Sigounis c. Sigounis | Mar 18, 2022

Sigounis c. Sigounis

2022 QCCS 965

SUPERIOR COURT

(Commercial Division)

CANADA

PROVINCE OF QUÉBEC

DISTRICT OF MONTRÉAL

No.:

500-11-052150-170

DATE: March 18, 2022

_____________________________________________________________________

BY THE HONOURABLE MICHEL A. PINSONNAULT, J.S.C.

_____________________________________________________________________

DIMITRIOS (JIMMY) SIGOUNIS

Plaintiff

v.

NICOLAS (NICHOLAS) SIGOUNIS

and

ARGYRO SIGOUNIS

Defendants

and

ELENI MAKRIDIS (SIGOUNIS), ès qualités Liquidator of the Estate of the Late Nicolas

Sigounis and ès qualités designated Particular and Universal Legatee in virtue of the

Last Will and Testament of the Late Nicolas Sigounis and subject to the decision to

exercise an option with respect to the Estate of the Late Nicolas Sigounis

Defendant in Continuance of suit

and

AMALIA SIGOUNIS

and

114753 CANADA INC.

and

114754 CANADA INC.

and

136585 CANADA INC.

and

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PAGE: 2

CHENOY DELICATESSEN & STEAK HOUSE INC.

and

CHENOY DELICATESSEN & STEAK HOUSE (1976) LTD.

and

CHENOY FOOD NETWORK INC.

and

N.K.D.S. CONSULTANTS & INVESTMENTS INC.

Mises-en-cause

_____________________________________________________________________

JUDGMENT ON OPPRESSION REMEDY APPLICATION

(Sections 241 and following of the Canada Business Corporations Act and

Sections 450 and following of the Business Corporations Act (Québec))

_____________________________________________________________________

OVERVIEW

[1] Since 2017, the undersigned has been responsible for the case management of this

oppression remedy matter initiated by Plaintiff Mr. Dimitrios (Jimmy) Sigounis (“Jimmy¹”)

against his father Mr. Nicolas (Nicholas) Sigounis (“Nicolas”) and his sister Ms. Argyro

Sigounis (“Argyro”). They all hold various interests (direct or indirect) in the seven Mises-

en-cause corporations that will be described collectively as the “Chenoy Corporations”.

[2] Unfortunately, this case which tantamount, to all intents and purposes, to a major

family dispute, has been bogged down with multiple disagreements and conflicts that

generated countless motions on all sides thus preventing this commercial case from

progressing as quickly as it should have.

[3] Until now, the members of the Sigounis Family have not been able to resolve their

disagreements on an amicable basis. If anything, their family dispute has grown even

more acrimonious with the unfortunate passing of the patriarch Nicolas on August 29,

2020.

[4] On February 24, 2017, Jimmy filed an Originating Application for various forms of relief

and for liquidation and dissolution of corporations (the “Oppression Remedy

Application”) against his father and sister seeking various forms of relief and ultimately,

the liquidation and dissolution of the family owned Chenoy Corporations or what remains

of them.

¹The use of first or last names in the judgment is meant to lighten the text. It should not be construed as

a lack of respect for the individuals concerned.

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[5] Jimmy, holding a direct and indirect minority interest², contends that he has been the

object of oppressive manoeuvres and actions by his father Nicolas and his sister Argyro

to such an extent that there exists an irremediable conflict and impasse between himself,

his father and his sister who clearly hold diverging interests in the Chenoy Corporations,

more specifically, as it pertains to their management and operations.

[6] Under such circumstances, Jimmy believes that there are no more alternatives, and

effective or useful means to resolve the deadlock but to proceed with the liquidation and

dissolution of the Chenoy Companies, in order to sell their assets, satisfy their outstanding

debts and distribute the residuum among their shareholders.

[7] In April 2017, in response to Jimmy’s allegation in his lengthy Oppression Remedy

Application, Nicolas and Argyro filed a joint written contestation disputing his allegations

without providing any details. They added that since this was in part a family matter, they

did not wish to engage in a sterile debate over corporations, Mises-en-cause in the

present proceedings, which are either insolvable or worthless³.

[8] In that regard, Defendants were referring to the Mises-en-cause 114753 Canada Inc.

(“114753”), 114754 Canada Inc. (“114754”), 136585 Canada Inc. (“136585”), Chenoy

Food Network Inc. (“Chenoy Food Network”) and N.K.D.S. Consultants & Investments

Inc. (“NKDS”) who were, since some years already, all insolvable as defined under the

Bankruptcy and Insolvency Act⁴.

[9] The remaining two Mises-en-cause corporations offer a different perspective.

[10] Chenoy Delicatessen & Steak House (1976) Ltd. (“Chenoy DDO”) owns the real

estate property situated at 3616 Saint-Jean Boulevard, in Dollard-des-Ormeaux (the

“DDO Property”) and holds the shares of its wholly owned subsidiary, Chenoy

Delicatessen & Steak House Inc. (“DDO Restaurant”).

[11] DDO Restaurant leases the DDO Property from Chenoy DDO and has been

operating therein a 24-hour restaurant since the mid-1970s under the Chenoy’s banner.

[12] As a teenager, Argyro started working for DDO Restaurant, at her father’s

request, and has been working there ever since. She now manages the restaurant

operations.

[13] Notwithstanding their allegation that most of the Chenoy Corporations are

insolvent, Defendants Argyro and Nicolas concluded their Oral Defence by indicating their

2

The Court refers to a corporate chart of the Chenoy Corporations produced by Jimmy in support of his

proceedings, which is annexed to the present judgment for ease of reference.

³Paragraph 3 of Defendants’ Oral Defence of April 12, 2017.

⁴Paragraph 4 of Defendants’ Oral Defence of April 12, 2017.

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intention to purchase all of Jimmy’s shares in the Mises-en-cause at a value to be

determined by the Court on the basis of the evaluations provided by the parties.⁵

[14] Jimmy refuses to sell his shareholding interest in the Chenoy Corporations mainly

on the basis that the parties will never agree to a realistic value especially insofar as the

DDO Property is concerned, given that DDO Restaurant has been operating at a loss for

years. In his view, the only logical and equitable solution is the liquidation and dissolution

of all seven corporations.

[15] The Court understands that the following corporations are essentially inactive:

- 114753 (“Chenoy Laval”) used to own land and a building in Laval (the “Laval

Property”) that was leased to 114754 until its sale in 2015;

- 114754 operated a restaurant under the Chenoy’s banner (the “Laval

Restaurant”) until the sale of the Laval Property in 2015 at which time it also sold

the equipment used until then for the restaurant’s operations;

- Chenoy Food Network used to be the franchisor of franchise restaurants operating

under the Chenoy’s banner.

[16] NKDS owns a 33-acre real estate property in the Eastern Townships known as the

“Country House”. Everyone agrees that the property should be disposed of.

[17] 136585 is a holding company who owns, inter alia, 40% of Chenoy DDO.

[18] Chenoy DDO owns the DDO Property and leases the same to DDO Restaurant.

[19] DDO Restaurant actually operates a restaurant under the Chenoy’s banner in the

DDO Property.

[20]

The Chenoy’s restaurant operated by the DDO Restaurant was the first restaurant

founded by Nicolas and is now the last of more than a dozen restaurants chain that used

to operate under the Chenoy’s banner.

[21] For years, the Chenoy Corporations have been struggling financially to stay

financially afloat.

[22] The central issue with respect to Jimmy’s proposed liquidation and dissolution of

the Chenoy Corporations is twofold:

⁵Paragraph 6 of Defendants’ Oral Defence of April 12, 2017:

6. The Defendants agree and undertake to purchase all of Plaintiff’s shares in the Mises-en-cause at a

value to be determined by this Honorable Court on the basis of the evaluations provided by the parties;

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- Argyro wants to keep the DDO Restaurant intact and continue to operate the

same as she claims that her father always told her that it would be hers thus

implying that it would be given to her;

- However, the land belonging to Chenoy DDO upon which the restaurant is built

on Saint-Jean Boulevard is apparently worth millions of dollars, far more than

the value of the building housing the restaurant and the value of the commercial

business conducted therein, which according to Jimmy, has been losing money

for years.

[23] Jimmy believes that the dissolution and liquidation of DDO Chenoy with the sale

of the Chenoy Property should yield sale proceeds that exceed by far the value of the

restaurant business and of the relatively old building which, in all likelihood, may have to

be demolished given the significant size of the lot and its prime commercial location on

Saint-Jean Boulevard.

[24] In short, the liquidation and dissolution of all Chenoy Corporations would ensure

the disposition of all remaining corporate assets followed with the orderly distribution of

the liquidation proceeds to their creditors with any residuum to the shareholders whoever

they may be.

[25] On the other hand, as proposed by herself and her father in their Oral Defence, by

ordering the buy-out of Jimmy’s interest in the Chenoy Corporations, it would enable

Argyro to keep DDO Restaurant operating without any further “interference” from her

brother.

[26] However, the present exercise would likely be moot should the Court retain the

expert evidence produced by Argyro that was adduced at trial proposing that Jimmy

should not be entitled to receive any sums of money for his shares given his alleged level

of indebtedness to the Chenoy Corporations either personally or via his own corporations.

[27] Jimmy argued that, under the present circumstances, Defendants’ proposed

outcome is not realistic nor acceptable as it would only maintain the status quo to his

detriment and to the detriment of the other members of the Sigounis family, who also have

an interest as co-shareholders or purported co-shareholders of the Chenoy Corporations

including in the holding company 136585 who owns 40% of Chenoy DDO who in turn

owns 100% of DDO Restaurant.

[28] In a nutshell, the Court is called upon to determine, in light of Jimmy’s proven

allegations of oppression that are contested by Argyro, whether the liquidation and

dissolution of the seven Chenoy Corporations or anyone thereof should be ordered or

should the Court favour instead Argyro’s offer to purchase Jimmy’s interests in the

Chenoy Corporations.

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[29] Under the latter circumstance, the Court would have to determine the fair market

value of Jimmy’s shareholding interest which would also imply determining the date of

reference to establish such a value.

[30] However, for the reasons that follow, in the presence of repeated acts of blatant

oppression by:

- Nicolas who acted as if he was the sole shareholder and director of all Chenoy

Corporations with total disregard for the interest of Jimmy as a minority

shareholder and even as co-director; and by

- Argyro who by following blindly the instructions of her father that suited her very

well, thus placing herself in a situation of conflict of interests, demonstrated a total

indifference or her complete ignorance of her fiduciary duties as director of the

Chenoy Corporations, again with outright disregard for the interest of Jimmy as a

minority shareholder and even as co-director;

the Court can only come to one sensible, logical and equitable conclusion namely

that, to the exception of DDO Restaurant, the other six Chenoy Corporations all governed

by the CBCA must be liquidated and dissolved in order to initiate the realization of their

remaining assets with a Court-appointed Liquidator who shall then proceed, under the

Court’s supervision, to the orderly distribution of the realization proceeds.

[31] The foregoing does not necessarily imply that DDO Restaurant should not be also

liquidated and dissolved since the DDO Property is owned by Chenoy DDO that is to be

liquidated and dissolved, bearing in mind that the latter also owns 100% of the shares of

DDO Restaurant that should be disposed of as a result therefrom.

[32] However, given the fact that DDO Restaurant, Chenoy DDO wholly owned

subsidiary, is still in operation and given its questionable financial situation and profitability

as it will be more fully discussed hereafter, the Court finds it more prudent to seek the

opinion and recommendation of the Liquidator to be appointed pursuant to the present

judgment before making a final determination with respect to DDO Restaurant.

CONTEXT

THE SHAREHOLDING OF THE CHENOY CORPORATIONS

[33] As it will be discussed further later, ordering the buy-out of Jimmy’s interest in the

Chenoy Corporations will not resolve all the outstanding issues between the members of

the Sigounis Family in connection with those family-owned corporations.

[34] Jimmy is not the only one to hold interest, direct or indirect, in NKDS, 136585,

Chenoy DDO and in DDO Restaurant, in particular.

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[35] Given the number of corporations involved, as previously indicated, a corporate

chart prepared by Jimmy is annexed to the present judgment for a better visualization and

understanding of their respective shareholding.

[36] According to Jimmy, at the time of the filing of the Oppression Remedy Application,

the shareholding was as follows with the proviso that Argyro is disputing certain of the

percentages attributed to Jimmy in said chart⁶. The Court shall deal with that particular

issue later.

The shareholding in 136585 Canada Inc.

[37] At the time that the present legal proceedings were instituted, 136585 was held by

Nicolas (20%) and his three children Jimmy (40%), Argyro (20%) and Ms. Amalia

Sigounis (“Amalia”) (20%).

[38] Argyro is disputing Jimmy 40% shareholding in 136585 claiming that he only holds

a 30% interest with the same percentage being held by her father Nicolas instead of 20%.

[39] At all relevant times, Nicolas, Argyro and Jimmy were the directors of 136585.

The shareholding in Chenoy DDO

[40] At the time that the present legal proceedings were instituted, Nicolas personally

held 60% of the shares of Chenoy DDO.

[41] The other 40% is held by the holding company 136585 through which Jimmy

derives his own interest.

[42] At all relevant times, Nicolas, Argyro and Jimmy were the directors of Chenoy

DDO.

The shareholding in DDO Restaurant

[43] DDO Restaurant is the wholly owned subsidiary of Chenoy DDO.

[44] At all relevant times, Nicolas, Argyro and Jimmy were the directors of DDO

Restaurant until Jimmy resigned as director in 2016 after discovering irregularities in the

handling of the GST/QST.

[45] Jimmy testified that his resignation was provoked by his discovery via the

accountant of DDO Restaurant that the restaurant was issuing fictitious invoices to offset

the GST/QST due to the tax authorities. He was nevertheless told not to worry as director

⁶The Court shall use the present tense when the shareholding of a corporation has not changed since the

filing of the Oppression Remedy Application in 2017.

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because Argyro would look after it if the ARQ reacted adversely. Jimmy did not want to

take any chance in that respect.

