By interpreting a family financial agreement in their own way and challenging any other interpretation in court for ten years, Pierre Karl Péladeau and his company Les Placements Péladeau committed an “abuse of rights” with regard to his sister Anne-Marie Péladeau , decides the Court of Appeal of Quebec.
In a decision released Monday, the Court of Appeal ordered Placements Péladeau, a company 100% owned by Pierre Karl Péladeau, to immediately pay $ 9.2 million to Anne-Marie Péladeau. This is the last installment of the amount owed to Mme Péladeau on his heritage.
This decision probably signifies the end of a dispute that has lasted for 10 years over part of the legacy of Pierre Péladeau, one of the most important entrepreneurs in the history of Quebec and the founder of Quebecor.
PHOTO MARTIN CHAMBERLAND, PRESS ARCHIVES
Anne-Marie Peladeau
I am obviously very happy with the result, but at the same time shocked to have had to fight all these years to have my rights and my dignity respected.
Anne-Marie Péladeau in a written statement sent through her lawyers
In theory, the litigation is not yet over, as the company Les Placements Péladeau could seek leave to appeal to the Supreme Court of Canada (the company did not indicate its intention on Monday). Even if this was the case, the Supreme Court in practice only accepts a tiny part of these requests (7% in 2020).
Placements Péladeau, a company owned by Pierre Karl Péladeau, is the controlling shareholder of Quebecor, a telecoms and media conglomerate worth approximately $ 7.3 billion on the Toronto Stock Exchange. Placements Péladeau did not respond to questions from Press.
Pierre Karl Péladeau is President and Chief Executive Officer of Quebecor.
Long battle
When he died in 1997, Pierre Péladeau bequeathed his block of Quebecor control shares to his children. Each of the seven children therefore receives a portion of the shares of Placements Péladeau, the company that controls Quebecor.
Under an agreement concluded in 2000, Anne-Marie Péladeau sells her inherited shares to Placements Péladeau for $ 55 million. Mme Péladeau was to receive this amount over the years in line with the dividends paid by Quebecor. These dividends must be a minimum of 4.2 million per year for it to receive an amount that year. It is estimated that it will take 13 years for her to receive her $ 55 million. The 2000 agreement was ratified by the Superior Court, because Mr.me Péladeau, struggling with drug addiction problems, has been under guardianship for his property since 1993 (this guardianship is still in effect although it is the subject of a request for review).
It does not go as planned: the drop in Quebecor’s dividend level means that Mr.me Péladeau received nothing between 2002 and 2015. Deeming the situation unfair, she took the matter to the courts in 2011 to renegotiate the terms of the agreement.
Unexpected conclusion
Ten years later, the litigation is practically over. In its decision rendered on Monday, the Court of Appeal confirms that Les Placements Péladeau must immediately pay all that is owed to Anne-Marie Péladeau. In practice, only one last installment remains to be paid: 9.2 million, ie interest and additional compensation.
The Court of Appeal also reserved a surprise for both parties in its decision: it concludes that the behavior of Placements Péladeau in this case for ten years constitutes “an abuse of rights” with regard to Anne-Marie Péladeau.
Without concluding in the bad faith of [Placements Péladeau], the Court considers that this way of interpreting and applying [l’entente de 2000] coupled with the fact that [Placements Péladeau] contested each of the steps taken by Anne-Marie to obtain what is due to her nevertheless constitutes an abuse of rights in the circumstances.
The three judges of the Court of Appeal
During the hearing, Anne-Marie Péladeau’s lawyers had not argued the theory of abuse of rights, based on articles of the Civil Code of Quebec.
On the monetary level, this debate on the abuse of rights does not change anything. The Superior Court ordered Placements Péladeau to pay what was owed under other articles of the Civil Code. This decision has also just been confirmed on appeal.
Second decision of the Court of Appeal
This is the second time that the Court of Appeal has ruled in this dispute between Anne-Marie Péladeau and Les Placements Péladeau. The first time, in 2015, the Court of Appeal ruled in favor of Anne-Marie Péladeau and ordered the two parties to “renegotiate in good faith the terms of a new agreement”. Placements Péladeau then owed $ 42.6 million to Mme Peladeau.
As the two parties could not come to an agreement, Anne-Marie Péladeau asked the courts in 2016 to end the impasse and impose an agreement. In 2020, the Superior Court ordered Placements Péladeau to immediately pay the remaining 36 million notwithstanding appeal (this amount has since been paid in full by Les Placements Péladeau).
Placements Péladeau then appealed to the Court of Appeal for a second time. In particular because we did not agree on the amount of interest and the additional indemnity. The Superior Court concluded that they had to start running from August 2013, even though M’s last resortme Péladeau had been deposited in 2016. That would therefore give 9.2 million (this amount as of April 30, 2020 will have to be indexed). Placements Péladeau disagreed. The Court of Appeal has just ruled in favor a second time to Mr.me Péladeau on this aspect of the dispute.
This is the second family dispute in which Les Placements Péladeau has just suffered a setback at the Court of Appeal in 2021. Last June, Les Placements Péladeau and Pierre Karl Péladeau lost a similar dispute against his half-brother Simon-Pierre Péladeau, who also had an agreement to repurchase shares at the rate of payment of dividends. The court forced the repurchase of the last shares of Simon-Pierre for 4.28 million by June 2022.