A Company was held by two shareholders, each holding half of the shares. The company was managed informally and without adhering to the minimal principles of corporate governance such as convening board meetings and general meetings and when company affairs were discussed between the parties it was as an aside. Due to the deterioration of the relationship between the shareholders one of them refused to sign the financial reports of the company and took other actions that caused the other to move the Court to liquidate the company as a remedy for removal of oppression of a shareholder.
The Court held that there is no problem to raise claims of oppression in a company that is equally held by the shareholders. Loss of trust between the shareholders as an oppression is usually raised in company that are managed as a partnership in which trust between the shareholders is a vital principal and in such case a company may be liquidated in case of loss of trust. However, liquidation of a company is an extreme measure and the Court will not grant it if lifting of the oppression can be reached by a more subtle measure such as setting rules for management of the company. Thus, the court provided instructions as to the management of the company in lieu of liquidating it.