2012 BCSC 1090 Northern Minerals Investment Corp. v. Mundoro ...
2012 BCSC 1090 Northern Minerals Investment Corp. v. Mundoro ...
2012 BCSC 1090 Northern Minerals Investment Corp. v. Mundoro ...
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<strong>2012</strong> <strong>BCSC</strong> <strong>1090</strong> <strong>Northern</strong> <strong>Minerals</strong> <strong>Investment</strong> <strong>Corp</strong>. v. <strong>Mundoro</strong> Capital Inc.<br />
…<br />
(iv)<br />
were protected.<br />
The interests of the shareholders not present at the meeting<br />
…<br />
71 Many of the persons issuing proxies were not present at the meeting. Although they may very<br />
well have been informed of the tensions between Blair and Canadian Express, they would certainly<br />
not have expected there to be a contested election for the position of 11th director. At the time the<br />
proxies were given to Ravelston and Canadian Express, it was assumed that the 11 persons listed in<br />
the management circular would simply be elected. The evidentiary record does not reveal that<br />
anyone's mind was alerted to the possibility that the proxyholders would use the proxies to nominate<br />
Price over Blair. No notice whatsoever was given of Price's nomination. In this context, I find some<br />
merit to Blair's submission that his decision to follow Osler's advice must be viewed also in light of<br />
the interests of the shareholders not present at the meeting.<br />
72 In the end, by following the instructions on the proxies and then requisitioning a new shareholders'<br />
meeting on July 24, 1989, Blair gave all shareholders an opportunity to make a fully informed<br />
decision regarding the election of the directors, thereby promoting the integrity of Enfield's<br />
voting procedures. Shareholders holding fully 16 percent of the shares of Enfield who were not aware<br />
that Canadian Express would attempt to take control of the Board were thus placed in a position of<br />
being able to make an informed choice as to how to vote (see judgment of the Court of Appeal, at p.<br />
801). The corollary is that Canadian Express suffered no prejudice in respect of its voting rights in<br />
that it had the opportunity to nominate and support Price at the new meeting or pursue legal action<br />
against Enfield. ….<br />
73 In my mind, the fact that Blair promptly, and contrary to his personal interests, requisitioned a<br />
new meeting constitutes further evidence that his actions were taken with a view to the best interests<br />
of Enfield. If anything, Canadian Express's decision to pursue this matter through litigation drives<br />
against the wellbeing of Enfield's shareholders, especially those who have no personal interest in<br />
who acts as the 11th director, provided simply that individual discharge his or her duties to the<br />
corporation in a competent and trustworthy manner.<br />
[49] In Horton v. St. Thomas Elgin General Hospital (1982), 140 D.L.R. (3d) 274, 39 O.R. (2d) 247 (H.C.J.),<br />
an advance notice by-law was enacted by a non-profit corporation under the Ontario <strong>Corp</strong>orations Act. That<br />
statute does not deal expressly with members’ voting rights nor with director nomination rights. The by-law<br />
was held invalid for technical reasons however Smith J. observed at para. 25:<br />
[25] The American reports are replete with pronouncements on the right to vote and nominate.<br />
The applicant has made reference to a large number of them. They all allow that by-laws can be<br />
passed to curtail as long as the wording is clear. I am of the same view. …<br />
[50] The respondent notes that advance notice is supported by ISS (Institutional Shareholder Services Inc.)<br />
the leading independent advisory on good governance for shareholder meetings. ISS favours advance<br />
notice of nominations to “ensure full disclosure in regard to a proponent’s economic and voting position in the<br />
company so long as the informational requirements are reasonable and aimed at providing shareholders with<br />
the necessary information to review such proposal.”<br />
[51] The Policy in this case leaves with the board the sole discretion to waive any requirement in the policy<br />
which discretion can be reviewed by a court. In addition the press release noted that the company intended<br />
to seek shareholder approval and confirmation of the Policy at the AGM. Both of these factors evidence<br />
http://www.courts.gov.bc.ca/jdb-txt/SC/12/10/<strong>2012</strong><strong>BCSC</strong><strong>1090</strong>.htm[10/22/<strong>2012</strong> 1:37:45 PM]