Ebrahim et al. v. Continental Precious Minerals Inc. et al.

Continental Precious Minerals Inc. v. Ebrahim et al.

[Indexed as: Ebrahim v. Continental Precious Minerals Inc.]

111 O.R. (3d) 110

2012 ONSC 2918

Ontario Superior Court of Justice,

D.M. Brown J.

May 22, 2012

Corporations -- Oppression -- Quorum -- Company's by-law requiring quorum of not less than 50 per cent of shareholders at any meeting considering resolutions to remove, replace or appoint directors -- That requirement existing when applicant shareholders purchased their shares -- Lack of quorum preventing election for directors at annual general meeting -- Existence and operation of by-law not running counter to applicants' reasonably held expectations -- Applicants not having attempted to solicit proxies and issue dissident's information circular -- Board's reliance on quorum requirement not oppressive.

Corporations -- Shareholders -- Meetings -- Company's by-law requiring quorum of not less than 50 per cent of shareholders at any meeting considering resolutions to remove, replace or appoint directors -- Lack of quorum preventing election for directors at annual general meeting -- Applicant shareholders asking court to call meeting of shareholders under s. 106 of Ontario Business Corporations Act for election of directors -- Application dismissed -- Applicants not having attempted to requisition meeting and evidence not indicating that it would be impracticable to do so -- Business Corporations Act, R.S.O. 1990, c. B.16, s. 106.

A Special Quorum Requirement in the respondent's by-laws required a quorum of not less than 50 per cent of the company's shareholders at any meeting considering resolutions to remove, replace or appoint directors. There had been no shareholder vote for the election of directors for 15 years because a 50 per cent quorum had not been achieved at annual general meetings. The applicant shareholders brought an application for a declaration that the board of directors acted [page111] oppressively in relying on the Special Quorum Requirement at the 2011 AGM by failing to solicit proxies to attain the Special Quorum Requirement and by excluding certain non- management proxies from voting without justification and a declaration that the Special Quorum Requirement was invalid. They also asked the court to exercise its power under s. 106 of the Ontario Business Corporations Act ("OBCA") to call a special meeting for the election of directors.

Held, the application should be dismissed.

The board complied with its obligations under corporate and securities law in soliciting proxies for the 2011 AGM. It was open to the applicants to solicit proxies and issue a dissident's information circular, but they did not do so. Management's conduct regarding the solicitation of proxies was not oppressive. There was no indication that the chair acted in bad faith in disallowing proxies at the 2011 AGM. He obviously relied on advice the respondent had received prior to the AGM from its transfer agent about the validity of the proxies. In any event, the disallowance of the proxies was not conduct which caused an oppressive or unfair result because the required quorum would not have been met even if the proxies had been counted. The Special Quorum Requirement was not per se invalid, and its operation did not run counter to the reasonably held expectations of the applicants. As the Special Quorum Requirement existed when the applicants purchased their shares, it was not reasonable for them to expect that the election of directors would use some requirement other than that contained in the by-law. There was no evidence that the board had acted in any way to frustrate attaining sufficient numbers to meet the Special Quorum Requirement. It could not be said that the Special Quorum Requirement, in practice, acted as an insurmountable barrier to effecting management change when the applicants had not tried to use the tools available in the OBCA to bring about such change.

The evidence in this case did not reveal any matter which would make it impracticable to call a shareholder meeting. Rather, this application was an attempt by one faction of shareholders to seek court intervention against another faction. That is not a proper use of s. 106 of the OBCA. The applicants had other corporate remedies available to them.

APPLICATION for oppression remedies and for an order calling a special meeting of shareholders.

Cases referred to Airline Industry Revitalization Co. v. Air Canada (1999), 1999 15075 (ON SC), 45 O.R. (3d) 370, [1999] O.J. No. 3581, 178 D.L.R. (4th) 740, 49 B.L.R. (2d) 254, 91 A.C.W.S. (3d) 393 (S.C.J.); Athabasca Holdings Ltd. v. ENA Datasystems Inc. (1980), 1980 1567 (ON SC), 30 O.R. (2d) 527, [1980] O.J. No. 3787, 116 D.L.R. (3d) 318 (H.C.J.); B. Love Ltd. v. Bulk Steel & Salvage Ltd. (1982), 1982 1901 (ON SC), 40 O.R. (2d) 1, [1982] O.J. No. 3578, 141 D.L.R. (3d) 621, 20 B.L.R. 266, 17 A.C.W.S. (2d) 281 (H.C.J.); BCE Inc. v. 1976 Debentureholders, [2008] 3 S.C.R. 560, [2008] S.C.J. No. 37, 2008 SCC 69, 52 B.L.R. (4th) 1, EYB 2008-151755, J.E. 2009-43, 301 D.L.R. (4th) 80, 71 C.P.R. (4th) 303, 383 N.R. 119, 172 A.C.W.S. (3d) 915; Blair v. Consolidated Enfield Corp., 1995 76 (SCC), [1995] 4 S.C.R. 5, [1995] S.C.J. No. 29, 128 D.L.R. (4th) 73, 187 N.R. 241, 24 B.L.R. (2d) 161, 58 A.C.W.S. (3d) 230; El Sombrero, Ltd. (Re), [1958] Ch. 900, [1958] 3 All E.R. 1, [1958] 3 W.L.R. 349 (Ch. Div.); Giannotti v. Wellington Enterprises Ltd., [1997] O.J. No. 574, 26 O.T.C. 161, 69 A.C.W.S. (3d) 84 (Gen. Div.); Greenlight Capital Inc. v. Stronach (2008), 2008 34359 (ON SCDC), 91 O.R. (3d) 241, [2008] O.J. No. 2749, 168 A.C.W.S. (3d) 91, 240 O.A.C. 86, 47 B.L.R. (4th) 215 (Div. Ct.), affg 2006 36620 (ON SC), [2006] O.J. No. 4353, 22 B.L.R. (4th) 11, 152 A.C.W.S. (3d) 616 (S.C.J.); McEwen v. Goldcorp. Inc., 2006 35985 (ON SC), [2006] O.J. No. 4265, 21 B.L.R. (4th) 262, 152 A.C.W.S. (3d) 431 (S.C.J.); [page112] Montreal and Canadian Diocese of the Russian Orthodox Church Outside of Russia Inc. v. Protection of the Holy Virgin Russian Orthodox Church (Outside of Russia) in Ottawa Inc., 2002 3570 (ON CA), [2002] O.J. No. 4698, 167 O.A.C. 138, 30 B.L.R. (3d) 315, 119 A.C.W.S. (3d) 573 (C.A.); Morris Funeral Service Ltd. (Re), 1957 399 (ON CA), [1957] O.J. No. 80 (C.A.); Pente Investment Management Ltd. v. Schneider Corp., 1998 14808 (ON SC), [1998] O.J. No. 2036, 62 O.T.C. 1, 40 B.L.R. (2d) 244, 79 A.C.W.S. (3d) 930 (Gen. Div. (Comm. List)); Wells v. Melnyk (2008), 2008 89823 (ON SC), 92 O.R. (3d) 121, [2008] O.J. No. 2845, 46 B.L.R. (4th) 112 (S.C.J.)

