Executive Summary: Key Legal and Evidentiary Issues

• Shareholders Yacine Elaguab and Meriem Berriah claimed $2,300 in damages, alleging they were not notified of the extraordinary shareholders' meeting convened to approve Sun Life's acquisition of Dialogue Health Technologies Inc.
• Under the Canada Business Corporations Act (CBCA), shareholders with voting rights are legally entitled to receive notice of any shareholders' meeting.
• No direct evidence was produced confirming that the notice of meeting was sent specifically to the claimants' address of record, preventing the presumption of receipt under s. 253(3) CBCA from applying.
• Publication of the notice on Dialogue's website did not satisfy the statutory requirements for electronic notification, as the claimants were never notified in writing of the document's availability online.
• Even if a procedural breach occurred, the claimants failed to establish damages or a causal link, as their votes would not have altered the outcome of the special resolution approved by 99.62% of participating shareholders.
• Minority shareholders had access to a statutory right of dissent under s. 190 CBCA, but the court found it unlikely the claimants would have obtained a higher price through that mechanism than the premium already offered.

Facts of the case

Yacine Elaguab and Meriem Berriah, shareholders of Dialogue Health Technologies Inc. ("Dialogue"), brought a claim in the Small Claims Division of the Court of Québec against Dialogue and Sun Life du Canada, Compagnie d'Assurance-Vie ("Sun Life") for $2,300 in damages. The claimants alleged that their shares in Dialogue were sold without their knowledge or consent, and that they never received a notice of convocation for the extraordinary shareholders' meeting held in connection with Sun Life's acquisition of Dialogue. The $2,300 figure represented the difference between the price the claimants originally paid for their shares and the price at which those shares were subsequently sold.

On July 26, 2023, the acquisition of Dialogue by Sun Life was announced by press release, which was published on Cision, Dialogue's website, and Sedar. A newspaper announcement followed on August 14 and 15, 2023. On August 17, 2023, Dialogue published a Notice of Convocation to an Extraordinary General Meeting of Shareholders and a Management Proxy Circular on its website and on Sedar. According to the defendants, the notice was mailed by Computershare to all shareholders on August 23, 2023, in support of which they produced a sworn declaration from Computershare. On September 19, 2023, the extraordinary shareholders' meeting was held; 75.38% of shareholders participated, and of those, 99.62% approved the acquisition. The acquisition was confirmed by press release on October 3, 2023.

Statutory and legal framework

The right to receive notice of a shareholders' meeting flows directly from the right to vote. Section 24(3)(a) of the Canada Business Corporations Act (CBCA) establishes that the right to vote at any shareholders' meeting is a fundamental right of shareholders of a federal corporation. Section 135(1)(a) of the same statute requires that notice of a meeting be sent to each shareholder entitled to vote. The defendants, being federal corporations, were bound by these provisions.

For a mailed notice to trigger the presumption of receipt under s. 253(3) CBCA, it must be sent to the shareholder's last known address on record with the company or its transfer agent. If notice is distributed electronically via a website, s. 252.3 CBCA and s. 7(2) of the Securities Transfer Act Regulations require that the recipient first consent in writing and be notified in writing of the availability and location of the document.

The Superior Court's interim order of August 17, 2023, approving the arrangement process, had also expressly directed that notice materials be distributed to registered shareholders by mail, in accordance with the CBCA and the company's by-laws, at least 21 days before the meeting date.

Reasoning and analysis

The court found that while Computershare's sworn declaration confirmed that notices were mailed to Dialogue shareholders on August 23, 2023, there was no direct evidence that the notice was specifically sent to the claimants' address of record with the company or its transfer agent. Without proof of that specific mailing, the presumption of receipt under s. 253(3) CBCA could not be invoked. The court referenced the reasoning in Picard c. Napky, 2015 QCCQ 417, on what is required to establish proof of mailing — noting that, at minimum, evidence such as a postmark or postal obliteration would be needed to confirm the date and act of sending. In the absence of such evidence, the court declined to presume the claimants received the notice.

The court equally rejected the sufficiency of the online publication. Since the claimants were never notified in writing that the notice was available on Dialogue's website, the electronic notice requirements under the CBCA were not met.

Despite concluding that a procedural breach likely occurred, the court turned to the question of damages and found the claimants' case deficient on two additional fronts. First, given that 99.62% of participating shareholders approved the acquisition, the claimants' votes would not have changed the outcome of the special resolution. The court cited Alix c. Promotions SCP inc., 2026 QCCS 364, for the principle that the mere fact that a collective decision creates an inconvenience for a dissenting shareholder is not sufficient to invalidate it or ground a legal remedy. Second, as minority shareholders, the claimants had access to a statutory right of dissent under s. 190 CBCA, which would have entitled them to demand that the company purchase their shares at fair value, assessed as of the close of business on the day before the resolution. The court noted, relying on Fixation des actions de Fibrek inc., 2024 QCCA 137, that fair value is generally determined by reference to market value. Given the evidence that the acquisition price already represented a premium of approximately 43.1% over Dialogue's closing share price on the Toronto Stock Exchange on July 25, 2023 — the day before the acquisition was announced — and a premium of approximately 59.4% over the 20-day volume-weighted average price on the same date, the court found it improbable that the claimants would have obtained a better price through the dissent mechanism.

Ruling and overall outcome

The court dismissed the claimants' demand in its entirety. Although the court acknowledged that the claimants were deprived of the opportunity to vote at the September 19, 2023 extraordinary shareholders' meeting, it found no preponderant evidence that they suffered any actual prejudice as a result. The defendants, Dialogue Health Technologies Inc. and Sun Life du Canada, Compagnie d'Assurance-Vie, were the successful parties. No damages, costs, or monetary amounts were awarded to the claimants; the claim was dismissed without costs.