2023 QCCA 1064, 2023 QCCA 1064

Leacross Foundation c. Bow GC Holdco Inc. 2023 QCCA 1064 COURT OF APPEAL CANADA PROVINCE OF QUEBEC REGISTRY OF MONTREAL No.: 500-09-030649-230 ( 500-17-104212-181 ) MINUTES OF HEARING DATE: August 18, 2023 THE HONOURABLE PATRICK HEALY, J.A. APPLICANTS COUNSEL The Leacross Foundation Mtre ALAIN CHEVRIER Mtre ALEXANDRE FOURNIER ( Dunton, Rainville ) Absent RESPONDENTS COUNSEL Bow GC Holdco inc. Bow Mbr holdco inc. Mtre HÉLÈNE B. TESSIER Mtre SIMON RAINVILLE ( Lapointe Rosenstein Marchand Melançon ) Absent IMPLEADED PARTIES COUNSEL Wavin Canada Holding inc. Mtre SÉBASTIEN RICHEMONT Mtre MARIE-ÈVE LABONTÉ ( Fasken Martineau DuMoulin ) Absent

Lapointe Rosenstein Marchand Melançon s.e.n.c.r.l. Mtre HÉLÈNE B. TESSIER Mtre SIMON RAINVILLE ( Lapointe Rosenstein Marchand Melançon ) Absent DESCRIPTION: Application for leave to appeal from a judgment rendered in the course of the proceeding on June 14, 2023 by the Honourable Thomas M. Davis of the Superior Court , District of Montreal (Articles 31 and 357 C.C.P. ). Clerk at the hearing : Anne Dumont Courtroom: RC-18 HEARING Continuation of the hearing held on August 15, 2023. The parties were excused from appearing in Court. BY THE JUDGE : Judgment – see page 4. Anne Dumont, Clerk at the hearing JUDGMENT [ 1 ] Under

Article 31 C.C.P. the petitioner (“L”) seeks leave to appeal against a decision of the Superior Court [1] that refused to order disclosure by the respondents (“B”) of documents concerning their sale of assets to the impleaded party (“W”). [ 2 ] In May 2017 L concluded a share purchase agreement (“SPA”) with B. For convenience this transaction will be styled as “L-B”. The date fixed for determination of the value of the shares was 25 November 2016.

The SPA provided that an amount of $800,000.00 would be reserved as part of the purchase price and paid in amounts of $300,000.00 in May 2018 and $500,00.00 in May 2019. In June 2018 B claimed a reduction of the purchase price in the amount of $9,132,685.56 based on alleged misrepresentations in the negotiation of the SPA. In July 2018 L filed an Originating Application to claim payment of the amount of $300,000.00. In February 2019 L filed an oral defence and a cross-application in the amount of $9,168,929.00, which was amended in August 2022 to claim $8,145,763.00.

In September 2022 L learned that in 2022 B sold the shares acquired from L to W and W thus acquired B. For convenience this transaction will be styled as “B-W”. It included provisions concerning confidentiality and non-disclosure of what it defined as “confidential information,” which included information relating to B-W. In September 2022 L requested that B disclose a copy of the B-W on the ground that it suspected that the sale price in that agreement was higher than that in the L-B and that, if so, B incurred no damages.

On 19 September 2022 B informed L that it would not disclose this document because the B-W concerned a transaction between strangers to the litigation opposing L and B and that it was not only irrelevant in that litigation, and of no utility for its advancement, but protected against disclosure by the confidentiality and non-disclosure clauses of the B-W. In December 2022, pursuant to a Notice of Case Management (Article 158 C.C.P.), L applied for an order by the Superior Court that B disclose the following:

[L]e document de transaction de vente des actions de [B] à la société [W] ou toute autre société à laquelle la Pièce R-1 peut faire référence, ainsi que tout document complémentaire et toute annexe, le cas échéant. [ 3 ] The Superior Court dismissed this application and in the present application for leave the petitioner proposes to bring before the Court the same conclusion. [ 4 ] The Superior Court dismissed the application for disclosure on the basis that it was irrelevant to the pending litigation between the parties, unhelpful for advancing the progress of the case and inconsistent with the principle of proportionality.

The court underscored the lapse of five years between L-B and B-W and concluded as follows: [19] Dans le présent dossier, le Tribunal est d’avis que la longue période entre la vente impliquant les parties au dossier et la vente de l’entreprise à [W], de même que tous les imprévus entre temps, permettent de conclure que la pertinence de l’entente de 2022 est très discutable.

Quand nous ajoutons à ce constat, la complexité que la production de ce document ajouterait à l’administration de la preuve, il ne serait pas proportionnel d’en permettre sa communication. [20] Vu le sort de cette question, celle de la confidentialité devient moins importante. Cependant, le Tribunal peut refuser la production d’un document quand une

partie ou un tiers démontre un intérêt légitime à la confidentialité. Cela est le sens du jugement de la juge Beaugé dans Construction Frank Catania & Associés inc. c. Université de Montréal . Les demanderesses demandaient la communication d’un acte de vente intervenue entre la défenderesse et un tiers en relation avec un immeuble convoité par les demanderesses.

