Contested Elections And The Oppression Remedy

A recent decision of the Ontario Superior Court of Justice (the "Court"), Ebrahim v. Continental Precious Minerals Inc., considered the oppression remedy in the context of a contested director election.  It shows that securityholders may have to first pursue other potential avenues of redress before turning to the oppression remedy, or at least be prepared to justify why they have not done so.

Background

Continental Precious Minerals Inc. ("Continental") is a junior mining company with shares listed on the Toronto Stock Exchange.  Continental's by-laws required that shareholders holding not less than 50% of Continental's shares be present or represented by proxy at a meeting in order to consider resolutions to remove, elect or appoint directors.  Since the quorum requirement was implemented in 1996, the 50% quorum had not been achieved at any of Continental's annual general meetings, and the election of directors had not been put to a shareholder vote.  The