[46] The Court can appreciate Jimmy’s reacting with caution given his personal liability

to the ARQ was triggered for unpaid taxes as director of 114753 who used to own the

Laval Property.

[47] DDO Restaurant owns 50% of the shares of Chenoy Food Network.

The shareholding in Chenoy Food Network

[48] Chenoy Food Network was the franchisor of the franchise restaurants operating

under the Chenoy’s banner.

[49] The remaining 50% shares in Chenoy Food Network are held by 114754 who used

to operate the Laval Restaurant.

[50] At all relevant times, the directors of Chenoy Food Network were Argyro and

Jimmy.

The shareholding in 114754 Canada Inc.

[51] 114754 was held by 136585 (40%) and by Nicolas personally (60%).

[52] Until the sale of its movable assets (restaurant equipment) in July 2015⁷, 114754

operated the Laval Restaurant under the Chenoy’s banner at the Laval Property situated

at 355, Boulevard Curé-Labelle in Laval.

[53] 114754 leased the Laval Property from 114753.

[54] At all relevant times, the directors were Nicolas and Jimmy. Argyro testified that

she was a director of 113753 and 113754 until July 14, 2015, when the consultant hired

by her father told her to resign, which ultimately left her brother Jimmy to deal with the tax

liabilities of those two corporations.

The shareholding in 114753 Canada Inc.

[55] Until the sale of July 13, 2015⁸, 114753 owned the Laval Property situated at 355,

Boulevard Curé-Labelle in Laval and leased the same to 114754 to operate the Laval

Restaurant.

[56] The directors were Nicolas and Jimmy, Argyro having resigned on the following

day July 14, 2015, to avoid tax liabilities resulting from the sale.

⁷CP-8A.

⁸CP-8B.

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The shareholding in N.K.D.S. Consultants & Investments Inc.

PAGE: 9

[57] Jimmy and his father owned the shares issued by NKDS in the respective ratio of

25% and 75%.

[58] Following the Costas Buy-out (as defined hereafter) and pursuant to the

Acknowledgment⁹(as defined hereafter), Jimmy claimed that he became a shareholder

of NKDS with 33^1/3% from 25% and his father owning 66^2/3% from 75%.

[59] At all relevant times, Nicolas, Argyro and Jimmy were the directors of NKDS.

[60] NKDS owns the 33-acre Country House in the Eastern Townships that should be

sold, an outcome that does not constitute an issue herein.

THE PASSING OF NICOLAS, THE PREVIOUS TRANSFER OF HIS SHARES

TO HIS DAUGHTER ARGYRO IN DECEMBER 2019 AND HER MOTHER

ELENI’S INVOLVEMENT IN THE PRESENT LITIGATION

[61] This case is further complicated by the following additional facts and events that

occurred after the filing of the Oppression Remedy Application.

[62] From the outset of the present proceedings, Nicolas, as co-defendant, sided with

and supported the position of his daughter Argyro, preferring a buy-out of Jimmy’s interest

as opposed to liquidating and dissolving the Chenoy Corporations, hence their joint Oral

Defence.

[63] Around 2002, Nicolas suffered a serious health issue that ultimately, kept him

significantly incapacitated physically. Over the following years, his health deteriorated

essentially confining him at home with his wife Eleni.

[64] Argyro started assuming a greater role in the management and in the defence of

the present proceedings, but always under the guidance and directions of her father.

[65] Nicolas passed away on August 29, 2020, which caused his widow Madam Eleni

Makridis Sigounis (“Eleni”) to file on January 7, 2021, a Notice of Continuance of suit in

her capacity as Liquidator (“Liquidator”) of her late husband’s Estate (the “Estate”)

pursuant to Article 200 of the Code of civil procedure (“C.c.p.”), which incidentally, was

not opposed by Argyro nor by Jimmy.

[66] To compound the already complicated relations among the Sigounis family

members, the passing of the patriarch Nicolas has further entangled this family saga when

his widow Eleni, not only as Liquidator of the Estate but also as her husband’s universal

legatee in virtue of his Last Will and Testament¹⁰(“Universal Legatee”), realized with the

⁹P-26.

¹⁰DIC-1.

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assistance of counsel that the Estate was, to all intents and purposes, insolvent as a

result of a recent transaction in virtue of which Nicolas transferred to his daughter Argyro

his most valuable assets, namely his entire shareholding in the Chenoy Corporations,

leaving his wife with no money to satisfy the significant debts and liabilities of her late

husband.

[67] Even in her capacity as Defendant in continuance of suit as Liquidator (“DICS¹¹

Eleni”), Argyro refused to provide her mother any of the documentation evidencing the

alleged transfer to her of the shares that her father held in the Chenoy Corporations (the

“Shares”).

[68] On March 12, 2021, Argyro’s refusal left the Court with no other alternative but to

order her to produce the documentation evidencing the transaction that took place

between her father and herself. Argyro via her then lawyer not only steadfastly objected

to produce said information and documentation to her mother Eleni despite the fact that

she was the Liquidator and Universal Legatee of her late husband, but also to her brother

Jimmy as Plaintiff who had sued his father in the present instance as a shareholder and

director.

[69] In compliance with the March 12, 2021, Order, Argyro’s counsel at the time,

namely, M^treDavid Rosenzveig¹², finally communicated to the counsel for DICS Eleni the

following documents:

a. Document entitled “Confirmation Share Transfer Between Sigounis Nicholas

and Sigounis Argyro” dated December 8, 2019 (“Confirmation #1”);¹³

b. Document entitled “Confirmation Share, Advances and Other Agreements

Between Sigounis Nicholas and Sigounis Argyro” also dated December 8, 2019

(“Confirmation #2”)¹⁴.

[Confirmation #1 and Confirmation #2 to be referred to collectively hereinafter as

the “Confirmations”]

[70] At trial, it was disclosed that Argyro proceeded unilaterally to make on her own all

the modifications with the Registraire des entreprises du Québec (“REQ”) to reflect the

situation following the transfer of the Shares, without informing Jimmy or seeking his

consent as director of the corporations affected by such transfer.

[71] With the Confirmations finally on hand, Plaintiff Jimmy and DICS Eleni with the

assistance of her counsel, discovered that a few months before his passing, Nicolas had

transferred to his daughter Argyro all the Shares that he held in the Chenoy Corporations

¹¹Defendant In Continuance of Suit (DICS).

¹²M^treRosenzveig was substituted shortly thereafter.

¹³DIC-8A.

¹⁴DIC-8B.

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for a consideration that, in the opinion of Jimmy and of DICS Eleni, was significantly below

their fair market value.

[72] The Shares held until then by Nicolas gave him, inter alia, an overall 68% to 72%

interest in 136585 and DDO Chenoy (DDO Property) and a 66^2/3% to 75% interest in

NKDS¹⁵.

[73] They also concluded that Argyro failed to pay the declared consideration in the

Confirmations for the Shares as the necessary corporate resolutions were never passed

at the time and that in so doing, the Late Nicolas also transferred to Argyro certain shares

that he held for the benefit of his son Jimmy, which constituted in the latter’s view, another

act of oppression against him.

[74] DICS Eleni’s further investigation of the Estate affairs with the assistance of

counsel revealed the existence of several unresolved lawsuits involving the Late Nicolas

thus exposing the Estate to significant potential liabilities that could not be honoured

without the liquidation proceeds of the Shares that were transferred to his daughter Argyro

a few months before his passing.

[75] DICS Eleni’s counsel argued that with those Shares, the Late Nicolas was to all

intents and purposes, directly and indirectly, the main or controlling shareholder of the

Chenoy Corporations and as such his Shares were his most important assets that were

to provide, inter alia, some security to his wife after his passing. His daughter Argyro could

not ignore that the transfer of the Shares that occurred allegedly on December 8, 2019,

rendered her father the Late Nicolas insolvent under such circumstances. In other words,

with the assistance of his daughter, Nicolas also ensured that he would become

“judgment proof” vis-à-vis the ongoing lawsuits against him.

[76] At trial, Argyro admitted knowing about his father’s financial situation at the time of

the transfer of his Shares. He wanted to protect himself because of the ongoing lawsuits

against him. He told me what to do.

[77] Argyro added that her father told her that by transferring his Shares to her, his

creditors would not be able to collect.

[78] However, as incredible as it may seem, despite being aware of the lawsuits against

her father, Argyro pointed out that at no time did she understand that her father was facing

serious indebtedness.

¹⁵Depending on whether Jimmy holds 30% or 40% of the shares issued in 136585 following the

execution of the Acknowledgment by his father in the context of the Costas Buy-out (kindly refer below to

section 3.8 The Costas Buy-out of February 2016).

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[79] When confronted with the fact that the only asset of real value left was the DDO

Property, without it her mother could not contemplate settling her late husband’s debts,

leaving a totally insolvent Estate, Argyro claimed that I never thought of it. I don’t know.

[80] Although she benefitted from the proceeds of one life insurance policy, DICS Eleni

was facing a serious predicament for a person who always believed that her late husband

had taken the necessary steps to ensure her financial security after his passing. Even her

personal residence has been heavily mortgaged ($760,000¹⁶) before her husband’s

passing to cover, inter alia, a variety of debts and liabilities linked to the Chenoy

Corporations.

[81] Without the Court expressing any opinion at this juncture on the validity, the legality

and the opposability of the Confirmations evidencing the December 8, 2019, transfer of

the Shares to his daughter Argyro, DICS Eleni who is not only the Liquidator of the Estate

but also the Universal Legatee, also realized that she was not in a position to properly

deliberate and exercise the option to accept the succession of her late husband with the

significant risks presently associated with an insolvent Estate.

[82] On February 17, 2021, Justice Hélène Langlois granted Eleni’s Application and

ordered the suspension of the six-month delay to deliberate and exercise the option with

respect to the Estate¹⁷.

[83] Justice Langlois also ordered that suspension shall remain in force and effect until

a final judgment is rendered in the present Superior Court dossier bearing number 500-

11-052150-170 and in the Superior Court dossier bearing number 500-17-111490-200

which is a lawsuit instituted by Jimmy before Nicolas’ passing claiming from his father

$190,975.13 in connection with a guarantee the he granted to Nesbitt Burns on behalf of

his father to cover his investment portfolio (the “Nesbitt Burns Lawsuit”). As Nicolas was

in default to pay to Nesbitt Burns the said sum of money, the same was debited from

Jimmy’s own investment portfolio as he had guaranteed his father’s obligations to Nesbitt

Burns.

[84] Since then, DICS Eleni amended her Notice of Continuance of suit claiming to act

herein not only in her capacity as Liquidator but also in her capacity as Universal Legatee

who has not yet opted for the reasons stated above.

[85] DICS Eleni also filed a written Defense as well as a Cross-Application as

Defendant in continuance of suit of the Late Nicolas with conclusions against Argyro

seeking, inter alia and with Jimmy’s support, the cancellation of the Confirmations, and

the appointment of a liquidator to NKDS, 136585 and Chenoy DDO who hold interest in

the remaining real estate assets of the Chenoy Corporations, in order to put up for sale

the Country House and the DDO Property.

¹⁶P-25.

¹⁷DIC-6.

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[86] Although DICS Eleni is not seeking the liquidation and dissolution of all seven

Chenoy Corporations¹⁸, in contrast with Defendant Nicolas’s initial joint Oral Defence with

Argyro, DICS Eleni is essentially in agreement with her son Jimmy’s proposed relief

sought in that regard given that she now has the duty to liquidate the Estate. Should she

successfully retrieve the Shares of her late husband, the same would have to be disposed

of in order to satisfy the debts and liabilities of the deceased.

[87] In other words, despite his mother’s precarious standing in the present

proceedings, Jimmy is no longer the only one seeking the liquidation and dissolution of

the Chenoy Corporations, in whole or in part.

[88] DICS Eleni’s counsel argued that should her late husband’s Shares revert back to

the Estate, the only sensible and equitable solution available to his client was to liquidate

and dissolve 163685, DDO Chenoy (DDO Property) and NKDS (Country House) in order

to dispose of the remaining real estate assets that are of significant value and that would

enable Eleni as Liquidator to address and deal with her late husband’s debts and

liabilities.

[89] DICS Eleni’s counsel added that under such a scenario, given the exceptional

value of the DDO Property in particular, the prospects that the Estate would likely

generate a surplus in favour of his client in her capacity as Universal Legatee were

reasonably good.

[90] During her testimony, Eleni confirmed that position indicating that she also wanted

that her share of the net realization proceeds¹⁹of those remaining assets be ultimately

shared equally between her three children.

[91] In addition to her Defense and Cross-Application, DICS Eleni filed on May 31,

2021, a Declaration of Intervention of Defendant in continuance of suit (the

“Intervention”) pursuant to article 185²⁰C.c.p. in virtue of which she is seeking:

- A judicial declaration that the Confirmations both dated December 8, 2019, are

cancelled, null and void and unopposable against her;

- A judicial confirmation that:

o DICS Eleni holds a 60% shareholding interest in Chenoy DDO;

- A judicial confirmation that:

¹⁸The Court understands that 114753, 114754 and Chenoy Food Network are inactive and insolvent.

¹⁹After her late husband’s debts and liabilities have been settled.

²⁰185. Voluntary intervention is termed aggressive when the third person seeks to be acknowledged as

having, against the parties or one of them, a right which is in dispute. It is termed conservatory when the

third person wishes to be substituted for one of the parties in order to represent it, or to be joined with one

of the parties in order to assist it or support its claims. A third person is said to intervene as a friend of the

court when seeking only to participate in argument during the trial.

A third person who intervenes for aggressive or conservatory purposes becomes a party to the proceeding.

500-11-052150-170

o 136585 owns a 40% shareholding interest in Chenoy DDO;

PAGE: 14

o Plaintiff Jimmy owns a 40% shareholding interest in 136585;

o DICS Eleni owns a 20% shareholding interest in 136585;

o Defendant Argyro owns a 20% shareholding interest in 136585; and

o Mise-en-Cause Amalia owns a 20% shareholding interest in 136585.

