Lexpert Magazine quotes Vancouver lawyer Mark Andrews in an article about the decision reached by the BC Court of Appeal, which confirms that minority shareholders must meet a significant requirements before a board of directors is overruled.
“The case is an authoritative and detailed reminder that minority shareholders seeking the protection of statutory provisions must meet significant requirements so as to preserve a pragmatic balance between their rights and respect for the democratic rights of boards elected by a majority of shareholders to run the affairs of a company,” says Mark Andrews of Fasken Martineau Dumoulin LLP in Vancouver.
Andrews believes that the decision reassesses the balance between minority rights and a board’s rights to govern a company the way it sees fit. “It’s a pragmatic decision that says minority shareholder need to have a very substantial case that meets a high threshold if they want to get the protection of statutory provisions,” he says. “They can’t walk in armed only with innuendo and suspicion and lay waste to what the board is doing.”
Other appellate courts will take heed, Andrews says: “Although the decision is to some degree based on BC statutes, there is quite good cross-fertilization between Canadian appellate courts, especially between Ontario and British Columbia. Jaguar is consistent with Ontario law and will certainly be picked up in Ontario and maybe in other jurisdictions.”