QUEEN’S BENCH FOR SASKATCHEWAN Citation: 2016 SKQB 166 Date: 2016 05 06 Docket: QBG 1499 of 2015 Judicial Centre: Saskatoon BETWEEN: FCC GROUP INVESTMENT CORPORATION and THE DIRECTOR OF CORPORATIONS FOR SASKATCHEWAN Counsel: Jeffrey M. Lee, Q.C. for the applicant Michael J. Morris for the respondent JUDGMENT SCHERMAN J. May 6, 2016 Introduction [1] Shareholders of FCC Group Investment Corporation [FCC] approved plan of arrangement and seek an order approving that arrangement pursuant to s. 186.1 of The Business Corporations Act, RSS 1978, B-10 [Act or SBCA]. The plan of arrangement involves proposed liquidation and dissolution with provision that if various shareholders of record cannot be found after outreach efforts, their pro rata entitlement to return of the corporation’s capital will accrue to and be paid to the remaining known shareholders. FCC argues the court has the power to approve such an arrangement under the powers given to it under ss. 186.1(4), 203(8) and 210(m) of the Act. [2] The Director of Saskatchewan Corporations Branch opposes approval of the plan of arrangement on the basis that s. 204 of the Act requires corporation to distribute its assets among its shareholders according to their respective rights on dissolution and s. 220 directs that property distributable to shareholder who cannot be found shall be converted to money and paid to the Minister of Finance. Under s. 220(3) shareholders can apply to the Minister of Finance for payment out to them on proof of entitlement. [3] FCC is the successor corporation to three corporations, each of which was an investment vehicle for potential immigrants to Canada under an immigrant investor program. FCC has 275 shareholders from 19 countries. Despite history of mismanagement or worse by the promoters of the three original immigrant investor funds and significant litigation and related problems, FCC has dealt with those problems, and the capital of the corporation is now sufficient to return to each shareholder their original capital investment. However, they will have had little, if any, return on their investments over some thirty years. [4] Despite significant efforts, FCC has been unable to determine current addresses or other contact information for 37 of its shareholders. It wants to liquidate and distribute its capital to its shareholders. Because it does not know how to contact the “missing” 37 shareholders, the plan of arrangement approved by the remaining shareholders contemplates an outreach or advertising program to be conducted over the next two years with view to reaching at least some of the missing 37 shareholders and thereby give them an opportunity to confirm their status as shareholders and to participate in the distribution of capital on dissolution. [5] The purpose of the arrangement was described in Notice of Meeting and Management Information Circular circulated to known shareholders in advance of the meeting which approved the plan of arrangement. It stated as follows: Purpose of the Arrangement The purpose of the Arrangement is to achieve result whereby FCC GIC, upon dissolution, will be permitted to distribute all of its net proceeds to those of its Shareholders who have “proven claims in establishing their status as Shareholders rather than having portion of the proceeds revert to the Minister of Finance in the right of Saskatchewan pursuant to the SBCA. The rationale for the Arrangement is that the Shareholders have already sustained significant loss on their investment as result of the oppressive acts of former management. The business purpose of the Arrangement is to assist in relieving the Shareholders against the losses suffered by them and to provide Missing Shareholders with reasonable opportunity to obtain notice of the Plan of Arrangement, to identify themselves to the Company, to satisfy the Participation Requirements (as defined in the Plan of Arrangement) and thereby to obtain return of their respective original investments in the Company. The Arrangement is to be carried out pursuant to the terms of the Plan of Arrangement. (Emphasis added) The Legislation [6] The relevant provisions of the Act within Divisions XIV and XVI dealing with Fundamental Changes and Liquidation and Dissolution respectively are as follows: DIVISION XIV-FUNDAMENTAL CHANGES 186.1(1) In this section “arrangement” includes: (f) liquidation and dissolution of corporation; and (3) Where it is not practicable for corporation that is not insolvent to effect fundamental change in the nature of an arrangement under any other provision of this Act, the corporation may apply to court for an order approving an arrangement proposed by the corporation. (4) In connection with an application under this section, the court may make any interim or final order it thinks fit including, without limiting the generality of the foregoing: (e) an order approving an arrangement as proposed by the corporation or as amended in any manner the court may direct. DIVISION XVI-LIQUIDATION AND DISSOLUTION (7) After issue of certificate of intent to dissolve, the corporation shall: (c) proceed to collect its property, to dispose of