In the matter of an Application brought by DIRTT Environmental Solutions Ltd.
Ken McEwan, K.C., Emily Kirkpatrick, and Saheli Sodhi, on behalf of three of the respondents, successfully defended against allegations advanced by the applicant company that the respondents were acting jointly and in concert under the Securities Act, R.S.A. 2000, c. S-4.
In this case, the applicant company sought various orders against the respondents under ss. 179 and 198 of the Act, including and seeking orders restricting the respondents’ share voting rights, cease trade orders, and director and officer bans.
These allegations arose following a period of disastrous company performance and after the other respondents requisitioned a shareholder meeting for the purpose of replacing the members of the Board. In defending against these allegations, the respondents argued that the Board had weaponized the Commission’s processes for the ulterior purpose of entrenching the current Board and prevailing in its proxy battle, and had sought to do so on the basis of evidence that was—at best—speculative.
In an oral decision delivered on March 4, 2022, the Commission Panel dismissed all the relief sought by the applicant company. In doing so, the Commission Panel noted that the onus was on the applicant company “to provide clear and cogent evidence of the joint actor relationship. The Commission Panel found that there was no “air of reality” to the joint actor allegation and that, on the contrary, the evidence was “far more consistent with [the respondents] each having acted independently in their own respective commercial interest.” The Commission Panel concluded its oral decision by expressing its “dismay” that the application was brought on the paucity of evidence provided, finding that the application was “ill-conceived” and an “imprudent use” of the applicant company’s resources.
The Commission Panel’s written reasons have not yet been issued. The Commission Panel’s oral decision can be found here.