Caron v Canadian Energy Inc, 2017 ABQB 782

Court of Queen’s Bench of Alberta Citation: Caron v Canadian Energy Inc, 2017 ABQB 782 Date: 20171218 Docket: 1703 23631 Registry: Edmonton Between: Richard Caron and Norac Capital Inc. Applicants - and - Canadian Energy Inc., Mount Western Investments Inc., Don Caron, Fritz Boehm and Rainald Heinisch Respondents _______________________________________________________ Supplemental Reasons for Judgment of the Honourable Mr. Justice Robert A. Graesser _______________________________________________________ Introduction [ 1 ] This is a follow-up to my decision in Caron v Canadian Energy Inc , 2017 ABQB 767 .

In that decision, I enjoined Mount Western Investments Inc. from paying dividends to its shareholders. The dividends had been declared in May 2016. [ 2 ] Immediately after my decision was given to the parties, Don Caron applied to have me reconsider the decision on various grounds. Background [ 3 ] Don Caron had provided an affidavit sworn December 4, 2017 responding to Richard Caron’s affidavit of November 30, 2017. That affidavit did not come to my attention until after my earlier decision was finalized and provided to the parties. [ 4 ] I heard the application to set the injunction aside on December 13, 2017.

At that time, I directed that Richard Caron provide

an undertaking as to damages by the close of business on December 14. Don Caron’s affidavit gave me sufficient concern about the merits of the injunction I granted for me to make that direction. I also gave Richard Caron’s counsel until noon on Friday, December 15 to provide written argument in response to Richard Caron’s arguments. [ 5 ] Before noon on December 15, I received a further affidavit from Richard Caron sworn December 14, responding to Don Caron’s December 4 affidavit. Mr.

Bieganek’s letter of December 15 responded to the arguments raised on Don Caron’s behalf, but also indicated that Richard Caron would not be providing the required undertaking as to damages. [ 6 ] The failure of Richard Caron to provide the undertaking as to damages makes the application to set aside the earlier order and decision moot, but for costs. Nevertheless, because my decision of December 8 was a written decision and has been published as such, it is appropriate to update the record. Analysis [ 7 ] Mr.

Delblanc, on Don Caron’s behalf, was certainly correct that I have a jurisdiction to vary or set aside the order pronounced in my December 8 decision. Mr. Delblanc referred me to my own decision in Westpoint Capital Corporation v Solomon Spruce Ridge Inc. , 2017 ABQB 497 , as well as Blue Steel Investments LLC v Hegco Canada Inc. , 2013 ABQB 275 , and JH Drilling Inc. v Parsons Creek Aggregates , 2014 ABCA 223 . [ 8 ] There are always two sides to every story.

On November 30, I heard only one side as the application was on very short notice, with no opportunity for the Respondents to respond with any evidence of their own. I recognized that the Respondents may have had a different version of events, and expressly gave leave (if any leave was necessary) for the Respondents to revisit the order once cross-examination of Richard Caron had taken place. I understood that was going to be organized very quickly. [ 9 ] I did not expect any further evidence to be submitted before I made a decision.

Once I read Don Caron’s affidavit, I recognized that it would be appropriate to revisit the November 30 application without requiring the cross-examination of Richard Caron. I advised counsel on December 13 that I intended to re-consider the application once I had Mr. Bieganek’s response argument on the basis of reviewing the competing affidavits to determine if the competing evidence warranted the continuation of the injunction. I also immediately imposed the requirement of the undertaking as to damages, as a minimum response to Don Caron’s evidence. [ 10 ] There are indeed two competing

interpretations of the situation facing the group of companies. I am satisfied from the affidavits of Richard Caron of November 29 and Don Caron of December 4 that the dispute is one that does not warrant the intervention of the courts at this stage. Richard Caron’s affidavit of December 14 does not tilt the balance in favour of maintaining the injunction.

I recognize there has been no cross-examination on any of the affidavits, but frequently interim decisions must be made on competing evidence before cross-examination takes place and before there is an opportunity to bring further evidence to the Court’s attention. I have also received a further affidavit from Don Caron and brief submissions from Mr. Wilson regarding Richard Caron’s decision to not provide the undertaking as to damges. [ 11 ] Had Don Caron’s affidavit of December 4 come to my attention before I finalized my decision, I would have called for further argument before making my decision.

With the benefit of both arguments, I am satisfied that there are other remedies available to Richard Caron in these circumstances, instead of an injunction restraining payment of dividends. [ 12 ] What is transpiring within this family of companies appears on the face of the affidavits to be a business dispute among businessmen with strong views, but who are acting in good faith. These circumstances do not make a prima facie case of oppressive conduct.

Reasonable people can disagree, and my earlier decision should not be interpreted as anything more than a pronouncement made in exigent circumstances based on one side of the dispute only. [ 13 ] This is a dispute that may never see the courthouse again, and it would be unfair to have a one-sided record. [ 14 ] The orders directed in my December 8 decision are wholly vacated. Costs may be spoken to if the parties are unable to agree on the appropriate manner of dealing with them. Heard on the 13 th day of December, 2017. Dated at the City of Edmonton, Alberta, this 18 th day of December, 2017. Robert A.

Graesser J.C.Q.B.A.

Appearances: Darren R. Bieganek, Q.C. Duncan Craig LLP for the Applicants Donald J. Wilson DLA Piper (Canada) LLP for the Respondent Canadian Energy Inc Sigurd Delblanc Bryan & Company LLP for the Respondent Don Caron