Murphy et al. v. Cahill et al., 2013 ABQB 335

JudgeVeit, J.
CourtCourt of Queen's Bench of Alberta (Canada)
Case DateAugust 06, 2013
Citations2013 ABQB 335;(2013), 568 A.R. 80 (QB)

Murphy v. Cahill (2013), 568 A.R. 80 (QB)

MLB headnote and full text

Temp. Cite: [2013] A.R. TBEd. AU.067

Gerald Murphy and Gerald Murphy in his capacity as Trustee of the Gerald Murphy's Children's Parallel Life Interest Settlement Trust (applicant) v. Margaret Cahill, Christopher Cahill, 1248429 Alberta Ltd., 554168 Alberta Ltd., 1247738 Alberta Ltd. and Canadian Consolidated Salvage Ltd. (respondents)

(1203 04666; 2013 ABQB 335)

Indexed As: Murphy et al. v. Cahill et al.

Alberta Court of Queen's Bench

Judicial District of Edmonton

Veit, J.

August 15, 2013.

Summary:

Under the authority of ss. 242 and 244 of the Business Corporations Act (Alta.) and s. 13 of the Judicature Act, and claiming oppression, Murphy brought an originating application in his personal capacity and in his capacity as trustee of the Gerald Murphy's Children's Parallel Life Interest Settlement Trust to appoint a receiver-manager of the CCS Group of companies, to rectify the registers and records of the CCS Group to reflect that Murphy was the sole shareholder of the CCS Group, and to compensate himself for loss caused by the oppressive conduct of the respondents. This special chambers application was for the appointment of an interlocutory receiver-manager in these proceedings.

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

Company Law - Topic 2170.1

Shareholders - Shareholders' rights - Oppressive acts - Remedies - [See all Company Law - Topic 7105 ].

Company Law - Topic 7105

Fundamental changes and shareholders' rights - Appointment of receiver-manager or monitor - Considerations - Under the authority of ss. 242 and 244 of the Business Corporations Act (Alta.) and s. 13 of the Judicature Act, and claiming oppression, Murphy brought an originating application in his personal capacity and in his capacity as trustee of the Gerald Murphy's Children's Parallel Life Interest Settlement Trust to appoint a receiver-manager of the CCS Group of companies, to rectify the registers and records of the CCS Group to reflect that Murphy was the sole shareholder of the CCS Group, and to compensate himself for loss caused by the oppressive conduct of the respondents - This special chambers application was for the appointment of an interlocutory receiver-manager in these proceedings - The Alberta Court of Queen's Bench held that "[a]n interlocutory application for the appointment of a receiver-manager of a corporation pursuant either to the oppression provisions of business corporations legislation, such as Alberta's Business Corporations Act, or the general equitable jurisdiction of a court, such as under Alberta's Judicature Act, brought by a person who is not a security holder who is the beneficiary of an instrument which authorizes the appointment of a receiver on the default of the creditor is an application for an extraordinary remedy which should only be granted cautiously and sparingly. Generally, the applicant for such a remedy must satisfy the tripartite test for obtaining an interlocutory injunction: it must establish that there is a serious issue to be tried, that it will suffer irreparable damage if the relief is not granted, and that the balance of convenience favours the granting of the relief. Exceptionally, the dictates of fairness may be so overwhelming that interim relief is justified even where one or more terms of the tripartite test have not been met." - See paragraphs 7 to 9 and 57 to 79.

Company Law - Topic 7105

Fundamental changes and shareholders' rights - Appointment of receiver-manager or monitor - Considerations - Under the authority of ss. 242 and 244 of the Business Corporations Act (Alta.) and s. 13 of the Judicature Act, and claiming oppression, Murphy brought an originating application in his personal capacity and in his capacity as trustee of the Gerald Murphy's Children's Parallel Life Interest Settlement Trust to appoint a receiver-manager of the CCS Group of companies, to rectify the registers and records of the CCS Group to reflect that Murphy was the sole shareholder of the CCS Group, and to compensate himself for loss caused by the oppressive conduct of the respondents - This special chambers application was for the appointment of an interlocutory receiver-manager in these proceedings - The Alberta Court of Queen's Bench stated that "the remedy requested is equitable relief, in other words that the court has a discretion to grant the relief requested, rather than an obligation to grant the relief upon proof of the underlying requirements, although that discretion must, of course, be exercised judicially" - See paragraph 80.