- A judicial confirmation that:

o DICS Eleni owns a 66^2/3% shareholding interest in NKDS; and

o Plaintiff Jimmy owns a 33^1/3% shareholding interest in NKDS;

- Authorization to mandate a Certified Real Estate Broker to sell the immovable

properties belonging to Chenoy DDO and to NKDS for a price commensurate

with their fair market value; and

- An order to join her Declaration of Intervention together with the Oppression

Remedy Application which was fixed for proof and hearing on the merits

commencing on October 13, 2021.

[92] Although more detailed, the conclusions of the Intervention are essentially the

same ones found in DICS Eleni’s Defense and Cross-Application.

[93] On June 30, 2021, Jimmy instituted a Paulian Action²¹against his sister Argyro

and his mother Eleni in her capacity as Liquidator of the Estate of his father the Late

Nicolas.

[94] With his Paulian Action, Jimmy is seeking a declaration that the Confirmations may

not be set up against him and are not opposable to him.

[95] Jimmy is also asking for a declaration of nullity of the transfer of 8.33 shares of the

capital stock of NKDS and 100 shares of the capital stock of 136585 that were likely part

of the transaction of December 8, 2019, between Nicolas and Argyro pursuant to the

Confirmations.

[96] Jimmy and DICS Eleni sought that the Intervention, the Cross-Application and the

Paulian Action be joined to the Oppression Remedy Application and be heard and

disposed of at the same hearing that was scheduled to commence on October 13, 2021.

[97] Argyro contested said applications to join the Paulian Action and the Intervention

as well as DICS Eleni’s legal interest and capacity to file the Cross-Application and the

Intervention.

[98] Argyro also disputed the jurisdiction of the Court to hear the matters and the issues

raised in the Cross-Application and in the Intervention with respect to the Confirmations

²¹500-17-117432-214 (the “Paulian Action”).

500-11-052150-170

PAGE: 15

and the Shares of the Late Nicolas given the arbitration clauses found in the

Confirmations.

[99] Needless to say, this protracted family saga that has been unfolding for some five

years, cannot reach a much-needed complete resolution with a judgment ordering the

liquidation and dissolution of the Chenoy Corporations, as it will not completely settle the

issue of the transfer of Nicolas Shares to Argyro raised by Eleni, who claims to be the

rightful owner of said Shares as Universal Legatee.

[100] Be that as it may, on October 6, 2021, the Court rendered the following judgment:

[141] DISMISSES the Application of Defendant Argyro Sigounis to dismiss the

Amended Defense and Cross-Application of Defendant in Continuance of suit, and

to dismiss the Declaration of Intervention of Defendant in Continuance of suit dated

August 2, 2021;

[142] DISMISSES the Modified Application of Defendant Argyro Sigounis to refer

the parties to arbitration dated July 14, 2021;

[143] DECLARES that Defendant in Continuance of suit Eleni Makridis (Sigounis)

ès qualités designated Particular and Universal Legatee in virtue of the Last Will

and Testament of the Late Nicolas Sigounis and subject to the decision to exercise

an option with respect to the Estate of the Late Nicolas Sigounis, has the sufficient

interest to intervene in the present instance in that capacity in addition to her

capacity as Liquidator of the Estate of the Late Nicolas Sigounis;

[144] DECLARES that Defendant in Continuance of suit Eleni Makridis (Sigounis)

ès qualités designated Particular and Universal Legatee in virtue of the Last Will

and Testament of the Late Nicolas Sigounis and subject to the decision to exercise

an option with respect to the Estate of the Late Nicolas Sigounis, can validly file

the Re-Amended Defense and Cross-Application of Defendant in Continuance of

suit dated August 11, 2021, as well as the Amended Declaration of Intervention of

Defendant in Continuance of suit dated August 11, 2021, which for the purposes

hereof shall be considered as one and the same with the Re-Amended Defense

and Cross-Application given their similar allegations and conclusions;

[145] To the extent necessary, ORDERS the joinder of the Amended Declaration

of Intervention together with the Introductory Application in the present instance to

be heard on the merits commencing on the October 13, 2021;

[146] ORDERS the joinder of the Paulian Action in case bearing number 500-17-

117432-214 together with the Introductory Application in the present instance to

be heard on the merits commencing on the October 13, 2021;

[147] CALLS upon the parties’ counsels to attend a virtual preparatory conference

on Friday, October 8, 2021, at 9 a.m. with coordinates to be provided

subsequently;

500-11-052150-170

PAGE: 16

[148] ORDERS the provisional execution of the present Judgment notwithstanding

appeal therefrom;²²

[101] On October 8, 2021, the Court also ruled as follows with respect to the trial

scheduled to commence on October 13, 2021:

Le Tribunal CONCLUT que le procès débutera par le recours en oppression qui

est la requête initiale (# 1), suivis de la contestation et demande reconventionnelle

de Mme Argyros Sigounis (# 64) qu’il considère être à l’intérieur du débat soulevé

par la demande principale en oppression.

[102] In other words, the Court would deal with the other issues raised in the Cross-

Application/Intervention and in the Paulian Action in a separate hearing to be held at an

undetermined date depending on the outcome of the Oppression Remedy Application.

[103] The order to proceed to the liquidation and dissolution of the Chenoy Corporations

will allow the Court to deal with the aforesaid outstanding issues during the liquidation

process in order to enable the Court-appointed Liquidator to remit the net realization

proceeds to their rightful holders or beneficiaries.

THE ACTS OF OPPRESSION RAISED BY PLAINTIFF JIMMY

Preliminary comment

[104] As a preliminary comment, the Court has already mentioned that Jimmy was the

object of blatant acts of oppression by his father and sister.

[105] The Court noted that the corporate documentation for the family owned, and

family-run corporations was the least of the preoccupations of Nicolas and of Argyro who

did not hesitate to raise the absence of the necessary resolutions or documentation

against her brother when it suited her purposes at trial.

[106] Be that as it may, the operation and management of the Chenoy Corporations in

such an informal and loose manner may have suited everyone’s purpose while all of the

Sigounis family members were in agreement and were entertaining cordial relations.

[107] However, with the severe discord developing between the family members who

held shareholders’ interest in the Chenoy Corporation, the previous conduct of loose

management did not confer upon Nicolas and Argyro as directors the licence or the right

to carry on in the same manner and act in an oppressive or an unfairly prejudicial manner

towards a minority shareholder who happened to be also a co-director of those

corporations.

²²2021 QCCS 4185.

500-11-052150-170

PAGE: 17

[108] Being aware of their disagreements with Jimmy, Nicolas and Argyro could not

simply act as if Jimmy was no longer a co-director with them and make crucial corporate

decisions in his absence and without his knowledge and consent.

[109] With all due respect, Nicolas may have been the founder of the group of Chenoy

Corporations, but he decided at one point to operate his business in a corporate

environment. Such an environment certainly provided significant advantages to the

shareholders, but it also came with obligations and duties especially for the directors.

[110] Nicolas and Argyro breached on several occasions their fiduciary duty as directors

to the detriment of Jimmy as co-director and minority shareholder. With respect to Nicolas,

there are instances where with the assistance and complicity of Argyro, he gave

instructions to Chenoy’s corporate counsel without the directors’ approval and knowledge

on the basis that he was the controlling shareholder.

[111] Under such circumstances, as frustrating as it may have been for him, Nicolas

could not act and decide as if he was the sole shareholder and director.

[112] With respect to Argyro, claiming to be unfamiliar with or unaware of her fiduciary

duty as director cannot be set up as a defence nor could she successfully invoke the fact

that her actions were always dictated by her father as she was executing his will by

carrying out his instructions.

Jimmy Sigounis’ call for restructuring the Chenoy Corporations

[113] Jimmy, the son of Nicolas and Eleni, is a businessman who is involved in the food

industry via his principal venture Mello Foods Inc. (“Mello”). His shares in Mello came

from his father many years ago.

[114] At all relevant times, Nicolas no longer had any interest in Mello who was supplying

meat products to the Chenoy’s restaurants over the years until the breakdown in their

relationship.

[115] Although he was not directly involved in the operations of the Chenoy’s

restaurants, Jimmy nevertheless kept a direct and indirect interest in several of the

Chenoy Corporations and sat on most if not all of their board of directors.

[116] With his father’s failing health, he responded to his every call for assistance until

their relationship soured.

[117] On September 21, 2012, Jimmy proposed a restructuring plan for Chenoy

Corporations to his father Nicolas, his two sisters Argyro and Amalia and to his uncle

Costas (Costa) Sigounis (“Costas”) pursuant to which he also proposed to assume the

leadership of the corporations to bring them back to profitability:

500-11-052150-170

PAGE: 18

Being at the crossroad, I believe that it is important to know where we come from,

where were we as a group, where are we now and where we need to go!

For many years, the “Chenoy’s” concept was profitable, and it was supported by a

solid balance sheet. The strength of the leader (Nick) with his team, guided by his

vision of business brought the concept to a certain level up to the moment that his

health started to deteriorate.

Unfortunately, when that occurred, there was no backup plan in place, and we are

where we are today; in a nonprofitable situation and all divided. Figures speak by

themselves and there is no shame to say that the system that Nick has built over

the years is now today a total failure.

There is no franchise system in place; there is no more consistency toward over

services, quality, advertising, and image, policies etc... and most important of all,

no positive results! All corporate stores had drifted away from what a franchise

system is all about!

We must all realize and understand that a restructuration must take place now and

if we refuse to face this reality on a timely matter, by appointing a new leader who

will oversee ALL operations, we will suffer the consequence and there will be

severe collateral damages.²³

[Emphasis added]

[118] In retrospect, Jimmy’s assessment of the situation at the time and his

apprehensions in the absence of a sound restructuring plan, unfortunately proved to be

right.

The Costas Sigounis oppression remedy lawsuit and the closing of the

Brossard and Laval Restaurants

[119] By the end of 2013, nothing had changed.

[120] As previously mentioned, 114753 owned the Laval Property that was leased to

114754 who operated the Laval Restaurant.

[121] Nicolas’ brother, Costas was handling the management and operations of that

restaurant.

[122] Following a falling out with his brother Nicolas, Costas who wanted to withdraw

from the Chenoy Corporations, instituted on November 8, 2013, oppression remedy

proceedings in November 2013 essentially seeking the liquidation and dissolution of the

same²⁴.

²³CP-01.

²⁴500-11-045606-130 (the “Costas Oppression Lawsuit”).

500-11-052150-170

PAGE: 19

[123] The case was ultimately settled out of court in the following context.

The Costas Agreement of December 5, 2013

[124] On December 5, 2013, a Memorandum of Agreement was entered into between

Costas, Nicolas, Jimmy, Chenoy DDO, DDO Restaurant, 114753 (Laval property),

114754 (Laval Restaurant) and NKDS²⁵(the “Costas Agreement”).

[125] The Costas Agreement was reached following meetings that involved the Sigounis

family members and their lawyers including Argyro and Amalia. It confirmed and

evidenced the parties’ agreement that it constituted a transaction that could be

homologated by the Court.²⁶

[126] Jimmy explained that, year after year, the Chenoy’s restaurants were losing

money. They had to mortgage their remaining real estate properties to replenish the

companies’ cashflow. As their businesses were no longer profitable, the Costas

Agreement evidenced their collective will and decision to liquidate the Chenoy

Corporations instead of spending money in court to contest Costas Oppression Lawsuit.

[127] The main purpose of the Costas Agreement was to agree on an orderly winding

up of the affairs and operations of the Chenoy Corporations which involved, inter alia, the

liquidation of the assets of Chenoy DDO (DDO Property), DDO Restaurant, Chenoy Food

Network, 114753 (Laval Property), 114754 (Laval Restaurant), NKDS (Country House)

and the holding company 136585.

[128] This agreed upon outcome would ensure that together, with all the other interested

shareholders, Costas would receive his share of the net liquidation proceeds

commensurate to his then shareholding interest.

[129] The parties also agreed to mandate a real estate broker to sell the Laval Property

and the DDO Property and ultimately close the two restaurants.²⁷Any and all Sigounis

family members were free to make offers to acquire any of the said properties should they

so desire.²⁸

[130] The parties also agreed to sell the Country House owned by NKDS with an asking

price of $500,000 and a minimum selling price of $450,000.²⁹

²⁵P-2.

²⁶Clause 7 of the Costas Agreement.

²⁷Clause 5a) of the Costas Agreement.

²⁸Ibid.

²⁹Ibid., clause 5g).

500-11-052150-170

The failed attempts to sell the DDO Property in 2014

PAGE: 20

[131] In furtherance of the Costas Agreement, the DDO Property was put up for sale³⁰.

Jimmy pointed out that offers were received in March 2014 and that they came close to

making a deal with a $2.8M offer payable in full without any conditional financing³¹, but

Nicolas refused to give his consent.

[132] The Court understands that Jimmy as a director of Chenoy DDO was unaware at

the time of two other offers made by his sister to her father to purchase the DDO Property.

It is not clear whether Nicolas ever accepted those offers.

[133] On February 5, 2014, Argyro offered to purchase the DDO Property from Chenoy

DDO for an amount of $2.4M without making any deposit.³²Argyro was proposing to pay

the purchase price of $2.4M with a “down payment” of $912,000 at closing, being a

contribution of Nick Sigounis to Argy Sigounis for the share of the Property as always

promised. Nine Hundred and Twelve thousand dollar ($912,000).³³

[134] The offer was also subject:

- to obtaining a hypothecary financing of $525,000; and

- to Chenoy DDO accepting a balance-of-sale price of $963,000 payable in five

years; and

- Argy S. will redeem her share or deemed held shares in both companies at DDO

(i.e. the building and operating company).³⁴

[135] On February 28, 2014, Argyro made another offer to Chenoy DDO in the amount

of $2.7M again without any deposit, payable with $945,000 at closing and subject to a

hypothecary financing of $1,755,000.³⁵

[136] Offers from third parties were also received for the DDO Property in March 2014

with prices ranging from $1.9M to $2.8M³⁶as previously mentioned.

[137] The Court is unaware of other attempts to sell the DDO Property in 2014. However,

other offers were received in late 2016 as it will be more fully discussed later.

