



COURT OF APPEAL FOR ONTARIO

CITATION: Rea v.
    Wildeboer, 2015 ONCA 373

DATE: 20150526

DOCKET: C59168

Weiler, Sharpe and Blair JJ.A.

BETWEEN

Natale Rea, Rea Holdings Inc. and Edward Sorbara

Plaintiffs (Appellants)

and

Robert Wildeboer, Nick Orlando, Fred Jaekel,
    Armando Pagliari, Suleiman Rashid, R.A.M. Contracting Limited, Robert Marzilli,
1530309 Ontario
    Limited, Martin Pathak
and Martinrea International Inc.

Defendants (
Respondents
)

AND BETWEEN

Robert Wildeboer, Armando Pagliari, Suleiman
    Rashid and Martinrea International Inc.

Plaintiffs by Counterclaim

and

Natale Rea and Rea Holdings Inc.

Defendants to the Counterclaim

Jeremy C. Millard and Holly V.A. Cunliffe, for the appellants

Don H. Jack and Courtney Raphael, for the respondents

Heard: January 9, 2015

On appeal from the judgment of Justice T. McEwen of the Superior
    Court of Justice, dated June 30, 2014.

R.A. Blair J.A.:

[1]

Oppression
    remedy or derivative action?  What is the nature of these proceedings?

[2]

The
    appellants have asserted an oppression claim under s. 248 of the
Business
    Corporations Act
alleging misappropriation of funds from Martinrea International
    Inc. and seeking to recover those funds for the corporation.  They submit that
    they are entitled to proceed on that basis, arguing that the somewhat murky
    line between oppression remedies and derivative actions has all but
    disappeared.  The respondents argue, on the other hand, that the claim is
    solely Martinreas claim and that it must be pursued as a derivative action on
    behalf of the corporation, with leave of the court.

[3]

The
    motion judge agreed with the respondents and struck the claim as against them. 
    In the context of this claim as against these respondents, I too agree, and for
    the following reasons would dismiss the appeal.

Background and Facts

[4]

Martinea
    is a successful Canadian manufacturer of auto parts.  It is a widely-held
    public company, trading on the Toronto Stock Exchange, with approximately 84.5
    million outstanding shares.

[5]

The
    appellant Natale Rea and the defendant Fred Jaekel are the companys principal founders. 
    They became directors, along with the defendants Wildeboer, Orland and Rashid. 
    The defendant Pagliari was a Martinrea executive, but not a board member.  All
    of these defendants are referred to in the appellants submissions as the
    Insider Defendants.

[6]

Between
    2002 (when the company was founded) and 2012, Mr. Rea and his holding
    corporation, Rea Holdings Inc., were significant minority shareholders of the
    company  holding between 12% and 17% of its shares.  After the alleged
    improper transactions discussed below were discovered in 2011, and not dealt
    with to Mr. Reas satisfaction, he and Rea Holdings sold their 9,910,009 common
    shares in 2012.  Subsequently  two weeks before the motion to strike was
    heard, and after these proceedings had been commenced  they re-acquired
    approximately 0.1%, or 100,000, of Martinreas outstanding shares.

[7]

In
    substance, the statement of claim alleges that the Insider Defendants undertook
    a series of transactions and other activities that involved a breach of their
    fiduciary and other duties to Martinrea and resulted in the misappropriation of
    large amounts of Martinreas corporate funds  allegedly $50 to $100 million 
    for their own personal benefit (the Improper Transactions).  The action seeks
    the recovery of these funds for Martinrea.

[8]

The
    defendants 1530309 Ontario Limited (sometimes known as IM) and Martin Pathak
    are the moving parties and the respondents on the appeal.  Mr. Pathak is the
    principal of IM.  Neither he nor IM is a shareholder of Martinrea and Mr.
    Pathak has never been a director or officer of Martinrae.  IM is a supplier of
    used auto parts.

