Dockets: A-372-16, A-370-16,
A-371-16, A-373-16,
A-374-16, A-375-16, A-376-16,
A-377-16, A-378-16, A-379-16,
A-380-16, A-381-16, A-382-16,
A-383-16, A-384-16, A-385-16
Citation: 2016 FCA 299
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CORAM:
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NOËL C.J.
TRUDEL J.A.
SCOTT J.A.
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BETWEEN:
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LINE DUROCHER
(2011-1393(IT)G)
XAVIER
VALLERAND (2011-1274(IT)G)
MARIE-PIER
BLONDEAU (2011-1358(IT)G)
OLIVIER RINGUET
(2011-1365(IT)G)
GENEVIÈVE
LAGARDE (2011-1352(IT)G)
LOIK VALLERAND
(2011-1272(IT)G)
MARISOL RINGUET
(2011-1357(IT)G)
FRANCINE
BUSSIÈRES (2011-1360(IT)G)
G.MARIUS BÉRUBÉ
(2011-1284(IT)G)
CATHERINE
SANSOUCY (2011-1314(IT)G)
CLAUDINE
LAGARDE (2011-1349(IT)G)
NATHALIE
MONETTE (2011-1356(IT)G)
AISHA BLONDEAU
(2011-1305(IT)G)
FRANCIS S.
LABONTÉ (2011-1351(IT)G)
VINCENT LAGARDE
(2011-1363(IT)G)
ÉLISE LAGARDE
(2011-1350(IT)G)
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Appellants
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and
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HER MAJESTY THE
QUEEN
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Respondent
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REASONS FOR JUDGMENT
NOËL C.J.
[1]
There are 16 appeals against judgments rendered
by the Tax Court of Canada judge (TCC judge) confirming 16 notices of
assessment issued against the appellants (Durocher v. the Queen, 2015
TCC 297), based on a single set of reasons. These assessments deny the
appellants the capital gains deduction provided for in subsection 110.6(2.1) of
the Income Tax Act, R.S.C. 1985, c. 1 (5th suppl.) (the ITA). The
taxation years at issue are between 2006 and 2008, and vary among the
appellants.
[2]
The appeals were consolidated by an order made
on October 19, 2016, as amended on November 23, 2016, with the Line Durocher docket
(A-372-16) designated as the main case. In accordance with that order, the
reasons which follow dispose of the 16 appeals. The original version will be
filed in the main docket, and a copy will be filed in each related docket as
reasons for judgment therein.
[3]
In support of their appeals, the appellants submit
that the call option underlying the refusal of the deduction which they claimed
is absolutely null and void and that the TCC judge erred in law by failing to reach
this conclusion.
[4]
For the reasons set out below, I am of the
opinion that the TCC judge correctly concluded that this option was not null
and void and that the appeals must therefore be dismissed.
[5]
The statutory provisions relevant to the
analysis are set out in the appendix.
THE RELEVANT FACTS
[6]
There were initially nine Gestion RJCG Inc.
(RJCG) shareholders, but following a transfer to family trusts in early April
2005, the number of individuals for which the trusts held these shares
increased to 16.
[7]
In April 2006, the 16 appellants realized a
taxable capital gain upon the sale of the shares of the capital stock of RJCG with
respect to which they claimed the capital gains deduction provided for in
subsection 110.6(2.1) of the ITA.
[8]
However, these deductions were rejected by the
Minister of National Revenue (the Minister) on the ground that, throughout the
entire 24-month period preceding the sale, RJCG was not a “Canadian-controlled private corporation” within the
meaning of subsection 125(7) of the ITA (Appeal Book, vol. 2, p. 308).
[9]
Six different corporations are directly or
indirectly involved in the transactions underlying these appeals (Reasons,
paras. 7, 8, 27 and 29):
a) Dale Parizeau L. M. Inc. (Dale Parizeau), an insurance brokerage company carrying on business
in Quebec.
b) Gestion Lagarde Massicote Inc. (Gestion Lagarde), a company that holds all of the common and
preferred shares in Dale Parizeau.
c) Gestion RJCG, a corporation, which before
April 28, 2006, held all the common shares in Gestion Lagarde.
d) Aviva Canada Inc. (Aviva), formerly CGU
Group Canada Ltd. (CGU), a company incorporated under the laws of Ontario, which holds all the preferred shares in Gestion Lagarde.
e) Aviva International Holdings Limited
(Aviva International), a non-resident corporation, which is Aviva’s parent
company.
f) 1695711 Ontario Inc. (1695711 Ontario) of
which Aviva holds 20% of the capital stock and to whom the shares of the
capital stock of RJCG were sold on April 28, 2006.
