“A Practical Guide for Shareholder Disputes” is the first installment in Brownlee LLP’s three-part series, designed for Alberta business owners, directors, and corporate advisors. This series explores key legal concepts and strategic options available when conflicts arise between shareholders in closely held companies.

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Understanding Oppression Claims

Shareholder disputes are among the most contentious of business conflicts, particularly in closely held corporations where personal and commercial relationships often intertwine. To that end, Alberta business owners and corporate advisors should familiarize themselves with one of the most powerful tools available to aggrieved stakeholders: an oppression claim.

Shareholder oppression involves unfair, prejudicial or harmful conduct by individuals in control of a corporation, such as majority shareholders, directors or officers, that adversely affects minority shareholders and other stakeholders. The oppression may occur as a result of abuse of authority, which often leads to a disregard for the rights, interests and other expectations of shareholders. 

Conduct that may be considered oppressive includes misusing company assets, self-dealing, policies that disadvantage minority shareholders, denied access to profits or dividends, violating shareholder agreements, and ignoring decision making rights of the minority shareholders. The impugned conduct can relate to personal claims, but may also relate to claims based on obligations owed to the corporation and breaches that cause harm. However, simply being upset over bona fide business decisions will not be sufficient for courts to find a claim of oppression.[1]

Who Can Bring an Oppression Claim in Alberta?

For Alberta corporations, who are provincially incorporated, parties will rely on the Alberta Business Corporations Act (“ABCA”)[2] when seeking remedy for oppressive conduct. If you are a federally incorporated company, parties must rely on the Canada Business Corporations Act (“CBCA”).[3]

The ABCA defines a complainant broadly under section 239. A complainant may include:

• current or former shareholders;
• current or former directors or officers;
• beneficial owners of securities; or
• “any other person who, in the discretion of the Court, is a proper person to make an application.”

This definition allows a range of parties, including creditors in some cases, to access the oppression remedy where their interests have been affected. A similar definition is found in the CBCA under section 238.

It is important a claimant begin taking legal steps as soon as they know about the oppressive conduct, even where the conduct is ongoing. An oppression claim under the ABCA will be subject to a two-year limitation period, wherein a claimant will be barred from bringing forward a claim after that two-year period.[4]

Broad and Flexible Relief: Powers of the Court 

The oppression remedy is intentionally drafted in both provincial and federal legislation to be broad and flexible. Section 242 of the ABCA provides that the Court may make any order it thinks fit, so long as the conduct of a corporation, its affiliates, or its directors or officers is oppressive, unfairly prejudicial, or unfairly disregards the interests of a complainant.

Section 242(3) of the ABCA grants the Court exceptionally broad powers to remedy oppression and address the harm suffered by the impugned shareholder. Potential remedies include:

• orders to amend articles or bylaws;
• appointing directors;
• compelling the purchase or sale of shares;
• setting aside transactions;
• awarding damages;
• winding up the corporation.

The Court will tailor remedies to address the specific harm suffered and ensure the complainant’s reasonable expectations are met.

Under section 241(2) of the CBCA, a court will intervene where it is satisfied that a corporation’s conduct is oppressive, unfairly prejudicial, or unfairly disregards the interests of key stakeholders such as a directors, officers, creditors or security holders. Conduct can include harmful omissions, unfair business practices, or misuse of power by a director(s). 

The court will have broad authority to grant remedial orders for oppressive conduct under section 241(3) of the CBCA. This may include an order to stop the oppressive conduct, appoint new directors, set aside unfair transactions, compensate affected parties, issue or repurchase shares rectify corporate records, and compensate affected parties. 

The Supreme Court of Canada in BCE Inc. v. 1976 Debentureholders (“BCE”), has made clear that the oppression remedy is not about punishing wrongful conduct but about remedying harm to stakeholders whose reasonable expectations have been frustrated.[5]

Reasonable Expectations: The Cornerstone of Oppression Claims

Under the test developed in BCE, the Supreme Court determined two crucial steps in establishing oppression: 

1. Did the Complainant(s) have a reasonable expectation that was breached? 
2. If so, did the conduct complained of amount to “oppression”, “unfair prejudice” or “unfair disregard”?[6]

The second prong of that test involves the core question in any oppression proceeding. The court must weigh whether the complainant’s reasonable expectations have been violated. Alberta courts follow the principle that reasonable expectations are assessed objectively and contextually. Courts will consider:

• General commercial practice 
• the nature of the corporation (e.g., family-run vs. arm’s length business);
• the relationship between the parties;
• past practices and dealings;
• representations or agreements between stakeholders;
• steps the complainant could have taken to protect themselves.[7]

Importantly, not every disappointment or breach of expectation qualifies as oppression. As Alberta courts have noted, the oppression remedy does not protect mere “hurt feelings” or normal commercial disappointments.[8]

Fact finding is crucial in establishing a strong oppression case. Courts caution that what may be oppressive in one factual context may not be oppression in a slightly different factual context.[9] Specific facts may merit a specially tailored relief. 

Examples of Oppressive Conduct

While oppression is fact-specific, Alberta courts have awarded for typical forms of oppressive conduct, including:

• exclusion of minority shareholders from decision-making;
• diversion of corporate assets or opportunities for personal benefit;
• misappropriation of corporate funds;
• diluting shareholdings unfairly;
• lack of disclosure regarding significant corporate decisions;
• refusing to purchase a minority shareholder’s interest in circumstances where there’s a reasonable expectation of a buyout.

