Shareholder Dispute: De Grandpré Chait Obtains Dismissal of an Application for Leave to Bring a Derivative Action

The Superior Court of Québec recently intervened in a dispute arising in the context of tensions between business partners active in the real estate and construction sectors.

Through this proceeding, the plaintiffs sought authorization to institute a claim on behalf of the company involved, alleging that it had been the victim of a diversion of business opportunities. The Court, however, ruled in favour of the defendants, who were seeking dismissal of the claim, on the basis that the plaintiffs had failed to demonstrate good faith and that the proposed claim was in the best interest of the company. In addition, the Court found that the claim was clearly unfounded, as it was prescribed.

Beyond its significant importance for the defendants, the decision includes a comprehensive review of the legal principles governing derivative actions under the Business Corporations Act. It also provides an insightful analysis of the available defences in such proceedings, particularly with respect to (i) the concept of good faith in light of delay in bringing the action and (ii) the assessment of the company’s interest as opposed to that of the plaintiff.

Our involvement

In this matter, De Grandpré Chait successfully represented the defendants, Gestion Julstef Inc. and Vittorio Tiramani, notably by:

• highlighting the weaknesses of the claim;
• obtaining the complete dismissal of the action.

De Grandpré Chait is proud to have represented Gestion Julstef Inc. and Vittorio Tiramani in this matter, with a team composed of Louis Samuel, Audrey-Ann Trudeau and Charlotte Paquet.