Company Law - Topic 7105

Fundamental changes and shareholders' rights - Appointment of receiver-manager or monitor - Considerations - Under the authority of ss. 242 and 244 of the Business Corporations Act (Alta.) and s. 13 of the Judicature Act, and claiming oppression, Murphy brought an originating application in his personal capacity and in his capacity as trustee of the Gerald Murphy's Children's Parallel Life Interest Settlement Trust to appoint a receiver-manager of the CCS Group of companies, to rectify the registers and records of the CCS Group to reflect that Murphy was the sole shareholder of the CCS Group, and to compensate himself for loss caused by the oppressive conduct of the respondents - This special chambers application was for the appointment of an interlocutory receiver-manager in these proceedings - The Alberta Court of Queen's Bench held that the first branch of the tripartite test had been met: there were serious issues to be tried - There were two main issues that had to be tried: had Murphy been oppressed by the respondents in the way in which they had conducted the CCS business and had he been oppressed by the respondents in the way in which the share register and corporate documents had been executed - See paragraphs 10 and 81 to 87.

Company Law - Topic 7105

Fundamental changes and shareholders' rights - Appointment of receiver-manager or monitor - Considerations - Under the authority of ss. 242 and 244 of the Business Corporations Act (Alta.) and s. 13 of the Judicature Act, and claiming oppression, Murphy brought an originating application in his personal capacity and in his capacity as trustee of the Gerald Murphy's Children's Parallel Life Interest Settlement Trust to appoint a receiver-manager of the CCS Group of companies, to rectify the registers and records of the CCS Group to reflect that Murphy was the sole shareholder of the CCS Group, and to compensate himself for loss caused by the oppressive conduct of the respondents - This special chambers application was for the appointment of an interlocutory receiver-manager in these proceedings - The Alberta Court of Queen's Bench held that the second branch of the tripartite test had not been met: Murphy had not established that he, or the Trust, would suffer irreparable harm if the relief was not granted - There was no need for immediate corporate action as nothing much would change in the companies' outlook within the next several months - There was no important corporate issue that had to be addressed in the near future - Also, the lowest appraisal of the current market value of the real property owned by the CCS companies established that the current value of those properties significantly exceeded the original investment - If the respondent Cahill had been responsible for financial losses suffered by the companies, her apparent equity interest in the companies appeared to be adequate to compensate the Trust for such losses - See paragraphs 11 and 88 to 93.

Company Law - Topic 7105

Fundamental changes and shareholders' rights - Appointment of receiver-manager or monitor - Considerations - Under the authority of ss. 242 and 244 of the Business Corporations Act (Alta.) and s. 13 of the Judicature Act, and claiming oppression, Murphy brought an originating application in his personal capacity and in his capacity as trustee of the Gerald Murphy's Children's Parallel Life Interest Settlement Trust to appoint a receiver-manager of the CCS Group of companies, to rectify the registers and records of the CCS Group to reflect that Murphy was the sole shareholder of the CCS Group, and to compensate himself for loss caused by the oppressive conduct of the respondents - This special chambers application was for the appointment of an interlocutory receiver-manager in these proceedings - The Alberta Court of Queen's Bench held that the third branch of the tripartite test had not been met: the balance of convenience did not favour the appointment of an interim receiver-manager - The evidence was that Murphy had considerable financial resources whereas the financial resources of the respondent Cahills were tied to their employment at, and apparent equity position in, the companies - The granting of interim relief which dealt with Murphy's concerns but not those of the Cahills and which virtually cut off the financial ability of the Cahills to advance their apparently legitimate interests would create an inappropriate balance in favour of Murphy - See paragraphs 12, 94 and 95.

