Citation: EnCana Corporation v. Douglas, 2005 ABCA 439
Date: 20051215
Docket: 0401-0306-AC
Registry: Calgary
Between:
EnCana Corporation
Respondent
(Applicant)
- and -
Robert Hewitt Douglas
Appellant
(Respondent)
_______________________________________________________
The Court:
The Honourable Madam Justice Carole Conrad
The Honourable Madam Justice Ellen Picard
The Honourable Madam Justice Marina Paperny
_______________________________________________________
Reasons for Judgment Reservedof the Honourable Madam Justice Conrad
Concurred in by the Honourable Madam Justice Picard
Concurred in by the Honourable Madam Justice Paperny
Appeal from the Order by
The Honourable Mr. Justice C.S. Brooker
Dated the 23 rd day of September, 2004
_______________________________________________________
of the Honourable Madam Justice Conrad
_______________________________________________________
I. Introduction
[1] This appeal involves the proper interpretation of s. 21 of the Canada Business Corporations Act, R.S.C. 1985, c. C-44 (“CBCA”), and the obligation of the respondent, EnCana Corporation (“EnCana”), to furnish the appellant, Robert Hewitt Douglas (“ Douglas”), with its securities register.
[2] Douglas is the sole director, officer and shareholder of the company, Douglas Resources Ltd. (“ Douglas Resources”). One of the business activities of Douglas Resources is to identify potentially lost, misplaced or forgotten shares (“lost shares”) in a corporation. Once lost shares are identified, Douglas Resources sells information about the lost shares to the rightful shareholder or, more frequently, to the heirs or beneficiaries of such shareholder, for a fee. EnCana applied for, and received, relief from any obligation imposed upon them by s. 21 of the CBCA to provide information from its securities register on the basis that Douglas’ intended use of the information was unlawful. Douglas appeals.
II. Issues
[3] This appeal raises two main issues:
A. What is the obligation on a corporation to provide its securities register under s. 21 of the CBCA?
B. Is the intended use of the securities register by Douglas an allowable use under s. 21(9)(c) of the CBCA?
III. Decision
[4] I would allow the appeal. The scheme of the CBCA requires that a corporation provide an applicant with the names, number of shares and addresses of all shareholders in the securities register upon receipt of the reasonable fee, a request by a shareholder and an affidavit in compliance with ss. 21(7) and (8). Privacy legislation does not modify that obligation where the information is being provided as required by law. The statute does not place the onus of protecting against misuse of information on the corporation, but on the applicant. To protect against misuse, the statute requires an applicant provide an undertaking to confine use of the information to the lawful uses enumerated in s. 21(9). In the event an applicant misuses the information, he or she is subject to prosecution under s. 21(10).
[5] The word “affairs” as used in s. 21(9)(c) relates to the relationships between the corporation, shareholders, directors and officers. Any use of the securities register that involves communication between shareholders – as shareholders, or regarding the corporation, directors and/or officers is an allowable use.
IV. Background Facts
[6] Douglas, through his company, Douglas Resources, attempts to identify potentially lost shares in a corporation. The securities register, or basic list, of a corporation contains the name of the shareholder, the last known address and the amount of shares owned. As Douglas Resources, Douglas plans to use the information associated with the securities register and potential lost shares in order to find shareholders or, if the shareholder is deceased, to contact the shareholder’s relatives in order to unite the shares with their rightful owner for a fee.
[7] Douglas, in his personal capacity, is also a shareholder in EnCana, and in that capacity seeks a copy of the securities register of EnCana and its predecessor companies, Pan Canadian and Alberta Energy. In particular, Douglas seeks information about shares in the predecessor companies that have not yet been exchanged for EnCana shares as this indicates they may be lost shares.
