A family company may operate informally for years. When a parent becomes unable to manage it or dies, one child may take control while the others remain shareholders. Does accepting the parent’s way of doing things mean accepting the same treatment from a sibling indefinitely?

In Smith v Tassone, 2026 BCCA 387, the Court of Appeal said the context of a change in control mattered. It upheld findings that the company had been operated oppressively and unfairly prejudicially toward one shareholder.

What happened in the family company

The father established a holding company and gave common shares to his three children as part of an estate freeze. He retained control through preferred shares. Different classes of common shares later allowed the company to declare different dividends.

After the father suffered a stroke, his son effectively took over the company. A daughter challenged how it was being run. The trial judge found oppression involving withheld information, failures concerning meetings and financial statements, self-dealing transactions and an arbitrary unequal dividend.

The appellants argued, among other things, that the company had long operated informally under the father. They said that history undermined the daughter’s claimed reasonable expectations.

Why the appeal failed

The Court of Appeal distinguished tolerance of the founder’s control from expectations after the son took over. The daughter’s acceptance of some practices during her father’s lifetime did not mean she permanently surrendered the expectation that the company would comply with corporate requirements.

There was evidence supporting the finding that information had been systematically withheld. The court also upheld the conclusion about unequal dividends. Although the share structure permitted different dividends, that did not prevent an expectation that differences would have a legitimate rationale.

The appeal was dismissed. The result was based on the company’s structure, conduct and circumstances—not a general rule that all family shareholders must receive identical payments.

A shareholder dispute is not a judgment on family loyalty

The court did not need to decide whether the controlling sibling was a bad person or which child had been more deserving within the family. The relevant inquiry concerned treatment as a shareholder.

That distinction is practical. A person may strongly believe that a sibling contributed less to a parent’s care or deserved less financially. Those feelings do not, on their own, justify withholding corporate information or using company powers to settle personal disagreements.

Equally, family conflict alone does not prove oppression. The claimant must connect the challenged conduct to reasonable expectations and legally relevant unfairness.

Records that help clarify the dispute

  • The articles, share register, shareholder agreements and estate-planning documents.
  • Financial statements, dividend resolutions and meeting records.
  • Written requests for information and the responses received.
  • Details of transactions involving directors, relatives or related businesses.

Preserve records you are entitled to hold and seek advice about obtaining missing information through proper channels. Do not assume a right to enter accounts or systems simply because you are related to the person controlling them.

The takeaway

Past informality is not unlimited permission for future unfairness. Sinclair Centre Law LLP assists with shareholder and civil disputes in British Columbia. We can help assess the corporate records, the treatment complained of and whether negotiation or court remedies may be appropriate.

Sources and next steps