Articles 450 to 453 of the (Quebec) Business Corporations Act, S-31.1 (“QBCA”) provide remedies available to applicants to rectify acts or omissions of a corporation, its board of directors or affiliates that are or could be oppressive or unfairly prejudicial to any security holder, director or officer of the corporation.
In other words, the QBCA offers remedies to members of a corporation that consider themselves having been oppressed by its other members. The remedies themselves range from the issuance of orders restraining the conduct complained of, to the issuance of orders dissolving the corporation itself.
In either case, Courts have the authority to make any order they think fit in virtue of article 452 QBCA; and this, regardless of whether an applicant specifically requested it.
The general notion that a Court cannot grant remedies ultra petita therefore seems to be set aside, raising the question of whether a Court may issue orders or render conclusions not listed at article 451 QBCA when ruling in cases of oppressive or unfairly prejudicial acts or omissions committed by members of a corporation.
While the notion that a Court might have the opportunity to issue orders that have not been requested by applicants and that are not provided for by legislation might seem alarming at first glance – lest we end up vulnerable to judicial overreach – the increasing role of alternate dispute resolution (ADR) methods invites us to reflect on whether additional authority allowing Courts to force parties to attempt mediation or to attend settlement conferences might be desirable. In fact, such an opening might be most appropriate in the application of articles 450 to 453 QBCA given that oppression is an equitable remedy in virtue of which Courts force “not just what is legal but what is fair.”[1]
In the last year, the Superior Court of Québec has reiterated the notion that when deciding on oppression remedies, Courts must consider the relationship between the parties and their reasonable expectations of each other. [2] While recent case law ordering parties to resort to ADR methods has yet to be rendered, the Superior Court of Québec has recently rendered decisions in the area of shareholders’ disputes namely in which settlement offers (and responses) were made and filed into Court on a with prejudice basis, meaning that parties can be held to their offers/responses although not binding per se; and in which at times, without explicitly ordering it, the Court even seemed to try to persuade the parties to negotiate a settlement agreement.[3]
Recent amendments to the Code of Civil Procedure, c.25-01 (“C.C.P.”) provide that settlement conferences are automatically held in cases brought before the Court of Quebec where the amount claimed or value of the subject matter is under $100 000. The automatic resort to settlement conferences in such a context helps reduce costs for the parties and enables more expedient access to justice. In the context of shareholder disputes, a resort to settlement conferences might have the added benefit of protecting potentially ongoing business relationships or preventing them from disintegrating even further.
In the meantime, while arbitration clauses are commonly provided for in shareholders’ agreements,[4] shareholders might benefit from including provisions to their agreements in which they undertake to resort to ADR methods – and settlement conferences in particular – prior to instituting judicial proceedings.
[1] BCE Inc. v. 1976 Debentureholders, 2008 SCC 69; see also: Paul Martel, La société par actions au Québec, vol. 1 « Les aspects juridiques », (Montreal: Wilson & Lafleur) at 31-180 – 31-181, no 31-311.
[2] Sigounis v. Sigounis, 2023 QCCA 1375, Wu c. Lessard, 2024 QCCS 3239; see also: Re Ferguson and Imax Systems Corp. (1983), 1983 CanLII 1646 (ON CA)
[3] Harris c. Blais, 2024 QCCS 1970
[4] Dell Computer Corp. v. Union des consommateurs, 2007 SCC 34