Company law; management; oppression of minorities; remedies
Facts: Glatis inherited shares in a company controlled by Snell. Snell failed to issue these shares to Glatis. He held them in trust and did not remit any dividends to Glatis. Glatis contended that this amounted to oppressive conduct. He asked the court to order Snell to buy out Glatis’ shares. The primary court made the order for a buy-out. Snell appealed on grounds that it was not practical to find the necessary funds in the time allowed.
Issue: What was the most appropriate remedy for oppression in the given circumstances?
Decision: The order for the buy-out of Glatis’s shares should be set aside and an order made for the company to be wound up.
Reason: The courts have a discretion when granting remedies for oppression. In this case, the court held that it would not be practical for Snell to find the funds necessary to buy out Glatis’ shares, and this difficulty required the court to consider the alternative relief available, that is, an order to wind up the company. Although the company was solvent, it was to a large extent no longer trading and its assets consisted of real estate and debts owing which were easily realisable. Therefore, there was no compelling reason to avoid a winding up, even if this was not the remedy originally sought by Glatis.