2012 QCCA 1019, 2012 QCCA 1019

Ben & Florentine Restaurants inc. c. 7255764 Canada Ltd. 2012 QCCA 1019 COURT OF APPEAL CANADA PROVINCE OF QUEBEC REGISTRY OF MONTREAL No: 500-09-022643-126 ( 500-17-067679-111 ) MINUTES OF THE HEARING DATE: June 1, 2012 THE HONOURABLE NICHOLAS KASIRER, J.A. PETITIONER ATTORNEY BEN & FLORENTINE RESTAURANTS INC. Mtre Jeremy Wisniewski (ABSENT) HEENAN BLAIKIE RESPONDENTS ATTORNEY 7255764 CANADA LIMITED ISSAM BOUTROS Mtre Vincent Thibeault (ABSENT) LAVERY DE BILLY

MOTION FOR LEAVE TO APPEAL FROM A JUDGMENT RENDERED ON APRIL 23, 2012 BY THE HONOURABLE HÉLÈNE LEBEL OF THE SUPERIOR COURT IN THE DISTRICT OF MONTREAL MOTION TO SUSPEND THE PROVISIONAL EXECUTION OF AN INTERLOCUTORY JUDGMENT Clerk: Annick Nguyen Court Room: —— HEARING Continuation of June 1, 2012, morning's hearing. Judgment – See page 3.

Annick Nguyen Clerk JUDGMENT [ 1 ] Ben & Florentine Restaurants inc. ask for leave to appeal from an interlocutory judgment of the Superior Court, District of Montreal (the Honourable Hélène Le Bel presiding), rendered on April 23, 2012, which held the petitioner to have filed improper proceedings within the meaning of articles 54.1 C.C.P. The judge ordered the petitioner to pay a provision for costs to the respondents of $35,000. [ 2 ] Because judgments recording an improper use of procedure are subject to provisional execution notwithstanding appeal under

article 547(

j) C.C.P., the petitioner also asks me to suspend execution of the judgment pursuant to

article 550 C.C.P. *** [ 3 ] The respondents were formerly franchisees of the petitioner, operating a breakfast restaurant under the Ben & Florentine Restaurants banner. The franchise agreement contained a non-competition clause. When the franchise arrangement between the parties was ended, the petitioner alleged the respondents were continuing to carry on a business in violation of the ongoing obligations they had under the clause.

The respondents disagreed and litigation ensued. [ 4 ] The motion brought by the respondents to declare the petitioner’s proceedings improper arose in the context of this wider dispute. Beginning in the fall of 2011, the petitioner brought a series of proceedings against the respondents before the Superior Court,

including an application for an injunction, a safeguard order, a motion to authorize a bailiff to seize property and a motion to cite the respondents for contempt. These included, latterly, a motion to authorize a bailiff to prevent members of the public from entering a restaurant operated by the respondents under another name. Certain of these proceedings were successful, in whole or in part.

Others, such as the motion respecting contempt proceedings and two efforts to stop the public from entering the respondents’ restaurant, were not. *** [ 5 ] In the judgment on the motion to declare the petitioner’s proceedings improper, the motions judge reviewed the whole of the dispute. She appropriately observed that in a number of its proceedings the petitioner had been successful, including in its initial bid for an injunctive order. However at paragraphs [23] et seq. of her reasons, in particularly in paragraphs [25], [27] and [28], the judge held that aspects of the proceedings were improper under

article 54.1, para. 2 C.C.P., noting them to be excessive and unreasonable, that they were undertaken in a manner so as to cause harm to the respondents, and that they may even be considered as an “attempt to defeat the ends of justice” as that term is understood in the Code of Civil Procedure .

She explained her view that the petitioner’s real purpose was to burden the respondents with expenses, with the eventual goal of running them out of business. [ 6 ] As a remedy, she ordered the payment of a provision for costs of $35,000, which was less than one half of the amount the respondents had asked for in their motion. Needless to say, she did not put an end to the main proceedings. *** [ 7 ] The petitioner argues that the motions judge erred in fact and in law in observing an abuse of process.

