Ringuet v. Bergeron

ST. MAURICE KNITTING MILLS

LIMITEDMIS-EN-CAUSE. LIMITED ............

The parties, as shareholders of the mise-en-cause company, entered into an agreement to acquire control of the company's shares. Each party undertook inter alia, (1) to vote for their election to the board of directors; (2) to ensure the election of the defendant R as president, of the defendant P as vice-president and general manager, and of the plaintiff B as secretary-treasurer and assistant general manager; (3) to vote unanimously at all meetings of the company. The agreement further provided that on a breach of it by one of the parties, his shares were to be transferred to the others in equal parts. When the plaintiff was subsequently excluded from the management of the company, he sued for breach of contract. The sole defence was that the contract was contrary to public order. The trial judge dismissed the action. The judgment was reversed by the Court of Appeal.

Held (Taschereau and Fauteux JJ. dissenting): The appeal should be dismissed.

Per Abbott, Judson and Ritchie JJ.: The agreement did not tie the hands of the parties in their capacity as directors so as to contravene any of the provisions of the Quebec Companies Act. It was no more than an agreement among shareholders owning or proposing to own the majority of the issue shares to unite upon a course of policy or action and upon officers whom they would elect. There was nothing illegal or contrary to public order. It was a well-known, normal and legal contract, frequently encountered in current practice. The clause specifying unanimity in voting had no reference to director's meetings, but to shareholders' meetings. No question of public order arose in a private arrangement of that kind.

Per Taschereau and Fauteux JJ., dissenting: The requirement of the agreement to vote unanimously applied to directors meetings as well as to shareholders' meetings. Such binding of the parties in their capacities as directors was contrary to their duties as directors. It was contrary to the fiduciary relationship which directors have towards a company and which requires them to give their entire ability to the best interests of the company and its shareholders. This abdication of duties rendered the agreement invalid, and since the clause requiring the unanimous vote was not severable, the penalty was not enforceable.

APPEAL from a judgment of the Court of Queen's Bench, Appeal Side, Province of Quebec', reversing a judgment of Lajoie J. Appeal dismissed, Taschereau and Fauteux JJ. dissenting.

:-Les appelants se pourvoient A 1'encontre d'une decision majoritaire de la Cour d'Appel' maintenant, contrairement au jugement de la Cour sup6rieure qui l'avait rejet6e, 'action intent6e contre eux par l'intim6 Bergeron.

1 [19581 Que. Q.B. 222.

Cette action repose sur un contrat notari6 sign6 le 3 aofit 1949 par les appelants et l'intim6. La question en litige est, e.

comme il appert ci-apris, une pure question de droit touchant la 16galit6 de ce contrat dont la validit6 est ni6e par les appelants et affirm~e par l'intim6.

A la date de cette convention, Ringuet, Bergeron et Pag6 d6tenaient, avec quatre autres actionnaires, tous les sept dans une 6gale proportion, tout le capital-action 6mis de la St. Maurice Knitting Mills Limited, compagnie incorpor6e par lettres patentes le 30 janvier 1947 sous le regime de la premibre partie de la Loi des compagnies de Qudbec. D6sireux de s'assurer le contr6le de l'entreprise de cette compagnie, les appelants et l'intim6 prenaient les uns envers les autres, dans ce contrat, divers engagements destin6s A cette fin. C'est ainsi que chacune des parties h la convention s'engageait, particulibrement, h ne pas disposer de ses actions sans le consentement de chacune des autres parties; h acheter en parts 6gales les actions qui pouvaient 6tre offertes par leurs h6ritiers respectifs ou par les autres actionnaires; h voter leurs actions pour leur 6lection au conseil d'administration; A assurer, en permanence, 1'61ection de Ringuet comme Pr6sident, Pag6 comme Vice-Pr6sident et G6rant- G6ndral et l'intim& comme Secr6taire-Trisorier et Assistant G6rant-G6n6ral; h voter pour assurer des salaires d6termines h, chacune des parties au contrat; h ne pas demander la modification de la prsente convention ni l'attaquer en justice ou autrement sans le consentement unanime des deux autres parties contractantes; h voter unanimement, sur tout objet n6cessitant un vote, A toutes assembl6es de la compagnie (clause 11) et h accepter, comme sanction de toute violation du contrat, la perte de ses actions, au bin6fice des deux autres parties contractantes (clause 12).

