Metis Nation of Alberta Association Local Council #63 v Alberta (Corporate Registry), 2021 ABQB 982

Court of Queen’s Bench of Alberta Citation: Metis Nation of Alberta Association Local Council #63 v Alberta (Corporate Registry), 2021 ABQB 982 Date: 20211210 Docket: 1913 00261 Registry: Ft. McMurray Between: Métis Nation of Alberta Association Local Council #63 Fort Mckay, Ronald Quintal, Glen Faichney and Janice Richards Applicants - and - Her Majesty the Queen in Right of Alberta (Corporate Registry) and the Métis Nation of Alberta Association Respondents A.

Background [ 1 ] This is an application under Rule 3.12 to convert an action started by Originating Application to an action commenced by statement of claim, and to compel responses to certain undertakings from a questioning on affidavit. [ 2 ] At its core, this action concerns a political dispute between a provincial organization and a relatively newly-formed local organization regarding who legitimately represents the interests of a 70-member Metis community in northern Alberta. I will only briefly canvass the relevant facts in this decision.

The background facts are more fully set out in para 4 of the decision of Ho J (now JA) in Metis Nation of Alberta Association Local Council #63 v Alberta (Corporate Registry) , 2019 ABQB 614 , affirmed at 2020 ABCA 89. [ 3 ] Despite the way the style of cause reads, the applicant in this application is the Metis Nation of Alberta Association (MNA). MNA is a society incorporated under the Societies Act that purports to function as the “democratically elected representative government that speaks for over 41,000 Metis Albertans” (Applicant’s Brief, para 1).

The respondents dispute this status and say MNA merely speaks for its members and has no constitutional or legal right to represent Metis persons in general in the province (Respondents’ Brief, para 4 and the authorities cited therein). [ 4 ] The MNA operates at three levels: a provincial council, 6 regional councils and a number of local councils situated throughout the province. The respondent Local #63, itself a separately incorporated society, is (or was) one such local council for the Fort McKay area. The individual respondents Quintal, Faichney and Richards are the directors of Local #63.

[ 5 ] The Fort McKay Metis Community Association (FMMCA) was formed in 2012, primarily by Mr. Quintal. Following its formation, all registered members of Local #63 listed in corporate registry joined FMMCA. Thereafter, the individual respondents took steps to dissolve Local #63 and its 9 members terminated their membership with MNA. [ 6 ] When Local #63 filed articles of dissolution with the registrar of corporations on December 5, 2018, MNA disputed the legitimacy of the dissolution, resulting in the registrar suspending Local #63 until a court order is obtained permitting the dissolution.

The individual respondents and Local #63 filed an Originating Application on April 18, 2019 seeking that court order. This Originating Application is the action which MNA now seeks to convert to a statement of claim action. [ 7 ] As an initial response to the Originating Application, MNA first brought a cross-application to strike the Originating Application on the basis that those applicants (these respondents) had no standing. The cross-application was dismissed by Ho J in her written decision and the appeal decision. [ 8 ] MNA alleges that FMMCA was created by Mr.

Quintal as a rogue organization for the purposes of avoiding the lawful authority of the MNA and converting assets belonging to Local #63. Further, MNA alleges that the individual respondents are guilty of corruption as directors of Local #63 and are attempting to cover it up. Consequently, says MNA, a full action under a statement of claim is required to properly canvass the wrongdoing and hold the wrongdoers to account, before the dissolution question can be decided. [ 9 ] The respondents in this application say there is no impediment to a court determination of the dissolution issue.

Whether Local #63 has been validly dissolved is determined by the statutory requirements set out in the Societies Act and the Business Corporations Act having been satisfied, and does not depend on the resolution of the various unproven malfeasance allegations made by MNA. B. Converting to a Statement of Claim Action [ 10 ] Under Rule 3.2(2), an action must be started by way of statement of claim unless there is no substantial factual dispute, in which case an originating application may be used to start the action.

The applicant says there are substantial factual disputes here, namely the malfeasance allegations, and thus the dissolution question cannot proceed by way of originating application. Therefore, contends MNA, the originating application action must be converted to a statement of claim action using Rule 3.12. [ 11 ] Further, MNA asserts that there is a serious unresolved question with respect to whether Local #63 has any property. One of the allegations made by MNA is that the upstart FMMCA has appropriated Local #63’s property, and therefore holds that property in trust for Local #63.