[9]

The
    respondents are implicated in the action because they are said to have aided
    and abetted the Insider Defendants in two particular aspects of the Improper
    Transactions.  It is alleged: (i) that they sold used equipment to Martinrea
    over a 10-year period at prices well over market value and on terms unfair to
    Martinrea, and as a result of which some of the Insider Defendants received
    substantial kickbacks; and (ii) that a company controlled by them purchased a
    parcel of land from Martinrea in 2009 without an appropriate sale process and
    on terms unfair to Martinrea.

[10]

In 2011, Mr. Rea
    became aware of some of the alleged Improper Transactions and brought them to
    the attention of the defendant Wildeboer (the Executive Chairman of Martinrea)
    and the defendant Rashid (head of the audit committee).  Rashid was asked to,
    and did, prepare a report for the board of directors.  The appellants say that
    the report was a complete whitewash.  When Wildeboer protected Orlando (the
    President and CEO) by refusing to accept his resignation, the differences came
    to a head. In June 2012, Mr. Rea stepped down as Vice-Chairman and a director
    of Martinrea.  He and Rea Holdings sold their shares.

[11]

In September 2013,
    this action was commenced.

Analysis

[12]

The general issue raised
    on this appeal is whether a complainant may assert, by way of an oppression
    remedy proceeding, a claim that is by nature a derivative action for a wrong
    done solely to the corporation, thereby circumventing the requirement to obtain
    leave to commence a derivative action.

[13]

Some understanding of
    how and why these two forms of statutory redress evolved will help in
    addressing this issue.

History

[14]

At common law,
    minority shareholders in corporations had very little protection in the face of
    conduct by the majority (or by directors controlled by the majority) that
    negatively affected either the corporation itself or their interests as
    minority shareholders.  This handicap was due to two well-entrenched common law
    principles of corporate law: the notion of a corporate personality and the
    indoor management rule.  Both of these principles can be traced back to a
    decision of now almost mythical stature  that of Vice-Chancellor Wigram in
Foss
    v. Harbottle
(1843), 67 E.R.189, 2 Hare 461 (Eng. V.C.).

[15]

In law, a corporation
    is a legal entity distinct from its shareholders.  It followed from this that
    shareholders were precluded from bringing their own action in respect of a
    wrong done to the corporation.  Except as modified by the derivative action,
    the oppression remedy, and winding-up proceedings, this remains a governing
    principle in Canadian corporate law: see
Hercules Management Ltd. v. Ernst
    & Young
, [1997] 2 S.C.R. 165, at para. 59;
Meditrust Healthcare
    Inc. v. Shoppers Drug Mart
(2002), 61 O.R. (3d) 786 (C.A.).  As Laskin
    J.A. put it, in
Meditrust
, at paras. 12-14:

The rule in
Foss v. Harbottle
provides simply that a
    shareholder of a corporation  even a controlling shareholder or the sole
    shareholder  does not have a personal cause of action for a wrong done to the
    corporation. The rule respects a basic principle of corporate law: a
    corporation has a legal existence separate from that of its shareholders. See
Salomon
    v. Salomon & Co.
(1896), [1897] A.C. 22, 66 L.J. Ch. 35 (U.K. H.L.) A
    shareholder cannot be sued for the liabilities of the corporation and, equally,
    a shareholder cannot sue for the losses suffered by the corporation.

The rule in
Foss v. Harbottle
also avoids multiple
    lawsuits. Indeed, without the rule, a shareholder would always be able to sue
    for harm to the corporation because any harm to the corporation indirectly
    harms the shareholders.

Foss v. Harbottle
was decided nearly 160 years ago but
    its continuing validity in Canada has recently been affirmed by the Supreme
    Court of Canada in Hercules
Management Ltd. v. Ernst & Young
,
    [1997] 2 S.C.R. 165 (S.C.C.) and by this court in
Martin v. Goldfarb
(1998),
    163 D.L.R. (4th) 639 (Ont. C.A.).

[16]

The companion indoor
    management rule has also played a significant role in restricting minority
    shareholders rights to redress.  At common law, if an act that was claimed to
    be wrongful could be ratified by the majority at a general meeting of shareholders,
    neither the corporation nor an individual shareholder could sue to redress the
    wrong.  The rationale for this was that courts were reluctant to interfere in
    the internal management affairs of the corporation.

