101147420 Saskatchewan Ltd. Applicant - v. –, 2016 ABQB 109

Court of Queen ’ s Bench of Alberta Citation: 101147420 Saskatchewan Ltd v Swift Hotels Group Ltd, 2016 ABQB 109 Date: 20160223 Docket: 1301 04008 Registry: Calgary Between: 101147420 Saskatchewan Ltd. Applicant - and – Swift Hotels Group Ltd. Respondent ____________________________________________________ Reasons for Decision of the Honourable Mr. Justice C.M. Jones _______________________________________________________ I. Introduction [ 1 ] 101147420 Saskatchewan Ltd. (the “Applicant”) seeks an oppression remedy as against Swift Hotels Group Ltd. (the “Respondent” or “Swift Hotels”) pursuant to an application under

section 242 of the Business Corporations Act , RSA 2000 (the “ ABCA ”). [ 2 ] The Applicant commenced this application by way of originating notice on April 5, 2013, which was amended on August 27, 2013. Both parties filed affidavit evidence and written argument. I heard oral submissions on May 11, 2015. These are the reasons for my decision.

II. The Parties [ 3 ] The Applicant is a closely-held holding company of Mr. Jim Beck and his wife. Mr. Beck is the director, president, and secretary treasurer. He and his wife are both shareholders. [ 4 ] Swift Hotels was incorporated on September 15, 2009, and then amalgamated with 1500615 Alberta Ltd. on November 10, 2009, under the same name. Swift Hotels operates a Best Western Hotel in Swift Current, Saskatchewan, and it is registered extra- provincially in Medicine Hat, Alberta. Mr. Brian Ostrander is its president and Mr. Joseph Arling is its secretary treasurer. Mr. Ostrander and Mr.

Arling are also directors of Swift Hotels. Mr. Phil Krahn is the Director of Hotel Operations for Swift Hotels, but is not a shareholder, corporate director, or officer. [ 5 ] Swift Hotels has two shareholders. The first of these is Ostrander Family Holdings Ltd. (“Ostrander Holdings”), which owns a 66.66 percent interest in Swift Hotels. Mr. Ostrander is the sole director of Ostrander Holdings. The other shareholder is JMBL Holdings Ltd. (“JMBL”), which owns a 33.33 percent interest in Swift Hotels. Mr. Arling is the president and a director of JMBL. III.

Facts [ 6 ] The following facts are based on the affidavit evidence and exhibits filed by the parties. Mr. Beck filed an affidavit on behalf of the Applicant, and Mr. Ostrander and Mr. Arling filed affidavits on behalf of the Respondent. A. Pre-Incorporation Correspondence [ 7 ] Mr. Beck and Mr. Ostrander had been friends for many years and occasionally discussed potential business opportunities. Mr. Beck became interested in entering the hotel business, and in July 2009 they discussed the idea of Mr. Beck purchasing shares of Swift Hotels.

These discussions occurred before Swift Hotels was incorporated in September 2009, and Mr. Beck and Mr. Ostrander disagree as to the details of this transaction. [ 8 ] Mr. Beck’s affidavit states that on or about July 4, 2009, Mr. Ostrander in his capacities as a director of Swift Hotels and Ostrander Holdings agreed to sell ten percent of the “issued and outstanding shares” of Swift Hotels to Mr. Beck on behalf of the Applicant for $295,312.50. [ 9 ] For his part, Mr. Ostrander states that he and Mr. Beck “entered into discussions with respect to the possibility” that Mr.

Beck could purchase some of the outstanding Class “A” shares of Swift Hotels that were owned by Ostrander Holdings. Mr. Ostrander swears that he was acting solely as a representative of Ostrander Holdings during any discussions relating to this transaction. He adds that the transaction was between Mr. Beck and Ostrander Holdings, and that Swift Hotels never participated in any of the discussions. [ 10 ] The ensuing correspondence and documents do not shed much light on the transaction. On July 6, 2009, Mr. Krahn sent Mr.

