Case information

Civil liability — Commercial law — Corporations — Abuse of rights and oppression — Personal and distinct remedy of shareholder — Assessment of damages — Duties and obligations of directors — In Quebec civil law, whether it is enough for shareholder of corporation to establish directness of injury suffered by them within meaning of art. 1607 of Civil Code of Québec and causal link between that injury and fault committed against them, or whether shareholder must also establish that there was breach of distinct obligation owed to them and that their injury is distinct from injury suffered by corporation — Where oppression by one shareholder against another is shown, whether principles established in majority reasons in Brunette v. Legault Joly Thiffault, [2018] 3 S.C.R. 481, apply or whether they must be displaced in favour of more flexible rules — Whether Court of Appeal judges and trial judge erred in law and in fact by making cross applicants bear significant portion of damages even though they had not participated in alleged faults in any way — Whether such approach is consistent with application in law of arts. 1457 and 1607 of Civil Code of Québec and with principle of full restitution for damages — Whether interpretation by courts below of concepts of “distinct obligation” and “distinct injury” makes it possible to achieve objectives of test established by this Court in Brunette — Conditions on which director of Quebec corporation that depends on venture capital investments can be held personally liable to compensate third party — Civil Code of Québec, arts. 1457 and 1607 — Business Corporations Act, CQLR, c. S 31, s. 119.

Case summaries are prepared by the Office of the Registrar of the Supreme Court of Canada (Law Branch). Please note that summaries are not provided to the Judges of the Court. They are placed on the Court file and website for information purposes only.

Leclerc Glu Lam Products inc. (“Leclerc”) and Americana Lumber inc. (“Americana”) are management companies whose sole shareholder is Jacques Bérubé. In 2000, Mr. Bérubé established a portfolio management company, Polystar inc., in order to acquire businesses in the forestry and agriculture sectors. Between June 2000 and May 2001, three commercial corporations or partnerships, including the Fonds de développement de la Confédération des syndicats nationaux pour la coopération et l’emploi (“Fondaction”) and Amisk inc., invested in the various businesses started by Mr. Bérubé. In 2001, Polystar carried out a corporate reorganization and ended a new round of financing. Polystar’s principal shareholders were then Americana (24.85%), Leclerc (18.30%), Fondaction (29.61%) and Amisk inc. (15%). Polystar held 100% of the capital stock of Leclair Américana inc. (“Leclair”), which manufactured flooring for trailers and containers, Canadiana Flooring inc. (“Canadiana”), which, among other things, manufactured residential flooring in the forestry division, and Industrie Bodco Inc. (“Bodco”), a manufacturer of manure and feed handling equipment in the agriculture division. In the fall of 2001, André Salesse was appointed to represent Amisk on Polystar’s board of directors and Jacques Clément joined Yvon Marcil in representing Fondaction on the board of directors. At the end of 2001, a business turnaround specialist conducted financial audits of Polystar and its subsidiaries as a result of a meeting with bank representatives in which Mr. Clément and Mr. Salesse participated. Further to the reports submitted by the specialist, Polystar’s directors and shareholders made various decisions that led in part to Mr. Bérubé’s dismissal as chief executive officer in December 2001 and ultimately to his resignation as president and director of Polystar and its three subsidiaries in January 2002. In April 2002, Polystar’s board of directors approved the transfer of the shares held in Bodco to three creditors, including Amisk and Fondaction, in payment of debts. On May 13, 2002, Canadiana and Leclair were declared bankrupt. Between May and June 2002, Bodco acquired a company in the agriculture sector. That acquisition, for which steps had begun to be taken a year earlier, was made possible by a subscription agreement for the acquisition of Bodco’s capital stock, including by Fondaction and Amisk. In July 2002, Leclerc, Americana and Mr. Bérubé instituted legal proceedings against Polystar and some of its shareholders and directors. They claimed, among other things, damages for abuse of authority and oppression. The Superior Court ordered Polystar, Amisk, Pan O Lac Ltée, Fondaction, Mr. Clément, Mr. Marcil and Mr. Salesse solidarily to pay $4,372,950 to Americana, Leclerc and Mr. Bérubé. The Court of Appeal allowed the principal appeal in part. Fondaction, Mr. Clément, Mr. Marcil and Mr. Salesse were ordered in solidum to pay $4,012,950 to Americana and Leclerc. Fondaction was ordered to pay $280,000 to Mr. Bérubé. Mr. Salesse’s incidental appeal was dismissed.