[17]

It took over a century
    for legislative reforms to be put in place to temper the restrictive effect of
    these principles on minority shareholder rights.  In the latter part of the 20
th
century, however, the two statutory forms of relief that are at the heart of
    this appeal  the derivative action and the oppression remedy  were created
    for this purpose.
[1]
It is noteworthy that they approached the problem in two different, although
    potentially overlapping, ways.

[18]

The derivative action
    was designed to counteract the impact of
Foss v. Harbottle
by providing
    a complainant  broadly defined to include more than minority shareholders
[2]
 with the right to apply to the court for leave to bring an action in the
    name of or on behalf of a corporation  for the purpose of prosecuting,
    defending or discontinuing the action on behalf of the body corporate:
Business
    Corporations Act
, R.S.O. 1990, c. B.16, s. 246 (OBCA).  It is an action
    for corporate relief, in the sense that the goal is to recover for wrongs
    done to the company itself.  As Professor Welling has colourfully put it in his
    text,
Corporate Law in Canada: The Governing Principles
, 3
rd
ed. (Mudgeeraba: Scribblers Publishing, 2006), at p. 509, [a] statutory
    representative action is the minority shareholders sword to the majoritys twin
    shields of corporate personality and majority rule.

[19]

The oppression remedy,
    on the other hand, is designed to counteract the impact of
Foss v.
    Harbottle
by providing a complainant  the same definition  with the
    right to apply to the court, without obtaining leave, in order to recover for
    wrongs done to the individual complainant by the company or as a result of the
    affairs of the company being conducted in a manner that is oppressive or
    unfairly prejudicial to or that unfairly disregards the interests of the complainant. 
    The oppression remedy is a personal claim:
Ford Motor Co. of Canada v.
    Ontario (Municipal Employees Retirement Board)
(2006), 79 O.R. (3d) 81
    (C.A.), at para. 112, leave to appeal refused, [2006] S.C.C.A. No. 77;
Hoet
    v. Vogel
, [1995] B.C.J. No. 621 (S.C.), at paras. 18-19.

[20]

These two forms of
    redress frequently intersect, as might be expected.  A wrongful act may be
    harmful to both the corporation and the personal interests of a complainant
    and, as a result, there has been considerable debate in the authorities and
    amongst legal commentators about the nature and utility of the distinction
    between the two.  In the words of one commentator, the distinction between
    derivative actions and oppression remedy claims remains murky: Markus Koehnen,
Oppression and Related Remedies
(Toronto: Thomson Canada Limited, 2004),
    at p. 443.

[21]

Yet the statutory
    distinctions remain in effect.

The
    Parties Positions

[22]

The appellants submit
    that the distinction between the remedies has been significantly moderated and
    that a complainant is entitled to pursue an oppression remedy even where the
    wrong in question is a wrong in respect of the corporation, provided that the
    shareholders reasonable expectations have been violated by means of conduct
    caught by the terms oppression, unfair prejudice or unfair disregard. 
    They rely on the decision of the Supreme Court of Canada in
Re BCE Inc.
,
    2008 SCC 69, [2008] 3 S.C.R. 560, at para. 68, for this proposition.  The
    rationale, they say, is that the oppression remedy provisions provide
    stakeholders with a personal, statutory right not to have their reasonable
    expectations violated in this manner.

[23]

The appellants stress that
    in
Malata Group (HK) Ltd. v. Jung
, 2008 ONCA 111, 89 O.R. (3d) 36, and
Jabalee v. Abalmark Inc.
, [1996] O.J. No. 2609 (C.A.), this Court
    acknowledged that there could be a degree of overlap between claims that could
    be made out as a derivative action and those that could fall under the
    oppression remedy, and that the two are not mutually exclusive:
Malata
,
    at para 30;
Jabalee
, at para. 5.