[10]
A unanimous shareholder agreement (Shareholders’
Agreement) signed by RJCG, Aviva, Gestion Lagarde and Dale Parizeau on April
12, 2002, is at the centre of this case (Appeal Book, vol. 7, pp. 1071–1104).
[11]
In addition to Article 18.2 of the Shareholders’
Agreement, according to which that agreement is governed by the laws of Quebec,
two articles are of particular importance in the context of this litigation. In
Article 6 of the Shareholders’ Agreement, the parties recognized that
Aviva – formerly CGU – had been granted an option to acquire 66.305% of Gestion
Lagarde Class “A” common shares. It also provided that Gestion Lagarde would
issue a sufficient number of shares to allow Aviva to acquire this percentage
(Reasons, para. 13):
6. CGU OPTION
The parties recognize that CGU has been
granted the option to subscribe to and purchase that number of Class
"A" Shares (the "Optioned Shares"), which, when issued and
added to the issued and outstanding Class “A” Shares, would result in the
Optioned Shares representing 66.305% of the resulting issued and outstanding
Class “A” Shares (which include the Optioned Shares), for a price of one dollar
($1.00) per Share, pursuant to a restated and amended option agreement entered
into between CGU and the Corporation as of April 12, 2002 (the “CGU Option”).
The Shareholders shall, and shall cause their respective nominees to the board
of directors of the Corporation to, give effect to the CGU Option and cause the
Corporation to issue the appropriate number of Shares to CGU upon the exercise
of the CGU Option.
[12]
The other provision of interest is Article 7.3
of the Shareholders’ Agreement. It provided that starting on May 1, 2005,
Aviva would be entitled to require RJCG to dispose in its favour the Class “A”
shares it held in the capital stock of Gestion Lagarde (Reasons, para. 13):
7.3 Call on RJCG Shares by CGU
CGU shall be entitled to require RJCG to
sell on May 1, 2005, and any May 1 thereafter, all but not less than all of its
Shares to CGU upon giving six (6) months’ prior notice to RJCG, (which notice
may be given six months prior to May 1, 2005), and CGU shall, in such event,
purchase such Shares at their Fair Value increased by an amount equal to the
following: […] and RJCG shall be obliged to sell such Shares at such purchase
price.
[13]
At some point before the exercise date, a sum of
$400,000 was paid by Aviva in consideration for the right to make some
amendments to the Shareholders’ Agreement. This amount, which was to be paid to
Gestion Lagarde, was ultimately paid to RJCG (Appeal Book, vol. 7, p. 1111).
[14]
Several amendments were then made to
Article 7.3 (Reasons, paras. 15-27), which gave rise to many questions
during the proceedings, including whether, pursuant to a letter dated December
20, 2005, Aviva’s option covered the shares of the capital stock of RJCG as the
Crown argued, rather than the shares of Gestion Lagarde as the appellants
argued (Reasons, para. 27). The TCC judge conducted his analysis on the
assumption that the shares of the capital stock of Gestion Lagarde were the
ones targeted, without however elucidating that question.
[15]
At any rate, the shares of the capital stock of
RJCG were the ones that were eventually sold. The record shows that on April
28, 2006 Aviva ceded its option to 1695711 Ontario, a corporation in which it
held 20% of the capital stock, and on the same day, 1695711 Ontario acquired
the shares that the family trusts held in the capital stock of RJCG (Appeal
Book, vol. 7, pp. 1200–1202 and 1209).
[16]
In rejecting the claimed deduction, the Minister
relied on the deeming provision provided for in paragraph 251(5)(b)
of the ITA and made the assumption that the December 20, 2005 letter granted
Aviva the right to acquire the shares of the capital stock of RJCG, thereby giving
Aviva control over RJCG. Aviva was in turn controlled by Aviva International, a
non-resident corporation. As a result, RJCG no longer met the requirement that
it be a “Canadian-controlled private corporation”
during the 24 months prior to the sale (see paragraph 110.6(1)(c)
and subsection 125(7) of the ITA).
