What is the oppression remedy and how does it relate to director conduct in Ontario?

The oppression remedy is one of the most powerful tools in Ontario corporate law. Under the Ontario Business Corporations Act, a court may make any order it thinks fit to rectify the conduct of a corporation or its directors if that conduct is oppressive or unfairly prejudicial to, or that unfairly disregards the interests of, any security holder, creditor, director, or officer.

The remedy is intentionally broad. Courts have used it to remedy a wide range of director and majority-shareholder conduct: squeezing out minority shareholders, withholding dividends without legitimate business reason, misusing corporate funds for personal benefit, excluding a shareholder from management participation that they had a reasonable expectation of, and failing to disclose information material to a shareholder's interests.

Unlike a derivative action, the oppression remedy allows the aggrieved person to recover for harm done to them personally, not just harm to the corporation. Courts have ordered compensation, share buyouts, appointment of inspectors, and even corporate dissolution where the oppression was severe. Directors facing an oppression claim — or shareholders considering bringing one — should retain legal counsel early, because the court's discretion is wide and the factual record matters enormously.