2018 QCCQ 7208, 2018 QCCQ 7208

Croghan c. Redibase Inc. 2018 QCCQ 7208 COURT OF QUÉBEC « Small Claims Division » CANADA PROVINCE OF QUÉBEC DISTRICT OF BEDFORD LOCALITY OF COWANSVILLE « Civil Chamber » N° : 455-32-005944-177 DATE : October 10, 2018 ______________________________________________________________________ PRESIDENT : THE HONOURABLE MARTIN TÉTREAULT J.Q.C. ______________________________________________________________________ Heather CROGHAN Plaintiff v. REDIBASE INC.

Defendant ______________________________________________________________________ JUDGMENT ______________________________________________________________________ [ 1 ] The Plaintif, Ms Heather Croghan ("Ms Croghan"), is claiming $2,546 from Defendant, Redibase Inc. ("Redibase"), for the reimbursement of her lawyer’s fees and her own fees spent after she stopped acting as president of Redibase. [ 2 ] More precisely, Ms Croghan alleges that she had to defend herself in a lawsuit instituted by Redibase to have her sign a document transferring the Domain name of "Redibase-form.com" to Redibase (the "Recourse"). [ 3 ] Redibase contests the Demand on the basis that it has no obligation to reimburse Ms Croghan for her lawyer’s fees and her own costs. [ 4 ] In order to have the Demand granted, Ms Croghan had the burden to prove, on the balance of probabilities, that her claim was well founded [1] . [ 5 ] Ms Croghan has not met her burden. [ 6 ] In support of her claim, Ms Croghan relies upon 1) Redibase’s by-laws, more particularly

Section 110, and 2) comments that would have been made by Justice Suzanne Mireault J.S.C. when she was handling the Recourse. [ 7 ] After reviewing Redibase’s by-laws and the file in Superior Court relating to the Recourse, the Court comes to the conclusion that Ms Croghan’s arguments cannot be accepted. [ 8 ] The following

section of the by-laws [2] are relevant to this case : […] 110. Right to compensation .

The Company shall compensate its directors, its officers or its representatives in respect of all costs or expenses reasonably incurred by them in connection with the defence of an action, of a suit, of an application, of a proceeding of a civil, of a criminal or of an administrative nature or of any other legal proceeding to which one (1) or more of them were parties by reason of their duties or of their office, whether this action, this suit, this application or this legal proceeding was commenced by or on behalf of the Company or by a third party.

Reasonable costs or expenses shall include, in particular, all damages or fines arising from the actions, from the acts or from the deeds done by the directors, by the officers or by the representatives in the discharge of their duties as well as all amounts paid to settle an action or to satisfy a judgment.

The right to compensation shall exist only to the extent that the directors, the officers or the representatives were substantially successful on the merits in their defence of the action, of the suit, of the application or of the legal proceeding, that they acted prudently, diligently, honestly and faithfully in the best interests of the Company, that they did not place themselves in a position of conflict of interest between their personal interest and that of the Company, and, in the case of an action, of a suit, of an application or of a proceeding of a criminal or of an administrative nature leading to the imposition of a fine, to the extent that they had reasonable grounds for believing that their conduct was lawful or to the extent that they were acquitted or freed.

The Company shall assume these liabilities in respect of any person who acts or acted at its request as a director, as an officer or as a representative of a body corporate of which the Company is or was a shareholder or a creditor. As the case may be, this compensation shall be paid to the heirs, legatees, liquidators, transferees, mandataries, legal representatives, successors, assigns or rightful claimants of the directors, of the officers or of the reprentatives, in accordance with paragraphe 114 below. […] 112 Legal action by the Company .

Where an action, a suit, an application, a proceeding of a civil, of a criminal or of an

administrative nature or any legal proceeding is commenced by the Company against one (1) or more of its directors, of its officers or of its representatives for one (1) or more actions, acts or deeds done in the discharge of their duties, the Company may pay compensation to the directors, to the officers or to the representatives if it loses its case and if a court of law or a tribunal so orders. If the Company wins its case only in part, the court of law or the tribunal may determine the amount of the costs or the expenses which the Company shall assume. […] 115.

Determination of conditions precedent to compensation. In the event that a court of law or a tribunal has not made a finding on the matter, the compliance or the non-compliance of the conduct of a director, of an officer or of a representative with the standards of conduct set out in paragraph 110 above, or the question of whether a case was won in part or whether a person was substantially successful on the merits in his defence of the action, of the suit, of the application or of the legal proceeding shall be determined in the following manner :

a) by a majority vote of the directors who are not parties to such action, suit, application or legal proceeding, if a quorum exists; or

b) by way of opinion from an independent legal counsel if such a quorum of the directors cannot be attained, or, even if attained, if a quorum of the directors who are not parties to such action, suit, application or legal proceeding so decides; or, failing the above,

c) by decision of the majority of the shareholders of the Company. [ 9 ] Ms Croghan admitted at the trial that there was no order from a court concerning the reimbursement of the fees that she is now claiming. Moreover, she admits that she did not go through the process provided by

Section 115 of the by-laws. [ 10 ] This admission is in conformity with the court’s file and the judgment rendered by Justice Mireault homologating the transaction that put an end to the Recourse. FOR THESE REASONS, THE COURT : [ 11 ] DISMISSES Plaintiff’s Demand; [ 12 ] THE WHOLE WITH JUDICIAL COSTS against the Plaintiff. __________________________________ MARTIN TÉTREAULT J.Q.C.