THE DECISION OF
THE TAX COURT OF CANADA JUDGE
[17]
The TCC judge first examined the argument according
to which the Minister could not rely on the call option set out in the Shareholders’
Agreement as a basis for rejecting the deduction claimed because this option
was absolutely null and void (Reasons, para. 33). After having indicated that a
ruling favourable to the appellants on this issue would bring an end to the matter,
the TCC judge devoted the better part of his analysis to this issue (Reasons,
paras. 35–69).
[18]
According to the appellants, Article 6 of
the Shareholders’ Agreement, which gives Aviva an option to acquire the shares
of Gestion Lagarde, and Article 7.3 of the Shareholders’ Agreement, which
gives Aviva the option to acquire the shares held by RJCG in Gestion Lagarde, are
contrary to section 148 of the Act respecting the distribution of
financial products and services, CQLR, c. D-9.2 (ARDFPS) because they give
Aviva more than 20% of the capital stock of Dale Parizeau (Reasons, para. 47).
[19]
In support of this argument, the appellants rely
on subparagraph 251(5)(b)(i) of the ITA, which provides that, for
some purposes, call options for shares are deemed to have been exercised so
that the holder of a call option for shares is treated as if it owned the subject
shares. According to the appellants, section 148 of the ARDFPS, and in
particular the words “directly or indirectly” in
that section, mean that the holder of a call option must be treated in the same
fashion for the purposes of this act.
[20]
According to the appellants, it follows that the
call option granted by the Shareholders’ Agreement is contrary to the ARDFPS
because it would allow Aviva, as a financial institution, to hold more than 20%
of the capital stock of Dale Parizeau, which meets the definition of a damage
insurance company. Given that this is a requirement of public order,
Articles 6 and 7.3 of the Shareholders’ Agreement would be null and void as
they allow this threshold to be exceeded. Articles 1413 and 1418 of the Civil
Code of Québec, C.Q.L.R. c. CCQ-1991 (C.C.Q.) are cited in support of this proposition.
[21]
The TCC judge accepted from the onset that it is
the Superior Court that has the jurisdiction to declare null and void the call
option (Reasons, para. 45). Nevertheless, the Tax Court of Canada (TCC), in
exercising its jurisdiction to rule on an appeal from an assessment, “must consider the bona fides of contracts, including
the validity of a contract and any of its provisions” (Reasons, para.
46). The TCC judge therefore proceeded on the basis that he could entertain the
argument based the alleged nullity of the option.
[22]
However, the TCC judge rejected the appellants’
argument, holding that a deeming provision under the ITA cannot be used in the
application of another act (Reasons, paras. 51–52). The fact that Aviva is,
under paragraph 251(5)(b), deemed to be the owner of the shares of
Gestion Lagarde for the purposes of subsection 110.6(1) of the ITA does not
mean that this fiction can be transposed and applied for the purposes of
section 148 of the ARDFPS (Ibidem).
[23]
The TCC judge also underlined the fact that as
long as the option had not been exercised, Aviva remained able to ensure that
the acquisition which was envisaged would be completed in compliance with the
20% threshold provided for in section 148 of the ARDFPS. This is in fact
what happened since Aviva, by transferring its option to 1695711 Ontario and
allowing it, rather than Aviva, to acquire the shares of the capital stock of RJCG,
complied with this threshold (Reasons, para. 50).
[24]
The TCC judge added that even if the fiction
created by paragraph 251(5)(b) of the ITA applied to the ARDFPS,
Articles 6 and 7.3 would not be null and void. Not only does Article 18.6
of the Shareholders’ Agreement provide for the severability of illegal portions
(Reasons, para. 53), but the framework provided by the ARDFPS already contemplates
remedies other than a declaration of nullity for corporations that contravene its
provisions (Reasons, para. 65).
[25]
The TCC judge then considered the effect of
Articles 6 and 7.3 of the Shareholders’ Agreement on the deduction claimed
by the appellants. He conducted his analysis without adopting the Minister’s
position that pursuant to the letter dated December 20, 2005, the option was
modified to cover the shares of the capital stock of RJCG rather than those in
the capital stock of Gestion Lagarde, thus disqualifying RJCG as a “Canadian-controlled private corporation.”
[26]
Indeed, he took the initiative of raising the
hypothesis that the appeals were doomed to fail on the basis of the assets and
activities criterion set out in subsection 110.6(1) of the ITA (Reasons,
para. 71).
[27]
After having invited the parties to be heard on
this new issue and having considered their written submissions, the TCC judge
explained that none of the exceptions to the application of the deeming
provision applied in this case (i.e.: see paragraph 110.6(14)(b)),
and that paragraph 251(5)(b) had therefore to be applied with all attendant
consequences (Reasons, para. 76). One of these consequences was that the RJCG
shares did not meet the requirements of paragraph 110.6(1)(c).