properties that are not to be distributed in kind to its shareholders, to discharge all its obligations and to do all other acts required to liquidate its business; and (d) after giving the notice required under clauses (a) and (b) and adequately providing for the payment or discharge of all its obligations, distribute its remaining property, either in money or in kind, among its shareholders according to their respective rights. (8) The Director or any interested person may, at any time during the liquidation of corporation, apply to court for an order that the liquidation be continued under the supervision of the court as provided in this Division, and upon such application the court may so order and make any further order it thinks fit. 210 In connection with the dissolution or the liquidation and dissolution of corporation, the court may, if it is satisfied that the corporation is able to pay or adequately provide for the discharge of all its obligations, make any order it thinks fit including, without limiting the generality of the foregoing: (l) subject to section 216, an order approving any proposed interim or final distribution to shareholders in money or in property; (m) an order disposing of any property belonging to creditors or shareholders who cannot be found; 220(1) Upon the dissolution of corporation, the portion of the property distributable to creditor or shareholder who cannot be found shall be converted into money and paid to the Minister of Finance. (2) payment under subsection (1) is deemed to be in satisfaction of debt or claim of such creditor or shareholder. (3) If at any time person establishes that he is entitled to any moneys paid to the Minister of Finance under this Act, the Minister of Finance shall pay an equivalent amount to him out of the general revenue fund. 221(1) Subject to subsection (2) of section 219 and section 220, property of corporation that has not been disposed of at the date of its dissolution vests in Her Majesty in right of Saskatchewan. Judicial Consideration [7] Counsel were unable to provide me with any authorities interpreting these provisions of the Act in comparable situation. FCC cited the following decisions as providing some guidance: BCE Inc. 1976 Debentureholders, 2008 SCC 69, [2008] SCR 560 [BCE]; Confederation Financial Services (Canada) Limited Confederation Treasury Services Limited (2003), 2003 CanLII 46351 (ON SC), 40 CBR (4th) 10 (Ont Sup Ct) [Confederation Financial Services]; and Canadian Red Cross Society (Re), 2012 ONSC 7124 (CanLII), 99 CBR (5th) 101. The Director, in addition to BCE, cited Re Prairie Fibreboard Ltd. (1962), 1962 CanLII 245 (SK QB), 36 DLR (2d) 767 (Sask QB) [Prairie Fibreboard], as providing some guidance. With the exception of BCE, found no assistance in these decisions. [8] Prairie Fibreboard was an unopposed application by the liquidator under the provisions of The Companies Winding Up Act, RSS 1953, 131 (since rep), seeking approval to distribute to charities small amount of funds remaining after discharge of all of the corporation’s debts. The decision does not engage the arguments and issues that are in play in the present situation. [9] In Confederation Financial Services the Ontario Public Guardian and Trustee was challenging previous court order, that had not been appealed, which directed that funds unclaimed in respect of certain “residue certificate holders” under form of trust indenture could be paid pari passu to the existing residue certificate holders, notwithstanding that the existing holders were paid in full. The residue certificates arose pursuant to court sanction plan under the Companies’ Creditors Arrangement Act, RSC 1985, C-36. The beneficiaries under the residue certificates were creditors of the company in question, not shareholders. The decision dismissing the Public Guardian and Trustee’s application was made in the context of challenge to an existing un-appealed court order and was decided upon issues related to the concept of bona vacantia and the Escheats Act, RSO 1990, E.20 within the law of Ontario. Here again the decision does not engage the arguments and issues that are in play in the present situation. [10] In Canadian Red Cross Society the Red Cross, in the face of class action proceedings by large number of claimants, had plan of arrangement approved under the Companies’ Creditors Arrangement Act. That plan involved the creation of five separate trust funds to pay out claims. Cheques issued to various beneficiaries of the trusts were uncashed. The trustees of the funds sought direction. The court ordered that the time and expense that would be involved in attempting to find and pay those who did not cash their cheques was not proportional to the potential benefit involved, and while no perfect solution existed, the court ordered the funds in question be paid to known class members identified as “known partially paid claimants”. Once again, the decision does not engage the arguments and issues that are in play in the present situation. FCC’s Position [11] Counsel for FCC cites BCE (see paras. 