| Case ID |
095cd983-9ad8-4c1f-9921-03f0610b3a22 |
| Body |
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| Case Number |
D-2741 of 2016 |
| Decision Date |
Jul 13, 2017 |
| Hearing Date |
Nov 29, 2016 |
| Decision |
The Supreme Court upheld the lower court's decision to hold corporate directors personally liable for oppressive conduct under section 241(3) of the Canada Business Corporations Act. The court reinforced the necessity for a two-pronged approach to personal liability: first, the oppressive conduct must be properly attributable to the director, and second, the imposition of personal liability must be appropriate in all circumstances. The court emphasized the importance of fair dealing and the reasonable expectations of shareholders, concluding that the appellant had personally benefitted from the oppressive conduct which unjustly prejudiced the respondent's interests. The trial judge's findings were supported by evidence that the appellant had played a significant role in the decision-making process that led to the oppression and had gained financially from the actions taken against the respondent. The appeal was dismissed, affirming the previous rulings and the awarded compensation of $648,310 to the respondent. |
| Summary |
In the landmark case of Andrus Wilson v. Ramzi Mahmoud Alharayeri, the Supreme Court of Canada addressed the critical issue of personal liability for corporate directors under the Canada Business Corporations Act. The decision underscored the principles governing oppressive conduct and the standards for holding directors accountable for their actions. The case involved a dispute stemming from the actions of directors during a financially tumultuous period for Wi2Wi Corporation, where the respondent, Alharayeri, alleged that the directors had acted oppressively, leading to a significant dilution of his shares. The court recognized that the oppression remedy is intended to ensure fairness and protect the reasonable expectations of shareholders, thereby reinforcing the need for directors to act in good faith and in the best interests of the company and its stakeholders. The ruling serves as a pivotal reference for future cases involving corporate governance and the responsibilities of directors, highlighting the delicate balance between corporate control and shareholder rights. This decision has significant implications for corporate law, emphasizing the need for transparency and accountability in corporate governance, particularly in cases involving closely held corporations. As such, it remains a vital resource for legal practitioners, corporate directors, and shareholders alike, ensuring that principles of fairness and equity are upheld in corporate dealings. |
| Court |
Supreme Court of Canada
|
| Entities Involved |
Wi2Wi Corporation,
Mitec Telecom Inc.
|
| Judges |
MCLACHLIN, C.J.,
ABELLA, J.,
MOLDAVER, J.,
KARAKATSANIS, J.,
WAGNER, J.,
GASCON, J.,
BROWN, J.,
ROWE, J.
|
| Lawyers |
Terrence J. O'Sullivan,
Paul Michell,
Zain Naqi,
Doughlas C. Mitchell,
Emma Lambert
|
| Petitioners |
ANDRUS WILSON
|
| Respondents |
RAMZI MAHMOUD ALHARAYERI
|
| Citations |
2017 SLD 2908,
2017 SCMR 1851
|
| Other Citations |
Budd v. Gentra Inc. (1998), 43 B.L.R. (2d) 27 (Ont. C.A.),
Sidaplex-Plastic Suppliers Inc. v. Elta Group Inc. (1998), 40 O.R. (3d) 563,
Naneff v. Con-Crete Holdings Ltd. (1995), 23 O.R. (3d) 481 (C.A.),
Smith v. Ritchie, 2009 ABCA 373,
Stern v. Imasco Ltd. (1999), 1 B.L.R. (3d) 198 (Ont. S.C.J.)
|
| Laws Involved |
Canada Business Corporations Act, R.S.C. 1985, c. C-44
|
| Sections |
241(3)
|