[8] EnCana has a statutory obligation to maintain a current register (s. 50) and, to that end, has its own asset reunification program through a third party who charges a fee to locate and transfer the shares. EnCana submits that there are differences in methodology between its program and that of Douglas’, which result in less intrusion on privacy. It did not, however, lead evidence to support this claim. Douglas claims that if EnCana’s reunification program was adequate, there would be no lost shares for him to reunite with their rightful owners. Interestingly, under EnCana’s by-laws, if dividends are not claimed for a year they can be invested for the benefit of the corporation. Also, if dividends are not claimed for three years they are forfeited to the corporation, but the board retains the discretion to make subsequent payments. Thus, EnCana’s incentive to re-unite shareholder’s with their shares may not be as great as that of Douglas’.
[9] In any event, Douglas’ request to access the common securities register generated communication between the parties, with EnCana informing Douglas that it would require a cross-examination on his affidavit supporting his application and that it would pursue court action before complying. As a result of this communication, Douglas changed his request, limiting it to the securities register of EnCana. Once his affidavit complied with the statutory requirements of s. 21(7), Douglas was allowed access to EnCana’s securities register. Douglas found it incomplete and renewed his request for access to the common securities registers of EnCana’s predecessor companies. EnCana refused and commenced its application by way of originating notice to clarify its obligations to Douglas.
A. The chambers decision
[10] The chambers judge understood the technical problems arising from the fact that Douglas requested the information, but the information was to be used by Douglas Resources. He recognized that the parties were all there, and they were interested in receiving an answer to the substantive question – the interpretation of s. 21(9)(c).
[11] The chambers judge correctly identified the main issue as whether Douglas’ intended use of the securities register fell outside of the scope of s. 21(9)(c) of the CBCA. In answering that question, the chambers judge characterized Douglas’ intended use as being one of personal gain that would only incidentally benefit some shareholders. He found that the intended use was too broad given the privacy concerns evidenced by privacy legislation. As a result, he held that EnCana was not required to provide access to the securities register.
[12] The chambers judge recommended that this matter be appealed as there was no appellate jurisprudence on the issue. Douglas appeals.
B. Arguments on appeal
[13] EnCana argues that Douglas’ intended use is not an authorized use under s. 21(9), and that his use would breach privacy laws, which justifies EnCana’s retaining the information. Douglas claims that re-uniting shareholders with their shares is a use falling under s. 21(9)(c), as a matter relating to the “affairs of the corporation”, and that EnCana has an obligation to provide him with a copy of the securities register, without further questioning, once he submitted his affidavit under s. 21.
V. Legislation
[14] The relevant provisions are as follows:
Canada Business Corporations Act, R.S.C. 1985, c. C-44 :
2. (1) In this Act,
“affairs” means the relationships among a corporation, its affiliates and the shareholders, directors and officers of such bodies corporate but does not include the business carried on by such bodies corporate;
...
“person” means an individual, partnership, association, body corporate, or personal representative;
...
21. (3) Shareholders and creditors of a corporation, their personal representatives, the Director and, if the corporation is a distributing corporation, any other person, on payment of a reasonable fee and on sending to a corporation or its agent the affidavit referred to in subsection (7), may on application require the corporation or its agent to furnish within ten days after the receipt of the affidavit a list (in this section referred to as the “basic list”) made up to a date not more than ten days before the date of receipt of the affidavit setting out the names of the shareholders of the corporation, the number of shares owned by each shareholder and the address of each shareholder as shown on the records of the corporation.
...
(7) The affidavit required under subsection (1.1) or (3) shall state
(a) the name and address of the applicant;
(b) the name and address for service of the body corporate, if the applicant is a body corporate; and
(c) that the basic list and any supplemental lists obtained pursuant to subsection (4) or the information contained in the securities register obtained pursuant to subsection (1.1), as the case may be, will not be used except as permitted under subsection (9).
(8) If the applicant is a body corporate, the affidavit shall be made by a director or officer of the body corporate.
(9) A list of shareholders or information from a securities register obtained under this section shall not be used by any person except in connection with
(a) an effort to influence the voting of shareholders of the corporation;
(b) an offer to acquire securities of the corporation; or
(c) any other matter relating to the affairs of the corporation.
(10) A person who, without reasonable cause, contravenes this section is guilty of an offence and liable on summary conviction to a fine not exceeding five thousand dollars or to imprisonment for a term not exceeding six months or to both.
...