Beck an email that states “10% Buy-in to this project equates to $295,312.50”, and requested that Mr. Beck forward a $200,000 deposit payable to 1393230 Alberta Ltd. (“139 Alberta Ltd.”). Little is known about 139 Alberta Ltd. It was registered on August 4, 2008, and ceased to exist on October 2, 2012. Mr. Ostrander was its sole director, and in his affidavit describes it as one of his “personal companies”. [ 11 ] This transaction was formalized by way of a promissory note dated July 14, 2009 (the “Promissory Note”) between 139 Alberta Ltd. and Mr. Beck.

The Promissory Note states that: The sum of $200,000 has been deposited to the account of 1393230 Alberta Ltd. for the purchase of Swift Current Best Western Hotel in Swift Current, SK. This is a deposit of 10% share in this project equating to $295,313 with a balance of $95,313 to be paid at a time of Joint Venture Agreement finalization and Closing of Purchase. [ 12 ] Mr. Ostrander signed the Promissory Note on behalf of 139 Alberta Ltd., but Mr. Beck did not. There is handwriting on the Promissory Note that states “This stands as a personal guarantee between Brian Ostrander & Jim Beck”.

Someone initialed this handwriting, although it is not clear who. [ 13 ] On July 16, 2009, a receipt from TD Canada Trust confirms that $200,000 passed from an account owned by Mr. Beck to 139 Alberta Ltd. That same day, Mr. Krahn sent Mr. Beck an email that confirmed that the $200,000 “deposit” had been received by 139 Alberta Ltd. “to operate as Best Western Inn Swift Current.” The email goes on to say: You are coming into this project for 10% at $295,313 with $95,313 at closing. … Next steps: 1. You to name the entity of person to enter the joint venture. 2. JV Agreement to be finalized and signed. 3.

Financing sign-off. 4. Franchise license modification.

Welcome aboard! [ 14 ] Although not stated in the evidence, Mr. Beck argues that Swift Hotels was substituted as the purchaser of the Best Western Hotel instead of the 139 Alberta Ltd. B. Incorporation [ 15 ] Swift Hotels was incorporated on September 15, 2009, with Mr. Ostrander as its sole director. The articles of incorporation established four classes of shares. The only relevant class is the Class “A” shares, which provide voting, dividend, and winding up rights.

The articles specify that no securities of Swift Hotels shall be transferred without the approval of the board of directors. [ 16 ] On September 15, 2009, Swift Hotels passed a resolution that appointed Mr. Ostrander as its president and issued 200 Class “A” shares to Ostrander in his personal capacity. Three days later, Swift Hotels issued ten Class “A” shares to JMBL, and approved a transfer of 100 Class “A” shares from Mr. Ostrander to Ostrander Holdings. At some point thereafter, Mr.

Arling also became a director and officer of Swift Hotels. [ 17 ] On November 9, 2009, Ostrander Holdings passed a resolution that guaranteed a $7,210,000 loan to Swift Hotels from Innovation Credit Union. This guarantee was up to a limit of $4,700,000, and was signed by Mr. Ostrander. This loan was made, presumably, for the acquisition of the Best Western Hotel. C. Post-Incorporation Correspondence [ 18 ] On October 27, 2009, Mr. Beck emailed Mr. Krahn for an update on the “JV paperwork”. Mr. Krahn replied the following day stating that the paperwork is “still in process” and would be provided in the next week.

Mr. Krahn also confirmed that the closing date was November 1, 2009. [ 19 ] On January 15, 2010, Mr. Beck received an email from Ms. Marilyn Paterson, whom Mr. Beck believed was counsel for Swift Hotels and Ostrander Holdings. That email states that Mr. Ostrander spoke to Mr. Arling and that Mr. Arling had no objection to Mr. Beck “being a shareholder” of Swift Hotels. The email goes on to say “we believe the easiest way to do this transaction is for [Mr. Ostrander] to sell to you a 10% interest from his shares in that company.” [ 20 ] On April 21, 2010, Mr. Beck and Mr.

