What is the limitation period applicable to Oppression Claims?

In Ontario, the limitation period applicable to all claims unless specifically exempted by the Limitations Act is two years from the date the cause of action arose, subject to discoverability.

It is not clear, however, that the two-year limitation period applies to oppression remedy claims under the OBCA and under the Canada Business Corporations Act. In Ford Motor Company of Canada, Ltd. v. Ontario Municipal Employees Retirement Board 2006 CanLII 15 (ON C.A.), the Ontario Court of Appeal, expressed doubt, without reaching a definitive conclusion, as to whether an action for oppression was subject to the six-year limitation period under the Ontario Limitations Act which was in effect until January 1, 2004.

The Court suggested the issue was not cut and dry saying:

[169] The trial judge found that s. 45(1)(g) of the former Limitations Act applied to the oppression remedy under the CBCA. Section 45(1)(g) imposes a six-year limitation period for “an action … upon the case other than for slander”. The issue for the trial judge was the meaning to be attributed to the somewhat archaic concept of an action upon the case. The trial judge relied upon this court’s decision in Perry, Farley & Onyschuk v. Outerbridge Management Ltd. 2001 CanLII 5678 (ON C.A.), (2001), 54 O.R. (3d) 131. In that case, Sharpe J.A. reviewed at some length the meaning of the phrase. He referred to this court’s earlier decision in Simpson (Robert) Co. Ltd. v. Foundation Co. of Canada Ltd. (1982), 36 O.R. (2d) 97 at 101, where Cory J.A. suggested that the three fundamental aspects of an action on the case were:

(a) a duty owed by the defendant to the plaintiff;
(b) a breach of that duty by the defendant; and
(c) damage suffered by the plaintiff as a result of the breach of the duty owed to him by the defendant.

[170] Then, at para. 27, Sharpe J.A. summarized the effect of the cases in which actions grounded on a statute have been classified as actions upon the case, noting that “one finds that damages and the breach of a legal duty have been essential elements”. The trial judge at para. 283 held in this case that, “Both elements are present in the action for oppression at hand.” In his view the oppression claim in this case was “in the nature of a personal action for damages for breach of a statutory and common law duty to act fairly in the best interests of the corporation, i.e. in the best interests of all the shareholders”.

[171] Because of my conclusion on the discoverability and reference issues it is unnecessary to come to a settled view on this issue. I should not, however, be taken as agreeing with the trial judge. I have some reservations about the trial judge’s conclusion since an oppression action need not rest on breach of any duty. As has been said repeatedly, the oppression action looks to the effects of conduct. As McKinlay J.A. said in Brant Investments Ltd. at p. 301:
It must be recalled that in dealing with s. 234, the impugned acts, the results of the impugned acts, the protected groups, and the powers of the court to grant remedies are all extremely broad. To import the concept of breach of fiduciary duty into that statutory provision would not only complicate its interpretation and application, but could be inimical to the statutory fiduciary duty imposed upon directors in s. 117(1) (now s. 122(1)) of the CBCA. That provision requires that

117.(1) Every director and officer of a corporation in exercising his powers and discharging his duties shall

(a) act honestly and in good faith with a view to the best interests of the corporation ...

Acting in the best interests of the corporation could, in some circumstances, require that a director or officer act other than in the best interests of one of the groups protected under s. 234. To impose upon directors and officers a fiduciary duty to the corporation as well as to individual groups of shareholders of the corporation could place directors in a position of irreconcilable conflict, particularly in situations where the corporation is faced with adverse economic conditions. [Emphasis added.]

[172] The trial judge’s application of s. 45(1)(g) to the oppression claim is, as well, inconsistent with this court’s decision in Waxman, which was released after the trial judge’s decision in this case, where the court stated:

[534] Fifth, the appellants contend that the trial judge erred in applying the oppression remedy to events that occurred five or more years before the claim was made.
[535] Again, we disagree. The appellants seek assistance from Jaska v. Jaska 1996 CanLII 2926 (MB C.A.), (1996), 141 D.L.R. (4th) 385 (Man. C.A.). In that case the court determined that the counterpart Manitoba legislation could not reach back in time to the extent sought by the respondents. In Jaska, however, the result depended on a general limitation period imposed by the Manitoba Limitations of Actions Act, R.S.M. 1987, c. L150, which has no counterpart in Ontario, and in part on an exercise of the court's discretion in the circumstances of that case.

[536] The trial judge understandably found the Jaska case of little assistance to her, because in this case there is no similar legislative provision and the oppression of Morris continued right up until the commencement of the action. The trial judge exercised her discretion to apply her broad remedial authority to the pattern of oppressive conduct that started in 1979. In doing so she neither abused her discretion nor ran afoul of any legislative limitation period. [Emphasis added.]

[173] I can see little to distinguish this case from Waxman. Finally, I note that in Hughes v. Bob Tallman Investments Inc., 2005 MBCA 16 (CanLII), (2005), 250 D.L.R. (4th) 74, considering somewhat different legislation, the Manitoba Court of Appeal did not follow the trial decision in this case. Also see Seidel v. Kerr, 2003 ABCA 267 (CanLII), [2004] 1 W.W.R. 53 (Alta. C.A.).