The respondent, a silent investor in a private company, brought an oppression action against the managing directors for awarding themselves excessive compensation and failing to provide financial disclosure.
The trial judge found the directors liable for oppression and awarded damages and substantial indemnity costs.
On appeal, the Court of Appeal upheld the findings of oppression and the scale of costs, but found the trial judge erred by not calculating the excess compensation on a net basis over the entire 22-year period, which would have credited the directors for under-compensation in the company's early years.
The Court reduced the damages award from $250,000 to $187,453.51 and remitted the quantum of costs to the trial judge for reconsideration in light of a Rule 49 offer to settle.