Statutes referred to Business Corporations Act, R.S.O. 1990, c. B.16, ss. 99 [as am.], 101(1), 106, (1), (2), 110(1), (2) [as am.], (a), 111, 248 [as am.], (3) Corporations Act, 1953, s. 309 Securities Act, R.S.O. 1990, c. S.5, Part XX [as am.]

Rules and regulations referred to Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rule 4.1.01

Nathan, Hartley R., and Mihkel E. Voore, Corporate Meetings: Law and Practice, looseleaf (Scarborough, Ont.: Carswell, 1995-)

B. Bowen and W.R. MacDougall, for applicants Sajjad Ebrahim et al. P. Howard and S. Hosseini, for respondents Continental Precious Minerals Inc. et al.

D.M. BROWN J.: --

I. Application to Direct the Holding of a Shareholder Meeting

[1] Dissatisfied shareholders of Continental Precious Minerals Inc., a junior mining company, ask the court to call a special meeting for the election of directors. They are upset over the results of Continental's annual general meeting held on October 24, 2011, where a lack of quorum prevented an election for directors.

[2] At the heart of these proceedings lies a Special Quorum Requirement in Continental's by-laws which requires a quorum of not less than 50 per cent of the company's shareholders at any meeting considering resolutions to remove, replace or appoint directors.

[3] The applicants, Sajjad Ebrahim, Ali Ebrahim, Salman Ebrahim, Jatinder Dhillon and Rita Hoff, are all shareholders of Continental. They object to the Special Quorum Requirement, alleging that the requirement is invalid and the company's reliance on the requirement oppressive of their interests as shareholders. In what I will call their shareholder oppression application (CV-11-9446-00CL), they request the court to call [page113] a special meeting of shareholders to consider the election of directors to the company's board and to impose a lesser quorum requirement for that meeting.

[4] Continental opposes the application contending that no legal infirmity exists regarding the Special Quorum Requirement or the events which transpired at the October 2011 AGM. In the event the court does not dismiss the oppression application, Continental asks the court to consider its counter-application (CV-11-9520-00CL), in which the company seeks a declaration that the Ebrahim family applicants, and their companies, contravened Part XX of the Securities Act, R.S.O. 1990, c. S.5 by reason of acting jointly and in concert with respect to the acquisition of their Continental shares.

[5] For the reasons set out below, I dismiss the oppression application. In light of the position taken by Continental at the hearing, I need not consider its counter-application.

II. The Parties

A. Continental Precious Minerals

[6] Continental is a public junior mining company with various mineral exploration licences in Sweden. Founded by Edward Godin after an amalgamation with Fin Resources Inc. in July of 1987, the company's shares commenced trading on the TSX in February 2007. Prior to that, the shares traded on the TSX Venture Exchange.

[7] Mr. Godin has been president, chief executive officer and a member of the board of directors since the company's founding. At present, Mr. Godin is the only executive of the company who is employed on a full-time basis. The other executives work on a part-time basis.

[8] In addition to Mr. Godin, Continental has three other directors: the respondents Patricia Sheahan, Gerard Osika and Herb Dhaliwal. Mr. Godin approached each individual to join the board. Patricia Sheahan was appointed to the board in 1988, Gerard Osika in 2005 and Herb Dhaliwal in 2008. Neither the appointment of Mr. Osika nor that of Mr. Dhaliwal has ever been ratified by the company's shareholders by reason of the lack of quorum at AGMs.

[9] At the time of the October 2011 AGM, Mr. Godin owned about 2.66 per cent of the company's issued and outstanding shares; Ms. Sheahan and Mr. Osika collectively owned less than 1 per cent of the shares. Mr. Dhaliwal did not own any shares. [page114]

B. The applicants

[10] Sajjdad Ebrahim is the father of Ali Ebrahim and Salman Ebrahim. All three own shares in Continental either personally or, in the case of Sajjdad, through Par-Pak Companies Inc. Sajjad filed an early warning report in April 2009 as a result of his purchase of five million shares, which brought his holdings to 14.31 per cent of the then issued and outstanding shares of Continental.

[11] As of October 2011, the Ebrahim family applicants collectively owned a little over 20 per cent of Continental's issued and outstanding shares. By the time of the hearing this past March, their collective holdings had dropped to just below 20 per cent. The Ebrahim family bought the majority of their shares on the advice of their investment advisor, Gurdass (Gary) Singh of Canaccord Genuity Corp. ("Canaccord"), including through a private placement in 2009 sponsored by Canaccord.

[12] Mr. Singh is also one of the larger shareholders of Continental, holding about 1.75 per cent of the issued and outstanding shares of the company as at the date of the application. Although the counter-application originally named Mr. Singh as a respondent, Continental has settled its dispute with him.

[13] The applicant, Jatinder Dhillon, held approximately 2.5 per cent of Continental's issued and outstanding shares as at the date of the application. The applicant Rita Hoff holds only a very small number of shares of the company and is a retired executive of Canaccord.

C. The differing business perspectives of the applicants and the company

[14] The applicants have become disenchanted with what they perceive as the company's lacklustre performance and its steadily declining stock price. Sajjad Ebrahim framed the issue from his perspective as follows:

The applicants are not asking this Honourable Court to rule or decide upon the performance of the Company. Whether or not the Company has been successful, I believe that the Board should be held accountable to the Company's shareholders, and should be subject to shareholder approval on a regular basis.

On its part, Continental contends that the development of its mine resource has proceeded at a reasonable pace and that the company is focused on managing its assets, as opposed to its stock price. [page115]

III. The Background Events

A. Overview of Continental's business

[15] Continental first acquired a group of mineral exploration licences in Sweden in March 2005. To date, Continental's mineral exploration licences have not earned any revenues as the properties are in the development stage. Continental's most important mineral exploration property interest is its multi-metal sediment Viken project. The company filed evidence, including expert evidence, to support its view about the business value of the Viken project. For purposes of these applications, I need not review that evidence in detail. Suffice it to say that since 2007, Continental has filed several technical reports pursuant to National Instrument 43-101 containing estimates of the resources in the Viken project.

B. The Special Quorum Requirement in By-law No. 1

B.1 The genesis of the Special Quorum Requirement

[16] In 1996, there were 5,527,329 issued and outstanding shares of the company, of which Mr. Godin held 1,160,492, or some 21 per cent, of the total number of shares. The other directors at the time collectively held 150,999 shares (3 per cent) of the company.

