2018 QCCA 1860, 2018 QCCA 1860

Pomerantz c. Canadian Imperial Bank of Commerce 2018 QCCA 1860 COURT OF APPEAL CANADA PROVINCE OF QUEBEC REGISTRY OF MONTREAL No: 500-09-027898-188 (500-17-104949-188) MINUTES OF THE HEARING DATE: November 2, 2018 THE HONOURABLE MARK SCHRAGER, J.A. PETITIONERS COUNSEL TERRY POMERANTZ S.P. HOLDINGS CANADA INC. POMERANTZ FAMILY INC. 4037057 CANADA INC. POMERANTZ HOLDINGS INC. TRAMS PROPERTY MANAGEMENT INC. POMERANTZ FOUNDATION Mtre Anas Qiabi For Mtre Carmine Mercadante ( Mercadante Di Pace ) RESPONDENTS COUNSEL CANADIAN IMPERIAL BANK OF COMMERCE CIBC WOOD GUNDY FINANCIAL SERVICES (QUÉBEC) INC. Mtre Frédéric Paré Mtre ALEXA TEOFILOVIC ( Stikeman Elliott s.e.n.c.r.l., s.r.l .)

DESCRIPTION: Application for leave to appeal from a judgment rendered in the course of the proceeding on October 30, 2018 by the Honourable Benoît Moore of the Superior Court, District of Montreal. Application for a safeguard order. (Art. 49 et 379 C.c.p .) Clerk: Lory Beauregard Courtroom: RC-18 HEARING 14:00 Continuation of the hearing held on November 1, 2018. The parties’ attendance is not required this morning. BY THE JUDGE : Judgment – see page 3. Conclusion of the hearing.

Lory Beauregard, clerk BY THE JUDGE JUDGMENT [ 1 ] I am tasked to decide an application for leave to appeal the judgment of the Superior Court, District of Montreal (the Honourable Benoît Moore) dated October 30, 2018 dismissing the Applicants’ motion to obtain a safeguard order to enjoin the Respondent to continue to provide banking services to the Applicants.

The Applicants also seek the issuance of a safeguard order by the undersigned essentially equivalent to that sought before the Superior Court, to remain in force while the appeal is pending or until the judgment on the interlocutory injunction to be heard by the Superior Court. [ 2 ] The Applicants received notice from their banker, the Respondent (CIBC) on or about August 15, 2018 that their accounts would be closed in 30 days and that they should find alternate banking arrangements. The notice period was extended to October 31, 2018.

More precisely, the record indicates that there are certain accounts where the bank requests that the personal Applicant, Mr. Pomerantz, be replaced as a signing officer failing which the account will be closed on October 31, 2018. That date has been extended pending this judgment. These accounts appear from the names to be those of successions or trusts or associations of condominium co- owners. For another group of accounts, it is requested that they be closed by November 13, 2018. These appear to be Mr. Pomerantz’s personal and corporate/business accounts.

As well, CIBC requests that loans and credit facilities be closed by March 11, 2019 while “committed facilities” such as letters of credit will be honoured until their stated maturity date. [ 3 ] The Applicants assert that they are a substantial undertaking with need of considerable banking services. This appears from the exhibits to be the case. Annual deposits allegedly exceed $50 million. The amount of outstanding borrowings is unclear. [ 4 ] The reason given by CIBC for its decision, without further explanation, is that there is “unacceptable risks” regarding the operation of the various accounts.

[ 5 ] The motion for a safeguard order was presented before the Superior Court in the context of proceedings seeking the issuance of an interlocutory and permanent injunction enjoining CIBC to “continue doing business with and offering financial services” to the Applicants. [ 6 ] The judge of the Superior Court dismissed the motion for the issuance of a safeguard order primarily because the Applicants had not demonstrated that the situation was urgent. There was no evidence presented as to the steps taken to engage a new banker with a view to establishing that the notice given by CIBC was inadequate.

The affidavits before the Superior Court and this Court contain only a general assertion, without detail, that efforts to arrange alternate banking facilities have been unsuccessful. [ 7 ] Even though the lack of urgency was sufficient reason to deny the safeguard order, the judge added that an order to have CIBC continue contracts of banking services for an indeterminate time, is not sustainable. The right to cancel always exists provided proper advance notice is given.

The length of such notice is determined either by the terms of the contract, in this case 30 days, or by the application of the notion of what is reasonable in the circumstances. In fact and despite the 30-day clause and at the request of the Applicants, extensions have been granted by CIBC so that in effect, a 70-day notice (or longer) has been given.

Accordingly, the judge concluded that the right which the Applicants sought to enforce by way of injunction was absent or extremely weak. [ 8 ] I agree with the judge of the Superior Court. [ 9 ] In order for leave to be granted by the undersigned, the Applicants must demonstrate, in this case, that the judgment causes an irreparable prejudice (Article 31 C.C.P. ). While that may be the case, the interest of justice, always a factor, as provided by

Article 9 C.C.P. does not favour the granting of leave. Leave to appeal judgments ruling on safeguard orders is to be granted with parsimony and reserved for exceptional cases. [1] As I have indicated, I believe that the judgment does not suffer from any reviewable error, so that any appeal would have no reasonable chance of success. [ 10 ] The judge correctly identified that the Applicants have no right to insist that the Respondent continue to be their banker. The Respondent has a right to terminate the business relationship by giving notice to such effect as the judge points out.

The length of notice stipulated in the CIBC’s standard form agreements is 30 days. Alternatively, the Respondent would be bound to give a notice, which is reasonable in the circumstances. This is a function of the obligation to act in good faith, [2] again as the judge points out. Notice was first given in mid-August and has been extended as I have indicated. The judge observed that the notice was in fact 70 days. It is actually longer for some of the accounts as I have outlined above. I am shown no reason to disagree with the judge’s findings of fact nor his conclusions.

The Applicants have not demonstrated that the 70-day notice (or longer) is unreasonable to put new banking arrangements in place or even why Mr. Pomerantz’s signing authority on some accounts cannot be withdrawn or replaced within that time frame.

The enterprise may be considerable and granted, a banker cannot be replaced overnight, but there is no evidence on record to show that the delays are unreasonable. [ 11 ] Indeed and as mentioned, the affidavit of the principal of the Applicants, both in first instance and in appeal, contains only a general assertion that he has not been able to make alternate banking arrangements. There is no detail provided of when efforts were made, what efforts were made and which financial institutions have been approached. Mr.

Pomerantz, the affiant, may not wish to disclose details as he states for business reasons, but if this is the case, he must suffer the consequence of not properly making his case before the Court for the issuance of a safeguard order. Without the aforementioned information, it is not possible to ascertain whether the prejudice resulting from the closure of the accounts is due to the notice period being too short or the Applicants’ efforts lacking the appropriate diligence. The burden of persuasion is Applicants to satisfy. They did not.

Their leave to appeal should not be granted nor a safeguard order issued by the undersigned. FOR ALL OF THE FOREGOING REASONS, THE UNDERSIGNED: [ 12 ] DISMISSES the application for leave to appeal; [ 13 ] DISMISSES the application for safeguard order; [ 14 ] THE WHOLE with legal costs. MARK SCHRAGER, J.A.