/
.?
)
.
.
~
. phese materials were prepared by Richard Danyliuk; of McDougall Gauley law firm Saskatoon,
Saskatchewan for the
Sask~tchewan
Legal Education Society
Inc.s~minar,
Corporate Divorce;
No"ember2004.

)

Richard W. Danyliuk, McDougall Gauley
1.
This paper is part of is SKLESI's seminar entitled "Corporate Divorce". When, sadly, the corporate marriage comes to an end it is for a number of reasons.
As with other, more traditional forms of divorce, some of these are assessed as fault-based. The oppression action is one such item, and it has attracted significant attention within Saskatchewan in the last 10 to 15 years.
This paper covers the following subjects:
I.
II.
Legislative Framework;
Qualifying for the Remedy;
III.
Conduct Falling Within the Act;
IV.
Remedies; and
V.
Strategic Concerns and Possibilities.
I.
2.
LEGISLATIVE FRAMEWORK
The oppression remedy is rooted in Section 234 of the Business Corporations
Act (hereafter "BCA"). Section 234 reads, in part, as follows:
(1) A complainant may apply to a court for an order under this section.
(2) If, upon an application under subsection (1), the court is satisfied that in respect of a corporation or any of its affiliates:
(a) any act or omission of the corporation or any of its affiliates affects a result;
(b) the business or affairs of the corporation or any of its affiliates are or have been carried on or conducted in a manner; or
(c) the powers of the directors of the corporation or any of its affiliates are or have been exercised in a manner;

2 that is oppressive or unfairly prejudicial to or that unfairly disregards the interests of any security holder, creditor, director or officer, the court may make an order to rectify the matters complained of.
(3) In connection with an application under this section, the court may make any interim or final order it thinks fit including, without limiting the generality of the foregoing:
(a) an order restraining the conduct complained of;
(b) an order appointing a receiver or receiver-manager;
(c) an order to regulate a corporation's affairs by amending the articles or bylaws or creating or amending a unanimous shareholder agreement;
(d) an order directing an issue or exchange of securities;
(e) an order appointing directors in place of or in addition to all or any of the directors in office;
(f) an order directing a corporation, subject to subsection (6), or any other person, to purchase securities of a security holder;
(g) an order directing a corporation, subject to subsection (6), or any other person, to pay to a security holder any part of the moneys paid by him for securities;
(h) an order varying or setting aside a transaction or contract to which a corporation is a party and compensating the corporation or any other party to the transaction or contract;
(i) an order requiring a corporation, within a time specified by the court, to produce to the court or an interested person financial statements in the form required by section 149 or an accounting in such other form as the court may determine; m an order compensating an aggrieved person;
(k) an order directing rectification of the registers or other records of a corporation under section 236;
(I) an order liquidating and dissolving the corporation;
(m) an order directing an investigation under Division XVII to be made;
(n) an order requiring the trial of any issue.

3
3.
The legislature designed this remedy to provide quick, summary relief (where appropriate) to parties holding an interest in a corporation. It was not intended that all such cases use the classic civil action or even proceed to trial, although it is clear this is contemplated in some instances (see s. 234(3)(n)). As stated by Dennis
Peterson in Shareholder Remedies In Canada (Markham: Butterworths) at p. 18.14, the oppression remedy is an equitable remedy. It is designed to protect the interests of corporate stakeholders in a variety of corporate circumstances. It is a creature of statute and certain essential elements must be present if a court is to have jurisdiction to invoke the remedy. The grounds for relief include, not only conduct that is oppressive, but also conduct that is unfairly prejudicial to or unfairly disregards the interest of any security holder, creditor, director, or officer. And although in a particular fact situation no single event may qualify as oppressive or unfairly prejudicial conduct, conduct may be considered oppressive or unfairly prejudicial when various events are considered together.
4.
It also seems clear that this portion of the BCA is not to be read in isolation.
Rather, it is part of a cumulative bundle of rights and remedies provide by the BCA.
For example, there is power in the Court (Division XVII) to order an investigation of internal corporate affairs. That power is separate and distinct from the oppression application, yet related to it.
While this paper concentrates on the oppression remedies, readers are urged to utilize all of the BCA's provisions in assisting their clients.
5.
These provisions have often been referred to as "minority" shareholders' rights upon oppression. That is something of a misnomer, although many (if not most) of these matters involve unfair action taken by the majority against the minority within a company.
However, one should be aware that being in the "minority" is not a prerequisite to taking action under s. 234 BCA.
For example, in Serhan Family
Trust et al v. Poncelet, [2003] S.J. No. 103 (Q.B.), Kyle J.
granted remedies where the two shareholders each owned 50% of the issued shares.

