other reporting information.

  26. Oppressive Conduct: A minority shareholder was removed as a director, breaching an understanding between principal shareholders that both would be involved in management.

    1. Outcome: An injunction was granted to restrain the removal.

  27. Oppressive Conduct: A family company was treated as personal property by the majority shareholder without regard for the rights of other family members. Basic corporate governance was oppressed.

    1. Outcome: An oppression remedy was successful, highlighting the denial of shareholders’ rights.

  28. Oppressive Conduct: A majority shareholder caused minority shareholders to pay outstanding accounts that belonged to the respondent and stripped the company of its assets.

    1. Outcome: The court held the majority shareholder as being unfairly prejudicial and unfairly disregarding the interests of minority shareholders.

  29. Oppressive Conduct: Two directors converted Class B and C shares but not Class A shares, causing a loss to a minority shareholder.

    1. Outcome: The court held the directors personally liable for the loss.

  30. Oppressive Conduct: A father and daughter, serving as directors, were liable for taking out a mortgage for the benefit of their family company and manipulating financial statements.

    1. Outcome: Both were held liable for oppression to minority shareholders.

  31. Oppressive Conduct: The sole director of a corporation failed to provide financial information and misused corporate funds for personal benefit, operating the corporation as a private company.

    1. Outcome: The director was personally liable to a minority shareholder for oppression.

  32. Oppressive Conduct: Directors of a company adopted a policy of never paying dividends and combined with excessive remuneration, promoting the success of the Company for their own benefit, thereby denying other shareholders a return on investment.

    1. Outcome: The court found that the remuneration and no-dividend policies were prejudicial, amounting to oppression.

  33. Oppressive Conduct: Intentional exclusion of a co-owner and director from a shareholder meeting and nullifying the meeting.

    1. Outcome: Actions taken at the meeting were declared null and void.

  34. Oppressive Conduct: Exclusion of a minority shareholder from management, denial of financial information, and failure to provide notices of meetings.

    1. Outcome: Majority shareholders ordered to offer to purchase the minority shareholder’s shares at a determined price.

  35. Oppressive Conduct: Self-dealing by the sole director, granting himself favourable compensation, loan arrangements, and prioritizing personal interests.

    1. Outcome: Petition for an oppression remedy successful.

  36. Oppressive Conduct: Mismanagement of a corporation, leading to biased treatment of an estate, improper usurpation of a corporate opportunity.

    1. Outcome: Imposition of a constructive trust and ordered liquidation of the corporation.

  37. Oppressive Conduct: Unilateral change of employment contracts leading to loss of key salespersons and breaching the share purchase agreement.

    1. Outcome: Oppression claim against the purchaser allowed.

  38. Oppressive Conduct: Terminating an employee and transferring corporate assets to avoid possible judgment in a wrongful dismissal case.

    1. Outcome: Judgment granted to plaintiff, corporate veil pierced, and personal liability imposed on the defendant.

  39. Oppressive Conduct: Misuse of corporate assets for personal benefits, gross inaccuracies in financial statements.

    1. Outcome: Defendants found jointly and severally liable for compensating the plaintiffs.

  40. Oppressive Conduct: Favoritism among family members, failure to charge a reasonable rate for business resources.

    1. Outcome: Respondents found to have acted oppressively, appeal dismissed.

  41. Oppressive Conduct: Suspension and removal of a CEO in violation of unanimous shareholder agreement and employment agreement.

    1. Outcome: Application for oppression allowed.

  42. Oppressive Conduct: Dissolving a corporation to rid themselves of a partner, harming the corporation’s interests.

    1. Outcome: Application for oppression allowed.

  43. Oppressive Conduct: Running the company in a way that disregarded minority shareholder’s interests, contrary to shareholder agreements.

    1. Outcome: Action for oppression allowed, including damages for wrongful dismissal and punitive damages.

  44. Oppressive Conduct: Breach of a unanimous shareholder agreement by a brother for personal benefit, taking control of property, and signing a lease surrender without approval.

    1. Outcome: Application for oppression allowed, orders for compensation and payment for loss of profit.

  1. The limitation period for oppression claims can be complex, and the applicability of the limitation period may vary depending on the governing statute.

    Ontario Business Corporations Act (OBCA): In Ontario, the general rule is that a limitation period of two years applies to all claims unless specifically exempted by the Limitations Act. This two-year limitation period also applies to oppression remedy claims under the OBCA, starting from the date the cause of action arose, subject to the principle of discoverability.

    Canada Business Corporations Act (CBCA): The situation under the CBCA is less clear. While the two-year limitation period applies to claims under the OBCA, the application of the limitation period to oppression remedy claims under the CBCA is uncertain.

