A. McNish

The appellants appealed an order finding they acted oppressively toward the respondent, a 10% minority shareholder in a landlord corporation, by leasing property to their own company at below-market rent.

The Divisional Court upheld the finding of oppression regarding the failure to pay fair market rent after the initial lease term expired in 2010.

However, the court set aside the application judge's finding that the respondent reasonably expected triple rent for overholding, and reversed remedial orders directed at a non-party tenant corporation and for the period prior to 2010, finding that cash payments made to the respondent's principal had alleviated any unfair prejudice during that time.

The applicant, a 10% minority shareholder in a landlord corporation, brought an oppression application against the majority shareholders.

The court determined preliminary issues, finding that the majority shareholders acted oppressively by leasing the corporation's property to their own related business at less than fair market value and failing to enforce the lease terms.

The court also found accounting irregularities, including the landlord corporation paying expenses that should have been paid by the tenant, and ordered remedies including the repayment of improper expenses and a buyout of the applicant's shares without a minority discount.