[24]

The respondents
    submit, on the other hand, that the distinction between the two remedies
    remains, and for good reason.  They accept  as did the motion judge  that
    there has been some relaxation in the approach to the commencement of
    oppression remedy actions in cases where the factual circumstances create an
    overlap between the two remedies, particularly in the case of small closely
    held corporations.  But they contend that the distinction remains important 
    because of the leave requirement for derivative actions  in the case of
    publicly-held corporations such as Martinrea.

[25]

In such cases, they argue,
    the leave requirement fulfills its important threefold purpose of (i)
    preventing strike suits, (ii) preventing meritless suits, and (iii) avoiding a
    multiplicity of proceedings  all of which may lead to the corporation
    incurring significant and unwarranted costs, concerns that are less acute for closely-held
    corporations.  Relying on
Malata
themselves, the respondents point to
    the importance Armstrong J.A. placed in that case on the fact that Malata was a
    closely held corporation (para. 38) and to his observation, at para. 39, that:

[i]n disputes involving closely held corporations with
    relatively few shareholders  there is less reason to require the plaintiff to
    seek leave of the court.  The small number of shareholders minimizes the risk
    of frivolous lawsuits against the corporation, thus weakening the main
    rationale for requiring a claim to proceed as a derivative action.


Discussion

[26]

I accept that the
    derivative action and the oppression remedy are not mutually exclusive.  Cases
    like
Malata
and
Jabalee
make it clear that there are
    circumstances where the factual underpinning will give rise to both types of
    redress and in which a complainant will nonetheless be entitled to proceed by
    way of oppression remedy.  Other examples include:
Ontario (Securities Commission)
    v. McLaughlin
, [1987] O.J. No 1247 (H.C.J.);
Deluce Holdings Inc. v.
    Air Canada
(1992), 12 O.R. (3d) 131 (Gen. Div.);
C.I. Covington Fund
    Inc. v. White
, [2000] O.J. No. 4589 (S.C.), affd [2001] O.J. No. 3918
    (Div. Ct.);
Waxman v. Waxman
, [2004] O.J. No. 1765 (C.A.), at para.
    526, leave to appeal refused, [2004] S.C.C.A. No. 291.

[27]

However, I agree with
    the respondents that claims must be pursued by way of a derivative action after
    obtaining leave of the court where, as here, the claim asserted seeks to
    recover solely for wrongs done to a public corporation, the thrust of the
    relief sought is solely for the benefit of that corporation, and there is no
    allegation that the complainants individualized personal interests have been
    affected by the wrongful conduct.

[28]

It is true that the
    jurisprudence is inconsistent about how to treat cases where there is an
    overlap and that there has been considerable discussion amongst legal
    commentators about this and whether the distinction should be maintained.  See,
    for example, the following texts and articles and the jurisprudence referred to
    therein: Koehnen, at pp. 440-448
;
Jeffrey G. MacIntosh, The
    Oppression Remedy: Personal or Derivative? (1991) 70 Can. Bar. Rev. 29; Edward
    M. Iacobucci and Kevin E. Davis, Reconciling Derivative Claims and the
    Oppression Remedy (2000) 12 S.C.L.R. 87.

[29]

While this debate is
    interesting, it is not necessary to resolve it here.  On my reading of the
    authorities, in the cases where an oppression claim has been permitted to proceed
    even though the wrongs asserted were wrongs to the corporation, those same
    wrongful acts have, for the most part, also directly affected the complainant
    in a manner that was different from the indirect effect of the conduct on
    similarly placed complainants. And most, if not all, involve small closely-held
    corporations not public companies.

[30]

Waxman
is a
    good example. The company was a family scrap metal business.  Some of the acts
    complained of, including the wrongful distribution of bonuses, could have been
    the subject of a derivative action, but it was not disputed on appeal that the
    complainant was personally aggrieved by the distribution and that it was
    done at the expense of his interest in the company: para. 526.

[31]

Malata
 a
    case involving another closely-held company  is also a good example.  The
    misappropriation of funds in that case affected not only the company (and therefore
    the indirect interests of all shareholders), but the direct interests of the
    minority shareholder as a creditor of the company.