II.
QUALIFYING FOR THE REMEDY
4
6.
While being in the "minority" is not a condition precedent to launching an application under s. 234, it is necessary to qualify under the BCA for relief. In order to obtain relief pursuant to the BCA, an applicant must firstly show that it is a
"complainant" within the meaning of s. 234(1), BCA. This is defined in the BCA as follows:
231. In this Division:
(b) "complainant" means:
(i) a registered holder or beneficial owner, and a former registered owner or beneficial owner, of a security of a corporation or any of its affiliates;
(ii) a director or an officer or a former director or officer of a corporation or any of its affiliates;
(iii) the Director; or
(iv) any other person who, in the discretion of the court, is a proper person to make an application under this Division.
7.
Generally, these applications are brought by aggrieved shareholders, who are clearly complainants within the meaning of this provision. However, current or former officers may bring the application even if they have no ownership interest in the company.
In Serhan, supra, the applicants were the 50% shareholder (the family trust) and one of the directors (Serhan). Both had standing before the Court.
8.
Also see Bai.lscher-Grant Farms Inc. et al v. Lake Diefenbaker Potato
Corporation et ai, 199_ _.
There, a limited partnership made up of corporate partners was in issue. The applicant was a company which was never issued shares in the corporate general partner. It alleged this was because the company had acted oppressively; the company responded by saying the applicant had failed to honor its conditions precedent to becoming shareholders. The applicant was held to have a sufficient interest to bring this type of application. At paragraph 17 Baynton J.
stated:

5
3.
Any IIcomplainant" is entitled under s. 234(1) to bring an 1I0ppressionll application. Section 231 defines a IIcomplainantll to include a registered holder or beneficial owner (including a former holder or owner) of a security of a corporation. A IIsecurityll is defined by s. 2(1 )(bb) as including a share of a corporation.
G.A. Smith, J.
considered the "complainant" issue at paragraphs 70,71 and 83 of Beechy Stock Farm (1996) Ltd. et a/ v. SP/ Marketing Group Ltd., [2003]
S.J. No.
704 (Q.B.). She held one of the applicants was not a complainant because no shares in the defendant company had been issued to it.
She found that complainant had no status to bring the application.
She noted, however, that she had not been provided with any authority in this regard and it does not appear the Bauscher-Grant case had been drawn to her attention.
Similarly, it does not appear she was referred to Murphy v. Phillips (1993),
12 BLR (2d) 58 (Ont. G.D.). There, the owners of a car dealership agreed to sell their shares to a senior employee over a prolonged term.
The owners sought to avoid the agreement by manufacturing complaints against the senior employee and alleging he had breached his obligations under the share purchase agreement. O'Driscoll J.
held the applicants had standing to bring the application.
He further strongly rebuked the majority shareholders and held their conduct to be both oppressive and unfairly prejudicial to the interest of the senior employee/minority shareholder. At page 87 he stated:
In my view their actions demonstrate a flagrant attempt by RCP and
TAK [the majority] to disregard contractual obligations and a unilateral attempt to change all of the rules that had been agreed to by the parties to the September 1987 Share Purchase Agreement.
9.
As well as determining whether your client is a "complainant" under the SCA, counsel should never forget to consider jurisdiction.
For example, see Axis
Management Inc. v. A/sager, [2000] S.J. No. 535 (Q.B.). There, SCA remedies
(Le. a derivative action) were sought against a company incorporated in Texas, and extra-provincially registered here.
All of the "players" hailed from Saskatchewan.
Arguably, all of the improper dealings also occurred here.
However, it was successfully argued that the Saskatchewan court had no jurisdiction. The rights in