[17] On August 20, 1996, the company's board of directors (Mr. Godin, Ms. Sheahan and Stuart Jackson, who has since stepped down) passed a resolution to amend the company's By-law Number 1 to include the Special Quorum Requirement. Prior to that point of time, para. 59 of the company's by-law had read as follows:

Quorum. All of the shareholders or two shareholders, whichever number be the lesser, personally present or represented by proxy, shall constitute a quorum of any meeting of any class of shareholders. No business shall be transacted at any meeting unless the requisite quorum be present at the time of the transaction of such business. If a quorum is not present at the time appointed for a meeting of shareholders or within such reasonable time thereafter as the shareholders present may determine, the persons present and entitled to vote may adjourn the meeting to a fixed time and place but may not transact any other business and the provisions of paragraph 58 of the by-law with regard to notice shall apply to such adjournment. (Emphasis added)

[18] As a result of the amendment, s. 59 of Continental's amended and restated By-law Number 1 (the "by-law") read as follows: [page116]

Quorum. (a) All of the shareholders or two shareholders, whichever number be the lesser, personally present or represented by proxy, shall constitute a quorum of any meeting of any class of shareholders. No business shall be transacted at any meeting unless the requisite quorum be present at the time of the transaction of such business. If a quorum is not present at the time appointed for a meeting of shareholders or within such reasonable time thereafter as the shareholders present may determine, the persons present and entitled to vote may adjourn the meeting to a fixed time and place but may not transact any other business and the provisions of paragraph 58 of this by-law with regard to notice shall apply to such adjournment.

(b) Notwithstanding the foregoing, two or more persons, personally present or represented by proxy and representing not less than fifty percent (50 per cent) of the outstanding shares of the Corporation entitled to vote generally at meetings of the shareholders of the Corporation, shall constitute a quorum for the purpose of considering any resolution of the shareholders that relates to any of the matters listed below: (i) removal of any director or directors from office; (ii) election or appointment of any director or directors; (iii) changing the number of directors (within the minimum and maximum numbers provided in the articles of the Corporation or otherwise); or (iv) confirming, amending, altering, repealing or adopting any provision inconsistent with this para. 59(b) of this by-law. (the "Special Quorum Requirement") (Emphasis added)

[19] According to the circular for the 1996 AGM the board's rationale for adopting the Special Quorum Requirement was that "only a significant number of shareholders ought to be able to change the board, since a change in the board will affect the overall direction of the Company". The amendments were ratified at the 1996 AGM of shareholders, apparently by no more than 5 per cent of the total shares of the company.

[20] Since the enactment of the Special Quorum Requirement in 1996, the number of issued and outstanding shares of Continental has risen from approximately 5.5 million to 51 million.

B.2 Availability of the by-law to shareholders

[21] The by-law containing the Special Quorum Requirement has been publicly available on the System for Electronic Document Analysis and Retrieval ("SEDAR") since May 11, 2006. The quorum requirement for the election of directors has been described in every management information circular ("MIC") since 1996, all of which have been available on SEDAR.

[22] Continental stated that until the concerns voiced last fall by the applicants, no shareholder had expressed to the board [page117] any dissatisfaction with the Special Quorum Requirement for the election of directors or had asked that an amendment be put to the shareholders.

B.3 Applicants' knowledge of the Special Quorum Requirement

[23] The applicants confirmed that they had received and had the opportunity to review the management information circulars mailed by the company since becoming shareholders. While Sajjad Ebrahim conceded that Continental's MICs historically had described the Special Quorum Requirement, he deposed:

I was not aware (until after the 2011 AGM) that the Company had consistently failed to generate sufficient interest among shareholders to AGMs (either in person or by proxy) to satisfy the special quorum requirement since the implementation of this By-law provision.

On his cross-examination, this exchange occurred with Continental's counsel:

Q. 179. For the years that you were a shareholder, am I correct that you agree with me that it appears that the company told you as a shareholder, every year in its annual statement, about the quorum requirement for the election of directors, correct?

Sajjad Ebrahim: It's stated over here. . . . . .

Q. 181. My question, sir, is, if you took the time or -- you had the opportunity to know, would you agree with me? If you read what the company was telling you, you would know it, correct?

A. It's unreasonable to expect somebody to read all the filings that are sent to you. I don't think it's reasonable, and I did not -- I do not, I did not know of this particular clause.

[24] Sajjad's son, Salman Ebrahim, was aware before the 2011 AGM of the Special Quorum Requirement; he had seen a reference to it in the MIC.

[25] The Ebrahim family and Mr. Dhillon did not complain about the by-law or the Special Quorum Requirement for the election of directors at any time before this application, and prior to this application they never had made any request that the by-law or any revisions to it be put to another vote of shareholders.

B.4 The historical effect of the Special Quorum Requirement

[26] There has been no shareholder vote taken or held for the election of directors of the company in the 15 years since the [page118] company's by-laws were amended to include the Special Quorum Requirement because a 50 per cent quorum has not been achieved at the AGMs.

C. Events leading up to the October 24, 2011 AGM

C.1 Issuance of the notice of the AGM and the management information circular

[27] On August 19, 2011, Continental announced that its 2011 AGM would be held on Monday, October 24, 2011, with a record date of September 14, 2011. The company delivered notice of the AGM and a management information circular dated September 14, 2011. The four nominees for election to the board were the incumbent directors -- Edward Godin, Patricia Sheahan, Gerard Osika and Herb Dhaliwal. The MIC specified that proxies had to be delivered by Thursday, October 20, 2012, and identified the Special Quorum Requirement, noting that "in the event that directors are not elected at the Meeting for whatever reason, the incumbent directors shall continue in office until their successors are elected".

C.2 No dissident proxy circular

[28] After receiving Continental's MIC, none of the applicants proposed any items for the agenda for the AGM nor did any of them distribute a dissident proxy circular.

C.3 Applicants deliver proxies

[29] Each of Sajjad, Ali, Salman and Jatinder authorized Canaccord (who held the shares on their behalf) to deliver proxies to Mr. Grant Sawiak, a partner in the Fogler, Rubinoff firm, to vote their shares at the 2011 AGM. A total of 12,755,630 proxy votes were given to Mr. Sawiak to vote at the 2011 AGM.

[30] The Ebrahims provided Canaccord with signed documents confirming their authorization of Mr. Sawiak to attend the AGM "in person to represent me and to vote on all matters and make such motions as he deems advisable".

[31] The forms of proxy delivered to the company's transfer agent, Equity Transfer Trust Company, were October 19, 2011 omnibus proxies signed by Canaccord which named the shareholders on whose behalf the proxies were submitted. The company received a further Canaccord omnibus proxy permitting Mr. Singh to vote a total of 993,600 shares held by his family and his business partner, Margaret Barron. [page119]

[32] In an October 20, 2011 e-mail to Ms. Chu Steinberg, Continental's corporate counsel, Equity Transfer summarized the omnibus proxies received from Canaccord which had printed on them the names of approximately 25 non-objecting beneficial ("NOBO") holders. Equity Transfer expressed the following opinion about the validity of the Canaccord omnibus proxies:

Please note that the balance of 11,358,860 can be validated only if:

-- Canaccord sent in proxies on behalf of their NOBO holders. Please note that we can only accept these proxies if they are executed by NOBO holders[.]