In consequence, MNA argues that it cannot fairly be said that Local #63 has no property. The factual issue, it says, needs to be determined before dissolution can be granted. [ 12 ] The respondents reply that the corruption allegations have nothing to do with whether the statutory criteria for dissolution are met.

They say, that under sections 34 and 35 of the Societies Act , they need only show that: • a proper special resolution has been procured; • proper notice has been given and the society has no debts or liabilities; and • section 211(1) of the Business Corporations Act , which applies by reference, has been met in that the corporation has not issued any shares and has no property and no liabilities, and there is a dissolution resolution of all the directors. [ 13 ] In further response, the respondents say that the dissolution process is procedural only and is not meant to delve into questions such misappropriation or corruption, which exist outside of the statutory criteria.

They say that they will be able to unassailably demonstrate that the statutory criteria are all satisfied. They also say that the ability of MNA, or anyone with standing, to challenge the past conduct of the individual respondents is not foreclosed. Dissolution of Local #63 does not insulate the individual respondents nor does it put any former property of Local #63 out of reach. That is because section 227(2) of the Business Corporations Act , also incorporated by reference, provides that: Continuation of actions after dissolution

(2) Subject to

section 15.7, notwithstanding the dissolution of a body corporate under this Act, (

a) a civil, criminal or administrative action or proceeding commenced by or against the body corporate before its dissolution may be continued as if the body corporate had not been dissolved, (

b) a civil, criminal or administrative action or proceeding may be brought against the body corporate within 2 years after its dissolution as if the body corporate had not been dissolved, and (

c) any property that would have been available to satisfy any judgment or order if the body corporate had not been dissolved remains available for that purpose. [ 14 ] During argument I asked counsel for MNA whether it could simply commence a separate action to pursue the allegations against the respondents, independent of the dissolution application, and he replied that it could. The only reason for conjoining the two would be considerations of judicial economy. [ 15 ] In the normal case, an application to dissolve a society would be dealt with by the registrar of corporations as an administrative manner.

Here, the registrar effectively referred the matter to the court because of the objection made by MNA. The sole issue for court determination is the validity of the dissolution. The proposed statement of claim advanced by MNA introduces whole new areas of inquiry which, in my view, are not germane to the question of whether the statutory criteria for dissolution have been properly

met. The information presented in support of dissolution shows that Local #63 has no property. A determination of what happened to that property, why and who is responsible, are not questions required to be answered to determine whether the statutory criteria are fulfilled. [ 16 ] Moreover, section 227(2) of the Business Corporations Act preserves both the viability of the proposed action and the remedy that is available. The proposed action is not dependent on whether Local #63 is dissolved or not. [ 17 ] This is not a case like The Owners Condominium Corporation No 1710419 v Condominium Corporation No.1710627 , 2019 ABQB 655 where the applicant invoked a

summary process, by Originating Application, under

section 67 of the Condominium Property Act to resolve complex contractual and tort claims. The learned Master found that the applicant had invoked the wrong process. He said at para 17: … In my view,

section 67 of the Act is designed to deal with issues which arise within the administration of a condominium corporation and its relationship with its own unit owners. That may extend to disputes involving the developer.

It is not designed to deal with relationships between a condominium corporation and strangers to the condominium corporation … [ 18 ] The proper parties were before the court in the Condominium Corporation case but the process utilized for that type of dispute was wrong, and it was for that reason the Originating Application was converted to a statement of claim action. [ 19 ] In the present case, MNA seeks to constitute itself as plaintiff, turn the applicants in the Originating Application into defendants and introduce entirely new and complex issues that are not before the court in the Originating Application.

As defendants, the respondents here would be required to counterclaim against the registrar of corporations in order to get the dissolution registered, which was the original purpose of the Originating Application. [ 20 ] The present case is more like Frydman v Pelletier, 2013 ABQB 225 where the applicant (by way of Originating Application) sought to obtain a court declaration that certain shares were held in trust for him by the respondent, as an oppression remedy. The respondent asserted that the applicant’s past conduct demanded to be explored in a fully blown statement of claim action.