6 issue were matters relating to the status and power of a corporation; therefore, the laws of that corporation's domicile must prevail (in this case, Texas).
Rothery J.
determined she had no jurisdiction to act.
It therefore appears the oppression remedies under the SCA only apply to Saskatchewan corporations.
III CONDUCT FALLING WITHIN THE ACT
10.
Having established standing, it is submitted that an applicant must now endeavor to show two things:
(a) that the Respondents' conduct falls within one of the descriptions contained in sections 234(2) (a), (b) or (c) of the BeA;
(b) that the Respondents' conduct is "oppressive", "unfairly prejudicial to", or "unfairly disregards the interests of" a security holder, creditor, officer or director of the Company.
11.
In general, the onus under section 234 SCA lies with the applicants.
Case authority to this effect includes:
Tsui v. International Capital Corp., [1993] 4 WWR 613 (Sask. Q.B.); affirmed [1993] 4 WWR 1xvii (Sask.C.A.);
Beechy Stock Farm (1996) Ltd.
et al v. SPI Marketing Group Ltd., supra.
12.
The standard of proof applicants must meet on this type of application is on a balance of probabilities:
Tsui v. International Capital Corp., supra;
Miller v.
F.
Mendel Holdings Ltd.
(1984), 30 Sask. R. 298 (Q.B.);
Wark v. Kozicki et al (1997), 153 Sask. R. 127 (Q.B.); and
Ceapro Developments v. Canamino Inc., (1996), 146 Sask. R. 117
(Q.B.).

7
13.
The type of conduct subject to review under s. 234 BCA is broadly stated to include acts or omissions of the company or any affiliate, the manner in which the business and affairs of the company or any affiliate has been conducted, and the manner in which the powers of the directors of the company or any affiliate have been exercised.
See s. 234(2).
The precise conduct of which the applicant complains must be set out in the affidavit material filed on behalf of the applicant.
Note that this type of application is generally considered to be final, not interlocutory, and therefore no hearsay should be adduced in the affidavits.
14.
In considering s. 234 (and equivalent sections in other jurisdictions), courts have held that this provision should be construed broadly and liberally.
"The legislation is remedial and is to be given a broad interpretation": 347883 Alberta Ltd.
v. Producers Pipelines Inc., [1991] 4 WWR 577 (Sask. C.A.), per Sherstobitoff J.A.
at page 601.
15.
An identically worded section in the Canada Business Corporations Act was interpreted by the Ontario Court of Appeal in Re Ferguson and Imax Systems
Corp.
(1983) 150 DLR (3d) 718. Brooke J.A. said this section "must not be regarded as being simply a codification of the common law".
He declared that "the section should be interpreted broadly to carry out its purpose". He emphasized the flexibility of the oppression remedies, as other judges have done in dealing with such legislation. After reviewing several cases, the Ontario Court of Appeal concluded at page 727:
They establish primarily that each case turns on its own facts. What is oppressive or unfairly prejudicial in one case may not necessarily be so in the slightly different setting of another.
16.
The approach taken by Saskatchewan courts has grown in its consistency over the years. The approach to be taken is summarized in Wind Ridge Farms Ltd.
et al v. Quadra Group Investments Ltd.
et al (1999), 180 Sask.R. 231 (C.A.). As stated by Vancise J.A. at paragraphs 30,31,37 and 38:

