In a recent decision of the Ontario Superior Court of Justice, the Court reaffirmed that the statutory oppression remedy is not a vehicle for creative plaintiffs to advance common wrongful dismissal claims.
In Abbasbayli v Fiera Foods Company et al, 2022 ONSC 1968 (Abbasbayli), the plaintiff was a non-shareholding employee of the defendant. He commenced an action against the defendant corporations for wrongful dismissal. The plaintiff’s action also included a plea of oppression under the Business Corporations Act (Ontario)(OBC”) against the individual directors of the defendant corporations. The oppression claim in the original claim was struck out for failing to disclose a cause of action, with leave granted to amend the pleading. The plaintiff amended, but the amended claim was again the subject of a motion to strike for failing to disclose a cause of action.
The Court again struck out the amended pleading of oppression, this time without leave to amend. Abbasbayli provides litigants with two key takeaways.
- Establishing oppression in connection with a wrongful dismissal
Although employees have advanced oppression claims in the past, the oppression remedy is not generally a vehicle for non-shareholding employees to advance wrongful dismissal claims. The plaintiff in Abbasbayli attempted to rely on a number of cases where non-shareholding employees were successful in claims for oppression. However, in almost all of those cases, there was some element of internal corporate maneuvering, used as a tool to defeat the employee’s legitimate claim for damages. Such corporate maneuvering included examples where the employer wound up the business, or where the employer’s assets were transferred out of the company, leaving the corporation unable to satisfy the outstanding claims of the employees. In the one case where there was no such corporate maneuvering, the sole officer and director of the employer had misled the plaintiff employees into working for the corporation while knowing all along that the corporation was never in a position to pay the employees what they were owed.[1] It takes unusual circumstances for an employee to establish oppression in connection with a wrongful dismissal.
2. Interests protected by the oppression remedy
Although the definition of a complainant for the purposes of the oppression remedy is fairly broad, the oppression remedy only protects the interests of the complainant as a security holder, creditor, officer or director of the corporation. The Court considered the text of section 248 of the OBCA and concluded that while “complainant” may be broader than “security holder, creditor, director or officer of the corporation”, in order to establish oppression, the conduct complained of must be oppressive, unfairly prejudicial to, or unfairly disregarding of the interests of a security holder, creditor, director or officer of the corporation.[2] Having considered the impugned provisions of the plaintiff’s amended pleading, the Court found that each of the plaintiff’s pleaded reasonable expectations were all qua employee, and not qua shareholder, creditor, officer, or director.[3]
Conclusion
In the result, the Court in Abbasbayli struck the plaintiff’s pleading with respect to the oppression claim against the director defendants without leave to amend. Although leave to amend should only be refused in the clearest of cases, in this case, the plaintiff already had “the benefit of a prior motion and decisions from both [the ONSC] and the Court of Appeal,” and “the defendants’ [previous motion to strike] had provided a road map to the plaintiff about what was required to properly plead the claim.” Although the plaintiff had tried to fix the pleading by mirroring language from the various tests, it was clear that “an oppression remedy claim cannot succeed on these pleaded facts, even assuming them all to be true.” That’s because the claim was really a wrongful dismissal claim, not an oppression claim.
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[1] Abbasbayli at para 28.
[2] Ibid at para 21.
[3] Ibid at para 33.