136 to 155) for the criteria court should consider when deciding whether to approve plan of arrangement. FCC’s position is that its proposed plan of arrangement has complied with all statutory requirements for an arrangement to be approved by the court and satisfies the criteria enunciated in BCE for approval. It says there is valid business reason for the arrangement the shareholders have approved and the plan is proposed in good faith and is fair and reasonable in the circumstances. [12] Stated in more detail FCC says that: i. Section 186.1(4) gives the court the power to approve an arrangement proposed by the corporation; ii. Section 186.1(1)(e) defines “arrangement” as including liquidation and dissolution of corporation; iii. The benefit of the arrangement proposed for the missing shareholders is that it calls for significant efforts and expenditures to be made over two-year period to find the missing shareholders (outreach efforts) so that they might participate in distribution of capital on dissolution; iv. Without the proactive outreach efforts contemplated by the proposed plan of arrangement FCC says that realistically the missing shareholders will never be found and will never exercise their rights as shareholders much less become aware of their entitlement under s. 220 of the Act. It argues that any theoretical benefit to the missing shareholders under s. 220 of the Act is practically non-existent; v. Section 210 provides that in connection with the liquidation and dissolution of corporation the court may make any order it thinks fit including, under ss. (l) and (m), approving any distribution to shareholders and disposing of property belonging to shareholders who cannot be found; and vi. It is just and equitable that the known shareholders share the capital that would have otherwise been payable to missing shareholders since the shareholders (albeit through the corporation) have had to expend significant monies and efforts on litigating to oppose oppressive conduct and various problems created by the promoters. Thus FCC says thus sharing in the capital otherwise allocable to missing shareholders would provide the known shareholders some compensation for the wrongs done to them. The Director’s Position [13] The Director points out that the power of the court to approve plan of arrangement arises under Division XIV Fundamental Changes of SBCA. It argues that this division’s approval process is generally applicable to fundamental changes often involving change of control transactions where the arrangement is sponsored by the directors of target company and the goal is to require some or all shareholders to surrender control. The approval process is focussed on whether the arrangement proposed viewed objectively is fair and reasonable to all interested parties in such circumstances. The Director says s. 186.1 is here being used to circumvent the mandatory requirements of the Act with respect to the entitlement of missing shareholders and it should not be permitted to so use it. It says the plan of arrangement is not undertaken for valid business purpose within the approval criteria set forth in BCE. [14] The Director points out the plan of arrangement does not involve any elements of change of control or of shareholders being required to exchange one type of shares for other assets or any arrangement that facilitates an ongoing existence of the corporation. It argues that while fundamental change may involve the liquidation or dissolution of one corporation in the context of larger transaction (and thus s.186.1 defines arrangement as including liquidation and dissolution) what is sought here is simply liquidation that in effect deprives missing shareholders of their entitlement. It says Division XVI, dealing specifically with liquidation and dissolution, should have been used and that FCC is using it as means to circumvent the requirements of the Act. [15] The Director’s position is that it is basic right of shareholder to receive their pro rata entitlement on liquidation and dissolution of corporation. Section 220 of the Act is there to ensure this right is not extinguished. The proposal of FCC will extinguish this basic right and therefore even if the court has the power to approve the arrangement under s. 186.1(4) it should not do so. [16] The Director argues that: i. Had FCC proceeded with liquidation and dissolution in the normal manner there would be no question but that the funds of the missing shareholders would be dealt with under s. 220 of the Act; ii. The arrangement process is being used to circumvent the requirement that funds due to missing shareholders are paid to the Minister of Finance under the provisions of s. 220 of the Act; iii. There is no valid business purpose for the arrangement proposed since there is no benefit to the corporation. The benefit provided is to the known shareholders with the burden thereof imposed on missing shareholders. As disclosed in FCC’s own statement of the purpose of the arrangement, the purpose is to permit known shareholders to share in what would otherwise be the entitlement of missing shareholders; iv. The outreach program proposed by FCC could occur without court order approving