Floden (R.) Services Ltd. v. Solomon et al., [2015] A.R. TBEd. JL.075

• Judge: Renke, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: May 13, 2015
• Citations: [2015] A.R. TBEd. JL.075;2015 ABQB 450

Floden Services Ltd. v. Solomon, [2015] A.R. TBEd. JL.075

MLB being edited

Currently being edited for A.R. - judgment temporarily in rough form.

Temp. Cite: [2015] A.R. TBEd. JL.075

R. Floden Services Ltd. (applicant) v. Rick Solomon, Firefox Inc., Firefox Emergency Response Solutions Inc., Firefox Thermo-Tech Inc., Firefox Wildfire Controls Inc. and Direct Injection Services Inc. (respondents)

(1403 16627; 2015 ABQB 450)

Indexed As: Floden (R.) Services Ltd. v. Solomon et al.

Alberta Court of Queen's Bench

Judicial District of Edmonton

Renke, J.

July 10, 2015.

Summary:

Solomon, an inventor, learned about a gel that could be used to fight forest fires and began development of injector systems that would mix and deliver the gel and water from fixed and rotary wing firefighting aircraft. The gel and injectors also had applications in the hydraulic fracturing of oil and gas wells. Solomon needed capital and approached Roy Floden, a director, officer, and shareholder of R. Floden Services Ltd., a company involved in the oil patch trucking services business. Solomon and Foden Services reached an agreement whereby Floden Services would provide funding in exchange for a share position in a new corporation. Solomon, who would also be a shareholder, would provide expertise, equipment, and the benefit of his contacts. The corporation would also rely on the intellectual property developed by Solomon. The corporation began as a numbered company controlled by Solomon; however, its name was later changed to Firefox Inc. and Solomon, Roy Floden (later replaced by Floden Services), Duane Floden (Roy's son), and Duncan James Stewart were named as directors. Floden Services invested $1,240,291.60 in the Firefox business. Firefox did not provide any financial return on that investment. The relationship between Floden Services and Solomon broke down. Floden Services claimed that Solomon engaged in various forms of self-dealing through diverting funds, assets, and opportunities from Firefox. Floden Services commenced an oppression action under s. 242 of the Business Corporations Act against Solomon (and the other corporate defendants) asserting that, in his capacity as a director of Firefox, Solomon's conduct was oppressive or unfairly prejudicial to or unfairly disregarded the interests of Floden Services as a shareholder. Solomon denied wrongdoing and claimed that Roy Floden and his family members impeded Firefox's business. Solomon cross-applied under s. 242 of the Act, asserting that, in their capacities as directors of Firefox, the conduct of Roy Floden and Duane Floden was oppressive or unfairly prejudicial to or had unfairly disregarded the interests of Solomon as a shareholder.

The Alberta Court of Queen's Bench allowed Floden Services' action, holding that Solomon's conduct was oppressive or unfairly prejudicial to or unfairly disregarded the interests of Floden Services. The court dismissed Solomon's cross-application, holding that the conduct of Roy Floden and Duane Floden was not oppressive or unfairly prejudicial to and did not unfairly disregard the interests of Solomon.

Barristers and Solicitors - Topic 6266

Unauthorized practice (incl. offences) - Acting as a solicitor - See paragraphs 12 to 14.

Company Law - Topic 2170

Shareholders - Shareholders' rights - To rectify oppressive or unfairly prejudicial act - See paragraphs 25 to 136.

Company Law - Topic 2170.1

Shareholders - Shareholders' rights - Oppressive acts - Remedies - See paragraphs 137 to 140.

Company Law - Topic 4334

Directors - Rights of directors - Oppression remedy - See paragraphs 25 to 136.

Company Law - Topic 9785

Actions against corporations and directors - Action for oppressive conduct - Oppression, prejudice or disregard of interests - See paragraphs 25 to 136.

Company Law - Topic 9787

Actions against corporations and directors - Action for oppressive conduct - Remedies - See paragraphs 137 to 140.

Company Law - Topic 9799

Actions against corporations and directors - Action for oppressive conduct - Evidence (incl. onus and standard of proof) - See paragraph 29.

Practice - Topic 35

Actions - Conduct of - General - Representation by non-lawyer - See paragraphs 12 to 14.

Practice - Topic 3076

Applications and motions - Applications - On affidavit evidence - See paragraphs 18 to 24.

Practice - Topic 3604.3

Evidence - Affidavits - General - Consideration of (incl. conflicting affidavits) - See paragraphs 18 to 24.

Counsel:

Edward Feehan (Duncan Craig LLP), for the applicant;

Rick Solomon, self-represented litigant.

This matter was heard on May 13, 2015, before Renke, J., of the Alberta Court of Queen's Bench, Judicial District of Edmonton, who delivered the following decision on July 10, 2015.