Canada: Galantis v Alexiou: No Oppression After Dissolution

In Galantis v Alexious, [2019] UKPC 15 the Privy Council concluded that the oppression remedy existing under the Bahamian Companies Act cannot be invoked after the dissolution of a company, with respect to oppressive conduct by directors that occurred before the dissolution of the company.

The Bahamian Companies Act is based on the Canadian Business Corporations Act (the "CBCA") and the Privy Council relied almost exclusively on Canadian jurisprudence in reaching their conclusion. The decision is therefore likely to be of substantial persuasive weight in Canada.

The heart of the Privy Council's decision is that, while the Bahamian Companies Act includes a provision providing that the liability of the company and its directors shall "continue" following its dissolution, the oppression remedy is a discretionary and flexible power and therefore mere fact that a director faced the possibility of being subject to the oppression remedy at the time of dissolution did not give rise to a liability at that time which could be extended.

The decision will be of particular interest to creditors and security holders with potential oppression claims against a company in circumstances where the company is on the verge of bankruptcy. It provides a strong incentive to move for such a remedy as quickly as possible to avoid losing that potential relief. Similarly, the decision will be of interest to creditors who may have interests in a bankrupt company that compete with those of potential oppression claimants and may provide greater certainty to such creditors.


The respondent, Mr. Galantis sold his shares in a company to another company called "Ali-Cat Designs Ltd" in 1998. Mr. Antony Alexiou and Mr. Alexander Alexiou, the appellants, were the directors of Ali-Cat. Mr. Galantis received a lump sum and a promise that the remainder of the purchase price would be paid in installments pursuant to a promissory note.

In 1999, Ali-Cat defaulted on its obligations and, also in 1999, Mr. Galantis obtained a judgment for the outstanding balance with interest. The judgment was never paid.

In 2007, Mr. Galantis learned that one of the appellants had essentially converted the business that he had sold and transferred its assets to a third company, Bahama Republic Ltd., which operated on the first company's former premises.

In 2008 Ali-Cat was struck from the Bahamian register of companies, and in 2009 Mr. Galantis commenced an oppression claim against the former directors of Ali-Cat.


Mr. Galantis advanced his claim under s. 280 of the Bahamian Companies Act, which reads:

280. (1) A complainant may apply to the court for any order against a company or a director or officer of that company to restrain oppressive action.

(2) If upon an application under subsection (1), the court is satisfied that in respect of a company or any of its affiliates —

(a) any act or omission of the company or any of its affiliates effects a result;

(b) the business or affairs of the company 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 company or any of its affiliates are or have been exercised in a manner,

that is oppressive or unfairly oppressive to, or that unfairly disregards the interest of any shareholder or debenture holder, creditor, director or officer of the company, the court may make an order to rectify the matter complained of.

This is essentially equivalent to s. 241 of the CBCA. There are slight differences in wording – for example the CBCA refers to conduct that is "unfairly prejudicial" instead of "unfairly oppressive" – but those differences are not significant to this case.

The Bahamian Companies Act also provided that the liability of the company and its directors continues following the removal of the company from the register of companies:

272. Where a company is removed from the register of companies pursuant to section 271, the liability of the company and of every director, officer or member of the company shall continue and may be enforced as if the company had not been removed from the register.


The Privy Council, like all the lower courts in this case, had no difficulty concluding that s. 280 applied and that the appellants had engaged in oppressive conduct.

The judge at first instance held that the best interests of the company would have been to direct any profit or asset value towards the outstanding debt of the company (i.e., to Mr. Galantis). Similarly, she held that by opening a rival company while he still owed a duty to the company the director had engaged in oppressive conduct.

However, judge at first instance concluded that because the oppressive conduct all occurred before the company was struck off the register of companies there was no basis to make an oppression claim.