[32]

Here, however, on
    the facts pleaded, there is no overlap between the derivative action and the
    oppression remedy (once one goes beyond the boiler plate repetition of the
    statutory language from the OBCA describing the oppression remedy).  The
    appellants are not asserting that their personal interests as shareholders have
    been adversely affected in any way other than the type of harm that has been suffered
    by all shareholders as a collectivity.  Mr. Rea  the only director plaintiff 
    does not plead that the Improper Transactions have impacted his interest
qua
director.

[33]

Since the creation of
    the oppression remedy, courts have taken a broad and flexible approach to its
    application, in keeping with the broad and flexible form of relief it is
    intended to provide.  However, the appellants open-ended approach to the
    oppression remedy in circumstances where the facts support a derivative action
    on behalf of the corporation misses a significant point: the impugned conduct
    must harm the complainant personally, not just the body corporate,
i.e.
,
    the collectivity of shareholders as a whole.

[34]

The oppression remedy
    is not available  as the appellants contend  simply because a complainant asserts
    a reasonable expectation (for example, that directors will conduct themselves
    with honesty and probity and in the best interests of the corporation) and the
    evidence supports that the reasonable expectation has been violated by conduct
    falling within the terms oppression, unfair prejudice or unfair
    disregard.  The impugned conduct must be oppressive of or unfairly
    prejudicial to, or unfairly disregard
the interests of the complainant
:
    OBCA, s. 248(2).  No such conduct is pled here.

[35]

That the harm must
    impact the interests of the complainant personally  giving rise to a personal
    action  and not simply the complainants interests as a part of the
    collectivity of stakeholders as a whole - is consistent with the reforms put in
    place to attenuate the rigours of the rule in
Foss v. Harbottle
.  The legislative
    response was to create
two
remedies, with two different rationales and
    two separate statutory foundations, not just one: a corporate remedy, and a
    personal or individual remedy.

[36]

The derivative action
    provides aggrieved minority stakeholders with the ability to pursue a cause of
    action on behalf of the corporation to redress wrongs done in respect of the
    corporation, provided leave is obtained from the court to do so.  As Professor
    MacIntosh has observed:

The corporation will be injured when all shareholders are
    affected equally, with none experiencing any special harm. By contrast, in a
    personal (or direct) action, the harm has a differential impact on
    shareholders, whether the difference arises amongst members of different
    classes of shareholders or as between members of a single class.  It has also
    been said that in a derivative action, the injury to shareholders is only
indirect
,
    that is, it arises only because the corporation is injured, and not otherwise.
    [See, for example,
Farnham v. Fingold
, [1973] 2 O.R. 132 (C.A.);
Goldex
    Mines Ltd. v. Revill
(1974), 7 O.R. (2d) 216 (C.A.)].

[37]

The requirements for
    leave are straightforward and are set out in s. 246(2) of the OBCA: the
    directors must be given 15 days notice of the intention to bring the
    application, and the court must be satisfied: (i) that the directors will not
    pursue the claim; (ii) that the complainant is acting in good faith; and (iii)
    that it appears to be in the best interests of the corporation that the action
    be brought. In this way the legislative goals of avoiding strike suits,
    meritless actions and a multiplicity of proceedings against the corporation 
    and the potentially unwarranted costs that accompany them  are strengthened.  Although
    they have been the subject of some academic criticism,
[3]
these remain valid legislative objectives and concerns, in my view, particularly
    in the context of actions against publicly-traded corporations.

[38]

Indeed, in para. 28 of
    their statement of claim the appellants themselves flagged Martinreas
    potential exposure to legal proceedings by each person or company that
    acquired or disposed of shares of Martinrea during the period in which the
    Improper Transactions took place.  A judgment in a derivative action, however,
    if proceeded with and ultimately successful, will be binding on all
    shareholders.