[33] Equity advised the company that of the 18,184,100 shares held by Canaccord in CDS as of the record date of the meeting, 16,860,565 had been allocated to the NOBO position and 2,422,370 allocated to the objecting beneficial ("OBO") holders. Equity took the position that because proxies by NOBO holders must be executed by the NOBO holders, Canaccord, as an intermediary, was only able to vote the OBO position on behalf of the shareholders. Accordingly, based on Equity's analysis, only 2,390,370 of the 13,749,230 proxies deposited by Canaccord could be validly voted.

C.4 Meetings and communications between the applicants and Continental prior to the AGM

[34] Prior to the Monday, October 24 AGM, arrangements were made through Mr. Singh for a meeting amongst Mr. Godin, Sajjad Ebrahim and Mr. Dhillon to discuss the company's future performance and goals. The meeting was scheduled to take place on Monday, October 17, 2011 at 6:30 p.m. It did not occur. Mr. Godin stated he had mistaken the time of the meeting; the applicants saw its cancellation as further evidence of the company's unwillingness to treat seriously their concerns. Mr. Godin arranged another meeting for Wednesday, October 19, but it was cancelled by Mr. Ebrahim and Mr. Dhillon.

[35] That Wednesday, Grant Sawiak requested, on behalf of the Ebrahims and some other shareholders, a meeting for the following day with Mr. Godin and Continental's corporate counsel, Ms. Chu Steinberg. According to Mr. Godin, at the meeting on Thursday, October 20, Mr. Sawiak advised Ms. Chu Steinberg and himself that there were two groups of dissident shareholders, that he represented one group which included Sajjad Ebrahim and that the dissidents as a group controlled approximately 35 per cent of the shares of the company. Mr. Sawiak advised that unless the company issued a news release by 9:30 a.m. the following day announcing that the AGM would be [page120] postponed for a period of 30 days, there would be "all-out war" and that the "axes would come out".

[36] Ms. Chu Steinberg advised Mr. Sawiak that information obtained by Continental from SEDI and SEDAR showed that the Ebrahim family owned over 20 per cent of the issued and outstanding common shares of the company and that corporate counsel would be examining whether Sajjad Ebrahim had breached his insider reporting and early warning disclosure obligations.

[37] Following that meeting, Mr. Sawiak reported by e-mail on the meeting to a group consisting of Mr. Singh, his partner at Canccord, Margaret Barron, Sajjad Ebrahim, Walied Soliman (a lawyer at Norton Rose) and Peter Puccetti. In his e-mail, Mr. Sawiak wrote:

I had a civil meeting with them and told them that I wanted them to know there were 13.8 million shares against them obtained in 24 hours so they knew I wasn't bluffing. When Godin said they could get more, I told him not after 10:30 this morning he couldn't. He offered up one board seat and I said that I didn't have instructions but that offer would be seen in a context that he still controlled the board and that was unacceptable. I said that based on some loose discussions amongst a few people yesterday I thought the absolute best he could ever hope for was 2 directors from the current board, 2 from the "dissidents" and 1 independent but that was a guess on my part.

The pitch really was that he had to make a public announcement that the meeting was adjourned for one month by 9:30 tomorrow morning for whatever reason they wanted and then the "dirty laundry" would be dealt with in private negotiations so no one's reputation was sullied and we didn't waste money on lawyers. I said that he could stall but eventually it would all come down to the fact that we had more shares than he did and it was really a matter of time before he lost but he would in fact lose. I also said that if he "crawled into the ring" by not adjourning by tomorrow morning then he was not going to crawl out of the ring and this would be pursued to its natural conclusion which is that he would be tossed off the board and that after taking over the board we would scrutinize on whether he was spending corporate funds for the personal purpose of entrenching himself which could give rise to a civil suit.

[38] Messrs. Puccetti and Soliman responded to Mr. Sawiak's e-mail, each noting that the matter should be settled to avoid further costs. Mr. Soliman advised that he had a "good simple precedent settlement agreement from Webtech that we can dust off to get this done real quick".

[39] On Friday, October 21, Mr. Sawiak sent an early morning e-mail to Ms. Chu Steinberg with a proposal to expand the board to five members:

The board will be expanded to 5. Your side may appoint 3 directors as long as one is Herb Dhaliwal who apparently all sides are prepared to view as independent. Our side would appoint 2 directors. This would occur at the [page121] meeting on Monday. Director resolutions to expand the board to 5 are to be done before Monday.

Mr. Sawiak asked for a response within an hour. Continental did not respond to that e-mail. Mr. Sawiak sent a further one later that morning expressing his disappointment that Continental did not agree to his clients' "very reasonable offer to settle this matter", and he requested copies of the transfer agent proxy reports.

D. The October 24, 2011 AGM

[40] Mr. Godin chaired the October 24, 2011 AGM. Messrs. Sawiak and Singh attended as proxy holders, carrying 13,749,230 proxies for clients of Canaccord. All of the applicants, except Ms. Hoff, had given proxies for their shares to Mr. Sawiak. At the meeting, a representative of Equity told Mr. Sawiak that he would be allowed to vote only 2,217,628 of the shares for which he held proxies and Mr. Singh was informed that he could only vote 172,142 of the 993,600 shares for which he held proxies. In consultation with Mr. Godin, Equity pro-rated and allowed Messrs. Sawiak and Singh to vote the 2,390,370 of their proxies it considered had been validly submitted.

[41] As a result of those disallowances, management held more proxies than Mr. Sawiak and Mr. Singh. The minutes of the meeting recorded:

Upon the request of the Chairman, the Scrutineer reported that there were 2 shareholders present holding 2,390,370 shares and 139 proxies had been received totaling 8,794,047 shares; accordingly, there were 11,184,417 shares represented at the Meeting, representing 21.6 per cent of the issued and outstanding shares of the Corporation. . . . . .

In response to questions from a proxy holder (Mr. Grant Sawiak), the Chairman confirmed that: (1) he had instructed Equity Transfer Trust Company not to inform proxy holders of the reasons that certain of their proxies were invalid and, with the exception of certain invited individuals such as directors and officers, to limit attendance at the Meeting to registered shareholders and duly appointed proxy holders, (2) the Scrutineer's report would not be available until after the Meeting, and (3) in respect of the voting results form to be filed on SEDAR following the Meeting, the Corporation would make a determination within the next couple of days as to whether invalid proxies would be referenced.

