2019 QCCA 290, 2019 QCCA 290

Unofficial English Translation of the Judgment of the Court Talbot c. Autorité des marchés financiers 2019 QCCA 290 COURT OF APPEAL CANADA PROVINCE OF QUEBEC REGISTRY OF MONTREAL No: 500-09-027793-181 (500-17-100434-177) DATE: FEBRUARY 19, 2019 PRESIDING: THE HONOURABLE ALLAN R. HILTON, J.A. KARL TALBOT APPLICANT – Plaintiff v. AUTORITÉ DES MARCHÉS FINANCIERS NATHALIE G.

DROUIN YAN PAQUETTE HÉLÈNE BARABÉ ISABELLE ROBITAILLE SYLVAIN THÉBERGE LISE GIRARD SUZANNE COSTOM JULIE-MAUDE PERRON RESPONDENTS – Defendants and SÉBASTIEN TALBOT JEAN-FRANÇOIS WELCH IMPLEADED PARTIES– Defendants JUDGMENT [ 1 ] The applicant seeks leave to appeal a judgment rendered on July 25, 2018, [1] by the Superior Court (the Honourable Sylvana Conte), District of Montreal, granting an application by several defendants [2] to dismiss the applicant’s originating application seeking damages for abuse of right (arts. 18 and 51 C.C.P. ). [ 2 ] Those provisions read as follows:

18. The parties to a proceeding must observe the principle of proportionality and ensure that their actions, their pleadings, including their choice of an oral or a written defence, and the means of proof they use are proportionate, in terms of the cost and time involved, to the nature and complexity of the matter and the purpose of the application. Judges must likewise observe the principle of proportionality in managing the proceedings they are assigned, regardless of the stage at which they intervene.

They must ensure that the measures and acts they order or authorize are in keeping with the same principle, while having regard to the proper administration of justice. 51. The courts may, at any time, on an application and even on their own initiative, declare that a judicial application or a pleading is abusive. Regardless of intent, the abuse of procedure may consist in a judicial application or pleading that is clearly unfounded, frivolous or intended to delay or in conduct that is vexatious or quarrelsome.

It may also consist in a use of procedure that is excessive or unreasonable or that causes prejudice to another person, or attempts to defeat the ends of justice, particularly if it operates to restrict another person’s freedom of expression in public debate. 18.

Les parties à une instance doivent respecter le principe de proportionnalité et s’assurer que leurs démarches, les actes de procédure, y compris le choix de contester oralement ou par écrit, et les moyens de preuve choisis sont, eu égard aux coûts et au temps exigé, proportionnés à la nature et à la complexité de l’affaire et à la finalité de la demande . Les juges doivent faire de même dans la gestion de chacune des instances qui leur sont confiées, et ce, quelle que soit l’étape à laquelle ils interviennent.

Les mesures et les actes qu’ils ordonnent ou autorisent doivent l’être dans le respect de ce principe , tout en tenant compte de la bonne administration de la justice. 51. Les tribunaux peuvent à tout moment, sur demande et même d’office, déclarer qu’une demande en justice ou un autre acte de procédure est abusif. L’abus peut résulter, sans égard à l’intention, d’une demande en justice ou d’un autre acte de procédure manifestement mal fondé, frivole ou dilatoire, ou d’un comportement vexatoire ou quérulent.

Il peut aussi résulter de l’utilisation de la procédure de manière excessive ou déraisonnable ou de manière à nuire à autrui ou encore du détournement des fins de la justice, entre autres si cela a pour effet de limiter la liberté d’expression d’autrui dans le contexte de débats publics. [ 3 ] Here is the context that gave rise to the judgment under appeal. [ 4 ] The Autorité des marchés financiers brought proceedings against the applicant before the Criminal and Penal Division for alleged breaches of ss. 11 and 148 of the Securities Act . [3] In short, he was accused of soliciting investors without a prospectus and having acted as a securities dealer without being duly registered. [ 5 ] The applicant raised two defences to those charges: (1) that they were prescribed; and (2) that the prosecution was in bad faith for the reasons he set out.

The Court of Québec judge dismissed the charges on the ground that the prosecution’s recourse was prescribed. Nevertheless, he wisely decided to rule on the claim of abuse so that this Court would have a complete picture of the file if the AMF chose to appeal. [ 6 ] In so doing, he dismissed the allegations concerning abuse of right.

