Executive Summary: Key Legal and Evidentiary Issues

• The court examined whether the 2017 Buy/Sell Notice complied with the Unanimous Shareholders Agreement governing Dynasty Power Inc.
   
• Evidentiary questions arose over which portions of Jason Brown's May 2024 affidavit constituted admissible fact versus impermissible opinion or speculation.
   
• Oppression findings under section 242 of the Business Corporations Act extended to the shareholders' unilateral selection of a valuator using privileged settlement information.
   
• Valuation dates for four related Dynasty companies required individualized analysis based on each company's circumstances and Jason Brown's diminishing influence over time.
   
• A subsequent correction application tested the limits of the court's authority under Rules 9.12 and 9.13 to vary or clarify its earlier reasons.
   
• Disputes also emerged over whether experts should prepare valuation reports to an estimate or comprehensive standard.
   

Facts of the case

Dynasty Power Inc. was incorporated in 2011 by, among others, Allan Cho and Jason Brown. Brown provided capital and held 275,000 shares, representing 10.38% of Dynasty Power at formation; those shares were later assigned to his holding company, JBRO Holdings Inc. Brown served as a director and CFO of Dynasty Power, which expanded through affiliates Dynasty North America Holdings Inc. and Dynasty Energy California Inc. The shareholders entered a Unanimous Shareholders Agreement (the USA) dated July 1, 2013.

On September 28, 2016, Dynasty Power terminated Brown's employment, purportedly for cause. On April 10, 2017, the other shareholders of Dynasty Power (the Exercising Shareholders) issued a Buy/Sell Notice to JBRO Holdings proposing to acquire its shares for $1,919,500. JBRO Holdings objected, and litigation over the notice's validity followed. Rather than pursuing that litigation to a decision, the Exercising Shareholders discontinued their own application in December 2017 and used a power of attorney under the USA to unilaterally complete the share purchase, tendering $2,033,979.39 plus $98,000 in dividends, which JBRO Holdings did not accept but held in trust.

The Plaintiffs commenced this action on March 20, 2018, alleging oppression across the Dynasty companies. On June 14, 2021, Justice Romaine granted partial summary judgment, finding that Dynasty Power's issuance of a cash call and Dynasty California's cancellation of JDFA Holdings Inc.'s shares (voided in March 2017 for non-payment of a subscription price) were oppressive. The Court of Appeal upheld those oppression findings but set aside the ordered reinstatement of JDFA's shares, returning the remedy question to the lower court. [Source-document note: the Court of Appeal's decision date is given as April 20, 2022 in the 2026 decision and as April 4, 2022 in the 2025 decision; both values are preserved here as they appear in the respective source documents.] By February 2023, the parties agreed that the ultimate resolution would be a "corporate divorce," with the Defendants buying out the Plaintiffs' interests, though they disagreed on procedure.

Policy and legislative provisions at issue

Article 13.B.01 of the USA permits a Buy-Sell Notice to be given by "such Shareholder," using singular phrasing throughout, including the offeror's obligations. Article 11.01 required that any valuator be "mutually acceptable to the parties," though a later sentence in the same article addressed approval rights tied to which party funded the valuation. Article 28.01 provided a general interpretive rule that singular terms include the plural unless context indicates otherwise. Oppression claims were governed by section 242 of the Business Corporations Act (Alberta), which permits relief where conduct is oppressive, unfairly prejudicial, or unfairly disregards a stakeholder's interests. The subsequent correction application turned on Rules 9.12 and 9.13 of the Alberta Rules of Court, which respectively allow correction of accidental errors and, before an order is entered, variation of a decision for good reason.

Reasoning and analysis

On the validity of the 2017 Buy/Sell Notice, Justice Simard found two breaches of the USA. First, Article 13.B.01's consistent use of singular language, the absence of pro rata provisions for multiple offerors, and comparison with other USA articles that expressly extended to plural parties, demonstrated that only a single shareholder could act as offeror; the joint notice therefore did not comply. Second, the Exercising Shareholders breached Article 11.01 by unilaterally retaining valuator Trevor Kawka without JBRO Holdings' consent, relying improperly on a "without prejudice" settlement letter that was protected by settlement privilege and could not be unilaterally used by the Defendants. Applying the two-step test from BCE v 1976 Debentureholders, the court held that JBRO Holdings reasonably expected compliance with the USA and that the breaches, particularly the misuse of privileged information, amounted to oppression under section 242(2)(b).

The court also permitted the Plaintiffs to amend their pleadings to allege breach of fiduciary duty and seek disgorgement, finding the claim was not "hopeless" given the Exercising Shareholders' use of a power of attorney to unilaterally close the transaction. On the Brown affidavit, the court struck limited passages containing legal opinion, speculation, and privileged solicitor-client communications, while declining to strike broader categories of arguably inadmissible evidence given similar deficiencies in the Defendants' own affidavits.

Turning to remedy and valuation, the April 2026 oral decision found jurisdiction to address all four Dynasty companies, including Dynasty Property, based on the Defendants' prior admission that a corporate divorce was the agreed end point; no relief was ordered against a non-party entity referred to as Gyu-Kaku. The court set individualized valuation dates: December 31, 2021 for Dynasty Power and December 31, 2020 for Dynasty California, both chosen to balance the wrongful taking of the Plaintiffs' shares against the declining relevance of Brown's contributions over time and the practicality of year-end dates; December 31, 2025 for Dynasty NA and Dynasty Property, reflecting that the Plaintiffs still hold those shares. The court also ordered fair value (not fair market value) as the valuation basis and rejected a single court-appointed valuator in favour of each side retaining its own experts.

In the 2026 correction decision, the court clarified that its earlier undefined use of "JBRO" referred variously to JBRO Holdings or JBRO Investments Inc. depending on context, and declined to change the Dynasty Power valuation date from December 31, 2021 to December 31, 2022, finding that an earlier arithmetical description of delay ("about seven and a half years," corrected to about six and a half years) had not driven the discretionary, multi-factorial valuation-date finding. The court further clarified that JBRO Holdings' tax-planning damages claim and JDFA's argument for an undiluted 10.38% valuation of Dynasty California remain open for the Final Hearing, as do claims for tax-loss damages, aggravated or punitive damages, disgorgement, interest, and costs. Finally, on reflection that its April 2026 choice of an "estimate valuation report" standard rested on a factual misunderstanding about an expert report, the court removed that restriction and permitted experts to prepare reports up to the "comprehensive valuation report" standard.

Ruling and overall outcome

The Plaintiffs were substantially successful across both decisions. The 2025 decision declared the 2017 Buy/Sell Notice invalid, found the Exercising Shareholders' conduct oppressive, permitted the fiduciary-duty amendments, and awarded JBRO Holdings damages in principle, with quantum reserved for later proceedings. The 2026 correction decision similarly favoured the Plaintiffs on the clarification of the term "JBRO" and on relaxing the valuation report standard, though the Plaintiffs did not succeed in shifting the Dynasty Power valuation date to December 31, 2022. No specific monetary amount has yet been ordered or granted in either decision; damages and the final valuation figures for JBRO Holdings, JDFA, and the other Plaintiffs remain to be determined at the Final Hearing, based on the valuation dates and parameters the court has now set.