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Rajah Lehal

Claims of oppression

October 27, 2016

The registered holder and beneficial owner of a security can make an application to the court to give it a standing oppression claim.

For example, in Gandalman Investments Inc. v. Fogle, 52 O.R. (2d) 614, shares in a company were equally held by two shareholders. One the secretary-treasurer carrying on the actual business of a company and the other shareholder, a son-in-law of the deceased president. The son in law was attempting to become a director of the company. The court held that the son-in-law who was the registered holder and beneficial owner of the company had the right to bring an oppression claim. A corporation can make an application for oppression. For example, see Calmont Leasing Ltd. v. Kredl, 30 Alta. L.R. (3d) 16, where a company brought an action for oppression under the Alberta Business Corporations Act because the director was taking unauthorized financial benefits from the company. A minority shareholder cannot bring an action of oppression against majority shareholders and directors. For example in Brant Investments Ltd. v. KeepRite Inc, 3 O.R. (3d) 289, a minority shareholder brought an application for oppression because the move of the company was beneficial for Keeprit but not Brant, the minority shareholder. The court held that Brant Investments could not bring the claim because the move was beneficial to the majority shareholders.

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Written by Rajah. Rajah Lehal is Founder and CEO of Clausehound.com. Rajah is a legal technologist and technology lawyer who is, together with the Clausehound team, capturing and sharing lawyer expertise, building deal negotiation libraries, teaching negotiation in classrooms, and automating negotiation with software.