Specifically, it is argued that of the six proceedings brought by Ben & Florentine Restaurants inc. against the respondents, four were granted and thus cannot be characterized as abusive, others were characterized as justified by opposing counsel and the last proceeding, which was dismissed, had nevertheless be reserved for judgment by the Superior Court. The petitioner states that its good faith should be presumed, which the judge failed to do.

Finally, petitioner alleges that the respondents had made insufficient proof of the costs to them of proceedings for a provision for costs to be awarded. *** [ 8 ] The motion for leave to appeal should be dismissed. [ 9 ] An order for provision for costs is generally understood as one that does something that cannot be undone by final judgment. [1] But even if the judgment of the Superior Court is susceptible of appeal under

article 29, para. 1, C.C.P., in my view the petitioner has failed to disclose a reason why the pursuit of justice, within the meaning of

article 511 C.C.P., requires leave to be granted. [ 10 ] The cases decided under

article 54.1 C.C.P. make plain that for a court to declare proceedings to be improper, the conduct of the person bringing them must be blameworthy. [2] This determination is one of fact. Accordingly, it is deserving of deference on appeal and, absent a palpable and overriding error in that determination or an error in principle impugning it, this Court should refrain from disturbing such a finding. [ 11 ] Petitioner had failed to show the basis of such an error here.

The judge made no such mistake in her appreciation of the previous proceedings that had been successful, in whole or in part, before the motion of which she was seized. She fixed principally on proceedings following the September 23, 2011 decision of Riordan, J. in which the judge refused to cite the respondents for contempt. In analyzing the impugned proceedings, the motions judge drew nuances that the petitioner prefers not to emphasize.

For example, it is true that in one of the proceedings, Hallé J. ordered that certain of the respondents' menus be seized, but she also refused to allow the respondents' restaurant to be closed. About three weeks later, Lefebvre, J. refused a similar demand make by the petitioner. These appeared to the judge to be instances in which the petitioner was not seeking merely to protect its rights under the non-competition clause, but to harm the respondents.

The judge further observed that the petitioner later brought an hypothecary action that, in her estimation was part of a strategy not to make good its security but to shut down the restaurant. [ 12 ] The fact that, in law, a person has a right to take proceedings does not insulate those proceedings from being characterized as abusive. This is plain from the idea, made manifest in

article 54.1 C.C.P., that where a party takes an otherwise legitimate action for an ulterior and blameworthy motive, a court can characterize the whole as a subversion of the ends of justice (or as the French text provides, a " détournement des fins de la justice "). [3] That measure is a finding of fact and one to which the motions judge arrived at in paragraph [25] of her reasons. [ 13 ] The judge did not fail to presume the petitioner in good faith but recounted specifically why it was evident that certain of the proceedings were take in bad faith.

Good faith is presumed, to be sure, but that presumption is not an absolute one. [ 14 ] Lastly, her finding that a provision for costs of $35,000 is justified in the circumstances finds support in the affidavit evidence presented before her. [ 15 ] In argument before me, the petitioner cites this Court's recent decision in Industries Lalonde inc . v. Oasis d'Olivia inc . [4] in support of its position that the legitimate character of its proceedings is incompatible with a finding of abuse of process. I disagree.

In Oasis , the Court makes plain that there was no evidence that proceedings were taken with an ulterior, blameworthy motive (paras. [10], and [19]). The Court held that the proceedings undertaken were not just viable in law, but were not shown to have been undertaken to subvert the ends of justice (paras. [17] et seq ., especially para. [22]). This point alone distinguishes Oasis from the instant case. FOR THE FOREGOING REASONS , the undersigned: [ 16 ] DISMISSES the motion for leave to appeal, [ 17 ] DECLARES the motion to suspend provisional execution to be without further object,

[ 18 ] With costs in the whole against the petitioner. NICHOLAS KASIRER, J.A.