³⁰CP-21.

³¹P-32, pages 34-47.

³²Ibid., pages 11-19.

³³Ibid., page 18.

³⁴Ibid., page 22.

³⁵Ibid., pages 24-32

³⁶P-32.

500-11-052150-170

PAGE: 21

The sale of the Laval Property and the equipment of the Laval

Restaurant in 2015.

[138] In accordance with the Costas Agreement, the efforts to find a buyer for the Laval

Property were more fruitful.

[139] On July 13, 2015, 114753 sold the Laval Property for $2M³⁷and 114754 sold the

equipment of its restaurant for $200,000³⁸.

[140] The net proceeds of $1,674,100 were deposited in a trust account controlled by

lawyer Denis Kounadis (“Kounadis”) who, at all relevant times, acted as corporate

counsel for the Chenoy Corporations.

[141] The sizable profit induced Nicolas to use the net proceeds to cover various debts

thus raising Jimmy’s serious concerns about holding unto sufficient funds to cover all tax

liabilities stemming from the sales, bearing in mind that Jimmy and his father were the

sole remaining directors of both corporations that they had just sold all of their respective

assets. Argyro had resigned as director of both corporations on July 14^th,the day following

the completion of the sales in question to avoid potential director’s liability to the tax

authorities resulting therefrom.

[142] Nicolas had different priorities than Jimmy’s. He decided to buy out immediately

his brother Costas for $425,000 with a portion of the net sale proceeds. He also decided

to use another $450,000 to pay the outstanding mortgage on his family residence on

Marlatt Street in Montreal (the “Marlatt Property”) that was registered in his wife Eleni’s

name only.³⁹

[143] By the end of 2015, the Marlatt Property belonging to Eleni was mortgage free.

[144] Unfortunately, sufficient funds were not retained at the time to cover the

outstanding taxes due by 114753 and 114754 stemming from the sales.

[145] Following the sale of the Laval Property (114753) owned one third by Jimmy and

two thirds by Nicolas, the capital gain generated was not paid and Jimmy as sole

remaining director, is still personally responsible for the payment of the same to the

Agence du revenu du Québec (“ARQ”)⁴⁰.

The closing of the Brossard Restaurant in 2015

[146] The year 2015 also saw the closing of the Chenoy’s restaurant located in Brossard

on the South Shore of Montréal (the “Brossard Restaurant”).

³⁷CP-08B.

³⁸CP-08A.

³⁹P-33 and P-34.

⁴⁰P-28.

500-11-052150-170

PAGE: 22

[147] The Brossard Restaurant was operated by 2959-8455 Québec Inc. from 1992 until

its bankruptcy in 2015.

[148] The shareholders of 2959-8455 Québec Inc. were Nicolas and his daughter Amalia

who was responsible for the restaurant’s operations. Nicolas was the sole director.

[149] The closing and bankruptcy of the Brossard Restaurant triggered lawsuits

involving, inter alia, Nicolas that are still pending, including legal proceedings instituted

by the ARQ regarding notices of assessment totalling $863,417 for failure to report all

sales and gratuities (tips) remit the deductions at source (DAS), GST and QST since

2008⁴¹.

[150] The landlord of the Brossard Restaurant also has a significant claim in excess of

$1M against Nicolas as personal guarantor under the existing lease⁴².

[151] These cases are still active and pending.

[152] Amalia sought the protection of the Bankruptcy and insolvency Act with a proposal

to her creditors.

[153] The Court understands that despite owning shares (20%) in 136585, Amalia

ceased being involved with the Chenoy Corporations including their management and

operations and did not participate to the present hearings.

The Costas Buy-out of February 2016

[154] Following the sale of the Laval Property, Jimmy was against the immediate buy-

out of Costas’ interest in the Chenoy Corporations with the sale proceeds of the Laval

Property.

[155] Jimmy insisted that the Costas Agreement of December 2013 be respected which

also implied the sale of the DDO Property and the DDO Restaurant before the

shareholders could receive what was due to them out of the remaining net proceeds.

[156] Nicolas saw it in a different way. He preferred to use immediately a portion of the

net proceeds of the sale of the Laval Property to buy out his brother Costas against a

payment of $425,000 (the “Costas Buy-out”), which involved, inter alia, granting mutual

releases and discharge between the various members of the Sigounis family, including

Jimmy.

[157] On January 20, 2016, Jimmy’s lawyer advised Nicolas’s lawyer and Argyro that

his client would not partake in the Costas Buy-out. However, Jimmy would only agree to

participate in such a buyout if an agreement was reached with the other members of the

⁴¹DIC-20 (500-80-036795-186).

⁴²DIC-21 (500-17-090263-156).

500-11-052150-170

PAGE: 23

Sigounis family concerning the handling and disposition of the remaining assets of the

Chenoy Corporations in furtherance of the Costas Agreement.⁴³

[158] The outstanding issues which were to be dealt with and agreed to involved:

 The debt and liabilities of the 114753 (Laval Property) and the outstanding debts

and obligations of the Laval Restaurant operations and the resulting directors’

liability;

 The debts and obligations of DDO Restaurant and the resulting directors’ liability;

 The sale of the Country House in order to repay outstanding debts;

 The sale of the DDO Property and/or relocation of the DDO Restaurant;

 Stabilizing the Gatineau and Joliette franchises.

[159] In addition to the foregoing, Jimmy also objected to conclude the Costas Buy-out

with the sale proceeds of the Laval Property and to grant Costas a mutual release and

discharge, unless debts due to Mello Foods⁴⁴for supplying the restaurants were to be

paid in full, unless Jimmy received a portion of Costas shares and unless his father would

cover the shortfall (US$146,666.74) in his own Nesbitt Burns investment account that

Jimmy had guaranteed.⁴⁵At the time, Nesbitt Burns had not yet debited Jimmy’s

investment account to satisfy his father’s indebtedness to the investment company.

[160] On February 8, 2016, relying upon the assurances of Nicolas’s lawyer, Me

Kounadis, that a sufficient amount would be kept from the sale proceeds of the Laval

Property to cover the outstanding tax liabilities of 114753 and 114754 which had yet to

be determined precisely and that the DDO Property would be put up for sale again, and

that his father would make the necessary payment regarding his indebtedness to Nesbitt

Burns, Jimmy agreed to sign on his personal behalf and on behalf of Mello Foods, 136585

and of Chenoy Food Network, the Mutual Release requested by Costas who received

$425,000 for his shares (the “Costas Release”).⁴⁶

[161] Unfortunately, those assurances that induced Jimmy to sign the Costas Release

did not materialize. Nesbitt Burns ultimately collected the funds due by his father by

withdrawing $190,975.13 from Jimmy’s own investment account⁴⁷. This event caused

Jimmy to institute the Nesbitt Burns Lawsuit against his father on February 5, 2020, to

recover the sum of $190,975.13.⁴⁸

⁴³P-4, page 4.

⁴⁴For food and supplies extended to the Chenoy restaurants.

⁴⁵DIC-22.

⁴⁶P-7.

⁴⁷DIC-22.

⁴⁸Ibid., 500-17-111490-200 (the “Nesbitt Burns Lawsuit”).

500-11-052150-170

PAGE: 24

[162] With respect to the outstanding taxes due to the ARQ by 114753, Jimmy is

currently making payments personally to cover said corporate debts as the remaining

director.

The Acknowledgment signed by Nicolas on February 8, 2016

[163] On the same day that the Costas Release was executed, namely on February 8,

2016, Nicolas also signed in favour of Jimmy a document entitled “Acknowledgement”⁴⁹,

in virtue of which Nicolas acknowledged that:

In connection with that certain Share Purchase Agreement between Mr. Costas

Sigounis as Vendor and Nick as Purchaser dated February 8, 2016 (the “Share

Purchase Agreement”), into which Share Purchase Agreement intervened

N.K.D.S. Consultants & Investments Inc. (“N.K.D.S.”), Chenoy Food Network Inc.,

Chenoy Delicatessen & Steak House (1976) Ltd., Chenoy Delicatessen & Steak

House Inc., 114754 Canada Inc. (“Laval”), 136585 Canada Inc. («ꢀ136ꢀ585ꢀ»),

95735 Canada Inc., 9259-8455 Quebec Inc., Mona Lisa Advertising Ltd. (“Mona

Lisa”) and Aliments Mello Inc., the undersigned hereby agree as follows:

1. In respect of the purchase by Nick of 25 Class “A” Common Shares of N.K.D.S.,

300 Class “A” Common Shares of 136585 and 20 Class “A” Common Shares of

Mona Lisa (the “Purchased Shares”), Nick hereby acknowledges acquiring one

third (⅓) of the Purchase Shares in and for the benefit of Jimmy, who hereby

acknowledges that he shall be bound by the terms and conditions of the said Share

Purchase Agreement insofar as it pertains to the rights and obligations in and to

the Purchase Shares;

2. In respect of the purchase by Nick of certain advances made by Costa to

N.K.D.S. and Laval in the aggregate amount of One Hundred Sixty-Three

Thousand Nine Hundred and Eighty-Five Dollars ($163,985.00) (the “Advances”),

Nick hereby acknowledges having acquired one third (1/3) of the Advances in and

for the benefit of Jimmy, and Jimmy hereby acknowledges that he shall be bound

by the terms and conditions of the Share Purchase Agreement insofar as it pertains

to the rights and obligations in and to the Advances;

3. The parties shall execute such further agreements, transfers, instruments and

documents as may be necessary in order to give effect to the present

acknowledgment;

4. In particular and without limiting the generality of the foregoing, Nick shall

transfer to Jimmy, and/or as Jimmy may direct, to any company, trust and/or

nominee of Jimmy, one third (⅓) of the Purchase Shares and one third (⅓) of the

Advances at such time and to such person or entity as Jimmy shall direct.⁵⁰

[Emphasis added]

⁴⁹P-26.

⁵⁰Ibid.

500-11-052150-170

[the “Acknowledgment”]

PAGE: 25

[164] At trial, Argyro argued that the Acknowledgment was not binding as it was not

followed with the appropriate corporate documentation, bearing in mind that those shares

were allegedly part of the transfer by her father to her via the Confirmations, although the

same was not specifically mentioned therein. The Paulian Action instituted by Jimmy

addresses that particular issue among other things.

The NKDS/Marlatt hypothecary loan of July 14, 2016

[165] In June 2016, the Chenoy Corporations are experiencing financial difficulties. The

sale of the Laval Property, the bankruptcy of the Brossard Restaurant and its closing

together with the closing of the Laval Restaurant did not bring back the remaining

companies to a positive financial position.

[166] Mr. Michel Montmorency (“Montmorency”) acting as a consultant for Nicolas,

informed Jimmy that he had received instructions from Nicolas to secure financing by

hypothecating the Country House owned by NKDS, bearing in mind that Jimmy was a

director and a 33^1/3% shareholder pursuant to the Acknowledgment.

[167] Jimmy refused to consent to NKDS borrowing moneys against the Country House

under the prevailing circumstances to cover debts that did not concern that company.

[168] A meeting was called for on June 29, 2016, at Kounadis’ office that was

subsequently cancelled by Montmorency claiming to act on Nicolas’s instructions.

[169] In an email sent to Kounadis and to Jimmy’s lawyer, Montmorency reassured

everyone that no hypothecary loan would be granted by NKDS without “respecting the

procedure”:

Je suis désolé de ce contretemps pour la réunion, c’est hors de mon contrôle. En

effet la démarche effectuée dans le dossier de N.K.D.S. inc. a pour but de

protéger l’actif vulnérable et ne se veut en aucun moment être préjudiciable

envers les actionnaires.

Monsieur Nick m’a donné les instructions de rechercher un prêt afin de régler

certaines urgences et de sécuriser l’actif et ultimement de satisfaire son fils pour

sa participation dans la compagnie. Un travail laborieux fut effectué et la

conclusion est positive.

Par ailleurs, je peux vous confirmer que rien ne se produira sans avoir respecté

les procédures ou tout au moins avant notre rencontre de mardi prochain [July 5,

2016].

Salutations

michel montmorency

représentant autorisé de

500-11-052150-170

monsieur Nicholas Sigounis⁵¹

PAGE: 26

[Emphasis added]

[170] At the time, Jimmy was unaware that the new loan sought by Nicolas was going

to be secured with the Country House and the Marlatt Property.

[171] At trial, Montmorency candidly confirmed that he was involved in the NKDS/Marlatt

refinancing which was essentially prompted by the fiscal debts plaguing the companies

and Nicolas. The goal was to “wipe out” the equity in order to “secure the assets against

an attack” (pour sécuriser les actifs contre une attaque).

[172] Montmorency added that since the Chenoy companies experienced cashflow

issues, this proposed refinancing became a golden opportunity to solve two problems at

once, cover various outstanding debts mostly unrelated to NKDS and shield NKDS’ main

asset from creditors such as the ARQ.

[173] Be that as it may, on the same day, June 29, 2016, Jimmy’s lawyer sent the

following message to his colleague Kounadis and to Montmorency:

Dear Dennis,

Obviously, I am somewhat disappointed by the additional delay but have no

problem in postponing our meeting to next Tuesday, July 5^th, at 11:00, provided

that Michel [Montmorency] confirms to us that, in the meantime, nothing will be

done with respect to the hypothecation of the NKDS property located in Bromont,

and of which Jimmy is a substantial shareholder. I notice that amongst the

documents forwarded by Michel to Jimmy, there appears to be instructions given

to Notary Francis Pierre Rémillard. Obviously, this property cannot be

hypothecated without a proper resolution of the directors and shareholders

of NKDS and, as far as I know, no such meeting had yet been called nor convened.

Provided that we are given the aforementioned assurance and that nothing will

happen with respect to that property without the calling of a proper meeting, we

agree to the postponement of today’s scheduled meeting.⁵²

[Emphasis added]

[174] Following the meeting that was held on July 5, 2016, Jimmy’s lawyer confirmed

the following to Kounadis and Montmorency:

Further to our meeting and discussions of this day, these presents shall serve to

confirm that the hypothecary loan in the amount $400,000.00 will not be proceeded

with and that, in accordance with the instructions conveyed by Michel to Mtre

⁵¹P-8.

