Civil And Corporate Law
Shareholder’s Dispute: Conflict or Dispute Between the Shareholders of the Company
Companies’ shareholder agreements and the applicable Corporations Act outline and protect shareholders’ rights in Canada. Shareholder agreements ensure that the company’s officers and directors act in the corporation’s best interests. There can often be questions or disputes between multiple shareholders when they seek different business opportunities or pursue other strategic goals in a business. An experienced lawyer well-versed in corporate law and litigation will help you resolve these disputes through negotiation, arbitration, mediation, or litigation. In handling shareholder disputes, Negi Law Office examines merit, strategizes over the other party’s goals and motives, and determines the best method of resolving cases.Shareholder disputes: are you involved?
For advice on business law, contact Negi Law Office.
Examples of Common Shareholder Dispute Cases
Several issues can lead to shareholder disputes, including:
A) Violation of shareholder agreement
B) Forced buyout of shares
C) Termination of business relationships
D) Oppression of minority shareholders
E) Share price and valuation disputes
F) Breach of fiduciary duty
G) Business dissolution
Fraud
Other disagreements between shareholders Claims of Oppression and Mismanagement In Canada, corporate law holds that corporations must act as good corporate citizens and consider the interests of all stakeholders and those affected by their actions. An oppression remedy may be available when corporate actions or decisions negatively impact those with interests in the corporation (including directors, officers, shareholders, creditors, and debtors). Despite the complexity of corporate disputes, Negi Law Office helps our clients see through the thicket. We cut through the underbrush for our clients through creative, cost-effective solutions. As well as representing those who seek oppression remedies, we also represent those who allege oppressive conduct against others.The Oppression Remedy in Ontario
To protect shareholders from misconduct by companies under their control, OBCA and CBCA provide oppression remedies. It depends on where the corporation was incorporated (federally or provincially) and which of the two pieces of legislation will apply. An oppression remedy can be ordered by a court when a corporation or its directors act unfairly against shareholders, other directors, or officers of the corporation. The court considers how the actions or decisions of the directors have impacted the interests of the oppressed shareholder in an individual manner.Actions that can result in a finding of oppression include:
- Shareholders, directors, or officers use corporate resources for their own personal benefit instead of the company.
- Unfair treatment or ignoring the interests of minority shareholders.
Mismanagement: Conflicting Stakeholder Interests
According to their fiduciary duty to act in the corporation’s best interests, directors must resolve conflicts of interest when they arise. The case law on oppression demonstrates that this duty also includes treating individual stakeholders fairly and equitably. A set of interests cannot be favored over another because there are no absolute rules. In each case, it is essential to determine whether the directors acted in the corporation’s best interest, considering all relevant factors, such as — but not limited to — the need to treat affected stakeholders somewhat by the corporation’s responsibilities as a responsible corporation. The fact that the directors rejected alternative transactions that were no more beneficial than the chosen one will be irrelevant, and it is impossible to please all stakeholders.Acquisition of Business
Mergers and acquisitions permit companies to grow and change to compete more effectively. Mergers and acquisitions are complex and stressful operations. However, the resulting business, if successful, could be well worth the effort. Mergers are designed to make your company more competitive by merging with another. Due to this, all mergers must be well-thought-out. Companies acquire each other by buying their assets, either cash, stock, or both, and combining them with their own. There are two types of acquisitions: private and public, friendly and hostile. The aftereffects of a merger or acquisition must also be considered along with the transaction. The company needs to consider various changes, such as tax changes, branding changes, new products, new market reach, changes in staff, cultural synergies, and financing and sales opportunities. All companies involved in a merger or acquisition have a vested interest in the merger or acquisition’s success. As a result, it is essential to ensure that experienced lawyers, accountants, and other professionals are involved in the process. It takes a long time to document and value a property. To determine the company’s value being acquired, all parties must complete due diligence and perform business valuations. A “merger agreement,” a “share purchase agreement,” or an “asset purchase agreement” is then drafted depending on the transaction’s structure. A skilled mergers and acquisitions lawyer should review a long list of conditions, representations and warranties, covenants, termination rights, and shareholder provisions in this document. Are you considering a merger or acquisition to improve your business’s position in the market? Contact us today.PARTNERSHIP LITIGATION
The disruption of and interference with a partnership’s day-to-day operations can undermine a venture’s success and growth. As a result of the Partnership Act, R.S.O. 1990, the rights and obligations of each partner are determined by the Partnership Act unless a formal partnership agreement is entered into. Partner disputes that cannot be resolved through mediation, arbitration, or negotiation may have to be resolved through litigation. Despite the complexity of corporate disputes, Negi Law Office helps our clients see through the thicket. We cut through the underbrush for our clients through creative, cost-effective solutions.Tort claims for fraud
If the plaintiff believes that the defendant acting solely or jointly with other defendants has committed fraud, the plaintiff can file a civil claim for fraud. The Supreme Court of Canada in Hryniak v. Mauldin, 2014 SCC7, laid down the following elements for a civil claim for fraud: (1) a false representation by the defendant; (2) knowledge of the falsehood of the representation on the part of the defendant; (3) the plaintiff acted upon the false representation; and (4) the loss suffered by the plaintiff after acting upon the false representation.Tort claims for Conspiracy
The plaintiff who alleges that the defendants have engaged in the Conspiracy, will need to prove that the defendants were involved in the course of conduct with the primary purpose of injuring the plaintiff and the plaintiff suffered some damage as a result. The Court of Appeal for Ontario in Agribrands Purina Canada Inc. v. Kasamekas laid down the following elements for a civil claim for Conspiracy:- There was a concerted effort, an agreement, or a standard plan or intention between two or more parties;
- There was unlawful conduct among the co-conspirators, such as the violation of a statute, the breach of contract, or the committal of a tort, such as misrepresentation or fraud;
- Plaintiff was the target of the conduct;
- In light of the circumstances, it is reasonable to assume that the defendants knew the injury was likely to result; and
- There was injury or harm as a result.
