9354-9186 Québec inc. (Bluberi Gaming Technologies Inc.) c.  
Callidus Capital Corporation  
2022 QCCS 1999  
SUPERIOR COURT  
(Commercial Division)  
CANADA  
PROVINCE OF QUÉBEC  
DISTRICT OF MONTRÉAL  
No.:  
500-11-059300-208  
DATE: June 1, 2022  
_____________________________________________________________________  
BY THE HONOURABLE MARTIN F. SHEEHAN, J.S.C.  
_____________________________________________________________________  
9354-9186 QUEBEC INC. (formerly Bluberi Gaming Technologies Inc.)  
9354-9178 QUEBEC INC. (formerly Bluberi Group Inc.)  
GÉRALD DUHAMEL, ex officio trustee of Fiducie Gérald Duhamel  
GÉRALD DUHAMEL, ex officio trustee of Fiducie Familiale Gérald Duhamel OPCO  
GÉRALD DUHAMEL, ex officio trustee of Fiducie Familiale Gérald Duhamel  
HOLDCO  
GÉRALD DUHAMEL  
Plaintiffs  
v.  
CALLIDUS CAPITAL CORPORATION  
CATALYST CAPITAL GROUP INC.  
NEWTON GERSHON ZEV GLASSMAN  
DAVID M. REESE  
JAMES RILEY  
CATALYST FUND LIMITED PARTNERSHIP IV  
CATALYST FUND GENERAL PARTNER IV INC.  
Defendants  
and  
BLUBERI GAMING CANADA INC.  
Impleaded Party  
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PAGE: 2  
_____________________________________________________________________  
JUDGMENT  
_____________________________________________________________________  
OVERVIEW  
[1] Defendants, Callidus Capital Corporation (“Callidus”), Catalyst Capital Group Inc.,  
Catalyst Fund Limited Partnership IV, Catalyst Fund General Partner IV Inc. (together  
Catalyst”), Mr. Newton Gershon Zev Glassman (“Glassman”), Mr. David M. Reese  
(“Reese”) and Mr. James Riley (“Riley”)1 present two motions:  
1.1. A motion to dismiss the application on the basis that it is time barred or, in the  
alternative, that it be dismissed with regard to some of the Plaintiffs who have  
no interest in the matter;  
1.2. A motion to strike allegations and exhibits on the grounds that they are:  
a) irrelevant and prejudicial; or b) speculative and hypothetical.  
[2] Plaintiffs 9354-9186 Quebec Inc. (formerly Bluberi Gaming Technologies Inc.)  
(hereinafter “Bluberi Gaming”), 9354-9178 Quebec Inc. (formerly Bluberi Group Inc.)  
(hereinafter “BGI”, and collectively with Bluberi Gaming, “Bluberi”) and Mr. Gérald  
Duhamel (in his personal name and as a trustee of various trusts that own Bluberi shares)  
(“Duhamel”) contest the motions.  
[3] As a preliminary objection, they plead that Defendants should be estopped from  
filing these motions because they are late. In the alternative, they submit that the principle  
of prudence should govern at this stage and that any decision with regard to the merits or  
relevance of their allegations should be deferred to the trial judge.  
CONTEXT  
[4] The context of the motions is as follows:2  
[5] Bluberi is a Canadian gaming company that specialized in the development and sale  
of casino games. It was founded by Duhamel in 1994.  
[6] Duhamel was the president, secretary and sole director of Bluberi Gaming and BGI.  
He was also a trustee and beneficiary of Plaintiffs Fiducie Gérald Duhamel, Fiducie  
1
Family names in this judgment are used to facilitate the reader’s comprehension. No disrespect is  
intended nor should be implied.  
The description that follows is taken, in large part, from the allegations in the latest version of Plaintiffs’  
2
proceedings (the Re-Modified, Re-Particularized Application Originating a Proceeding as of April 19,  
2022 (the “Damage Proceedings”)). While these allegations must, for the most part, be assumed to  
be true at this stage, they are contested by the Defendants and have not been proven in court.  
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PAGE: 3  
Familiale Gérald Duhamel OPCO and Fiducie Familiale Gérald Duhamel HOLDCO  
(hereinafter collectively the “Trusts”), which are family trusts who held voting or  
participating shares in Bluberi Gaming or BGI.  
[7] BGI also held shares in Bluberi USA Inc., a company established for Bluberi’s US  
operations.  
[8] From 1994 to 2012, Bluberi focused on selling its technology and gaming content to  
third parties. These parties would incorporate Bluberi’s technology into their own gaming  
cabinets for use in casinos across North America. Most of Bluberi’s revenue during this  
period consisted of royalties collected by virtue of a joint venture with American Gaming  
Systems (“AGS”), a manufacturer/vendor of gaming machines placed in American  
Indigenous casinos in the United States. During this period, Bluberi’s revenue grew from  
approximately $1 million in 1997 to $10 million in 2000 and then to over $37 million in  
2012.  
[9] The casino gaming industry is highly competitive and requires constant and  
significant investments in technology.  
[10] In 2012, Bluberi decided to evolve from a content and technology provider to a full-  
service gaming manufacturer. It also decided to start distributing Class III games in  
addition to the Class II games developed until then.3  
[11] The change would allow Bluberi to provide casinos with “turn-key” products and  
services (i.e. fully functioning cabinet units that included software, hardware and technical  
on-site and off-site support) in exchange for a share of the revenue generated by the  
machines. Profit margins would be higher because they would no longer be divided with  
AGS.  
[12] To implement the change in its business model, Bluberi sought financing. A broker  
was mandated to canvass opportunities.  
[13] In early 2012, Callidus, which describes itself as an asset-based or distressed  
lender”,4 was introduced to Bluberi and Duhamel.  