[28]
According to this provision, in the 24 months
preceding the sale, the shares had to be those of a corporation, the fair
market value of the assets of which was attributable to assets used principally
in an active business carried on primarily in Canada; or the corporation related
to it had to be a “Canadian-controlled private
corporation” whose shares met the asset test (Reasons, paras. 81–83).
[29]
The TCC judge had previously concluded, in view
of the evidence, that RJCG and Gestion Lagarde were only management
corporations; RJCG’s assets were composed only of the shares of the capital
stock of Gestion Lagarde; Gestion Lagarde’s assets were composed only of the
shares of the capital stock of Dale Parizeau and that given the deeming provision,
Dale Parizeau had ceased to be a “Canadian-controlled
private corporation” starting in 2002, when the call option was
initially granted (Reasons, paras. 73–74, 78–79 and 83).
THE PARTIES’
POSITIONS
[30]
At the beginning of the hearing, counsel for the
appellants informed us that only the argument based on the nullity of the call
option would be invoked in support of the appeals. He recognized that if he did
not succeed on this point, the appeals had to be dismissed. The summary of the
arguments is therefore limited to those pertaining to the alleged nullity of
the option.
[31]
Counsel for the appellants first argued that the
TCC judge had the jurisdiction to analyze the Shareholders’ Agreement and rule
on the nullity of the option granted to Aviva, because it was an issue related
to the notices of assessment (Appellants’ factum, paras. 25–26).
[32]
He added that the TCC judge had to give the
ARDFPS a broad and liberal interpretation, something which he had omitted from
doing (Appellants’ factum, paras. 41–42). He cites the decision of the Quebec
Court of Appeal in Souscripteurs du Lloyds c. Alimentation Denis & Mario
Guillemette, 2012 QCCA 1376 [Souscripteurs Lloyds], where certain
contractual provisions were declared inoperative because they contravened the
ARDFPS. In reaching this conclusion, the Court of Appeal emphasized the fact
that the ARDFPS is an act of public order designed to protect the consumer (Souscripteurs
Lloyds, para. 82).
[33]
Counsel for the appellants also cited the
decision of the Superior Court in Formule Pontiac Buick GMC Inc. c. Bureau
des Services financiers, 2004 CanLII 7239 [Formule Pontiac], where
the word “remuneration”, as it appears in
section 431 of the ARDFPS, was interpreted as including the concept of
dividends (Formule Pontiac, paras. 68–69):
[translation][68]
The Tribunal understands the argument made by counsel for the applicant,
stating that it was not remuneration but a dividend or some other way of being
paid. If we adopt a literal interpretation, counsel for the applicant may be right.
But that is not the interpretation that the Tribunal must follow to ascertain compliance
or non-compliance with the act. If there is no ambiguity, the Tribunal must ascertain
the purpose of the act. The language is clear, the legislature seeks to protect
the consumer and wants the consumer to be informed of the cost of its product
when it is sold by a person who is not accredited.
[69] The applicant attempts to circumvent
the law by adopting a literal interpretation and using a distinct corporate structure.
The Tribunal cannot follow the applicant on this argument.
[34]
The Superior Court gave effect to the legislative
intent in these terms (Formule Pontiac, paras. 75–76):
[translation][75]
Indeed, the act seeks to prevent someone from receiving more than 30%
remuneration without disclosing it to the consumer. By the applicant’s own
admission in paragraph 94, the applicant organized its affairs in order
not to receive more than 30%, using a literal interpretation of the section as
previously stated. The Tribunal concludes that the legislation must be
interpreted in such a way as to achieve its purpose. And this purpose of the act
is not respected by the financial structure developed by the applicant.
[76] In conclusion, the applicant is not
entitled to act as it does. It does not comply with section 431 of [the
ARDFPS]. The amount of money that it receives as remuneration or a dividend or
otherwise, is greater than the 30% permitted under section 431. This
section must be interpreted so that it can achieve the full purpose that the
legislator intended to give it, i.e. consumer protection.
[35]
Counsel for the appellants argues that
section 148 of the ARDFPS must be construed in the same fashion. According
to him, the words “held directly or indirectly”
must be given a broad and liberal interpretation in order to include “options acquired by taxpayers who have a lot of money and
can pay considerable sums to change those options at the appropriate time
[...]” (Appellants’ factum, para. 50).