For instance, in JBRO Holdings Inc. v. Dynasty Power Inc., the Alberta Court of Appeal reiterated that courts will intervene where the conduct is oppressive, unfairly prejudicial, or unfairly disregards stakeholder interests, but will show deference to honest business judgments.[10]

However, in Venture Leasing Corporation, the oppression claim was unsuccessful as the respondent was found to have balanced the expectations of multiple shareholders, rather than prioritizing the interests of one shareholder over the other.[11] The respondent relied on professional advice, made inquiries, and exercised reasonable judgement. 

Oppression vs. Derivative Actions

A critical strategic question is whether a stakeholder should pursue an oppression claim or a derivative action. While both may overlap, oppression claims focus on personal harm to the complainant, whereas derivative actions address wrongs done to the corporation itself. Unlike derivative actions, oppression claims do not require leave of the court.

In Alberta, a shareholder can apply to court to bring a derivative action under section 240(1) and (2) of the ABCA. This can allow a shareholder to bring forward an action on behalf of the corporation. Essentially a complainant can “step in” where company leadership fails to act. In order to be successful, the complainant must show: 

1. That they gave reasonable notice to the directors about their intent to apply
2. They are acting in good faith
3. The action is within the best interest of the corporation

In Rea v. Wildeboer, which Alberta justices often look to for guidance, the Ontario Court of Appeal held that oppression and derivative remedies are not mutually exclusive.[12]  If a shareholder has been directly and individually harmed they may have a personal claim, separate from any legal claims the corporation may have.[13] This means you can pursue both at the same time. 

It’s important to note that animosity between parties does not imply that a claimant is acting in bad faith. As long as the claimant is not acting in a frivolously or vexatious manner, a claimant will meet the good faith component.[14]

The Business Judgment Rule: A Key Defense

The Business Judgement Rule is a frequent defence in oppression claims which allows courts to give appropriate deference to the business judgement of directors of a corporation. Courts in Canada are cautious about second-guessing directors’ business decisions unless those decisions fall outside a reasonable range. However, the business judgment rule will not protect directors engaging in self-dealing, fraud, or conduct contrary to stakeholders’ reasonable expectations. As long as business decisions lie within the range of reasonable alternatives, courts will be reluctant to interfere with business decisions of a corporation.[15] 

Conclusion

Oppression applications remain a potent tool in resolving disputes in Alberta’s closely held corporations. It remains as a powerful tool to address unfair treatment and protect the reasonable expectations of stakeholders. However, given their complexity and the fact-specific nature of these claims, potential complainants and corporations alike should seek experienced legal advice before proceeding. 

Brownlee’s experienced commercial litigation and corporate services teams can help assist you in navigating these disputes and pursuing those solutions and remedies that are best sited to your needs.

Contact us at (780) 497-4800 or reach out online to connect with one of our lawyers.

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About the Author
Nathaniel is an experienced commercial litigator at Brownlee LLP with a focused practice on shareholder disputes, corporate governance issues and complex business litigation.  With a deep understanding of the legal and strategic considerations that arise in closely held corporations and partnerships, Nathaniel regularly acts for shareholders, directors, and corporations in high-stakes litigation involving oppression claims, derivative actions, breaches of fiduciary duty, and shareholder agreement disputes.

Questions? 

📞 Reach Nathaniel at Nbrenneis@brownleelaw.com or (780) 428-7308.

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^{[1] Calgary Co-operative Association Limited v Federated Co-operatives Limited, 2025 ABCA 142 at para 144.}

^{[2] Business Corporations Act, RSA 2000, c B-9 [ABCA].}

^{[3] Canada Business Corporations Act, RSC 1985, c C-44 [CBCA].}

^{[4] Limitations Act, RSA 2000, c L-12 at s. 3(1).}

^{[5] BCE Inc. v. 1976 Debentureholders, 2008 SCC 69 (CanLII) at para 45.}

^{[6] BCE Inc. v. 1976 Debentureholders, 2008 SCC 69 (CanLII) at para 68.}

^{[7] BCE Inc. v. 1976 Debentureholders, 2008 SCC 69 (CanLII) at para 72.}

^{[8] Multiguide GmbH v. Broer, 2022 BCSC 852, applied by analogy in Alberta contexts.}

^{[9] Shefsky v California Gold Mining Inc, 2016 ABCA 103 at para 2.}

^{[10] JBRO Holdings Inc. v. Dynasty Power Inc., 2022 ABCA 258 at paras 77-8.}

^{[11] Venture Leasing Corporation v Hanger 11 Corporation, 2025 ABKB 294 (CanLII) at paras 101-2.}

^{[12] Rea v. Wildeboer, 2015 ONCA 373, at para 26.}

^{[13] Hercules Managements Ltd. v. Ernst & Young, 1997 CanLII 345 (SCC) at para 62.}

^{[14] Black Fluid Inc v Opulence Clothing Inc, 2014 ABQB 138 at paras 21-2.}

^{[15] Peoples Department Stores Inc (Trustee of) v Wise, 2004 SCC 68 at paras 64-65.}