Elroy was the controlling shareholder and sole director of Maxi-Screen Ltd,which carries on a film production business.His wife,Ann,is a minority shareholder.The corporation was incorporated in 1995 and has paid a substantial dividend each year to its shareholders.In 2009,Ann and Elroy separated.Elroy did not declare a dividend even though the business was more profitable than ever because he did not want to share the profits with Ann.Which of the following statements best reflects Ann's legal position?
A) She has no remedy because the declaration of dividends is a matter within the discretion of the directors.
B) She has no remedy because Elroy is the controlling shareholder and can do what he wants.
C) She could seek relief in court on the basis that Elroy and the corporation have defeated her reasonable expectations as a shareholder and thereby oppressed her or unfairly disregarded or prejudiced her interests as a shareholder.
D) The only way she could seek relief is to apply to the court for permission to bring a derivative action against Elroy on behalf of the corporation for breaching his fiduciary duty.
E) She has no remedy because the failure to pay dividends is not an action that she can dissent from.
Correct Answer:
Verified
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