[39]

Much of the debate
    here focussed on
Malata
 this Courts most recent consideration of
    the relationship between derivative actions and the oppression remedy.  Does it
    stand for the proposition, as the appellants assert, that oppression remedy
    claims and derivative action claims may be collapsed into an oppression remedy
    claim?  Or, as the respondents say, does it stand for the proposition that the
    remedies may not be conflated when it is a public corporation that is involved? 
    In my view,
Malata
stands for neither of these broad propositions and,
    in any event, is distinguishable from the present appeal.

[40]

Like this case,
Malata
involved the alleged misappropriation of funds from the corporation 
    there, by a director, officer and major shareholder. Unlike this case, however,
Malata
involved a small closely-held corporation.  The aggrieved
    minority shareholder was one of only three shareholders of the corporation and,
    significantly, was also a major creditor of the corporation.  On those facts,
    there was clearly an overlap and coexistence between the wrong caused by the
    alleged misappropriation to the corporate collectivity and the wrong caused by
    it to the minority shareholder in its capacity as creditor because the
    misappropriation threatened the corporations ability to pay its debt to the
    minority shareholder/creditor.  Martinrea, however, is a large, widely-held
    public corporation and no type of personal wrong is evident.

[41]

To be sure, there are bald
    allegations in the statement of claim that the Improper Transactions caused
    significant damage to [Martinrea]
and its shareholders
 (para. 28,
    emphasis added) and that the defendants have acted and continue to act in a
    manner that is oppressive, unfairly prejudicial to, and that unfairly
    disregards
the interests of the Plaintiffs and other Martinrea shareholders

    (para. 33, emphasis added).  However, there is no particularized allegation of
    any wrong done to the interests of the plaintiffs themselves,
qua
shareholders
    or otherwise, as opposed to a wrong affecting the corporate body,
i.e.
,
    the collectivity of shareholders as a whole.

[42]

In their written and
    oral arguments, although not in their pleadings, the appellants make three
    submissions in an attempt to particularize the alleged harm to them
    individually, and thus bring the claim within the rubric of an oppression
    remedy.  They assert first that the alleged misappropriations precluded [them]
    from managing [their] investment[s] or exercising [their] voting rights in an
    informed manner; secondly, that the failure to provide adequate disclosure of
    material information to shareholders has been recognized as oppressive conduct;
    and thirdly, that by reason of the director defendants lack of candour with
    their fellow directors, Mr. Rea lacked the full information needed to
    genuinely exercise his role in governing Martinrea.  None of these allegations
    is specifically pleaded and none suffices to permit the appellants to cross the
    line  however murky that line may be  between the derivative reality of
    this action and its proposed oppression remedy illusion, in my opinion.

[43]

[M]anaging [their]
    investments and exercising [their] voting rights in this context means
    exercising their role as shareholders in supervising management.  The Supreme
    Court of Canada has held that claims in respect of losses stemming from an
    alleged inability to oversee or supervise management are really derivative and
    not personal in nature:
Hercules Management
, at para. 62.

[44]

It may be that, in
    some circumstances, the failure to provide proper disclosure of material
    information to shareholders can constitute oppressive conduct and, similarly,
    that in some circumstances wrongfully withholding information from a director
    may be oppressive to the directors ability to carry out his or her role in
    that capacity.  However, no such pleading is asserted here.  To the extent that
    the preparation of inaccurate financial statements and the lack of candour
vis-à-vis
fellow directors are asserted as facts in the statement of claim, they are
    pleaded as examples of the Insider Defendants breach of fiduciary duty to the corporation,
    not as something that impacts the interests of the appellants in any individual
    manner other than what might affect the collectivity of the shareholders.  Mr.
    Rea is the only plaintiff who was a director and he asserts no claim that his
    interests have been affected in that capacity.   As pleaded, these wrongs are
    relevant as tools used to perpetrate the fraud against Martinrea, not as acts
    that have any particularized impact on any of the plaintiffs individually.

[45]

At its heart, the
    appellants allegation involves the misappropriation of corporate property by
    the Insider Defendants, assisted in some cases by the respondents here (IM and
    Pashak) and others.  The substantive remedy claimed is the disgorgement of the
    ill-gotten gains back to Martinrea.