it, and the liquidation can proceed in the normal manner; v. The powers of the court under s. 186.1(4) and s. 210 should be interpreted in limited manner that does not conflict with the mandatory direction in s. 220; and vi. Even if such limited interpretation is not given, the powers given the court under s. 210 are discretionary and should not be exercised as requested by FCC since to do so would extinguish shareholders’ rights, expropriate their property and the proposed arrangement is not fair and reasonable. Applicable Principles of Statutory Interpretation [17] Counsel for FCC says that applying the modern principle of statutory interpretation yields the conclusion that, to the full extent possible, ss. 186.1(4) and 210(m) of the SBCA and s. 220(1) should be read and interpreted in such manner as to permit these sections to co-exist and to operate in harmony. The interpretation it says should be given is one that allows the court to approve plan of arrangement that permits the court to override the direction of the legislature in s. 220. [18] Since its 1984 decision in Stubart Investments Ltd. Canada, 1984 CanLII 20 (SCC), [1984] SCR 536, the Supreme Court of Canada has consistently applied the so‑called “modern principle of statutory interpretation” as enunciated in E.A. Driedger, Construction of Statutes, 2d ed (Toronto: Butterworths, 1983), where the author stated, at page 87, the principle as follows: Today there is only one principle or approach, namely, the words of an Act are to be read in their entire context in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament. [19] Subsequently, the so‑called “modern rule of statutory interpretation” was confirmed in Rizzo Rizzo Shoes Ltd. (Re), 1998 CanLII 837 (SCC), [1998] SCR 27, and has been consistently applied by courts since. This modern rule is more fully articulated by Ruth Sullivan in Sullivan on the Construction of Statutes, 6th ed (Markham: LexisNexis Canada, 2014) [Sullivan]. After outlining the questions an interpreter should consider when determining whether provision applies to particular facts, Sullivan went on to say the following: §2.9 At the end of the day, after taking into account all relevant and admissible considerations, the court must adopt an interpretation that is appropriate. An appropriate interpretation is one that can be justified in terms of (a) its plausibility, that is, its compliance with the legislative text; (b) its efficacy, that is, its promotion of legislative intent; and (c) its acceptability, that is, the outcome complies with accepted legal norms; it is reasonable and just. [20] In chapter 11 of her text, Sullivan deals with “Coherence, Overlap and Conflict Resolution” in the interpretation of statutes. Starting with the presumption of coherence in legislation, she states at page 337: §11.3 The presumption of coherence is also expressed as presumption against internal conflict. It is presumed that the body of legislation enacted by legislature does not contain contradictions or inconsistencies, that each provision is capable of operating without coming into conflict with any other. As La Forest J. wrote in Friends of Oldman River Society v. Canada (Minister of Transport) [1992 CanLII 110 (SCC), [1992] SCR 3]: there is presumption that the legislature did not intend to make or empower the making of contradictory enactments. In Willick Willick [1994 CanLII 28 (SCC), [1994] SCR 670], Sopinka J. wrote: With respect to the application of the contextual approach, the objective is to interpret statutory provisions to harmonize the components of legislation inasmuch as is possible, in order to minimize internal inconsistency…. [21] Moving on to the presumption of overlap, she summarizes at page 338 that: §11.7 Presumption of overlap. When two provisions are applicable without conflict to the same facts, it is presumed that each is meant to operate fully according to its terms. So long as overlapping provisions can apply, it is presumed that they are meant to apply. The only issue for the court is whether the presumption is rebutted by evidence that one of the provisions was intended to apply exhaustively to facts of the sort in question. [Emphasis in original] and she continues at page 341 by noting that: §11.16 Exhaustive provisions. Under the presumption of overlap, when provisions overlap without conflict it is presumed that each is meant to apply. However, this presumption is rebutted by showing that in the circumstances one of the provisions is intended to exhaustively declare the applicable law. If one provision is exhaustive, the other cannot apply. [22] The learned author discusses extensively principles and techniques of conflict resolution, but before doing so, she states at page 344: §11.22 The challenges of defining conflict. When two or more provisions overlap, the courts try to give effect to each. They do not resort to the conflict resolution strategies at their disposal unless there is genuine conflict. However, determining whether genuine conflict exists in particular circumstances can be challenging. There are several distinct contexts in which provisions conflict with one