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Corporate

Directors' Duties and the Oppression Remedy

BCE: fiduciary duty owed to the corporation; oppression protects reasonable expectations.

BCE Inc v 1976 Debentureholders (2008) restated Canadian corporate-law fundamentals. Directors' fiduciary duty under s.122(1)(a) CBCA is owed to the corporation, not directly to shareholders or other stakeholders. The oppression remedy in s.241 protects reasonable expectations of stakeholders against conduct that is oppressive, unfairly prejudicial, or unfairly disregards their interests.

Key principles

  • Duty owed to corporation
    Not to particular stakeholder groups; directors may consider stakeholder interests in good faith.
  • Reasonable expectations
    Foundation of the oppression analysis — assessed objectively by reference to surrounding circumstances.
  • Oppression test
    Conduct must be oppressive, unfairly prejudicial, or unfairly disregard the claimant's interests.
  • Peoples Department Stores
    Pre-BCE foundation; reaffirmed and refined in BCE.

Cases (1)

BCE Inc v 1976 Debentureholders

landmark
[2008] 3 SCR 560
Supreme Court of Canada· 2008· Corporate