3
In footnote 2 of their originating application, Plaintiffs explain that the three-tiered class system was  
created pursuant to the Indian Gaming Regulatory Act (Public Law 100-497-Oct. 17, 1988 100th  
Congress Sec. 2701) in the United States. The outcome of a Class II game is determined by the pattern  
generated from an electronic bingo game: the odds are a function of the patterns on the bingo card,  
and there is no strategy involved. The machine is connected to a central computer server whose  
function is to draw “bingo balls” randomly. This is in contrast to Class III games (table games like  
blackjack and poker, or slots and video games, where the result is determined by a random number  
generator located within a given machine itself). Class III requires much more sophisticated technology,  
as millions of calculations are made in a fraction of a second, applying numerous complex algorithms  
and formulas, all controlled by a central server located hundreds of kilometres away, to determine the  
outcome of bets placed or inputs made in hundreds or thousands of remote machines.  
4
9354-9186 Québec inc. v. Callidus Capital Corp., 2020 SCC 10, para. 5.  
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PAGE: 4  
[14] On April 24, 2012, the parties signed a term sheet (the “Term Sheet”)5 pursuant to  
which Callidus would provide $24 million to Bluberi in the form of a demand loan carrying  
interest at 18% per annum.  
[15] After signing the Term Sheet, Callidus required Bluberi to hire Hilco Enterprise  
Valuation Services LLC (“Hilco”) to evaluate Bluberi’s intellectual property (the “Bluberi  
IP”).6 It also hired other professionals (GDR Advisory Group and Fuller Landau) to  
conduct due diligence mandates on Bluberi.  
[16] In June 2012, Hilco concluded that the Bluberi IP had a liquidation value of up to  
$17.8 million.7  
[17] In July 2012, Bluberi executed documents to activate a “blocked account” (the  
Blocked Account”). Plaintiffs describe the Blocked Account as an important feature of  
Callidus’ credit facility agreements. Although the account was held in Bluberi’s name,  
Plaintiffs allege that Callidus used it to dictate the use of Bluberi’s working capital and  
therefore indirectly controlled Bluberi’s account. The agreements compelled Bluberi to  
deposit all receipts into the Blocked Account and forced Bluberi to obtain Callidus’  
consent prior to debiting any sums from the Blocked Account even when the withdrawal  
was to pay suppliers.  
[18] Right from the start the parties had disagreements with regard to the timing of the  
loan disbursements.  
[19] Bluberi assumed that, upon closing, it would receive the major part of the negotiated  
loan (approximately $20 million). However, on July 26, 2012, Callidus advised that  
disbursements would be made incrementally in accordance with certain milestones  
pertaining to the deployment of gaming machines.8  
[20] Bluberi believed that the purpose of the loan was to fund the research, development  
and manufacturing of machines and thus that the loan should pre-empt their deployment.  
Thus, the very next day, Bluberi sent a demand letter to Callidus to force it to honour the  
Term Sheet.9  
[21] Discussions ensued. Bluberi agreed to retract the demand letter.  
[22] On August 1, 2012, Callidus and Bluberi attended the offices of Callidus’ attorneys  
to sign the loan agreements. At signing, Callidus’ attorneys advised Bluberi that only  
$11.3 million would be disbursed. Duhamel protested. He picked up the signed  
documents and left.  
5
Exhibit P-15.  
Exhibit P-16.  
Exhibit P-17.  
Exhibit P-19.  
6
7
8
9
Exhibit P-20.  
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PAGE: 5  
[23] Email exchanges followed10 which Bluberi considered to be reassuring. A new  
closing was scheduled on August 9, 2012. Callidus advised Duhamel that it was willing  
to disburse $14 million. Again, Duhamel protested and threatened to go elsewhere.  
[24] Callidus sent its Chief Operating Officer, Reese, to Montréal to close the deal.  
[25] On August 15, 2012, Reese proposed that Callidus distribute $18.5 million on  
closing, and granted Bluberi’s request to allow it to keep, at all times, $1.5 million outside  
the Blocked Account. Bluberi agreed.  
[26] Hilco was asked to re-evaluate the Bluberi IP. They concluded that it was worth  
$22.8 million.11  
[27] On August 31, 2012, the parties signed loan documents (the “Loan Documents”)12  
for an amount of approximately $24 million. The loan was secured by all of Bluberi’s  
movable and immovable property as well as a personal guarantee from Duhamel.  
[28] Bluberi began distributing its new gaming machines in January 2013. Initially, the  
machines underperformed the “floor average” (the average revenue of all machines on  
the casino’s gaming floor) by 30%. Bluberi’s clients were upset and put significant  
pressure on Bluberi to increase performance. Some clients asked that Bluberi remove its  
machines.  
[29] Bluberi focused on improving game profitability in a limited number of casinos.  
Eventually, profit returns increased.  
[30] In February 2013, Bluberi asked Callidus for an advance of $5 million, which would  
bring the total loan amount to $29 million. Callidus eventually approved the disbursement  
on April 15, 2013.13 By then, Bluberi had depleted the funds in its operating account  
creating an overdraft situation which triggered an additional 3% interest to Callidus over  
the entire amount of the loan.  
[31] In July 2013, Bluberi asked Callidus for another $5 million advance, which would  
bring the total loan amount to $34 million. Callidus hesitated. Bluberi alleges that it was  
forced into an overdraft position triggering additional interest. Bluberi also had to wait for  
Callidus to review and approve each of Bluberi’s payables. According to Bluberi, these  
approvals were late in coming which led to conflicts with some critical suppliers as a result  
of them being paid late.  
10  
Exhibits P-22, P-23, P-87 and P-88.  
Exhibit P-24.  
Exhibit P-25.  
Exhibit P-25D.  
11  
12  
13  
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PAGE: 6  
[32] In November 2013, Callidus confirmed that it would approve an increase of  
$12 million, subject to Bluberi agreeing to an amended contract with more onerous  
conditions. These included a “kicker” of $2,8 million or 5% of the “business enterprise  
value” of Bluberi (whichever was greater) payable to Callidus upon the occurrence of a  
default or upon repayment of the loan. Bluberi agreed.14  
[33] In June 2014, Callidus approved a credit facility for an additional $10 million.15  
However, Bluberi alleges that when expenses, penalties, fees and interest are taken into  
consideration very little of the money went to operating expenses.  
