Case information

Commercial law — Corporations — Oppression action — Abuse of power — Iniquity — Remedy — Repurchase of shares — Fair market value — Standard for appellate intervention — Approach court of appeal must adopt when considering appeal relating to remedy in context of action for rectification of abuse of power or iniquity, in particular estimate of “fair value” of shares of victim of oppression — Whether order for repurchase of shares made in context of oppression action must affect, retroactively to “fairest date”, rights of shareholder who brought action — When there is absence of evidence resulting from deliberate choice of party who has burden of proof, whether court of appeal may compensate for that absence by engaging in exercise of pure speculation in name of judicial discretion.

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The respondent Entreprises L.T. Ltée (“Entreprises LT”) is a company governed by the Business Corporations Act, CQLR, c. S 31.1 (“BCA”). It was founded by the parents of the three Lagacé brothers, Pierre and Carol (respondents) and Michel (applicant). Entreprises LT’s main activities are the manufacturing and sale of concrete, asphalt, stone and sand, as well as municipal and provincial snow removal. Beginning in 2015, the Lagacé brothers started to discuss the transfer of Entreprises LT to the next generation. However, the discussion turned sour, and the conflict culminated with the applicant Michel Lagacé being excluded from the company’s board of directors. The matter became a legal one in May 2018, when Michel Lagacé and his management company brought an action against the respondents.

Following a trial in the Quebec Superior Court, the judge found, after analyzing the evidence, that Pierre and Carol Lagacé had acted oppressively and unfairly towards their brother Michel. Pursuant to s. 451 BCA, the judge ordered, among other things, that the respondents repurchase the applicants’ shares at their fair value, which was determined to be $27,633,333. The Quebec Court of Appeal allowed the appeal in part for the sole purpose of revising the market value of the applicants’ shares downwards to $19.3 million.