Ontario Civil


Business Associations

Specific matters of corporate organization

Shareholders

Shareholder not having reasonable expectation she would become manager or receive dividends

Applicant was minority shareholder of LL Inc. which was family business. Applicant and his brother each received 24 per cent of shares in context of father’s estate planning and gift of shares had never been accompanied by promises or insinuations regarding involvement in management. Applicant asked brother to buy back all of his remaining shares but since these shares were ordinary shares, not accompanied by redemption option, LL Inc. refused to redeem remaining shares and brought motion in attempt to force redemption. Applicant alleged that she expected dividends when family business was profitable and that brother chose not to distribute profits and made questionable business decisions. Applicants unsuccessfully brought motion for oppression under s. 248 of Business Corporations Act. Motion dismissed. Applicant appealed. Appeal dismissed. Judge did not err in law or in fact when he concluded that conduct of respondent was not abusive or unfair or that it would harm interests of applicant as shareholders. Judge clearly explained why applicant did not have reasonable expectation as shareholder, that she would become manager or employee or that she would receive dividends, given challenges facing lumber industry. Judge correctly concluded that only applicants’ claim that was not time-barred was remedy for non-payment of dividends.

Lemoine c. Lecours (2017), 2017 CarswellOnt 18606, 2017 ONCS 7011, Swinton J., Linhares de Sousa J., and Favreau J. (Ont. Div. Ct.); affirmed (2017), 2017 CarswellOnt 10842, 2017 ONCS 3230, Robert N. Beaudoin J. (Ont. S.C.J.).

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