On Friday, January 13, 2017, Borden Ladner Gervais LLP published
bulletin on the Koh decision, which discussed the Court's
denial of an application for a declaration brought by the largest
shareholder of Ellipsiz Communications Ltd. ("Ellipsiz")
claiming that he validly requisitioned a shareholders meeting under
the Business Corporations Act (Ontario)
("OBCA"). The Court denied the application on the basis
that the primary purpose of the requisition was to redress a
"personal grievance" against Ellipsiz and a group of its
directors, in which case the Ellipsiz board was not, pursuant to
section 99(5)(b) of the OBCA, obligated to comply with the
The Court's analysis is relevant to organizations
incorporated under the CNCA or ONCA because section 163(6)(b) of
the CNCA and section 56(6)(b) of the ONCA provide nearly identical
language to section 99(5)(b) of the OBCA.
Canadian courts have previously applied interpretations of
business corporations legislation to analogously worded
not-for-profit corporations legislation (see Lash v. Lash Point Association Corp.,
a recent case in which Borden Ladner Gervais LLP was involved) and
interpretations of not-for-profit corporations legislation to the
business corporations context. In fact, the Court in Koh relied
heavily on Saskatchewan WTF Taekwondo Assn Inc. v.
Taekwondo Canada, a decision that directly considered the
scope and application of section 163(6)(b) of the CNCA, in defining
"personal grievance" as "a dispute that does not
entail an issue of corporate policy or operations but rather
involves an issue primarily pertaining to the personal interest of
The Koh decision serves as useful guidance on the scope and
application of the personal grievance exception to member
The onus of proof rests with the corporation:
The corporation must demonstrate that that primary purpose of the
member proposal is to redress a personal grievance, rather than the
member having to demonstrate that such a proposal is
The burden of proof is a high one: Section
163(6)(b) of the CNCA and section 56(6)(b) of the ONCA imposes a
high threshold on the corporation, requiring that it must be
clearly apparent that the primary purpose of the member proposal is
to redress a personal grievance.
The determination must be made on 'objective'
evidence: An analysis of whether a member's proposal
can be said to be motivated by personal grievance must focus on
objective evidence (in the form of the member's actions,
including prior conduct, behavior and written communications).
The use of electronic signatures is becoming increasingly commonplace in commercial transactions, as individuals and businesses capitalize on the administrative efficiency afforded by today’s digital world.
Following the Divisional Court's decision in Toronto-Dominion Bank v. Ryerson University, companies that contract with government institutions should be aware that such contracts are likely open to disclosure under the Freedom of Information and Protection of Privacy Act.
Back in April 2015, we discussed key questions to keep in mind when negotiating earn-outs, and looked at recent trends coming out of the American Bar Association's 2014 Canadian Private Target M&A Deal Points Study (the 2014 ABA Study).
Before sending out that next tweet or posting to a blog, hit the pause button and consider whether the timing and content pass muster. Reporting issuers and their representatives must take note of Staff Notice 51-348
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