[36]
He adds that, contrary to what the TCC judge
states, while failure to meet the requirements of section 148 of the
ARDFPS can be sanctioned by penalties, this does not prevent a court from
ruling on issues of public order (Appellants’ factum, para. 52 citing Formule
Pontiac and Souscripteurs Lloyds), and in this case, from ruling that
Articles 6 and 7.3 are absolutely null and void.
[37]
Although the Crown supports the TCC judge’s
decision rejecting the appellants’ argument based on nullity, it submits that
only the Superior Court was entitled to declare the call option null and void (Factum
of the Crown, para. 41, note 38). The Crown adds that in the absence of such a
declaration, the appellants could not base their case on the nullity of
Articles 6 and 7.3 of the Shareholders’ Agreement (Ibidem).
[38]
Be that as it may, the Crown submits that the
option was not null and void. It points out that section 148 of the ARDFPS
governs the holding of shares beyond the stipulated threshold, whereas the call
option merely confers a right to purchase (Factum of the Crown, paras. 42–43).
This distinction becomes crucial when regard is had to the fact that Aviva did
not exercise its right to purchase in violation of section 148 of the
ARDFPS (Factum of the Crown, para. 46).
[39]
At any rate, according to the Crown, the TCC
judge correctly concluded that a violation of section 148 of the ARDFPS
did not result in the absolute nullity of the option given the sanction provided
for in section 485 of the ARDFPS (Factum of the Crown, paras. 45–47).
ANALYSIS
-
TCC’s jurisdiction
[40]
The Crown is challenging the TCC’s jurisdiction to
declare null and void the call option. In pronouncing on the assessment, the
TCC judge held that he could entertain the argument based on the nullity of the
call option, the validity of which was relied upon by the Minister in issuing
the assessment, even though no competent tribunal had ruled on the matter.
[41]
It is not necessary to resolve this issue since,
as will be seen, the TCC judge correctly rejected the argument that the option
was null and void. However, I note that, as mentioned during the hearing, the
Crown is distorting the controversy when it suggests that the TCC judge would
have been required to “declare” the option null
and void with all attendant consequences. As the TCC judge explains at
paragraphs 45 and 46 of his reasons, he would have been required to pronounce
on the nullity of the option for the sole purpose of determining the validity
of the assessments under appeal.
[42]
Thus, the role of the TCC, when addressing an
argument based on nullity in an appeal under the ITA, cannot be assimilated to that
of the Superior Court, which has the jurisdiction to “declare”
null and void a contract for all legal purposes under articles 33, 35 and
142 the Code of Civil Procedure, C.Q.L.R. c. C-25.01 (compare, see Markou
v. The Queen, 2016 TCC 137, paras. 7–21 where the TCC had to deal with a
similar problem in a case arising in a common law province).
[43]
That being said, I do not dismiss the position
of the Crown counsel who takes exception to the approach of the appellants who,
in her view, rely on the legal validity of the option granted to Aviva when it
suits them, but argue that it would be contrary to the public order when they
find it useful to depart from it. It is far from clear that the public order
can be invoked in this manner, but the TCC judge having correctly refused to give
effect to the argument based on nullity, it is not necessary to expand upon
this subject.
-
Nullity of the call option
[44]
The cornerstone of the appellants’ argument in
support of the alleged nullity of the call option under articles 1413 and
1418 of the C.C.Q. is that for the purposes of section 148 of the ARDFPS,
the holding of a call option on shares of an insurance company must be treated as
if the option had been exercised.
[45]
In making this argument, counsel for the
appellants recognizes that no provision equivalent to paragraph 251(5)(b)
of the ITA is found in the ARDFPS. However, he submits that the words “held, directly or indirectly” in section 148 of
the ARDFPS, when given a broad and liberal interpretation, cover not only the
holding of shares, but also the option to hold shares. The TCC judge refused to
accept that interpretation, insisting on the fact that the deemed provision provided
for in paragraph 251(5)(b) of the ITA finds no equivalent in the
ARDFPS (Reasons, paras. 51–52).
[46]
The question raised is one of statutory
interpretation, which is subject to the standard of correctness (Housen v.
Nikolaisen, 2002 SCC 33, para. 8).
[47]
Before addressing this issue, it must be recalled
that the words of section 148 of the ARDFPS are to be read in the light of
their entire context and according to their grammatical and ordinary sense
harmoniously with the scheme of the ARDFPS, its object and the intention of
Parliament (Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27, para.