convient de citer au texte les clauses et 12 dont les dispositions sont particulibrement invoqu6es au soutien de la proposition d'invalidit6 du contrat:

A Dans une seconde convention, ex6cutie le 3 f6vrier 1950 par les appelants, I'intim6 et le mis-en-cause Jean, il fut pourvu h l'admission de Jean dans le groupe form6 par les appelants et 'intim6 pour le contr81e de la compagnie, a 1'acquisition des actions d'un autre actionnaire et 1'engagement, assurant les salaires fix6s h la premibre convention, fut r~it6r6. Cette seconde convention laisse subsister la premibre qui seule contient la clause p6nale dont I'application est r6clam6e par la pr6sente action.

De la date du contrat en litige, soit du 3 aoft 1949 A 1952, les parties h ce contrat en observ~rent les termes. Mais en juin 1952, les appelants, h des assembl6es du conseil d'administration et des actionnaires, cess&rent, au m6pris de leurs engagements, d'assurer 1'61ection de 1'intim6 au bureau de direction, d'assurer sa nomination au poste de secr6taire-tr6sorier et d'assistant g6rant-g6ndral et de lui voter le salaire convenu. C'est alors que Bergeron poursuivit les appelants et invoquant ces violations du contrat du 3 aofit 1949, demanda l'application de la sanction privue h l'article 12, soit le transfert h, son b6n6fice de toutes les actions d6tenues par Ringuet et Pag6.

Jean et la compagnie furent mis-en-cause, pour qu'ils puissent prendre connaissance du jugement h intervenir et s'y conformer.

Les faits all6gu6s au soutien de cette action sont admis par les d6fendeurs appelants qui plaident en droit I'invalidit6 de la convention.

La Cour sup6rieure rejeta l'action pour un motif auquel il n'y a pas lieu de s'arrter. Outre d'avoir t6 6cart6 par la Cour d'Appel, il a 6t6 abandonn6 par les appelants.

En appel, M. le Juge en chef Galipeault interpr6ta l'obligation de voter unanimement, contenue en la clause 11, comme ne s'appliquant qu'aux assembl6es d'actionnaires et non h celles des directeurs. Par inadvertance, il consid~ra, -ce qui n'est pas, soit dit en toute dif6rence,-que les parties h la seconde convention constituaient, A la date d'icelle, tous et les seuls actionnaires de la compagnie. Avec ces vues, il conclut A la validit6 de cette clause et partant du contrat. MM. les Juges Pratte et Owen, adoptant une interpr6tation diffirente de cette clause, d6clardrent que 1'obligation touchant la solidarit6 du vote s'appliquait aussi bien aux assembl6es des directeurs qu'aux assembl6es des actionnaires. Partant de cette interpr6tation, M. le Juge Pratte jugea la clause contraire a l'ordre public et la consid6rant comme l'une des conditions essentielles h l'assentiment donn6 par les parties au contrat, il conclut que cette stipulation viciait la convention mime en laquelle elle se trouvait. M. le Juge Owen, d'autre part, indiqua qu'il inclinait A partager l'opinion de son colligue sur l'invalidit6 de la clause en question mais 6tant d'avis qu'il s'agit d'une clause accessoire et non essentielle, il ne crut pas n6cessaire de d6terminer la question de validit6. Pour ces motifs, il conclut avec le Juge en chef au maintien du contrat et de F'action.

Je crois que les conclusions auxquelles M. le Juge Pratte est arriv6 sur 'interpr6tation, l'ins6parabilit6 et l'invalidit4 de la clause 11 sont bien fondies.

Interpr6tation. Il se peut qu'en soi, isol6e du texte de la convention et consid~r6e exclusivement au regard de la Loi des compagnies, 1'expression "Dans toutes assemblies de ladite compagnie . . .", apparaissant au d6but de la clause puisse s'interpr6ter comme n'embrassant que les assembl6es d'actionnaires. LA n'est pas la question. II faut donner A cette expression un sens conforme A l'intention des parties au contrat oil elle se trouve. Et pour ce, il faut tenir compte des rigles d'interpr6tation et, particulibrement, de celle 6dictie A l'art. 1018 C.C. voulant que les clauses d'un contrat s'interpritent les unes par les autres en donnant A chacune le sens qui r6sulte de 1'acte entier. Les parties ont voulu assurer leur 6lection comme officiers de la compagnie aussi bien que le traitement se rattachant h ces fonctions. Cette intention ne pouvait 6tre r~alis6e que par les d6cisions du conseil d'administration. Aussi bien, pour donner effet h leur volonti, elles ont stipul6 l'unanimit6 du vote "dans toutes les assembl6es de ladite compagnie" c'est-A-dire dans les assemblies du conseil d'administration comme dans les assemblies des actionnaires.

