The oppression remedy provided under the Business Corporations Act confers on a Court broad equitable discretionary power to rectify “oppressive” conduct. The SCC has recently confirmed in Wilson v. Alharayeri that corporate directors can bear personal liability in the context of corporate oppression. Obviously, personal liability is not attracted in every case, nor would a personal remedy always be necessary or appropriate. Where, however, directors (or other shareholders) have been personally involved in the impugned conduct, or have personally benefitted therefrom at the expense of the complainant, there is no good reason in principle why, given that commercial fairness is the touchstone, they should not be liable. The SCC decision comes as no surprise to practitioners in the field, the only surprise being that the case got as far as the SCC.
Monthly Archives: August 2017
Cooperatives are not generally regulated like Condominium corporations governed by the Condominium Act which spells out the rights of condo owners who own a physical unit in the condominium property. In contrast, in a Cooperative, the owner does not own a unit but rather a share in the Cooperative corporation, with an exclusive right to possession of a given unit. The rights and obligations of the owners to each other is generally spelled out in a contract among owners and the Cooperative. We were recently retained to advise on the rights of an individual owner who had refused at first to pay a disputed plumbing invoice, but later did, under protest. The Cooperative Corporation, acting through a property manager and its lawyers, purported to lien the owner’s share for 100% of all legal costs incurred by the corporation in seeking the payment for the plumbing invoice, and to enforce that lien by seeking a Court order to sell the owner’s share (and effectively his residential unit). The plumbing invoice, disputed but paid, was for about $1,700. The corporation then spent approximately the $40,000 on legal costs (judging by cost summary presented to the Court as the hearing). Those costs had become the real matter in dispute as the corporation appeared to operate on the basis that however much it spent on legal fees it could just pass them on to the owner by liening his share for the fees and then seeking to enforce the lien through forced sale. The Court declined to grant the corporation any of the main relief it sought and in fact found that the unit owner had overpaid with respect to one invoice. The Court did grant a declaration that the unit owner had committed an initial breach, but also declared that he had cured it. Meanwhile, as a result of the Court decision, the other owners are left to bear the $40,000 in legal costs incurred by the lawyers retained by the property manager. This was a case where hindsight suggests that, if there had been a modest application of common sense by the board, the matter might have been practically resolved at an early stage.
Oppression and Breach of Contract Action Against a Corporation and One Principal for Failure to Deliver Promised Shares
Representing Doctor who was promised shares in a retirement home project
Termination of Commercial Real Estate Contract on Basis of Alleged Breach of Environmental Warranties; Return of Deposit
Representing plaintiff purchaser who terminated an agreement of purchase and sale for a commercial property which, according to environmental reports, could not be developed on a cost-effective basis. The purchaser demanded return of his deposit. The vendor refused. The purchaser sued the vendor and the agent–who acted on both sides of the deal and who refused to return the substantial deposit without the consent of the vendor — for breach of contract against the vendor and for negligence and breach of fiduciary duty against the dual agent. This strategy resulted in return of the deposit before any defence was delivered.
Defence of corporation which fired employee for cause after theft of company property. Termination for cause is risky business, the onus being on the employer to prove just cause; the failure to so prove can result in higher damages payable to the employee in the form of longer notice periods, aggravated and punitive damages and the now popular “moral damages” which sometime exceed the amount which the employer could have paid in lieu of notice just to rid itself of a troublesome employee.
Defence of large dental practice corporation and of gas companies and their principals for alleged violations of Human Rights Code on basis of gender, marital status and age. Allegations of this nature are a stretch in many instances but are now unfortunately commonplace by some employment lawyers insofar as they create nuisance value calculated to result in small settlements for the employee, a fraction of the amounts originally claimed, but sufficient to cover the costs of the lawyer or paralegal making the claims. Such claims must be vigorously contested if the notion of rights is to be left with any integrity and substance.