Written by Paul Harden, Principal, and Edward E. Bowes, Associate Counsel, Meridian Law Group on September 17, 2026
Family-owned companies in British Columbia are often built on trust rather than paperwork. A founder runs the business, the profits support the household, and everyone assumes this arrangement will work forever. When control passes to the next generation, the surviving spouse or a sibling can find that the profits no longer reach them, that the person in control is paying themselves a large salary, and that there is no mechanism in the company’s documents to break the resulting stalemate. British Columbia’s Business Corporations Act gives the courts broad tools to address exactly this situation.
A recent decision of the Supreme Court of British Columbia, Wilson v. Wilson, 2025 BCSC 1799, illustrates how those tools work when a widow holding half of a family business challenged the way her stepson, the sole director, was running the companies. In this blog, we answer the questions clients most often ask us about shareholder oppression and “just and equitable” winding up in BC.
What is a shareholder oppression claim in British Columbia?
A shareholder oppression claim is a court application under section 227 of the Business Corporations Act, S.B.C. 2002, c. 57 asking the court to remedy conduct by a company or its directors that is oppressive or unfairly prejudicial to a shareholder. The court has very broad powers under section 227 to correct the conduct, but the remedy is personal: it protects the applicant in their position as a shareholder and is not available to address harm done to the company as a whole.
The test, drawn from the Supreme Court of Canada in BCE Inc. v. 1976 Debentureholders, 2008 SCC 69, has two parts. The applicant must first establish what their reasonable expectations were, and that those expectations were breached. The applicant must then show that the conduct in question was oppressive or unfairly prejudicial. Shareholder and partnership disputes of this kind are among the most common forms of business dispute that reach the BC courts. For a general overview of the remedy, see our earlier post, Oppression Claims in BC: When Minority Shareholders Go to Court.
Who can bring an oppression claim? Do I need to hold the shares personally?
No. Section 227 allows a shareholder, a beneficial owner of a share, or “any other appropriate person” to bring an oppression claim, so shares held through a trust or another vehicle do not shut the door. In Wilson, the petitioner did not hold shares in her own name; the shares were held by a spousal trust of which she was the trustee and, during her lifetime, the sole beneficiary. The court found she was an appropriate person to bring the claim.
The same reasoning applies to an application under section 324 of the Business Corporations Act, which permits a shareholder, director, or other appropriate person to apply to liquidate and dissolve a company. The petitioner, as a director of one company and the beneficial holder of shares in both, qualified under that section as well.
How does the court decide what a shareholder’s “reasonable expectations” are?
The court looks at the entire factual matrix of the company, not just its articles and shareholder records. That includes general commercial practice, how the company has operated over time, the relationships between closely held companies, the relationships between the people involved, and the company’s past practices. In a family company, the history of how profits were actually used can carry significant weight.
In Wilson, the deceased founder had used the company’s earnings throughout the marriage to fund the couple’s lifestyle. Before his death he reorganized the companies so that his son and the spousal trust each held 50 percent of the voting shares in the construction company, and he told his wife he was leaving her his estate in return for her support of him and her investment in the business. On that evidence the court found the widow had a reasonable expectation of equal control and financial participation in the construction company, and of sharing equally in dividends from the holding company.
Can a director’s salary be oppressive if all shareholders receive the same dividends?
Yes. A director cannot defeat an oppression claim simply by pointing out that every shareholder receives identical dividends, if the director is using salary to take a disproportionate share of the profits for themselves. The court will look at the total flow of money out of the company and at how that compares with the parties’ historical financial participation.
In Wilson, the director argued that the petitioner was conflating salary and dividends: as shareholders they were treated identically, and she did not work in the business, so she was not entitled to a salary. The court described that argument as having a “superficial attractiveness” but found it ignored the history. While the founder was alive, both he and his wife drew remuneration from the company. After his death, the director passed a resolution setting his own salary at $550,000 per year plus perquisites, indefinitely. Combined with $168,000 in annual dividends, he was taking $718,000 a year out of the company while the petitioner received $168,000. The court found that the director could have achieved the same personal outcome by declaring higher dividends and reducing his salary, which would have benefited both shareholders, but chose instead to prefer his own interests. Setting his salary unilaterally and in perpetuity at roughly three times the shareholders’ dividend entitlement was unfairly prejudicial and breached the petitioner’s reasonable expectations.
Can a company be forced to pay dividends in BC?
