Dumbo hits the wall.https://www.courts.gov.bc.ca/Jdb-txt/SC/04/02/2004BCSC0288.htm
Citation:
Safe Environment Engineering v. Watson et al
Date:
20040206
2004 BCSC 288
Docket:
S036722
Registry: Vancouver
IN THE SUPREME COURT OF BRITISH COLUMBIA
Oral Reasons for Judgment
The Honourable Madam Justice Satanove
February 6, 2004
BETWEEN:
SAFE ENVIRONMENT ENGINEERING CANADA INC.
PLAINTIFF
AND:
RICHARD J. WATSON, JOANNA YU,
N. DiMAMBRO & ASSOCIATES and NICHOLAS DiMAMBRO
DEFENDANTS
Counsel for the Plaintiff:
G.S. McAlister,
and A.J. Kietaibl
Counsel for the Defendant, Joanna Yu:
R.W. Perrick
Counsel for the Defendant, McCarthy Tetrault:
H.W. Veenstra
Appearing on his own behalf:
G.M. Morin
Appearing on his own behalf:
R.J. Watson
Appearing on his own behalf:
N. DiMambro
[1] THE COURT: On December the 12, 2003 I granted the plaintiff a form of Anton Pillar order with respect to the defendant, Richard Watson. I also granted other orders requiring certain parties to deliver up documents into the possession of Mr. Fraser, a third-party custodian appointed for that purpose. The defendants apply today to set aside this order. There are also a number of other applications before me, but it was agreed by the parties that I would deal with the ex-parte order made by me on December 12 as the first application.
[2] I have decided to set aside the order for the following reasons. It was granted on erroneous factual information. In particular, I was advised that the plaintiff was a duly incorporated company extra-provincially registered in British Columbia. In fact, the transcript of the proceedings in Chambers on December 12 disclosed that I specifically asked counsel for the plaintiff whether the company search, which was provided to me, was showing the status of the company as of November 20, 2003. I was assured it was.
[3] I was further advised on December 12 that Mr. Sharp, who swore the affidavit in support of the application, was a duly appointed director who was authorized to represent the plaintiff corporation and bring this action against the defendants, some of whom were former directors.
[4] I voiced a concern about there being no resolution in effect authorizing the commencement of the action, but I was assured there would be a resolution and it would be ratified. Mr. McAlister brought to my attention that there was an issue whether or not there had been a resolution passed by the directors authorizing the commencement of the action. He told me that there had not been, but that there would be a ratification of the authorization. I specifically asked how one ratifies something that has not taken place. I expressed a concern that there had been no resolution attempted to be passed and queried how it could be ratified, and I was assured that the conduct could and would be ratified.
[5] The evidence filed today by Mr. Watson and relied upon by all the defendants establishes that the plaintiff corporation was dissolved and struck from the Alberta Registry of Companies on September 2, 2003. It has not been resurrected and did not exist when this action commenced or when I made my order on December 12. Secondly, it is not at all clear whether Mr. Sharp, who purports to have the authority to bring this action, will ever have that authority. It is not at all clear whether this plaintiff corporation will ever be resurrected or restored to the register. Notwithstanding the able submissions of Mr. McAlister about the effect of any restoration order, it appears that it will be in the discretion of an Alberta judge whether to make the order. In light of the circumstances of this case, that discretion may not be exercised in favour of restoration.
[6] The effect of the dissolution of the plaintiff on the continuance of this action is that either the action must be struck for abuse of process, or it must be stayed pending restoration of the plaintiff to the company register. (First Gwent Investment Corp. v. Sia, [1995] B.C.J. No. 2478 (S.C.) (QL). A stay of proceedings was granted in First Gwent Investment Corp. It was also granted in Goldleaf Northern (1991) Gold Fund Limited Partnership v. Wilcox (1999), 31 C.P.C. (4th) 208 (B.C.S.C.) a decision of Mr. Justice Henderson made on March 2, 1999. Both of these cases concern the status of dissolved plaintiffs. However, these cases did not involve the sort of issue where there appears to be a directors and shareholders dispute within the plaintiff company, as in the case at bar. In First Gwent and Goldleaf it was simply a matter of doing the paperwork necessary to accomplish the task of restoration.
[7] In the case at bar, it is quite possible that the plaintiff company will never be restored and any litigation that ultimately takes place will be between individual shareholders acting as individuals, not on behalf of the company. Given this uncertainty, the potential prejudice to the defendants, (who are being sued by the very company which they claim to control), and the non-existence of the plaintiff which may never reappear into existence, I am not prepared to order a stay of proceedings.
[8] I cannot dismiss this action now because there is no application before me to do so and counsel for the plaintiff was not notified that Mr. Watson would be seeking to dismiss the action entirely. Therefore, I will simply set aside my order of December 12. All the documents and property in possession of Mr. Fraser obtained through this order must be returned by 4:00 p.m. Monday, February 9.
[9] I have considered the submissions on costs and under the circumstances, it is appropriate to leave costs as costs in the cause because technically, the action is still ongoing and the outcome is not yet clear. The final point is I am not seized of this.
(PROCEEDINGS CONCLUDED)
“D.A. Satanove, J.”
The Honourable Madam Justice D.A. Satanove