[34] Callidus made changes to Bluberi’s management appointing a new Sales Director  
and a new Chief Operating Officer.  
[35] In June 2015, Callidus extended another credit facility for $14 million.16 According  
to Bluberi, the entire amount was used to pay for interest, fees and penalties to Callidus.  
The new arrangement also entailed modification to Bluberi’s board of directors with three  
of the four members being close to Callidus.  
[36] Bluberi alleges that from that point on, Callidus made decisions that were prejudicial  
to Bluberi (for example starting to sell cabinets at liquidation prices in September 2015)  
or failed to approve strategies that were in Bluberi’s interest (for example cancellation of  
the development of Jaguar circuit board and the Cole Kepro new gaming cabinet in June  
2015, the delaying of a transaction with Primero, etc.) and that were subsequently  
implemented when Callidus took over control of Bluberi.  
[37] In November 2015, the differences between Callidus and Bluberi came to a head.  
Callidus refused to fund the November 12 payroll unless Duhamel signed a Voting Trust  
Agreement increasing Callidus’ control over the company.17 Duhamel refused. Callidus  
threatened to forcefully seize the shares of BGI18 culminating in Bluberi filing proceedings  
(the “CCAA Proceedings”) under the Companies’ Creditors Arrangement Act (the  
CCAA”).19  
[38] In its petition, Bluberi alleged that its liquidity issues were the result of Callidus taking  
de facto control of the corporation and dictating a number of purposefully detrimental  
business decisions. According to Bluberi, Callidus engaged in this conduct in order to  
deplete the corporation’s equity value with a view to owning Bluberi and, ultimately, selling  
it.20  
14  
Exhibit P-25E.  
Exhibit P-25G.  
Exhibit P-29.  
Exhibit P-59.  
Exhibit P-64.  
Exhibit P-65.  
Bluberi’s petition, paras. 14, 22, 25, 138 and 176.  
15  
16  
17  
18  
19  
20  
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PAGE: 7  
[39] On November 12, 2015, Justice Jean-François Michaud granted an Initial Order that  
included a stay of proceedings against Bluberi (the “Stay of Proceedings”). Ernst &  
Young was eventually appointed Monitor to the company.21 In December 2015, Joe  
Pernica (“Pernica”) of Pernica Advisory Services Inc. was appointed as Chief  
Restructuring Officer (the “CRO”).  
[40] The CCAA Proceedings were vigorously contested.22  
[41] In January 2016, the court approved an expedited sale and solicitation process  
(“SSP”) for the assets of Bluberi.23  
[42] Eventually, Callidus made a “credit bid” for Bluberi’s assets, in an amount  
corresponding to its debt at the time less $3 million (approximately $91 million when the  
bid was entered), which no prospective purchaser matched.24  
[43] In June 2016, the court approved Callidus’ bid and the transaction closed in  
February 2017.  
[44] Callidus thus acquired almost all of Bluberi Gaming’s assets, which were then  
integrated into Callidus’ own existing casino operations, namely with Gateway Casinos &  
Entertainment Ltd. (“Gateway”).  
[45] The Superior Court allowed Bluberi to retain its litigation rights against Callidus.  
[46] Because Bluberi has no other assets, the Superior Court approved litigation funding  
to allow Bluberi to pursue its lawsuit.  
[47] In its proceedings first filed in November 2018, Bluberi alleges that Callidus and its  
directors and officers (Defendants Glassman, Reese and Riley) engaged in predatory  
lending practices which forced Bluberi to seek protection under the CCAA. They add that  
Callidus’ conduct during the CCAA proceedings impeded Bluberi’s restructuring efforts  
and led to the liquidation of Bluberi’s assets.  
[48] Plaintiffs are also suing Catalyst, Callidus’ parent company on the basis that Callidus  
is the alter ego of Catalyst.  
ANALYSIS  
[49] Defendants ask that Plaintiffs’ case be dismissed on the basis that it is time-barred.  
They allege that all of the elements of civil liability forming their right of action were known  
to Plaintiffs prior to November 7, 2015.  
21  
Exhibit P-66.  
22  
As appears in part from Callidus’ contestation of Bluberi’s petition for CCAA protection; exhibit P-67.  
Exhibit P-71.  
Exhibit P-74.  
23  
24  
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PAGE: 8  
[50] In the alternative they ask that for partial dismissal on the basis that:  
50.1.The Trusts and Duhamel lack sufficient interest to be claimants in the  
application or, alternatively, that they lack sufficient interest to seek damages  
for the alleged loss of Bluberi’s enterprise and to seek punitive damages; and  
50.2.The conclusions sought in the application in relation to: a) punitive damages;  
b) the annulment of Duhamel’s personal guarantee; and c) the seizure and  
sale of the shares of BGI for the execution of a judgment to be rendered in  
Plaintiffs’ favour are unfounded in law.  
[51] In a second motion Defendants ask that certain paragraphs of the Damage  
Proceedings be struck because they: a) consist of similar fact evidence; or b) speculative  
or hypothetical.  
[52] Defendants Motions raise the following questions and sub-questions:  
52.1.Should Plaintiffscase be totally or partially dismissed because it has no real  
chance of success even assuming the alleged facts are proven?  
a) Should the case be totally dismissed against all Plaintiffs because it is  
time-barred?  
b) Should the conclusions on the annulment of the personal guarantee be  
dismissed?  
c)  
Should the conclusion regarding the seizure of Bluberi Gaming Canada  
Inc. shares be struck?  
52.2.Should the case be totally or partially dismissed with regard to Duhamel or the  
Trusts for lack of interest?  
52.3.Should certain of the allegations of Plaintiffs action be struck?  
Tardiness  
[53] Before addressing these questions, the Court must deal with Plaintiffs’ preliminary  
argument with regard to the tardiness of the motions.  
