In its November 8, 2010 decision in "Jellema v.
American Bullion Minerals Ltd". the Court of Appeal for
British Columbia decided that shareholder oppression claims can be
certified as class proceedings. This fundamentally changes the
shareholder dispute landscape in British Columbia, for both
shareholders and the closely held and publicly traded corporations
whose shares they own.
American Bullion Minerals owned an interest in a mining
property. In 2006 its majority shareholder bankrupted it. In 2008
two minority shareholders persuaded the Supreme Court of British
Columbia to annul the bankruptcy, on the ground that the majority
shareholder had bankrupted the corporation for the improper purpose
of acquiring its interest in the property for less than it was
worth. In 2009 the minority shareholders began a shareholder
oppression claim against American Bullion Minerals and others,
seeking (among other things) an order requiring the corporation, or
its majority shareholder, to buy their shares at their fair value,
to be determined by the court. The plaintiffs applied to have that
claim certified as a class proceeding.
On November 27, 2009 the Supreme Court of British Columbia
dismissed the application, on the ground that a claim cannot be
certified under the Class Proceedings Act where it can be
made in a representative capacity under another statute, and an
oppression claim could be made in such a capacity under the
Business Corporations Act.
The Court of Appeal disagreed. The court concluded that an
oppression claim could not be brought in a representative capacity
under the Business Corporations Act. It therefore could be
certified as a class proceeding.
This decision fundamentally changes the British Columbia
shareholder dispute resolution landscape. Corporations, both
closely held and publicly traded, must now recognize in their
dealings with the interests of corporate stakeholders that they may
be subject to oppression claims even if the effects of their
actions on individual stakeholders are small. Under the Class
Proceedings Act, these claims can now be aggregated across all
affected stakeholders. Class counsel can now bind all affected
stakeholders to a contingency fee agreement. Representative
claimants now also have the benefit of the "no-costs"
regime provided for under the Class Proceedings Act. The
representative claimants do not have to pay the defendants any
assessed costs of an unsuccessful certification application, nor an
unsuccessful trial of common issues in the class proceeding or an
appeal from it (absent litigation misconduct). These factors change
the economic incentives for representative claimants and class
counsel, and make oppression claims more likely.
Similarly, corporate stakeholders, who might not have considered
it feasible to seek relief for oppressive conduct, may now find
that certification under the Class Proceedings Act allows
them to pursue such claims.
It's not often that our little blog intersects with such titanic struggles as the U.S. presidential race – and by using the term "titanic" I certainly don't mean to suggest that anything disastrous is in the future.
J.J. v. C.C., is an interesting case in which the court held that an automotive garage owes a duty to minor children to secure the vehicles on the premises by locking the cars and safely storing the car keys...
In Irwin v. Alberta Veterinary Medical Association, 2015 ABCA 396, the Alberta Court of Appeal found that the "ABVMA" failed to afford procedural fairness to a veterinarian undergoing an incapacity assessment.
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