Party Agreement Isn't Enough: Court Retains Discretion Over Petition Procedure

The recent British Columbia Supreme Court decision in Jivan v. Ruggles ("Jivan")¹, provides an important reminder: even when all parties agree that a matter should proceed by way of petition, the court ultimately retains discretion to determine the appropriate procedural route. This case underscores that party consent, while relevant, does not override the court's responsibility to ensure that justice is properly served through the most suitable procedure.

Background

The case involved TalentMarketplace Inc. ("TMP"), a technology startup founded by the parties. The petitioner filed an oppression petition seeking equitable damages of $780,000, alleging the respondents excluded him from management, undermined a fair market sale of the company, dissolved it and misappropriated its intellectual property. The respondents denied the allegations, submitting that TMP's business was never viable, and that the situation was worsened by the petitioner's lack of cooperation and refusal to perform his role.

The Legal Framework: Understanding Oppression

Oppression is an equitable remedy that provides broad jurisdiction to enforce not merely what is legal, but what is fair as between the parties. What is just and equitable is determined by reference to the reasonable expectations of stakeholders in the context of their relationships, making the analysis inherently fact-specific.

Under section 227 of the Business Corporations Act², a claim for oppression is analyzed in two stages:

1. Does the evidence support the reasonable expectation asserted by the claimant?
2. Does the evidence establish that the reasonable expectation was violated by conduct falling within the terms "oppression", "unfair prejudice" or "unfair disregard" of a relevant interest?

Test for Converting Petitions to Actions

When determining whether it is in the interests of justice to convert a petition to an action, courts consider five key factors:

1. undesirability of multiple proceedings;
2. securing a just, speedy and inexpensive determination of the proceeding on its merits (Supreme Court Civil Rule 1-3(1));
3. need for credibility assessment;
4. need for a full grasp of the evidence; and
5. whether justice will more likely be served by pleadings and discovery in the usual way to resolve the dispute.

The British Columbia Court of Appeal confirmed in Cepuran v. Carlton ("Cepuran")³, that where there is a genuine triable issue, the court should consider whether the case might be resolved through alternative methods. When faced with credibility issues and other triable issues that make summary procedures inappropriate, hybrid procedures such as limited document production, examination for discovery or cross-examination may be preferable to proceeding by action.

The Court's Decision to Order a Trial

Both parties agreed that the oppression claim was suitable for determination by petition. However, the Court disagreed, exercising its discretion to refer the matter to the trial list.

The Court held that the case could not be fairly decided on the merits without a trial, as virtually every allegation underlying the claims of oppression was disputed in ways that required credibility assessments based on a full grasp of the evidence.

The Court identified fundamental conflicts on virtually every material issue, including:

• Exclusion from operations: The petitioner claimed oppressive exclusion; the respondents claimed he stopped cooperating and participating.
• Company performance: The petitioner asserted promising growth with increasing revenues; the respondents contended TMP never functioned well and lost money most years.
• Valuations: Conflicting evidence on multiple valuations ranging from over $12 million to less than $100,000.
• Third-party offers: Conflicting accounts of whether offers in the amounts of $2 million and $3 million were serious or realistic for the sale of TMP.
• Misappropriation: Disputed whether the respondents misappropriated intellectual property or whether assets were truly lost after the petitioner declined to take over payments.
• Wind-up: Conflicting narratives about whether the petitioner's termination was oppressive or justified, and whether the respondents failed to monetize assets or the petitioner abandoned them to shoulder debts.

Two additional considerations supported the conversion to trial in this case:

1. Proportionality: The quantum of the claim ($780,000 in equitable damages plus $100,000 in punitive damages) meant that a trial was not disproportionate to the issues at stake.
2. Urgency: Given that TMP was dissolved, the standard rationale for expedited oppression decisions did not apply — the delay associated with a trial would not prejudice ongoing company operations or the value of the petitioner's stake.

Conclusion

Jivan reinforces that courts retain robust discretion to ensure procedural fairness in oppression disputes, and that party agreement on procedure does not bind the court where the interests of justice require otherwise. While the trend in British Columbia following Cepuran is to implement hybrid procedures—allowing courts to tailor procedures in the interests of proportionality and access to justice —Jivan illustrates the circumstances in which such procedures are inadequate. Where credibility issues are pervasive and the facts are fundamentally contested on every material point, even hybrid procedures may be insufficient to ensure a fair determination on the merits, and a full trial becomes necessary.

Footnotes

1. 2026 BCSC 51.

2. S.B.C. 2002, c. 57.

3. 2022 BCCA 76.

The foregoing provides only an overview and does not constitute legal advice. Readers are cautioned against making any decisions based on this material alone. Rather, specific legal advice should be obtained.

© McMillan LLP 2025

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.