Ostrander exchanged a series of emails that established other terms for their transaction. Mr. Beck proposed that he pay the remaining $95,000 over a two year period in four installments without interest. Mr. Ostrander confirmed this, writing “The 95k can be carried for 2 Years at that started Nov 1st/2009 NO interest.” Mr. Beck also proposed that he would receive a ten percent dividend paid quarterly, three percent of which would be paid to Ostrander Holdings to accrue against the remaining $95,000 owing. He included a

schedule for the dividends to be paid on March 31, May 31, August 31, and November 30. Mr. Ostrander’s reply email indicates his agreement to this. [ 21 ] On June 9, 2010, a lawyer named Ms. Maria Doerksen sent an email to Mr. Ostrander indicating that Ostrander Holdings had granted Mr. Arling a security interest in the Swift Hotels shares that it owned. She adds that Mr. Arling would need to sign a release before the shares could be sold to the Applicant. Presumably, Mr. Arling was given a security interest in the shares for loaning money to Mr. Ostrander. Ms. Doerksen also states that because Mr.

Arling is a director of Swift Hotels, he would need to grant authorization of the transfer through a director resolution. [ 22 ] On December 24, 2010, Mr. Beck emailed Mr. Krahn, copying Mr. Ostrander, asking if any dividends have been declared for 2010. In his reply, Mr. Ostrander writes “Phil forward out Info... as well pls ensure a deposit/wire goes to Jim Becks account asap. Ensure we record payment as shareholder loan, and or then as dividend upon completion of year-end...” Mr. Krahn then sent Mr.

Beck a document that contained the following financial information: Net Income $378,364.42 Add Back Amortization $253,509.15 $631,873.57 Less Mortgage Principal -$224,741.84 Net Cash $407,131.73 Jim Beck 6.77% $27,562.82 Payments April 23, 2010 $7,311.83 GST $6,475.31 December 24, 2010 $5,000.00 Total Payment $18,787.14

Balance $8,775.68 [ 23 ] On March 24, 2011, Mr. Beck sent Mr. Ostrander an email to confirm items that were agreed upon in a discussion earlier that same day. The email states that Mr. Beck agreed to purchase seven percent of Swift Hotels’ shares, which were being held by Ostrander Holdings. He adds that “Tonight we discussed, and you agreed, that the correct way to conclude this matter was to transfer the proportionate value of shares of Swift Motels Group (sic) to Beck Holdco.” In an email dated March 30, 2011, Mr. Beck notified Mr.

Ostrander that “a T5 will need to be issued to me for dividends issued to my holdco.” [ 24 ] By June 2011, Mr. Beck retained a lawyer named Mr. Derrek Fahl to prepare the paperwork necessary to complete the share transfer. In an email dated June 6, 2011, Mr. Fahl explained to Mr. Ostrander and Mr. Beck his fee structure and what information he requires. Mr. Beck then emailed Mr. Ostrander asking if he was prepared to proceed. Mr. Ostrander replied that same day writing “U bet....” [ 25 ] On June 19, 2011, Mr. Beck notified Mr. Ostrander by email that the paperwork had still not been sent to Mr. Fahl.

He also stated that dividend payments were owing, and demanded his shares or the return of his $200,000. Mr. Krahn eventually emailed Mr. Fahl stating that “Ostrander Holdings Ltd. is assigning 15.2 of these 200 Class A shares to Jim Beck (7.6%) for his $200,000 contribution.” [ 26 ] On September 12, 2011, Mr. Krahn sent to Mr. Beck a “dividend

summary” from 2009 to July 31, 2011. This

summary specifies that Mr. Beck received $18,787.14 on April 23, and December 24, 2010, but has not received any other payments. In his affidavit, Mr. Ostrander swears that he made the payment of $18,787.14 “strictly in good faith” and in his personal capacity. He also swears that at no time did Swift Hotels ever provide a dividend payment to the Applicant or Mr. Beck. [ 27 ] The last piece of correspondence is an email from Mr. Beck to Mr. Krahn dated December 17, 2011. In that email, Mr. Beck requests Swift Hotels’ financial documents for the past fiscal year. Mr. Krahn did not respond to this email. D.

