Chisholm v. Antigonish Construction Ltd.

Parties

Procedural Posture

Application for Interlocutory Relief Under Schedule 3 S.5 of the Nova Scotia Companies Act (oppression Remedy) / Interlocutory Decision (validation of Shareholders Meeting; Appointment of Interim Protections)

Legal Issues

1. 1 Whether the June 20, 2006 shareholders' meetings were valid and the resulting election of directors valid
2. 2 Whether proxies were invalid for failure to be deposited 48 hours before the meeting
3. 3 Whether the March 1999 shareholders' agreement could override the companies' articles

Ratio Decidendi

The court held that the June 20, 2006 shareholders' meetings were valid and the election of John and Trevor as directors was valid because the companies' articles authorized election by majority vote and the 1999 shareholders' agreement did not and could not override the articles as it had not amended them by special resolution; the failure to deposit proxies 48 hours before the meeting was a technical defect not fatal to validity; the applicant established oppression warranting interim relief, and the court validated the meeting while imposing safeguards (appointment of a litigation guardian to manage litigation claims and a monitor to oversee valuation and disposition of assets).

Court Disposition

Application granted in part: June 20, 2006 shareholders' meetings validated; John and Trevor confirmed as directors; interim protective measures ordered; winding up refused.

Orders

• Validate the June 20, 2006 shareholders' meetings and confirm the election of John Chisholm and Trevor Chisholm as directors of Antigonish Construction Limited and Chisholm Development Limited.
• Appoint a litigation guardian (to be agreed by counsel or appointed by the Court if counsel cannot agree) to evaluate claims the companies have against John Chisholm and ACL Construction Limited and to instruct counsel.