Gilks v. Green Clean Squad Inc. et al., 2015 ABQB 83

• Judge: Veit, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: January 27, 2015
• Citations: 2015 ABQB 83;(2015), 610 A.R. 186 (QB)

Gilks v. Green Clean Squad Inc. (2015), 610 A.R. 186 (QB)

MLB headnote and full text

Temp. Cite: [2015] A.R. TBEd. FE.032

Karen Gilks (applicant) v. Green Clean Squad Inc. and Kathleen Pearse (respondents)

(1403 16637; 2015 ABQB 83)

Indexed As: Gilks v. Green Clean Squad Inc. et al.

Alberta Court of Queen's Bench

Judicial District of Edmonton

Veit, J.

February 2, 2015.

Summary:

Gilks, a 50% shareholder and the sole remaining director of Green Clean Squad Inc., applied for a preservation order against any bank and PayPal Canada accounts controlled by Pearse, the other 50% shareholder.

The Alberta Court of Queen's Bench held that the application failed, "[f]or one 'technical' reason, breach of the rule in Foss v. Harbottle, and one substantive reason, the failure to meet the requirements of s. 17 of the Civil Enforcement Act for an interlocutory preservation or attachment order."

Company Law - Topic 251

Nature of corporations - General - Distinct legal personality - A 50% shareholder of the corporate respondent applied for a preservation order against any bank and PayPal Canada accounts controlled by the other 50% shareholder - The Alberta Court of Queen's Bench held that the application failed for breach of the rule in Foss v. Harbottle - "Compliance with the rule in Foss v Harbottle is not a mere technicality: the rule preserves fundamental rights such as limited liability, corporate democracy, and creditor priority. Failure of compliance with the rule is, in the circumstances here, a fatal flaw in the application." - See paragraphs 3, 18 to 20.

Injunctions - Topic 1612

Interlocutory or interim injunctions - General principles - Mareva injunctions - Preservation of property pending or after judgment - The Alberta Court of Queen's Bench stated that "every application for pre-judgment relief asks for exceptional relief and must meet general standards. For example, an applicant for an interlocutory injunction must satisfy a tri-partite test. When one party is, prior to a trial, asking the court to prevent another party from dealing with property which they could ordinarily dispose of, the application should be assessed in light of the requirements of an interlocutory injunction. Statutorily, an applicant for an attachment order must meet a higher test than the one set for an interlocutory injunction. An applicant for the latter type of relief must satisfy the court only that there is a serious issue to be tried, that they will suffer irreparable harm if the relief is not granted and that the balance of convenience favours the granting of the relief. An applicant for relief in the nature of a preservation or attachment order must satisfy the last two tests, but must satisfy a higher standard on the first test, i.e. that 'there is a reasonable likelihood that the claimant's claim against the defendant will be established'." - See paragraph 6.

Practice - Topic 3371.9

Payment of money into court - Preservation of property - Attachment order - General - [See Injunctions - Topic 1612 ].

Practice - Topic 3371.9

Payment of money into court - Preservation of property - Attachment order - General - A 50% shareholder of the corporate respondent applied for pre-judgment relief; specifically, a preservation order against any bank and PayPal Canada accounts controlled by the other 50% shareholder - The Alberta Court of Queen's Bench held that the application failed - "At a minimum, an applicant for a preservation or attachment order must satisfy the requirements of s. 17 of the Civil Enforcement Act. Here, the applicant has not established that the individual respondent is dealing with exigible property other than for the purpose of meeting her ordinary business or living expenses" - In addition, the applicant had not complied with the requirements of ss. 17(5) and 17(6), that any order "cause as little inconvenience to the defendant as is consistent with achieving the purposes for which the order is granted" and that any order "not attach property that exceeds an amount or a value that appears to the Court to be necessary to meet the claimant's claim" - Finally, if the application were assessed solely on the basis of an application for a preservation order, the application would be denied on the grounds that the applicant had not identified pre-existing property that was in dispute - See paragraphs 4, 5 and 7.

Practice - Topic 3378

Interim proceedings - Preservation of property - Mareva injunction - [See Injunctions - Topic 1612 ].

Cases Noticed:

Foss v. Harbottle (1843), 2 Hare 461; 67 E.R. 189, refd to. [paras. 2, 8].

Bank of Montreal v. Jarjoura, [2010] A.R. Uned. 101; 2010 ABQB 103, refd to. [para. 8].

Interclaim Holdings Ltd. et al. v. Down et al. (1999), 250 A.R. 94; 213 W.A.C. 94; 1999 ABCA 329, refd to. [para. 8].

Olympia Trust Co. v. Totten, [2012] A.R. Uned. 524; 2012 ABQB 488, refd to. [para. 8].

Cho v. Twin Cities Power-Canada U.L.C. et al. (2012), 522 A.R. 154; 544 W.A.C. 154; 2012 ABCA 47, refd to. [para. 8].

Giammarco & Co. (Western) Division Ltd. et al. v. TRL Real Estate Syndicate (05) Ltd. et al., [2014] A.R. Uned. 527; 2014 ABQB 424, refd to. [para. 8].

Rea v. Patmore et al. (1999), 253 A.R. 363; 1999 ABQB 759, refd to. [para. 8].

Hryniak v. Mauldin (2014), 453 N.R. 51; 314 O.A.C. 1; 2014 SCC 7, refd to. [para. 9].

Statutes Noticed:

Civil Enforcement Act, R.S.A. 2000, c. C-15, sect. 17 [para. 22].

Counsel:

Steven A.A. Dollansky (McLennan Ross LLP), for the applicant;

Stephanie A. Wanke (Ogilvie LLP), for the respondents.

This application was heard on January 27, 2015, before Veit, J., of the Alberta Court of Queen's Bench, who delivered the following memorandum of decision, dated at Edmonton, Alberta, on February 2, 2015.