Hebert v. Hebert's Recycling Inc. et al., (2014) 425 N.B.R.(2d) 174 (TD)

• Judge: Walsh, J.
• Court: Court of Queen's Bench of New Brunswick (Canada)
• Case Date: July 21, 2014
• Jurisdiction: New Brunswick
• Citations: (2014), 425 N.B.R.(2d) 174 (TD);2014 NBQB 235

Hebert v. Hebert's Recycling Inc. (2014), 425 N.B.R.(2d) 174 (TD);

    425 R.N.-B.(2e) 174; 1107 A.P.R. 174

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[French language version follows English language version]

[La version française vient à la suite de la version anglaise]

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Temp. Cite: [2014] N.B.R.(2d) TBEd. OC.015

Renvoi temp.: [2014] N.B.R.(2d) TBEd. OC.015

In The Matter Of an application made pursuant to sections 166 and 155 of the Business Corporations Act, S.N.B. 1981, c. B-9.1

Robert Hebert (applicant) v. Hebert's Recycling Inc., Kevin Sargent and Carole Ann Sargent (respondents)

(NM/23/2014; 2014 NBQB 235; 2014 NBBR 235)

Indexed As: Hebert v. Hebert's Recycling Inc. et al.

Répertorié: Hebert v. Hebert's Recycling Inc. et al.

New Brunswick Court of Queen's Bench

Trial Division

Judicial District of Miramichi

Walsh, J.

July 25, 2014.

Summary:

Résumé:

An application was brought under the Business Corporations Act by Hebert, a minority shareholder and director of Hebert's Recycling Inc. The respondents were the company, the majority shareholder, and the majority shareholder's wife. Hebert claimed that the respondents' conduct had been oppressive or unfairly prejudicial to or had unfairly disregarded his interests in the company. Relying on s. 166 of the Act, Hebert sought rectification by various forms. In the Notice of Application a concurrent application was made for an "investigation" pursuant to s. 155 of the Act. The respondents moved for an order directing that the application be converted to the trial of an action pursuant to s. 166(3)(n) of the Act and rule 38.09 of the Rules of Court.

The New Brunswick Court of Queen's Bench, Trial Division, ordered that the issues raised in the Notice of Application under the s. 166 claim be tried as an action. The court held that the claim under s. 155 was premature, without prejudice to renewal if circumstances materially changed, subject to the appropriate notices being given.

Company Law - Topic 2169

Shareholders - Shareholders' rights - Inspection or investigation - [See Practice - Topic 2493 ].

Company Law - Topic 2203

Shareholders - Shareholders' rights - Investigation of company - Application for - [See Practice - Topic 2493 ].

Company Law - Topic 9785

Actions against corporations and directors - Action for oppressive conduct - Oppression, prejudice or disregard of interests - [See Practice - Topic 2493 ].

Evidence - Topic 16

General and definitions - Ban on publication - An application was brought under the Business Corporations Act by Hebert, a minority shareholder and director of Hebert's Recycling Inc. - The respondents were the company, the majority shareholder, and the majority shareholder's wife - Hebert claimed that the respondents' conduct had been oppressive or unfairly prejudicial to or had unfairly disregarded his interests in the company - Relying on s. 166 of the Act, Hebert sought rectification by various forms - The New Brunswick Court of Queen's Bench, Trial Division, addressed the issue of a publication ban - The court stated, inter alia, "Here the submission of counsel for the respondents was broadly stated; to the effect that the commercial interest relates to concerns about the possible impact of public knowledge of these proceedings, including the Section 166 application, on existing contract negotiations between the respondent company and an important customer. Without more, that identified concern does not prima facie meet the initial threshold established by the Supreme Court. Moreover, no notice was provided to the other party (who are not consenting) and there have been no supporting materials filed laying an evidentiary base for such an order" - See paragraphs 24 to 29.

Practice - Topic 2493

Writ of summons, endorsements, originating summons and originating notices - Originating notices - Conversion to or from formal action - An application was brought under the Business Corporations Act by Hebert, a minority shareholder and director of Hebert's Recycling Inc. - The respondents were the company, the majority shareholder, and the majority shareholder's wife - Hebert claimed that the respondents' conduct had been oppressive or unfairly prejudicial to or had unfairly disregarded his interests in the company - Relying on s. 166 of the Act, Hebert sought rectification by various forms - In the Notice of Application a concurrent application was made for an "investigation" pursuant to s. 155 of the Act - The respondents moved for an order directing that the application be converted to the trial of an action pursuant to s. 166(3)(n) of the Act and rule 38.09 of the Rules of Court - The New Brunswick Court of Queen's Bench, Trial Division, ordered that the issues raised in the Notice of Application under the s. 166 claim be tried as an action - The affidavit evidence was in serious conflict on most critical points - There was a substantial dispute of fact underlying the legal claims - Of relevance as well was the importance of the matter, particularly the significant monetary nature of the claim - The court also considered the nuanced nature of the legal inquiry required - The court held that the claim under s. 155 was premature, without prejudice to renewal if circumstances materially changed, subject to the appropriate notices being given - See paragraphs 1 to 12 and 17 to 21.

