Turner et al. v. Turner et al., 2008 ABQB 590

• Judge: Veit, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: October 27, 2008
• Citations: 2008 ABQB 590;(2008), 458 A.R. 215 (QB)

Turner v. Turner (2008), 458 A.R. 215 (QB)

MLB headnote and full text

Temp. Cite: [2008] A.R. TBEd. NO.019

Stacey William Turner and Stacey William Turner Family Trust (applicants) v. Doyle Thomas Turner, Doyle Turner Family Trust, Stewart John Cameron, Stewart Cameron Family Trust and 724849 Alberta Ltd. (respondents)

(0803 04515; 0703 05371; 2008 ABQB 590)

Indexed As: Turner et al. v. Turner et al.

Alberta Court of Queen's Bench

Judicial District of Edmonton

Veit, J.

October 27, 2008.

Summary:

Stacey Turner was the legal owner of 50% of the shares of a numbered company which owned the Secondary Industrial Park in Fort McMurray. Relying on s. 215(1)(b) of the Alberta Business Corporations Act, Stacey asked the court to appoint a liquidator for the company because the shareholders were in deadlock. The respondents, Doyle Turner and Stewart Cameron, the legal owners of 25% each of the shares of the company, agreed that the corporation was in deadlock, but they opposed Stacey's application. The respondents argued that Stacey was not a beneficial owner of any shares of the corporation and therefore could not bring the application. They claimed that, by oral agreement reached in 1996 or 1997, the three individuals agreed that Stacey would nominally receive certain shares of the corporation but that he would hold them in trust for Doyle and Stewart. The respondents also argued that, even if Stacey was a shareholder, he was disqualified from invoking the court's equitable jurisdiction because he had not done equity to the respondents. The respondents proposed, instead of the liquidation of the company, the appointment of a corporate "attorney" for the company with the power to sell the land, and the obligation to hold the sale proceeds in trust pending a trial of the issue of entitlements of the shareholders. They proposed that the company lawyer, who had also acted for and against each of the shareholders personally, be appointed as the company's agent, or "attorney", for the purposes of finalizing the sale of the land.

The Alberta Court of Queen's Bench allowed the application for the appointment of a liquidator. The respondents' allegation that Stacey had no beneficial ownership in the shares could be tried after the immediate interests of all shareholders had been met by the appointment of a liquidator and before the liquidator distributed the net corporate assets to its shareholders. The application for the appointment of the company lawyer as attorney for the company was denied.

Barristers and Solicitors - Topic 1619

Relationship with client - Conflict of interest or duties - Situations resulting in a conflict - [See Company Law - Topic 8326 ].

Company Law - Topic 8326

Winding-up legislation - Jurisdiction - General - Stacey Turner was the legal owner of 50% of the shares of a numbered company which owned the Secondary Industrial Park in Fort McMurray - Relying on s. 215(1)(b) of the Alberta Business Corporations Act, Stacey asked the court to appoint a liquidator for the company because the shareholders were in deadlock - The respondents, Doyle Turner and Stewart Cameron, the legal owners of 25% each of the shares of the company, agreed that the corporation was in deadlock - However, they proposed, instead of the liquidation of the company, the appointment of a corporate "attorney" for the company with the power to sell the land, and the obligation to hold the sale proceeds in trust pending a trial of the issue of entitlements of the shareholders - They proposed that the company lawyer, who had also acted for and against each of the shareholders personally, be appointed as the company's agent, or "attorney", for the purposes of finalizing the sale of the land - The Alberta Court of Queen's Bench denied the application for the appointment of the company lawyer as attorney for the company - Within the panoply of powers outlined in ss. 215 and 242 of the Business Corporations Act, there was no functional gap or vacuum of powers required to deal with this situation of corporate deadlock - Even if there were such a functional gap in the remedies provisions of the Act as would allow the court to exercise its inherent jurisdiction or discretion to appoint an "attorney" for the company, it would not appoint the corporate lawyer as the "attorney" because of the perception of conflict in that individual's position relative to the parties to the litigation - See paragraphs 38 to 46.

Company Law - Topic 8356

Winding-up legislation - Application or petition - Persons entitled to apply - [See second Company Law - Topic 8808 ].

Company Law - Topic 8360

Winding-up legislation - Application or petition - Bars - General - Stacey Turner was the legal owner of 50% of the shares of a numbered company which owned the Secondary Industrial Park in Fort McMurray - Relying on s. 215(1)(b) of the Alberta Business Corporations Act, Stacey asked the court to appoint a liquidator for the company because the shareholders were in deadlock - The respondents, Doyle Turner and Stewart Cameron, the legal owners of 25% each of the shares of the company, asserted that Stacey had disqualified himself from invoking the court's equitable jurisdiction because he had not done equity to the respondents where he had misused corporate funds, made nasty comments about the respondents, allowed strangers to use corporate land without paying for the privilege and failed to provide an accounting to his fellow shareholders of the company's operations - The Alberta Court of Queen's Bench held that even if Stacey did all of the things that were alleged against him, those wrongs would constitute only a low level of wrongful dealing which would not disqualify him from calling on the court's equitable jurisdiction - The seriousness of any wrongdoing committed by Stacey had to be assessed in light of all the circumstances - See paragraphs 28 to 35.

Company Law - Topic 8808

Winding-up legislation - Liquidator - Appointment of - The Alberta Court of Queen`s Bench allowed an application for the appointment of a liquidator for a numbered company where the shareholders were in deadlock - The court held that the best form of order for the appointment of the liquidator was the template approved by the court's commercial practice committee - See paragraphs 47 to 48.