Company Law - Topic 7105

Fundamental changes and shareholders' rights - Appointment of receiver-manager or monitor - Considerations - Under the authority of ss. 242 and 244 of the Business Corporations Act (Alta.) and s. 13 of the Judicature Act, and claiming oppression, Murphy brought an originating application in his personal capacity and in his capacity as trustee of the Gerald Murphy's Children's Parallel Life Interest Settlement Trust to appoint a receiver-manager of the CCS Group of companies, to rectify the registers and records of the CCS Group to reflect that Murphy was the sole shareholder of the CCS Group, and to compensate himself for loss caused by the oppressive conduct of the respondents - This special chambers application was for the appointment of an interlocutory receiver-manager in these proceedings - The Alberta Court of Queen's Bench held that Murphy had not met the tripartite test for the appointment of an interim receiver-manager - Further, the dictates of fairness were not so overwhelming that they compensated for Murphy's inability to satisfy the last two branches of the tripartite test - The reasonable expectations of the parties would not be served by the appointment of an interim receiver-manager - The only deadlock which had arisen had been created by Murphy - Finally, the fact that all parties agreed that they could be ready for trial in very short order was a strong factor militating against the granting of interlocutory relief where there was no immediate danger to Murphy's interests and where the facts were so hotly contested that only a trial could safely resolve the contested issues - See paragraphs 13, 14 and 96 to 102.

Contempt - Topic 683

What constitutes contempt - Judgments and orders - Requirement of clear and unambiguous order - Under the authority of ss. 242 and 244 of the Business Corporations Act (Alta.) and s. 13 of the Judicature Act, and claiming oppression, Murphy brought an originating application in his personal capacity and in his capacity as trustee of the Gerald Murphy's Children's Parallel Life Interest Settlement Trust to appoint a receiver-manager of the CCS Group of companies, to rectify the registers and records of the CCS Group to reflect that Murphy was the sole shareholder of the CCS Group, and to compensate himself for loss caused by the oppressive conduct of the respondents - This special chambers application was for the appointment of an interlocutory receiver-manager in these proceedings - In August 2012, an Inspector had been appointed, whose task was "reviewing and assessing the CCS companies' current and historical financial position and historical operating results; reviewing and assessing the group's accounting and control procedures with respect to accounts receivable, accounts payable, inventory, and in general; and, attempting to address the questions and issues arising from the Deloitte report" - One of the terms appointing the Inspector provided that the Inspector's reports would be sealed - At issue was whether the respondents Cahill and her lawyer should be held in contempt, and sanctioned, for having disclosed to Chris Cahill Jr. the contents of the Inspector's Third Report which dealt principally with allegations against Chris Cahill Jr. - The Alberta Court of Queen's Bench held that no finding of contempt should be made - The hearsay information which constituted the content of the Inspector's Third Report centered on Chris Cahill Jr. - Further, the sealing order was not sufficiently clear and unequivocal so as to provide a basis for a contempt finding - See paragraphs 6 and 52 to 56.

Evidence - Topic 1527

Hearsay rule - Hearsay rule exceptions and exclusions - General - Where admission of hearsay necessary and evidence reliable - Under the authority of ss. 242 and 244 of the Business Corporations Act (Alta.) and s. 13 of the Judicature Act, and claiming oppression, Murphy brought an originating application in his personal capacity and in his capacity as trustee of the Gerald Murphy's Children's Parallel Life Interest Settlement Trust to appoint a receiver-manager of the CCS Group of companies, to rectify the registers and records of the CCS Group to reflect that Murphy was the sole shareholder of the CCS Group, and to compensate himself for loss caused by the oppressive conduct of the respondents - This special chambers application was for the appointment of an interlocutory receiver-manager in these proceedings - In August 2012, an Inspector had been appointed, whose task was "reviewing and assessing the CCS companies' current and historical financial position and historical operating results; reviewing and assessing the group's accounting and control procedures with respect to accounts receivable, accounts payable, inventory, and in general; and, attempting to address the questions and issues arising from the Deloitte report" - One of the terms appointing the Inspector provided that the Inspector's reports would be sealed - At issue was whether the Inspector's reports could be considered in assessing the interlocutory application - The Alberta Court of Queen's Bench held that it was entitled, in assessing the application, to consider the hearsay information contained in the Inspector's Third Report - However, in the circumstances, the court did not attach any weight to that hearsay evidence - See paragraphs 5 and 38 to 51.