Ins6parabilit6. De la lecture du contrat, il apparait 6galement que chacune des parties a voulu se gararitir contre toute contingence de nature A empicher la r6alisation de l'intention commune et adopter les mesures les plus efficaces pour assurer le respect int6gral des engagements pris h cette fin. Comme dit M. le Juge Pratte, cette clause ne peut 6tre consid6r6e comme une clause purement accessoire et n'ayant jou6 aucun r6le d6terminant dans la conclusion du contrat. Invalidit6. C'est au regard du contrat lui-m~me et de la situation existant A la date de son execution que cette question doit 6tre consid6rie. Si la convention 6tait alors invalide, elle n'a pu 6tre subs6quemment valid6e par suite d'6v6nements subsiquents. Suivant la situation alors existante, il y avait, h la date de ce contrat, sept actionnaires dans la compagnie, chacun, comme d6jh indiqu6, d6tenant un nombre 6gal d'actions et tous 6tant 6ligibles, en droit, et susceptibles d'6tre 61us, en fait, au conseil d'administration. Les questions qui se posent sont de savoir si dans de telles circonstances, les parties au contrat pouvaient, comme elles l'ont fait, comme directeurs, s'engager d'avance, aveugl6ment et pour toujours, sous la sanction d'une peine extremement s6vire, h ne prendre que des d6cisions agr6ables A leurs co-contractants et h renoncer pour toujours, A moins que ceux-ci ne soient d'accord avec elles, h partager 1'opinion d'un autre directeur de la compagnie, mime s'il leur apparaissait que le bien de la compagnie exigeait qu'elles le fissent. Avaient-elles le droit d'ainsi irr6vocablement ali6ner la libert6 de choisir sans contrevenir h leurs devoirs comme directeurs, h la lettre ou du moins h 1'esprit de la Loi des compagnies?

Sur la nature des devoirs d'un directeur de compagnie, il parait suffisant de r6f6rer A la description qu'en donne Wegenast, 1931, The Law of Canadian Companies, et Masten & Fraser, Company Law of Canada, 4th ed. Le premier, aux pages 364 et 365, s'en exprime comme suit: Et il ajoute, A la page 366:

Dans le second, on peut lire h la page 580:

It is a director's duty to give his whole ability, business knowledge, exertion and attention to the best interests of the shareholders have placed him in that position: Re Iron Clay Brick Mfg. Co. (1889) O.R. 113, 123. Directors by reason of their fiduciary obligations in the exercise Fauteux J. of their powers are bound to act with the utmost good faith for the benefit of the company: The Sun Trust Company Ltd. v. Bigin (1937) S.C.R. 305, at p. 307.

Dans Motherwell v. Schoof', la Cour Supreme d'Alberta eut h consid~rer la validit6 d'une convention faite par deux directeurs, aux termes de laquelle ils avaient, dans une clause, convenu qu'au cas de leur disaccord sur toute question soulev6e au conseil d'administration, le conflit serait soumis aux d6cisions d'un arbitre et qu'ils voteraient conform6ment A ces d6cisions. Dans une autre clause de la convention, ils se sont engag6s, comme directeurs, h se nommer, 'un comme President de la compagnie et l'autre comme G6rant de la compagnie. Sur la validit6 de la premibre et de la deuxibme de ces clauses, M. le Juge Clinton J. Ford exprima les vues suivantes aux pages 818 et 819:

In my opinion this contravenes s. 92 of the Dominion Companies Act, 1934, which empowers the directors to administer the affairs of the company in all things and to make or cause to be made for the company any description of contract which the company may by law enter into. The discretion of the directors to act in the administration of the affairs of the company is fettered by the agreement and, in so far as it does so, it cannot be valid. The attempt to bind the directors in their decision as to whom to appoint as president or manager or otherwise is also, in my opinion, invalid, as contrary to the provisions of the section above referred to and, also, to s. 90(d) of the Act.