8
1. The onus of proof rests with the person claiming the remedy on a balance of probabilities.
2. Oppressive conduct is at the lowest a visible departure from the standard of fair dealing and a violation of the conditions of fair play on which shareholders who entrust their money to a company are entitled to rely.
(...) Oppressive conduct has also been described as a lack of probity and fair dealings in the affairs of the company to the prejudice of some portion of its members
3. The terms 'unfair' and 'prejudice' are defined as conduct that is unjust and inequitable and unfairly prejudicial.
4. Section 234 is remedial legislation for the relief of minority shareholders and it sot be given a broad interpretation.
5. Relief may be given upon proof of unfair prejudice to, or disregard of a shareholder's interest.
6. The section should be interpreted broadly to carry out its purpose.
7. Each case will be decided on its own facts: what is oppressive or unfairly prejudicial in one case may not necessarily be so in a different set of circumstances.
(
...
)
In essence there are two branches to an application under s. 234 of the Act.
The first is the claim for oppression which can be successfully resisted if the majority acted bona fide. The second is whether the action or actions of the majority were unfairly prejudicial to the interests of the minority or, in other words, whether the majority unfairly disregarded the minority's interests. No element of bad faith or lack of bona fides is required to obtain a remedy under this branch of the applicant. It is the effect or the result of the activity and not the intention that is crucial. That two-fold approach was adopted by this court in Eiserman v. Ara Farms Ltd. where Sherstobitoff, J.A., writing for the majority stated that "it must be noted that under s. 234, the conduct need not be deliberate - it is sufficient if the conduct has the effect of being unfairly prejudicial".
Thus, a finding that the majority acted bona fide is not a complete answer to the claim for relief under s. 234. The court must also examine the second branch of the application and determine whether the conduct was unfairly prejudicial to the applicant or the actions unfairly disregarded the interests of the minority.

9
17.
The conduct giving rise to the oppression remedy under s. 234 SeA is almost infinitely various.
As stated in Re H.R. Harmer Ltd., [1958] 3 All E.R.
689 (Eng.
C.A.) at page 698:
Inevitably the result of applications under s. 210 in different cases must depend on the particular facts of each case, the circumstances in which oppression may arise being so infinitely various that it is impossible to define them with some precision.
18.
More importantly, the acts or omissions complained of must not be considered in isolation.
Other impugned conduct must be considered; the overall context is important. The acts must be considered cumulatively. See Loveridge Holdings
Ltd. v. King-Pin Ltd.
(1991), 5 BlR (2d) 195 (Ont.
C.A.), at page 201:
In my view, the applicant has satisfied the onus on her to show that she has been unfairly prejudiced by the actions of the respondent. ( ... ) I must say that not all of the categories outline by Rosen would have led to this conclusions, but the cumulative effect of his findings does.
19.
Other leading cases of similar effect include:
Naneff v. Con-Crete Holdings Ltd.
G.D.);
(1994), 11 BlR (2d) 218 (Ont.
Wark v. Kozicki, supra.
20.
It must also be noted that bad faith is not a prerequisite to the granting of relief under the oppression remedy. The authorities are clear that, in allowing review for acts or omissions which are "unfairly prejudicial" to a corporate stakeholder, it is not necessary to show bad faith on the part of the corporation or the majority. See Brant
Investments Ltd. v. KeepRite Inc.(1991), 80 DlR (4d) 161 (Ont.
C.A.), per
McKinlay J.A. at page 173; then at page 176 it is stated:
. . . I am of the view that a requirement of bona fides would unnecessarily complicate the application of the provision and add a judicial gloss that is inappropriate given the clarity of the words used.
Of course, there may be many situations where the rights of minority shareholders have been prejudiced or their interest disregarded, without any remedy being appropriate. The difficult question is whether