The Superior Court judge reproduced them in her own judgment at paragraph 12: [ translation ] [291] The Court must now rule on the issue of abuse of procedure, bearing in mind that there must be evidence on a balance of probabilities of serious misconduct, in bad faith and motivated by an improper purpose. [292] The misconduct must be extremely serious and likely to shock society’s sense of justice to the point where the Court must exceptionally order a stay of proceedings. [293] In view of all of the evidence, the Court cannot come to that conclusion: counsel for the defendant can be strongly and sincerely convinced of the correctness of his arguments without the Court itself being convinced and agreeing with them. [294] Overall, the evidence does not establish on a balance of probabilities that the AMF had a well-defined plan, in advance, to prosecute the defendant and that the use of the normalization process was in reality just a [ translation ] “mouse trap”, an ambush, or a decoy.

[295] In the Court’s view, an administrative investigation was conducted in good faith with no other purpose or plan than to regularize Nemex’s situation. [296] Normalization could have taken place and thereby assured investor protection with the key requirement, however, that Nemex and its officers show constant good faith and cooperation with the AMF; unfortunately, that requirement was never satisfied.

Such is the reality to which the evidence leads. [297] Nor does it establish actual collusion between the AMF and a private interest group that included Sébastien Talbot, for the pursuit and achievement of unlawful and abusive purposes. [ 7 ] The AMF did not appeal, and the applicant instituted his civil proceeding on October 6, 2017. He sued not only the AMF, but also its investigators and external counsel. The Superior Court judge rightly concluded that there was no res judicata between the two proceedings since there was no identity of object.

Nevertheless, the judge found that the proceeding was abusive because the applicant’s originating application was based on the same arguments, facts, and evidence that he had already unsuccessfully raised before the Court of Québec: [ translation ] [40] In the Court’s view, allowing the applicant to re-engage in the same debate would entail an unnecessary waste of judicial resources that would bring the proper administration of justice into disrepute. [41] After thirty-three (33) days of hearing and the testimony of twenty-four (24) witnesses, Charest, J.C.Q. concluded that the evidence did not establish an abuse of procedure by the AMF and that Talbot’s constitutional rights had not been violated.

It is inconceivable that a Superior Court judge would find differently upon a mere reading of the transcript of the stenographic notes. [42] In addition, this is not a situation where re-litigation would serve the integrity of the judicial system since it was not established that the first proceeding is tainted by fraud or dishonesty or that fairness dictates that the original result should not be binding in the new context. [Emphasis added.] [ 8 ] First, it is clearly abusive to include the AMF’s employees and external counsel as defendants.

Even if we assume that the proceeding against the AMF is legitimate, the applicant did not offer any valid reason for having named them as defendants. In any event, the AMF would necessarily be liable for the alleged faults of its subordinates (art. 1463 C.C.Q. ). The applicant cannot claim that their presence in the proceeding is necessary to guarantee the execution of a future judgment in his favour. [ 9 ] Moreover, the applicant did not take into account the relative immunity of the respondents in the good faith exercise of their functions. [4] In Proulx v.

Quebec (A.G.) , Iacobucci and Binnie, JJ., for the majority of the Supreme Court of Canada, wrote in this regard, “... courts should be very slow indeed to second-guess a prosecutor’s judgment calls when assessing Crown liability for prosecutorial misconduct.” [5] [ 10 ] Taking into account that principle in light of the case before me, I am of the opinion that the Superior Court judge’s reasoning and conclusions regarding those of Charest, J.C.Q. are reasonable and constitute the legitimate exercise of her discretionary power to control access to the Superior Court.

FOR THESE REASONS, THE UNDERSIGNED: [ 11 ] DISMISSES the application for leave to appeal, with legal costs. ALLAN R. HILTON, J.A. Mtre Yacine Agnaou DUPUIS PAQUIN ATTORNEYS AT LAW & BUSINESS COUNSELORS INC. For the applicant Mtre Douglas Mitchell IMK ADVOCATES For the Autorité des marchés financiers, Nathalie G. Drouin, Yan Paquette, Hélène Barabé, Isabelle Robitaille, Sylvain Théberge, Julie-Maude Perron Mtre Dominic Naud Mtre Laurent Lacas CLYDE & CO CANADA For Lise Girard Mtre Bernard Amyot LCM ATTORNEYS INC.

For Suzanne Costom Mtre Félix B. Lebeau (absent) DEBLOIS AVOCATS For Sébastien Talbot Mtre Elif Oral NORTON ROSE FULBRIGHT CANADA For Jean-François Welch Hearing date: February 11, 2019