[54] Defendants are correct to point out that a case protocol is a judicial contract that  
binds the parties. In many instances it may be important to bar late motions that would  
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PAGE: 9  
have the effect of unduly delaying proceedings. This is especially the case when the  
matter is ready to be heard or when a delay agreed to in the protocol has elapsed.25  
[55] However, a case protocol is not a straightjacket.26 The fact that a party failed to  
announce a motion in a case protocol does not imply a renunciation of its rights to present  
one.27 Courts have held that the delays to file motions to dismiss28 or motions to strike  
allegations29 are not peremptory. Cases evolve over time. Arguments ripen. Proceedings  
are amended. These changes often influence the parties’ analysis of their case and the  
way they decide to present it or respond to it. The particular fashion in which a case  
unfolds should definitely be examined before a party is deprived of its rights for failing to  
conform to the case protocol.  
[56] In the present case, the Damage Proceedings were initially stayed for months.  
[57] The first case protocol was signed by the parties in February 2021. In it, Defendants  
mention that they reserve their rights to file other preliminary motions following their  
receipt of particulars and documents.  
[58] Plaintiffs point to case law that states that a “reservation of rights” in the conclusions  
of a judgment has no effect.30 They conclude that the same applies to statements in a  
case protocol and thus that Defendantsnotice should be ignored. This argument is  
unfounded.  
[59] It is true that when they are filling in a case protocol, the parties should identify fixed  
dates for any pre-trial matter as opposed to dates that are contingent upon other events.  
Such a requirement respects the teachings of the C.C.P. which states that the protocol  
must “set the deadlines to be met within the strict time limit for trial readiness(art. 148  
C.C.P.). Therefore, a notice to the effect that other motions may be filed when  
amendments or documents are received does not respect the spirit of a case protocol.  
[60] This being said, while one of the purposes of the protocol is to establish a schedule  
for pre-trial matters, its goal is also to give notice to other parties of one’s intention to  
avoid surprises on their part. The C.C.P. also provides, for the possibility “if warranted by  
the complexity of the case or by special circumstances” for a complementary protocol to  
25  
9091-4532 Québec inc. (X-Métal) c. Construction Polaris inc., 2019 QCCS 1437; Dubois c. 2857-3640  
Québec inc. (Ferme Desjardins et Filles), 2017 QCCS 5805; Honco inc. c. Société canadienne de  
transfert technologique (4 SCATT) inc., 2009 QCCS 5183.  
Scene Holding Inc. c. Galeries des Monts inc., 2016 QCCA 1662, para. 27.  
26  
27  
SSAB Hardox c. McCarthy, 2006 QCCA 152, para. 15; Développement Olymbec inc. c. Avanti Spa de  
jour, 2016 QCCS 4320, para. 18.  
28  
Arbour c. Duclos, [2004] no AZ-50236370 (C.S.), para. 18; Formont inc. c. Progère Construction inc.,  
J.E. 2004-832 (C.S.), para. 5; Filtrum inc. c. Roch Lessard (2000) inc., J.E. 2004-833 (C.S.), para. 17  
(Withdrawal of appeal (C.A., 2004-08-05) 200-09-004779-044).  
Thomas c. Transport Watson Montréal ltée, 2011 QCCA 262, para. 10.  
Droit de la famille 21366, 2021 QCCA 453, para. 17; Blumenthal c. Di Zazzo, 2020 QCCA 1032,  
29  
30  
para. 15 (Application for order to reopen investigation abusive and dismissed, 2021 QCCS 3834).  
500-11-059300-208  
PAGE: 10  
provide for points that could not be determined at the case protocol stage. It also allows  
the parties to “identify certain points on which they were unable to reach an agreement”  
(art. 148 C.C.P. in fine). The C.C.P. also allows for disclosure and filing of preliminary  
exceptions at another time “with the authorization of the court” (art. 166 C.C.P.).  
[61] This is what happened here.  
[62] On November 25, 2021, a case management conference took place before Justice  
Christian Immer. The court prayed act of Plaintiffsundertaking to file a re-modified  
application by December 3, 2021, and allowed Defendants to file their motions by  
December 29, 2021. On December 31, 2021, after the motions were filed, the parties  
reappeared before Justice Immer and hearing dates were scheduled. These decisions  
were not appealed.  
[63] Case management decisions by the court are “considered to be part of the case  
protocol” and “they govern the conduct of the proceeding together with the case protocol”  
(art. 159 C.C.P.). While such measures can be revised, this should only happen in the  
presence of a change in circumstances.31 No such change occurred here.  
[64] Furthermore, no prejudice is suffered by the presentation of these motions. Plaintiffs  
are not taken by surprise. The case remains in its preliminary stages. Defendants have  
yet to file their plea and depositions have not yet taken place.  
[65] When the above circumstances are considered, it would not be appropriate to  
dismiss the motions simply because they were not disclosed at the outset.  
[66] It is thus necessary to delve into the merits of the motions and analyze the factors  
identified by the jurisprudence for each of them.  
[67] However, the fact that Defendants’ motions were filed so long after they received  
notice of the Damage Proceedings is a factor that can be taken into consideration when  
assessing the legal costs that should be paid in the event the motions are successful.32  
The Motion to Dismiss for Lack of Reasonable Chances of Success  
Legal Principles  
2.1.1 General principles  
[68] The principles applicable to a motion to dismiss at the pre-trial stage of litigation are  
well known. They can be summarized as follows:  
31  
Pop c. Boulanger, 2017 QCCA 1009, paras. 38 and 39.  
Art. 341 CCP; Luc CHAMBERLAND and al., Le Grand Collectif: Code de procédure civile:  
32  
commentaires et annotations, 4th ed., volume 1, Montreal, Éditions Yvon Blais, 2019, s. 168.  