Kenny J disagreed, stating at para 35: Mr. Pelletier raises the issue of Mr. Frydman proceeding by way of Originating Application. He says that one cannot proceed in this fashion unless there is no substantial factual dispute: Rule 3.2(2) (a), Alberta Rules of Court , AR 124/2010 . Mr. Pelletier says there are many issues in dispute including when the shares were held in trust, whether the shares were for compensation, and whether the Convention was part of a larger agreement.

Credibility, he argues, is an issue and full discovery and questioning needs to take place along with a trial to ascertain all of the facts. Even if appropriate, the Court should convert the Originating Application to a Statement of Claim to deal with all of the complex unsettled issues regarding

interpretation of contract, parole evidence, the principles of the oppression remedy and the doctrine of unclean hands. This latter issue arises by virtue of Mr. Pelletier’s allegations that Mr. Frydman brings his application with unclean hands because the law in Alberta prevents certain foreign entities from holding agricultural land and these companies including Vialta were structured to get around this limitation. In my view, what the company can and cannot do and what the ramifications will be of the company holding land in Alberta have nothing to do with this application … [ 21 ] I agree with that sentiment.

Here, what happened to Local #63’s property, whether it was converted and by whom, are not germane to the issue before the court in the application, which is whether Local #63 has been validly dissolved. Moreover, the applicant here can still pursue the respondents for misappropriation and engage in a full exploration of their conduct by way of a statement of claim action, irrespective of the dissolution application. [ 22 ] Lastly, I am not convinced there is anything to be gained in terms of judicial economy by conjoining the dissolution application with the applicant’s action against these respondents.

It would only serve to delay the determination of the dissolution question. In the Originating Application action, the applicant has attacked the validity of the steps taken by the individual respondents to dissolve Local #63. That is the issue to be determined in the dissolution application. The introduction of a whole new suite of allegations would only complicate and prolong the dissolution issue, which is capable of determination on a

summary basis. [ 23 ] For the above reasons, I deny MNA’s application to convert the Originating Application action into a statement of claim action. Nothing that I have said in these reasons should be construed as commenting, one way or the other, on the merits of either the dissolution application before the court or any allegations which MNA might choose to pursue by way of a separate statement of claim. C. Compelling Undertakings [ 24 ] During the hearing, counsel for MNA confined the request for refused undertakings to #17 through 26, omitting #24.

Counsel agree that the test for compelling production of undertakings is relevance and materiality to the application before the court: Dow Chemical Canada Inc v Shell Chemicals Canada Ltd , 2008 ABQB 671 at para 5 and Edmonton v Gosine, 2020 ABQB 546 at para 17 . [ 25 ] All of the sought-after undertakings appear to me to be aimed at determining whether the individual respondents, particularly Mr.

Quintal, properly managed the financial affairs of Local # 63 while they were in charge, and whether assets of Local #63 are properly accounted for or have been misappropriated. [ 26 ] In light of the ruling I made above, the matter remaining before the court is restricted to whether Local #63 has been properly dissolved. None of the information represented in these refused undertakings would assist the court in determining this question.

If the applicant chooses to pursue a separate action for malfeasance, it can pursue the information in that action. [ 27 ] Accordingly, the application to compel undertakings is also dismissed. D. Costs

[ 28 ] Counsel may address costs of this application by contacting me through my judicial assistant within 30 days of the date of this decision. Heard on the 4 th day of November, 2021 Dated at the City of Ft. McMurray, Alberta this 10 day of December, 2021 Douglas R. Mah J.C.Q.B.A. Appearances: Christian.E. Villeneuve, Biamonte LLP for the Appellant, Metis Nation of Alberta Association Anjalika N.

Rogers and Aron Taylor, Maurice Law Barristers & Solicitors for the Respondents, Metis Nation of Alberta Association Local Council #63 Fort McKay, Ronald Quintal, Glen Faichney, Janice Richards Josh T. de Groot, Alberta Justice (watching brief) for the Respondent, Her Majesty the Queen in Right of Alberta (Corporate Registry)