Legal Updates

Non-delivery of information and documents to a shareholder is not deemed oppression of the minority

July 8, 2021
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A shareholder and a former director of a company, who resigned over a decade ago, contended to be oppressed by the other shareholders because he was denied company financial information as well as participation in the company decisions.

The Court held that once the shareholder ceased to be a director of the company, he is no longer entitled to receive the documents. Oppression of the minority can occur where a company operates by way of unfair distribution of resources among its shareholders or while breaching their legitimate expectations. Nevertheless, a shareholder's right to receive information and documents is limited by law and is narrower than a director’s right to receive such information. Generally, failure to provide such documents to a shareholder is not deemed oppression of the minority. Here, because the shareholder chose to waive his rights as a director, his expectations of being a partner in the company decisions or to receive financial documents and information have been considerably reduced. Therefore, non-participation in such decisions and non-delivery of such documents does not amount to oppression of the minority.

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