2018 QCCA 1132, 2018 QCCA 1132

TCA Global Credit Master Fund c. 8894132 Canada inc. 2018 QCCA 1132 COURT OF APPEAL CANADA PROVINCE OF QUEBEC REGISTRY OF MONTREAL No: 500-09-027134-170 (500-17-099260-179) DATE: July 3, 2018 CORAM: THE HONOURABLE ALLAN R. HILTON, J.A. MARTIN VAUCLAIR, J.A. GENEVIÈVE MARCOTTE, J.A. TCA GLOBAL CREDIT MASTER FUND LP APPELLANT – Plaintiff v. 8894132 CANADA INC. 8895791 CANADA INC.

JEAN-PIERRE APELIAN RESPONDENTS – Defendants JUDGMENT [ 1 ] This is an appeal of a judgment of the Superior Court of the District of Montreal, rendered on September 19, 2017 (the honourable Peter Kalichman) that granted the respondents’ motion for declinatory exception and dismissed the appellant’s judicial demand for reimbursement of amounts owed under the Guaranty agreements signed in relation to a Credit agreement. [ 2 ] The Credit and Guaranty agreements all contain a forum selection clause giving exclusive jurisdiction to the courts in the State of Florida, USA.

The said clause entitled “MANDATORY FORUM SELECTION” is drafted with capital letters in the following identical terms: MANDATORY FORUM SELECTION . ANY DISPUTE ARISING UNDER, RELATING TO, OR IN CONNECTION WITH THE AGREEMENT OR RELATED TO ANY MATTER WHICH IS THE SUBJECT OF OR INCIDENTAL TO THE AGREEMENT (WHETHER OR NOT SUCH CLAIM IS BASED UPON BREACH OF CONTRACT OR TORT) SHALL BE SUBJECT TO THE EXCLUSIVE JURISDICTION AND VENUE OF THE STATE AND/OR FEDERAL COURTS LOCATED IN BROWARD COUNTY, FLORIDA. THIS PROVISION IS INTENDED TO BE A « MANDATORY »

FORUM SELECTION CLAUSE AND GOVERNED BY AND INTERPRETED CONSISTENT WITH FLORIDA LAW. [1] [ 3 ] Regardless of this forum selection clause, the appellant chose to sue the respondents in Quebec where they are domiciled. In fact, the proceedings were initiated in the District of Montreal where the respondent Apelian is domiciled. [ 4 ] The respondents sought the dismissal of the judicial demand on the basis of the forum selection clause, alleging that the intention of the parties was clear regarding forum and applicable law (being the law of Florida). [ 5 ] Relying on the second paragraph of

article 3148 of the Civil Code of Quebec , [2] the Superior Court judge granted the declinatory exception given that the forum selection clauses contained in the agreements were conclusive and unambiguous, as appellant also acknowledged. He dismissed the appellant’s argument that the respondents cannot invoke these forum selection clauses because they contest the validity of the agreements containing such clauses. [ 6 ] In doing so, the judge distinguished the case of Dobexco Foods International Inc. v.

Van Barneveld Gouda BV . [3] In that particular case, the forum selection clause in dispute was stipulated on the back of a sales contract that the defendant Gouda had never signed and had probably never received, and the defendant had expressed the intention to reject any sale conditions to which Dobexco might refer. [ 7 ] The judge underlined that, in the case at hand, the signature of the agreements by the parties is not in dispute.

He refused to assume that consent was not properly given, as proposed by the appellant, further indicating that the issue of the validity of the consent is one which should be left to be determined on the merits of the case, as it goes beyond a

summary review of the proceedings and exhibits.

[ 8 ] He applied this Court’s reasoning in General Motors du Canada ltée v. 178018 Canada inc. , [4] where a forum selection clause was held to bind the parties notwithstanding the contestation of the validity of the agreement containing such clause, based on lack of consent. [ 9 ] Moreover, he dismissed the argument that the Court can only give effect to an otherwise binding and valid forum selection clause where there is evidence linking the dispute to the forum selected, in the absence of any authority supporting this proposition and given that this is not a situation contemplated by

article 3136 C.C.Q . [5] He also pointed out that there was “at least some evidence linking the Demand to the State of Florida”. [ 10 ] In appeal, the appellant argues that the motion judge committed an error of law in failing to consider the respondents’ defence and their judicial admission that their consent to the Guaranty agreements had been vitiated by fraud and false representations. He claims that, as result, the judge failed to apply correctly paragraph 2 of

article 3148 C.C.Q. [ 11 ] In the Court’s opinion, this argument is devoid of any merit. [ 12 ] As determined by the motion judge, the principles set out in General Motors apply in this case and they are also consistent with an earlier decision of Honeywell International Inc. v. Notiplex Sécurité incendie inc. , [6] where Roy, J, then sitting in Superior Court outlined: [21] À ce stade, le Tribunal n’a pas à statuer sur la validité de l’Entente, il doit seulement se demander si la clause d’élection de for justifie d’accueillir l’exception déclinatoire.