[42] Mr. Sawiak made a motion, seconded by Mr. Singh, that the AGM be adjourned for 30 days. The minutes recorded that Mr. Godin ruled the motion was invalid under para. 59 of the company's by-law, which he regarded as specifying the circumstances in which a shareholder present at a meeting could adjourn a meeting. [page122]

[43] Since, according to the scrutineer's report, only 21.61 per cent of the issued and outstanding shares were represented at the 2011 AGM, no election of directors took place because the 50 per cent Special Quorum Requirement had not been met. The minutes recorded:

The Chairman stated that two or more persons personally present or represented by proxy and representing not less than 50% of the outstanding shares of the Corporation entitled to vote at the Meeting constituted the quorum required for the purposes of electing directors at the Meeting. He further stated that because the requisite quorum was not present for this purpose, the Corporation would be unable to elect directors at the Meeting and that the incumbent directors would continue in office until their successors are elected.

[44] There is no dispute on the evidence that even if all the proxies held by Mr. Sawiak and Mr. Singh had been recognized as valid, the 50 per cent Special Quorum Requirement would not have been met at the 2011 AGM. That is to say, it was not the disallowance of certain proxies held by Mr. Sawiak and Mr. Singh which prevented reaching the required quorum for the election of directors.

E. Effort by Continental to adduce expert evidence

[45] Continental filed an affidavit from Mr. Wesley Hall, the founder and CEO of Kingsdale Shareholder Services Inc., a large shareholder services firm. In his affidavit, Mr. Hall proffered his opinion about the relationship between shareholder turnout at a general or special meeting and whether the meeting had resulted from a requisition or was characterized by a disputed proxy solicitation. Mr. Hall submitted a signed rule 4.1 certificate from an expert.

[46] I ruled Mr. Hall's evidence inadmissible. On October 26, 2010, Kingsdale had executed a multi-year contract with Continental to provide services for shareholder meetings in 2011 through 2013. In my view, a person under retainer to a party to litigation, however qualified he might be in a subject area, lacks the independence necessary to provide opinion evidence that is "fair, objective and non-partisan". [^1] As a result, I was not prepared to entertain the evidence proffered by Mr. Hall.

IV. The Two Applications

[47] In their oppression application, the shareholders sought the following relief: [page123] (i) a declaration that the board of Continental acted oppressively by relying on the Special Quorum Requirement at the meeting, by failing to solicit proxies to attain the Special Quorum Requirement and by excluding certain non- management proxies from voting without justification; (ii) an order permitting the applicants to call a shareholder meeting to elect directors, and related orders for the disclosure of shareholders' lists and the payment of proxy solicitation costs for such a meeting; (iii) a declaration that the Special Quorum Requirement is invalid and that the ordinary quorum requirement contained in s. 59(a) of the by-law applies to the matters enumerated in s. 59(b); and (iv) an order that the company be prohibited from issuing new securities or entering into certain contracts without an order of this court or approval of 50 per cent plus one of the shareholders.

[48] In its counter-application, Continental sought the following relief against the Ebrahim family and Mr. Singh: (i) a declaration that the Ebrahims acted in contravention of the takeover bid provisions in Part XX of the Securities Act; (ii) an order that the Ebrahims dispose of all securities of Continental acquired in contravention of Part XX; and (iii) a declaration as to whether a "flip-in event", as defined in Continental's Shareholders Rights Plan, had occurred by reason of the conduct of the Ebrahims. Prior to the hearing, Continental settled that part of its application brought against Mr. Singh. At the hearing, Continental advised that in the event the court dismissed the oppression application, it would withdraw the relief requested in its counter-application.

V. The Oppression Claim under s. 248 of the OBCA

A. Governing legal principles

[49] The oppression remedy contained in s. 248 of the Ontario Business Corporations Act, R.S.O. 1990, c. B.16 (the "OBCA") is an equitable remedy which seeks to ensure fairness and which gives courts a broad, equitable jurisdiction to enforce not just [page124] what is legal, but what is fair. In BCE Inc. v. 1976 Debentureholders, [^2] the Supreme Court identified the two inquiries which a court must make when considering an oppression claim: (i) does the evidence support the reasonable expectation asserted by the claimant; and (ii) does the evidence establish that the reasonable expectation was violated by conduct falling within the terms "oppression", "unfair prejudice" or "unfair disregard" of a relevant interest?

[50] In considering oppression claims, courts must look at business realities, not merely narrow legalities. At the same time, the remedy is very fact-specific -- what is just and equitable is judged by the reasonable expectations of the stakeholders in the context and in regard to the relationships at play.

[51] The reasonable expectations of specified stakeholders is the cornerstone of the oppression remedy. Fair treatment -- the central theme running through the oppression jurisprudence -- is most fundamentally what stakeholders are entitled to "reasonably expect". The concept of reasonable expectations is objective and contextual. The actual expectation of a particular stakeholder is not conclusive -- the question is whether the expectation is reasonable having regard to the facts of the specific case, the relationships at issue and the entire context, including the fact that there may be conflicting claims and expectations.

[52] The onus lies on the claimant to identify the expectations that he asserts have been violated by the conduct at issue and establish that the expectations were reasonably held. Factors which a court may consider in determining whether a reasonable expectation exists include general commercial practice, the nature of the corporation, the relationship between the parties, past practice, steps the claimant could have taken to protect himself, representations and agreements, and the fair resolution of conflicting interests between corporate stakeholders.

[53] Section 248(3) of the OBCA provides the court with broad remedial powers to make "any interim or final order it thinks fit", including an order amending the by-laws of a corporation.

B. Analysis

[54] The applicants contend that three acts of the board of Continental effected a result which was oppressive, unfairly prejudicial or unfairly disregarded their interests as shareholders: [page125] (i) relying on the Special Quorum Requirement at the 2011 AGM; (ii) failing to solicit actively proxies for that meeting; and (iii) excluding non-management proxies from voting at the meeting.

B.1 Failing to solicit proxies

[55] Let me start off by dealing with the second and third allegations. In regards to the board's solicitation of proxies for the 2011 AGM, the evidence disclosed that the board complied with its obligations under corporate and securities law. A shareholder of an offering corporation has a reasonable expectation that management will give proper notice of a shareholder meeting, solicit proxies as required by s. 111 of the OBCA and send out a management information circular. Continental met those obligations imposed by the law. If the applicant shareholders thought that something more was required to secure a large turnout at the AGM, it was open to them to make suggestions to management about what to do; they made none. It was also open to them to solicit proxies and issue a dissident's information circular, but they did not do so. Accordingly, I see no basis for the applicants' allegation that management's conduct regarding the solicitation of proxies for the 2011 AGM was oppressive in some way.