Company Law - Topic 8808

Winding-up legislation - Liquidator - Appointment of - Stacey Turner was the legal owner of 50% of the shares of a numbered company which owned the Secondary Industrial Park in Fort McMurray - Relying on s. 215(1)(b) of the Alberta Business Corporations Act, Stacey asked the court to appoint a liquidator for the company because the shareholders were in deadlock - The respondents, Doyle Turner and Stewart Cameron, the legal owners of 25% each of the shares of the company, asserted that Stacey was not a beneficial owner of any shares of the corporation and therefore could not bring the application - They claimed that, by oral agreement reached in 1996 or 1997, the three individuals agreed that Stacey would nominally receive certain shares of the corporation but that he would hold them in trust for Doyle and Stewart - The Alberta Court of Queen's Bench held that Stacey had status to bring the application - In the circumstances here, where the respondents had recently executed corporate documents which maintained Stacey's apparent 50% shareholding in the company, Stacey had the limited capacity to invoke the court's equitable jurisdiction - The respondents' allegation that Stacey had no beneficial ownership in the shares could be tried after the immediate interests of all shareholders had been met by the appointment of a liquidator and before the liquidator distributed the net corporate assets to its shareholders - See paragraphs 15 to 26.

Courts - Topic 2004

Jurisdiction - General principles - Inherent jurisdiction (incl. parens patriae jurisdiction) - [See Company Law - Topic 8326 ].

Equity - Topic 1482

Equitable principles respecting relief - Clean hands doctrine - Application of - [See Company Law - Topic 8360 ].

Cases Noticed:

Pe Ben Pipelines Ltd., Re (1978), 14 A.R. 480; 7 Alta. L.R.(2d) 174 (T.D.), refd to. [para. 9].

Scozzafava v. Prosperi, 2003 ABQB 248, refd to. [para. 9].

Gainers Inc. v. Pocklington Holdings Inc. (2000), 255 A.R. 373; 220 W.A.C. 373; 2000 ABCA 151, refd to. [para. 9].

Korogonas v. Andrew et al. (No. 1) (1992), 128 A.R. 381; 1 Alta. L.R.(3d) 316 (Q.B.), refd to. [para. 9].

Alles v. Maurice, 1992 CarswellOnt 133 (Gen. Div.), refd to. [para. 9].

McAteer et al. v. Devoncroft Developments Ltd. et al. (2001), 307 A.R. 1; 2001 ABQB 917, refd to. [para. 9].

McRoberts v. Whissell, [2006] A.R. Uned. 719; 2006 ABCA 388, refd to. [para. 10].

Guaranty Properties Ltd. et al. v. Edmonton (City) (2000), 261 A.R. 376; 225 W.A.C. 376; 2000 A.R. LEXIS 521; 2000 ABCA 215, refd to. [para. 10].

Sylvan Lake Golf & Tennis Club Ltd. v. Performance Industries Ltd. and O'Connor, [2002] 1 S.C.R. 678; 283 N.R. 233; 299 A.R. 201; 266 W.A.C. 201; 2002 SCC 19, refd to. [para. 10].

Bingeman v. McLaughlin, [1978] 1 S.C.R. 548; 16 N.R. 55; 1977 S.C.R. LEXIS 497, refd to. [para. 10].

Soulos v. Korkontzilas et al., [1997] 2 S.C.R. 217; 212 N.R. 1; 100 O.A.C. 241; 1997 S.C.R. LEXIS 1361, refd to. [para. 10].

Oldfield v. Transamerica Life Insurance Co. of Canada et al., [2002] 1 S.C.R. 742; 284 N.R. 104; 156 O.A.C. 310; 2002 S.C.R. LEXIS 22; 2002 SCC 22, refd to. [para. 10].

Cameron et al. v. Turner et al., [2007] A.R. Uned. 251; 2007 ABQB 304, refd to. [para. 11].

Udeco Inc. v. Quebec, [1984] 2 S.C.R. 502; 55 N.R. 360, refd to. [para. 12].

Stelco Inc. et al., Re (2005), 196 O.A.C. 142; 75 O.R.(3d) 5 (C.A.), refd to. [para. 12].

Unity Insurance Brokers (Windsor) Ltd. et al. v. Unity Realty & Insurance Inc. et al., [2005] O.A.C. Uned. 277; 251 D.L.R.(4th) 368 (Div. Ct.), refd to. [para. 12].

Large et al. v. Strata Plan No. 601, Owners, [2005] B.C.T.C. 1128; 34 R.P.R.(4th) 62; 2005 BCSC 1128, refd to. [para. 12].

Royal Oak Mines Inc., Re (1999), 96 O.T.C. 279 (Gen. Div.), refd to. [para. 39].

Authors and Works Noticed:

Koehnen, Markus, Oppression and Related Remedies (2004), generally [para. 9].

Wegenast, F.W., The Law of Canadian Companies (1979), generally [para. 9].

Counsel:

James R. Vaage (Emery Jamieson LLP), for the applicants;

Brock I. Dagenais, for the respondents;

Georges R. Brosseau, Q.C. (Brosseau & Associates), for 724849 Alberta Ltd.

This application was heard on September 30 and October 3 and 6, 2008, before Veit, J., of the Alberta Court of Queen's Bench, Judicial District of Edmonton, who delivered the following memorandum of decision on October 27, 2008.