Parallel Derivative And Oppression Actions: New Guidance For Investors In Closely Held Corporations

• Published date: 26 November 2025
• Subject Matter: Corporate/Commercial Law, M&A/Private Equity, Corporate and Company Law, Shareholders
• Law Firm: McCarthy Tétrault LLP
• Author: M&A and Private Equity Perspectives, Adam Goldenberg and Cayne Lander

Oppression actions and derivative claims offer distinct remedies when the directors of a closely held company have caused harm to the corporation or its shareholders. The Ontario Superior Court of Justice's recent decision in Clark v. Cen-Ta Real Estate Ltd et al., 2025 ONSC 5759, offers guidance on when investors may pursue these remedies in parallel.

What happened?

Chris Clark, the largest shareholder in both Cen-Ta Real Estate Ltd. and Plum Financial Planning Ltd., alleged that the directors of these corporations had awarded themselves and their personal companies excessive compensation, even as the companies' revenues and profitability declined.¹ Mr. Clark sought leave to commence a derivative action under s. 246 of the Ontario Business Corporations Act ("OBCA"), aiming to recover funds for the companies and to set future limits on director compensation.² Mr. Clark was already pursuing an oppression remedy against the same directors, seeking damages and a buyout of his shares.³

Oppression claims vs. derivative actions

Oppression claims are designed to protect the personal interests of shareholders and other stakeholders who have been treated unfairly by the corporation or its directors. The focus is on harm to the legal and equitable interests of the complainant as a stakeholder.⁴

On the other hand, derivative actions are brought on behalf of the corporation itself to address harm done to the company, typically by its own directors or officers. In these cases, the complainant acts as a representative of the corporation to enforce rights that belong to the company, such as claims for breach of fiduciary duty.⁵

Both actions proceed in parallel

In Clark, the Court recognized that oppression claims and derivative actions serve distinct legal purposes and can proceed...