21).
[48]
I begin the analysis by emphasizing the particular
nature of a deeming provision. As the Supreme Court noted in R. v. Verrette,
[1978] 2 S.C.R. 838, at page 845, “[a] deeming provision
is a statutory fiction; as a rule it implicitly admits that a thing is not what
it is deemed to be but decrees that for some particular purpose it shall be
taken as if it were that thing although it is not or there is doubt as to
whether it is.” For the particular purposes of the ITA,
paragraph 251(5)(b) deems, among other things, that a corporation
that has a right to acquire shares contingently and in the future has exercised
this right, even if in reality this option has not been exercised. While the situation
in 2002 was that the option had not been exercised, the fact does remain that,
for the purposes of subsection 125(7) of the ITA, a legal fiction already
prevailed. However, in areas unaffected by a legal fiction, the actual
situation stands. For the purposes of the ARDFPS, the actual situation was and
remained that Aviva had not exercised its option.
[49]
This conclusion does not fully resolve the issue
because counsel for the appellants asks us to interpret section 148 of the
ARDFPS so as to include not only the holding of shares above the prohibited
threshold, but also the holding of an option, which, if exercised, would allow
this threshold to be exceeded (Appellants’ factum, para. 50).
[50]
I accept that the words “held,
directly or indirectly” give section 148 of the ARDFPS a large
scope, but I do not believe that these words go so far as to allow for the
appellants’ reading of this provision. As stated, the reality is that holding a
right to acquire shares in the future does not equate with holding the shares
covered by that right.
[51]
The purpose of section 148 of the ARDFPS,
when read in context, is to prevent a financial institution from holding an
interest of more than 20% in an insurance company or exercising on it the
influence associated with an interest that would exceed this threshold.
Therefore, at first glance, holding shares indirectly rather than directly
covers the holding of shares by proxy. This reading is faithful to the ordinary
meaning of the words and gives section 148 of the ARDFPS an effect
consistent with the legislative intent because a person who holds shares by
proxy is able to exercise all the rights arising from them. Conversely, holding
the right to exercise a call option on these shares does not confer any of
these rights.
[52]
Applying this reasoning to the facts at issue,
Aviva did not directly or indirectly hold the shares of Dale Parizeau. Aviva
had a choice to acquire the shares covered by the option. The mere fact that
this choice was available does not make Aviva the owner of the shares covered
by the option. Only a legal fiction comparable to the one created under the ITA
could alter the situation and cause Aviva to be deemed the owner of the shares
that it was entitled to purchase. In this regard, it would be incongruous to
say the least to declare Aviva in violation of section 148 of the ARDFPS
during the period preceding the exercise of the option based on the evidence which
shows that this option was exercised without contravening the requirements of
the ARDFPS.
[53]
The cases cited by the counsel for the
appellants do not support their argument. In Souscripteurs Lloyds, the
Court of Appeal held that a provision excluding indemnification for gross
negligence contravened the regulations applicable to insurance policies enacted
under the ARDFPS, as well as section 196 thereof. Aside from establishing
that a contractual provision can be declared inoperative because it is contrary
to the ARDFPS, that case does not assist the appellants.
[54]
Similarly, Formule Pontiac, where the
Superior Court construed the word “remuneration”,
is of no assistance to the appellants. In that case, the Court found that a
dividend had been paid to disguise remuneration exceeding the threshold set out
in section 431 of the ARDFPS. It was in that context that the Superior
Court held that a broad and liberal construction of the word “remuneration” could include the payment of a
dividend. If a parallel is drawn with this case, not only must it be repeated that
holding a call option for shares does not equate with holding the shares
covered by the option, but nothing in this case suggests that the call option
granted by the Shareholders’ Agreement was intended to defeat section 148
of the ARDFPS. The opposite is rather obvious when one considers how the option
was exercised.
[55]
I therefore conclude that section 148 of
the ARDFPS cannot be construed so as to treat a person who holds a call option
the same way as a person who holds the shares covered by the option. It follows
that the appellants’ argument based on nullity must be dismissed.
[56]
That is sufficient to dispose of these appeals.
CONCLUSION
[57]
I would dismiss the appeals with costs in the
main case only.
"Marc Noël"
“I agree.
Johanne Trudel
J.A.”
“I agree.
A.F. Scott
J.A.”
Certified true translation
François Brunet,
Revisor
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