B.C. – T’s responses to F’s mediation efforts justify delayed oppression remedy petition, qualify as component of oppressive conduct – #418

In Gierc Jr. v. Wescon Cedar Products Ltd., 2021 BCSC 23, Madam Justice Catherine Murray determined that Petitioner’s “reasonable efforts to mediate and settle the matter” served two (2) purposes: to rebut Respondents’ allegations of Petitioner’s undue delay to apply for oppression remedy under the Business Corporations Act, SBC 2002, c 57 and to qualify Respondents’ own conduct as oppressive.

On August 3, 2015, T terminated F as an employee.  Between that date and February 2016, F attempted to gain access to financial information about the companies in which he was a beneficial owner through his co-petitioner corporation. He also sought to secure financing to appoint an inspector but was unable to do so.  “In late 2015/early 2016, the parties had tentatively agreed to appoint an auditor. That did not work because, according to [F], [T] imposed numerous obstacles including failing to pay the auditor’s retainer and restricting the auditor’s access to information”.

As determined by Murray J. “in February 2016, feeling like he had no other option, [F] filed a petition for oppression remedy” under section 227 of B.C.’s Business Corporations Act, SBC 2002, c 57 (“BCA”).

As part of the chronology, Murray J. recorded the parties’ post-filing mediation conducted in July 2016.  Their mediation produced a signed agreement (“Agreement”), the terms of which Murray J. excerpts in part at para. 26.  As set out further in the concluding two (2) paras 1(j) and 1(k) to that Agreement, the parties agreed to engage in further mediation if they “cannot agree on the final settlement amount and terms”.   They did not agree including disagreements on payments of amounts stipulated elsewhere in the Agreement.

Murray J. excerpted relevant portions of section 227 of the BCA and observed that oppression is “an equitable remedy that seeks to ensure fairness”, referencing BCE Inc. v. 1976 Debentureholders, 2008 SCC 69 (CanLII), [2008] 3 SCR 560.

Respondent challenged both of the petitioners’ standing to petition for oppression remedy. Murray J. agreed in part, determining that only the individual petitioner F (“Petitioner”) had standing.  She then addressed and dismissed Petitioners’ allegations that Respondent had delayed in petitioning the court.  To do so, she relied on Petitioners efforts “to mediate and settle the matter”.

[66] Before moving on to the next issue I must address the respondent’s argument that this action was not brought within a timely manner. Frank was fired in August 2015. As set out above, in the months that followed he attempted to obtain information about the value of the company but was frustrated. The petition was filed on February 19, 2016. There followed attempts to come to a resolution including two mediations, a seemingly endless back and forth between counsel and an application before Punnett J.

[67] In Runnalls v. Regent Holdings Ltd. 2010 BCSC 1106 (Runnalls), N. Smith J. noted that “timeliness is a flexible concept that will depend on the circumstances of each case” and that under the BCA, “an application is timely if a course of conduct that constitutes oppression is continuing or if its effects are continuing”: paras. 52-56. The limitation period is not an issue here.

[68] I am satisfied that the petition was brought in a timely manner. Any delay is due to the petitioners’ reasonable efforts to mediate and settle the matter and is not an impediment to this action”.

Further into her analysis of the merits of Petitioner’s claims of oppression, Murray J. returned to Petitioner’s efforts to mediate and settle.  It is unclear if Murray J. included only the mediation attempted before the petition was filed or included the mediation conducted in July 2017.  It is also unclear if the oppression includes Respondents’ unwillingness to engage in meaningful solutions before the petition or to respect the terms of the mediated Agreement.  At a minimum, she bundled mediation into her list of facts which qualified as Respondents’ oppression of Petitioner.

[96] While exclusion from management of a company taken alone may not necessarily amount to oppressive conduct (see Brown v. Boyar, 2009 BCSC 1300 at paras. 57-58), it is part of the pattern of conduct that must be considered. Having said that, in my view, following Discovery, the respondents’ failure/refusal to provide financial information and audited financial statements as requested, is, on its own, in these circumstances, oppressive. All of the other conduct adds to that finding.

[97] [T] has demonstrated his contempt toward [F] throughout the course of these proceedings. He took over 19 months to pay [F] pursuant to the Agreement. He has failed to pay the costs ordered against him by Punnett J. in 2018. Before me, [T] advanced disingenuous arguments that rather than working as a door hanger, [F] could have returned to teaching after being out of the profession for approximately 35 years, and that [F] did not bring his petition in a timely manner when the lapsed time was spent in an effort to reach an agreement.