⁵²Ibid.

500-11-052150-170

PAGE: 27

Rémillard’s assistant, the file will be put on hold until our client and the rest of his

family decide otherwise.⁵³

[Emphasis added]

[175] A few minutes later, Montmorency reassured Jimmy’s lawyer as follows:

Thank you for your email, although I believe this email was not really necessary,

since you witnessed my call during which I gave instructions, but I just want to

remind you that the file will move on and will be ready to be in place at the right

moment, once all necessary approvals will be obtained.⁵⁴

[Emphasis added]

[176] Contrary to Montmorency’s assurances given on behalf of Nicolas, on July 14,

2016, Nicolas claiming to act as a “duly authorized” representative of NKDS, executed a

deed of hypothecary loan in the amount of $600,000⁵⁵that was not only registered against

the Country House but also against the Marlatt Property belonging to his wife Eleni (the

“NKDS/Marlatt Hypothec”).

[177] The loan proceeds were used to cover various debts, liabilities and bills due by

NKDS or by Eleni and Nicolas in connection with the Marlatt Property. Nicolas also

caused the loan proceeds to cover debts of Chenoy Restaurant due to Mello Foods⁵⁶

without Jimmy’s knowledge and involvement.

[178] The NKDS/Marlatt Hypothec was executed by Nicolas without ever obtaining

Jimmy’s consent as director of NKDS and 33^1/3% shareholder and in direct contravention

to the assurances and representations made by Montmorency on behalf of Nicolas.

[179] On the same day, July 14, 2016, Nicolas also executed an extract of the minutes

of a meeting of the board of directors of NKDS to authorize the $600,000 hypothecary

loan, falsely indicating that all directors had been duly called and were present at NKDS’s

head office (the “NKDS Resolution”).⁵⁷

[180] In fact, at the time, Nicolas was hospitalized, and Argyro confirmed at trial that she

acted as a go-between to get the necessary documents executed by her father. Argyro

was present when her father executed the NKDS Resolution and acknowledged that they

were not at NKDS’s head office, and that Jimmy was not present as director despite the

deceptive wording on the document.

⁵³P-9.

⁵⁴Ibid.

⁵⁵P-10, incidentally, the deed only provided for an initial disbursement of $400,000. It is not certain that the

remaining $200,000 was ever disbursed. Be that as it may, if the intended purpose was to “wipeout”

any equity, a hypothecary charge of $600,000 was satisfying that goal.

⁵⁶P-23.

⁵⁷P-24.

500-11-052150-170

PAGE: 28

[181] In short, Nicolas and Argyro both directors of NKDS with Jimmy could not ignore

at the time that the latter was against such a loan to charge the Country House and yet,

they nevertheless proceeded without any appropriate and valid resolutions and without

the knowledge and consent of Jimmy.

[182] The acts and omissions of Nicolas and Argyro towards Jimmy surrounding the

NKDS/Marlatt Hypothec clearly constitute acts of oppression despite the fact that Nicolas

caused a portion of the loan proceeds to cover outstanding debts to Mello Foods for

supplies sold to the remaining restaurants.

The attempted transfer of shares from NKDS—August 2016

[183] The operation to shield Nicolas’s corporate assets from an “attack” of the tax

authorities did not end with the NKDS/Marlatt Hypothec.

[184] At trial, Argyro acknowledged that her father had told her that they had to protect

the corporate assets since the “government was after him” following the sale of the Laval

Property and of the bankruptcy of the Brossard Restaurant. At the time, we were served

with papers at Kounadis’ office.

[185] On August 22, 2016, Nicolas claiming to be “the major shareholder of NKDS”,

instructed his corporate attorney Kounadis to proceed with the transfer to his unidentified

wife’s company for $1,000 of all trademarks, logos, designs and name related to Chenoy

belonging to NKDS:

As the major shareholder of the above-mentionned (sic) company, I duly

authorize you to prepare all necessary resolutions and transfer documents to

transfer all trademarks, logos, designs and name related to “Chenoy” that belong

to N.K.D.S. Inc., to my wife’s company.

Considering the current value in the books of the company and also since the fair

market of value of the name being is currently very minimal, I want the transfer to

be done for 1 000$.

Please execute this at your earliest and I hereby confirm that I assume all

responsability (sic) toward this transaction.⁵⁸

[Emphasis added]

[186] On the same day, also claiming to be “the major shareholder of Chenoy Food

Network, DDO Restaurant and 114754”, Nicolas instructed Kounadis to sell the shares of

Chenoy Food Network to his unidentified wife’s company for $1,000:

Chenoy’s Network shares are held 50% by Chenoy Delicatessen and Steak House

Inc. and by 114754 Canada Inc., kindly take note that as the major shareholder

⁵⁸P-11.

500-11-052150-170

PAGE: 29

of those 3 companies, I duly authorize you to prepare all necessary resolutions

and deed of sales of 100% shares or transfer of shares of “réseau d’Aliments

Chenoy Inc.” to my wife’s company.

Considering the current value in the books of the companies and also since the

fair market of value is negative, I want the transfers to be done from each company

for a total of 1 000$.

Please execute this at your earliest and I hereby confirm that I assume all

responsability (sic) toward this transaction.⁵⁹

[Emphasis added]

[187] Jimmy who was a director of NKDS, Chenoy Food Network and 114754 was never

consulted by his father nor did he ever consent to those transactions that he was unaware

of.

[188] Despite her fiduciary duty as director of NKDS, Chenoy Restaurant and Chenoy

Food Network, Argyro assisted her father in connection with the above-mentioned

instructions by writing to Kounadis on September 26, 2016, raising her father’s impatience

and insisting that the transfer of the shares and trademarks be completed immediately.

[189] Argyro concluded her message with a veil threat:

As a courtesy to your law firm this will be the last request to the abovementioned

documents.⁶⁰

[190] Kounadis responded quite appropriately to Argyro as follows:

I have repeatedly explained all this to you, your father and Michel [Montmorency].

Michel has understood the predicament and I’m sure has explained all this to you

and your father. We have objections from a minority shareholder [Jimmy] which

will make the situation much more volatile and may be place the majority

shareholder in a predicament.⁶¹

[Emphasis added]

[191] On September 27, 2016, Argyro indicated that she and her father did not accept

no as an answer:

Thank you for your reply, I know you have explained all this to Nick and he told

you to do what needs to be done. To my understanding in your last email the

resolutions are ready for signing, Nick wants you to give them to Michel and Nick

will worry about the circumstances. […]

⁵⁹Ibid.

⁶⁰P-12.

⁶¹Ibid.

500-11-052150-170

PAGE: 30

If you find that you are in a conflict of interest please let me know because Nick

will do what needs to be done to get the shares and trademarks transferred to his

wife’s company.

Like previously stated Nick will like to have the resolutions which you said are

ready, to be given to Michel by the end of this week.⁶²

[Emphasis added]

[192] Subsequently alerted of the situation by Kounadis, Jimmy wrote him back at the

end of the day on September 27, 2016:

Dennis I would also remind both Argy and Michel [Montmorency] that my Dad has

made commitments and promises TO YOU as corporate counsel that by

persuading me signing the costa buyout he agreed and confirmed to you that

he would pay off his Nesbit burns account 170k and forward to me an additional

150k to cover some outstanding loans which needed to be repaid.

Instead they go ahead without my knowledge or any discussion and pledged

the debt free property to pay out bills that have nothing to do with that

company’s debts or obligations and reduce the debts and mortgages of DDO

property and business.⁶³

[Emphasis added]

[193] On the following day September 28, 2016, a colleague at Kounadis’ office tried

once again to set the record straight with Argyro in no uncertain terms about her fiduciary

duty:

As corporate counsel, it is our responsibility to execute the wishes of the directors

and shareholders and to do so, we must firstly assure that the instructions given

are in the best interest of the Corporations and that said Corporations act according

to the rules set out in the laws that govern them. Those instructions require

director approval and, in certain cases, shareholder approval. The wish of a

majority shareholder is not legally sufficient.

That being said, we have received your instructions regarding the transfer of

trademarks by N.K.D.S. and the transfer of shares by Chenoy Network to Helen

Sigounis’ company.

However, we have also been advised by Mr. Jim Sigounis, director and

shareholder of N.K.D.S. and Chenoy Network, directly or indirectly thru subsidiary

companies, that he is not prepared to consent to the transfer of trademarks nor the

transfer of shares to Helen’s company⁶⁴.

⁶²Ibid.

⁶³Ibid.

⁶⁴2638-7639 Québec Inc.

500-11-052150-170

PAGE: 31

Given the fact that the decision to transfer assets to your mother’s corporation

(whichever it may be) is not unanimously approved, the corporations are required

under corporate law to call the appropriate meetings of shareholders and directors

in order to approve the desired transfers. ln addition, since certain shareholders

are corporations, corporate resolutions/approvals must also be obtained in those

corporations before the corporations holding the trademarks and shares are able

to consider the transfers.

This situation was explained to Mr. Montmorency, both verbally and in writing,

which is the reason behind which we received instructions to call the necessary

meetings of the directors and shareholders of the various corporations that are

involved or touched by Mr. Sigounis’ decision to require the transfer of the

trademarks and shares. The retainer was required for this purpose.

The law requires that these procedures be taken in order to protect the creditors

and shareholders of a corporation, and decisions taken by any directors in

defiance of the rights of the creditors and shareholders expose the directors

ta legal responsibility. The directors are imposed by the Civil Code of Québec

and their respective corporate law (the Québec Business Corporation Act or the

Canada Business Corporations Act) to be bound towards the Corporations to act

with prudence and diligence, honesty and loyalty and in the best interest of the

Corporations. Please see the attached annexe.

Furthermore, even if the directors and/or shareholders approve any transfers, the

approval does not protect the transfers (or directors) against ether laws and

obligations that affect all debtors, including tax laws and bankruptcy and insolvency

legislation.

Finally, since the tax department is already making inquiries regarding certain

Chenoys entities, it is our opinion that it is perilous for N.K.D.S. to start

distributing its assets at this time for nominal sums to a corporation

benefitting the wife of the majority shareholder.⁶⁵

[Emphasis added]

[194] As director of the corporations involved in the transfers demanded by her father,

Argyro could not simply obey and execute blindly the instructions of her father to the

detriment of the corporations and of the minority shareholders in blatant violation of her

own fiduciary duty.

[195] On November 24, 2016, in an attempt to resolve the impasse, Kounadis’ office

issued notices calling for meetings of the board of directors for the Chenoy Corporations

involved in the proposed transactions envisaged by Nicolas. Those meetings were to be

held on December 19, 2016.⁶⁶

⁶⁵P-13.

⁶⁶P-14.

500-11-052150-170

PAGE: 32

[196] The Court understands that those board meetings never took place most likely as

a result of the blistering and scathing, yet most revealing, letter dated November 30, 2016,

sent by Jimmy’s counsel to Kounadis, the corporate counsel for the Chenoy

Corporations⁶⁷.

[197] In this long letter, Jimmy’s counsel reminded Kounadis that Jimmy still expected

all parties to abide by the terms of the Costas Agreement reached in December 2013 to

settle Costas Oppression Lawsuit which involved, inter alia, the liquidation and dissolution

of all Chenoy Corporations and the realization of their assets.

[198] Jimmy’s counsel also reminded Kounadis that:

- his client was against the Costas Buy-out using the sale proceeds of the Laval

Property before having completed the liquidation and dissolution of the other

assets of the Chenoy Corporations and ensuring these sale proceeds would serve

to satisfy first and foremost all outstanding liabilities of 114753 and 114754

including tax liabilities;

- Jimmy nevertheless agreed to the Costas Buy-out following Nicolas’ agreement

to:

o have the family members sit down, discuss and agree on the disposal of

the remaining assets of the Chenoy Corporations immediately after the

Costa’s Buy-out;

o repay to Jimmy $150,000 on account of the monies advanced by the latter

to the benefit and account of some of the Chenoy Corporations;

o arrange to pay the indebtedness due by him to Nesbitt Burns in order to

secure Jimmy’s release from the guarantee he had given to Nesbitt Burns

for Nicholas’s investment account; and

o cede and transfer to Jimmy, 1/3 of all shares and loans acquired by him

from Costas after having purchased Costas’ shareholding in the Chenoy

Corporations in compliance with the Nicolas Acknowledgment.

- Following the Costas Buy-out, Nicholas refused to hold the agreed upon family

meeting;

- It was obvious to Jimmy that once he had secured Jimmy’s consent to the Costas

Buy-out, Nicolas set about to renege on his commitments and undertakings, and

act as if he alone were entitled to direct all of the affairs of the Chenoy Corporations

without taking into account Jimmy’s rights as a minority shareholder and director.

[199] Jimmy’s counsel went on to highlight Nicolas’s defaults:

⁶⁷P-15.

500-11-052150-170

PAGE: 33

It is obvious that once he had secured our client’s consent to the Costa buyout,

Mr. Nicholas Sigounis set about to renege on his commitments and undertakings

and act as if he alone were entitled to direct all of the affairs of the Chenoy

Companies without taking into account our client’s rights.

To this day, Mr. Nicholas Sigounis has failed, refused and/or neglected:

A) to cause 8.33 Class A common shares of N.K.D.S., 100 Class A shares

of 136585 and 6.66 common shares of Mona Lisa Advertising Ltd. to be

registered in the corporate records of these corporations in the name of our

client or that of 9616870 Canada Inc.;

B) to cause an amount of $54,661.66 to be recorded in the financial books

and records of N.K.D.S. as being due and owing to our client or to 9616870

Canada Inc.;

C) to pay to our client an amount of $150,000.00 in payment and settlement

of all of the funds loaned and advanced by our client to the benefit of

several members of the Chenoy’s Group of Companies: and

D) to repay to the brokerage firm of Nesbitt Burns the amounts due and

owing by himself in order to secure the release of our client from the

guaranty which he has given Nesbitt Burns for the account of Mr. Nicholas

Sigounis.

Furthermore, Nicholas Sigounis has let it be known that he does not intend to sell

the DDO Property and intends to allow his daughter, Argyro Sigounis, to continue

operating Chenoy Deli in the DDO Property, despite the dire financial situation of

Chenoy Deli and, in turn, Chenoy 1976, as if she alone were the sole

shareholder thereof, without rendering account to any ether of the direct or

indirect shareholders of Chenoy Deli and Chenoy 1976.

As if reneging on his commitments and undertakings did not suffice, Mr. Nicholas

Sigounis has now embarked on a campaign, the sole objective of which is to

strip certain of the companies of the Chenoy’s Group of Companies, in which

our client has a direct or indirect interest, of their assets in order to transfer same

to 2638-7369 Québec Inc., a company whose sole shareholder is his wife, Helen

Sigounis, and to which our client, as you are aware, strenuously objects.⁶⁸

[Emphasis added]

[200] Jimmy’s counsel then went on to discuss his client’s discovery that Nicolas had

signed the NKDS/Marlatt Hypothec in July 2016 on behalf of NKDS of which Jimmy is a

director, by using a false and fictitious resolution of the board of directors of NKDS⁶⁹. Not

only was the hypothecary loan obtained without Jimmy’s consent and knowledge as a

⁶⁸P-15.

⁶⁹P-24.

500-11-052150-170

PAGE: 34

director, but the lawyer made the following comments with respect to the use of the

borrowed funds:

Furthermore, it would appear that the proceeds of these unauthorized loans were

used to pay and satisfy debts owing by Chenoy Taschereau [Brossard], an entity

in which our client has no interest whatsoever and to pay and discharge a

hypothecary loan due and owing to lndividual lnvestment Corporation [I.I.C.] which

had been contracted for the use and benefit of Chenoy Taschereau but which was

secured by a hypothec charging the DDO Property which, as above stated, is being

operated by Argyro Sigounis as if it was her own.⁷⁰

[201] Finally, Jimmy’s counsel reacted to the recent notices of convocation of board

meetings⁷¹as follows:

Determined to continue to act as if he alone could decide upon everything and

anything and although he was fully aware of our client’s refusal to agree, consent

or partake in an operation to strip certain of the Chenoy’s Group of Companies of

their assets, on August 22nd, 2016, Nicholas Sigounis, acting as a major

shareholder, purported to instruct your firm to:

A) transfer 100% of the shares held by 114754 and Chenoy Deli in Network

to his wife’s company for a nominal amount and without regard to law;

B) transfer all trademarks, logos, designs, and intellectual property related

to Chenoy and belonging to N.K.D.S. to his wife’s company for a nominal

amount and without regard to law;

On September 27^th, 2016, our client reminded you that his father, Nicholas, had

made commitments and promises to you as corporate counsel that if our client

agreed to participate in the Costa buyout, he would pay off his Nesbitt Burns

account and forward to our client an additional $150,000.00 to cover some of the

outstanding loans which needed to be repaid.

On the following day, September 28, your firm advised Argyro Sigounis and Michel

Montmorency that you could not act upon the unilateral instructions received from

Mr. Nicholas Sigounis and that if the decision to transfer assets was not

unanimously approved, then the corporations were required under Corporate Law

to call the appropriate meetings of shareholders and directors.

Furthermore, your firm advised that since the authorities were already making

enquiries regarding certain Chenoy entities, it was your opinion that it was perilous

for N.K.D.S. to start distributing its assets at this time for nominal sums to a

corporation benefiting the wife of the majority shareholder.

Yet and notwithstanding our client’s continued refusal to participate in the

aforementioned asset striping (sic) operations, and in spite of being advised by

⁷⁰P-15.

⁷¹P-14.

500-11-052150-170

PAGE: 35

your firm that such an operation was perilous, our client was just served with

notices of meetings scheduled for December 19^thnext and the purpose of which is

to consider and vote upon the resolutions required in order to carry out and

implement the aforementioned asset striping (sic) operations.

ln so doing, Mr. Nicholas Sigounis continues to act as if he were the sole

shareholder and director of the Chenoy’s Group of Companies in a manner

which is oppressive and unfairly prejudicial to our client’s interest and

legitimate expectation as a shareholder and director of the aforementioned

companies and with an utter disregard to the obligations of such Companies

to their respective creditors (including the federal and provincial tax

authorities).⁷²

[Emphasis added]

[202] Jimmy’s counsel concluded his letter by demanding that the notices convening

board meetings be rescinded failing which oppression remedy proceedings would be

initiated seeking, inter alia, the liquidation and dissolution of the Chenoy Corporations.

[203] By email dated December 9, 2016, Kounadis’ office advised that the meetings of

December 19^thnext were postponed until further notice.⁷³

The Lease between Chenoy DDO and DDO Restaurant—June 1, 2016

[204] Despite the fact that they had an agreement since 2013 that the DDO Property

and the DDO Restaurant would be sold, unbeknownst to Jimmy a director of Chenoy

DDO, Nicolas acting for the landlord (Chenoy DDO) allegedly executed on June 1, 2016,

a “triple net” commercial lease with DDO Restaurant represented by Argyro⁷⁴(the

“Lease”). It was the first time that such a lease was executed between Chenoy DDO

and DDO Restaurant.

[205] On October 25, 2016, Argyro caused the registration of a first notice of publication

of the Lease.⁷⁵

[206] Due to an error in the description of the parties to the June 1, 2016, Lease, another

notice was registered against the DDO Property on August 25, 2017,⁷⁶after the institution

of the present proceedings.

[207] At all relevant times, as director of the landlord, Jimmy never agreed to nor was

he ever consulted about entering into such a Lease and subsequently proceeding to its

⁷²P-15.

⁷³P-16.

⁷⁴P-29.

⁷⁵P-20 and P-29A.

⁷⁶P-29B.

500-11-052150-170

PAGE: 36

registration against the DDO Property, especially in the context where he had initiated

oppression remedy proceedings that involved the sale of the DDO Property.

[208] In any event, Jimmy testified that his sister did not pay the rent to Chenoy DDO

pursuant to the terms and conditions of the Lease. The preponderant evidence proved

that he was right in that regard with, inter alia, funds flowing back and forth between the

bank accounts of Chenoy DDO and DDO Restaurant after the payment of portions of the

rent from time to time in a seemingly haphazard manner.

[209] At trial, Argyro attempted unconvincingly to persuade the Court that the Lease was

entered into at the request of the Scotia Bank, without providing any evidence whatsoever

to that effect.

[210] The evidence rather suggests that this Lease was meant as a pre-emptive strike

since efforts to sell the DDO Property were resuming.

The “new” failed attempts to sell the DDO Property in 2016

[211] On December 22, 2016, Groupe Park Avenue Inc. made an offer of $3.45M for the

DDO Property net of commissions (the “Groupe Park Avenue Offer”).⁷⁷

[212] Nicolas refused to even respond to the Groupe Park Avenue Offer on the basis

that he had previously accepted an offer from Argyro that was still open.

[213] Jimmy was totally unaware of it and discovered it through the consultant

Montmorency long after the fact.

[214] The evidence revealed that Nicolas used his daughter’s offer as a false pretext to

avoid responding to the Groupe Park Avenue Offer.

[215] At the time, Jimmy had never seen or heard of another offer made by Argyro,

bearing in mind that she had previously secretly submitted two offers to her father in 2014.

[216] During her cross-examination, Argyro mentioned that she also made a $2.9M offer

in March 2016 but could not produce the document as an exhibit.

[217] According to Argyro, her father Nicolas did not want to sell the DDO Property but

did not tell her why…

[218] Apparently, her $2.9M offer of March 2016 was not accepted by her father who

told her to stop making efforts to find money to buy the DDO Property that was supposed

to be hers anyway.

[219] Then, why did Argyro submit another offer in June 2016?

⁷⁷P-17.

500-11-052150-170

PAGE: 37

[220] Argyro testified that when there was a possibility of a lawsuit by Jimmy after the

sale of the Laval Property and the Costas Buy-out, Nicolas told her to stop searching for

financing. We’ll find another way.

[221] They did!

[222] In an email sent on December 27, 2016, by the consultant Montmorency who had

been hired to assist in the restructuring which turned into somewhat of a liquidation

process, Montmorency wrote to Jimmy:

I was told that an offer [the Groupe Park Avenue Offer] would have come to your

father; withouth (sic) having all the details, allow me to present you a 1st picture

with the amount that I was told.

Also, for your information, Nick has already accepted an offer from your sister that

is subject to financing that she did not get as at yet and it expires end of January

2017. So Nick has to take some precaution before to put his signature on another

offer, because he can not accept 2 offers, unless to get the 1st one cancelled and

thjen (sic) compensate the broker which should be minimum any how!. (sic)⁷⁸

[Emphasis added]

[223] Based on the foregoing, the evidence shows that Nicolas was not truthful with

Montmorency.

[224] Be that as it may, Jimmy replied immediately to Montmorency:

Yes we have an official offer for $3,450,000 Net of commissions with a deposit

this was officially submitted to my father and sent to corporate council as this would

require shareholders meeting and approval. As far as any other offers I’m not

aware … they should have been submitted to corporate council and all

shareholders.⁷⁹

[Emphasis added]

[225] At that time in December 2016, Jimmy did not know that on June 23, 2016, Argyro

had signed and submitted an offer to her father to once again try to acquire the DDO

Property for an amount of $2.1M conditionally upon obtaining a $1.7M hypothecary

financing (the “Argyro June 2016 Offer”).⁸⁰

[226] Jimmy discovered that his father Nicolas, a director of Chenoy DDO and 136585,

had secretly accepted her offer on June 28, 2016, on behalf of 136585 and Chenoy DDO.

⁷⁸P-18.

⁷⁹Ibid.

⁸⁰P-31.

500-11-052150-170

PAGE: 38

[227] In short, Nicolas had accepted the Argyro June 2016 Offer in secret without ever

showing the same to Jimmy nor obtaining his consent as director of 136585 and of

Chenoy DDO.

[228] The existence of the Argyro June 2016 Offer for $2.1M was only revealed by

necessity in late December 2016 to seemingly block the Groupe Park Avenue Offer of

$3.45M.

[229] However, a perusal of the Argyro June 2016 Offer revealed that Montmorency

was, in all likelihood, misled by Nicolas if the latter really told him that Argyro had until the

end of January 2017 to complete her financing.

[230] There were no such conditions in the Argyro June 2016 Offer that provided instead

30 days from the acceptance of her offer to present proof of a $1,177,763 financing. In

reality, such a financing was not really needed given the other “special” provisions of the

Argyro June 2016 Offer.

[231] The closing was to take place on or before August 15, 2016, not after the end of

January 2017.

[232] Be that as it may, given the subsequent turn of events, and the relief sought by

Jimmy and DICS Eleni, it is relevant to note that with this document, Argyro and Nicolas

were concocting a scheme to sell or transfer more than the DDO Property to Argyro.

[233] To all intents and purposes, the scheme, if realized, would have caused the

transfer to new corporations set up for the occasion by Nicolas and Argyro, of all of the

shares and assets of Chenoy Food Network, Chenoy DDO and DDO Restaurant.

[234] Section 12 of the Argyro June 2016 Offer read as follows:

12 OTHER DECLARATIONS AND CONDITIONS:

1. Is also a SELLER: Nicholas Sigounis (personally)

Adress (sic): 1041 Marlatt Street, Montréal (Québec) H4R 1T1

The seller must ensure that the name and trademark are available for use.

The total price of $2,100.000 includes the property located at 3616 blvd St-John in

DDO, the facilities of the restaurant, goodwill, phone numbers, fax number, access

to the website, signs, all the known rights and known and unknown easements,

100% of the share capital of company.

4.2: Exemption to be asked by the buyer⁸¹.

⁸¹The “Exemption” related to the payment of the GST/QST on the sale price.

500-11-052150-170

PAGE: 39

5.2: ADDITIONAL SUM [$912,237]: Represents the assumption of the

companies debts by the BUYER⁸². The Purchaser having had a preliminary

opportunity to perform the searches and other due diligence reasonable or

customary in a transaction of a similar nature to that contemplated herein;

All representations and warranties of the Target⁸³(sic) and the Vendors being true

and all convenants (sic) of the Target and the Vendors having been performed in

all material respect as of the Closing;

That the formal offer shall contain the usual terms and conditions acceptable to

Purchaser;

The assumption of debt, the repayment of advances to shareholders and

repayment of existing mortgages will be entirely at the buyer’s expense.⁸⁴

[Emphasis added]

[235] Of greater interest, the Argyro June 2016 Offer also contained an Addendum on

its Annex G⁸⁵providing a complete accounting of the proposed transaction involving a

global amount of $2,100,000 and which contemplated:

- a vertical merger of Chenoy DDO and DDO Restaurant to be performed prior to

the transactions;

- the purchase by “Nicolas’ nominee” for $1,000 of the shares of Chenoy Food

Network held by DDO Restaurant and the shares of 114754 to be performed prior

to the transactions;

- the purchase by a “first Newco⁸⁶” (“Newco1”) of the DDO Property for

$1,700,447⁸⁷; according to the offer, Newco1 was to acquire from the vertically

merged Chenoy DDO/DDO Restaurant, the DDO Property, the entire restaurant

facility, the goodwill with the right to use the Chenoy’s name and trademarks; in

other words, all the assets of Chenoy DDO and of DDO Restaurant and more;

- the purchase by a “2^ndNewco⁸⁸” (“Newco2”) of Nicolas’ 60% shares in Chenoy

DDO⁸⁹for $9,353;

⁸²The Additional Sum stated therein was $912,237 without providing any other details. The Additional Sum

was in addition to the $10,000 deposit and was the only amount payable to the notary in time for the

closing but in reality, no such amount was payable at closing.

⁸³The expression “Target” is not defined anywhere.

⁸⁴P-31, page 8/12.

85

Ibid., pages 10-11. The Addendum is reproduced as an Annex to the present judgment for ease of

reference.