another: overlap between federal and provincial provisions overlap between provisions enacted by different levels of government within the same jurisdiction overlap between provisions enacted by the same legislative body overlap between executive legislation and other legislation within the same. Interpretation of the SBCA [23] In BCE, in per curiam decision, the Supreme Court of Canada succinctly described the history, nature and purpose of the fundamental change provisions of the Canada Business Corporations Act, RSC 1985, C-44 [CBCA] as follows: 123 The s. 192 approval process has its genesis in 1923 legislation designed to permit corporations to modify their share capital: Companies Act Amending Act, 1923, S.C. 1923, c. 39, s. 4. The legislation's concern was to permit changes to shareholders' rights, while offering shareholders protection. In 1974, plans of arrangements were omitted from the CBCA because Parliament considered them superfluous and feared that they could be used to squeeze out minority shareholders. Upon realizing that arrangements were practical and flexible way to effect complicated transactions, an arrangement provision was reintroduced in the CBCA in 1978: Consumer and Corporate Affairs Canada, Detailed background paper for an Act to amend the Canada Business Corporations Act (1977), p. (“Detailed Background Paper”). 124 In light of the flexibility it affords, the provision has been broadened to deal not only with reorganization of share capital, but corporate reorganization more generally. Section 192(1) of the present legislation defines an arrangement under the provision as including amendments to articles, amalgamation of two or more corporations, division of the business carried on by corporation, privatization or “squeeze-out” transactions, liquidation or dissolution, or any combination of these. [24] Given the decision by Saskatchewan and other provinces to pass business corporations’ legislation that essentially replicated the CBCA, have no difficulty in finding the Supreme Courts analysis in BCE to be equally applicable to the SBCA. [25] It is my opinion that s. 186.1 of the SBCA is here being used by FCC for a purpose which the legislature did not intend. While s. 186.1 of the SBCA does specify that an arrangement includes “a liquidation or dissolution” of corporation (as does s. 192 of the CBCA) the context within which this is provided must be considered. review of Division XIV Fundamental Changes shows that it is directed at fundamental changes such as changes to corporations’ articles including share structures and rights, amalgamations of corporations, continuances in and out of Saskatchewan, borrowing rights, dissent rights, re-organizations in circumstances of insolvency and the like. This is consistent with the Supreme Court of Canada’s discussion of the approval process relating to s. 192 of the CBCA. [26] Section 186.1 is that last section in Division XIV. It, with some minor variations in language, contains the same provisions as s. 192 of the CBCA. In particular, ss. (3) of both sections read identically as follows: (3) Where it is not practicable for corporation that is not insolvent to effect fundamental change in the nature of an arrangement under any other provision of this Act, the corporation may apply to court for an order approving an arrangement proposed by the corporation. [27] Section 186.1 is expressly stated to be mechanism to effect fundamental changes that cannot practicably be implemented under other provisions of the Act. The liquidation and dissolution of FCC was practical under other provisions of the SBCA. Division XVI of the Act specifically provides for the ordinary process of liquidation and dissolution. It would have not only been practicable but simpler for FCC to have proceeded to dissolution under these provisions. [28] However, the normal liquidation and dissolution process could not achieve the stated objective of FCC to redirect the otherwise entitlement of missing shareholders to the remaining shareholders. Does this objective transform what would otherwise be normal liquidation and dissolution into fundamental change in the nature of an arrangement which the court can and should approve under the powers given to the court in s. 186.1(4)(e) or otherwise? [29] FCC argues that should interpret s. 186.1(4)(e) as so permitting because, among other reasons, s. 210 authorizes the court to make any order it thinks fit in connection with the liquidation and dissolution of corporation including: 210 (l) an order approving any proposed interim or final distribution to shareholders in money or in property; (m) an order disposing of any property belonging to creditors or shareholder who cannot be found. [30] When interpreting the SBCA my objective, as outlined in Sullivan, is to achieve an appropriate interpretation that can be justified in terms of its compliance with the legislative text, promotion of the legislative intent and an outcome that complies with accepted legal norms. In pursuing these goals of plausibility, efficacy and acceptability am assisted by the presumptions of coherence and overlap. [31] do