Kirsten T. Crain

The appellant, a former director and executive, appealed a trial judgment that set aside his employment contract using the oppression remedy under s. 241 of the Canada Business Corporations Act.

The appellant argued the oppression remedy should only be available to minority shareholders unable to use normal corporate machinery, and that the trial judge improperly substituted her view for the Board's business judgment.

The Court of Appeal dismissed the appeal, holding that the oppression remedy addresses abuse of power and is not limited to minority shareholders.

The Court also upheld the trial judge's finding that the Board's process in approving the contract was seriously flawed and fell outside the range of reasonableness.

Leave to appeal the costs award was also refused despite the respondents failing to prove fraud, given the appellant's egregious conduct.

The purchasers (respondents) entered into an agreement to buy a residential property from the vendor (appellant), conditional upon a satisfactory home inspection in the purchasers' sole and absolute discretion.

After receiving an inspection report identifying several deficiencies, the purchasers decided not to waive the condition and requested the return of their deposit.

The vendor refused, arguing the purchasers did not act reasonably or in good faith.

The Court of Appeal upheld the trial judge's decision ordering the return of the deposit, finding that the inspection condition imported both objective and subjective elements, and that the purchasers exercised their discretion honestly, in good faith, and reasonably based on the inspection report.