    In the case of Ford Motor Co. of Canada Ltd. v. Ontario Municipal Employees Retirement Board, the Ontario Court of Appeal expressed doubt, without reaching a definitive conclusion, about whether an action for oppression under the CBCA was subject to the six-year limitation period under the Ontario Limitations Act. This was the act that was in effect until January 1, 2004. The former statute contained a reference to “an action on the case,” a concept that was eliminated by the new Limitations Act, 2002.

    No Ontario Court has definitively determined the matter, so it may be that the two-year limitation period applies to an OBCA oppression claim but not to a CBCA oppression claim. The potential distinction lies in the fact that a limitation period created by a provincial statute may not apply to a cause of action under a federal statute.

    In Conclusion: If you believe you have an oppression claim, it’s vital to consult with legal counsel as soon as possible. The limitation period’s applicability can be complex, particularly under the CBCA, and the risk of missing a limitation deadline can have serious consequences.

In an oppression claim, the court has the authority to make “any interim or final order it thinks fit” under Section 248(3) of the Ontario Business Corporations Act (OBCA). While this provision is broad and provides the court with considerable flexibility, there are 14 specific examples listed in the statute that illustrate the types of orders that may be made, without limiting the court’s broader discretion:

  1. Restraining Order: An order can be issued to restrain the conduct that is the subject of the complaint.

  2. Appointment of a Receiver or Receiver-Manager: This includes appointing an entity to manage or liquidate the assets of the corporation.

  3. Regulation of Corporate Affairs: The court can order amendments to the articles, by-laws, or a unanimous shareholder agreement to regulate the corporation’s affairs.

  4. Issuing or Exchanging Securities: An order may direct the issue or exchange of securities within the corporation.

  5. Appointment of Directors: The court may appoint directors in place of or in addition to the existing directors.

  6. Order to Purchase Securities: This order directs a corporation or any other person to purchase securities of a security holder, subject to s. 248(6).

  7. Order to Pay Money: An order may be made to pay to a security holder any part of the money paid by them for securities, also subject to s. 248(6).

  8. Varying or Setting Aside Transactions: The court can vary or set aside a transaction or contract involving the corporation and provide compensation to the parties.

  9. Requiring Financial Statements or Accounting: An order may require the corporation to produce financial statements or an accounting as determined by the court.

  10. Compensating an Aggrieved Person: This order allows for compensation to a person aggrieved by the conduct of the corporation.

  11. Rectification of Records: An order may direct the rectification of the corporation’s registers or other records under s. 250.

  12. Winding-Up the Corporation: The court can order the winding-up of the corporation under s. 207.

  13. Ordering an Investigation: This includes an order to conduct an investigation under Part XIX of the CBCA.

  14. Requiring the Trial of Any Issue: An order may require that a specific issue be tried within the court system.

Additionally, it is important to note that Section 248(6) of the OBCA prohibits a corporation from making a payment to a shareholder if there are reasonable grounds for believing that the corporation would be unable to pay its liabilities, or if the payment would reduce the realizable value of the corporation’s assets to less than its liabilities.

The overarching aim of these potential remedies is to ensure what is “just and equitable.” In BCE Inc. v. 1976 Debentureholders, the Supreme Court of Canada noted that oppression is an equitable remedy that takes into account business realities and not merely narrow legalities. Therefore, the court’s powers in an oppression claim are wide-ranging and flexible, aimed at achieving fairness in the specific context of the dispute.

Yes, there are several circumstances in which a court may not allow someone to bring an oppression claim. The ability to commence an application under the oppression remedy is contingent on the applicant falling within the definition of “complainant” in the relevant provincial corporation statute, and the courts also exercise discretion in granting standing as a “proper person.”

1. Definition of “Complainant”:

  • In provinces like Alberta, New Brunswick, and Nova Scotia, the definition of “complainant” expressly includes a “creditor.”
  • In others such as the OBCA, CBCA, and business corporation statutes of several territories, “creditor” is not expressly included. The definition of “complainant” in such jurisdictions might mean a registered holder, beneficial owner, director, officer, or any other person who the court deems a proper person to make an application.

2. Courts’ Discretion to Grant Standing as a “Proper Person”:

  • The court has the discretion to determine whether a creditor is a “proper person” to make an application for relief. This has been demonstrated in various decisions where creditors were recognized as proper persons to bring oppression remedy claims.
  • The court may deny standing based on several factors, as outlined below.

3. Factors that may Lead the Court to Deny Standing:

  • Not a Creditor at the Time: If the claimant was not a creditor when the disputed act occurred.
  • Lack of Good Faith: If the court believes the claimant is not proceeding in good faith.
  • No Legitimate Interest or Too Remote Interest: If the claimant has no genuine interest in the debtor’s affairs or the interest is considered too distant.
  • No Reasonable Expectation of Protection: If there is no reasonable expectation that the debtor’s actions would protect the claimant’s interests.
  • Lack of Legal Cause: If the impugned conduct was not the legal cause of the alleged harm.
  • Irrelevance of Complaints: If the complaints have no connection with the circumstances leading to the debt.
  • Wrongful Dismissal Claim: If the claim is for wrongful dismissal rather than an overall pattern of oppression.
  • Unclean Hands: If the claimant has unclean hands, for example, a director who has breached fiduciary duties to the corporation.

