SUPERIOR COURT OF JUSTICE - ONTARIO
(Divisional Court)
BETWEEN: AMARANTH L.L.C. (Applicant/Appellant)
AND: COUNSEL CORPORATION (Respondent/Respondent in Appeal)
BEFORE: Mr. Justice C. Campbell
COUNSEL: Patricia D. Jackson, Linda M. Plumpton for the Applicant
Fred Myers for the Respondent
HEARD: October 13, 2004
E N D O R S E M E N T
1The respondent Counsel seeks to quash the appeal in this matter on the basis (a) that it is moot; (b) that Amaranth by its conduct is estopped from appealing.
2The proceeding is an Application brought by Amaranth arising from a Notice given to it by Counsel on September 9, 2003 of Counsel’s intention to make payment under debentures issued by the company by payment of shares. Amaranth takes issue with the manner by which Counsel sought to satisfy its obligations under the debentures by the issuance of shares in certain amounts and certain price at maturity.
3As found by Ground J., the position of Amaranth is that “the issuance by Counsel of the notice of election of the share payment option, at the particular time and in the particular circumstances, constituted an oppressive act on the part of Counsel.”
4The Application dated September 29, 3003 sought:
a) an order declaring invalid, inoperative and of no force and effect the notice of election referred to above;
b) an order restraining Counsel from satisfying its obligations to holders of the Debentures on maturity by issuing shares…;
d) such further and other relief…
5By judgment dated October 28, 2003, Ground J. dismissed the Application on the basis that Amaranth did not have standing to bring it. The judgment of Ground J. has been appealed to the Divisional Court.
6Following the judgment, Amaranth delivered its debentures to the Trustee under the Trust Deed and received shares pursuant to the Share Payment Option. Some of the shares received have been sold and the position of Counsel is that Amaranth has taken that and other steps consistent only with being a continuing shareholder rather than seeking the invalidity of the steps by which it acquired those shares.
7This motion by Counsel seeks to quash the appeal from the decision of Ground J. on the basis that since Amaranth elected to take its shares, there is nothing left to enjoin or declare invalid. Alternatively, it is urged that Amaranth is estopped by its conduct from now claiming relief inconsistent with what it sought in its Application.
8Counsel for Amaranth takes the position that her client has from the commencement of the Application consistently taken the position that what it seeks by way of remedy is appropriate value for its shares, either by way of more shares or higher price. It is submitted that it intended to present that case to Justice Ground and was met on October 28, 2003 for the first time with the argument that it lacked standing. As a result, it is urged there has been no hearing on the merits of Amaranth’s claim for what it says should be the proper value of its shares.
9It was only following the decision of Ground J. that Counsel tendered shares to the Trustee. Such circumstances, it is suggested by Amaranth, should not disentitle it to claim for the value of its shares. If it succeeds in its appeal, Amaranth intends to elaborate or particularize its claim for “further and other relief” to encompass the events that have taken place since the standing issue was determined against it.
10I have concluded that there is an issue between the parties that is worthy of being dealt with by a full panel of the Divisional Court at the same time that it hears the appeal from the decision of Ground J.
11To grant the relief sought by Counsel would penalize Amaranth in respect of steps taken after the decision appealed from. If the standing issue were to be reversed, it might well have been deprived of an opportunity to present its case on its merits.
12Some commercial litigation is often referred to as “real time.” Events take place during the currency of the litigation that may affect its eventual outcome.
13It may be that either or both the parties have suffered prejudice by taking or not taking steps following the decision appealed from. In my view, it is preferable that this prejudice, if there is any, be considered at the same time as the merits of the appeal.
14Section 21(4) of the Courts of Justice Act makes specific provision that a motion heard by a single judge of the Divisional Court may adjourn it to a panel of the Divisional Court. This provision is complemented by Rule 61.16(2.1), which is the authorization for the hearing of a motion to be heard by one judge by the panel hearing the appeal or another motion.
15The issues raised on the motion before me are important for “real time” litigation and are worthy of being dealt with by the panel who will hear the appeal from the decision of Ground J.
16In my view, given that a panel will hear the appeal, there is nothing to be gained by a decision of a single judge that can better be dealt with in a full context.
17For the above reasons, this motion is adjourned to be heard by the panel hearing the appeal from Ground J. Unless otherwise advised or ordered, the material before me can be made available in this form before the full panel. The costs of this motion are to be dealt with by the panel.
C. CAMPBELL J.
Released: October 15, 2004