Evidence - Topic 1704

Hearsay rule - Exceptions and exclusions - Official statements - Reports - Constituting sufficient or prima facie proof - [See Evidence - Topic 1527 ].

Practice - Topic 3087

Applications and motions - Applications - Evidence on applications - [See Evidence - Topic 1527 ].

Cases Noticed:

Murphy v. Cahill et al., [2012] A.R. Uned. 253; 2012 ABQB 220, refd to. [para. 15].

R. v. Canadian Consolidated Salvage Ltd., [2012] A.R. Uned. 365; 2012 ABPC 133, refd to. [para. 15].

Murphy v. Cahill et al., [2012] A.R. Uned. 299; 2012 ABQB 446, refd to. [para. 15].

Murphy v. Cahill et al., [2012] A.R. Uned. 631; 2012 ABQB 530, refd to. [para. 15].

Murphy v. Cahill et al., [2012] A.R. Uned. 630; 2012 ABQB 531, refd to. [para. 15].

Murphy v. Cahill et al., [2012] A.R. Uned. 843; 2012 ABQB 793, refd to. [para. 15].

Murphy v. Cahill et al., [2012] A.R. Uned. 668; 2012 ABQB 754, refd to. [para. 15].

HSBC Capital Canada Inc. v. First Mortgage Alberta Fund (V) Inc. et al. (1999), 247 A.R. 37; 1999 ABQB 406, refd to. [para. 15].

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. 15].

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

Seidel v. Kerr et al. (2003), 330 A.R. 284; 299 W.A.C. 284; 2003 ABCA 267, refd to. [para. 15].

Paragon Capital Corp. v. Merchants & Traders Assurance Co. et al. (2002), 316 A.R. 128; 2002 ABQB 430, refd to. [para. 15].

Kumra v. Luthra et al., [2010] A.R. Uned. 965; 2010 ABQB 772, refd to. [para. 15].

Citibank Canada v. Calgary Auto Centre (1989), 98 A.R. 250 (Q.B.), refd to. [para. 15].

MTM Commercial Trust et al. v. Statesman Riverside Quays Ltd. et al., [2010] A.R. Uned. 715; 2010 ABQB 647, refd to. [para. 15].

Chow et al. v. Bresea Resources Ltd. (1997), 209 A.R. 284; 160 W.A.C. 284 (C.A.), refd to. [para. 15].

Garratt v. Charlton et al., [2012] O.T.C. Uned. 1129; 2012 ONSC 1129, refd to. [para. 15].

Fernando v. 2023928 Ontario Inc., 2007 CarswellOnt 2619, refd to. [para. 15].

781952 Alberta Ltd. et al. v. 781944 Alberta Ltd. et al. (2003), 347 A.R. 210; 2003 ABQB 980, refd to. [para. 15].

Deluce Holdings Inc. v. Air Canada (1992), 98 D.L.R.(4th) 509; 1992 CarswellOnt 154 (Gen. Div.), refd to. [para. 15].

Simonelli et al. v. Ayron Developments Inc. et al. (2010), 506 A.R. 50; 2010 ABQB 565, refd to. [para. 15].

Connelly v. Connelly-McKinley Ltd. et al., [2010] A.R. Uned. 587; 2010 ABQB 515, refd to. [para. 15].

Seymour Resources Ltd. v. Hofer et al., [2004] A.R. Uned. 418; 49 B.L.R.(3d) 104; 2004 ABQB 303, dist. [para. 84], refd to. [para. 15].

719946 Alberta Ltd. v. Alberta's B.E.S.T. Inc. et al., [2005] A.R. Uned. 836; 2005 ABQB 771, dist. [para. 76], refd to. [para. 15].

