1036122 Alberta Ltd. v. Khurana, 2012 ABCA 10

• Judge: McFadyen, Berger and O'Ferrall, JJ.A.
• Court: Court of Appeal (Alberta)
• Case Date: September 07, 2011
• Citations: 2012 ABCA 10;(2012), 519 A.R. 221

1036122 Alta. Ltd. v. Khurana (2012), 519 A.R. 221; 539 W.A.C. 221 (CA)

MLB headnote and full text

Temp. Cite: [2012] A.R. TBEd. JA.054

1036122 Alberta Ltd. carrying on business under the firm name and style of AML Construction (appellant/plaintiff) v. Des Raj Khurana and Kailash Devi Khurana (respondents/defendants)

(1003-0281-AC; 2012 ABCA 10)

Indexed As: 1036122 Alberta Ltd. v. Khurana

Alberta Court of Appeal

McFadyen, Berger and O'Ferrall, JJ.A.

January 10, 2012.

Summary:

The plaintiff corporation (AML) filed a Statement of Claim on October 31, 2007. AML had been struck from the Register of the Alberta Corporate Registry on September 2, 2007. The limitation period expired in September 2009. On February 9, 2010, the defendants moved to strike out the Statement of Claim as AML was a non-existent entity lacking capacity to commence an action at the time the Statement of Claim was filed. The motion was heard by a Master on February 25, 2010. AML had been revived on February 19, 2010. The Master dismissed the application to dismiss AML's action. The defendants appealed.

The Alberta Court of Queen's Bench, in a decision reported at (2010), 498 A.R. 183, allowed the appeal and directed that AML's claim be dismissed. AML appealed.

The Alberta Court of Appeal allowed the appeal. The court held that AML's revival validated the action because no order setting aside the Statement of Claim preceded the revival.

Company Law - Topic 1026

Incorporation and organization - Registration - Status of unregistered corporation re action - The plaintiff corporation (AML) filed a Statement of Claim on October 31, 2007 - AML had been struck from the Register of the Alberta Corporate Registry on September 2, 2007 - The limitation period expired in September 2009 - On February 9, 2010, the defendants moved to strike out the Statement of Claim as AML was a non-existent entity lacking capacity to commence an action at the time the Statement of Claim was filed - The motion was heard by a Master on February 25, 2010 - AML had been revived on February 19, 2010 - The Master dismissed the application - The defendants appealed - The chambers judge allowed the appeal and directed that AML's claim be dismissed - The chambers judge held that although AML had no capacity to commence an action and the Statement of Claim was invalid from the outset, it was capable of being prosecuted upon revival of the company - However, recognizing that the restorative powers of s. 208(4) of the Business Corporations Act were subject to rights acquired by third parties prior to revival, the chambers judge concluded that the defendants had acquired the right to have the Statement of Claim struck on the basis that AML lacked the capacity to sue - He reasoned that this right crystalized into a tangible and enforceable right when the defendants filed their motion to strike prior to the revival - The Alberta Court of Appeal allowed AML's appeal - The filing of the application was not the event that crystalized the right acquired in the context of the revival provision, it was the order that issued in consequence of the hearing - AML's revival validated the action because no order setting aside the Statement of Claim preceded the revival.

Company Law - Topic 1028

Incorporation and organization - Registration - Restoration of - [See Company Law - Topic 1026 ].

Company Law - Topic 9266

Dissolution or surrender or forfeiture of charter - Effect of restoration (after dissolution) of corporate status - Re court proceedings - [See Company Law - Topic 1026 ].

Practice - Topic 204.2

Persons who can sue and be sued - Corporations - Dissolved corporations (incl. effect of revival) - [See Company Law - Topic 1026 ].

Cases Noticed:

Associated Asbestos Services Ltd. v. Canadian Occidental Petroleum Ltd. (2002), 326 A.R. 31; 2002 ABQB 893, refd to. [para. 12].

299076 Alberta Ltd. v. Horizon Village Corp., [1987] A.J. No. 1331 (Q.B. Master), refd to. [para. 13].

Philippine/Filipino Centre Toronto et al. v. Portugal et al. (2010), 261 O.A.C. 290; 2010 ONSC 956, refd to. [para. 14].

Kornblum v. Canada (Minister of Human Resources and Skills Development) et al., [2010] F.T.R. Uned. 526; 2010 FC 656, refd to. [para. 14].

Shipdock Amsterdam B.V. v. Cast Group Inc. et al. (1999), 179 F.T.R. 279 (Protho.), refd to. [para. 14].

Preston v. Turnbridge Wells Opera House, [1903] 2 Ch. 323, refd to. [para. 14].

Brightman Capital Ventures Inc. v. Haynes (J.P.) and Associates Inc. et al. (2001), 143 O.A.C. 188; 8 C.P.C.(5th) 318 (Div. Ct.), refd to. [para. 15].

Stout Estate et al. v. Golinowski Estate et al. (2002), 299 A.R. 13; 266 W.A.C. 13; 2002 ABCA 49, refd to. [para. 20].

Neis v. Yancey et al. (1999), 250 A.R. 19; 213 W.A.C. 19; 1999 ABCA 272, refd to. [para. 21].

Kopr v. Kopr et al. (2006), 403 A.R. 29; 2006 ABQB 405, refd to. [para. 23].

Statutes Noticed:

Business Corporations Act, R.S.A. 2000, c. B-9, sect. 208(4) [para. 10].

Counsel:

M.L. Engelking, for the appellant/plaintiff;

K. Handzic, for the respondents/defendants.

This appeal was heard on September 7, 2011, before McFadyen, Berger and O'Ferrall, JJ.A., of the Alberta Court of Appeal. The following judgment of the Court of Appeal was delivered by Berger, J.A., on January 10, 2012.