Leblanc c. Capital d'Amérique CDPQ inc., 2008 QCCS 3188 (CanLII)

On July 17, 2008, Madame Justice Danièle Mayrand of the Quebec Superior Court dismissed a Motion for Authorization to Institute a Class Action suit filed against Capital d'Amérique CDPQ Inc., a subsidiary of the Caisse de dépôt et de placement du Québec, by Conrad Leblanc, a shareholder of Cable Satisfaction International Inc. (CSII).

In a 350-paragraph marathon proceeding supported by a multitude of documents, Mr. Leblanc held CDPQ (itself a major shareholder of CSII having designated a representative to sit on the company's board of directors) responsible for CSII's financial debacle and loss in share value. Mr. Leblanc was seeking the authorization to institute a class action of $300 million, according to estimates.

In her judgment, Justice Mayrand dismissed Mr. Leblanc's motion, accepting nearly all of the arguments put forward on CDPQ's behalf by a team from Fasken Martineau which included Alain Riendeau, Marianne Messier and Dominique Gibbens.

This is a detailed judgment that will no doubt become a landmark decision on the following aspects of corporate law:

· A shareholder--such as CDPQ--has no obligation towards the company, except to pay for its shares and respect the company's documents of incorporation (par. 59-60);

· The fact that a shareholder designates a person to sit on the company's board of directors does not make that shareholder responsible for the decisions made by the board, there is no master-servant relationship; the directors are the mandataries of the company and must act in its interest (par. 67-69);

· Even if such a situation did warrant authorizing a legal recourse, such recourse would belong to the company and not to its shareholders, who could only take a derivative action; moreover, the loss in share value resulting from the directors' alleged management faults only constitutes an indirect damage for the shareholders (par. 70-76).

This will also be an authoritative decision in the area of class actions, particularly as concerns the rigour and seriousness required in the drafting a motion for authorization to institute a class action and the qualities that a representative must have in order to institute such an action.

Attached is a copy of Justice Mayrand's judgment. (IN FRENCH ONLY).