Corporate Law: The Oppression Remedy
June 5, 2023
Under Canada’s corporate law, corporations have a legal duty to treat directors, shareholders, creditors, and other officers fairly and without prejudice. Unfortunately, the decisions and actions of a corporation may have an adverse effect on some of its stakeholders. In the event that the corporation disregards the stakeholder’s interests and acts unjustly towards them, the affected party may be entitled to bring an oppression remedy action.
Matthew R Harris Law P.C. is dedicated to offering trusted advocacy and compassionate representation to clients in their oppression remedy cases. As a highly-skilled Ontario corporate lawyer, Matthew Harris can evaluate every aspect of your case and educate you on your options for pursuing a remedy.
What Is the Oppression Remedy?
Oppression remedy is a legal concept that allows a person or entity—usually a stakeholder—who has been unjustly treated or oppressed by the actions and decisions of a corporation to pursue relief.
The oppression remedy was designed by the Canada Business Corporations Act (CBCA) and the Ontario Business Corporations Act (OBCA) to protect the best interests of stakeholders, including directors, creditors, shareholders, debtors, and other officers against misconduct.
Therefore, if the actions of the corporation or its directors are unfairly prejudicial, oppressive, or disregard the interests of stakeholders, the affected party is within their rights to seek redress by filing an oppression remedy claim.
Types of Actions That Can Constitute a Finding of Oppression
According to a Harvard Business Review of media reports, about 16% of director misconducts involved CEOs using corporate funds in questionable manners. Here are some common actions and decisions that may constitute a finding of oppression:
A director uses corporate finances and resources to fund their lifestyle or for personal benefits.
Shareholders disagree on various issues due to conflicts of interest.
Minority shareholders are being oppressed or treated unjustly.
Corporate or director misconduct.
A director is violating the rights of shareholders.
If you have been negatively affected by the decisions and conduct of a corporation, you need to reach out to an experienced commercial litigation lawyer immediately. Your legal counsel can investigate the corporation’s actions and determine if you have an oppression claim.
Things to Consider Before Filing an Oppression Claim
Here are some vital things to consider before you file an operation claim:
Whether filing a derivative action is better than an oppression claim.
Whether you’re eligible to file an oppression claim.
Whether the corporate misconduct in question warrants seeking oppression remedy.
The particular remedy you can pursue
The procedures, methods, and tools required to seek an oppression remedy.
A trusted corporate lawyer can investigate the surrounding facts of your case thoroughly, prepare a solid case on your behalf, and help you recover your deserved relief.
Types of Oppression Remedies
If the court finds the defendant guilty of the oppression claims, the court is within its discretion to order various types of relief. Here are some of the available remedies for oppression claims:
paying damages or restitution to the claimant
restraining the oppressive action or decision
removing and replacing the corporation’s directors
dissolving the corporation
suspending a transaction
sale of a corporation’s property and assets (the claimant will have the first refusal clause)
A reliable lawyer can fight vigorously for your legal rights and help you pursue the maximum possible relief for the oppression you might have suffered.
Put a Skilled Litigator in Your Corner
As a stakeholder, being subject to unfair treatment or oppression by a corporation’s actions can be difficult and overwhelming. Thankfully, Canada’s oppression remedy laws allow the affected party or parties to pursue relief through legal action. Ontario lawyer Matthew Harris is poised and ready to guide and represent directors, shareholders, and officers in their oppression remedy claims.
Using his extensive knowledge, Matthew will help evaluate and file your claims, seek to prove the corporation’s oppressive conduct, and help you recover your rightful remedy. Even if you need to protect your corporation against false oppression allegations, Matthew Harris will represent you diligently in your case in pursuit of the most favorable outcome.
Reach out today to schedule a simple case evaluation with a reliable corporate lawyer. Matthew R Harris Law P.C. is proud to serve clients across Toronto, Ottawa, Hamilton, and London, Ontario.