not interpret s. 210(l) as assisting FCC in its submissions. interpret this subsection as giving the court, in the context of liquidation or dissolution, the power to approve proposed distributions, interim or final, whether in money or property. The power is directed at “distribution” which must be interpreted as distribution of the assets of the corporation after all debts and obligations of the corporation are satisfied. Thus, this section permits the court to approve distribution to shareholders of their entitlement, qua shareholders, either in the form of money or the division of the property or assets of the corporation. Using the example of corporation owning real estate, the court could order that rather than the real estate being liquidated, it be divided among the shareholders, in specie, proportionate to their entitlement as shareholders. [32] can see no good reason for interpreting this subsection as having wider purpose and intent. Specifically, there is no good reason to conclude the legislature intended by this subsection to permit the court to override the mandatory directions contained in ss. 220 and 221. Interpreted in this manner there is no conflict between the mandatory requirements in ss. 220 and 221 and the power given to the court in s. 210(l). The court can exercise its power under s. 210(l) while comply with the mandatory direction in ss. 220 and 221. Thus, these provisions of the Act can be read to operate harmoniously and without conflict. [33] similarly find no conflict between the power given the court in s. 210(m) to order the disposition “of any property belonging to creditors or shareholders who cannot be found” and s. 220(1) which requires that on dissolution “the portion of the property distributable to creditor or shareholder who cannot be found shall be converted into money and paid to the Minister of Finance”. [34] As interpret s. 210(m), the reference to “disposition of any property belonging to creditors or shareholders who cannot be found” contemplates property of shareholders and creditors in the hands of the corporation, not the rights of shareholders that flow from their status as shareholders. Obviously the shares themselves are property of the shareholders, but the interpretive question to be answered is whether the legislature intended s. 210(m) to include rights arising qua shareholder when the language used can have narrower meaning, which does not conflict with the specific provision contained in s. 220 of the Act. [35] For dissolution of corporation to proceed there has to be an ability for the liquidating corporation to dispose of and convert into money, property in its possession owned by creditors and shareholders who cannot be found. corporation is not entitled to dispose of property owned by its creditors and shareholders simply because they cannot be found. It has duty to account. Section 210(m) gives the court the power to order the disposition of such property and thus solve the dilemma of corporation wishing to dissolve but being in possession of property owned by creditors or shareholders. On the face of it the language used in s. 210(m) deals only with the disposition of such property. It does not purport to speak to the distributive rights of shareholder, qua shareholder on dissolution. This the legislature has addressed in s. 220. [36] It is my interpretation that in s. 210(m) the legislature was intending to give the court the ability to order disposition of property of creditors and shareholders. It was not there dealing with shareholder’s right to distribution on dissolution. Giving s. 210(m) this limited interpretation and scope, no conflict with s. 220 arises indeed it results in harmonious interpretation that permits each of the provisions to operate within their intended scope and sphere. To interpret s. 210(m) as including the power of the court to order elimination of shareholders’ rights to pro rata distribution of the corporation’s assets or property gives meaning to s. 210(m) that find not to have been intended by the legislature. [37] Approached from another perspective it is to be noted that s. 220 expressly says that “the property distributable to creditor or shareholder who cannot be found shall be converted into money and paid to the Minister of Finance”. The phrase “property distributable” to shareholder can encompass both property owned by shareholder or the shareholder’s pro rata entitlement, qua shareholder, to distribution on dissolution (as might potentially be ordered by the court under s. 210(l). This is different language than the words used in s. 210(m) which addresses “property belonging to .shareholders”. Thus it is reasonable and appropriate to conclude that the legislature was in these different sections intending to deal with distinct situations. In s. 220 the legislature used words that encompassed both the proceeds of disposition of property of shareholders who cannot be found and missing shareholders’ rights to pro rata distribution of the corporation’s property. [38] Interpreted in this manner, the presumptions of coherence (against internal conflict) and the presumption of overlap