B.2 Exclusion of proxies

[56] Turning to the allegation concerning the exclusion of a large number of dissident proxies by the chair, Mr. Godin, s. 110(1) of the OBCA enables a shareholder to appoint a proxyholder, by means of a proxy, as the shareholder's representative to attend and act at the meeting. The proxy must be signed, in writing or by electronic signature, "by the shareholder or an attorney who is authorized by a document that is signed in writing or by electronic signature". [^3] Those requirements of the law were reproduced by Continental in its management information circular. [^4]

[57] In the present case, the Ebrahim applicants, who had elected to be treated as NOBO shareholders, did not deposit with Continental signed copies of the form of proxy the company had distributed. Instead, the Ebrahims signed a short form of letter, addressed to Gary Singh, at Canaccord, which stated: [page126]

This will confirm that I have authorized Grant Sawiak of Fogler Rubinoff LLP to attend the above meeting in person to represent me and to vote on all matters and make such motions as he deems advisable.

I have lost my original proxy, therefore needing you to take my instructions above and have Grant Sawiak vote on my behalf.

[58] Those short letters signed by the Ebrahim applicants were not deposited with Continental. What Continental received was its form of proxy, signed by Canaccord, designating Mr. Sawiak as the proxyholder for a number of named shareholders listed on the proxy -- i.e., an omnibus proxy.

[59] At the AGM, Mr. Godin gave no reason for his disallowance of those proxies notwithstanding that prior to the meeting Equity Financial Trust had advised the company that it could only accept the proxies if they were executed by their NOBO holders.

[60] The duty under which those who chair shareholder meetings labour is "one of honesty and fairness to all individual interests, and directed generally toward the best interests of the company". [^5] Although it is sometimes said that a chair has a duty to act quasi-judicially, the Supreme Court of Canada has observed that courts are reluctant to find a chair to be in dereliction of his responsibility barring proof of bad faith. [^6] A chair's obligation to promote administrative fairness must be tempered with the need to control and organize a meeting so as to ensure that it proceeds effectively: [^7]

The function of a chairman is to oversee, not participate in a partisan sense. It may be sensible to refer briefly to the reason why the chairman is so ruling, but again courts should not attempt to hamstring in advance chairmen of meetings in contested settings. [^8]

[61] In the present case, it would have been sensible, or the better practice, for Mr. Godin to have disclosed the reason for disallowing the proxies. However, the decision taken by Mr. Godin obviously relied on the advice which Continental had received prior to the AGM from its transfer agent about the validity of the proxies. I see nothing in the evidence to support a suggestion that Mr. Godin acted in bad faith by disallowing the proxies. [page127]

[62] As to the correctness of the advice given by the transfer agent about the validity of the proxies, I am reluctant to offer a definitive judgment given the absence of a request by the shareholder applicants for a specific declaration on that point and the lack of detailed argument on the point by the parties. I would observe, however, that where a shareholder relies on s. 110(2)(a) of the OBCA for the validity of his proxy, arguing that it was signed by his attorney, some regard must be given to the further language of that section requiring that the attorney has been "authorized by a document that is signed in writing". While the shareholder applicants contend that their letters to Mr. Singh of Canaccord satisfied that requirement, those letters -- or authorizations of an attorney -- were not sent to Continental. How can a company determine if a person is an authorized attorney unless it is presented with some evidence of that state of affairs? [^9] In their factum, the shareholder applicants submitted:

Had proper inquiries been made by the Company, it would have been determined that the proxies delivered by Canaccord on behalf of the applicants were, in fact, valid. [^10]

Generally speaking, the obligation rests on the shareholder to submit to the company any documentation necessary to establish the validity of his proxy.

[63] In any event, the disallowance of the proxies was not conduct which caused an oppressive or unfair result because the evidence is uncontroverted that even had the proxies been counted, the quorum required by the Special Quorum Requirement would not have been met. Causation remains a necessary element of any oppression claim, and in the present case no causal link existed between the disallowance of the proxies and the lack of a vote for the election of directors at the 2011 AGM. [^11]

[64] The applicants also submitted that Mr. Godin's refusal to adjourn the meeting for 30 days as requested by two of the proxy holders, Mr. Sawiak and Mr. Singh, constituted oppressive conduct. While s. 59(a) of the by-law authorizes "persons present" at [page128] a meeting to adjourn the meeting "if a quorum is not present at the time appointed for a meeting" (i.e., two shareholders), it is open to a shareholder, under s. 58 of the by-law, to request the chair to adjourn the meeting. The chair may do so "with the consent of the meeting". In light of s. 58, there is reason to doubt the correctness of Mr. Godin's ruling -- he should have sought the views of those present to ascertain whether the "consent of the meeting" existed for an adjournment. But, I see nothing oppressive or unfair in that ruling. Management had given proper notice of the meeting; management sent out the required information circular; it was open to any shareholder to attempt to seek proxies opposing management through a dissident information circular; the applicants did not do so; accordingly, in light of the company having taken all necessary steps before the meeting, I do not regard as unfair Mr. Godin's ruling to refuse an adjournment.

[65] Let me turn, then, to consider the real crux of the applicants' oppression complaint -- the existence of the Special Quorum Requirement.

B.3 Relying on Special Quorum Requirement

[66] The shareholder applicants seek a declaration that the Special Quorum Requirement is invalid and that by relying on the requirement for the election of directors at shareholder meetings the board of Continental has acted in a manner oppressive or unfairly prejudicial to the interests of the applicants.

[67] The shareholder applicants do not take issue with the process by which the Special Quorum Requirement was enacted in 1996. Nor, in my view, is it open to the shareholder applicants to argue that the Special Quorum Requirement is per se invalid when the 50 per cent quorum set by the Special Quorum Requirement simply mirrors the default statutory quorum set by s. 101(1) of the OBCA:

101(1) Unless the by-laws otherwise provide, the holders of a majority of the shares entitled to vote at a meeting of shareholders, whether present in person or represented by proxy, constitute a quorum.

[68] Which brings me to the primary argument advanced by the shareholder applicants, one based on the history of the actual quorums achieved at Continental shareholder meetings since the enactment of the Special Quorum Requirement in 1996. There is no dispute that since the Special Quorum Requirement was put in place a sufficient quorum for the election of directors has not been reached at any shareholder meeting. The applicants argued that the resulting absence of elections for directors [page129] breached their reasonably held expectations that the directors would be held accountable at annual votes or the directors would vary the quorum requirement if it were impractical and would recommend a "practical quorum requirement". [^12]

[69] In forming their reasonable expectations, shareholders must take into account the public pronouncements and documents issued by a company. [^13] Consequently, when determining the reasonableness of a shareholder's expectations about the activities or governance of a public company, a court may consider information publicly disseminated by a corporation whether by way of press release, "road shows" or statements contained in documents filed to satisfy ongoing disclosure obligations. [^14] The Special Quorum Requirement has been disclosed in materials posted on SEDAR. The by-law has been publicly available since May 2006; the Special Quorum Requirement has been described in MICs since 1996, all of which were available on SEDAR. At the time the Ebrahim applicants bought their shares, a simple search of SEDAR would have disclosed the existence of the Special Quorum Requirement. As a result, it was not reasonable for the Ebrahim applicants, or Mr. Dhillon or Ms. Hoff, [^15] to expect that the election of directors for Continental would use some quorum requirement other than that contained in the by-law.