Les prescriptions de P'art. 80 de la Loi des compagnies de Qubbec, applicables h la compagnie mise-en-cause, supportent, je crois, la proposition d'invalidit6 d'une clause telle que la clause 11 ayant pour effet d'obliger, en certaines circonstances, l'une des parties contractantes h, virtuellement abdiquer ses pouvoirs vis-a-vis la compagnie, au b6n6fice de ses co-contractants. L'article 80 de la premibre partie de la Loi des compagnies de Qu6bec 6dicte que: Les affaires de la compagnie sont administries par bureau de direction compos6 d'au moins trois membres.

1 [19491 4 D.L.R. 812.

[19601 Le riglement no 8 des riglements de la compagnie 6dicte que:

BY-LAW NO. 8

DIRECTORS

The affairs of the company shall be managed by a Board of seven (7) Fauteux J. directors of whom four (4) shall form a quorum.

De telles dispositions ont un caractbre imp6ratif et prohibitif. Dans In Re Alma Spinning Company', Jessel, M.R., eut h d6terminer 1'effet d'une semblable disposition et l'opinion A laquelle il s'est arrt6 est exprime comme suit aux pages 685-686:

The words of the 35th article of association are these: "The business of the company shall be conducted by not less than five, nor more than seven, directors." Very simple words. If there were no interpretation of them, I should hold them as equivalent to saying, there shall never be less than five nor more than seven directors. The words no doubt are, "the business of the company shall be conducted"; but they are meant to point out what the number of directors of the company shall be-not merely by whom the business of the company shall be conducted. It was so decided in Kirk v. Bell 16 Q.B. 290, where the words were practically the same as we have here; and therefore, if I wanted a decision in point, there it is. The words there were-instead of "the business of the company shall be conducted by"-"the management of the affairs of the company shall be entrusted to" (which, of course, is the same thing) "not less than five, nor more than seven, directors;" and it was held that there must be at least five directors. I agree that that is the fair meaning of the clause. Now comes the question, that being the proper meaning of the clause, is it to be treated as directory only, or as obligatory? If there were no decision I should have said on principle that it could not be merely directory-it is a negative and an affirmative. The shareholders have entrusted the management of their business to a certain number of persons, not to any other number. They say, in effect, "there shall not be less than five, nor more than seven, who shall manage our business; less than five shall not be the managers." If, in an ordinary case, persons appointed seven people to be their attorneys, and said, "they shall conduct the business, not being less than five," would anybody say that if the attorneys were below five they could conduct the business? Is there any distinction between that case and this? Or take the case of a man going away and leaving his business to three clerks, and giving them power to act for him, and to draw bills, not less than two to act together-could any one of them draw bills? I do not see the distinction on principle. The contract of this partnership, or quasi-partnership, is that the business shall be managed by not less than a certain number of persons: what right has a Court of Justice to say that it shall be managed by a less number, without the shareholders being consulted?

L'article 80 de la Loi des compagnies de Quebec implique necessairement une prohibition que les affaires d'une compagnie soient conduites par moins d'un certain nombre de 1 (1880), 16 Ch.

personnes et il est certain que l'un des directeurs constituant ce minimum s'engage h abdiquer, comme en 1'espice, et en faveur d'un ou de plusieurs directeurs, son pouvoir de voter, son engagement constitue une violation de 1'esprit, sinon de la lettre, de la disposition prohibitive.

Mais, dit-on de la part de 1'intim6, il est de principe que les questions soumises au bureau de direction soient, en cas de conflit entre les directeurs, d~cid6es par un vote majoritaire et de cela on diduit que la clause 11 n'est pas contraire h ce principe qui continue d'6tre appliqu6 lorsqu'il est donn6 effet ' la clause. Apris tout, ajoute-t-on, chacun des comparants n'a pas renonc6 h la d6lib6ration, la discussion, au droit de faire triompher son opinion, avant de se ranger h l'avis de la majorith qui, en principe, doit gouverner. Comme le signale M. le Juge Pratte, cependant, le principe de la d6cision par la majorit6 presuppose qu'il s'agisse d'une majorit6 r6alis6e par l'union de ceux qui ont une opinion commune. II faut, en effet, que ceux qui donnent leur vote formant cette majorit6 soient libres de donner ce vote et que ce vote soit 1'expression de leur opinion. Le directeur n'a pas, au conseil d'administration, un droit et un pouvoir limitis h une voix consultative. Ce qu'il a, c'est le droit, le pouvoir de voter suivant l'opinion qu'il s'est form6e sur la question A d6cider.

