In a company managing an insurance agency, whose shareholders were two brothers and another person as a minority shareholder, the minority shareholder contended that the non-distribution of dividends discriminated against him and that the brothers used company assets to purchase assets for themselves and their family.
The Court held that this was not oppression of the minority but nevertheless obligated the brothers to purchase the minority shareholder's shares. Oppression is a situation under which the conduct of the company's affairs causes the oppression of a shareholder or there is a substantial concern for it. In reviewing the contention of oppression, one examines whether the legitimate expectations of the shareholder were violated. However, not every non-distribution of dividends constitutes oppression, and this depends on the circumstances. Although the majority shareholders acted as if the company was theirs alone, regardless of the minority shareholder, their actions do not amount to oppression. However, when a company is actually managed as a partnership, loss of trust between the shareholders will result in a "separation of forces" remedy and for this reason, although it was held that there was no oppression, the Court ordered the brothers to purchase the minority shareholder's shares.