L’entente comprenait une clause de confidentialité. [21] La juge a maintenu l’objection à la production du document, s’exprimant en ces termes : [17] Pour disposer de l’argument, il faut se demander, dans un premier temps, si le recours de l’Université à l’intérêt légitime important est bien fondé. Dans la négative, l’objection sera déférée au juge du fond. Dans le cas contraire, il faudra la trancher. [18] De l’avis du Tribunal, la communication de l’offre d’achat à 9221 et de son acceptation menace l’intégrité des données commerciales confidentielles concernant un tiers.

Il s’agit donc d’un intérêt légitime important. [22] Le Tribunal reconnait que dans la présente affaire [L] désire accéder au document pour démontrer que les défenderesses/demanderesses reconventionnelles n’ont possiblement pas subi de dommages.

Cependant, pour les raisons discutées ci haut et surtout en référence à la période qui s’est écoulée entre les deux transactions, la demande de communication s’apparente à une recherche à l’aveuglette. [23] Ajoutons à cela que [W] possède un intérêt commercial légitime. [2] [ 5 ] The Superior Court notes that L seeks disclosure of the B-W on the hypothetical possibility that it might suggest that B suffered no damage in the manner claimed in its Originating Application.

This does not establish irremediable injury to L or anything that is actually exceptional in the circumstances that militate in favour of disclosure. The court also emphasises that in the passage of time between the L-B and the B-W the sale price in the latter might well be explained by multiple extrinsic factors that are immaterial to the assessment of the L-B. This is short of the relaxed standard of relevance that is applied in matters of discovery: [30] […] [T]he concept of relevance is generally interpreted broadly at the exploratory stage of the proceedings.

To be relevant, the requested document must relate to the issues between the parties, be useful and be likely to contribute to resolving the issues. [31] This relevance requirement ensures that the parties do not conduct “fishing expeditions”. It also ensures that the conduct of the proceedings is not delayed, complicated or even jeopardized by the introduction of evidence that does not assist in establishing the rights being claimed.

In this sense, the relevance rule is a procedural balancing rule that ensures the efficiency of the judicial process while facilitating the search for truth. [3] [ 6 ] The Superior Court reaches no conclusion about the probative value in the documents sought except as an incidental and indirect consequence of its conclusions that those documents at this stage have no apparent relevance and will not advance the case, and their disclosure is inconsistent with the principle of proportionality.

The overriding concern of the court is the apparent incompatibility of the application for disclosure with the guiding principle of proportionality, especially when the costs and benefits of devoting extensive times and resources are weighed in the circumstances of the case. In the present case disclosure the Superior Court concludes that the disclosure sought by L to explore a hypothetical possibility at this stage are disproportionate to any apparent or even likely benefit. [ 7 ] In this regard the observations of Mr.

Justice Mainville are apposite: [14] […] il ne suffit pas de démontrer un préjudice irréparable pour qu’une permission d’appel soit accordée à l’égard d’un jugement rendu en cours d’instance.

La décision du juge unique agissant sous l’article 31 du nouveau C.p.c. est aussi assujettie au principe prévu par le dernier alinéa de l’article 9 selon lequel les tribunaux et les juges doivent prendre en considération dans leurs décisions le meilleur intérêt de la justice et au au principe de proportionnalité énoncé à l’article 18. [15] Comme le soulignent André Rochon et Juliette Vani dans leurs commentaires concernant l’article 31 du nouveau C.p.c ( Le grand collectif – Code de procédure civile – Commentaires et annotations , sous la direction de Luc Chamberland, Éditions Yvon Blais, 2015, vol. 1, p. 239) (je souligne) : […] La requête devra satisfaire à trois conditions cumulatives : 1) la requête doit se qualifier aux termes du présent

article [31 du nouveau C.p.c. ]; 2) le meilleur intérêt de la justice doit favoriser l’octroi d’une permission , et 3) la requête doit être conforme au principe

de proportionnalité. Ce constat s’impose à la lecture combinée des articles 31, 9 al. 3 et 18 du Code qui se substituent aux articles 29, 511 et 4.2 [de l’ancien] Code. [16] Or, je suis d’avis que le meilleur intérêt de la justice ne favorise pas la permission d’appeler dans ce cas-ci. [4] [ 8 ] The assessment and conclusions of the Superior Court cannot support a claim under

Article 31 that its judgment will cause irremediable injury to L. To the extent that the decision of the Superior Court is properly characterised as a matter of case management it could not be considered unreasonable within the meaning of

Article 32 C.C.P. Further, it is axiomatic that if the application does not meet the standard of proportionality it is not in the interests of justice for the Superior Court to allow the application or to grant leave to appeal against its dismissal. An appeal at this stage against this judgment, which does not bind the trial judge, has no reasonable chance of success. THEREFORE, THE UNDERSIGNED: [ 9 ] DISMISSES with costs of justice the present application for leave to appeal. PATRICK HEALY, J.A.