⁸⁶The future shareholder(s) of Newco1 was (ere) not identified.

⁸⁷($2.1M—$9,353—$390,200= $1,700,447).

⁸⁸Idem.

⁸⁹By then, Chenoy DDO would have been vertically merged with DDO Restaurant.

500-11-052150-170

PAGE: 40

- the purchase by Newco2 of the 40% shares held by 136585 in Chenoy DDO⁹⁰for

$390,200;

[236] In other words, the transaction contemplated in the Argyro June 2016 Offer went

beyond a simple land sale transaction involving the DDO Property for $2.1M.

[237] In reality, the global price of $2,100,000 was composed of:

- $1,700,447 for the acquisition by Newco1 of the DDO Property from Chenoy DDO

after the vertical merger;

- $9,353 for the acquisition by Newco2 of Nicolas’ 60% direct shares in Chenoy DDO

and $390,200 for the acquisition of 136585’s 40% shares in Chenoy DDO.

[238] Indicating holding a 20%⁹¹shareholding in 136585, Nicolas stood to receive an

additional $78,040 from the $390,200 payment to be made by Newco2.

[239] In short, Argyro (and Nicolas) was(were) planning to acquire via Newco2 all of the

shares of Chenoy DDO—after its vertical merger with DDO Restaurant—for $399,553

being her father’s 60% shares in Chenoy DDO for $9,353 and the 40% shares of 136585

for $390,200.

[240] This begs the following question.

[241] Since those transactions were to take place after the vertical merger of DDO

Chenoy and DDO Restaurant, who was actually going to receive the sale proceeds of

$1,700,447 for the DDO Property?

[242] It had to be the vertically integrated Chenoy DDO after its original

shareholders 136585 and Nicolas would have sold their shares for $390,200 and $9,353

respectively bearing in mind that Nicolas was expecting to sell his 60% interest for only

$9,353…

[243] In any event, the Addendum to the Argyro June 2016 Offer provides the answer:

- $9,353 payable to Nicolas and $390,200 payable to 136585 with $78,040 reverting

back to Nicolas for his 20% share.

[244] With respect to the actual sale price of $1,700,447, the buyer Newco1 was

expected to pay $922,237 at an undetermined later date by way of an assumption of

[unidentified] debts by the buyer. There were no indications of the identity(ies) of the

beneficiary(ies) of those assumed debts.

⁹⁰Idem.

⁹¹As opposed to the 30% shareholding claimed by Argyro.

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[245] As for the remainder of $778,210, Newco1 was to:

- assume an existing mortgage loan estimated at the time at $558,000;

- brokerage fees of $21,000;

- other fees of $5,000;

- debts to trade and government of $58,162; and

- two loans of $104,948 and $31,100 due to a director, namely Nicolas.

[246] Clearly, without knowing the actual beneficiary(ies) of the balance-of-sale price of

$922,237, the sale price of the DDO Property of $1,700,447 was not destined to the

existing shareholders of Chenoy DDO other than Nicolas indirectly.

[247] Finally, the Addendum revealed that Nicolas expected to receive a global amount

of $223,440 to effectively sell to his daughter, via Newco1 and Newco2, all of his interests

as a shareholder of Chenoy DDO, DDO Restaurant and of 136585:

Nick Sigounis will be getting:

From the shares: 9 352$

From advances: 104 948$

From other advances: 31 000$

From 136585 Canada Inc.: 20% of 390 200$ = 78 040$.

Total from transaction: 223 440$⁹²

[248] Again, these figures do not account for the $922,237 of debts to be assumed by

the buyer payable at an undetermined later date to unidentified creditor(s).

[249] With such information on hand, the Court can understand why Nicolas and Argyro

were preoccupied to keep the Argyro June 2016 Offer secret, especially to their co-

director Jimmy. Even the consultant Montmorency was kept in the dark by Nicolas and

Argyro.

[250] The foregoing may also explain why Nicolas—with the assistance and complicity

of Argyro—was so adamant to proceed quickly with the sale to “my wife’s company” of

the Chenoy Food Network’s shares for $1,000 and the transfer of all trademarks, logos,

designs and names related to “Chenoy” that belonged to NKDS with their instructions of

August 22, 2016,⁹³to their corporate attorney Kounadis, as it was more fully discussed

above.

[251] Obviously, acting in secret without the knowledge and consent of Jimmy as a

minority shareholder and as co-director of the various corporations involved in the

⁹²P-31, page 11.

93

P-11. Kindly refer to Chapter 3.11—The attempted transfer of shares from NKDS—August 2016,

paragraphs 183 to 203 above.

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contemplated transactions and merger, the Court can only see two directors, Nicolas and

Argyro, who were concocting a scheme, being in flagrant conflict of interest and acting in

clear breach of their fiduciary duty with a blatant unfair disregard of the interest of the

Chenoy Corporations involved and their other shareholders.

[252] Be that as it may, once the end of January 2017 fictitious deadline expired with

respect to the Argyro June 2016 Offer, Groupe Park Avenue renewed, on February 9,

2017, its offer to purchase the DDO Property in the same amount of $3.45M net of

commissions and without any financing clause.

[253] How could Nicolas and Argyro as co-directors of Chenoy DDO be acting in the

best interest of that corporation and its shareholders and justify refusing such an offer

involving a “real payment” of $3,450,000 for the DDO Property, which was significantly

more than Argyro’s latest secret offer?

[254] In reaction to the second Groupe Park Avenue Offer, Jimmy quite appropriately

requested to schedule a meeting with the family to review and consider this offer to

purchase.⁹⁴But his father refused to hold such a meeting to consider the latest offer or to

make any counteroffer.

[255] All in all, despite his contractual undertakings stemming from the Costas

Agreement, on the one hand, since 2014, Nicolas secretly received and/or accepted up

to three offers from his daughter that never led to any conclusion due to lack of financing

and the terms and conditions of which were nowhere near as favourable as offers

received from serious third parties.

[256] On the other hand, Nicolas steadfastly refused all offers made by those third

parties without even responding to them, let alone by making any reasonable counteroffer

if he was not satisfied therewith.

[257] In Jimmy’s view, Nicolas was reneging the Costas Agreement and was

perpetuating the unacceptable status quo maintaining an unprofitable restaurant

business on a land worth millions of dollars.

[258] Confronted to such oppressive actions and obstruction from Nicolas and Argyro,

Jimmy had no other alternative but to file his Oppression Remedy Application in February

2017.

[259] However, Nicolas’s and Argyro’s oppression continued afterwards.

The oppression post filing of the Oppression Remedy Application

[260] The Court has already mentioned the transfer/sale of December 8, 2019, of all

Nicolas’s Shares to his daughter Argyro who was adamant to keep it secret from her

⁹⁴P-19.

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mother, her brother and even from the Court insofar as the details of the transaction were

concerned.

[261] Once Argyro finally complied with the Order of this Court and as those details

became known, they prompted the Cross-Application and the Intervention filed by DICS

Eleni and Jimmy’s Paulian Action.

[262] Save for two exceptions, it was decided that the issues raised by Jimmy in his

Paulian Action and by DICS Eleni in her Cross-Application/Intervention that did not relate

directly to the present oppression remedy proceedings, would be dealt with at a later date.

[263] Therefore, the Court shall refrain from discussing and dealing with those issues

more fully, bearing in mind that it was ordered that the evidence and testimonies adduced

during the present trial shall form an integral part of the evidence to be adduced when the

outstanding issues and demands are heard on their merits.

[264] Of particular interest in the present proceedings, Nicolas tried to transfer to Argyro

shares that he had specifically committed to transfer to Jimmy pursuant to the

Acknowledgment that he signed on February 8, 2016⁹⁵, as part of his agreement to induce

his son Jimmy to partake in the Costas Buy-out and sign the Costas Release with the rest

of the Sigounis family members.

[265] Argyro refused to recognize the validity and the opposability of the

Acknowledgment insofar as a specific number of shares of 136585 and of NKDS acquired

by her father from Costas via the Costas Buy-out belonged to Jimmy who was their

beneficial owner. Argyro’s position was essentially twofold:

- her unsubstantiated affirmation that her father would have changed his mind and

no longer considered the Acknowledgment binding and enforceable; and

- the absence of proper corporate resolutions and entries in the minute books of

those corporations finalizing the transfer of Jimmy’s shares.

[266] These two arguments were “utilisés à toutes les sauces” by Argyro whenever

convenient.

3.14.1 Nicolas allegedly felt that he was no longer contractually bound

by the Costas Agreement and the Acknowledgment

[267] Argyro testified that once the Costas Buy-out finally took place with Jimmy’s

consent and assistance—based on representations and assurances of Nicolas that

proved false—her father no longer felt bound by the December 2013 Costas Agreement

⁹⁵P-26.

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and by the February 2016 Acknowledgment adding that she personally never agreed with

the terms and conditions of those two agreements executed by her father.

[268] In other words, Argyro suggested to the Court that once the Costas Buy-out was

completed and that Costas’ legal threats were no longer material, her father’s signature

on contractual documents became worthless especially when it involved somehow the

undertakings and commitments taken in favour of her brother Jimmy.

[269] Argyro’s position purported to lead the Court to believe that her father signed, inter

alia, the Costas Agreement and the Acknowledgment because he had no other choice to

do so. On the one hand, he wanted to induce Costas to settle his oppression remedy

proceedings. On the other hand, he wanted to induce Jimmy—personally and as director

of most of the Chenoy Corporations—to give his consent to and partake in the

transactions related to the Costas Buy-out as Jimmy’s involvement and signature were

essential to complete said transactions with Costas.

[270] Once his goals were achieved and his brother Costas was no longer in the picture

thanks to Jimmy’s cooperation, Argyro claimed that her father felt at liberty to decide, to

ignore and to disregard his written contractual obligations and undertakings towards his

son which gave rise, in great part, to the major dissension that led to the present

proceedings.

[271] With all due respect, based on Argyro’s testimony, it would seem that her father’s

written and signed undertakings were not trustworthy as he was able to change his mind

at liberty once the reasons that compelled him to sign such documents disappeared.

3.14.2 The absence of proper corporate resolutions

[272] On a different note, the absence of corporate resolutions being duly adopted has

been invoked by all.

[273] For example, DICS Eleni and Jimmy argued that proper corporate resolutions were

not duly adopted authorizing the transfers of Nicolas Shares to Argyro bearing in mind

that Jimmy as co-director was never even informed of those transfers nor was he ever

asked to approve them as director given the shroud of secrecy set up by Nicolas and

Argyro.

[274] Another example involving Argyro is the absence of proper corporate resolutions

and entries in the minute books of the concerned corporations evidencing the transfer of

Jimmy’s shares covered by the Acknowledgment.

[275] In fact, the minute books of the Chenoy Corporations are in poor state and have

revealed to be quite unreliable as they were not properly maintained, this being said

without imputing any fault on the corporate counsels, but rather on Nicolas’s lack of

concerns for what appeared to be unimportant details in his eyes.

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[276] With all due respect, such an argument (the lack of proper resolutions and entries

in the minute books) cannot only sit well with Argyro when it suits her purposes and be

discarded when it does not.

[277] But with respect to Jimmy’s shares at the core of the Acknowledgment, the

evidence revealed more relevant facts confirming the validity of Nicolas’s undertakings.

3.14.3 The Acknowledgment of February 8, 2016, and the agreement of

Nicolas to transfer certain of Costas’ shares to Jimmy

[278] Pursuant to the Acknowledgment, certain shares acquired by Nicolas from Costas,

thanks in part to Jimmy’s consent to participate to the Costas Buy-out, were acquired by

Nicolas for the benefit of Jimmy.

[279] The Acknowledgment purported to essentially bring Jimmy’s shareholding in

136585 from 30% to 40% and in NKDS from 25% to 33^1/3%, reducing Nicolas’s

proportions by as much from 30% to 20% in 136585 and from 75% to 66^2/3% in NKDS.

[280] As previously mentioned, Argyro is contesting the validity of the percentages

claimed by Jimmy on the basis that the minute books of 136585 and NKDS did not reflect

the same without forgetting that Nicolas allegedly changed his mind subsequently about

it.

[281] But did he really change his mind?

[282] The Court does not believe so.

[283] The Argyro June 2016 Offer⁹⁶provides an indication as to how Nicolas treated his

undertakings made in favour of his son Jimmy in the Acknowledgment.

[284] First of all, there is no doubt in the mind of the Court that Nicolas had a hand in the

preparation of the Argyro June 2016 Offer.

[285] At clause 9 of the Addendum containing a summary of the amounts that would be

paid to Nicolas personally included a mention that he stood to receive $78,040

representing 20% of the $390,200 that would be paid by Newco2 to acquire the shares

of 136585.

[286] In June 2016, Nicolas did not use a share of 30% as subsequently argued by

Argyro. Four months after executing the Acknowledgment, Nicolas was already

recognizing and acting as if his shareholding in 136585 was at the 20% level. Yet, no

corporate resolution had been formally adopted and entered into the minute books of

136585.

⁹⁶P-31.

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[287] Be that as it may, Kounadis, the corporate attorney, confirmed during his testimony

that he was aware of the Acknowledgment, which was specifically mentioned, inter alia,

in the corporate summaries prepared by his office that contained the following mentions:

- In the corporate summary of 136585⁹⁷:

Nick holds one third (1/3) of the 300 shares for Jimmy Sigounis, in accordance with

the Acknowledgment Agreement dated Feb. 8, 2016.

- In the corporate summary of NKDS⁹⁸:

Nick holds one third (1/3) of the 25 shares purchased from Costa Sigounis for

Jimmy Sigounis, in accordance with the Acknowledgment Agreement dated Feb.

8, 2016.

[288] Given the broad powers conferred upon the Court pursuant to Section 241 (3) of

the Canada Business Corporations Act⁹⁹, in the presence of oppressive conduct, the

Court finds, for the purposes hereof, that Jimmy holds 40% of the shares of 136585 and

33^1/3% of the shares of NKDS, thus leaving Nicolas’s shares at 20% and 66^2/3%

respectively. The Court shall also order 136585 and NKDS to make the necessary

inscriptions and/or corrections, if need be, in their registers and other records to reflect

the Court’s findings.

