Executive Summary: Key Legal and Evidentiary Issues

• Nova Oculus Canada Manufacturing ULC alleged that its former officers and directors wrongfully transferred and used its corporate assets for their own benefit.
   
• Appellants argued that the Court of King's Bench of Alberta lacked subject matter jurisdiction over Nova's claim.
   
• Section 301 of British Columbia's Business Corporations Act formed the core of the jurisdictional dispute.
   
• Chambers judge characterized the claim as seeking non-statutory rescission rather than a statutory remedy under section 301.
   
• Alberta's Court of Appeal reviewed that characterization on a standard of palpable and overriding error.
   
• Ultimately, the Court of Appeal dismissed the appeal, confirming that Alberta courts have jurisdiction over the claim.
   

Facts of the case

Nova Oculus Canada Manufacturing ULC is a medical technology company incorporated in British Columbia in 2017. Justin Sather served as an officer and director of Nova from May 2017 to June 2019 and is also a director, officer, and shareholder of MacuMira Medical Devices Inc. Walter O'Rourke served as an officer and director of Nova from 2017 until December 2022, and is the sole director and shareholder of Karmatar Consulting Inc., which provided consulting services to Nova until December 2022. Effective October 2020, while O'Rourke was President and CFO of Nova, Nova entered into an Assignment of Inventions and Related Patent Rights with MacuMira, transferring assets including patents and confidential information related to certain technology. Nova and MacuMira entered an Amended and Restated Assignment of Inventions and Related Patent Rights in September 2022. O'Rourke signed the agreements on behalf of Nova, and Sather signed on behalf of MacuMira. In December 2022, Nova terminated its relationship with O'Rourke and Karmatar, and in 2023 Nova filed its action against the appellants, alleging breach of fiduciary duty, misuse of confidential information, breach of employment obligations, conspiracy, and conversion.

Policy and legislative provisions at issue

The appellants applied to strike Nova's claim under rules 3.68(1)(a) and 3.68(2)(a) of the Alberta Rules of Court, arguing that the Alberta courts had no jurisdiction because section 301 of British Columbia's Business Corporations Act grants exclusive jurisdiction to the Supreme Court of British Columbia over dispositions of all or substantially all of a company's undertaking. Section 301(1) prohibits a company from disposing of all or substantially all of its undertaking unless done in the ordinary course of business or authorized by special resolution, and section 301(2) permits "any shareholder, director or creditor" to apply to set aside or enjoin a non-compliant disposition. The appellants also relied on section 1(1), which defines "court" as the Supreme Court of British Columbia for these purposes. Later in the appeal, they additionally invoked section 228, which allows a "complainant"—including "any other person whom the court considers to be an appropriate person"—to apply for an order requiring compliance with the Act, arguing this could extend section 301's reach to companies themselves.

Reasoning and analysis

Grosse, Fagnan, and Feth JJ.A. applied a standard of palpable and overriding error to the chambers judge's characterization of the claim's essential nature, and correctness to his interpretation of the BCBCA. Determining the essential nature of a claim requires a realistic and practical assessment of the facts alleged and remedy sought, looking past artful pleading but focusing on the claim actually advanced. The panel found no basis for the appellants' assertion that the chambers judge had missed Nova's admission that the transactions disposed of all or substantially all of its undertaking; he had expressly addressed this point and concluded it was one relevant fact among many, not the essence of the claim. Rather, the chambers judge found the claim sought non-statutory rescission and ancillary relief to protect Nova's business, confidential information, and interests in the technology at issue. On the statutory interpretation questions, the panel held that section 301's text, context, and purpose do not support treating it as a complete code displacing a company's common law and equitable claims against its own directors and officers. The provision's language and history indicate it exists to protect stakeholders—shareholders, directors, and creditors—from specific company conduct, not to provide relief to the company itself. The court declined to resolve whether section 228 could theoretically allow a company to seek relief connected to section 301, finding this immaterial to Nova's claim as characterized. The panel also rejected the appellants' analogy to other BCBCA provisions found to be complete codes and rejected their argument that the chambers judge's interpretation produced an absurd result.

Ruling and overall outcome

The Court of Appeal upheld the chambers judge's characterization of Nova's claim and his interpretation and application of the BCBCA, finding no reversible error on either issue. The respondent, Nova Oculus Canada Manufacturing ULC, was successful: the appeal was dismissed, and the chambers judge's original decision refusing to strike Nova's claim for want of jurisdiction stands, allowing the action to proceed before the Court of King's Bench of Alberta. As an interlocutory ruling on a jurisdictional strike application, the decision does not address the merits of Nova's underlying claims, and no monetary amount was ordered, granted, or awarded to either party.