10 or not their rights have been prejudiced or their interest disregarded
"unfairly".
In testing the facts in a given case against the word
"unfairly", evidence of bad faith as to motive could be relevant, but there may be other cases where particular acts effect an unfair result, but where there has been no bad faith whatsoever on the part of the actors.
Also see Wind Ridge Farms, supra.
20.
Further, it is not necessary that corporate conduct constitute a breach of fiduciary duty in order to support a request for s. 234 BCA relief: Deluce Holdings
Inc. v. Air Canada (1992), 12 O.R. (3d) 131 (Ont. G.D.). Certainly, however, breach of fiduciary duty can amount to oppressive conduct, and such breach alone will satisfy the test of demonstrating oppression. See Calmont Leasing Ltd. v. Krehl,
[1993] 7 WWR 228 (Alta. Q.B.).
21.
Note that some authorities indicate it is only conduct which has already occurred which attracts the attention of s. 234 BCA. Future conduct or anticipated misbehavior may not fall within the ambit of this legislative provision. For example, see Diamond Dog Management Inc. v. D.M. Biehn Holdings Ltd., [2003] S.J. No.
297 (Q.B.) and Alexander v. Bar SP Ranches Ltd.
(1999),190 Sask.R.1 (Q.B.).
22.
Saskatchewan courts have interpreted each of the enumerated grounds for relief (oppressive conduct, unfairly prejudicial conduct; conduct that unfairly disregards the interests of a complainant) as being distinctive in nature. See Miller v.
F.
Mendel Holdings, supra.
At page 306 Wimmer J.
held that each of these grounds are ''to be regarded as being mutually exclusive, each applying as well to isolated acts as to a continuing course of conduct". Of similar effect are the decisions of this Court in Wark v. Kozicki, supra, and Bernard v. Montgomery (1987), 60
Sask. R. 20.
23.
Therefore, counsel acting for an applicant must carefully evaluate which category impugned conduct fits within. But it is this writer's view that counsel must go further, and draw a link amongst the conduct and categories, to show an overall course of conduct that is improper. The cumulative effect of bad corporate behavior

11 cannot be ignored, and should be used as a tool to advance the cause of the oppressed party.
24.
Each of the thre'e separate enumerated grounds is worthy of separate consideration.
Oppressive Conduct
25.
With respect to the ground for relief based on "oppressive conduct" the leading case remains the oft-cited decision of the House of Lords in Scottish Co-Operative
Wholesale Society Ltd. v. Meyer, [1958] 3 All E.R.
66.
There, the House of Lords defined "oppressive" to mean "burdensome, harsh and wrongful".
Further, oppression was held to include: a lack of probity and fair dealing in the affairs of a company to the prejudice of some portion of its members; a visible departure from the standards of fair dealing; a violation of the conditions of fair play on which every shareholder who entrusts his money to a company is entitled to rely.
26.
This definition of "oppressive" has been adopted on many occasions by
Canadian courts, including those of Saskatchewan. See:
Eiserman v. Ara Farms Ltd.
(1988), 62 DLR (4d) 498 (Sask. e.A.);
Re Keho Holdings Ltd.
(1987), 38 DLR (4d) 368 (Alta. e.A.);
Re National Building Maintenance Ltd.
[1971] 1 WWR 8 (SSeS); affirmed at [1972] 5 WWR 410 (SeCA); and
Aquino v. First Choice Capital Fund Ltd. et al (1995), 130 Sask. R.
252 (Q.B.).

