Slatter, Bielby and Wakeling JJA

3.8: Originating applications and associated evidence
4.31: Application to deal with delay
4.33: Dismissal for long delay

Case Summary

The Appellants, minority shareholders in Galvanic Applied Sciences Inc. (“Galvanic”), were dissatisfied with an offer they had received to sell their shares in Galvanic (the “Shares”). The Appellants applied in October of 2013, under section 191 of the Business Corporations Act, RSA 2000, c B-9, for an Order determining the fair value of the Shares. Their Originating Application was not accompanied by a supporting Affidavit but stated that it would “come later”. Almost three years to the day after the Appellants filed their Originating Application, Mr. Morrison filed the Affidavit (the “Affidavit”). The admissible parts of the Affidavit simply collected documents which were predominantly publicly available on SEDAR.

In April of 2017, the Respondents applied for an Order dismissing the Appellants’ Action for delay under Rules 4.31 and 4.33. The Appellants’ case was dismissed by both Master Robertson at first instance and Justice Kenny at the Court of Queen’s Bench on Appeal. The Alberta Court of Appeal found no reason to exercise its discretion in the Appellants’ favor and allow them to continue with their Action.

In interpreting delay under Rule 4.31, the Court of Appeal noted that Mr. Morrison’s justification for the delay was attributable to the fact that he was not a lawyer and did not know what information should be in the Affidavit, however, the Court did not find this argument persuasive. The Court found Mr. Morrison to be a sophisticated businessman and investor, familiar with the applicable jurisprudence, and that Mr. Morrison had never claimed to be unable to afford to retain counsel and he had, in fact, sought legal advice for various portions of the Affidavit.

Moreover, in assessing delay under Rule 4.33, the Court noted that the Appellants’ provision of the Affidavit did not constitute a significant advance. The Court found that most of the information contained in the Affidavit should have been stated in the Appellants’ Originating Application. The Court referenced Rule 3.8(1) which requires that an “originating application must … state the claim and the basis for it”. As such, the content of the Affidavit did not increase the likelihood that either the parties or the Court would have sufficient information to rationally asses the merits of the parties’ positions and be in a better positon to either settle or adjudicate the Action. As such, the Affidavit did not advance the Action to allow for an extension of the three year timeline under Rule 4.33. Accordingly, the Court dismissed the Appeal under both Rules 4.31 and 4.33.

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