Current Status Quo [ 28 ] In his affidavit, Mr. Beck swears that Swift Hotels has failed to provide the Applicant with notice of any annual or special shareholders’ meetings and has not permitted the Applicant to participate in the affairs of Swift Hotels in accordance with its right as a shareholder. Additionally, the Applicant has received limited financial information of Swift Hotels and has not been privy to any information concerning the business and affairs of Swift Hotels. As a result, Mr. Beck states that the Applicant has suffered prejudice. [ 29 ] For his part, Mr. Ostrander’s affidavit states that Mr.

Beck decided to terminate discussion regarding the sale of shares. He states that no purchase agreement was ever completed, and the transaction was never finalized. Mr. Ostrander adds that he and Mr. Beck have entered into discussions regarding the return of Mr. Ostrander’s $200,000. [ 30 ] Mr. Ostrander’s affidavit also states that discussions never got to the point where it was necessary to seek approval from Swift Hotels’ board of directors. He adds that Swift Hotels was never a party to the proposed transaction, and that Swift Hotels never received any of Mr. Beck’s $200,000 deposit. An affidavit sworn by Mr.

Arling corroborates Mr. Ostrander’s evidence on this point. Mr. Arling’s affidavit confirms that at no time was he aware of any negotiations between Mr. Ostrander and Mr. Beck relating to the purchase of any shares of Swift Hotels. IV. Positions of the Parties [ 31 ] Broadly speaking, the Applicant argues that the Respondent has failed or refused to implement the share purchase. As a result, its interests as a shareholder have been oppressed, unfairly prejudiced, and unfairly disregarded. It seeks an order pursuant to

section 242 of the ABCA :

a) enjoining the Respondent from declaring or making payment of dividends until further order of the Court;

b) directing the Respondent to issue to the Applicant a share certificate for 6.77% of the issued Class “A” shares in the capital stock of the Respondent;

c) directing the Respondent to record the Applicant as the owner of the shares referred to in

b) and report the same to Alberta Registries;

d) directing the Respondent to produce for the Applicant its financial statements for 2009 to 2011 and its other records and books of account;

e) directing the Respondent to obtain a valuation of its shares;

f) directing the Respondent to pay declared but unpaid dividends, return of capital or other distributions made by the Respondent to its Class “A” shareholders since November 1, 2009;

g) directing the Respondent to purchase the Applicant’s Class “A” shares at the value established by the valuation referred to in

e) above;

h) alternatively, directing the Respondent to pay money to the Applicant in an amount equal to the amount of money paid by the Applicant for shares of the Respondent; and

i) in the further alternative, directing the Respondent to compensate the Applicant in an amount determined by the Court.

[32] For its part, the Respondent argues that the application should be dismissed. It advances three procedural arguments and onesubstantive argument. With respect to the former, the Respondent first contends that this case involves contested facts and cannot bedecided summarily. The matter should be directed to trial. Second, this dispute concerns whether a contract to sell shares to the Applicantexisted. An oppression application cannot be used to resolve a common law dispute.

Third, even if an oppression application can be usedto decide whether a contract existed, the Applicant has not tendered sufficient evidence to show that such a contract existed. With respectto its substantive argument, the Respondent did not have any dealings with the Applicant and therefore has not acted in an oppressivemanner vis-à-vis the Applicant. If the Applicant has a grievance, it is between the Applicant and Ostrander Holdings. [33] Although the Respondent’s procedural arguments are in the alternative to its substantive one, I must start with the proceduralarguments.

This is because the merits of this application cannot be determined if the facts are too contested to grant

summary judgment. V. Analysis A. Whether this application is suitable for

summary judgment [34] The Respondent argues that the material facts are “hotly contested” and that this application cannot be determined summarily.It cites Hansen v Eberle (1995), (SK KB), 139 Sask R 249 (SKQB), and Aquino v First Choice Capital Fund Ltd(1997), (SK CA), 148 Sask R 288 (SKCA), for the proposition that an oppression application requires a trial if thereis a factual dispute. [35] The Applicant acknowledges that

summary relief is appropriate only if “instances of oppression on uncontested facts can befound.” However, it cites Brooks v Brooks, 2013 SKQB 325, for the notion that there is a trend to adjudicate summarily where possible.In its written submissions, the Applicant cites evidence to demonstrate that the necessary facts are in place for

summary judgment. I willaddress the cited evidence separately.