12
27.
This is an inclusive definition.
No case purports to define the term exhaustively. Counsel should be imaginative in determining conduct which fits under this test.
However, given the comments below as to the breadth of the other two branches of s. 234 SCA, it may be that the "oppression" portion of the remedy has been reduced in importance.
28.
Sometimes, as in Serhan, supra, this conduct will be obvious. There, a 50% shareholder used corporate funds to make personal loan payments, make payments to his wife and mistress, to travel on personal matters, and for a host of other unjustifiable reasons (paragraph 5). The conduct was held to be oppressive.
29.
Other times, the conduct may be more subtle, such as a gradual erosion of a particular shareholder's rights over time.
)
Unfairly Prejudicial Conduct
30.
This phrase has been held to offer much wider protection than is offered by the word "oppressive". For example, see Safarik v. Ocean Fisheries Ltd. (1993),
10 BLR (2d) 246 (BCSC).
31.
The phrase "unfairly prejudicial" was first considered in detail in Diligenti v.
TWMD Operations Kelowna Ltd. (1976), 1 BCLR 36 (BCSC), at page 45. It was held that by adding the words "unfairly prejudicial" as a ground of relief, the
Legislature must have intended that the courts would give those words "an effect different from and going beyond that given to the word 'oppressive"'. Fulton J.
stated at page 46:
It is significant that the dictionary definitions support the instinctive reactions that what is unjust and inequitable is obviously also unfairly prejudicial.
(. . .) Prejudicial, according to the dictionary, means detrimental or damaging to his rights, interests, etc.
I consider, however, that the new provision is not to be so narrowly interpreted or its effect so narrowly confined [ie. to legal rights], for to do so would be

13 to deal with it as though the word was still "oppressive". I consider that there are rights - Le. equitable rights - attaching to the position of the applicant as shareholder in circumstances present here, in respect of which he has been unfairly prejudiced, and in reaching this conclusion I rely upon and respectfully adopt the reasoning of Lord Wilberforce as distilled from a perusal of the whole of his jUdgment in the Ebramimi case.
32.
Fulton J.'s judgment has been approved in Saskatchewan in numerous cases, including:
Eiserman v. Ara Farms, supra;
Miller v.
F.
Mendel Holdings, supra; and
Tsui v. ICC, supra.
33.
In Wind Ridge Farms, supra, the Court of Appeal found conduct need not even be deliberate, as long as it has the effect of being unfairly prejudicial.
The majority can, therefore, inadvertently prejudice the minority in an unfair manner.
34.
This aspect of s. 234 SCA is quite broad, and impugned conduct can often easily be fit under this portion of the test.
Conduct Which Unfairly Disregards Interests
35.
The final ground of relief under s. 234 BCA is that the impugned conduct of the corporation or any of its affiliates "unfairly disregarded" the interests of the complainant. This has been held to be the least rigorous ground to prove to obtain a remedy: Sexsmith v. Intek Inc., [1993] O.M. No. 711.
36.
In Stech v. Davies, [1987] 5 WWR 563 (Alta. Q.B.) Egbert J. held at page
569 that "unfairly disregard" means:
To unjustly or without cause, in the context of s. 234(2), pay no attention to, ignore or treat as of no importance the interest of security holders, creditors, directors or officers of the corporation.

14
37.
Also see Such v. RW-LB Holdings Ltd.
(1993), 11 BlR (2d) 122 (Alta.
Q.B.) at 143:
The burden of proof of unfair prejudice or disregard is less rigorous than the burden of proof of oppression because as stated what is at issue is the unfair result, not a state of mind. In a sense, these broader grounds have absorbed the oppression ground. Once established, the court is given very broad powers to redress that result.
38.
In general, while applicants/complainants must prove one of the three modes of transgressing s.
234 BCA, the burden is not overly difficult to meet.
39.
There is unresolved judicial and academic debate over whether conduct which defeats or offends shareholder expectations can fall within s.
234 BCA. Some cases have found the circumstances appropriate to award relief for such disappointed expectations. For example in Tsui, supra, immigrant investors had been induced to invest their funds with the defendants on the basis that 30% would go into guaranteed investments and 70% would go into debentures of publicly-traded
Saskatchewan companies.
The company did not follow this plan, and the breach was wholesale and not trivial. The court found this to be deceitful, as the reasonable expectations created by these representations were breached.
A director of the defendant immigrant fund was removed.
40.
Further support for this concept may be found in Welling, Bruce: Corporate
Law In Canada: The Governing Principles (Toronto: Butterworths, 1984) at page 533:
"thwarted shareholder expectation is what the oppression remedy is all about" as long as those expectations were reasonable.
41.
However, these principles were considered in WaterGroup Co.
et al v.
Stevens et al (1996), 140 Sask.R. 245 (Q.B.). Matheson J.
discusses these ideas at paragraphs 47 to 49, and states at 49: "Simply because a shareholder's interest has been disregarded, or his legitimate expectations thwarted, does not necessarily