Cependant, force est de reconnaître qu’en l’espèce, les deux questions sont étroitement liées . [22] Lorsqu’un tribunal est saisi d’une question qui touche sa compétence, il doit d’abord la trancher : […] [24] La Cour d’appel, dans United European Bank and Trust Naussau Ltd. c.

Duchesneau , précise que, lorsque se soulève une question de validité d’une clause d’élection de for, le tribunal doit qualifier la nature du contrat et vérifier l’existence de règles particulières de droit international privé : […] [25] Ici, le contrat en est un de transaction, contrat nommé qui n’est soumis à aucune règle particulière de droit international privé qui empêcherait les parties d’opter contractuellement pour faire trancher leurs différends par un forum étranger . [26] À ce stade, le Tribunal ne peut que constater l’existence d’une clause d’élection de for.

Seuls les tribunaux du Connecticut sont compétents pour décider de la validité de cette clause . [Emphasis added] [ 13 ] That decision was confirmed by this Court in a judgment underlining that the argument related to the lack of consent was restricted to a particular aspect of the agreement and was totally unrelated to the forum selection clause: [25] L'Entente et, partant, la clause d'élection de for, doit être, dans les circonstances, tenue pour valide.

Il ressort d'ailleurs du dossier que l'absence d'autorité alléguée de l'avocat Stratton, même si tel était le cas, ne visait nullement la clause d'élection de for dans l'entente, mais uniquement l'article 2.2. La validité de l'Entente relève de l'autorité des tribunaux du Connecticut, à tout le moins en ce qui concerne l'action intentée au États-Unis. [26] La clause d'élection de for est une manifestation de la volonté des parties au contrat et doit être respectée ( Grecon Dimter Inc. c. J.R. Normand Inc. , 2005 CSC 46 , [2005] 2 R.C.S. 401; United European Bank and Trust Nassau Ltd . c.

Duchesneau , 2006 QCCA 652 , [2006] R.J.Q. 1255 ).

Bien que sa validité puisse être attaquée par les appelants, la clause doit être tenue pour valide jusqu'à jugement contraire par le tribunal du for, d'autant que l'Entente a été entérinée par un tribunal du Connecticut, après enquête et avis aux parties. [7] [Emphasis added] [ 14 ] Indeed, it would defeat the purpose of the forum selection clause that it be set aside at an early stage, without the benefit of a hearing on the merits, particularly where the validity of the agreement containing such clause is being challenged only in part, for reasons that have nothing to do with the signature or existence of the agreement: indeed, in the case at hand, the respondent Apelian has only challenged the validity of the agreement for failure to reproduce certain conditions agreed to by the parties. [ 15 ] Moreover, as underlined by Justice Rothman in Condominiums Mont St-Sauveur inc. v.

Constructions Serge Sauvé ltée , [8] “[…] it is difficult to see how appellant can be heard to complain about the effect of contractual arrangements it has, itself, put in place”. Indeed, in this case, the appellant’s own attorneys drafted the Guaranty agreements. As a result, the appellant is hard pressed to oppose the applicability of the forum selection clause that it stipulated, particularly in the context of a dispute which is fully captured by the clear and unambiguous language of the clause.

The argument appears to have been strategically raised by the appellant while it denies that the Guaranty agreements are vitiated for lack of consent. FOR THESE REASONS, THE COURT:

[ 16 ] DISMISSES the appeal with legal costs. ALLAN R. HILTON, J.A. MARTIN VAUCLAIR, J.A. GENEVIÈVE MARCOTTE, J.A. Mtre Jacques S. Darche Borden Ladner Gervais For Appellant Mtre Michel La Roche Miller Thomson For Respondents Date of hearing: April 19, 2018 [33] La situation en l’espèce est bien différente.

Même si les intimés invoquent ex post facto la nullité de la CRP (P-7) au motif de l’erreur provoquée par dol, il n’en demeure pas moins que le 26 mai 2009 l’intimé, monsieur Jacques Saillant, a bel et bien signé la CRP (P-7) […] [34] Par ailleurs, tel que déjà indiqué, ce n’est que le 2 juillet 2010, après l’accomplissement par l’appelante de son obligation de paiement en vertu de la CRP, que les intimés en demandent l’annulation pour dol.

Il ne s’agit donc pas d’une situation dans laquelle il n’y aurait pas eu rencontre des volontés parce que l’une des parties n’aurait pas signé l’entente comportant la clause d’élection de for ou n’en aurait même pas été informée comme c’était le cas dans l’affaire Dobexco citée avec approbation par la Cour suprême dans son arrêt GreCon Dimter . [Emphasis added] [5] 3136.

Even though a Québec authority has no jurisdiction to hear a dispute, it may nevertheless hear it provided the dispute has a sufficient connection with Québec, if proceedings abroad prove impossible or the institution of proceedings abroad cannot reasonably be required. 3136. Bien qu’une autorité québécoise ne soit pas compétente pour connaître d’un litige, elle peut, néanmoins, si une action à l’étranger se révèle impossible ou si on ne peut exiger qu’elle y soit introduite, entendre le litige si celui-ci présente un lien suffisant avec le Québec.