Soomal v. Sandher and Soomal Developments Ltd.

Soomal v. Sandher and Soomal Developments Ltd.

The court found on the affidavit record that the majority shareholder/director (Mr. Sandher) withheld dividends and placed funds in locked term deposits not for legitimate corporate purposes but to advantage himself and his niece and to impede Mr. Soomal's contractual and court‑granted purchase rights; that conduct...

Source-derived case information.

Citation
2001 BCSC 1908
Parties
Petitioner: Gurmit Singh Soomal; Petitioner: Soomal Holdings Ltd.; Respondent: Sandher and Soomal Developments Ltd.
Court
Supreme Court of British Columbia
Jurisdiction
Canada
Judgment Date
4 June 2001
Procedural Posture
Oppression Petition Under S.200 Company Act / Application for Relief Oral Reasons for Judgment (in Chambers)
Outcome
Application granted; conduct found oppressive; remedial orders made under s.200 Company Act
Legal Topics
Oppression Remedy, Dividends, Director Conduct, Shareholder Dispute, Corporate Records, Costs
Source Language
english
Corporate Law Company Law Equity Family Law Oppression Remedy Dividends Director Conduct Shareholder Dispute +2 more

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Parties

Gurmit Singh Soomal

Petitioner

Soomal Holdings Ltd.

Petitioner

Sandher and Soomal Developments Ltd.

Respondent

Procedural Posture

Oppression Petition Under S.200 Company Act / Application for Relief Oral Reasons for Judgment (in Chambers)

Legal Issues

  1. 1 Whether withholding dividends and investing funds in locked term deposits by the majority director constituted oppressive conduct under s.200 of the Company Act
  2. 2 Whether the conduct was for the benefit of the company or for the personal benefit of the director and his niece
  3. 3 Appropriate remedial orders including mandatory dividend payment, production of corporate records and costs

Ratio Decidendi

The court found on the affidavit record that the majority shareholder/director (Mr. Sandher) withheld dividends and placed funds in locked term deposits not for legitimate corporate purposes but to advantage himself and his niece and to impede Mr. Soomal's contractual and court‑granted purchase rights; that conduct amounted to oppression under s.200 of the Company Act; accordingly the court ordered statutory relief under s.200(2)(a) directing payment of a dividend equal to 80% of the accumulated surplus as at January 31, 2001 within ten days, directed production/location of corporate records, and awarded costs to the petitioner.

Court Disposition

Application granted; conduct found oppressive; remedial orders made under s.200 Company Act

Orders

  • Declare that the conduct of Sandher and Soomal Developments Ltd. through Mr. Sandher constituted oppression of Soomal Holdings Ltd.
  • Order Sandher and Soomal Developments Ltd. to pay a dividend to its shareholders equal to 80% of the accumulated surplus of the company as at January 31, 2001 (the exact sum to be calculated by percentage)