[70] Second, the Special Quorum Requirement ultimately came into being as a result of the vote of Continental's shareholders. Since its enactment, the board and management simply have applied the quorum rule approved by the shareholders. There is no evidence that the board has acted in any way to frustrate attaining sufficient numbers to meet the Special Quorum Requirement. To the contrary, the evidence showed that management had complied with its proxy solicitation and management information circular obligations. If some shareholders now think that with the significant increase in the number of issued and outstanding shares of Continental the time has come [page130] to change the Special Quorum Requirement, they are free to submit such a proposal to management for inclusion in the management information circular (OBCA, s. 99) or to requisition a special meeting to consider the proposal; the applicants have attempted neither.

[71] Third, it is true that historically turnout at the AGM has been low. Last fall, for the first time, one group of shareholders began to make some noise about the performance of Continental. Yet, they did not avail themselves of the tools contained in the OBCA by which displeased shareholders can attempt to effect change in the management of a corporation. Specifically, the applicant shareholders did not conduct a solicitation of proxies or distribute a dissident information circular. Common sense suggests that the more one acts as a squeaky wheel, the more likely it is that one's message will attract some attention. That is the whole premise underlying dissident information circulars. I cannot accept the applicants' submission that the Special Quorum Requirement in practice acted as an insurmountable barrier to effecting management change at Continental when the applicants really have not tried that hard to bring such change about. It would be one thing for dissident shareholders to complain that management was acting to impede or frustrate their efforts to solicit dissident proxies; such conduct could be oppressive. It is quite another thing for dissidents to complain about not meeting quorum when they have not resorted to the legal tools available to them to garner proxy support. I see no oppressive or unfair conduct by Continental's management concerning the quorum for the election of directors. Accordingly, I dismiss the shareholder applicants' claim for relief under s. 248 of the OBCA.

VI. Request to Call a Shareholder Meeting under OBCA s. 106

A. The principles upon which a court may exercise its power under OBCA s. 106 to call a meeting of shareholders

[72] Section 106(1) of the OBCA authorizes a court to call a meeting of the shareholders of a corporation:

106(1) If for any reason it is impracticable to call a meeting of shareholders of a corporation in the manner in which meetings of those shareholders may be called or to conduct the meeting in the manner prescribed by the by-laws, the articles and this Act, or if for any other reason the court thinks fit, the court, upon the application of a director or a shareholder entitled to vote at the meeting, may order a meeting to be called, held and conducted in such manner as the court directs and upon such terms as to security for the costs of holding the meeting or otherwise as the court deems fit. [page131]

Subsection 106(2) authorizes a court to set the quorum for the meeting:

(2) Without restricting the generality of subsection (1), the court may order that the quorum required by the by-laws, the articles or this Act be varied or dispensed with at a meeting called, held and conducted under this section.

[73] This provision first found its way into Ontario corporate legislation in 1953. [^16] The Court of Appeal considered the purpose of the section a few years later in Morris Funeral Service Ltd. (Re), [^17] a case in which one faction of shareholders applied for a court- ordered meeting, even though the faction possessed the numbers needed to call a meeting in the event the directors did not. (Given the applicants' challenge in this case to the Special Quorum Requirement, it is worth noting that the company's by-laws in Morris Funeral Service required a quorum of not less than 60 per cent of the shareholders for a meeting.) The Court of Appeal set aside the order of the lower court calling a meeting, stating:

The powers of the Court under s. 309 of the Act are, of course, discretionary. It is to be noted that in none of the reported decisions was the Court requested by one faction among the shareholders to intervene as against some other faction; on the contrary, in each case the Court was requested to remove some obstacle making it impracticable for the shareholders as a whole, or for an overwhelming majority thereof to call or conduct a meeting in accordance with the requirements in that behalf of the Company's Articles of Association. It is further to be observed, as illustrated in The Pall Mall Building Society's case (supra), that the Court, when ordering the calling of a meeting or directing the conduct of a meeting, was careful to do as little violence as possible to the corporate articles or regulations and, in fact, was careful to see that any meeting ordered to be held should be called and conducted in conformity with such articles or regulations as far as practicable. . . . . .

. . . In my opinion, except in extraordinary circumstances -- none of which are present here -- the section may not be invoked successfully for the express and sole purpose of placing in control of the Company's directorate and affairs one of two or more contending factions among the shareholders. [^18]

[74] In Airline Industry Revitalization Co. v. Air Canada, [^19] this court considered when judicial intervention under the [page132] corresponding section of the CBCA was appropriate. Blair J. noted that the judicial discretion given under the CBCA "should be exercised cautiously", [^20] and he concluded that since the requisitioning shareholders were empowered under the CBCA to call a meeting in the event the directors declined to do so, it was not a case where it was "impracticable" to call the meeting. He commented [at para. 54]:

Where there is a "corporate" remedy still open to a shareholder under the legislative scheme -- as there is here for AirCo, by virtue of subsection 143(4) of the CBCA -- the Court should be reluctant to step into the fray and impose its own solution to the "meeting" problem by exercising its discretion under section 144, in my view . . . The bare knuckled skirmishes of corporate restructuring warfare are best resolved by the combatants themselves to the extent possible, in their own boardrooms and meeting rooms and -- where, as is the case here, there are political dimensions as well -- in the public domain, rather than in the courtroom. The Court's role is to decide issues of a procedural or substantive nature which need to be determined to enable the process to proceed in a proper and timely fashion, but otherwise to remain apart from the battle.

The reluctance of a court to call a meeting where a shareholder has not availed itself of the procedure to requisition a meeting under corporate statute was echoed by Pepall J. in McEwen v. Goldcorp Inc. [^21]

[75] This cautious approach to the judicial calling of shareholder meetings was reiterated by the Court of Appeal in Montreal and Canadian Diocese of the Russian Orthodox Church Outside of Russia Inc. v. Protection of the Holy Virgin Russian Orthodox Church (Outside of Russia) in Ottawa Inc., [^22] where it observed that "courts have interpreted 'impracticable' narrowly, ordering shareholder meetings only in exceptional circumstances". [^23] In that case, the Court of Appeal did not consider it impracticable to call a meeting because the corporate by-laws were not in dispute, nor was there any confusion about the appropriate meeting procedures. [^24] [page133]

