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ARTICLE · 16 JULY 2008

No Bright-Line Distinction Between Derivative And Oppression Claims

McCarthy Tétrault
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In its decision in Malata Group (HK) Limited v. Jung, 2008 ONCA 111, the Court of Appeal for Ontario recently examined the relationship between a derivative action, which a shareholder may bring on behalf of a corporation, and the shareholder's personal oppression action.

CanadaLitigation, Mediation & Arbitration
William Atkinson
William Atkinson
Mendy Chernos
Mendy Chernos
Michael Feder
Michael Feder
Dana M Peebles
Dana M Peebles
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In its decision in Malata Group (HK) Limited v. Jung, 2008 ONCA 111, the Court of Appeal for Ontario recently examined the relationship between a derivative action, which a shareholder may bring on behalf of a corporation, and the shareholder's personal oppression action.

The decision arose from Henry Chi Hang Jung's motion to dismiss portions of a lawsuit brought against him by Malata Group (HK) Limited (MHK). According to the statement of claim, MHK and Mr. Jung were two of three shareholders in Malata Canada Ltd. (Malata). Mr. Jung also served as a director and officer.

MHK claimed, among other things, that Mr. Jung had misappropriated funds of and otherwise breached his fiduciary duties to Malata. MHK sought a declaration in that regard and an order that Mr. Jung return more than $1.5 million to Malata's bank accounts.

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