Such v. RW-LB Holdings Ltd. (1993), 147 A.R. 241; 15 Alta. L.R.(3d) 153 (Q.B.), refd to. [para. 15].

Stech v. Davies (1987), 80 A.R. 298 (Q.B.), refd to. [para. 15].

Alpha Investments & Agencies Ltd. v. Maritime Life Assurance Co. (1978), 23 N.B.R.(2d) 261; 44 A.P.R. 261 (C.A.), refd to. [para. 15].

JP Capital Corp. (Bankrupt), Re (1996), 4 O.T.C. 152; 38 C.B.R.(3d) 301 (Gen. Div. Bktcy.), refd to. [para. 15].

J.P. Capital Corp. (Trustee of) v. Perez - see J.P. Capital Corp.(Bankrupt), Re.

Farallon Investments Ltd. v. Bruce Pallett Fruit Farms Ltd. (1992), 31 A.C.W.S.(3d) 1283 (Ont. Gen. Div.), refd to. [para. 15].

Weaver v. Cahill (2011), 513 A.R. 380; 530 W.A.C. 380; 2011 ABCA 290, refd to. [para. 15].

R. v. Cahill (C.E.) (2006), 384 A.R. 301; 367 W.A.C. 301; 2006 ABCA 119, refd to. [para. 15].

Paragon Capital Corp. v. Merchants & Traders Assurance Co. et al. (2002), 316 A.R. 128; 2002 ABQB 430, refd to. [para. 16].

MTM Commercial Trust et al. v. Statesman Riverside Quays Ltd. et al., [2010] A.R. Uned. 715; 2010 ABQB 647, refd to. [para. 16].

Murphy Oil Co. et al. v. Predator Corp. et al. (2002), 316 A.R. 1; 7 Alta. L.R.(4th) 369; 2002 ABQB 403, refd to. [para. 16].

Spartan Drilling Ltd. v. Snowhawk Energy Inc. (No. 2) (1986), 74 A.R. 378; 46 Alta. L.R.(2d) 67 (Q.B.), refd to. [para. 16].

Kumra v. Luthra et al., [2010] A.R. Uned. 965; 2010 ABQB 772, refd to. [para. 16].

Citibank Canada v. Calgary Auto Centre (1989), 98 A.R. 250 (Q.B.), refd to. [para. 16].

Alberta Health Services v. Network Health Inc., [2010] A.R. Uned. 437 (Q.B.), refd to. [para. 16].

BG International Ltd. v. Canadian Superior Energy Inc. (2009), 457 A.R. 38; 457 W.A.C. 38; 2009 CarswellAlta 469; 2009 ABCA 127, refd to. [para. 16].

MTM Commercial Trust et al. v. Statesman Riverside Quays Ltd. et al., [2010] A.R. Uned. 715 (Q.B.), refd to. [para. 16].

RJR-MacDonald Inc. et Imperial Tobacco Ltd. v. Canada (Procureur général), [1994] 1 S.C.R. 311; 164 N.R. 1; 60 Q.A.C. 241; 111 D.L.R.(4th) 385, refd to. [para. 16].

Goebel et al. v. Edmonton (City) et al. (2004), 346 A.R. 275; 320 W.A.C. 275 (C.A.), refd to. [para. 16].

Monco Holdings Ltd. et al. v. B.A.T. Development Ltd. et al., [2005] A.R. Uned. 761 (Q.B.), refd to. [para. 16].

Lindsay Estate v. Strategic Metals Corp. et al., [2008] A.R. Uned. 623 (Q.B.), refd to. [para. 16].

Principal Group Ltd. (Bankrupt) v. Principal Savings and Trust Co. (1993), 142 A.R. 207; 11 Alta. L.R.(3d) 222 (Q.B.), refd to. [para. 16].

Envirodrive Inc. v. 836442 Alberta Ltd. et al., 2005 ABQB 446, refd to. [para. 18].

Consolidated Enfield Corp. v. Blair, 1995 CarswellOnt 1067 (Div. Ct.), refd to. [para. 18].

