Background
Teknocan Properties Inc. is a limited partner in two condominium developments in North Vancouver — Seylynn Village and Seylynn Gardens — holding 51.7% of the equity in both. MAJ Enterprises Inc. holds 90% of Teknocan’s shares while Mirage Trading Corporation holds the remaining 10%. In June 2024, Mirage petitioned the Supreme Court of British Columbia for an oppression remedy under s. 227 of the Business Corporations Act, S.B.C. 2002, c. 57, alleging that MAJ and its sole director, Rouzbeh Rabiei Ghahroud, had excluded Mirage from management, withheld audited financial statements, and selectively repaid millions of dollars in shareholder loans to MAJ while making no corresponding payments to Mirage.
The proceeding was contentious. MAJ was slow to comply with an interim injunction, was found in contempt of court, and — as the chambers judge ultimately concluded — engaged in a consistent pattern of sharp conduct throughout the litigation. By the time of the petition hearing, the appellants had consented to a buyout of Mirage’s shares with value to be determined by a chartered business valuator. On October 7, 2025, the chambers judge (2025 BCSC 1955) found oppressive conduct, appointed an interim receiver over Teknocan, and ordered MAJ to purchase Mirage’s shares at a price to be set by a chartered business valuator retained and instructed by the receiver — with no term requiring the court to approve or otherwise review the resulting valuation.
At a post-judgment hearing to settle the form of order, the appellants (now with new counsel) sought a term requiring a further court application to fix the fair value of the shares after the valuator completed its report. The chambers judge declined to entertain those submissions and entered the order on Mirage’s proposed terms, leaving the valuation entirely in the hands of the receiver-appointed chartered business valuator, with no avenue for the parties to challenge the outcome before the court or on appeal.
The Court’s Holding
The Court of Appeal allowed the appeal in part. Writing for a unanimous three-judge panel, Horsman J.A. held that the chambers judge erred in principle by delegating the determination of share value to a chartered business valuator without retaining any judicial role in fixing the final buyout price. The court accepted the appellants’ argument — though raised belatedly — because denying them the opportunity to contest the issue would be manifestly unfair given the amounts at stake and the absence of any procedural safeguards in the order. The existing record was sufficient to resolve the question, which turned on a point of principle rather than disputed facts.
The court identified three compounding defects in the order as entered. First, neither party had any right to participate in the selection of the valuator, provide instructions, or challenge the methodology through submissions or evidence. Second, because the final price would be set by the valuator rather than the court, neither party could appeal the determination — even on procedural-unfairness grounds. Third, and most fundamentally, it is the court’s responsibility to determine fair value in a forced share buyout; expert opinions assist that determination but do not replace it. The court rejected Mirage’s reliance on the Melcer Estate litigation as precedent, noting that in those cases the court expressly retained authority to consider challenges to the valuation and make the ultimate determination of fair value.
The court also rejected Mirage’s submission that the appellants’ reprehensible litigation conduct — for which they had already been sanctioned through a special costs award — justified stripping them of a fair valuation process. Litigation misconduct does not forfeit a party’s entitlement to procedural fairness, and finality and judicial economy alone cannot justify delegating a judicial responsibility to a private expert.
Key Takeaways
- In a court-ordered forced buyout under an oppression remedy, the court must retain authority to fix the final fair value of shares; it cannot wholly delegate that determination to a chartered business valuator whose report is final and unreviewable.
- Expert valuation evidence assists the court but does not bind it — parties must have an opportunity to challenge the valuator’s methodology and conclusions before a court capable of making an appealable ruling.
- An award of special costs for reprehensible litigation conduct does not extinguish a party’s right to a procedurally fair valuation process; the two sanctions operate independently.
- A new issue raised on appeal will be entertained where it goes to the fundamental fairness of the remedy, raises a pure question of principle, and the existing record is sufficient — even if the party’s own delay in raising it has compromised the appellate court’s role.
- The Melcer Estate line of cases (2018 BCSC 775; 2020 BCSC 1686; 2022 BCCA 143) does not authorize orders that exclude ongoing court oversight of share valuation; in those cases the court remained actively involved in supervising and approving the process.
Why It Matters
This decision clarifies the limits of a court’s remedial discretion under British Columbia’s corporate oppression regime. While s. 227(3) of the Business Corporations Act confers broad equitable powers to craft a just remedy, it does not permit a court to abdicate the judicial function of determining fair value in a compelled share purchase. Practitioners advising shareholders — whether majority or minority — should ensure that any buyout order expressly preserves a court-supervised process: a valuation report prepared by an independent expert, followed by a hearing at which parties may adduce competing evidence and make submissions, and a judicial determination that is subject to appeal.
The decision also has practical significance for cases involving court-appointed receivers. The appointment of a receiver as an officer of the court to oversee a valuation process does not, by itself, cure the procedural defects of an order that forecloses judicial review of the resulting valuation. Where the stakes are high — here, projections placed profits from a single tower at $76.7 million — courts and parties must design valuation orders with explicit mechanisms for court approval and party participation rather than relying on the receiver’s discretion to supply those safeguards.