50. (1) A corporation shall maintain a securities register in which it records the securities issued by it in registered form, showing with respect to each class or series of securities
(a) the names, alphabetically arranged, and the latest known address of each person who is or has been a security holder;
(b) the number of securities held by each security holder; and
(c) the date and particulars of the issue and transfer of each security.
Personal Information Protection and Electronic Documents Act, S.C. 2000, c. 5 (“PIPEDA”)
2. (1) The definitions in this subsection apply in this Part.
“personal information” means information about an identifiable individual, but does not include the name, title or business address or telephone number of an employee of an organization.
3. The purpose of this Part is to establish, in an era in which technology increasingly facilitates the circulation and exchange of information, rules to govern the collection, use and disclosure of personal information in a manner that recognizes the right of privacy of individuals with respect to their personal information and the need of organizations to collect, use or disclose personal information for purposes that a reasonable person would consider appropriate in the circumstances.
...
5. (1) Subject to sections 6 to 9, every organization shall comply with the obligations set out in Schedule 1.
...
7. (1) For the purpose of clause 4.3 of Schedule 1, and despite the note that accompanies that clause, an organization may collect personal information without the knowledge or consent of the individual only if
...
(e) the collection is made for the purpose of making a disclosure
(ii) that is required by law.
(2) For the purpose of clause 4.3 of Schedule 1, and despite the note that accompanies that clause, an organization may, without the knowledge or consent of the individual, use personal information only if
...
(d) it was collected under paragraph (1)(a), (b) or (e).
(3) For the purpose of clause 4.3 of Schedule 1, and despite the note that accompanies that clause, an organization may disclose personal information without the knowledge or consent of the individual only if the disclosure is
...
(d) it was collected under paragraph (1)(a), (b) or (e).
(i) required by law.
Personal Information Protection Act, S.A. 2003, c. P-6.5 (“PIPA”)
1 In this Act,
...
(k) “personal information” means information about an identifiable individual;
...
3 The purpose of this Act is to govern the collection, use and disclosure of personal information by organizations in a manner that recognizes both the right of an individual to have his or her personal information protected and the need of organizations to collect, use or disclose personal information for purposes that are reasonable.
...
5 (1) An organization is responsible for personal information that is in its custody or under its control.
...
14 An organization may collect personal information about an individual without the consent of that individual but only if one or more of the following are applicable:
...
(b) the collection of the information is pursuant to a statute or regulation of Alberta or Canada that authorizes or requires the collection;
...
17 An organization may use personal information about an individual without the consent of the individual but only if one or more of the following are applicable:
...
(b) the use of the information is pursuant to a statute or regulation of Alberta or Canada that authorizes or requires the use;
...
20 An organization may disclose personal information about an individual without the consent of the individual but only if one or more of the following are applicable:
(b) the disclosure of the information is pursuant to a statute or regulation of Alberta or Canada that authorizes or requires the disclosure;
VI. Standard of Review
[15] The standard of review on questions of law is one of correctness. On questions of fact, the standard of review is whether the trial judge made a palpable and overriding error: Housen v. Nikolaisen, [2002] 2 S.C.R. 235, 2002 SCC 33. The issues in the appeal concern the proper interpretation of s. 21 of the CBCA, which is a question of law attracting a standard of review of correctness. The question of whether privacy legislation modifies the obligation to disclose the securities register is also a question of law invoking the correctness standard.
VII. Analysis
A. When is a corporation obliged to provide its securities registerunder s. 21 of the CBCA?
1. scheme of the Act
[16] Section 21 of the CBCA has received little judicial interpretation, which makes it necessary to examine the scheme of the legislation. Section 21(3) provides certain persons “...may on application require the corporation or its agent to furnish...a list...setting out the names of the shareholders of the corporation, the number of shares owned by each shareholder and the address of each shareholder as shown on the records of the corporation.” This application must be accompanied by an affidavit that complies with ss. (7) and (8) and any reasonable fee, if required. Subsection (7) outlines the information that is required in the affidavit. Significantly, an applicant need not state the particular use that is intended, but merely that the information will not be used except for the purposes outlined in ss. (9). If persons use the information contained in the securities register in an improper manner, they can be prosecuted under ss. (10).