Pour ces raisons qui sont, en substance, celles donn6es par M. le Juge Pratte, je maintiendrais l'appel avec d6pens tant en Cour d'Appel qu'en cette Cour et r6tablirais le dispositif du jugement de premibre instance.

J.:-The respondent sued the appellants for a declaration that against each of them, he was entitled to certain shares of the St. Maurice Knitting Mills Limited registered in their names. In the Superior Court the learned trial judge dismissed the action. The Court of Queen's Bench (Appeal Side)' allowed the appeal and maintained the action. The two unsuccessful shareholders now appeal to this Court.

The action was brought on an agreement dated August 3, 1949, between the respondent and the appellants. At that time these parties and four other persons each held 50 shares e. of the St. Maurice Knitting Mills Limited, a company incorporated by letters patent under Part I of the Quebec Companies Act. These shares congtituted all the issued capital stock of the company. The purpose of the agreement was to provide for the acquisition of 50 shares from one Frank Spain and the division of these shares among the parties. With these 50 shares divided among them the parties then had control of the company and they agreed, among other matters, to vote for their election to the Board of Directors; to ensure the election of the appellant Ringuet as president of the company, of the appellant Pag6 as vice-president and general manager, and of the respondent Bergeron as secretary-treasurer and assistant general manager of the company, all at stated and agreed salaries. They also agreed to vote unanimously at all meetings of the company and provided for a penalty for breach of the contract in the following terms:

Two or three months later the parties also purchased the shares of another shareholder Robert Sevigny and divided them among themselves in accordance with the agreement. On the completion of this purchase, there remained only five shareholders in the company: the two appellants, the respondent, the mis-en-cause Gerard Jean, and Z6non Bachand. On February 3, 1950, the three parties to the first agreement entered into another agreement and included in this one the mis-en-cause Gerard Jean. The purpose of this agreement was to provide for the admission of Gerard Jean into the controlling group and for the acquisition of the shares of Z6non Bachand, the last of the minority shareholders. Two shares were issued from the treasury and the total issued shares were equally divided among the four individuals with the result that each held 88 shares. The e.

contract of February 1950, to which Jean was a party, contains no provision corresponding to clause 12 of the con- J. tract of August 3, 1949. It does not purport to replace or alter the earlier contract, which remains in full force and effect.

From August 1949 to June 14, 1952 the three parties to the first contract observed its terms. There had during this period been certain increases in salary which were properly authorized and fixed by mutual consent. On June 14, 1952 the appellant Maurice Pag6, at a directors' meeting, began to take steps to oust the respondent from the management of the company, and at a shareholders' meeting held on July 21, 1952, the appellants and Jean voted themselves in as a new board of directors. The respondent says that he had no notice of this meeting and did not attend. He was not nominated and no votes were cast for his election as director of the company. The new board of directors held a meeting following the shareholders' meeting. Ringuet was elected president, Pag6 was elected vice-president and Jean, secretary-treasurer. The respondent was thus completely excluded from the management of the company. He brought his action alleging that the appellants in failing to vote for his election to the board of directors and in not ensuring that he be appointed assistant general manager and secretary-treasurer, had violated the contract of August 3, 1949, and that he was entitled to enforce the penalty provided in clause 12 of the agreement. He claimed a transfer of 88 shares from each defendant. The facts were admitted in the pleadings and the sole defence was that the contract was contrary to public order. TheSuperior Court rejected the action on the very narrow ground that- clause 12 had no application when one party was suing the other two. No opinion delivered in the Court of Queen's Bench accepted this interpretation of clause 12 and no attempt was made in this Court to support the judgment at trial on this ground. In the Court of Queen's Bench the learned Chief Justice and Mr. Justice Owen found for the respondent, with Mr. Justice Pratte dissenting. The Chief Justice found nothing illegal in the agreement and decided that it should be given its full effect. The ratio of the dissenting opinion is to be found in the distinction drawn between the rights of a shareholder and the obligations assumed on becoming a director. While majority sharee. holders may agree to vote their shares for certain purposes, they cannot by this agreement tie the hands of directors and compel them to exercise the power of management of the company in a particular way. This appears in the following extract from the reasons of Pratte J.:

There can be no objection to the general principle stated in this passage, but, in my view, it was not offended by this agreement. However, the conclusion of Pratte J. was that a director who has bound himself as this contract bound the parties has rendered himself incapable of doing what the law requires of him and that clause 11 requiring unanimity at all meetings had that effect. He also held that clause 11 was not severable and that therefore the agreement was invalidated in its entirety.

