Smoothwater Capital Partners LP I, a dissident shareholder of
the Company (the "Dissident"), issued a
press release critical of the Company's board and soliciting
proxies in support of its efforts to replace the board. The Company
responded with its own press release defending its board's
actions and criticizing the Dissident (the "Press
Release"). The Press Release stated that the Company
would "provide a management information circular that will be
mailed to shareholders". It did not contain a request for
The Dissident applied to Court for an order that the Company
comply with, and be restrained from, acting in breach of s. 150 of
the CBCA. The Dissident asserted that section 150 of the CBCA
prohibited the Press Release, as the Company solicited proxies
before delivering a management proxy circular. The Company
responded that the Press Release was intended to inform its
shareholders and rebut inaccurate statements made in the
Dissident's press release, but did not solicit proxies.
Justice McEwen held that while "solicitation" under
the CBCA should be defined broadly, no such solicitation had taken
place in this case. The test of whether a document solicits proxies
is based on its "principal purpose", not whether it had
been created during a proxy fight. In the context of this case, the
principal purpose of the Press Release was to provide certain
explanations and defend the Company's historical position, not
to solicit proxies. Justice McEwen found that the Company was thus
entitled to respond to the Dissident's allegations in a single
press release, but noted that he was not asked to consider whether
multiple press releases could constitute a proxy solicitation.
This case stands for the proposition that a corporation is
entitled to defend itself from attacks
during a proxy fight provided that the principal purpose of the
communication is not to solicit proxies. It appears that the
Company's decision not to request proxies in the Press Release
and not to issue further press releases on this matter were factors
in Justice McEwen's finding that the Press Release was not a
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Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
Under the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan Act and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions.
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