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PAGE: 11  
68.1. The sound administration of judicial resources is essential to guarantee  
access to justice. To ensure this sound administration, the courts have been  
granted tools to terminate unfounded claims, even at the preliminary  
stage.33  
68.2. However, the consequences of dismissing an action at a preliminary stage  
are serious. Thus, the cardinal principle of access to justice also requires  
the court to be circumspect in the exercise of this power. As a general rule,  
the power to terminate litigation must be used “sparingly”. Premature  
termination should be avoided unless the recourse is “necessarily doomed  
to fail” and the situation is “clear and obvious”.34  
68.3. Whether the motion to dismiss alleges that a proceeding is “unfounded in  
law even if the facts alleged are true” (art. 168.2 C.C.P.) or alleges that it is  
abusive on the ground that it is “clearly unfounded, frivolous or intended to  
delay” (art. 51 C.C.P.), the rule is the same: one must act with the greatest  
caution. The motion will only be granted if it is clear that further  
consideration would be redundant.35  
68.4. In the case of a motion under article 168.2 C.C.P., the purpose of the review  
is to determine whether the conclusions sought are consistent with the facts  
and exhibits alleged which are then assumed to be true. This assumption  
applies to the facts themselves not to their characterization by the parties.36  
68.5. When the motion is based on article 51 C.C.P., the court may use the entire  
record, including any proceedings, exhibits as well as examinations already  
filed.37  
33  
34  
Brunette v. Legault Joly Thiffault, s.e.n.c.r.l., 2018 SCC 55 (hereinafter “Brunette”), paras. 48 and 49;  
Hryniak v. Mauldin, 2014 CSC 7, paras. 1 to 5 (Application to the Supreme Court rejected (C.S. Can.,  
2014-05-01) 34641); Canada (Procureur général) c. Confédération des syndicats nationaux, 2014 CSC  
49, para. 16; Canada (Attorney General) v. Lameman, 2008 SCC 14.  
Canada (Procureur général) c. Confédération des syndicats nationaux, supra, note 33, paras. 1, 17  
and 18; Bélanger c. Condominiums Onyx inc., 2021 QCCA 893, para. 2; Fanous c. Gauthier, 2018  
QCCA 293, paras. 15 and 16; Joyce c. Association internationale des débardeurs / International  
Longshoremen's Association, 2016 QCCA 1042, para. 35; Bohémier c. Barreau du Québec, 2012  
QCCA 308, para. 17; Acadia Subaru c. Michaud, 2011 QCCA 1037, paras. 30 and 31 (Motion for leave  
to appeal to Supreme Court denied, 34383); Entreprises Pelletier & Garon (Toitures inc.) c. Agropur  
Coopérative, 2010 QCCA 244, para. 4.  
Canada (Procureur général) c. Confédération des syndicats nationaux, supra, note 33, paras. 17 and  
18; Aliments Breton (Canada) inc. c. Bal Global France Canada Corporation, 2010 QCCA 1369, para.  
37; Acadia Subaru c. Michaud, supra, note 34, paras. 30 and 31; Développements Cartier Avenue inc.  
c. Dalla Riva, 2012 QCCA 431, para. 66; Masse c. Veilleux, 2018 QCCS 2928, para. 13.  
Canada (Procureur général) c. Confédération des syndicats nationaux, supra, note 33, para. 20;  
Fanous c. Gauthier, supra, note 34, para. 14; Bohémier v. Barreau du Québec, supra, note 34, para.  
66(1).  
35  
36  
37  
8187819 Canada inc. c. Dumoulin, 2017 QCCS 19, para. 34; Masse c. Veilleux, supra, note 35, para.  
13.  
500-11-059300-208  
PAGE: 12  
68.6. The motion to dismiss can apply to the whole proceeding or to part of it.38  
68.7. The court must not consider the degree of difficulty that a party may have in  
proving its allegations.39  
68.8. If the situation is clear or, if it is based solely on the resolution of a specific  
question of law, the court must decide without unnecessarily postponing the  
analysis of the problem to a later stage.40  
68.9. However, contested questions of fact or of mixed fact and law should be left  
to the discretion of the trial judge, rather than being decided on a motion to  
dismiss, since they undoubtedly benefit from further factual examination.41  
2.1.2 The Special Case of the Limitation Period  
[69] Caution is all the more warranted where the motion to dismiss alleges that the claim  
is prescribed. Indeed, the determination of the day on which a right of action arises (i.e.:  
the day that prescription begins to run) is a question of fact (or of mixed fact and law) that  
often, if not always, depends on an assessment of the circumstances of each case.42  
[70] Thus, while dismissal of an action on the basis of prescription remains possible,43  
the situation must be unequivocal.  
38  
Art. 168.2.  
39  
Bohémier v. Barreau du Québec, supra, note 34, para. 66(3); 8187819 Canada inc. c. Dumoulin, supra,  
note 37, para. 34; Masse c. Veilleux, supra, note 35, para. 13.  
Gillet c. Arthur, [2005] R.J.Q. 42 (C.A.), para. 29 (Application for leave to appeal to the Supreme Court  
40  
dismissed, 30769); Fortin c. Tribunal des droits de la personne et des droits de la jeunesse, 2016 QCCS  
3376, paras. 19 and 20; 8187819 Canada inc. c. Dumoulin, supra, note 37, para. 34; Masse c. Veilleux,  
supra, note 35, para. 13.  
41  
Mallat c. Autorité des marchés financiers de France, 2021 QCCA 1102, para. 124; 3952851 Canada  
inc. c. Groupe Montoni (1995), division Construction inc., 2017 QCCA 620, para. 34; Fanous c.  
Gauthier, supra, note 34, para. 16; Marchand c. Timu, 2019 QCCS 4552, para. 45.  
Pellerin Savitz LLP v. Guindon, 2017 SCC 29, para. 11; Christensen v. Roman Catholic Archbishop of  
42  
Québec, 2010 SCC 44, para. 2; 3632831 Canada inc. c. 4210310 Canada inc., 2018 QCCA 947, para.  
18; 3952851 Canada inc. c. Groupe Montoni (1995), division Construction inc., supra, note 41, para.  