In the right circumstances, yes. Where a shareholder has a reasonable expectation of participating in the profits of the business, that expectation extends to dividends being declared when money is available to pay them, and a failure to declare dividends without a legitimate business reason can be oppressive.
The numbers in Wilson made the point starkly. Since 2020 the construction company had paid dividends of $28,000 per month in aggregate on its voting shares. In that period its annual net income ranged from roughly $170,000 to more than $1.8 million, its retained earnings had reached over $13 million, and it held a GIC of approximately $5.7 million and an investment account of approximately $1.65 million. The director conceded the company was financially healthy and able to pay dividends, but said nothing should be done until a separate wills variation action over the founder’s estate was resolved. The court rejected that position: the question of who ultimately owns the shares cannot determine whether dividends on those shares ought to be declared. The court ordered the company to declare an aggregate monthly dividend of $41,666.66 on its voting shares, retroactive to January 1, 2024, and ordered an independent compensation expert to review the director’s salary.
The court also noted a point that often arises in family companies. The director expected to become the sole shareholder eventually, because he said the petitioner had promised to leave him her shares. If that were so, retaining earnings in the company while she was alive meant preferring his own future interest over her present entitlement. The petitioner was 71, and the founder’s estate plan had clearly intended her to benefit from the profits during her lifetime.
What is the difference between a wrong to the shareholder and a wrong to the company?
The oppression remedy protects the applicant personally, so a harm that falls on the company itself, even if it reflects badly on the director, will not support an oppression claim. It may, however, still matter under the “just and equitable” analysis.
Wilson gives a clean example. A commercial property that both sides agreed belonged to the construction company had been registered in the name of a related entity the director controlled, and he had agreed in 2021 to transfer it but had not done so. He said he would not complete the transfer until a separate property claim of his own was dealt with. The court held the director had no legitimate interest in delaying a transfer he admitted was owed, and that his refusal called his good faith into question. Because the failure to transfer was a wrong to the company rather than to the petitioner as shareholder, it could not ground the oppression claim. It was still a relevant consideration under section 324, because it underscored the petitioner’s loss of trust in the director, and the court ordered the transfer to be completed within 30 days.
When will a BC court order a company wound up as “just and equitable”?
Section 324(1)(b) of the Business Corporations Act allows the court to order a company liquidated and dissolved, or to grant any of the oppression remedies instead, where it is just and equitable to do so. The cornerstone of the analysis is again the parties’ reasonable expectations. As the BC Court of Appeal summarized the law in Weisstock v. Weisstock, 2023 BCCA 352, courts have historically found it just and equitable to wind up a company in four kinds of situations:
- loss of the company’s substratum;
- a justifiable lack of confidence among the members;
- a deadlock among the parties; and
- the partnership analogy, where the company is in substance a partnership between its owners.
Those categories are illustrations, not limits. The words “just and equitable” confer a broad discretion, the test may be applied more liberally to a family company than to a conventional commercial enterprise, and no finding of oppression or wrongdoing is required at all. In Wilson, the director’s refusal to resolve the salary issue and his failure to declare dividends had created significant distrust and a deadlock that the companies’ documents gave no means of resolving. The court declared that it was just and equitable to liquidate and dissolve both companies.
Importantly, liquidation was the backstop, not the first step. The court gave the parties 90 days to agree on a buyout of the trust’s interests, with any valuation funded by the company, and ordered liquidation only if no agreement was reached. The court also directed that no steps toward liquidation be taken until the parties to the related estate litigation had a chance to seek terms protecting their claims. This reflects the principle that remedies under the Act should go only as far as necessary to address the conduct in question.
Is there a limitation period for oppression claims in BC?
It depends on the remedy. For an application to wind up a company under section 324, the court in Wilson accepted that the two-year limitation period in the Limitation Act, S.B.C. 2012, c. 13 has no application. For an oppression claim under section 227, where the conduct is continuing (as it was here, with the director benefiting year after year from limited dividends and a unilateral salary), the claim itself is not barred, but following Brockman v. Valmont Industries Holland B.V., 2022 BCCA 80 the remedies are limited to wrongs occurring within the two years before the proceeding was started. That is a strong reason not to wait: every year of delay can mean a year of lost recovery.
What does this mean for family business owners and heirs in BC?
For anyone who owns part of a closely held BC company, and particularly for a surviving spouse or a sibling who inherited shares, Wilson offers several practical lessons.
