Andrus Wilson v. Ramzi Mahmoud Alharayeri

(Quebec) (Civil) (By Leave)




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Commercial law – Corporation – Shareholders – Oppression remedy – Personal liability of a corporate director – When may personal liability be imposed on corporate directors under the oppression remedy? – When can courts award relief that was not pleaded? – Canada Business Corporations Act, R.S.C. 1985, c. C-44, s. 241.

Until 2007, the respondent was the Chief Executive Officer and a major shareholder of a corporation named Wi2Wi specialised in manufacturing Wi-Fi modules. In 2007, as result of recurring cash issues, Wi2Wi considered merging its operations with another business called Mitec Telecom Inc. While negotiating the merger, the respondent decided to negotiate separately the sale of his own shares in Wi2Wi with Mitec Telecom Inc. in order to solve his personal financial problem. When the details of the respondent’s share purchase agreement reached the Board of Directors of Wi2Wi, the reaction of its members triggered his resignation as Chief Executive Officer of Wi2Wi. After the resignation of the respondent, further negotiations were conducted but neither merger nor shares purchase transactions occurred. In order to manage the financial crisis of Wi2Wi, the Board of Directors decided to proceed with the Private Placement of convertible secured notes. As a result of this Private Placement, the proportion of the common shares owned by the respondent was significantly reduced. After several attempts to reach the Board in order to get a decision on the conversion of his preferred shares, the respondent brought an action for oppression against the corporate directors.

Lower Court Rulings

January 28, 2014
Superior Court of Quebec

Motion granted in part.
August 19, 2015
Court of Appeal of Quebec (Montréal)

2015 QCCA 1350, 500-09-024260-143
Appeal dismissed. Cross-appeal dismissed.