34; Beaulieu v. Paquet, 2016 QCCA 1284, para. 20; J.V. c. Compagnie d'assurance-vie Croix Bleue,  
2013 QCCA 1686, paras. 6 and 18; S.C. c. Archevêque catholique romain de Québec, 2009 QCCA  
1349, para. 130 of Justice Chamberland’decision (confirmed by the Supreme Court of Canada, 2010  
CSC 44); Air Transat AT inc. c. Taillefer, 2006 QCCA 18, para. 8; Roberge (Succession de Filteau  
Roberge) c. Charland-Tousignant, 2019 QCCS 3281, paras. 28 to 32; Gestion Martin D'Astous inc. c.  
WSP Canada inc., 2018 QCCS 5464, paras. 61 and 62; Dubeau c. Lessard, 2015 QCCS 6144,  
para. 40; Ordre des Dominicains ou Frères prêcheurs au Canada (ODD) c. CIBC Wood Gundy inc.  
(WG), 2014 QCCS 367, paras. 29 and 30.  
43  
Desforges c. Ratté, 2006 QCCA 1519; Rosenberg c. Canada (Procureur général), 2014 QCCA 2041;  
9193-4265 Québec inc. c. Rubin & Rotman inc., 2016 QCCS 3487; Ville de Mascouche c. Architectes  
Rivest-Jodoin & Associé, 2019 QCCS 1996.  
500-11-059300-208  
PAGE: 13  
[71] For claims that seek to enforce a personal right for which no prescriptive period is  
determined, the limitation period is three years from the day on which the right of action  
arose.44 The day on which the right of action arises determines the beginning of the period  
of extinctive prescription.45 The right of action arises when the plaintiff becomes aware of  
the fault, the damage and the causal link between the two. Knowledge of these three  
elements must exist with a sufficient degree of certainty which goes beyond suspicion,  
fear, conjecture or a mere possibility.46 The injury must be concrete. It must have  
materialized, been incurred and be present (even if it cannot always be immediately  
quantified).47  
[72] On this last point, authors Baudouin, Deslauriers and Moore48 note that, as  
confirmed by article 2926 C.C.Q., when the appearance of the damage is delayed in  
relation to the fault, the case law considers that the prescription period starts from the day  
when the damage occurs, since it is only at that moment that the legal conditions for the  
right to sue are finally met.  
[73] Author Céline Gervais adds:49  
La question de la connaissance du dommage ou du préjudice appelle certains  
commentaires. Le dénominateur commun à toutes les situations où est examinée  
la question du préjudice tient au fait que sa manifestation doit être certaine. Il faut  
en effet que le dommage ait débuté, et qu’on en perçoive les premiers effets. La  
jurisprudence parle du moment où le dommage s’est réalisé, d’un préjudice actuel  
et certain, d’un dommage qui s’est cristallisé, ou encore du moment où le  
demandeur pouvait connaitre et évaluer sa perte. […]  
[L]e préjudice simplement hypothétique ou le préjudice de droit ne sont pas  
suffisants pour faire naître la prescription. On peut penser à titre d’exemple à  
l’hypothèse où une décision est annoncée, dont on sait qu’elle causera très  
certainement un préjudice. En ces cas, la jurisprudence conclut que ce n’est pas  
au moment de l’annonce d’une décision ou d’une mesure que débute la  
prescription, mais plutôt au moment de son entrée en vigueur ou de sa mise en  
application. Il faut en effet attendre que le dommage soit tangible.  
44  
Art. 2925 CCQ.  
Art. 2880 CCQ.  
45  
46  
Dehgahi c. Dufresne, 2021 QCCA 1428, para. 11; Pelletier c. Demers, 2021 QCCA 252, para. 33  
(Application allowed in part, 2021 QCCQ 13671); Lavoie c. Latouche, 2019 QCCA 2116, para. 69;  
Laniel Supérieur inc. c. Régie des alcools, des courses et des jeux, 2019 QCCA 753, para. 41; Beaulieu  
c. Paquet, supra, note 42, para. 17; Bolduc c. Lévis (Ville de), 2015 QCCA 1428, para. 53; Bomba c.  
Thomas, B.E. 2004BE-501 (C.A.), para. 11.  
47  
Pelletier c. Demers, supra, note 46, para. 33; Laniel-Supérieur inc. c. Régie des alcools, des courses  
et des jeux, supra, note 46, paras. 47 and 48.  
48  
Jean-Louis BAUDOUIN, Patrice DESLAURIERS et Benoît MOORE, La responsabilité civile, 8e éd.,  
volume 1, Cowansville, Éditions Yvon Blais, 2014, para. 1-1322.  
Céline GERVAIS, La prescription, Cowansville, Yvon Blais, 2009, pp. 111 and 112.  
49  
500-11-059300-208  
Discussion  
2.2.1 Dismissal on the basis of prescription  
PAGE: 14  
[74] Defendants ask that Plaintiffs’ case be dismissed because it is time barred.  
[75] Plaintiffs first filed their Damage Proceedings against Defendants on November 7,  
2018.  
[76] Given the three-year limitation period, Plaintiffs claim would be time barred if the  
cause of action arose before November 7, 2015.  
[77] Defendants plead that most of the faults alleged against the Defendants took place  
during the pre-contractual and contractual phases of the business relationship. These  
faults include:50  
77.1.Repeatedly imposing changes, at the eleventh hour, to commercial terms  
already agreed upon, after having engineered months of overdraft and  
financially squeezing Bluberi, forcing it to agree under financial duress to terms  
it would not otherwise have accepted;  
77.2.Taking advantage of the Blocked Account, precluding or delaying payments to  
critical suppliers and utilities, accountants and financial advisors, as well as to  
gaming commissions for gaming licenses and fees, all of which caused  
significant damage to Bluberi’s operations and commercial relationships;  
77.3.Taking inordinate amounts of time to provide authorizations or respond to  
urgent requests, frequently on the pretext that approval was required from  
Callidus’ “credit committee”, which also caused significant damage to Bluberi’s  
operations and commercial relationships;  
77.4.Interfering directly in Bluberi’s commercial operations despite Bluberi not  
having been declared formally in default; this included imposing certain  
executives and outside financial advisors on Bluberi, who had no knowledge  
of Bluberi’s business or market niche, to make decisions which were not in  
Bluberi’s best interests, all in the guise of protecting Callidus’ “investment”; and  
77.5.Rendering Bluberi unable to make debt repayments when due, which Callidus  
used as a pretext to impose increasingly onerous financial terms and  
conditions; this vicious circle caused a $40 million loan to balloon to over $130  
million, thereby in effect rendering Bluberi beholden to Callidus.  
50  
Damage proceedings, para. 7 and Amended Application for the Issuance of an Order Extending the  
Stay of Proceedings and for an Order Authorizing Litigation Funding and a Litigation Financing Charge  
dated February 15, 2018, para. 8 (exhibit R-8).  
500-11-059300-208  
PAGE: 15  
[78] In short, Bluberi alleges that Callidus was not so much interested in allowing Bluberi  
to repay its loan but preferred to keep Bluberi indebted until repayment was impossible,  
at which point Callidus could acquire Bluberi and exploit an otherwise valuable business  
for itself.51  
[79] Defendants are correct to point out that many of the alleged faults occurred prior to  
November 7, 2015. It is also true that in many instances in the Damage Proceedings,  
Plaintiffs allege that Defendants’ strategy became clear.52 However, that is not  
determinative.  
[80] As mentioned above, prescription does not start running before the damage occurs.  
This damage, according to the complaint, occurred when Callidus acquired Bluberi’s  
assets depriving the company of its property.53 The expedited SSP for Bluberi’s assets  
was ordered in January 2016. Callidus filed a credit bid shortly thereafter which was  
approved in June 2016. The transaction closed in February 2017.54 According to Bluberi  
this is when their damages occurred. Prior to the acquisition, they plead that the damages  
remained a mere possibility.  
[81] Indeed, Bluberi’s Petition for the Issuance of an Initial Order filed on November 11,  
2015, alleges that restructuring remains possible.55 The initial report of the monitor dated  
November 16, 2015, echoes this possibility.56 Defendants themselves seem to agree as  
they allege in their contestation to the CCAA Proceedings that Bluberi is “not cash flow  
insolvent”.57 In a judgment dated December 15, 2015, granting an extension of the stay  
of proceedings, Justice Michaud noted that Bluberi continues “to pursue a value  
maximization strategy […], to assess their alternatives to refinance, recapitalize, find a  
strategic partner to develop a business plan and/or develop a sale process for the benefit  
of all stakeholders”. He adds that these alternatives are not “doomed to fail”.58  
[82] Had Bluberi’s restructuring efforts been successful, it is possible that no damages  
would have been incurred.  
[83] Thus, while the alleged damages were certainly a possibility in November 2015, it  
cannot be established with certainty at this stage that they had materialized at that time.  
It follows that when the allegations of the Damage Proceedings are taken to be true, it  
cannot be said that Plaintiffs’ claim is time barred.  
51  
Damage proceedings, para. 145.  
Damage Proceedings, paras. 153, 159 and 189.  
Damage proceedings, paras. 345.8, 348 and 353.  
Damage Proceedings, para. 293.  
Exhibit P-65, paras. 40, 150, 151 and 169.  
First Report of the Monitor dated November 16, 2015, paras. 38 and 43.  
Exhibit P-67, Contestation of Callidus Capital Corporation dated November 16, 2015, paras. 5b) and  
52  
53  
54  
55  
56  
57  
128 to 130.  
58  
9354-9186 Quebec Inc. c. Ernst & Young Inc Controleur, C.S., Montréal, 500-11-049737-154,  
December 15, 2015, j. Jean-François Michaud.  
500-11-059300-208  
PAGE: 16  
[84] In addition, Plaintiffs also allege faults that occurred after November 7, 2015. For  
example, they allege that Defendants acted in bad faith in the course of the CCAA  
Proceedings and thus impeded Bluberi’s restructuring efforts.59  
[85] Therefore, even if the Defendants’ arguments are serious, the Court cannot be  
satisfied that the present situation constitutes a clear and unequivocal case, as required,  
for dismissal to be ordered at this preliminary stage of the case. The matter is thus best  
left to the trier of fact.  
[86] Defendants argue that they will be prejudiced if they are forced to go through a  
lengthy and costly trial. This is undoubtedly the case. Nonetheless, the following  
comments by Justice Léger respond to this argument:60  
[14] L’argument invoqué par l’appelante d’un procès inutilement long et complexe,  
vu le nombre d'employés que représente lintimée, est essentiellement un argument  
théorique. Au demeurant, il nest pas convaincant si on le compare au grave  
préjudice que représenterait un rejet prématuré de laction que lintimée a intentée.  
2.2.2 The Annulment of Duhamel’s Personal Guarantee  
[87] With respect to Duhamel’s personal guarantee,61 Plaintiffs seek the following  
conclusion:  
ORDER and DECLARE, de benne esse, that the personal guarantee executed by  
Gerald Duhamel on August 31, 2012, as subsequently amended, modified or  
restated, is null, void, and inoperative, à toutes fins que de droit.  
[88] Plaintiffs allege that this conclusion is justified by the allegations of false  
representations and by the fact that the debt is extinguished.62  
[89] These allegations, which must be considered as true for the purpose of a motion to  
dismiss, could possibly support the conclusions sought.63  
[90] This question is also best left to the judge who will hear the case on the merits.  
2.2.3 The Seizure and Sale of the Shares of Bluberi Gaming Canada Inc.  
[91] Plaintiffs seek the following conclusion:  
59  
Damage Proceedings, paras. 10 and 276 to 298.  
BPR-Bechtel inc. c. Commission des normes du travail, 2011 QCCA 766, para. 14.  
Exhibit R-12.  
Damage Proceedings, paras. 178 to 187 and 302.  