Catalyst Fund General Partner 1 Inc. v. Hollinger Inc., 2005 CarswellOnt 2193 (S.C.J.), refd to. [para. 18].

Leggat et al. v. Jennings et al., [2013] O.T.C. Uned. 903; 2013 ONSC 903, refd to. [para. 19].

Nicolas v. Perrier, 2012 QCCA 99, refd to. [para. 19].

176283 Canada Inc. v. St-Germain, 2011 QCCA 608, refd to. [para. 19].

Cassels Brock & Blackwell LLP v. 1578838 Ontario Inc., [2013] O.T.C. Uned. 4194; 2013 ONSC 4194, refd to. [para. 19].

Authors and Works Noticed:

Bennett, Frank, Bennett on Receiverships (2nd Ed. 1999), generally [para. 71]; pp. 130 to 132; 138 to 140 [para. 16].

Bennett, Frank, Bennett on Receiverships (3rd Ed. 2011), generally [paras. 19, 71]; pp. 156 [para. 71]; 159 [paras. 73, 74]; 823 [para. 74].

Counsel:

Sandeep K. Dhir and Lindsey E. Miller (Field LLP), for the applicants, Gerald Murphy and

Gerald Murphy's Children's Parallel Life Interest Settlement Trust;

Rostyk Sadownik (Wheatley Sadownik), for the respondent, Margaret Cahill;

Terrence Warner and Lesley M. Akst (Miller Thomson LLP), for the respondent, Christopher Cahill, Sr.;

M.T. Coombs and D.R. Peskett (Brownlee LLP), for the Inspector, BDO Canada Ltd.

This application was heard June 4-6, July 22 and August 6, 2013, by Veit, J., of the Alberta Court of Queen's Bench, Judicial District of Edmonton, who delivered the following memorandum of decision on August 15, 2013.

To continue reading

Request your trial
2 practice notes
  • Alberta (Treasury Branches) v. COGI Limited Partnership et al., 2016 ABQB 43
    • Canada
    • Court of Queen's Bench of Alberta (Canada)
    • January 20, 2016
    ...is compared to injunctive relief and the tripartite test that is used in those cases is recommended to be used here (see Murphy v Cahill 2013 ABQB 335 at para 7). Analysis . Serious issue to be tried [18] Is there a serious issue to be tried? Or more specifically, is there evidence that the......
  • Schendel Management Ltd, 2019 ABQB 545
    • Canada
    • Court of Queen's Bench of Alberta (Canada)
    • July 19, 2019
    ...[9] 1998 NSCA 42 [10] 2002 ABCA 239 [11] 2010 ONSC 2987 at paras 33 and 36 [12] 2013 BCSC 1833 [13] 2002 ABQB 430 at paras 26-32 [14] 2013 ABQB 335 at para-list: l10 level1 lfo4;background:white;text-autospace:none">[45] In Murphy v Cahill[14], Veit J updated that factor list, noting that: ......
2 cases
  • Alberta (Treasury Branches) v. COGI Limited Partnership et al., 2016 ABQB 43
    • Canada
    • Court of Queen's Bench of Alberta (Canada)
    • January 20, 2016
    ...is compared to injunctive relief and the tripartite test that is used in those cases is recommended to be used here (see Murphy v Cahill 2013 ABQB 335 at para 7). Analysis . Serious issue to be tried [18] Is there a serious issue to be tried? Or more specifically, is there evidence that the......
  • Schendel Management Ltd, 2019 ABQB 545
    • Canada
    • Court of Queen's Bench of Alberta (Canada)
    • July 19, 2019
    ...[9] 1998 NSCA 42 [10] 2002 ABCA 239 [11] 2010 ONSC 2987 at paras 33 and 36 [12] 2013 BCSC 1833 [13] 2002 ABQB 430 at paras 26-32 [14] 2013 ABQB 335 at para-list: l10 level1 lfo4;background:white;text-autospace:none">[45] In Murphy v Cahill[14], Veit J updated that factor list, noting that: ......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT