Executive Summary: Key Legal and Evidentiary Issues

• Corporate liquidation and dissolution under the Québec Business Corporations Act (LSAQ), including the role of resolutions under articles 308–310 LSAQ and the nature of a “distribution in money” versus in kind.
• Alleged abuse of shareholder rights through a tax-driven reorganization and use of management companies to receive a liquidation dividend, contrasted with the plaintiffs’ inability to show concrete prejudice or illegal diversion of value.
• Abuse of procedure under article 51 C.C.P., grounded in a manifestly ill-founded action, multiple substantial amendments to the originating application, and an exploratory use of litigation to search for a legal basis.
• Oppression-type and fundamental-rights damages claims (totalling $800,000) dismissed for lack of evidence of reasonable expectations, actual oppression, or any substantiated violation of fundamental rights.
• Informed consent and shareholder decision-making, with the court finding that the plaintiffs had ample information, time, and access to advisers but nevertheless chose not to implement a tax rollover of their shares before dissolution.
• Confidentiality of pre-trial discovery materials, where an attempt to block filing of the stenographic notes of the plaintiff’s examination failed due to insufficient proof of improper third-party use and because the transcript had been placed on the court record.

Factual background

Promotions S.C.P. inc. was incorporated in 1998 under Québec’s Loi sur les sociétés par actions (LSAQ). It ceased operations on 27 January 2013 and was formally dissolved on 26 January 2024. The circumstances of this dissolution, carried out within a broader corporate reorganization of the Groupe Paquette structure, gave rise to the dispute between the plaintiffs, Denise Alix and her son, Étienne Paquette, and several other family-connected defendants.
At the time of dissolution, Denise Alix was president and a director of Promotions S.C.P. inc. She held 240 class A common shares. Étienne Paquette held 20 class B shares. Other members of the Paquette family held the remaining class A shares. The company belonged to a larger group headed by a holding company, 9083-8210 Québec inc., often referred to as the Groupe Paquette structure.
The plaintiffs did not oppose the idea of liquidating and dissolving Promotions S.C.P. inc. In fact, they accepted that all shareholders agreed in principle to wind up the corporation. Their grievance focused instead on the way the liquidation was implemented, how the assets were distributed, who ultimately received the liquidation dividend, and what that meant for their perceived influence within the group.

Corporate reorganization and liquidation mechanics

The dissolution followed a tax-driven reorganization prepared by professional advisers and set out in a written memorandum. The objective was to allow each shareholder to access or invest the company’s funds in a way that suited their personal and financial situation. The plan required each class A shareholder to transfer their shares into an existing or newly created management company (a “société de gestion”). After those transfers, a liquidation dividend totalling $1,716,395 would be declared and paid to the holders of class A and class B shares.
Three class A shareholders followed this plan, transferring their shares into corporations controlled by their spouses. Only then was the liquidation dividend declared, and it was their management companies—not the individuals directly—that received the dividend. The mechanics were consistent with standard tax-planning strategies, allowing the shareholders to manage proceeds through corporate vehicles.
Denise Alix, however, did not instruct anyone to create or designate a management company for the rollover of her class A shares. As a result, the liquidation proceeded for her without any corporate rollover. A cheque for $403,200 was issued to her personally, and another for $33,600 was issued to Étienne Paquette. Both cheques were dated 24 January 2023 and remained uncashed at the time of the hearing. The plaintiffs later claimed that this structure weakened Denise Alix’s position in the overall Groupe Paquette holding structure, but they were unable to provide a single concrete example of such prejudice.

Shareholder decisions under the LSAQ and the unanimity argument

A key plank of the plaintiffs’ case was that the liquidation and dissolution breached article 310 LSAQ, which they said required unanimous shareholder consent for the distribution that occurred. The court began by situating article 310 within the broader statutory scheme. Under article 308 LSAQ, shareholders can resolve to dissolve a corporation by a “résolution spéciale”, which requires at least two-thirds of the votes cast. Article 309 provides that, where the corporation has obligations, liquidation should normally precede dissolution, unless shareholders decide otherwise by special resolution. Article 310 then governs the distribution of the remaining assets.
The court underscored that article 310 distinguishes between a distribution in money (the default) and a distribution “autrement qu’en argent” (in kind). A non-monetary distribution requires unanimous consent of shareholders entitled to participate in the distribution. But where the distribution is in money, the statute only requires the special resolution threshold that had already been met.
In this case, the distribution was in money: cash dividends were declared and paid (or at least cheques issued) as the liquidation dividend. The fact that other shareholders had previously transferred their shares to management companies did not convert the distribution into an in-kind transfer of assets; it remained a monetary distribution. The unanimity requirement under article 310 was therefore not triggered.
The minutes of the shareholders’ meeting of 14 December 2022 showed that a resolution authorizing the liquidation and dissolution under articles 308 and 309 LSAQ was validly adopted by more than two-thirds of the votes. Importantly, Denise Alix herself acknowledged the validity of this resolution, despite opposing it personally and despite preferring a different liquidation scenario. The court emphasized that it is not its role to second-guess such a collective business decision when properly adopted within the framework prescribed by law.

Oppression-style allegations and damages claims

Beyond their challenge to the statutory basis of the dissolution, the plaintiffs framed their action as one grounded in abusive and oppressive conduct. They sought $600,000 in damages for what they described as “abusifs et oppressifs” actions and an additional $200,000 for alleged breaches of their fundamental rights, stress, and inconvenience.
The court analyzed these claims through the lens of the oppression remedy jurisprudence, particularly the Supreme Court of Canada’s decision in BCE. The analysis proceeds in two steps: first, the court must identify whether the plaintiff had “reasonable expectations” in the circumstances; second, it must determine whether those expectations were violated by conduct that constitutes abuse, unfair prejudice, or an unjust failure to consider the plaintiff’s interests.
On the facts, one of the plaintiffs’ expectations—that they could question the accounting firm that designed the reorganization—was actually satisfied. A meeting was held on 14 July 2023 involving Denise Alix, her counsel, the chartered professional accountant, and the corporation’s lawyer, at which the reorganization memorandum was explained. That was enough to meet any reasonable expectation of access to information and explanation regarding the tax plan.
The plaintiffs’ other alleged expectation was that the liquidation dividend would be paid to the original individual shareholders instead of to the management companies to which some of them transferred their shares. The court held this expectation was not reasonable. The shareholders of Promotions S.C.P. inc. were subject to a shareholders’ agreement, and the plaintiffs were unable to pinpoint any clause forbidding the transfer of shares to management corporations in the way that had occurred or rendering such transfers a breach of the agreement. The defendants, for their part, showed that the limited restrictions the agreement did contain were inapplicable in these circumstances.
The plaintiffs did not contest the overall value of the corporation, the total amount of the liquidation dividend, or the proportional allocation of that dividend among shareholders. They offered no legal basis for claiming that duly constituted management companies, having lawfully acquired the shares before liquidation, could not receive the liquidation dividend. Their assertions of harm were confined to speculative fears of a loss of influence within the Groupe Paquette structure, with no evidence of concrete, present, quantifiable damage. On this record, the court found no oppression and no foundation for the requested $600,000 in damages.
As for the claimed $200,000 for violations of fundamental rights, the court found the pleading devoid of serious, specific allegations that could support such a remedy. No defined charter breach or concrete, rights-based injury was identified. Those claims were therefore also dismissed.

Informed consent, access to information, and the rollover decision

Another important thread in the plaintiffs’ argument concerned the quality of their consent and the sufficiency of information surrounding the option to perform a tax rollover of their shares into a management company. They alleged that they were not adequately informed and therefore could not make an informed decision before the dissolution occurred.
The factual record contradicted that claim. From the adoption of the resolution on 14 December 2022 until the dissolution on 26 January 2024, the plaintiffs had more than a year in which they could opt to transfer their shares for tax purposes. Even earlier, in October 2021, Denise Alix received correspondence inviting her to take a position on a potential transfer of her shares. She did not respond, nor did she react to a follow-up reminder two months later. She indicated that she wanted to consult a professional and acknowledged that the decision to transfer or not remained entirely hers.
The minutes of the 14 December 2022 shareholders’ meeting recorded that she expressly did not wish to proceed with a rollover and intended to keep her shares in her own name. The July 2023 meeting with her lawyer and the professional advisers further ensured that she was fully briefed on the mechanics and implications of the proposed reorganization. Despite that, she only communicated in writing on 28 February 2024—after the corporation had already been dissolved—that she now wished to participate in the reorganization on a rollover basis and wanted all the planning documents to review.
In light of these facts, the court concluded that the plaintiffs were never prevented from deciding by any lack of information or obstruction. They had the necessary time, documentation, and professional support to make an informed choice. The contention that their consent had been vitiated or that they were deprived of the opportunity to rollover their shares was therefore manifestly unfounded.

Confidentiality of pre-trial examinations and the transcript dispute

Before addressing the abuse of process, the court dealt with the plaintiffs’ attempt to oppose the filing of the stenographic notes (transcript) of the pre-trial examination of Denise Alix. They alleged that defendants had improperly communicated information obtained at that examination to third parties, in violation of the principle that discovery evidence is to be used solely for the purposes of the litigation absent court authorization.
The court acknowledged the Supreme Court’s direction that parties cannot freely use discovery information outside the litigation and that any intrusion into privacy is strictly confined to what is necessary for the case. However, here the plaintiffs relied mainly on a single email from Mario Paquette to Jacques Paquette, copying a third person, discussing a reorganization of shareholdings involving individuals connected to the Groupe Paquette. Those recipients were not random outsiders but people potentially affected by the outcome of the dispute. The information drawn from the examination that appeared in the email was limited to the reporting of concerns expressed by Denise Alix.
Crucially, once a party itself chooses to use examination content in the litigation and files the transcript in the court record, any residual expectation of confidentiality largely disappears, save for narrow exceptions that did not apply. At the hearing, the plaintiffs offered no additional evidence and no developed argument demonstrating wrongful use of the interrogation material or establishing a context of grave misuse. Accordingly, the court dismissed their opposition and allowed the transcript to remain on the record.

Abuse of procedure and dismissal of the action

The decisive part of the judgment concerns the defendants’ motion to dismiss the remodified originating application as an abuse of procedure. Article 51 of the Code of Civil Procedure allows courts to declare abusive and sanction any proceeding or procedural act that seriously diverts procedure from its purpose and undermines the proper administration of justice. Abuse can exist even without malice; it covers both ill-motivated litigation and good-faith lawsuits that are nonetheless manifestly ill-founded or represent excessive, unreasonable recourse to the courts.
The court highlighted the pattern of repeated, substantial amendments to the plaintiffs’ originating application. Although the factual story remained largely unchanged, the legal bases and conclusions shifted materially, culminating in a significantly revised fourth version filed just nine days before the hearing on the abuse motion. This evolution suggested that the plaintiffs were using the process to experiment with different legal theories in search of a viable claim, rather than asserting a clearly delineated cause of action from the outset.
On the merits, the court found the plaintiffs’ claims manifestly ill-founded. The dissolution and liquidation were conducted in accordance with the LSAQ, including a valid special resolution meeting the two-thirds threshold. The distribution of assets was in money, so article 310’s unanimity requirement for in-kind distributions did not apply. The plaintiffs had not shown any irregularity in the valuation of the company, the total liquidation dividend, or its proportional allocation.
Their oppression-style claims failed because their key reasonable expectation—access to the accounting firm—had been fulfilled; their other expectation—that the dividend be paid to the original individuals rather than their management companies—was not reasonable in law or on the evidence. They were unable to point to any breach of the shareholders’ agreement; the alleged prejudice boiled down to unsubstantiated mistrust and hypothetical fears of loss of influence, which do not suffice to ground an oppression remedy.
The fundamental-rights claim lacked any serious factual underpinning and was dismissed as well. Overall, the court held that the plaintiffs’ action was abusive in both its lack of substantive legal foundation and its unjustified consumption of judicial and party resources.

Ruling, successful parties, and monetary outcome

In its operative conclusions, the Superior Court rejected the plaintiffs’ opposition to the filing of the examination transcript, with costs, and granted the defendants’ motion to dismiss for abuse. It formally declared that the remodified originating application of 24 November 2025 was abusive and dismissed that application in its entirety. The court also extended the deadline for inscription for trial and judgment to 17 March 2026 so that the defendants could, if they chose, pursue a separate claim for damages without being blocked by procedural time limits.
The defendants had asked the court to “reserve” their right to claim damages in the future, but the court refused. Relying on Court of Appeal authority, it explained that a mere “reserve of rights” in the dispositive part of a judgment has no real effect unless expressly provided by law. Either it states rights the party already possesses, in which case it adds nothing, or it purports to create rights the party does not have, in which case it is misleading and ineffective.
Ultimately, the successful parties in this case are the defendants—Promotions S.C.P. inc. and the individual family-member defendants—who obtained dismissal of the plaintiffs’ action as abusive and an award of costs (“frais de justice”) in their favour. The judgment does not specify any fixed dollar amount for those costs, which in Québec are ordinarily determined according to tariff or later taxation. No damages were awarded to any party at this stage, and the total monetary amount ordered in favour of the successful defendants cannot be determined from the text of this decision, beyond the general entitlement to recover judicial costs.