i) The Applicant paid $200,000 for the purchase of an ownership interest, in the form of shares, in the Best Western. [36] Although the payment is uncontroverted, the Respondent maintains that Mr. Beck and Mr. Ostrander only had a series ofdiscussions and that no share purchase agreement was ever finalized. This contradicts the Applicant’s affidavit evidence that Mr. Beckand Mr. Ostrander had reached an agreement in July 2009. Absent more documents, determining whether an agreement was reachedrequires an assessment of the credibility of Mr. Beck and Mr.

Ostrander. ii) The $200,000 was part payment of an overall purchase price of $295,312.50 for a ten percent interest in the Best Western. [37] The evidence before me is not clear as to the extent of the ownership interest the Applicant was acquiring. The PromissoryNote and Mr. Beck’s affidavit state a ten percent interest. The dividend summaries authored by Mr. Krahn specify a 6.77 percent interest.The June 29, 2011, email from Mr. Krahn states that Mr. Beck’s $200,000 deposit entitles him to a 7.6 percent share.

This is a materialfact that remains uncertain. iii) While the $200,000 was paid to 139 Alberta Ltd, it was later, unknown to the Applicant, transferred to and used by the Respondent. [38] The Respondent expressly disputes this. iv) The Respondent purchased, owns and operates the Best Western. [39] I agree that this fact is uncontroverted.

v) The Respondent has made partial payment of dividends to the Applicant based on the Applicant’s 6.77 percent ownership interest inthe Respondent. [40] The Respondent disputes that it declared any dividends in favour of the Applicant. Mr. Ostrander’s affidavit states that thepayment he made to Mr. Beck was done in good faith and in his personal capacity. vi) Up until the end of December 2010, the Respondent provided the Applicant with some financial reporting on its investment in theRespondent. [41] Although it is uncontroverted that Mr.

Beck received certain financial documents, the Respondent disputes that it wasinvolved in any correspondence with Mr. Beck. This implies that Mr. Krahn and Mr. Ostrander sent these documents to Mr. Beck whileacting in some other capacity.

Moreover, it is not clear whether these financial documents belong to Swift Hotels, Ostrander Holdings, orsomething else. vii) The Respondent has not issued any shares to the Applicant, has not provided the Applicant with any financial reporting sinceDecember 2010, or invited the Applicant to any shareholder meetings. [42] Although neither party disputes these facts, the Respondent argues that the Applicant is not entitled to any of these things. TheRespondent takes the position that it was never aware of any communications with Mr. Beck, and that no share purchase agreement wasever finalized. Mr.

Beck’s affidavit directly contradicts this stating that the Respondent was involved with the share purchase agreement,which finalized as early as 2009. viii) The Respondent has kept and used the Applicant’s $200,000. [43] The Respondent expressly denies that it received any money from the Applicant.

ix) The Respondent, through its director, Mr. Ostrander, its representative, Mr. Krahn, and its solicitors, have acknowledged the receiptof $200,000 from the Applicant and a 6.77 percent ownership interest in the Respondent. [44] The affidavits of Mr. Beck and Mr. Ostrander contradict over whether Mr. Ostrander was acting as a representative for SwiftHotels. Given that Mr. Ostrander’s affidavit maintains that Swift Hotels never participated in any discussions with Mr. Krahn, thisimplies that Swift Hotels had no agents. Who Mr.

Krahn and the lawyers were representing is a contested fact that I cannot determinebased on the documents provided to me. [45] It is also important to note that Mr. Krahn ties into a crucial evidentiary objection by the Respondent, which I cannotdetermine summarily. Specifically, the Respondent indicates that this application is a final determination as opposed to an interlocutoryone. Therefore, the documents authored by Mr. Krahn that Mr. Beck appended to his affidavit are hearsay and cannot be used for thetruth of their contents. [46] Under rule 13.18 of the Rules of Court, a litigant applying for

summary relief that may dispose of all or part of a claim canrely on hearsay evidence if that evidence would have been admissible at trial: Murphy v Cahill, 2012 ABQB 793 at para 29 (Veit, J);Attila Dogan Construction and Installation Co v AMEC Americas Ltd, 2015 ABQB 120 at para 81 (Wittmann, CJ). If Mr.

