By Ty Schmidt – Supervised by Professor Maharaj
Is a decade of ongoing oppressive conduct by a majority shareholder subject to a limitation period when the oppressed party is seeking a remedy? Brockman v. Valmont Industries Holland B.V., 2022 BCCA 80, a recent decision of the British Columbia Court of Appeal, ruled that the two-year limitation period provided in s.6 of the current British Columbia Limitation Act, S.B.C. 2012, c. 13 applies to claims for oppression under s.227 of the British Columbia Business Corporations Act, S.B.C. 2002, c. 57 (equivalent to The Corporations Act, C.C.S.M. c.C225, s 234) from the time the claim is discovered even if the oppressive conduct is continuous and ongoing. However, this was not held to mean that an oppression claim for continuing oppressive conduct becomes statute barred in its entirety simply because the course of conduct had begun more than two years before the petition for relief was brought. Instead, because a new claim arises each day the oppressive conduct continues, the limitation period is constantly refreshed and accordingly claims for conduct that occurred within two-years of a claim or petition are permitted, and claims for such conduct that occurred more than two years prior to a petition starting will be statute-barred.
In 2008, Valmont Industries Inc. (“VMI”) acquired a majority interest in Valmont West Coast Engineering Ltd. (“Company”), eventually coming to own 80% of the Company’s shares. The remaining 20% belonged to Theodore Brockman through his holding company. Since the 2008 acquisition, VMI directed the Company not to bid in the market in which it operated, apparently depressing the Company’s value. This lead Brockman to filing a petition for oppression in 2018.
The Chambers judge found that continuing conduct did not trigger a limitation period. On appeal, this Court held that the running of a limitation period was triggered once Brockman discovered his claim, which is when he first complained of the policy that VMI imposed on the Company in 2008. As such, a fair market valuation of Brockman’s share of the Company is to be determined based on the oppressive conduct that took place during the limitation period (2016-2018), and not across the entire 2008-2018 timespan.
This case highlights the importance of petitioning for a remedy as early as possible after one discovers any wrongful conduct, not necessarily just for oppression. As written by Mr. Justice Harris in his decision on behalf of a unanimous BC Court of Appeal, “[t]he law of limitations is intended to force timely action to remedy wrongs… [a] cause of action in oppression is no different to other civil wrongs in this respect.”
The views and opinions expressed in the blogs and case reporter are the views of their authors, and do not represent the views of the Desautels Centre for Private Enterprise and the Law, the Faculty of Law, or the University of Manitoba. Academic Members of the University of Manitoba are entitled to academic freedom in the context of a respectful working and learning environment.