2. compliance with the technical requirements under ss. (7) and (8)
[17] There is an irregularity that exists in this case. Douglas made his application in his personal capacity. It is Douglas Resources, however, that intends to use the securities register.
[18] Both Douglas, as a shareholder, and Douglas Resources, as a corporation, are able to access the securities register of EnCana under s. 21(3) of the CBCA. Subsection (3) states, “Shareholders ... and, if the corporation is a distributing corporation, any other person, ...may on application require the corporation or its agent to furnish...a list... .” “Person” is defined in s. 2(1) to include a body corporate, and as a result, Douglas Resources is allowed to access the register of a distributing corporation. EnCana is a distributing corporation under the regulations: Canada Business Corporations Regulations, 2001, SOR/2001‑512, s. 2. (1).
[19] Although both Douglas and Douglas Resources may access the register, it is Douglas Resources that intends to use the information, and as such, it is the real applicant. Section 21(8) makes it clear that if the applicant is another corporation, the affidavit must be made by a director or officer of that corporation. There must be full compliance with ss. (7) and (8) in order to access a corporation’s securities register: Nathan v. Montreal Trust Co., [1987] O.J. No. 1179 (H.C.J.). Thus, I agree with EnCana that, if Douglas wins the substantive argument, he must re-swear an affidavit as a director or officer of Douglas Resources to ensure that EnCana is properly protected in releasing the information.
3. the obligation on a corporation to disclose its securities register if there is technical compliance with ss. (7) and (8)
[20] There is no suggestion in the language of the legislation that a corporation may refuse to furnish the securities register once the technical requirements of ss. (7) and (8) are met. In Re MacMillan Bloedel Limited, [1976] 6 W.W.R. 475 (B.C.S.C.), the court considered a similarly structured provision of the Companies Act, S.B.C. 1973, c. 18. Under s. 190 of the Companies Act a corporation “shall promptly furnish” a list upon the receipt of an application accompanied by a statutory declaration that states that the list will be “used only for corporate purposes”. The court held that the statutory declaration must comply strictly with the wording of the Companies Act, but that there is no additional requirement to identify the particular corporate purpose. The trial judge stated that the legislation contained safeguards for misstating the use through the penalty provision. A similar provision exists in s. 21(10) of the CBCA. Thus, the Legislature saw fit to allow a corporation to rely on the affidavit. Protection against improper use of the information by the applicant is provided by the prosecution provision.
[21] Here, EnCana distinguishes that case, arguing that it was entitled to refuse because it had learned, under cross-examination, that Douglas’ intended purpose was not for a purpose outlined in s. 21(9). This raises a further issue. Does EnCana have a right to inquire into a shareholder’s intent? In my view, it does not. There is no suggestion in the CBCA that a corporation has the right to cross-examine on the affidavit that accompanies an application. EnCana cannot rely on R. 314(1) of the Rules of Court, Alta. Reg. 390/68, which allows for a cross-examination on any affidavit filed in any action or proceeding. This affidavit was provided pursuant to the requirements of the CBCA – not as part of an action or proceeding. This is supported by the principle that there is no requirement for an applicant to state the intended purpose: Re MacMillan Bloedel, supra. Allowing cross-examination on an affidavit provided pursuant to s. 21 is of particular concern where, as in this case, the applicant is a shareholder.
[22] Shareholders have a long-standing right to access a corporation’s securities register in order to allow a shareholder to communicate with other shareholders: Mutter v. Eastern and Midlands Railway Company(1888), 38 Ch. D. 92 (C.A.). This overarching right was reiterated by the court in Cooper v. Premier Trust Co., [1945] 1 D.L.R. 376 at 381(Ont.C.A.), where the court said, “The right of inspection that a shareholder has is a right vested in him personally, to be exercised independently of the consent of the company.” There may be times when a corporation would not want a shareholder to have access to the securities register in order to prevent, or limit, communication between shareholders. For example, a shareholder may want to obtain the names of other shareholders in order to communicate with them about the possibility of a take-over bid or a change in management. Allowing a corporation the automatic right to cross-examine on an affidavit as to the purpose for obtaining the securities register would effectively erode the right of shareholders to freely communicate with each other – without interference by the corporation. Any restriction on a shareholder’s right to access the register requires clear wording in the legislation.
