Logan v. Riley et al., (2008) 438 A.R. 95 (QB)

• Judge: Mason, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: October 15, 2007
• Citations: (2008), 438 A.R. 95 (QB);2008 ABQB 72

Logan v. Riley (2008), 438 A.R. 95 (QB)

MLB headnote and full text

Temp. Cite: [2008] A.R. TBEd. FE.138

Timothy Logan (plaintiff/respondent) v. H.W. Bill Riley, Bryan Remillard, Kimball Capital Corporation; Prairie Boys Capital Corporation, ABC Co. and ABC Limited Partnership (defendants/applicants)

(0601 12206; 2008 ABQB 72)

Indexed As: Logan v. Riley et al.

Alberta Court of Queen's Bench

Judicial District of Calgary

Mason, J.

January 29, 2008.

Summary:

Along with the defendants Riley and Remillard, Logan was a shareholder, director and officer of SEC Management Ltd. (SEC), which engaged in investment activities through a limited partnership, SEC LP No. 1. Riley, Remillard and Logan entered into discussions with Moeller as a prospective investor. They discussed forming a new limited partnership, SEC LP No. 2, which included Logan. Subsequently, Riley, Remillard, Moeller and another decided to enter into a joint venture. Logan was invited to participate on a reduced basis. He rejected the offer and brought an action against Riley, Remillard and the corporate defendants, alleging, inter alia, oppression. Riley and Remillard sought an order requiring Logan to post security for costs on the basis that Logan was a non-resident of Alberta and had no assets in Alberta.

The Alberta Court of Queen's Bench dismissed the application.

Company Law - Topic 9736

Actions against corporations and directors - Practice - Costs - Security for - Along with the defendants Riley and Remillard, Logan was a shareholder, director and officer of SEC Management Ltd. (SEC), which engaged in investment activities through a limited partnership, SEC LP No. 1 - Riley, Remillard and Logan entered into discussions with Moeller as a prospective investor - They discussed forming a new limited partnership, SEC LP No. 2, which included Logan - Subsequently, Riley, Remillard, Moeller and another decided to enter into a joint venture - Logan was invited to participate on a reduced basis - He rejected the offer and brought an action against Riley, Remillard and the corporate defendants, alleging, inter alia, oppression - Riley and Remillard sought an order requiring Logan to post security for costs on the basis that Logan was a non-resident of Alberta and had no assets in Alberta - The Alberta Court of Queen's Bench dismissed the application - Under s. 243(3) of the Alberta Business Corporations Act, a complainant in an oppression action was shielded from responsibility for security for costs - To fall within s. 243(3), Logan had to be, inter alia, a registered holder or beneficial owner of a security of a corporation or a director or officer - Logan was an officer, director and shareholder of SEC - Following the initial negotiations with Moeller, he had a reasonable expectation that would qualify him as a security holder in the new company, SEC LP No. 2 - The complete reorganization of the arrangements between the defendants without notice and the last minute rejection of Logan from the new joint venture arrangement supported his claim of beneficial ownership of shares in the new arrangement - Logan was a security holder entitled to bring an oppression action - Although several causes of action were pled, the action's core was an oppression action - Section 243(3) was a complete answer to the application for security for costs - See paragraphs 24 to 38.

Practice - Topic 8113

Costs - Security for costs - General principles - Where plaintiff resident out of jurisdiction - General - [See Company Law - Topic 9736 ].

Practice - Topic 8179

Costs - Security for costs - Order for payment - Bars - [See Company Law - Topic 9736 ].

Cases Noticed:

Tkaczuk v. Frocan Industrial Contractors Ltd. (1993), 146 A.R. 234; 15 Alta. L.R.(3d) 4 (Q.B.), refd to. [para. 26].

32262 B.C. Ltd. v. Besler et al. (1998), 224 A.R. 262 (Q.B.), refd to. [para. 26].

Crothers v. Simpson Sears Ltd. - see Singh v. Dura.

Singh v. Dura (1988), 86 A.R. 268 (C.A.), refd to. [para. 26].

Steffanson v. Richardson Greenshields of Canada Ltd. (1992), 135 A.R. 55 (C.A.), refd to. [para. 28].

Trosin et al. v. Sikora et al. (2005), 376 A.R. 173; 360 W.A.C. 173; 2005 ABCA 410, refd to. [para. 29].

Sodhi et al. v. Genesis Land Development Corp. et al. (2004), 364 A.R. 137; 2004 ABQB 628, refd to. [para. 31].

Agbi et al. v. Durward et al. (1998), 235 A.R. 112; 1998 CarswellAlta 1136 (Q.B.), folld. [para. 31].

Abdalla v. Skalin et al., [2004] O.T.C. 618; 2004 CarswellOnt 2890 (Sup. Ct.), refd to. [para. 33].

Knoll v. Draxis Health Inc. et al. (2000), 132 O.A.C. 182 (Div. Ct.), dist. [para. 36].

Authors and Works Noticed:

Welling, Bruce L., Corporate Law in Canada: The Governing Principles (2nd Ed. 1991), generally [para. 34].

Counsel:

Johanna Price (Peacock, Linder & Halt LLP), for the plaintiff;

Randal S. Van de Mosselaer and Ellen K. Embury (Macleod Dixon LLP), for the defendants;

Tristram J. Mallett (Osler, Hoskin & Harcourt LLP), for the third party.

This application was heard on October 15, 2007, by Mason, J., of the Alberta Court of Queen's Bench, Judicial District of Calgary, who delivered the following reasons for judgment on January 29, 2008.