First, equal shareholdings without a deadlock mechanism are a recipe for litigation. A shareholders’ agreement that addresses director compensation, dividend policy, and how disputes between equal owners will be resolved is far cheaper than a section 324 application. Founders planning a succession should also consider whether the person taking over day-to-day management will face a conflict between their own salary and the other owners’ dividends, and build in an independent check.
Second, a director in control of a family company cannot treat pending estate litigation, or a grievance of their own, as a reason to freeze the other shareholders out of the profits. The court will look at what the company can afford, at the history of how profits were shared, and at whether the director is preferring their own interests.
Third, the court’s remedial toolkit is flexible. It can order a compensation review, retroactive dividends, the transfer of misregistered property, a negotiated buyout with a court-ordered fallback, and, if all else fails, a winding up, while still protecting the interests of third parties such as wills variation claimants in related estate litigation. Where shares are held through a trust, the trustee’s obligations and the beneficiaries’ entitlements add a further layer, and trust disputes frequently travel alongside corporate ones.
Frequently Asked Questions
Can a beneficiary of a trust that holds shares bring an oppression claim in BC?
Yes. Section 227 of the Business Corporations Act allows a beneficial owner of a share, or any other appropriate person, to apply for an oppression remedy. In Wilson v. Wilson, 2025 BCSC 1799, the court confirmed that a widow whose shares were held by a spousal trust was an appropriate person to bring claims under both section 227 and section 324.
Is it oppressive for a director to pay themselves a large salary in a family company?
It can be. A director who unilaterally sets their own salary at a level that leaves the other shareholders with a small fraction of the company’s profits, contrary to the way profits were historically shared, may be found to have acted in an unfairly prejudicial way. In Wilson, a salary of $550,000 per year set indefinitely by the sole director, giving him $718,000 annually against the other shareholder’s $168,000, was held to breach her reasonable expectations.
Can a BC court order a company to declare dividends?
Yes. Where a shareholder has a reasonable expectation of sharing in profits and the company has the funds to pay dividends, a failure to declare them without a legitimate business reason can be oppressive. In Wilson, the court ordered monthly dividends of $41,666.66 in aggregate on the voting shares, retroactive to January 1, 2024.
Does the court have to find wrongdoing before winding up a company?
No. Under section 324 of the Business Corporations Act, the court may order liquidation where it is just and equitable to do so, and the BC Court of Appeal has confirmed that no finding of oppression or wrongdoing is necessary. A justifiable loss of confidence or a deadlock between equal owners with no mechanism to resolve it may be enough, and the test is applied more liberally to family companies.
How long do I have to bring an oppression claim in British Columbia?
Where the oppressive conduct is continuing, the claim is not barred, but remedies are generally limited to wrongs occurring within the two years before the proceeding was started. The two-year limitation period was held not to apply to a winding-up application under section 324. Delay can still cost you recovery, so early advice matters.
Meridian Law Group: Providing Top-Tier Litigation Services in Vancouver
Meridian Law Group provides premier representation in commercial litigation, shareholder and partnership disputes. The firm’s litigation lawyers create tailored legal solutions and pursue the best results for each client. From its location in the prominent Nelson Square Building in downtown Vancouver, Meridian Law Group advocates for clients across British Columbia, Canada, and internationally. To discuss your matter, please call (604) 687-2277 or contact us online.
About the author: Paul Harden. Paul Harden is a Principal at Meridian Law Group in Vancouver. He holds a BA in Philosophy from the University of Calgary (2004) and a Juris Doctor from the University of British Columbia (2012), and was called to the British Columbia Bar in 2013. His practice spans estate litigation, business and property disputes, general civil litigation, insurance claims, and serious personal injury. He is a member of the Canadian Bar Association, the Law Society of British Columbia, and the Trial Lawyers Association of BC.
About the co-author: Edward E. Bowes. Edward E. Bowes is Associate Counsel at Meridian Law Group in Vancouver, practising civil and commercial litigation. He holds a law degree from the University of British Columbia (1971) and a Master of Laws from the London School of Economics and Political Science (1972), and was called to the British Columbia Bar in 1976. Edward taught at the UBC Faculty of Law, worked with the BC Law Reform Commission, and served for 15 years as a Judicial Justice of the Provincial Court of British Columbia. He is a member of the Canadian Bar Association and the Law Society of British Columbia.
This article provides general information only and is not legal advice. Outcomes depend on the specific facts of each case.