The Privy Council disagreed and held that the conduct which gives rise to oppression need not be continuing at the time of the application to the court. The Privy Council relied on the wording of s. 280(2) which referred to corporate affairs that "are or have been" conducted in an oppressive manner to conclude that the oppressive act need not be ongoing at the time the claim is brought. The Privy Council also relied on the Quebec Superior Court decision in Sparling v Javelin International Ltd, [1986] RJQ 1073 which came to the same conclusion.

However, while the conduct which gives rise to the oppression need not ongoing on the date the proceedings are commenced, the Privy Council concluded that the oppression itself must exist as of that date. The challenge in Galantis was that, on the date the oppression claim was commenced, the company had already been struck off the register of companies so the oppression could not be said to be ongoing.

The Court of Appeal had concluded on the basis of s. 272 of the Bahamian Companies Act that the liability of the directors for oppression survived the removal of the company from the register. The Privy Council disagreed.

The Privy Council concluded that s. 272 existed to ensure that directors could not cause a company to be dissolved so as to evade an existing personal liabilities as directors which existed as of the date of dissolution. However, the nature of the oppression remedy is fundamentally different from extant liability, and s. 272 does not extend liabilities that do not yet exist as of the date of dissolution.

The Privy Council relied on the decision of Cote J. in Wilson v Alharayeri, 2017 SCC 39 to conclude that the exercise of discretion is a pre-condition to any liability through the oppression remedy. Specifically, the oppression remedy turns on "equitable considerations" which vary depending on the facts of the case. That will, for example, include a consideration of the degree to which it is fair to assign liability to the director as opposed the company on all of the facts including the bad faith of the director or personal benefit to the director.

Because those discretionary considerations are a pre-condition to liability, s. 280 does not impose any liability "until such time as the court exercises its discretion under section 280". Thus there is no liability as of the date of dissolution and under s. 272 an applicant "cannot enforce the possibility than an order will be made in the future".

The Privy Council further relied on the decision of Cote J in Wilson to conclude that the outcome may depend, for example, on the number of creditors and whether it is appropriate to allow a remedy against directors under s. 280 in favour of some creditors at the expense of others.

Thus the Privy Council concluded that "section 280... do[es] not create a cause of action as such but a jurisdiction or power in the court which an applicant can invoke with a view to the court's exercising its power to grant him relief". Thus, Mr. Galantis could not bring his claim.


Canadian litigants should be cautious to avoid the situation in which Mr. Galantis found himself through his delay in bringing an oppression claim. The Privy Council clearly believed that he had a potentially meritorious oppression claim. But he had delayed until after the relevant company had been struck off the register. By that time it was too late to bring the oppression claim because the company no longer existed and the oppression claim was not an extant liability that could be extended by statute (although the Privy Council did note that he could have applied for an order to restore the company and then bring a derivative action, but he did not).

The principle from Galantis that an oppression claim is simply a power in the court to grant relief, rather than a liability, will be persuasive authority in Canada (being from a highly respected Court and being itself largely based on Canadian jurisprudence) and will be significant in any cases involving the potential dissolution of a corporation. Litigants with potential oppression claims would be well advised to consider bring their claims quickly, to ensure that changes to corporate status (not limited to dissolution, but also including insolvency or corporate restructuring) do not defeat their claims (or create procedural complications such as the need to restore a corporation to bring a claim). By contrast, creditors who lack an oppression remedy may want to rely on Galantis to defeat claims by other creditors who can advance an oppression claim.

In short, because a potential oppression claim may be held to be a mere power to grant relief – rather than a liability – it is important that the claim be brought as soon as possible to transform it into a true liability which has a greater chance of surviving major changes to the corporation. Given that such claims are often (although not exclusively) necessary when corporations face bankruptcy or other trouble (as solvent companies are typically more likely to meet their obligations), such diligence will frequently be prudent.

Case Information

Galantis v Alexious, [2019] UKPC 15

Docket: 0077 of 2017

Date of Decision: April 8, 2019

To view the original article click here

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions