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Friday 25 September 2015

REAL ESTATE BUYER BEWARE : CHECKING TITLE MAY NOT BE ENOUGH



Peter Kalichman
On August 24, 2015, the Court of Appeal rendered an important decision regarding acquisitive prescription[1]. The majority of the Court dismissed the appeal from the decision of Justice Dumas, J.S.C., effectively recognizing that the Respondent, Ms. Allie, had acquired title to two parking spots that were, according to the Land Registry, squarely located on the property of Appellants, Mr. Ostiguy and Ms. Savard. In dissent, Justice Jacques, J.C.A. (ad hoc), concerned over the stability of real estate transactions, explained why he would have granted the appeal.

In 1993, the Respondent purchased a chalet in Bromont. From that point on, she and her guests made use of two of the four adjacent parking spots. Appellants purchased a neighboring chalet in 2011 thinking that it came with two of the four parking spots, the other two of which belonged to Respondent. They soon discovered that all four parking spots were situated on their property. Appellants brought injunctive proceedings to prevent Respondent from using their parking spots. Respondent, in turn, brought a cross-demand seeking to be declared owner of the spots by acquisitive prescription.

Appellants argued unsuccessfully that Respondent’s possession did not meet the criteria of article 2910 CCQ. However, the more interesting and significant ground of appeal concerned the interpretation of art. 2918 CCQ, which reads as follows:

2918. Celui qui, pendant dix ans, a possédé un immeuble à titre de propriétaire ne peut en acquérir la propriété qu’à la suite d’une demande en justice.

2918. A person who has for ten years possessed an immovable as its owner may acquire the ownership of it only upon a judicial demand.

Appellants argued that Respondent’s possession of the parking spots could not be set up against them because her judicial demand was brought subsequent to the publication of their deed of sale in the Land Registry.  Justice Savard, J.C.A., writing for the majority, recognizes that there is currently a controversy over the interpretation of article 2918 CCQ, namely: does the judgment granting the judicial demand create title from that point forward or recognize it retroactively? Unlike Justice Jacques, the majority do not feel it is necessary to resolve this controversy in order to dispose of the appeal.  For them, article 2918 CCQ, even though it imposes a requirement of a judicial demand, does not alter the state of the law regarding the effect of possession. As the Court writes:

[30] (…) la possession utile d’un possesseur est opposable au propriétaire dont le titre est inscrit au registre foncier, peu importe que cette inscription survienne après que le délai acquisitif (dix ans) soit révolu et même avant la demande en justice requise en vertu de cette disposition.

For Justice Jacques, it is clear that the judicial demand is essential in order to acquire property by prescription. Consequently, unlike the majority, Justice Jacques finds that the disposition of the appeal necessarily requires that the controversy surrounding article 2918 CCQ be resolved. Finding no support for giving it retroactive effect, he determines that the judgment contemplated by article 2918 CCQ thus creates title. The Respondent was therefore in a position to acquire the parking spots by prescription but needed to bring a judicial demand in order to complete and perfect her right.  Moreover, in order for the right to be set up against Appellants, it needed to be published in the Land Registry before Appellants’ deed of sale, which it wasn’t.  Justice Jacques places great emphasis on the pre-inscription of rights under article 2966 CCQ as a means of securing the eventual right of ownership for parties looking to acquire title by prescription. 



[1] Ostiguy v. Allie, 2015 QCCA 1368.

Monday 21 September 2015

SAFEGUARD ORDERS: The Court of Appeal Will Decide If Urgency Means Urgency



Catherine McKenzie

On September 16, 2015, the Court of Appeal – new Justice Marie-Josée Hogue – granted leave from a safeguard order that had been issued to prevent a company from soliciting another company’s clients in Industries V-Tech inc. (Industries Play-Tech inc.) v. Cast Steel Products (Canada) Ltd., 2015 QCCA 1471. 

The Plaintiffs had chosen not to present a provisional injunction, filing only a request for an interlocutory and permanent injunction. The day before the first date of presentation, they served their request for a safeguard order. The Defendants argued that it should not be granted, inter alia, because the urgency criteria was not met: they Plaintiffs had known about the alleged wrongdoing for months. That argument was dismissed by the first instance judge:

[1] Le premier juge a rejeté cet argument et, aux paragraphes 31 à 34 de son jugement, a exprimé clairement l’idée que la notion d’urgence aux fins de l’émission d’une ordonnance d’injonction provisoire et aux fins de l’émission d’une ordonnance de sauvegarde n’est pas la même. Pour lui l’urgence aux fins de l’émission d’une ordonnance de sauvegarde est le fait qu’il est nécessaire pour le tribunal d’agir afin de sauvegarder les droits de toutes les parties pendant qu’elles attendent d’être entendues au stade interlocutoire. Eu égard à la demande d’interroger Farès et d’obtenir des précisions sur certaines allégations, il s’est dit d’avis que rien n’exige que les personnes visées par une telle demande aient l’opportunité de « compléter » le dossier et, au contraire, que de leur reconnaître ce droit conduirait à un résultat absurde puisque de telles ordonnances sont justement émises en attendant que le dossier soit complet.

In deciding whether to grant leave, Justice Hogue noted that a safeguard order is one that is appealable with permission if the appropriate criteria are met:

[9] Cette ordonnance, qui expirera le 24 novembre 2015, est de la nature d’une injonction interlocutoire provisoire et elle peut techniquement faire l’objet d’un appel aux termes de l’article 29 C.p.c. puisqu’elle « ordonne que soit faite une chose à laquelle le jugement final ne pourra remédier. » Ceci n’est toutefois pas suffisant pour que la permission demandée soit dès lors accordée. Il faut en effet que les fins de la justice requièrent d’accorder la permission, tel que l’exige l’article 511 C.p.c. Or, généralement les fins de la justice requièrent rarement que la permission soit accordée puisque, notamment, de telles ordonnances sont émises pour une durée limitée et sont de caractère discrétionnaire.

Although leave is almost never granted for safeguard orders, she felt that this case was an exceptional one given “notamment en regard du critère de l’urgence à satisfaire dans le cadre d’une demande d’ordonnance de sauvegarde.” (para. 14)

Should this alternative idea of urgency be accepted by the Court of Appeal, it would be a departure from the existing caselaw that the criteria for a safeguard order and a provisional injunction (the regular injunction criteria, plus urgency) are the same. To find otherwise would, in my view, enable litigants to do indirectly what they cannot do directly, i.e. circumvent the urgency criteria by not filing a provisional injunction first and merely proceeding to a safeguard motion.

Of note, art. 754.2(3) CCP—which is the authority for safeguard orders in an injunction context in the present CCP and is in the injunction section—appears to have been replaced by the more general art. 49 CCP in the CCP that is about to come into force. It provides that a court may “at any time and in all matters, even on their own initiative, grant injunctions or issue orders to safeguard the parties’ rights for the period and subject to the conditions they determine.”


Friday 18 September 2015

JURISDICTION: What happens when tragedy meets comity?



Kurt Johnson


On September 4th, 2015, the Supreme Court of Canada released its decision in the case of Chevron Corp. v. Yaiguaje, 2015 SCC 42. Anchoring its reasons in the principle of international comity and the notions of order and fairness upon which the doctrine is based, the Court paved the way for an eventual road to recovery and accountability in what has been an epic pursuit of justice spanning over 20 years.

The case has its origins in the oil-rich region of Lago Agrio in Ecuador. It is there that Texaco, Inc. (since merged with Chevron) engaged in exploration and extraction activities that, according to the Respondents , caused extensive environmental pollution and disruption of lives.

Following a failed attempt to pursue Texaco in its home jurisdiction in the United States, the Respondents eventually filed suit and obtained favourable judgment from the Ecuadorian courts. Appeals processes in Ecuador led to a final judgment from Ecuador’s Court of Cassation condemning Chevron to pay a reduced but nonetheless massive award of US $9.51 Billion.

As Chevron refused to acknowledge or pay the debt said to be owed by the Ecuadorian courts, and given that Chevron does not hold any assets in Ecuador, the Respondents turned to the Canadian courts for assistance in enforcing the judgment and obtaining their financial due. Chevron resisted the proceedings in Ontario, submitting that before proceeding with an action to recognize and enforce a foreign judgment, the Ontario court must first determine its own jurisdiction by applying the real and substantial connection test articulated in Van Breda. The courts below rejected Chevron’s submission, and so too did the Supreme Court.

Writing for a unanimous bench, Gascon J. clarified that the Supreme Court has never required there to be a real and substantial connection between the defendant or the action and the enforcing court for jurisdiction to exist in recognition and enforcement proceedings. This approach is based first on the crucial difference between an action in first instance and an action for recognition and enforcement. In the latter case, “the enforcing court’s role is not one of substance, but is instead one of facilitation. The court merely offers an enforcement mechanism to facilitate the collection of a debt within the jurisdiction. This entails that the enforcing court does not exercise jurisdiction in the same way as it does in actions at first instance.” (par. 44, internal references omitted)

Secondly, the Court appealed to the notion of comity which, according to Gascon J., “militates in favour of generous enforcement rules.” (par. 42). Commenting on the Supreme Court’s previous statements on comity, Gascon J. reasoned that:

[53] As this review of the Court’s statements on comity shows, the need to acknowledge and show respect for the legal acts of other states has consistently remained one of the principle’s core components.  Comity, in this regard, militates in favour of recognition and enforcement.  Legitimate judicial acts should be respected and enforced, not sidetracked or ignored.  The concepts of order and fairness in which comity is grounded are not affronted by rejecting Chevron’s proposed extension of the real and substantial connection test.  This is so for several reasons.
[54] First, in recognition and enforcement proceedings, order and fairness are protected by ensuring that a real and substantial connection existed between the foreign court and the underlying dispute.  If such a connection did not exist, or if the defendant was not present in or did not attorn to the foreign jurisdiction, the resulting judgment will not be recognized and enforced in Canada.  The judgment debtor is free to make this argument in the recognition and enforcement proceedings, and indeed will have already had the opportunity to contest the jurisdiction of the foreign court in the foreign proceedings.  Here, for instance, it is accepted that Chevron attorned to the jurisdiction of the Ecuadorian courts.  As Walker writes, “[t]he jurisdictional requirements of order and fairness considered in the context of direct jurisdiction operate to promote the international acceptance of the adjudication of a matter by a Canadian court”: p. 14-1 (emphasis in original).  There is no similar requirement of international acceptance in the context of the recognition and enforcement of a foreign judgment. 
[55] Second, no unfairness results to judgment debtors from having to defend against recognition and enforcement proceedings.  In essence, through their own behaviour and legal noncompliance, the debtors have made themselves the subject of outstanding obligations.  It is for this reason that they may be called upon to answer for their debts in various jurisdictions.  Of course, the principles of order and fairness are also protected by providing a foreign judgment debtor with the opportunity to convince the enforcing court that there is another reason why recognition and enforcement should not be granted: see Beals, at paras. 39 et seq.

Curiously, Gascon J. felt compelled to establish a clear, unambiguous rule to firmly set aside Chevron’s submissions on the jurisdiction issue. He did so in the following terms:

[69] Facilitating comity and reciprocity, two of the backbones of private international law, calls for assistance, not barriers.  Neither this Court’s jurisprudence nor the principles underlying recognition and enforcement actions requires imposing additional jurisdictional restrictions on the determination of whether a foreign judgment is binding and enforceable in Ontario.  The principle of comity does not require that Chevron’s submissions be adopted.  On the contrary, an unambiguous statement by this Court that a real and substantial connection is not necessary will have the benefit of providing a “fixed, clear and predictable” rule, which some say is necessary in this area: T. J. Monestier, “A ‘Real and Substantial’ Mess: The Law of Jurisdiction in Canada” (2007), 33 Queen’s L.J. 179, at p. 192.  Such a rule will clearly be consistent with the dictates of order and fairness; it will also allow parties “to predict with reasonable confidence whether a court will assume jurisdiction in a case with an international or interprovincial aspect”, as LeBel J. in Van Breda insisted they should be able to do: para. 73.  Moreover, a clear rule will help to avert needless and wasteful jurisdictional inquiries that merely thwart the proceedings from their eventual resumption.  As some have noted, our courts “should exercise care in interpreting rules and developing legal principles so as not to encourage unnecessary motions”, since “[i]n many cases, the defendant’s challenge to service ex juris is just another dilatory tactic that provincial rules of civil procedure have sought to avoid”: G. D. Watson and F. Au, “Constitutional Limits on Service Ex Juris: Unanswered Questions from Morguard” (2000), 23 Adv. Q. 167, at p. 205.  To accept Chevron’s submissions would be to ignore this wise counsel.

While the Court was careful to acknowledge that the establishment of jurisdiction will not necessarily lead to the Respondents succeeding in having the Ecuadorian judgment recognized and enforced, it is nonetheless refreshing to see international comity paving the way towards justice, rather than obstructing it (consider, by way of contrast, Kazemi Estate v. Islamic Republic of Iran, 2014 SCC 62 at par. 2 & 37).

Tuesday 15 September 2015

IMK ACCUEILLE FRANÇOIS GOYER


IMK est heureux d'accueillir au sein de son équipe François Goyer. Détenteur de diplômes en droit civil et en common law de l'Université de Montréal, il a par la suite obtenu une maîtrise en droit (B.C.L.) de l'Université d'Oxford, en Angleterre. François fut auparavant auxiliaire juridique de l'honorable Thomas A. Cromwell à la Cour suprême du Canada.

Friday 11 September 2015

PRÉJUDICE: le devoir du tribunal d’en arbitrer le quantum malgré les lacunes dans la preuve


David Éthier
Dans la récente décision Selectron inc. c. Gagnon, 2015 QCCS 4143[1], la juge Élise Poisson applique le principe selon lequel, malgré les lacunes dans la preuve, le tribunal a le devoir d’arbitrer le quantum du préjudice lorsque son existence, de même que celle d’une faute et d’un lien de causalité est malgré tout établie.

Les faits de l’affaire sont simples.

Gagnon est à l’emploi de Selectron, une compagnie familiale qui œuvre dans l’achat, la vente et la remise à neuf d’appareils utilisés dans l’industrie de l’électronique. Un jour, Selectron découvre que Gagnon lui vole de l’équipement.  Gagnon est congédié sur le champ et, après vérification, Selectron dresse une liste de 39 appareils qui auraient été volés par celui-ci.

Dans ce contexte, Selectron intente un recours contre Gagnon, lui réclamant 231 400 $, dont 106 400 $ pour les 39 appareils manquants.  Gagnon, pour sa part, reconnaît avoir volé 25 des 39 appareils et les avoir revendus pour 14 311,85 $ US.  Il nie toutefois avoir volé les autres appareils et conteste le quantum du préjudice qui lui est réclamé.

Le tribunal détermine d’abord que Gagnon a bel et bien volé les 29 appareils et se questionne ensuite à propos du quantum du préjudice.  À cet égard, rappelant les principes généraux, il énonce ce qui suit :

[24] Les auteurs Lluelles et Moore résument ainsi les principes juridiques applicables en matière de dommages compensatoires, suite à la violation d’une obligation contractuelle:

« 2018.  […] En règle générale, les dommages pour violation de la bonne foi sont de type compensatoire, ayant pour objectif de rétablir un équilibre économique rompu par le manquement du contractant. Ces dommages peuvent être matériels ou moraux. […]

3010. Le capital de la condamnation a essentiellement pour objet la perte subie et le gain manqué. Un des principes majeurs de la responsabilité civile est le droit de la victime à une indemnisation entière (la fameuse « restitutio in integrum »). En principe donc, l’indemnisation devrait permettre un rétablissement total de l’équilibre rompu par la faute du contractant.  […] si c’est par sa faute lourde ou intentionnelle que le débiteur a causé le préjudice, le créancier aura droit à tous les dommages, y compris ceux qui n’étaient pas prévisibles lors de la rencontre des volontés (art. 1613, in medio). » [références omises] [le Tribunal souligne]

[25] Les auteurs Pineau, Burman et Gaudet écrivent que les dommages octroyés doivent couvrir, de la façon la plus exacte possible, le préjudice souffert:

« 450  Les dommages-intérêts compensatoires. La réparation du préjudice subi par le créancier du fait de l’inexécution d’une obligation ou d’une exécution défectueuse se fait par l’octroi d’une somme d’argent appelée « dommages-intérêts compensatoires »; en effet, ce montant compense la prestation que n’a pas accomplie le débiteur et qui était attendue du créancier. Cette indemnisation doit couvrir de la façon la plus exacte possible le véritable préjudice souffert par le créancier, qui ne se limite pas nécessairement à la valeur de la prestation inexécutée. En effet, ce préjudice peut comprendre deux éléments dont il est fait mention à l’article 1611 C.c.Q. : d’une part, la perte subie par le créancier, c’est-à-dire son appauvrissement (…) et, d’autre part, le gain manqué (…). Par exemple, dans un transport maritime de marchandises, où des manquants ont été constatés à l’arrivée, le destinataire pourra être indemnisé non seulement de la valeur de l’achat de la marchandise perdue, mais aussi de la marge bénéficiaire dont il aurait profité si ladite marchandise avait pu être revendue. […]. »

Le tribunal est toutefois confronté à une difficulté particulière : quoique l’existence des dommages soit incontestable, la preuve de leur quantum est, à son avis, « faible et peu probante ».  Il écrit alors ce qui suit :

[38] Malgré ces carences dans la preuve, il est certain que Selectron a subi un préjudice résultant du vol des biens par Monsieur Gagnon.

[39] Le Tribunal doit donc arbitrer les dommages-intérêts devant lui être accordés afin de la compenser adéquatement pour la perte subie et le gain manqué.

[40] Les 39 items identifiés sur la Liste des biens volés faisaient partie de l’inventaire de Selectron et ils étaient tous destinés à la revente, dans le cours normal des activités de Selectron. N’eut été des vols commis, Selectron aurait écoulé cet inventaire, sur une certaine période de temps et elle aurait généré un profit net.

[41] Selectron ne met pas en preuve la valeur aux livres qu’elle attribue à ces 39 items et ne dépose pas ses états financiers ou autre registre financier permettant d’établir une marge bénéficiaire nette réaliste.

[42] Jeannot Plourde, représentant de Selectron, témoigne que, de manière générale, le profit brut recherché par Selectron, lors de la revente des appareils, varie entre 25 % et 30 % du prix de vente.

[43] Si l’on accepte que la valeur de 106 400 $ US, soit 112 857,67 $ CA, équivaut au prix de vente que Selectron aurait pu générer, n’eut été des vols perpétrés, Selectron aurait généré un profit brut oscillant aux alentours de 30 %, soit  33 857 $. Si l’on estime arbitrairement que le profit net est de 15 % à 20 % du prix de vente, le préjudice subi par Selectron s’élèverait à environ 20 000 $.

[44] Si l’on considère maintenant l’approche des gains générés par Monsieur Gagnon par la vente des biens volés, il est admis que les items 1 à 23, 38 et 39 apparaissant sur la Liste des appareils volés ont été vendus en contrepartie de 14 311,85 $ US, soit 15 180,47 $ CA. Il ne serait pas déraisonnable d’établir la valeur des gains totaux générés par Monsieur Gagnon pour les 39 items à approximativement 20 000 $.

[45] Compte tenu de ce qui précède, le Tribunal évalue arbitrairement à 20 000 $ le préjudice subi par Selectron en raison des vols commis par Monsieur Gagnon.

Le tribunal reconnaît donc, une fois de plus[2], qu’il y a lieu de « distinguer entre l’incertitude du dommage en elle-même et celle découlant de la difficulté qu’il y a à le mesurer exactement en raison de la nature du litige, de la réalité du débat ou de la complexité des faits »[3].  Aussi, dans ce dernier cas, le tribunal a le devoir d’arbitrer le quantum du préjudice en se basant sur les éléments disponibles au dossier, tout en gardant en tête l’idéal à atteindre que constitue la restitution intégrale.

_______________________

[1] http://t.soquij.ca/o6ANx
[2] Voir notamment : Black c. Alharayeri 2015 QCCA 1350, paras. 75 et ss. et Banque de Montréal c. TMI‑Éducaction.com inc. (Faillite de) 2014 QCCA 1431, paras. 103 et ss.
[3]Vidéotron, s.e.n.c. c. Bell ExpressVu l.p. 2015 QCCA 422, para. 88, citant Provigo Distribution inc. c. Supermarché A.R.G. inc., [1997] R.J.Q. 47, page 67.

Friday 4 September 2015

OPPRESSION: Revisiting the Governing Principles of Directors’ Personal Liability


Emma Lambert

A recent decision of the Quebec Court of Appeal (Black c. Alharayeri, 2015 QCCA 1350) provides a comprehensive review of the issue of the personal liability of directors in the context of an oppression claim. [Please note, the author of this post, Emma Lambert, was one of the attorneys representing the Respondent.]

This case involved a claim under section 241 of the Canada Business Corporations Act (“CBCA”) brought by Ramzi Mahmoud Alharayeri (“Alharayeri”), the former President, Chief Executive Officer and largest minority shareholder of the mise en cause Wi2Wi Corporation (“Wi2Wi”), against certain directors of Wi2Wi, specifically Hans Peter Black (“Black”), Andrus Wilson (“Wilson”), Rob Roy (“Roy”) and David Tahmassebi (“Tahmassebi”), seeking damages for conduct that Alharayeri deemed to be oppressive, unfairly prejudicial and that unfairly disregarded his interests.

Though Alharayeri’s oppression claim was originally wider in scope, the trial judge, the Honourable Stephen W. Hamilton J.S.C., determined that Alharayeri had succeeded in proving oppression in relation to two specific acts: the failure to convert Alharayeri’s preferential Class A and Class B Shares and the failure to ensure that Alharayeri’s rights as the holder of the Class A and Class B Shares were not prejudiced by a private placement. In light of the circumstances, the trial judge found that it was “fit” to order Black and Wilson to personally pay damages in the amount of $648,310, with interest, the additional indemnity and costs, to Alharayeri as a remedy to this oppression. The trial judge found that although each of the defendants had been involved in the oppressive conduct and had benefitted from changes to the stock option plan, it was Black and Wilson who had played the lead roles in the discussions at the Board level, participated in the private placement and benefitted from the dilution of Alharayeri’s preferential shares. Alharayeri’s action against Roy and Tahmassebi was dismissed.

Black and Wilson appealed the first instance judgment and Alharyeri filed an incidental appeal on the issue of the valuation of his Class A and Class B shares. Ultimately, the Court of Appeal dismissed both the principal and the incidental appeals. A particular issue of interest in the Court of Appeal’s decision was its treatment of the governing principles regarding the personal liability of directors, in this case of Black and Wilson, in matters of oppression.

On the issue of their personal liability, Black and Wilson had argued in appeal that the trial judge had erred in ruling that they had played the lead roles in the discussions at the Board level and that they had personally benefitted from the non-conversion of Alharayeri’s preferential shares. They maintained that the evidence adduced at trial was insufficient to demonstrate that they had personally committed the abusive and prejudicial acts towards Alharayeri. They also argued that the judge had violated the audi alteram partem rule in finding that they had personally benefitted from the non-conversion of the Alharayeri’s preferential shares on the basis of facts that had not been alleged and arguments that had not been pleaded.

By way of an introduction to the issue of the personal liability of directors, Justice Yves-Marie Morissette writing on behalf of the Court of Appeal had the following comments:

[13] Un autre arrêt de principe sur la portée de la même disposition mérite mention ici. Il s’agit du jugement de la Cour d’appel de l’Ontario dans l’affaire Budd v. Gentra[1]. Le juge Doherty, au nom d’une formation unanime de la Cour, écrivait:

[47] In deciding whether an oppression action claiming a monetary order reveals a reasonable cause of action against directors or officers personally, the court must decide:

Are there acts pleaded against specific directors or officers which, taken in the context of the entirety of the pleadings, could provide the basis for finding that the corporation acted oppressively within the meaning of s. 241 of the C.B.C.A.?

Is there a reasonable basis in the pleadings on which a court could decide that the oppression alleged could be properly rectified by a monetary order against a director or officer personally?

[48] The first requirement seems self-evident. No person should have to defend a lawsuit absent allegations which identify the conduct of that person said to render him or her liable to the plaintiff. This statement of claim utterly fails to deal with the director defendants or management defendants on an individual basis. Rather, they are treated as a single entity, each indistinguishable from the other, and all serving as the cat's paw of the controlling shareholders. Nowhere does the appellant allege that any named director or officer did or failed to do any specified act or participated in any identified way in any of the decisions or manoeuvres which the appellant relies on in support of his claim. The claim does no more than identify the individuals as directors or officers of Royal Trustco at some unspecified time. There is no attempt to connect any individual director or officer to the alleged corporate oppression.

[…]

[52] … To maintain an action for a monetary order against a director or officer personally, a plaintiff must plead facts which would justify that kind of order. The plaintiff must allege a basis upon which it would be "fit" to order rectification of the oppression by requiring the directors or officers to reach into their own pockets to compensate aggrieved persons. The case law provides examples of various situations in which personal orders are appropriate. These include cases in which it is alleged that the directors or officers personally benefitted from the oppressive conduct, or furthered their control over the company through the oppressive conduct. Oppression applications involving closely held corporations where a director or officer has virtually total control over the corporation provide another example of a situation in which a director or officer may be held personally liable to rectify corporate oppression.

[14] L’arrêt Budd v. Gentra a posé plusieurs jalons utiles dans l’analyse de recours pour abus intentés en vertu de l’article 241 de la LSA. C’est particulièrement le cas en ce qui concerne l’hypothèse d’une condamnation personnelle des administrateurs d’une société. Se fondant sur cet arrêt, qui présente un tour d’horizon de la jurisprudence alors en existence, un auteur offre la description suivante des situations qui se prêtent à cette hypothèse[2]:

14.1.1.1. Where directors obtain a personal benefit financial benefit from their conduct.

14.1.1.2. Where directors have increased their control of the corporation by the oppressive conduct.

14.1.1.3. Where directors have breached a personal duty they as directors.

14.1.1.4. Where directors have misused a corporate power.

14.1.1.5. Where a remedy against the corporation would prejudice other security holders.

On the first issue regarding Black and Wilson’s lead roles in the discussions at the board level as justification for their personal liability, the Court of Appeal determined the following:

[37] Tout d’abord, l’hypothèse d’une condamnation personnelle d’un ou de plusieurs administrateurs semble bien admise. L’auteur Markus Koehnen écrit à ce sujet[3]:

Directors and officers can be held personally liable for corporate oppression. Their liability in this regard does not depend on the breach of a specific statutory duty or common law tort but is substantially broader. Personal liability for directors and officers does not implicate corporate veil principles but involves the proper interpretation of the oppression remedy. Although the oppression remedy creates a broader personal basis of personal liability for directors than either the common law or specific provisions of statutory liability, not all oppression claims justify orders against directors. The plaintiff must make specific allegations against directors to found a claim against them; otherwise directors’ liability would be engaged each time the oppression remedy was invoked.

Le JurisClasseur Québec fait écho à ces observations[4]. Les auteurs du fascicule consacré au « Redressement en cas d’abus ou d’iniquité » commentent[5]:

Le recours en cas d’abus peut viser directement les administrateurs d’une société lorsqu’ils participent au traitement inéquitable du demandeur. […] De façon générale, il faut prouver que ces derniers ont posé des actes abusifs ou injustes justifiant une sanction pécuniaire pour compenser les dommages. Selon la jurisprudence, il y a lieu d’ordonner un tel paiement lorsque les membres du conseil ont tiré un profit personnel de l’acte reproché ou lorsqu’ils ont accru leur contrôle sur l’entreprise.

[38] En outre, si l’on retenait l’argument des appelants, il deviendrait plus difficile, voire impossible, d’individualiser la responsabilité des administrateurs afin de départager ceux d’entre eux qui ne sont pas à l’origine de l’abus (au sens du paragr. 241(2) de la LCSA) et ceux qui le sont. Lorsque tous les administrateurs ne sont pas également compromis par leurs agissements, cela risquerait d’engendrer une forme d’immunité à l’avantage des administrateurs fautifs. Un tel résultat paraît incompatible avec le large pouvoir discrétionnaire que la LCSA confère au tribunal (« enforce not just what is legal but what is fair », écrit la Cour suprême) de même qu’avec la finalité réparatrice du recours régi par l’article 241 de la LCSA.

[39] Une fois ces précisions apportées, cet aspect du pourvoi se dissout en quelque sorte en une série de questions d’appréciation de la preuve, pour la résolution desquelles il était loisible au juge de première instance d’étudier les documents de la société déposés en preuve, tels que les procès-verbaux et le registre des valeurs mobilières de la mise en cause, afin de déterminer au(x)quel(s) des administrateurs on pouvait légitimement imputer une conduite abusive ou inéquitable.

Secondly, on the issue of whether the trial judge had violated the audi alteram partem rule in finding that Black and Wilson had personally benefitted from the non-conversion of Alharayeri’s preferential shares, the Court began its analysis by distinguishing the facts of Budd v. Gentra from the present case and then concluding that Alharayeri’s pleadings and allegations in demand had not been deficient. As such, the Court concluded that there was no basis to invoke any violation of the audi alteram partem rule. Furthermore, on the issue of the sufficiency of the evidence of Black and Wilson’s personal benefit, the Court concluded the following:

[56] Il est vrai que les appelants ne sont pas les seuls investisseurs à avoir bénéficié du placement privé, mais en leur imputant une responsabilité le juge ne fonde pas sa conclusion sur leur simple participation à cette opération de financement par ailleurs légitime. Il y a beaucoup plus. Eux seuls ont joué un rôle actif, non seulement dans la mise en place de ce placement privé, mais également dans le refus de convertir les actions privilégiées de l’intimée, et ce en l’absence de toute mesure parallèle susceptible de protéger les attentes légitimes de ce dernier. C’est ce faisceau de circonstances en arrière-plan qui fait du bénéfice personnel direct ou indirect retiré par les appelants un élément probant dans leur condamnation personnelle en vertu de l’article 241 de la LCSA.

[57] D’autre part, on ne saurait considérer que le bénéfice en question se limite à la valeur des actions ordinaires acquises en conséquence du placement privé. Même s’il est vraisemblable que la situation financière de la mise en cause à l’automne 2007 et ultérieurement était précaire et rendait très hypothétique, voire illusoire, la réalisation prochaine d’un profit tangible en numéraire, un bénéfice personnel ne revêt pas uniquement la forme d’un gain économique et en espèces. On peut inférer des quelques décisions recensées sur le sujet que le bénéfice retiré par un administrateur peut aussi consister en autre chose, comme le fait d’accroître son contrôle sur le capital-actions de la société et sur la conduite de ses affaires[6]. L’intimé le soulève aux paragraphes 13.6 et 13.7 de sa requête introductive d’instance, précitée au paragraphe [51] et la preuve démontre que le placement privé aura permis aux appelants, quoique surtout à l’appelant Black, d’asseoir leur contrôle sur la mise en cause.

[…]

[61] Il faut conclure de ce qui précède que les appelants ont tort lorsqu’ils reprochent au juge de les avoir condamnés en l’absence de toute preuve adéquate - bien au contraire, il y avait au dossier un preuve prépondérante pour servir d’assise aux conclusions énoncées au paragraphe [167] de motifs livrés en première instance.


[1] [1998] O.J. No. 3109 (C.A. Ont.).
[2] Markus Koehnen, Oppression and Related Remedies, Carswell, Toronto, 2004, p. 201 (references omitted).
[3] Markus Koehnen, Oppression and Related Remedies, Carswell, Toronto, 2004, p. 200.
[4] Raymonde Crête et Philippe D’Anjou, “Redressement en cas d’abus ou d’iniquité”, in JurisClasseur Québec, Droit des sociétés, fascicule 14, Montréal, LexisNexis, 2013, p. 14.
[5] Ibid., p. 19.

[6] Budd v. GentraDowntown Eatery, [2001] O.J. No. 1879 (C.A. Ont.), paragr. 62: “Grad and Grosman, in terminating the operations of Best Beaver and leaving it without assets to respond to a possible judgment, should have retained a reserve to meet the very contingency that resulted. In failing to do so, the benefit to Grad and Grosman, as the shareholders and sole controlling owners of this small, closely held company, is clear.”