AMLC Legal Insights - No oppression, no problem – resolving shareholder disputes under s. 324 of the Business Corporations Act

By Bryan Hicks & Luana Kodato

In a recent decision, the British Columbia Court of Appeal (the “Court”) confirmed that the Limitation Act does not apply to shareholder proceedings brought under s. 324 of the Business Corporations Act (“BCA”), unlike claims brought under s. 227 for the oppression remedy. 

Section 324 of the BCA provides that a court may order that a company be liquidated if it is “just and equitable to do so”.  This arises most commonly where the founders of a closely held company have had a falling out to the point where it is no longer viable that they continue to operate the business together.  Importantly, the court has discretion to grant any relief that would be available in oppression proceedings instead of ordering a liquidation (such as a buy-out) where the court is satisfied that it would be just and equitable to order a liquidation. 

This Court decision is a good illustration of why parties in closely held companies should consider seeking relief under s. 324 of the BCA, either instead of or in the alternative to the oppression remedy.

Background​

Golden Spigot Pub Ltd. v. Eddy Ng Management Services Ltd., 2026 BCCA 231 involves a dispute between the two principals of the Six Mile Pub in Victoria. 

Mr. Ng and Mr. Wong incorporated Golden Spigot to acquire the pub.  Although structured as a corporation, the business effectively functioned as a partnership between the two individuals.  Their relationship deteriorated over time.  Mr. Ng became less involved in the operations and was eventually removed as a director. 

Following Mr. Ng’s death, his estate and related companies (the “Petitioners”) sought to sell his shares in Golden Spigot but did not obtain an acceptable offer from the majority shareholders. The Petitioners then commenced litigation seeking relief under s. 227 of the BCA – the oppression remedy – or alternatively, under s. 324 on the basis that it would be just and equitable for the court to order that the company be liquidated. 

The trial judge found that the Petitioners failed to establish oppressive conduct but ordered that the company be liquidated under s. 324 of the BCA.  The majority shareholders appealed the liquidation order and the Petitioners cross appealed the dismissal of their oppression claim. 

The Court upheld the trial judge’s dismissal of the oppression claim and agreed that it was “just and equitable” for the court to grant relief under s. 324.  However, the Court modified the trial judge’s order to give the majority shareholders an opportunity to purchase the Petitioners’ shares at fair market value, failing which the company will be liquidated. 

As part of its analysis, the Court clarified that proceedings under s. 324 of the BCA are not subject to the Limitation Act since they do not constitute “claims” within the meaning of the statute. 

The Court’s decision to provide an opportunity for a buy-out so the business may continue as a going concern rather than proceeding directly to a liquidation is an illustration of the court’s willingness to fashion a practical remedy based on commercial factors where there is a viable business but the principals are no longer able to work together.

​Takeaways

Section 324 of the BCA can be an attractive option for resolving shareholder disputes in closely held companies because: 
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1. such proceedings are not subject to the Limitation Act so relief may be available even where a claim for the oppression remedy is statue barred; 

2. the court has discretion to fashion a practical commercial remedy as an alternative to liquidation; and 

3. the court is not required to make findings of wrongdoing before granting relief under s. 324, which can simplify the process. 

Please contact us if you have questions or would like advice regarding a shareholder dispute. 

Please also see one of our previous Legal Insights for a discussion on court ordered shotgun sales in closely held companies

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AMLC Legal Insights are intended for informational purposes only and do not constitute legal advice or opinion.