15 mean the shareholder is entitled to relief.
The interest must have been unfairly disregarded and some injury thereby ensued." Matheson did not grant relief for such thwarted expectations.
He took the approach that courts should be cautious in tampering with the internal workings of a company, stating at paragraph 60: "Courts should not usurp the functions of the board of directors in managing a corporation."
42.
Shareholder expectations should therefore not be ruled out when considering alleged oppressive conduct under s. 234 BCA.
43.
Incidents amounting to conduct which transgresses one (or more) of the enumerated items in s. 234 are many and varied. Particular attention must be paid to the effect of such acts or omissions, and not just to their inherent nature.
The differing ''tests'' of each of the three grounds must be applied to each impugned act, to see whether (or where) the conduct fits within s. 234.
IV REMEDIES
44.
Section 234 BCA extends to the Court jurisdiction to "make any interim or final order it thinks fit". The subsection provides specific examples of the types of orders that may be granted, but "without limiting the generality" of this plenary jurisdiction.
Following this description of the Court's plenary jurisdiction, a list of 14 specific types of orders are listed. Care must be taken by counsel not to limit one's approach to the matter of remedies, as the definitions of same in s. 234 are inclusive and not intended to be exhaustive.
45.
The Court's remedial powers under s. 234 are to be construed liberally, to ensure that on both an interim and final basis justice is secured between the parties.
Perhaps the clearest statement of this proposition is found in the decision of Blair J.
at pages 149 - 150 of Deluce Holdings Inc. v. Air Canada, supra:
The court has a very broad discretionary power under the oppression remedy legislation to select a remedy appropriate to the situation at

16 hand.
Its mandate is to 'make any interim or final order it thinks fit'.
This discretion must be exercised in accordance with judicial principles, of course, and within the overall parameters of corporate law.
Nonetheless, the remedy has been described by one early commentator as 'beyond question, the broadest, most comprehensive and most open ended shareholder remedy in the common law world ...
unprecedented in its scope'. (...) Courts are prepared to be creative and flexible in fashioning remedies to fit the case when called upon to apply this broad remedy.
46.
The relatively recent case of Beaubien v. Campbell, [2003] S.J. No. 301
(Q.B.) is instructive. That case dealt with claims of oppressive behavior in a closelyheld corporation.
Beaubien, the applicant, had been treated harshly by Campbell.
He had been docked pay because he had not filled out some internal forms, and because "his office was messy".
He was denied access to corporate financial records. Ultimately, he was fired from the company with a year's working notice.
47.
The conduct was held to violate s. 234. As part of the remedy Campbell had to buy Beaubien's shares, as well as repay a shareholder's loan and pay for back wages. Dawson J.
dealt with remedies starting at paragraph 78 of her judgment. In determining which were appropriate she referred to the Court of Appeal in Wind
Ridge Farms, supra, paragraphs 43 and 44:
The wording of s. 234 makes it clear that the court has the power to ignore the technical rules binding the shareholders and to apply some unspecified combination of fair play and legitimate shareholder expectations to resolve the dispute the shareholders are unable to resolve themselves.
Typically it involves a situation where the majority has all the strict legalities on its side while the minority have all the equities. The intent of the section is to protect the interest of the minority and to provide it with an appropriate remedy.
What then is the appropriate remedy to redress the unfairly prejudicial conduct of the respondents in attempting to force the appellants to accept a valuation of their Class A shares in the respondent companies? Any remedy must not only protect the interest of the minority shareholders but also take into account the legitimate interests of the majority shareholders.