[23] In summary, once there is technical compliance with ss. (7) and (8); the corporation must provide access to the register. Having said that, I recognize circumstances may arise where a corporation has independent information that demonstrates an applicant’s intention to use the information for an unlawful purpose – one that clearly falls outside of s. 21(9). Suppose, for instance, that when requesting the securities register the applicant says that he wants to use the information to solicit investments from wealthy individuals for another enterprise. In such a case, it may be proper to seek directions from the court as to whether it is relieved of its duty to provide access to the register.
4. the effect of privacy legislation on a corporation’s obligation to disclose
[24] Re MacMillan Bloedel was decided prior to the enactment of privacy legislation. EnCana submits that privacy legislation modifies its obligations under s. 21 of the CBCA. Both the federal legislation, PIPEDA, and the Alberta legislation, PIPA, apply here. PIPA applies to all commercial activities within Alberta, while PIPEDA applies to those activities outside of Alberta. The general structure of the statutes is similar. The acts apply to organizations, and both state that their purpose is to balance the rights of an individual to have his/her personal information protected and the need for an organization to collect, use or disclose that information for purposes that are reasonable: PIPEDA, s. 3; PIPA, s. 3.
[25] Both statutes define personal information as “information about an identifiable individual” (PIPEDA, s. 2(1); PIPA, s. 1(k)). As none of the exclusions limiting personal information apply, the information within a securities register is personal information. Both statutes place responsibilities on organizations to protect the privacy of personal information: PIPEDA, s. 5; PIPA, s. 5. Under both federal and provincial privacy legislation, an organization may collect, use and disclose personal information without consent in certain situations: PIPEDA, s. 7; PIPA, ss. 14, 17 and 20. Under these provisions, both statutes allow for the disclosure and use of personal information if the disclosure and use are provided for by another statute or regulation – in other words, personal information may be disclosed or used without consent if authorized by law.
[26] Although privacy legislation has increased the awareness regarding personal information, in my view, the privacy argument in this situation is a circular one. If the CBCA authorizes the release of the information to Douglas, then disclosure by EnCana is allowed under both PIPEDA and PIPA. Similarly, if Douglas uses the information for a purpose allowed under s. 21(9), his use is lawful. Privacy legislation does not modify the obligations on EnCana to provide access to the securities register. A corporation cannot hide behind general privacy law to deprive shareholders access to the securities register, nor can it use such concerns to fish for information.
[27] In conclusion on this first issue, the CBCA requires a corporation to provide the securities register upon receipt of an application in compliance with s. 21. Because the disclosure of that information is required by law, the corporation does not breach privacy laws by so disclosing. Responsibility for the protection of personal information then moves to the person receiving the information. This person can only use it for the purposes outlined in s. 21(9), or risk prosecution pursuant to s. 21(10).
[28] I want to re-emphasize that if Douglas wants to use this information as Douglas Resources, he must re-swear the affidavit in compliance with s. 21(8). While Douglas in his personal capacity is entitled to the share register, he cannot simply transfer the information to Douglas Resources to use to locate lost shares. Both privacy legislation and the CBCA place obligations on Douglas. Douglas, and Douglas Resources, will be protected only if they use the information for the purposes allowed by the CBCA.
[29] Here, EnCana learned from communicating with Douglas, and from subsequent cross-examination on his affidavit, that he wanted to use the list for what it considered to be an improper purpose. For the purposes of this decision, I will assume that EnCana had sufficient outside information to cause it legitimate concern as to whether Douglas’ intended use was lawful, thereby justifying an application for directions from the court.
B. Is the intended use of the securities register by Douglas an allowable use under s. 21(9)(c) of the CBCA?
[30] For the purposes of this analysis, I will consider the use of the register from the point of view of Douglas, in his personal capacity as a shareholder. Different considerations would apply if he makes the application as Douglas Resources, where Douglas Resources is not a shareholder.