[46]

The misappropriation
    of corporate property was effected through the alleged Improper Transactions
    which in essence consisted of: (i) payment to the Insider Defendants of secret
    kickbacks and improper commissions in relation to services provided and
    equipment sold to Martinrea, as a result, at inflated prices; (ii) payments by
    Martinrea to third parties for construction, renovation and other services
    (including in one case the settlement of potential legal exposure) for the personal
    benefit of the Insider Defendants; and (iii) in the case of the respondents IM
    and Pashak, the purchase of used equipment by Martinrea at inflated prices
    (feeding kickbacks to the Insider Defendants) and the purchase of real estate
    in Kitchener by Martinrea from a related Pashak company, on terms unfavourable
    to Martinrea.  All of these allegations, if proved, will establish losses
    sustained by the corporation to its financial bottom line 
i.e.
, to
    the collectivity of shareholders as a whole  and not to any particular
    shareholder, including the appellants, individually.

[47]

For these reasons, I
    do not accept that the wrongs as pleaded in the statement of claim are wrongs
    other than wrongs done to the corporation that form the basis of a derivative
    action.  As noted earlier, I do not see this as a case involving overlap
    between the oppression remedy and the derivative action.

Conclusion and Disposition

[48]

I recognize that a
    party seeking to strike out a pleading under Rule 21.01(1)(b) must demonstrate
    that it is plain and obvious the claim discloses no reasonable cause of
    action.  For these purposes, the facts as pleaded must be accepted as true, the
    pleading should be given a large and liberal interpretation and courts should
    not, at this stage of the proceedings, strike out claims that are novel or
    dispose of matters of law that are not fully settled in the jurisprudence:  see
Hunt v. Carey Canada Inc.
, [1990] 2 S.C.R. 959, at pp. 971, 973 and
    990-991;
Falloncrest Financial Corp. v. Ontario
(1995), 27 O.R. (3d) 1
    (C.A.), at pp. 5-6.

[49]

For the reasons
    outlined above, I am satisfied that the appellants statement of claim does not
    disclose a reasonable cause of action based upon the oppression remedy.  Nor do
    I think it is a novel or unsettled principle of law that wrongs done solely to
    a corporation, for which remedies are sought on behalf of the corporation, give
    rise to a derivative action and require leave of the court before an action can
    be commenced to assert those claims.  Where the facts may give rise to both a
    corporate claim and a personal oppression remedy claim  as
Malata
and the other cases referred to above illustrate  the question of whether an
    oppression remedy proceeding is available will have to be sorted out on a case
    by case basis.  This task does not arise on the facts as pleaded here, however.

[50]

Accordingly, I would
    dismiss the appeal.

[51]

The respondents shall be
    entitled to their costs of the appeal, fixed in the amount of $20,000 inclusive
    of disbursements and all applicable taxes, as agreed.

Released: K.M.W.  May 26, 2015

R.A. Blair J.A.

I agree K.W. Weiler
    J.A.

I agree Robert J.
    Sharpe J.A.





[1]
In Canada, derivative action relief is embodied in s. 239 of the
Canada Business Corporations Act
, R.S.C.
    1985, c. C-44 (CBCA), and in various provincial business corporation
    statutes, such as the
Business
    Corporations Act
, R.S.O. 1990, c. B.16, s. 245.  The oppression remedy
    is provided for in s. 241 of the CBCA and s. 248 of the OBCA.



[2]
Section 245 of the OBCA, for example, defines a complainant to mean:

a)

a
    registered holder or beneficial owner, and a former registered holder or
    beneficial owner, of a security of a corporation or any of its affiliates,

b)

a director
    or an officer or a former director or officer of a corporation or any of its
    affiliates,

c)

any other
    person who, in the discretion of the court, is a proper person to make an
    application under this Part.

Security is earlier defined in s. 1 to mean a share
    or a debt obligation (e.g., a bond)



[3]
See, for example, Koehnen, at pp. 454; Iacobucci and Davis, at pp. 90-110
.