as outlined above can operate. Further, the objective of achieving harmonious interpretation is achieved. [39] do not interpret the power of the court found under either s. 210(l) or (m) to approve any “distribution to shareholders in money or in property” or to make an order “disposing of any property belonging to creditors or shareholders who cannot be found” as giving the court the power to so order where it would conflict with the express directions found in s. 220 and effectively eliminate shareholder’s express rights under s. 220. [40] To comply with the principles of avoiding conflict and giving harmonious interpretation to the legislation as whole, must interpret s. 210(l) and (m) as giving the court power to make such orders in circumstances other than where it would conflict with the express directions found in s. 220. The interpretations have given to the statutory provisions in question are consistent with the nature and purpose of the fundamental change provisions of the SBCA as extrapolated from the Supreme Court of Canada’s decision in BCE and that consistency supports the plausibility, efficacy and acceptability of the interpretations have given to the language in question. Conclusion [41] Given the interpretations I have made with respect to the applicable statutory provision, I conclude that I do not have the power to approve the plan of arrangement proposed by FFC. In my opinion s. 220 of the SBCA is mandatory and requires that where upon dissolution of corporation shareholders cannot be found that the pro rata entitlement of those unfound shareholders shall be paid to Minister of Finance. [42] If am wrong in my interpretation of the SBCA and this court does have the power to approve the proposed plan of arrangement, conclude that such powers as the court has under ss. 186.1(4)(e), 203(8) and 210 are discretionary. The power is to do what think fit. In all of the circumstances do not think it appropriate and fit to approve the plan of arrangement proposed. [43] The effect of approving the proposed arrangement would be to deprive the missing shareholders of their right to recover their pro rata entitlement to participate in distributions to shareholders on dissolution, then or subsequently under the provisions of s. 220(3). Even if had the power to cancel such right, that is decision that should not be made lightly. [44] While the corporation and thus the entire body of shareholders may have suffered oppressive conduct and potentially loss as result of the actions of former management, such losses were also suffered by the missing shareholders. Shifting the pro rata entitlement of missing shareholders to the known shareholders might be viewed as compensating the known shareholders, but it accomplishes that end only by increasing the loss to the missing shareholders. The proposed plan of arrangement would, in my assessment, benefit the known shareholders at the expense of the missing shareholders. Thus do not view the arrangement proposed as fair and reasonable to all affected parties. [45] During argument raised with counsel whether creating fund consisting of the entitlement of the missing shareholders on dissolution with this court ordering that: i. the proceeds of such fund be utilized to fund the outreach efforts proposed to find missing shareholders; ii. fixing pro rata distribution entitlement for the missing shareholders after payment of the costs of such outreach efforts from such fund; and iii. making distributions to such missing shareholders as are found to qualify any paying unclaimed balances or distribution entitlements to the Minister of Finance might be plan of arrangement that would be fair and reasonable. That is an approach and potential application that it is open to FCC to consider. However, the decision as to whether to propose such an approach as an alternative plan of arrangement is decision for FCC to make. FCC can, without the need for any order of this court, proceed with additional outreach efforts as it may see fit. Should FCC decide to simply liquidate and dissolve in the usual manner, without additional outreach efforts, and pay the distribution entitlement of missing shareholders to the Minister of Finance, that option is also available to it. [46] In the circumstances dismiss the application for approval of the proposed plan of arrangement. While the Director, on my request, did participate and oppose the application, am of the view that the Director should, in all of the circumstances, bear its own costs of this application.
HELD: The court held that it did not have the power to approve the proposed plan of arrangement. The court applied the rules of statutory interpretation, specifically the presumption of coherence and overlap, to the provisions of the Act and found that the applicant was using s. 186.1 for a purpose that the legislature did not intend. The applicant could have proceeded to dissolution under Division XVI. In s. 210(m) the legislature intended to give the court the ability to order disposition of property of creditors and shareholders but not to deal with a shareholder’s right to distribution on dissolution.