A
minority shareholder claimed oppression due to the fact that the company ceased paying salaries to the shareholders and appointed a representative of the control holder as a sole signatory of the company.
The Court held that the diversion of economic resources of a company in an unequal manner in favor of some of the shareholders would be considered oppression and in the case of a private company that may be seen as "a sort of partnership " oppression can be deemed in case of jeopardizing a legitimate expectation to joint management.
In general, non-payment of dividends in a profitable company is not by itself oppression of the minority, unless the control holder prevents the payment of dividends in order to impose its will on the minority in other issues. In this case moving from payment of salaries to the shareholders to distribution of dividends is a legitimate decision that is not oppression.
There is also no discrimination in giving signatory rights. Sole signatory rights in the name of the company do not allow actions that are not in the ordinary course of business and which require the Board's decision and sometimes a general meeting. Therefore, the claim was rejected.