)
17
48.
Thus there must be some balance in the remedy process. The majority may have transgressed the boundaries of fair play, but they have legitimate ownership and control interests that cannot be ignored by the Court.
49.
There must also be consideration of the respective positions of the parties, as they exist at the date of adjudication. Restoring a shareholder or director to his or her previous position may be untenable, as there is no faith or trust left within the group.
This was the case in Beaubien, but also in cases such as Lee v.
To (1997), 153
Sask.R.58.
50.
In Lee, the Court of Appeal discussed s. 234 remedies at paragraphs 14 to 28.
Ultimately, it partially applies the "expectation" analysis discussed above, with the parenthetical comment that this appears to be best applied to closely-held corporations than to a larger company (see paragraph 18).
The Court seems to endorse, cautiously, an creative and interventionist approach to remedies. "One size does not fit all" seems to be the end result.
51.
Note also that cases such as Lee, as well as Taylor v. La Reata Ranch Ltd.,
[2003] S.J. No. 794 (Q.B.) recommend that full viva voce hearings be held prior to making monetary awards under s. 234.
There may be circumstances where this cannot be done, but it should be the court's first resort.
52.
A short note on interim remedies.
While seeking interim relief is clearly allowed, the cases suggest the onus is higher and that to obtain such interim relief, the applicant must essentially show a prima facie case.
This can be difficult, and should be approached with care.
It is far easier to obtain a preservation order maintaining the status quo than to obtain some more substantive interim relief.
53.
One of the remedies available is, of course, costs. One may seek an order that the company pay solicitor-client costs to the applicant, under Section 234(3)0).
To justify this request, counsel must be ready to demonstrate the applicant falls within the definition of "aggrieved person": see Lunn v. BCL Holdings Inc. (1996),

18
150 Sask. R. 258 (Q.B.), per Dawson J.
At page 269 she held that once a finding is made that acts are unfairly prejudicial to the complainants, they become aggrieved persons. Solicitor-client costs do not always follow the event in these proceedings.
)
\
V STRATEGIC CONCERNS AND POSSIBILITIES
54.
A number of very practical considerations are proposed for the reader's consideration.
55.
Money. These are not easy actions to bring. They will take a huge amount of your time. They will inevitably cost more than you initially think. Quote high on fees, and you will seldom be disappointed.
56.
A further monetary concern is whether your client has the resources to pursue the matter. This should be checked at the outset. Get a retainer. Get the client to sign a retainer agreement. Be clear that you are providing your best fee estimate, as opposed to a guarantee as to the ultimate cost.
Frequently, the matter starts in
Chambers then mutates into a multi-stage trial.
Conversely, consider whether the company being attacked is capable of providing any remedy to your client, monetary or otherwise. If the corporation is a sinking ship, there's little use in convincing your client to re-board.
57.
A further, albeit minor, concern pertains to process. This is not an "action"; s.
234 refers to an "application" being made. A Statement of Claim is not reqUired and would seem to defeat one of the purposes behind s. 234: quick access to justice.
Some counsel commence using a Notice of Motion.
This writer prefers the
Originating Notice, which allows counsel to convey substantial information to the court on first reading, yet does not amount to formal pleadings.
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58.
Also consider, from a strategic viewpoint, the difference between a closelyheld company and a larger enterprise.
Differences in approach are called for, as illustrated by Beaubien.
59.
Also, from time to time you may be called upon to consider this from the other side.
Not only might you be defending such an application, from a corporate planning perspective you may want to instigate one on behalf of the majority. To rid itself of a weak and/or greedy player, majorities of corporations have sometimes intentionally acted in an overbearing, harsh or prejudicial manner toward the minority.
This is done knowing it will trigger an application being brought. Nevertheless, the end result is the company rids itself of a thorn in its side, sometimes at a lower cost than negotiations would bring.
While inducing corporate divorce through bad behavior is risky, it is a useful tool in the corporate solicitor's arsenal.

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