[31] While s. 21 has had very little judicial consideration, s. 21(9) has had none. This fact was responsible for the chambers judge proposing the judgment be appealed.
[32] The general purpose behind allowing access to corporate records is: (1) to allow shareholders to evaluate the enterprise in order to make informed decisions regarding investment; and (2) to allow shareholders the information required to evaluate performance of directors: Dennis H. Peterson, Shareholder Remedies in Canada, looseleaf (Markham, Ont.: LexisNexis-Butterworths, 1989) (“Shareholder Remedies”) at para. 12.1 (where the author was relying on F. Iacobucci, M. Pilkington and J. Prichard, Canadian Business Corporations – An Analysis of Recent Legislative Developments, Vol. 1 (Toronto: Canada Law Book, 1977)).
[33] The evolution of corporation law in Canada makes provincial law of interest. The federal CBCA has been substantially followed in most provinces; however, there are exceptions. The New BrunswickBusiness Corporations Act, S.N.B. 1981, c. B-9.1 , at s. 19, allows shareholders access to records including the securities register without any restriction on use. In contrast, the British ColumbiaBusiness Corporations Act, S.B.C. 2002, c. 57, at s. 49, restricts the use of the securities register to: (1) influence votes; (2) acquire shares; (3) effect an amalgamation or reorganization; or (4) call a meeting.
[34] Section 21(9) of the CBCA contains some restrictions, but is less restrictive than the British Columbia legislation. The securities register must only be used in connection with “(a) an effort to influence the voting of shareholders of the corporation; (b) an offer to acquire securities of the corporation; or (c) any other matter relating to the affairs of the corporation.” These restrictions are designed to prevent the improper use of the information. One author states that the “[F]iling of an affidavit [is] to ensure that the shareholder’s list will only be used for a proper corporate purpose such as proxy solicitation or take-over bid. It is not to be used, for example, to develop a mailing list of high-net worth individuals”: Wayne Gray, The Annotated Canada Business Corporations Act, 2nd ed. ( Toronto: Carswell, 2004) at 1-64. Peterson in Shareholder Remedies, supra, at para. 12.21, addresses the restrictions in s. 21(9) by saying: “It appears that the use of shareholder lists is restricted to prevent them from being used for such undesirable purposes as advertising or soliciting investment in other enterprises.”
[35] Douglas’ intended use does not fall under either ss. 21(9)(a) or 21(9)(b). To be successful, he must show that his intended use is a “matter relating to the affairs of the corporation”.
[36] The chambers judge characterized Douglas’ intended use as being for “personal gain” and concluded that it only indirectly benefitted the corporation. He then stated that if s. 21(9)(c) was given such a broad meaning to allow Douglas’ intended use, then anyone could buy a share and obtain the register as long as that person could demonstrate some indirect benefit or connection with the affairs of the corporation. This is basically a floodgates argument.
[37] I have two problems with this reasoning. First, the chambers judge confused motive with use. Section 21(9) does not address motive but states that the information from “a securities register...shall not be used...”. [emphasis added] Douglas may have financial gain as his motive but that is irrelevant. One must look to the use of the information. It is important to recognize that there is a difference between the purpose in using the list (e.g., to contact other shareholders) with the personal motive (e.g., to make money or to reorganize the corporation). Here, the list was to be used to reunite shareholders with their shares.
[38] The second difficulty I have with this reasoning is that it limits the scope of “affairs of the corporation” beyond the wording of the statute. Plain reading of the statute implies that if something is a matter relating to the “affairs of the corporation” a person has the right to use the information in the register – even if the benefit to the corporation is minimal, and even if the person financially profits.
[39] The phrase in s. 21(9)(c) of “any other matter relating to the affairs of the corporation” is modified by the definition of “affairs” in s. 2(1). Subsection 2(1) defines “affairs” as “the relationships among a corporation, its affiliates and the shareholders, directors and officers of such bodies corporate but does not include the business carried on by such bodies corporate”. The phrase in s. 21(9)(c) must be interpreted in light of this definition. The definition of affairs places an emphasis on the relationships between parties, not on the motive for use of the information.