[76] The applicants, however, did point to a few cases where this court intervened to call a shareholder meeting. For example, the court ordered a meeting in the case of a company whose by-laws required a quorum of all shareholders at a meeting, yet a disgruntled minority shareholder refused to attend any meeting, thereby precipitating a paralysis in the company's corporate governance affairs. [^25] (The well known English case of El Sombrero, Ltd. (Re) [^26] also involved a situation where shareholders refused to attend a called meeting, thereby preventing achieving the quorum required by the company's by-laws.) So, too, in the Athabaska Holdings case the court considered that requiring one group of shareholders to requisition a meeting would, in the circumstances of that case, simply impose "a meaningless, ritualistic routine" on them, so it called a meeting. However, in Athabaska Holdings it was apparent the court had concluded that instead of considering competing injunction motions concerning the ownership of certain shares, the most practical solution to the problem before it would be to call a shareholder meeting and to impose terms on the operations of the company pending that meeting. [^27] I accept, as an accurate characterization of the holdings of these cases the following passage from the judgment of Wilton-Siegel J. in Wells v. Melnyk:

This provision has been used to order that a meeting of shareholders take place under varied quorum requirements to prevent the non-attendance of minority shareholders from frustrating the ability of the meeting to transact business: see El Sombrero Ltd, In re [1958] Ch.D. 900 (Ch.), Paul (H.R.) & Son Ltd., In re (1974), 118 S.J. 166 (Ch. D), Opera Photographic Ltd., In re [1989] 1 W.L.R. 634 (Ch. D) and B. Love Ltd. v. Bulk Steel & Salvage Ltd. (1982), 40 O.R. (2d) 1. However, these decisions all involved private corporations in which a minority shareholder prevented the legitimate exercise of majority shareholder rights. [^28]

I also would note that in the more recent cases of Airline Industry Revitalization and McEwen v. Goldcorp Inc., this court did not consider the availability of the remedy of requisitioning a shareholder meeting to be either meaningless or ritualistic. [page134]

B. Analysis

[77] The evidence does not reveal any matter which would make it impracticable to call a shareholder meeting. The Special Quorum Requirement mirrors the default quorum provision found in the applicable corporate legislation. Management has not impeded the solicitation of proxies by dissident shareholders. Instead, dissident shareholders have not made use of the proxy fight devices available under corporate legislation to effect a change in Continental's management, nor have the shareholder applicants attempted to requisition a special meeting for the purpose of electing directors notwithstanding that they hold over 5 per cent of Continental's issued and outstanding shares.

[78] This is not an appropriate case for a court to call a meeting under OBCA, s. 106. The applicant shareholders made a last minute, unorganized attempt to change the composition of Continental's board prior to the 2011 AGM. They did not succeed. I regard their application as an attempt by one faction of shareholders to seek court intervention against another faction. The case law makes clear that such is not a proper use of s. 106. Other corporate remedies stand ready for use by the applicants. In those circumstances, I am not prepared to call a meeting, and I dismiss that portion of the applicants' claim.

VII. Conclusion and Costs

[79] For these reasons, I dismiss the oppression application brought by the shareholders. Since Continental stated that it would not pursue its counter-application in the event the oppression application was dismissed, I treat the counter- application as withdrawn.

[80] I would encourage the parties to try to settle the costs of these applications and the related refusals motion. If they cannot, any party seeking costs may serve and file with my office written cost submissions, together with a bill of costs, by June 1, 2012. Any party opposing a claim for costs may serve and file with my office responding written cost submissions by June 12, 2012. The costs submissions shall not exceed four pages in length, excluding the bill of costs.

Application dismissed.

[^1]: Rule 4.1.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. [^2]: BCE Inc. v. 1976 Debentureholders, 2008 SCC 69, [2008] 3 S.C.R. 560, [2008] S.C.J. No. 37. The summary of principles contained in paras. 50-52 of these reasons is taken from the BCE case, paras. 58-90. [^3]: OBCA, s. 110(2). [^4]: Application record, Tab 2A, p. 20. [^5]: Blair v. Consolidated Enfield Corp., 1995 76 (SCC), [1995] 4 S.C.R. 5, [1995] S.C.J. No. 29, para. 47. [^6]: Ibid., para. 52. [^7]: Ibid., para. 53. [^8]: Ibid., para. 54. [^9]: In a slightly different, but analogous, context, H. Nathan and M. Voore, in their text, Corporate Meetings: Law and Practice, looseleaf (Scarborough, Ont.: Carswell, 1995-), write, at p. 18-83: "Where shares are registered in the principal's name, the agent should sign the principal's name followed by the agent's name and authority, and proof of authority should generally accompany the proxy." [^10]: Reply factum of the shareholders, para. 6. [^11]: BCE Inc., supra, para. 90. [^12]: Applicants' factum, para. 40. [^13]: Pente Investment Management Ltd. v. Schneider Corp., 1998 14808 (ON SC), [1998] O.J. No. 2036, 62 O.T.C. 1 (Gen. Div. (Comm. List)), para. 55. [^14]: See, for example, Greenlight Capital Inc. v. Stronach, 2006 36620 (ON SC), [2006] O.J. No. 4353, 22 B.L.R. (4th) 11 (S.C.J.), para. 19, affd (2008), 2008 34359 (ON SCDC), 91 O.R. (3d) 241, [2008] O.J. No. 2749 (Div. Ct.), para. 27. [^15]: Mr. Dhillon deposed that he purchased his shares "over a period of time" commencing in 1999; Ms. Hoff deposed that she bought her shares in May 2007. [^16]: Corporations Act, 1953, s. 309. [^17]: 1957 399 (ON CA), [1957] O.J. No. 80 (C.A.). [^18]: Ibid., paras. 6 and 7. [^19]: (1999), 1999 15075 (ON SC), 45 O.R. (3d) 370, [1999] O.J. No. 3581 (S.C.J.). [^20]: Ibid., para. 53. [^21]: 2006 35985 (ON SC), [2006] O.J. No. 4265, 21 B.L.R. (4th) 262 (S.C.J.), para. 52. [^22]: 2002 3570 (ON CA), [2002] O.J. No. 4698, 167 O.A.C. 138 (C.A.). [^23]: Ibid., para. 10. [^24]: Ibid., para. 12. In Giannotti v. Wellington Enterprises Ltd., [1997] O.J. No. 574, 26 O.T.C. 161 (Gen. Div.), the trial judge observed, at para. 85, that where parties were uncertain about the quorum required in order to conduct a meeting, they could invoke OBCA s. 106. [^25]: B. Love Ltd. v. Bulk Steel & Salvage Ltd. (1982), 1982 1901 (ON SC), 40 O.R. (2d) 1, [1982] O.J. No. 3578 (H.C.J.). [^26]: [1958] Ch. 900, [1958] 3 All E.R. 1 (Ch. Div.). [^27]: Athabaska Holdings Ltd. v. ENA Datasystems Inc. (1980), 1980 1567 (ON SC), 30 O.R. (2d) 527, [1980] O.J. No. 3787 (H.C.J.), paras. 15-25. [^28]: (2008), 2008 89823 (ON SC), 92 O.R. (3d) 121, [2008] O.J. No. 2845 (S.C.J.), para. 36.