S.G. & S. Investments (1972) Ltd. v. Golden Boy Foods Inc. et al., (1991) 1 B.C.A.C. 303 (CA)

• Judge: Wallace, Southin and Hollinrake, JJ.A.
• Court: Court of Appeal (British Columbia)
• Case Date: June 13, 1991
• Jurisdiction: British Columbia
• Citations: (1991), 1 B.C.A.C. 303 (CA)

SG&S Inv. Ltd. v. Golden Boy Foods (1991), 1 B.C.A.C. 303 (CA);

    1 W.A.C. 303

MLB headnote and full text

S.G. & S. Investments (1972) Ltd. (petitioner/appellant) v. Golden Boy Foods Inc., Jiwasons Canada Ltd., Amarali Virani and Nizarali Virani (respondents)

(No. CA011312)

Indexed As: S.G. & S. Investments (1972) Ltd. v. Golden Boy Foods Inc. et al.

British Columbia Court of Appeal

Wallace, Southin and Hollinrake, JJ.A.

June 13, 1991.

Summary:

One of two equal shareholders of a company applied under ss. 224 and 295 of the Company Act for, inter alia, a winding-up of the company. The shareholders were deadlocked.

The British Columbia Supreme Court refused to wind up the company, but did order that the applicant shareholder offer its shares for sale to the other shareholder at a price fixed by the court. The sale was completed. The applicant shareholder appealed, challenging the jurisdiction to make the order and the value fixed by the court.

The British Columbia Court of Appeal allowed the appeal in part. The court stated that the trial judge's order should have been that the shares be sold, not that they be offered for sale. The court increased the purchase price of the shares.

Company Law - Topic 7034

Fundamental changes and shareholders' rights - Rights of equal shareholders - Deadlock - Court ordered sale of shares - Two equal shareholders were deadlocked - Shareholder A applied to wind up the company - The trial judge refused to wind up the company, but ordered that shareholder A offer to sell its shares to shareholder B at a price fixed by the court - The British Columbia Court of Appeal stated that where equal shareholders were deadlocked, which was not necessarily oppression, the court could under s. 224 of the Company Act order one shareholder to purchase the shares of the other - It was improper to order that the shares only be "offered" for sale, because if the purchase did not take place the deadlock would continue - The court varied the purchase price fixed by the trial judge.

Courts - Topic 2286

Jurisdiction - Bars - Academic or moot issues - Two equal shareholders of a company were deadlocked - Shareholder A applied to wind up the company - The trial judge refused, but ordered shareholder A to offer to sell its shares to shareholder B at a price fixed by the court - Shareholder B purchased the shares - Shareholder A appealed against the validity of the sale order and the price fixed - The company amalgamated with another company - Shareholder B claimed that the appeal was now moot or rendered nugatory - The British Columbia Court of Appeal, having found that the trial judge had jurisdiction to order the sale, held that the amalgamation did not preclude the court from adjusting the purchase price upwards to reflect a fair price.

Practice - Topic 8862

Appeals - Dismissal of appeals - Grounds - Appeal rendered nugatory - [See Courts - Topic 2286 ].

Statutes Noticed:

Company Act, R.S.B.C. 1979, c. 59, sect. 224, sect. 295(1), sect. 295(3), sect. 296 [para. 23].

Counsel:

Rolf Weddigen and Scott B. Stewart, for the appellant;

   Herbert S. Silber, for the respondents, Jiwasons Canada Ltd., Amarali Virani and Nizarali Virani.

This appeal was heard on May 9, 1991, at Vancouver, B.C., before Wallace, Southin and Hollinrake, JJ.A., of the British Columbia Court of Appeal.

On June 13, 1991, Southin, J.A., delivered the following judgment for the Court of Appeal.