Legal Updates

When examining the question of oppression of a shareholder in a company, the conduct of the party contending oppression will also be reviewed

June 3, 2024

A private company has not held board meetings or sent reports to its shareholders for over a decade.

The Court rejected the minority shareholders’ contention for oppression in light of the lack of harm to their legitimate expectations to participate in the management. A conduct will be classified as ‘shareholders oppression’ if it harms the legitimate expectations of a shareholder in the company. In order to find out what those 'legitimate expectations' are, one must examine the unique nature of the company, the relationship between the parties and their conduct throughout the years in which the company operates, including the conduct of the party contending oppression in the relation to the conduct which it views as oppressing. Here, the company has indeed operated for many years without adhering to proper corporate governance rules. However, for over a decade the shareholders have expressed little to no interest in the company or its business and have not asked for a board or shareholders' meeting and thus they can not contend that the lack of reporting, or the non-convening of the board, in which only the controlling shareholder was represented, harms their legitimate expectations, hence there is no oppression.