Krahn wasfound to be representing Swift Hotels, then his statements might be admissible as vicarious party admissions: R v Strand Electric Ltd, (ON CA), [1969] 1 OR 190, at para 31 (ONCA); Canada Southern Petroleum v Amoco Canada Petroleum Co, (AB KB), 60 Alta LR (3d) 122 at para 14; Sidney N Lederman, Alan W Bryant & Michelle K Fuerst, The Law ofEvidence in Canada, 4th ed (Ontario, LexisNexis: 2014), at 371; Hamish C Stewart, Halsbury’s Laws of Canada – Evidence (2014Reissue) at HEV-87 (Lexis). [47] Based on the affidavit evidence before me, I cannot determine whether Mr.

Krahn was acting as an agent of Swift Hotelswhen corresponding with Mr. Beck. Mr. Beck’s affidavit states that Mr. Krahn was Swift Hotels’ accountant and representative. Mr.Ostrander’s affidavit states that Mr. Krahn is the Director of Hotel Operations, although it does not specify the responsibilities of thatposition and whether he held that position from 2009 to 2011. Moreover, since Mr. Ostrander states that Swift Hotels was not privy toany discussions with Mr. Beck, there is the possibility that Mr.

Krahn was acting in some other capacity. [48] It is well established that when conflicting evidence is presented in affidavits and the credibility of the parties is at issue, thematter should be resolved through trial: Rensonnet v Uttl, 2014 ABCA 304 at para 10. As the parties correctly indicate, this rule appliesto oppression actions commenced under the ABCA: R Floden Services Ltd v Solomon, 2015 ABQB 450 at para 18. I conclude that is thecase here since the essential facts are disputed by the parties, and an assessment of credibility is required to determine these facts.

Theinability to resolve an important evidentiary objection is an additional reason why

summary judgment is inappropriate. B. Whether I can direct a trial [49] Subsection 242(3) of the ABCA sets out the interim and final orders that the Court may make in connection with an oppressionapplication. Subsection 242(3)(

p) permits the Court to order the trial of any issue. [50] The test for determining whether an applicant is entitled to a trial under the ABCA was discussed in Sodhi v Genesis LandDevelopment Corp, 2004 ABQB 628; aff’d 2005 ABCA 69. In the Court of Queen’s Bench decision, Justice Hart held at paragraphs 8 to12 that the applicant must demonstrate that the claim is “not spurious”. This is a low standard, and does not rise to the level of a primafacie case.

If the applicant meets that threshold, the Court must then determine whether an order directing a trial would be appropriate inall the circumstances: Sodhi, paras 13-14. In this case, neither the Applicant nor the Respondent made submissions on this test.Nonetheless, this test is not sophisticated and I will address it myself. [51] The Applicant has given affidavit evidence that Mr. Ostrander, in his capacity as a director for the Respondent, entered into ashare sale agreement with Mr. Beck. Documents show that Mr. Beck and Mr. Ostrander were having discussions over the formerpurchasing shares of Swift Hotels.

The Applicant has also given affidavit evidence that it has not received those shares, and has sufferedprejudice as a result. Although the conflicting evidence prevents me from determining the nature of this agreement, whether it hadfinalized, or whether Swift Hotels was aware of these discussions with Mr. Beck, I conclude that this claim is not spurious. [52] With respect to the second step of test, I conclude that a trial is appropriate in all the circumstances. This necessarily followsfrom my finding that this application is not appropriate for

summary judgment and that viva voce evidence is required. [53] Accordingly, I conclude that the Applicant is entitled to a trial pursuant to subsection 242(3)(

p) of the ABCA. C. What is the scope of the trial [54] The Respondent contends that before an oppression action can proceed to trial, the Applicant must first demonstrate that ashare sale agreement existed. This is a common law issue, which must be resolved outside of the oppression action. In other words, theRespondent asserts that the Applicant must first establish that it has the right to be a shareholder of the Respondent and only then it mayhave its oppression application adjudicated through trial.