In summary, while the definition of “complainant” varies among different jurisdictions, there are specific grounds and factors that a court will consider when deciding whether or not to allow an oppression claim. Courts exercise considerable discretion in this area, and applicants must satisfy the legal requirements to qualify as a complainant or proper person to bring the claim. Additionally, various factors related to the nature of the claim and the conduct of the parties can lead the court to deny standing to commence an oppression claim.

Yes, there are distinct differences between a derivative action and an oppression claim, and these differences might lead to specific advantages depending on the situation.

Derivative Action:

A derivative action is a lawsuit brought by a shareholder on behalf of the corporation itself when a corporation’s managers or directors have failed in their duties. The following are some characteristics of derivative actions:

  1. Aimed at Enforcing Corporate Rights: Derivative actions focus on the corporation’s rights and seek to address the harm done to the corporation itself rather than individual shareholders.

  2. Requires Court Approval: To proceed with a derivative action, one must obtain the leave (permission) of the court, which may involve demonstrating that the claim is brought in good faith and is in the best interest of the corporation.

  3. Corporate Control: Since the cause of action belongs to the corporation, any relief sought must be for the benefit of the corporation and not individual shareholders.

Oppression Remedy:

An oppression remedy is sought when shareholders suffer actual oppression, unfair prejudice, or unfair disregard. Here are some characteristics and advantages of oppression claims:

  1. Focuses on Individual Rights: Unlike derivative actions, oppression remedies focus on harm to the legal and equitable interests of individual stakeholders affected by the oppressive acts of the corporation or its directors.

  2. No Need for Court Approval: Unlike a derivative action, an action for oppression does not require leave of the court, making it potentially quicker to initiate.

  3. Shareholder Ratification: As a personal action, shareholder ratification (approval) of the disputed actions should be irrelevant in an oppression claim.

  4. Not Mutually Exclusive with Derivative Action: Both an oppression remedy and a derivative action may be pursued for the same wrong, giving flexibility to the complainant in seeking redress.


While derivative actions are aimed at enforcing the rights of the corporation and require court approval, oppression claims focus on individual shareholders and have advantages such as not requiring court leave and being unaffected by shareholder ratification. The choice between pursuing a derivative action or an oppression claim will depend on the specific facts and circumstances of the case, such as the nature of the harm, the parties involved, and the desired outcomes. Consulting with a legal professional well-versed in these areas of law would be essential in determining the most suitable course of action for a particular situation.

Yes, a corporation can be investigated under the provisions of the Ontario Business Corporations Act (OBCA). The process is quite comprehensive and may involve the following steps:

  1. Initiating the Investigation: Under s. 161(1) of the OBCA, a security holder, or the Ontario Securities Commission in the case of an offering corporation, may apply to a court for an order directing an investigation into the corporation or any of its affiliates. The main goal is to reveal facts that might otherwise be hidden from shareholders.

  2. Criteria for Investigation: The court may order an investigation if it finds evidence of fraudulent activity, oppressive or unfair conduct, unlawful purpose, or dishonest actions related to the corporation or its affiliates (OBCA, s. 161(2)).

  3. Wide Discretion of the Court: The court has extensive authority to order various actions, including:

    • Appointing an inspector, determining their remuneration, and defining their responsibilities.
    • Authorizing entry into premises for the examination of documents.
    • Requiring production of documents or conducting hearings under oath.
    • Directing any aspect of the investigation, receiving reports, and determining the availability of reports to the public.
    • Requiring the corporation to pay the costs of the investigation, or discontinuing an investigation (OBCA, s. 162(1)).
  4. Rights of Those Investigated: Individuals whose conduct is being investigated have the right to legal representation, and all statements made during an investigation are granted absolute privilege (OBCA, ss. 164 and 165).

  5. Inspector’s Powers: The appointed inspector has specific powers defined in the court order, and may also cooperate with public officials in Canada or elsewhere if investigating allegations of improper conduct similar to those being investigated by the inspector (OBCA, s. 163(1) and (2)).

  6. In Camera Hearing: Any interested party may apply for an in-camera hearing and seek directions on any matter related to the investigation.

  7. No Security Required: The applicant for the investigation is not required to give security for costs, and the hearing of the application without notice is closed to the public (OBCA, ss. 161(4) and (5)).

An investigation of a corporation under the OBCA is a detailed process involving court oversight, appointment of an inspector, careful examination of documents, potential hearings, and cooperation with other public officials. It serves as a remedy for shareholders concerned with the corporation’s financial status and can be a critical tool in addressing fraud, oppression, or dishonest practices within the corporation.

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