Owen J. agreed that the undertaking of unanimity at directors' meetings which he considered was required by clause 11 might be contrary to public order but that it was not necessary to decide this since the clause was severable from the other provisions of the agreement to which he gave full effect. The defendants had failed to comply with other clauses in the contract-the voting of Bergeron's salary, the election of Bergeron as a director of the company and his appointment as secretary-treasurer and assistant general manager.

The point of the appeal is therefore whether an agreement among a group of shareholders providing for the direction and control of a company in the circumstances of this case is contrary to public order, and whether it is open to the parties to establish whatever sanction they choose for a breach of such agreement.

Did the parties of this agreement tie their hands in their capacity as directors of the company so as to contravene the requirements of the Quebec Companies Act, which provides 80) that "the affairs of the company shall be managed J. by a board of not less than three directors"? I agree with the reasons of the learned Chief Justice that this agreement does not contravene this or any other section of the Quebec Companies Act. It is no more than an agreement among shareholders owning or proposing to own the majority of the issued shares of a company to unite upon a course of policy or action and upon the officers whom they will elect. There is nothing illegal or contrary to public order in an agreement for achieving these purposes. Shareholders have the right to combine their interests and voting powers to secure such control of a company and to ensure that the company will be managed by certain persons in a certain manner. This is a well-known, normal and legal contract and one which is frequently encountered in current practice and it makes no difference whether the objects sought are to be achieved by means of an agreement such as this or a voting trust. Such an arrangement is not prohibited either by law, by good morals or public order.

It is important to distinguish the present action, which is between contracting parties to an agreement for the voting of shares, from one brought by a minority shareholder demanding a certain standard of conduct from directors and majority shareholders. Nothing that can arise from this litigation and nothing that can be said about it can touch on that problem. The fact that this agreement may potentially involve detriment to the minority does not render it illegal and contrary to public order. If there is such injury, there is a remedy available to the minority shareholder who alleges a departure from the standards required of the majority shareholders and the directors. The possibility of such injurious effect on the minority is not a ground for illegality.

I think that this litigation can be decided on the simple ground that clause 11 has no reference to directors' meetings. Clause 11 refers to meetings of the company, that is, shareholders' meetings, and not to meetings of the board of directors. On this point I agree with the Chief Justice, who stated his opinion in the following terms:

Au surplus, y a-t-il quelque chose qui r6pugne h la loi, h 1'ordre public Judn J. et aux bonnes maeurs qu'un groupe d'actionnaires s'entendent pour contr8ler et diriger une compagnie, pour devenir ses administrateurs, ses principaux officiers? Il n'6tait strement pas besoin d'un contrat 6crit pour pareille entente qui intervient chaque jour dans le monde des compagnies, 6tant notoire qu'un grand nombre d'entre elles sont contr8l6es par un groupe d'actionnaires qui souvent mame ne repr6sentent pas la majorit6 des actions.

L'engagement des co-contractants h voter unanimement leurs actions dans les assemblies de la compagnie ne saurait lui-mime, A mon avis, 6tre invalide; aprbs tout, chacun des comparants n'a pas renonc6 A la d6liberation, h la discussion, au droit de faire triompher son opinion avant de se ranger A l'avis de la majorit& qui en principe doit gouverner. I have the greatest difficulty in seeing how any question of public order can arise in a private arrangement of this kind. The possibility of injury to a minority interest cannot raise it. If this were not so, every arrangement of this kind would involve judicial enquiry. Minority rights have the protection of the law without the necessity of invoking public order. This litigation is between shareholders of a closely held company. The agreement which the plaintiff seeks to enforce damages nobody except the unsuccessful party to the agreement. No public interest or illegality is involved.

I would dismiss the appeal with costs.

Appeal dismissed with costs, TASCHEREAU and FAUTEUX JJ. dissenting.