Negi Law Office
The lawyers at Negi Law Office help their clients find their way through the thicket of corporate disputes. To clear the problems for our clients, we provide creative, cost-effective solutions. Contact us today.Claims for recovery of money and damages
In Canada, successful parties receive damages for both monetary and non-monetary losses. There are several non-pecuniary losses, including pain, suffering, and mental distress. The term “pecuniary loss” refers to losses that can be measured in monetary terms, such as property losses, services losses, personal injuries, reputation losses, and damage to economic interests. As a matter of private law, Canada’s remedies are based on the principle of restitution in integrum, which means ‘restoration to original condition. Damages awarded under private law for torts or contract breaches are compensatory. Successful plaintiffs are awarded damages to return them to the position they occupied before the legal wrong occurred. Furthermore, Canadian law emphasizes consistency, fairness, and rationality in damages awards. Many of the aspects of Canadian damage law have been influenced by these principles. In circumstances where a legal award would not be adequate to compensate for losses, monetary relief may be available through equitable damages. We can help with non-compensatory damages that are only available under certain circumstances based on the facts of the case and the defendant’s conduct. Examples of non-compensatory damages include exemplary damages, punitive damages, and restitution damages.Claims for Specific Performance
Two legal regimes apply in Canada: civil law applies in the province of Québec with respect to Property and civil rights matters, and common law applies in the rest of the country.Canadian Common Law
General Principles
Remedies for breach of contract seek to put the aggrieved party in the position it would have been had the contract been performed. At common law, the remedy as of right for a breach of contract is an award of monetary damages on the basis that an aggrieved party can then use the monetary award to acquire a substitute for what it had initially bargained for. Specific performance is an equitable remedy, which can only be obtained if a court exercises its discretion to grant it. A court will typically be inclined to exercise its discretion in favor of ordering specific performance if an award of monetary damages would be inadequate to place the aggrieved party in the same position it would have been had the agreement been performed. Some of the grounds upon which damages are usually considered inadequate include where (i) the subject of the agreement is unique, (ii) damages are difficult or impossible to calculate, or (iii) the party in breach of the agreement is not in a financial position to pay an award of damages.Civil Appeals
The Appeal Process in Canada’s Court System
Superior courts in provincial and territorial jurisdictions hear criminal and civil cases of the highest severity. It is also possible for these courts to hear claims that a law or action of the government is unconstitutional. A lower provincial or territorial court’s decision is sometimes reviewed by them.Federal Court
In addition to constitutional challenges to federal law or actions, the Federal Court hears cases involving federal law. The court can also review the decisions of the federal boards, commissions, and tribunals. Judges can order decision-makers to reconsider decisions that are deemed unreasonable or unconstitutional. A decision similar to the original one stands if everything else is equal. The judicial process usually ends when the parties reach an agreement.Courts of Appeal
Parties can ask the Provincial/Territorial Courts of Appeal or the Federal Court of Appeal to review a judge’s decision if they disagree. After the appellate court accepts the appeal, the trial judge’s decision can be reversed or changed, a new trial can also be ordered, or the appellate court can hold the trial judge’s decision as correct. To succeed at appeal, the appellant must prove that the trial judge’s wrong interpretation of the law or facts influenced the outcome.Supreme Court of Canada
An appeal can be made to the Supreme Court of Canada by parties who disagree or are aggrieved with the court of appeal’s decision. The Supreme Court of Canada only accepts cases with national significance or cases involving unresolved law issues. After hearing the appeal, the supreme court can either reverse/change or uphold the lower court judgment or order a new trial or hearing.