[98] The main thrust of [T]’s application to have [F]’s petition dismissed is that [F] has brought this action the wrong way. If [T] is successful, the last four plus years of legal wrangling would have been wasted and [F] would face further delay and expense to bring this as an action in trusts rather than oppression remedy. As I have made clear above, I do not accede to this argument. In my view it is another attempt by the respondents to delay resolution of this matter and cause further hardship to [F].

[99] Viewing all of the circumstances as a whole and in the context of this family business, I am satisfied that the above enumerated conduct engaged in by [T] and the respondent companies is contrary to [F]’s reasonable expectations. I find that [F] has been treated unfairly and that the respondents’ actions have been oppressive”. (underlining added)

Having determined that Petitioner had standing to petition for oppression remedy and that Petitioner had experienced oppression, Murray J. did not lose sight of the activity which initially prompted Petitioner to engage in attempts to mediate and settle and to appoint an inspector. Murray J. ordered Respondents to appoint an auditor by February 1, 2021 and to produce to Petitioner the audited financial statements by March 31, 2021.  She also ordered Respondents to bear the costs of the auditor and to hold an annual general meeting within 21 days of delivery of the audited statements.

urbitral notes – First, BCE Inc. v. 1976 Debentureholders, 2008 SCC 69 (CanLII), [2008] 3 SCR 560 cautioned that oppression may have broad remedy but remains fact-specific.

[58] First, oppression is an equitable remedy.  It seeks to ensure fairness — what is “just and equitable”.  It gives a court broad, equitable jurisdiction to enforce not just what is legal but what is fair: Wright v. Donald S. Montgomery Holdings Ltd. (1998), 1998 CanLII 14805 (ON SC), 39 B.L.R. (2d) 266 (Ont. Ct. (Gen. Div.)), at p. 273; Re Keho Holdings Ltd. and Noble (1987), 1987 ABCA 84 (CanLII), 38 D.L.R. (4th) 368 (Alta. C.A.), at p. 374; see, more generally, Koehnen, at pp. 78-79.  It follows that courts considering claims for oppression should look at business realities, not merely narrow legalities: [Scottish Co-operative Wholesale Society Ltd. v. Meyer, [1959] A.C. 324 (H.L.)], at p. 343.

[59] Second, like many equitable remedies, oppression is fact-specific. What is just and equitable is judged by the reasonable expectations of the stakeholders in the context and in regard to the relationships at play.  Conduct that may be oppressive in one situation may not be in another”.

Second, as noted in Runnalls v. Regent Holdings Ltd., 2010 BCSC 1106, the courts must still address limitation periods if and when they arise.  In Boulet v. Inventys Thermal Technologies Inc., 2019 BCSC 1416, the parties engaged first in a November 2017 arbitration involving shareholder agreement amendments addressing nominations of independent directors and then in a petition for oppression remedy filed June 2018.  The arbitrator dismissed the arbitration for want of jurisdiction over the dispute.  The court held that the limitation period applied to the June 2018 petition and that the wording of the BCA differs from how other jurisdictions coordinate their oppression remedy and limitation statutes.

[31] In July 2017, [B] provided a notice of dispute under the Shareholders’ Agreement and in November 2017, provided a notice to arbitrate the dispute regarding amendments to the Shareholders’ Agreement pursuant to s. 15.1 of the Shareholders’ Agreement; however, the arbitrator determined that the dispute did not come within the scope of the dispute resolution provisions of the Shareholders’ Agreement and he therefore did not have jurisdiction over the dispute put before him”. 


[74] The difficulty with the petitioner’s submission is that principal cases relied upon are from the Alberta courts where the Limitation Act provides for expressly for a “continuing course of conduct” exemption to the expiry of the standard two-year limitation period.  This is found in s. 3(3)(a) which states:

(3) For the purposes of subsections (1)(b) and (1.1)(b),

(a) a claim or any number of claims based on any number of breaches of duty, resulting from a continuing course of conduct or a series of related acts or omissions, arises when the conduct terminates or the last act or omission occurs.

[75] There is no such exemption to the basic limitation period under the British Columbia act.  More importantly, the cases in this province do not support the view that regardless of the exemptions that the limitation period is extended by each subject act.  As the respondent submits, Runnalls v. Regent Holdings Ltd., 2010 BCSC 1106 makes it clear that an oppression claim is subject to the provisions of the Limitation Act; and that Palmer v. Gerbrandt, 2005 BCSC 1711 makes it clear that continuing breaches do not create new causes of action with a restart of a limitation period”.