Supreme Court of British Columbia rules that Business Corporations Act does not prohibit directors from voting on motions involving their termination as officers

Lead by

Bryan Hicks

Partner

Vancouver

Lyndon Patrick and Michael Reimann v. MGX Minerals Inc. et al, Supreme Court of British Columbia No. S1913851

In a January 17, 2020 decision, Madam Justice Fitzpatrick of the Supreme Court of British Columbia ruled that Mr. Jared Lazerson, the President, CEO and signing authority of MGX Minerals Inc. (“MGX”) was not prohibited by MGX’s articles or the British Columbia Business Corporations Act from voting on a motion to remove him from his position as an officer.

The decision was a result of a board meeting occurring in October 2019, in which two of the Company’s directors, Mr. Lyndon Patrick and Mr. Michael Reimann, had put forward a motion to remove Mr. Lazerson as MGX’s President, CEO and signing authority. MGX’s other two directors, including Mr. Lazerson, voted against the motion. Mr. Lazerson further exercised a casting vote, as authorized by the MGX’s articles, and consequently defeated the motion.

Messrs. Patrick and Reimann argued that Mr. Lazerson was prohibited from voting on the motion by the conflict of interest provisions under MGX’s articles and the Business Corporations Act, a submission that was dismissed by the Court. Messrs. Patrick and Reimann were ultimately ordered to pay legal costs to both MGX and Mr. Lazerson.  The Court decision also affirmed Mr. Lazerson’s position as MGX’s President, CEO and signing authority.  The judgment was consistent with the initial advice provided by MGX’s corporate counsel and the position taken by MGX at the court hearing.

Bryan Hicks (Corporate, Commercial Litigation) of Miller Thomson advised MGX in the dispute.