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Three Rogers family members who are also directors voted to remove Edward Rogers as chair last month, after he attempted to fire chief executive officer Joe Natale.CARLOS OSORIO/Reuters

The latest: Edward Rogers can replace independent directors, B.C. Supreme Court judge rules

A British Columbia judge who has spent her career focused on narrowly defined legal issues is expected to rule Friday on a battle for control of Rogers Communications Inc. with sweeping corporate governance implications.

After stock markets close on Friday, B.C. Supreme Court Justice Shelley Fitzpatrick is scheduled to hand down a judgment on Edward Rogers’s unilateral move in late October to replace five independent directors at the cellphone and cable giant with five new board members, all of whom support Mr. Rogers as the company’s chair.

Three Rogers family members who are also directors voted to remove Mr. Rogers as chair last month, after he attempted to fire chief executive officer Joe Natale. The three family members and the company want the board changes put to a shareholder vote, which would take several months.

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Corporate governance experts, including former Rogers chair Gar Emerson, said if Mr. Rogers is successful, it would be a setback for shareholder rights at Canadian public companies, while if Justice Fitzpatrick rules against him, it would show that even companies controlled by families must respect the highest governance standards.

Justice Fitzpatrick spent 28 years as a corporate lawyer in Winnipeg and Vancouver working on complex issues such as insolvencies, restructuring and finance, cases in which legal decisions are driven by precise interpretations of documents. She became a judge in 2010, and has heard cases involving tax law, commercial property disputes and the rights of parents who use surrogate mothers, relying on legal precedents and relatively narrow interpretations of contracts to make rulings.

Justice Fitzpatrick oversaw the recent restructuring of retailer Mountain Equipment Co-op.

While lawyers, bankers and institutional investors who own Rogers shares said it is presumptuous to predict how a judge will rule, several legal experts said everything in Justice Fitzpatrick’s background points to a decision on Friday that reflects only what is spelled out in B.C.’s Business Corporations Act and the Rogers articles of incorporation. The Globe and Mail is not naming the individuals because they did not want to speak on the record about what a judge might rule.

A narrowly focused approach would favour Mr. Rogers, the experts said. Several lawyers and fund managers said their interpretation of Monday’s hearing was that Mr. Rogers has the right to vote shares held in the family trust and the ability to change the board, and the only question is how long it will take for him to prevail.

In a court hearing on Monday, Mr. Rogers’s lawyer Ken McEwan argued that as chair of a family trust that controls 97.5 per cent of the company’s voting class A shares, Mr. Rogers has the right under B.C. law to change the board through what is known as a “consent resolution,” with no need for a vote. Mr. McEwan said the court should rule on this “simple and narrow question.”

In response, Rogers lawyers argued that the company’s own publicly disclosed governance practices, its articles of incorporation and a “memorandum of wishes” that founder Ted Rogers left for his family call for a shareholder vote on the proposed changes to the board. Mr. Emerson, a former chair of Rogers, said in a court filing that allowing Edward Rogers to replace five directors using a consent resolution “would be a direct denial of the best corporate governance practices adopted by large Canadian corporations.”

The legal drama is playing out as Rogers attempts to win federal government approval for its proposed $26-billion takeover of Shaw Communications Inc. and roll out a multibillion-dollar expansion of 5G wireless networks. This week, rivals BCE Inc. and Telus Corp. urged federal regulators to delay hearings on the Shaw purchase until Rogers leadership issues are resolved.

Justice Fitzpatrick, 63, was born in Winnipeg and did her law degree at the University of Manitoba. She spent three years at Winnipeg law firm Fillmore Riley LLP, then moved to Vancouver in 1986, serving as a partner at Campney & Murphy and Davis LLP (now part of global law firm DLA Piper LLP) before being appointed to the B.C. Supreme Court.

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