It cites Bauscher-Grant Farms Inc v Lake Diefenbaker Potato Corp, (SK KB), 167 Sask R 14 (SKQB), for the proposition that a trial of an oppression action is limited to determining whetheroppression occurred and what remedies result. [55] This issue was thoroughly canvassed in Cask v Aumon (1990), (ON SC), 69 DLR (4th) 567 (Ont Sup Ct).In that case, the applicants entered into a pre-incorporation contract with the respondent’s sole director and shareholder. The applicantsprovided start up financing and technical advice in exchange for one-third of the shares.

After incorporation, the respondent refused toissue the shares and the applicants commenced an oppression action. The applicants claimed that they had an equitable interest in theshares, giving them standing as a “beneficial owner” of shares under the

Canada Business Corporations Act, RSC 1985 c C-44(“CBCA”). The respondent denied that the applicants were shareholders and that they had standing to commence an oppression action. It

argued that the applicants’ entitlement is a matter of dispute and until the dispute is resolved in favour of the applicants by the issue of a decree of specific performance, the applicants did not have standing as beneficial owners. [ 56 ] Writing for the Court, Justice Lane stated at paragraph 12 that a beneficial owner of shares can refer to a situation in which applicants claim to be beneficial owners of shares which ought to have been issued to them. He stated that this

interpretation accords with the remedial nature of the CBCA . His Lordship added the following insightful comments at paragraph 15: In my view, if any person claiming a relevant status under ss. 238 or 241 by reason of being a registered shareholder, beneficial owner, creditor, a director or the like, could be turned away without a hearing by the simple denial of the existence of the relevant status, much of the remedial effect of the CBCA would be demolished.

In effect, the respondents’ contention would re-write the legislation by redefining “creditor” in s. 241 as “judgment creditor” and “beneficial owner” in s. 238 as “beneficial owner whose status as such has been confirmed by the Court or is not in any way contested.” Since by definition a beneficial owner is one who does not have legal title, every such person is at risk that he may have to go to the law to enforce his right to turn beneficial ownership into legal ownership.

In my view, Parliament did not intend the absence of legal title to prevent the applicants here from bringing an application under ss. 238 and 241 until some other court had passed upon the validity of their claim to beneficial ownership. Their status is to be dealt with within the CBCA application and not as a condition precedent. [ 57 ] At paragraph 17, Justice Lane held that the applicants had standing to commence the oppression application by reason of their claim to be beneficial owners of securities of the respondent company.

In other words, the oppression action could be used to determine both legal entitlement to the shares and whether the company had engaged in oppressive conduct. [ 58 ] The principles enunciated in Cask were affirmed in Frydman v Pelletier , 2013 ABQB 225 (Kenny,

J) at para 23 , and I agree with them as well. They also accord with the liberal and flexible

interpretation that courts give the ABCA , and promote the efficient administration of justice. In this case, the Applicant claims to be a “beneficial owner” of shares in the Respondent, which is a type of complainant under

section 239 of the ABCA . [ 59 ] Given the foregoing, the scope of the trial will include determining whether the Applicant has standing as a complainant under subsection 242(1) of the ABCA , whether the Respondent’s conduct amounts to oppression, and if so to what relief the Applicant is entitled. VI. Determination [ 60 ] Pursuant to subsection 242(3)(

p) of the ABCA , I order that this application proceed to trial on the following issues:

a) does the Applicant have standing as a complainant under subsection 242(1) of the ABCA ;

b) does the Respondent’s conduct amount to oppression under the ABCA ; and

c) to what relief, if any, is the Applicant entitled? [ 61 ] If the parties cannot agree on costs within thirty days of the date of this judgment, they are directed to make written submissions. Heard on the 11 th day of May, 2015. Dated at Calgary, Alberta this 23 rd day of February, 2016. C.M. Jones J.C.Q.B.A. Appearances:

M.J. Krawchuk for the Applicant M.M. Ahluwalia Brar for the Respondent