Edward Rogers' consent resolution sufficient to remove and replace directors

'Family issues are of little assistance in determining the narrow legal issue raised': judge

Edward Rogers' consent resolution sufficient to remove and replace directors
Members of the board of directors can be removed or replaced through methods in the Articles or statute

The Supreme Court of British Columbia has ruled that Edward Rogers’ consent resolution was sufficient to remove and replace directors from the Rogers Communications board of directors, as provided in the company’s articles of incorporation (Articles).

In Rogers v. Rogers Communications Inc., 2021 BCSC 2184, Edward Rogers sought to remove and replace five of the company’s directors. In doing so, he had obtained consent to act as a director from the other directors, mailed a written consent resolution to all the company’s registered voting shareholders, obtained special majority approval in writing and submitted these documents to the company for filing with the British Columbia Registrar of Companies.

After what the court called a “Shakespearean drama” played out publicly between members of the Rogers family, Edward Rogers filed the petition, arguing that Article 3.4 of the Articles allowed the shareholders to remove any director and fill the vacancy created by ordinary resolution, subject to the Business Corporations Act, S.B.C. 2002, c. 57 (the Act). Since all the requirements set forth in the Article had been met, the consent resolution was valid and effective, he argued.

Under Section 1(1) of the Act, a consent resolution is an ordinary resolution passed after being submitted to all the voting shareholders in general meetings and consented to in writing by a special majority of such shareholders.

Rogers Communications objected, stating that the circumstances surrounding the adoption of the Articles did not support such an interpretation and that Article 3.4 contained a “complete code” on the removal of directors.

But Justice Shelley Fitzpatrick of the B.C. Supreme Court ruled in favour of the petitioner.

On the surrounding circumstances, both parties relied to an extent the words of Rogers Communications founder Ted Rogers, which were contained in his “Memorandum of Wishes” and excerpts from his autobiography. The company had also submitted its statement of intentions towards “good corporate governance.” In rejecting these documents, Justice Fitzpatrick said that they were unhelpful because they post-dated the company’s adoption of the Articles. Citing Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, , Justice Fitzpatrick ruled that “only those facts and circumstances present at the time of contracting are of relevance.”

Justice Fitzpatrick also rejected the company’s argument that Article 3.4 presented a “complete code,” stating that the Article itself provided that it is subject to the provisions of the Act.

On the other hand, the judge found the Edward Rogers’ arguments “coherent and logical and… consistent with a plain reading of both the Articles and the Act.” Justice Fitzpatrick agreed that Article 3.4 meets the requirements set forth in s.128(3) in allowing the removal of a director through an ordinary resolution by the shareholders. Having met all the requirements, the consent resolution was valid.

Despite what she called an “interesting backdrop to the dispute,” Justice Fitzpatrick did not address the family issues surrounding the case. “[At] best, they are a distraction” and they are of little assistance in determining the legal issue raised before the Court, she said.

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