[40] Accordingly, “affairs” relates to the relationships between the corporation, shareholders, directors and officers. Any use of the securities register that involves communication between shareholders – as shareholders, or regarding the corporation, directors and/or officers would be an allowable use. The CBCA neither limits access to the register in situations where the benefit is more than minimal nor does it prohibit someone making a profit from these relationships. Relying on the relationships between the parties limits the abuse that is possible if the definition is too broad. The possibility of a shareholder using the securities register to create a mailing list of high-net worth individuals, to advertise or solicit investment in another enterprise would be prevented as the communication would not be encompassed by the relationship between shareholders – as shareholders.
[41] What is the character of Douglas’ intended use of the register? EnCana claims that Douglas’ intended use is not a communication between shareholders but simply a business opportunity, a communication only for personal gain that has nothing to do with his role as a shareholder.
[42] There is another possible characterization. One of the general purposes identified for supporting communication between shareholders is the need for shareholders to be able to evaluate the performance of directors. An individual shareholder has a vested interest in all shareholders being identified in order for each of them to have the opportunity to take part in this evaluation. To that end, a shareholder may want to participate in the reunification process. In addition, a corporation is required by legislation to maintain an accurate securities register. Shareholders who are concerned that the corporation comply with legislation may want to foster this compliance. This could be done by helping other shareholders return to an active relationship with the corporation. The fact that reuniting lost shares with shareholders would only benefit some shareholders, and that there may be personal gain by others, is irrelevant based on the wording of the statute.
[43] Douglas, in his personal capacity, is a shareholder. He wants to find, and communicate with, other shareholders about their shares in EnCana. His use of the register will, if successful, reunite shareholders with their shares. This, surely, is a matter relating to the affairs of the company. Indeed, the company itself is supposed to do this. This falls withing the scope of “affairs of the corporation”. He is entitled to the list.
[44] EnCana argues that Douglas’ methods go too far in that he will indiscriminately communicate with a broad sector of the public in his attempt to find the missing shareholders, and that this will violate privacy legislation. Interestingly, EnCana states this although it has its own asset reunification program through a third party, and has entered no evidence as to its own methodology, and how it is different from that proposed by Douglas. It may be that Douglas will cast his net too far, and he will disclose personal information to persons that are not closely enough associated with the missing shareholder such that it brings him outside the lawful purpose and in violation of privacy legislation, but that is a question for another day. Those questions must be decided in a factual background and Douglas is not entitled to advance approval for future actions. The same applies for the use of the register by Douglas Resources if it is not a shareholder. It is also not entitled to advance approval for future actions. Douglas, and Douglas Resources, must comply with both the CBCA and privacy legislation.
[45] Finally, it is important to recognize that while a corporation has an obligation to maintain the securities register, it is not always in its financial best interests to find lost shareholders. Indeed, if the corporation was doing a good job of maintaining the required list there would be no shareholders for Douglas to find.
VIII. Conclusions
[46] In conclusion, once there has been technical compliance with the statute a corporation must provide the securities register to an applicant. If a corporation provides the securities register to an applicant in accordance with s. 21, it has met its obligations under privacy legislation. The CBCA does not give a corporation the right to cross-examine an applicant on his or her affidavit. If there are circumstance where a corporation has reason to believe that the information in the securities register will be used for an improper purpose, a corporation is entitled to seek direction from the court as to whether it must comply with the obligation to provide access to the securities register under s. 21.
[47] EnCana must provide Douglas access to the securities register. His proposed use as a shareholder, on the face of it, falls within the meaning of “affairs of the corporation”. I make no determination as to whether his methodology is acceptable. He must use the information he obtains from the securities register in a manner that is consistent with both the CBCA and privacy legislation.
Appeal heard on September 12, 2005
Reasons filed at Calgary, Alberta
this 15th day of December, 2005
Conrad J.A.
Picard J.A.
Paperny J.A.