Droit des compagnies - Cote 2169

Actionnaires - Droit des actionnaires - Examen - [Voir Company Law - Topic 2169 ].

Droit des compagnies - Cote 2203

Droits des actionnaires - Inspection de la compagnie - Demande - [Voir Company Law - Topic 2203 ].

Droit des compagnies - Cote 9785

Actions contre les corporations et les administrateurs - Demande en cas d'abus - Oppression, préjudice ou mépris des intérêts - [Voir Company Law - Topic 9785 ].

Preuve - Cote 16

Généralités et définitions - Ordonnance de non-publication - [Voir Evidence - Topic 16 ].

Procédure - Cote 2493

Bref d'assignation, mentions, assignations et avis introductifs d'instance - Avis introductifs d'instance (y compris révision judiciaire) - Transformation en action ordinaire ou d'une action ordinaire - [Voir Practice - Topic 2493 ].

Cases Noticed:

Aegon Capital Management Inc. et al. v. BCE Inc. et al., [2008] 3 S.C.R. 560; 383 N.R. 119; 2008 SCC 69, refd to. [para. 5].

BCE Inc. v. 1976 Debentureholders - see/voir Aegon Capital Management Inc. et al.

Doucet et al. v. Spielo Manufacturing Inc. et al. (2011), 372 N.B.R.(2d) 1; 961 A.P.R. 1; 2011 NBCA 44, refd to. [para. 5].

Lizotte v. Arseneault et al. (2012), 395 N.B.R.(2d) 298; 1023 A.P.R. 298; 2012 NBCA 89, refd to. [para. 5].

Ford Motor Co. of Canada Ltd. v. Municipal Employees Retirement Board (Ont.) et al. (2006), 208 O.A.C. 125; 79 O.R.(3d) 81 (C.A.), refd to. [para. 9].

Westfair Foods Ltd. v. Watt et al. (1991), 115 A.R. 34; 79 D.L.R.(4th) 48 (C.A.), refd to. [para. 9].

Leclerc v. Savard (2000), 234 N.B.R.(2d) 176; 604 A.P.R. 176 (Q.B.), refd to. [para. 10].

LeBlanc v. Corporation Eighty-Six Ltd. (1997), 192 N.B.R.(2d) 321; 489 A.P.R. 321 (C.A.), refd to. [para. 10].

Fleck v. Baxter (1989), 94 N.B.R.(2d) 329; 239 A.P.R. 329 (C.A.), refd to. [para. 12].

Trackom Systems International Inc. v. Trackhom Systems Inc., 2014 QCCA 1136, refd to. [para. 19].

Moore et al. v. Assaly et al., [2013] O.T.C. Uned. 817; 2013 ONSC 817, refd to. [para. 20].

Woodford v. Johnston et al., [2001] N.B.R.(2d) (Supp.) No. 53; 2001 NBQB 50, refd to. [para. 20].

Prendiville v. 407 International Inc. et al., [2002] O.T.C. 441 (Sup. Ct.), refd to. [para. 25].

Sierra Club of Canada v. Canada (Minister of Finance) et al., [2002] 2 S.C.R. 522; 287 N.R. 203, refd to. [para. 26].

Foster-Jacques v. Jacques (2012), 320 N.S.R.(2d) 166; 1014 A.P.R. 166; 2012 NSCA 83, refd to. [para. 27].

Simms v. Simms (2012), 400 N.B.R.(2d) 30; 1038 A.P.R. 30; 2012 NBQB 394, refd to. [para. 29].

Statutes Noticed:

Business Corporations Act, S.N.B. 1981, c. B-9.1, sect. 166 [para. 4]; sect. 155 [para. 17].

Counsel:

Avocats:

Steven R. Barnett and Matthew R.S. Pearn, for the applicant;

Daniel R. Jardine, for the respondents.

This matter was heard on July 21, 2014, before Walsh, J., of the New Brunswick Court of Queen's Bench, Trial Division, Judicial District of Miramichi, who delivered the following rulings on July 25, 2014.