A “complainant” may seek remedies for oppressive conduct by a corporation pursuant to the oppression remedy provisions of the Ontario Business Corporations Act (OBCA) and the Canada Business Corporations Act (CBCA). The OBCA defines “complainant” as “a registered holder or beneficial owner, and a former registered holder or beneficial owner, of a security of a corporation or any of its affiliates; a director or an officer, or a former director or officer of a corporation or any of its affiliates; or any other person who, in the court’s discretion, is a proper person to make an application” (OBCA s. 245). Similarly, the CBCA defines “complainant” as “a registered holder or beneficial owner, and a former registered holder or beneficial owner, of a security of a corporation or any of its affiliates; a director or an officer or a former director or officer of a corporation or any of its affiliates; or any other person who, in the court’s discretion, is a proper person to make an application” (CBCA s. 238). Notably, the definition of “complainant” in the OBCA and CBCA does not expressly include “creditor”; rather, the court has the power to evaluate whether a creditor is the “appropriate person” to bring an oppression remedy claim.
Under the OBCA and CBCA, the court may make an order to rectify oppressive or unfairly prejudicial conduct by a corporation or any of its affiliates. Specifically, the court may make an order where “any act or omission of a corporation or any of its affiliates effects a result — or where the business or affairs of a corporation or any of its affiliates have been conducted in a manner, or where the powers of the directors of a corporation or any of its affiliates have been exercised in a manner, that is oppressive or unfairly prejudicial to or that unfairly disregards the interests of any shareholder (or other security holder), creditor, director or officer” (OBCA s. 248(1)). Similarly, under the CBCA, the court may make an order where “the business or affairs of a corporation have been or are being carried on, or the powers of the directors of a corporation have been or are being exercised, in a manner oppressive or unfairly prejudicial to, or unfairly disregarding the interests of, any shareholder, creditor, director or officer” (CBCA s. 241(1)).
The oppression remedy is intended to offer shareholders, directors, and officers with a method to seek redress where they have been subjected to oppressive treatment by the corporation. This may include instances in which the corporation has operated in a manner that is unfairly prejudicial to the interests of specific shareholders or has disregarded the rights of its directors or officers. The oppression remedy enables the court to order the corporation to take particular actions to remedy the oppressive conduct, such as resolving the underlying causes that lead to the oppressive conduct or paying the affected individuals for losses sustained as a result of the oppression.
There are a number of reasons why a judge may deny standing to initiate an oppression claim. The claimant was not a creditor at the time of the impugned act or conduct and only became one later (as in Piller Sausages & Delicatessens Ltd. v. Cobb International Corp., Apotex Inc. v. Laboratories Fournier S.A., and Trillium Computer Resources Inc. v. Taiwan Connection Inc.), or the claimant has an alternative and adequate remedy (as in the case of Awad v. Dover Investments Ltd.). In evaluating standing, a court may also consider the claimant’s actions and whether it contributed to the oppression (as in the case of Glasvan Great Dane Trailers Ltd. v. Northland Trailer & Equipment Inc.).
Importantly, the oppression remedy is not designed to be used to resolve small disputes or complaints within a company. Rather, it aims to provide a mechanism of addressing major, persistent concerns that have resulted in the oppression of one or more individuals. The oppression remedy has been widely utilized in Ontario and has been effective in delivering relief to individuals who have experienced oppressive conduct by a corporation and serving as a deterrent to firms considering engaging in oppressive conduct.
