Executive Summary: Key Legal and Evidentiary Issues

• Applicants sought a court order appointing an arbitrator under a unanimous shareholder agreement dated July 3, 2009, to resolve a dispute over shareholders' rights and obligations.
• Central to the dispute was whether the definition of "cottage" in article 1.01 of the unanimous shareholder agreement was ambiguous and should be read to include the word "rental."
• Contractual interpretation principles from Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, were applied to assess whether the factual matrix supported adding the word "rental" to the definition.
• No provision in the unanimous shareholder agreement addressed the rights and obligations of shareholders based on whether they were part of the cottage pool.
• Evidentiary gaps were significant, as the investor information package and the fifteen-year lease were not placed in evidence, leaving the factual matrix unsupported.
• Settlement attempts by the Applicants — letters sent between 2019 and 2022 — were found insufficient to meet the conditions precedent to arbitration under article 9(a) of the unanimous shareholder agreement.

Facts of the case

The vacation resort now operating under the trade name Hôtel Deux Rivières Enr. originated from a public-private partnership formed in the Tracadie area around 1998. Owned by 638274 NB Inc., the resort grew over time to include a cottage accommodation complex, a hotel, and a convention centre. Thirty-three cottages were built in 1999, with seventeen additional cottages added in 2001. A convention centre and outdoor pool were built in 2000, a health centre and spa opened in 2005, and a twenty-room hotel was constructed in 2009, with four more rooms added in 2018. Early investors were informed they could purchase a cottage for $30,000, with the remaining half of the purchase price funded by the Atlantic Canada Opportunities Agency on behalf of the Corporation du Développement des Deux Rivières Tracadie (CDDRT). Investors were told that after fifteen years, cottage owners could withdraw from the rental pool and become full owners, either by living in their cottages or selling them upon full repayment of the ACOA loan.

Over time, fifty private investors became shareholders in 638274 NB Inc., each owning one cottage and one Class A voting common share. In 2009, 638274 NB Inc. was established to serve as collateral for loans to the fifty owners, and a unanimous shareholder agreement was signed that same year. By 2013, the fifty cottage owners became full owners as part of a transaction transferring management of the resort from the CDDRT to 638274 NB Inc., though they remained subject to restrictions, including prohibitions on renting or renovating their cottages without the resort's consent. That same year, 638274 NB Inc. purchased the convention centre and land from the CDDRT with $700,000 in financial assistance from the Town of Tracadie. Since 2017, 638274 NB Inc. redeemed thirteen Class A common shares for $100 each and bought back one cottage, which was returned to the rental pool. As of June 20, 2025, thirty-four shareholders still held Class A voting shares, including the five Respondents — Normand Losier, Théo Gauvin, Ginette McLaughlin, Raoul Brideau, and Rémi Brideau — all of whom had withdrawn from the cottage rental pool.

The Applicants, Samuel Sivret and 647925 NB Inc., brought this application arguing that the Respondents, no longer part of the rental pool, were no longer contributing to the company's revenue, capital outlays, and expenses — including repayment of debt for cottage construction — creating an inequitable relationship between shareholders who remained in the pool and those who had withdrawn.

Contractual clauses at issue

The unanimous shareholder agreement dated July 3, 2009, contained an arbitration clause in article 9.01, which provided that any disagreement or dispute relating to or arising from the interpretation or application of the agreement's provisions shall be resolved exclusively by arbitration under the Arbitration Act of New Brunswick. Before referring any dispute to arbitration, article 9(a) required each shareholder to make every effort and take all reasonable steps — which may include mediation — to reach a settlement. The definition of "cottage" in article 1.01 defined the term as "a cottage in the cottage pool of the Complexe Les Deux Rivières in Tracadie-Sheila, New Brunswick." The Applicants argued this definition was ambiguous and should be interpreted to include the word "rental," making it a "rental cottage pool," which would in turn give rise to an arbitrable interpretive disagreement about the rights and obligations of shareholders outside that pool. Clause 8.02 was also referenced by the Applicants, though the court noted it contains no reference to the rights and obligations of shareholders based on whether they are part of any cottage pool.

Reasoning and analysis

Justice Lanteigne applied the contractual interpretation principles established in Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, which require that a contract be read in light of its text and the surrounding factual matrix — understood as objective background facts known or reasonably ought to have been known to both parties at the time of contracting. The court found that while Samuel Sivret's affidavit outlined the origins of the vacation resort, it failed to provide a factual matrix describing the circumstances at the time the unanimous shareholder agreement was signed on July 3, 2009. The investor information package and the fifteen-year lease referenced in the affidavit were not placed in evidence. Although the affidavit mentioned the word "rental" five times, the court found nothing to establish the parties' mutual and objective intent to introduce that word into the definition of "cottage." The court concluded it was impossible to determine, on a balance of probabilities, that the parties intended to negotiate the issue of rights and obligations based on pool membership at the time of signing.

The court further held that even if contractual interpretation permitted the word "rental" to be read into the definition — which it did not — this would not by extension raise the issue of rights and obligations suggested by the Applicants, as doing so would amount to overwhelming the words of the agreement or creating a new one, contrary to the principles in Sattva. No provision of the unanimous shareholder agreement addressed the nature and scope of shareholders' rights and obligations based on whether a shareholder is part of a cottage pool. Section 8.01 addressed only the principle that every cottage owner must hold at least one share and must dispose of that share upon disposing of their interest in a cottage. The court also rejected the joint venture argument, finding no basis to conclude a joint venture existed for the renting of cottages.

On the conditions precedent to arbitration, the court found that the Applicants had not met the requirements of article 9(a). The first letter, dated July 26, 2019, was addressed solely to Normand Losier and contained an error suggesting he had sold his cottage, presenting him with a fait accompli regarding the proposed redemption price of his share. The letters sent on November 22, 2022, to Raoul Brideau, Mireille Gauvin, Théo Gauvin, Ginette McLaughlin, and Normand Losier were formal notices that did not, on their own, constitute the "every effort" and "all reasonable steps, which may include mediation" required under the agreement.

Ruling and overall outcome

The application was dismissed in its entirety. The Respondents — Normand Losier, Théo Gauvin, Ginette McLaughlin, Raoul Brideau, and Rémi Brideau — were the successful parties. The court awarded costs of $1,500 payable by the Applicants to the Respondents.