3.14.4 The urgent repairs to the DDO Restaurant requiring hypothecary

financing in October 2019

[289] With all due respect, certain events occurred after the institution of the Oppression

Remedy Application that left the Court to question Argyro’s understanding of her fiduciary

duty as director of NKDS, Chenoy DDO and DDO Restaurant particularly, and of the

necessity for her to respect, follow and abide by the Orders issued by this Court.

[290] On September 26, 2019, the counsel for Nicolas and Argyro filed a Motion to

partially lift the Safeguard Order of May 18, 2018, that prevented, inter alia, borrowing

against and charging the DDO Property.

[291] Argyro claimed that the roof of the DDO Property, the air conditioning units as well

as the celling, lighting system and the hot water tank must be immediately repaired or

replaced.¹⁰⁰She provided various estimates totalling $223,207.92 to perform the repairs

on an urgent basis.¹⁰¹

⁹⁷P-27B-3.

⁹⁸P-27B-7.

⁹⁹136585 and NKDS were both constituted under the CBCA.

¹⁰⁰Paragraph 2 of the Motion to lift the Safeguard Order in part of September 26, 2019.

¹⁰¹Paragraphs 11-16 of the Motion to lift the Safeguard Order in part of September 26, 2019.

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[292] In order to proceed with those immediate repairs, Defendants were seeking the

authorization of the Court to allow a $530,000 hypothecary financing to charge the DDO

Property although the proposed loan agreement produced as an exhibit provided for a

$600,000 loan not $530,000¹⁰².

[293] The proceeds of the $530,000 loan were destined to reimburse two existing

hypothecary loans totalling $305,577.62 with the balance of some $224,000 being used

for the urgent repairs more fully described in the Motion to lift the Safeguard Order in part

of September 26, 2019.

[294] By judgment rendered on October 28, 2019¹⁰³, based on the evidence adduced

and the representations of Argyro, the Court authorized the partial lift of the Safeguard

Order with strict instructions on how to use the borrowed funds that were increased to

$600,000 at Argyro’s request:

[32] PARTIALLY LIFTS the existing Safeguard Order of May 18, 2018, and

ALLOWS and AUTHORIZES Chenoy Delicatessen & Steak House (1976) Ltd. to

grant an immovable hypothec against the Chenoy Property situated at 3616 St-

Jean Boulevard, in the Municipality of Dollard-des-Ormeaux to secure in favour of

the lender a loan of up to $600,000 in capital with the strict understanding that the

proceeds of the proposed loan shall be used primarily to reimburse the two existing

hypothecary loans affecting the Chenoy Property in favour of the Scotia Bank and

ICC and secondarily, to carry out the repairs to the Chenoy Property situated

at 3616 St-Jean Boulevard, in the Municipality of Dollard-des-Ormeaux that

were more fully described in Defendants’ “Motion to lift the Safeguard Order

in part” of September 26, 2019;

[Emphasis added]

[295] In order to conclude as it did, the Court made the following comments:

[14] The evidence (including photographs) submitted at the hearing satisfy the

Court that the Chenoy Property housing a 24-hour restaurant operation is in dire

need of a new roof that can no longer be reasonably be patched again and

again¹⁰⁴. This replacement must be carried out before winter [2019] to stop the

various roof leaks that have plagued the restaurant operations during the last

winter and spring seasons.

[15] The air conditioning units¹⁰⁵that are located on the roof no longer function

reliably and must also be replaced together with a hot water tank¹⁰⁶. Finally, the

numerous water infiltrations have severely damaged the tiles found in the inside

¹⁰²P-1 of the Motion to lift the Safeguard Order in part of September 26, 2019.

¹⁰³2019 QCCS 4487.

¹⁰⁴Exhibit P-2.

¹⁰⁵Providing heat and cool air (Exhibit P-3).

¹⁰⁶Exhibit P-6.

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suspended ceiling throughout the building. The tiles must be entirely replaced¹⁰⁷

together with the integrated lighting system¹⁰⁸.

[…]

[18] Be that as it may, Argyro testified that she nevertheless obtained from a private

lender a bridge loan offer in the amount of $600,000 at a rate of 10% per annum

payable by way of monthly interest payments of $5,000, the $600,000 capital

becoming due 18 months after the disbursement¹⁰⁹. Argyro added that the bridge

loan will ensure that the urgent repairs to the Chenoy Property will be carried

out in time for the winter season and allow for the completion of the long-awaited

financial statements to be remitted to the chartered banks that will be approached

once again for a more formal hypothecary loan.

[19] In addition to enabling Chenoy and Chenoy 1976 to deal with the urgent

repairs and obtain additional time to seek a conventional hypothecary loan (as

opposed to a bridge loan), the proposed bridge loan will cause to lower the monthly

carrying costs that are presently paid to the Scotia Bank and to ICC.

[Emphasis added]

[296] At the time, Jimmy contested Defendants’ Motion being convinced that Argyro’s

estimates were not realistic and were significantly inflated. The Court addressed Jimmy’s

position as follows in the judgment:

[27] Finally, the Court does not believe that Plaintiff, who is a 12.5% indirect

shareholder, will suffer a prejudice with this refinancing and the proposed

renovations to the Chenoy Property.

[28] The Court understands that Jimmy who still advocates the pure and simple

liquidation of inter alia, Chenoy and of Chenoy 1976, is against such a refinancing

as he is of the view that the land would be worth more than $4M without the current

building erected on it, adding that in his view, the Chenoy’s restaurant operations

managed by his sister Argyro are not profitable and should close permanently, a

fact that seems inaccurate based on the financial information provided to the Court.

[297] With all due respect, in retrospect and based on the evidence adduced at the trial

on the merits, the Court seriously doubts now that the financial projections provided were

reliable and reasonable at the time regardless of the adverse impact of the Covid-19

pandemic.

[298] On December 13, 2019, relying on Argyro’s representations, the Court granted

Argyro’s request to be authorized to sign alone and without Jimmy’s involvement, the

deed of loan and deed of hypothec on behalf of Chenoy DDO with an order that a copy

¹⁰⁷Exhibit P-4.

¹⁰⁸Exhibit P-5.

¹⁰⁹Exhibit P-1.

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of the executed deed of Loan and of the deed of immoveable hypothec be communicated

to Jimmy’s lawyer within a reasonable delay after they became available to her.

[299] The Court also pronounced the following:

PRAISES ACT of the undertaking of Defendant Ms. Argyro Sigounis to provide to

the attorney for Plaintiff Mr. Jimmy Sigounis within a reasonable delay after they

are available to her, a copy of any contract executed, as the case may be, ail the

main invoices issued in connection with the repairs to be carried out on the Chenoy

Property pursuant to the undersigned’s October 28, 2019, Order and the evidence

of payment of said main invoices.

[Emphasis added]

[300] In retrospect, Argyro did not honour her undertakings for the simple reason that

most of the alleged “urgent repairs” were not carried out as previously represented to the

Court. The pandemic cannot explain by itself this surprising turn of events given the

“gravity” of the situation in October 2019 and the fact that borrowed funds earmarked

specifically for those “urgent repairs” would be available several months before the onset

of the pandemic.

[301] On February 1, 2021, Argyro was still in default to honour her undertakings noted

by the Court in its judgment of December 13, 2019. The situation prompted the

presentation by Jimmy of a Demand for case management seeking, inter alia, an order

against Argyro for the disclosure and production of

- the contracts entered into with the contractors with respect to the “urgent repairs”

authorized in October 2019 and the relevant invoices; and

- the documents evidencing the transfer of Nicolas’ Shares to Argyro.

[302] Jimmy also sought an accounting of the $600,000 funds borrowed against the

DDO Property and the production of various financial statements of the Chenoy

Corporations that were still missing.

[303] On March 12, 2021, the Court rendered various Orders in connection with the

foregoing Demand.

[304] Unfortunately, on September 3, 2021, the Court had to reiterate the Order made

on March 12, 2021, which had previously granted to Argyro a delay ending on April 12,

2021, by extending that delay to September 13, 2021:

Le Tribunal RÉITÈRE son ordonnance prononcée le 12 mars 2021 :

«ꢀLe Tribunal ORDONNE que la défenderesse Argyros Sigounis fournisse par

l’entremise de son avocat Me Rosenzveig d’ici au 12 avril 2021, une reddition de

compte détaillée établissant l’usage qui a été fait du produit de deux chèques émis

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par la notaire Me Annie Morrisseau à savoir un chèque au montant de 50ꢀ624,27 $

daté du 24 mars 2020 payable à l’ordre Charcuterie & Grilladerie Chenoy (1976)

Ltée (pièce A-3) et un chèque au montant de 46ꢀ164,72 $ apparemment émis à

l’ordre de Charcuterie & Grilladerie Chenoy (1976) Ltée (Avance aux

administrateurs) (pièce A-1). Quant au deuxième chèque la défenderesse devra

également produire une copie de celui-ci. Dans les deux cas, la reddition de

compte de la défenderesse inclura la production des relevés de comptes bancaires

attestant ou constatant l’usage qui a été fait du produit des deux chèques en

question.

Le Tribunal ORDONNE également que la défenderesse Argyros Sigounis

fournisse d’ici au 12 avril 2021 par l’entremise de son avocat Me Rosenzveig la

preuve documentaire qui devra être satisfaisante aux yeux du Tribunal confirmant

que le solde du prêt hypothécaire de 151ꢀ791,24 $ (pièce A-1) se trouvant toujours

dans le compte en fidéicommis de la notaire Morrisseau est suffisant pour

permettre au printemps 2021 la réfection complète du toit de l’édifice situé au 3616

boul. Saint-Jean à Dollard-des-Ormeaux et d’y installer deux nouvelles unités d’air

climatisé comme il avait été prévu à l’automne 2019. […]ꢀ»

Le Tribunal ACCORDE un nouveau délai jusqu’au 13 septembre 2021 à Me

Di Battista pour se conformer à cet ordre du Tribunal.

[Emphasis added]

[305] On the first day of the trial in October 2021, Jimmy’s lawyer reiterated that Argyro

had still not produced the cheques and invoices ordered on March 12, 2021, evidencing

the use of the funds borrowed with the $600,000 hypothecary loan authorized by the

Court in 2019.

[306] Argyro’s apparent reluctance may have been justified with the proof that was about

to be made in that respect.

[307] An “État des déboursements” as at August 30, 2021,¹¹⁰was produced. It related

to the Chenoy DDO $600,000 loan and was prepared by Notary Annie Morrisseau.

Surprisingly, it revealed an unused loan balance that had shrunk to $75,357.56 from the

amount of $151,791.24 appearing in Exhibit A-1¹¹¹filed in March 2021 in support of

Argyro’s sworn declaration in response to Jimmy’s Demand at the time.

[308] In other words, between the Court Orders rendered from March 12, 2021, onwards

until the trial was held in October 2021, the unused balance of the $600,000 loan went

from $151,791.24 to $75,357.56¹¹²with a differential of $76,433.44.

¹¹⁰CP-25A.

¹¹¹P-21.

¹¹²CP-25A.

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[309] According to the “État des déboursements”¹¹³, bearing in mind that the “urgent

repairs” had to be performed before the winter of 2019 for an estimated global amount of

$223,207.92, by the end of August of 2021, almost two years later, Chenoy DDO had

only spent a total of $109,270.54 on account of those “urgent repairs” with the roof only

being done in July 2021 (two winters later) at the cost of $54,038.25¹¹⁴instead of the

estimate of $90,446,23¹¹⁵provided to the Court in October 2019.

[310] The Court also bears in mind that the estimates produced by Argyro at the time

that were contested by Jimmy as exaggerated, also purported to justify a loan increased

to $600,000.

[311] Be that as it may, although the $600,000 loan proceeds were also used to pay the

previous hypothecary loans as directed by the Court in its judgment of October 28, 2019,

the evidence revealed that contrary to the Court’s Orders that provided strict instructions

on the use of the $600,000 loan proceeds, a cheque dated January 30, 2020, in the

amount of $46,164.72 payable to the order of Chenoy DDO¹¹⁶(as it should have been as

the borrower) was issued by the notary but according to Argyro, she erroneously

deposited the cheque in the bank account of DDO Restaurant instead of the bank account

of its true beneficiary, Chenoy DDO.

[312] In the “État des déboursements”¹¹⁷, the notary indicated that the proceeds of the

$46,164.72 cheque represented an “Avance aux administrateurs”.

[313] Argyro could not remember who actually asked the notary to issue that cheque

and whether it was issued because the lender would have given his permission, thus

ignoring completely the strict Orders of the Court.

[314] In any event, Argyro explained that the $46,164.72 were to refund advances made

in the past by DDO Restaurant to NKDS (the Country House).

[315] Then, why would Chenoy DDO use its own borrowed money destined for urgent

repairs to be carried on its building, and in contravention to the Court Order of October

28, 2019¹¹⁸, to “refund” debts due by NKDS to DDO Restaurant?

¹¹³Ibid.

¹¹⁴Ibid.

¹¹⁵P-2 of the Motion to lift the Safeguard Order in part of September 26, 2019.

¹¹⁶P-21B.

¹¹⁷CP-25A.

¹¹⁸ALLOWS and AUTHORIZES Chenoy Delicatessen & Steak House (1976) Ltd. to grant an immovable

hypothec against the Chenoy Property situated at 3616 St-Jean Boulevard, in the Municipality of Dollard-

des-Ormeaux to secure in favour of the lender a loan of up to $600,000 in capital with the strict

understanding that the proceeds of the proposed loan shall be used primarily to reimburse the two existing

hypothecary loans affecting the Chenoy Property in favour of the Scotia Bank and ICC and secondarily, to

carry out the repairs to the Chenoy Property situated at 3616 St-Jean Boulevard, in the Municipality of

Dollard-des-Ormeaux that were more fully described in Defendants’ “Motion to lift the Safeguard Order in

part” of September 26, 2019 [in reference to the estimates Exhibits P-2 to P-6]; [Emphasis added]