60  
61  
62  
63  
Larkin c. Boissonneault, [2003] R.D.I. 718 (C.A.), para. 43; Banque HSBC Canada c. Métivier, 2017  
QCCS 2900, para. 63.  
500-11-059300-208  
PAGE: 17  
DECLARE that any of the plaintiffs can seize and sell any or all of the shares of  
Bluberi Gaming Canada Inc. for the execution of any judgment to be rendered in  
their favour.  
[92] Plaintiffs allege that this conclusion goes with the one before it asking that the sale  
of the shares of Bluberi Gaming Canada Inc. not be set up against Plaintiffs.64  
[93] The Court of Appeal has recognized that a declaration of unenforceability can in  
certain circumstances, allow the creditor to seize the property in the hands of the person  
holding it as if it still belonged to the debtor.65  
[94] This question is also best left for the judge tasked to hear the case on the merits.  
The Motion to Dismiss for Lack of Personal Interest  
[95] Defendants seek the partial dismissal of the Damage Proceedings on the grounds  
that several Plaintiffs do not have a sufficient interest. In particular, they allege that the  
Trusts and Duhamel have no claim in law for loss of value of the Bluberi shares.  
Conclusion  
[96] The motion to dismiss with regard to the lack of interest of Duhamel is dismissed as  
partial dismissal for lack of interest is not possible and Defendants concede that Duhamel  
has a sufficient interest for at least part of the claim.  
[97] The motion to dismiss with regard to the Trusts is granted as the Trusts do not have  
a sufficient interest to claim for losses that were suffered by Bluberi.  
Legal Principles  
3.2.1 General principles  
[98] A person who wishes to file a judicial claim must have a sufficient interest.66 This  
“sufficient interest” has been defined as the benefit a plaintiff will derive from the  
proceeding he or she brings, assuming that it is well founded. In order to be considered  
sufficient, the interest must be direct and personaland cannot be premised on another  
party’s right of action.67  
64  
Damage Proceedings, paras. 345.1 to 345.14.  
Sakellaropoulo c. SLV Films inc., 2019 QCCA 333, para. 42; Levasseur c. 9095-9206 Québec inc.,  
65  
2012 QCCA 45, para. 102; Didier LLUELLES and Benoît MOORE, Droit des obligations, 3rd ed.,  
Montréal, Éditions Thémis, 2018, para. 2865.  
Art. 85 CCP.  
Brunette, para. 14; Jeunes Canadiens pour une civilisation chrétienne c. Fondation du Théâtre du  
66  
67  
Nouveau-Monde, [1979] C.A. 491, p. 493 (Motion for leave to appeal to the Supreme Court denied  
(C.S. Can., 1980-02-07).  
500-11-059300-208  
PAGE: 18  
[99] [T]o have the necessary interest to bring an action, a person must have sustained  
personal injury.68  
[100]When a person lacks this sufficient interest, a party may seek that the application  
be dismissed.69  
[101]The legal principles applicable to a motion to dismiss for lack of interest were  
recently re-examined by the Supreme Court of Canada in Brunette. These principles can  
be summarized as follows:  
101.1. The existence of a sufficient interest is not presumed. Plaintiff must allege  
the necessary facts to justify the sufficiency of his or her interest in a precise  
manner.70  
101.2. While the principle of prudence applicable to motions to dismiss also applies  
to motions to dismiss for lack of personal interest, sufficient interest is a  
condition of admissibility of a claim. It follows that this interest must be  
established before the court considers the claim on its merits. Thus, the  
plaintiff must be able to justify his or her interest at the preliminary motions’  
stage.71  
101.3. Unlike the rule applicable to motions to dismiss alleging the claim is  
“unfounded in law even if the facts alleged are true” (art. 168.2 C.C.P.), for  
the purposes of a motion to dismiss for lack of interest, the court is not  
required to treat the facts alleged as true.72  
101.4. Furthermore, while a motion to dismiss alleging the claim is “unfounded in  
law even if the facts alleged are true […] can pertain to only part of the  
application or defence” (art. 168.2 C.C.P.), this possibility is not open to  
motions to dismiss based on the first paragraph of article 168 (for example  
a motion to dismiss based on lack of sufficient interest). Thus, if a plaintiff  
has an interest for part of the claim, the motion to dismiss will fail.73  
3.2.2 The Particular Case of a Shareholder Suing for Damages Suffered by  
a Corporation  
[102]It is trite law that corporations have a legal personality that is separate from its  
shareholders. This entails that shareholders of corporations are shielded from  
68  
Bou Malhab v. Diffusion Métromédia CMR inc., 2011 SCC 9, para. 44.  
Art. 168.1(3) CCP.  
Brunette, para. 16.  
69  
70  
71  
Brunette, paras. 18,19, 46, 47, 48 and 49; Société d’habitation du Québec c. Leduc, 2008 QCCA 2065,  
para. 15; Paradis c. Association des propriétaires VDA, 2007 QCCA 1736, para. 5.  
Brunette, para. 20; Société d’habitation du Québec v. Leduc, supra, note 71, para. 16.  
Wilson c. Dias, 2016 QCCS 1302, paras. 13 to 15.  
72  
73  
500-11-059300-208  
PAGE: 19  
responsibility for liabilities incurred by the corporation even when the corporation has  
insufficient funds to pay.74  
[103]This benefit comes with a corresponding limit on the rights of shareholders. The  
distinct personality of corporations implies that they have a separate patrimony (art. 302  
C.C.Q.) and that they have the capacity to exercise and enforce their legal rights (art. 303  
C.C.Q.). As such, shareholders of corporations cannot personally make claims against  
third parties for damages suffered by the corporation or for the loss of value of their shares  
in the corporation.75 As the Supreme Court notes in Brunette: “The corporate veil is  
impermeable on both sides; just as shareholders cannot be liable for faults committed by  
the corporation, so too are they barred from seeking damages for faults committed against  
it.”76 This principle has been recognized by Quebec courts on numerous occasions.77  
[104]Two reasons are generally invoked to refuse such claims. Firstly, the interest of the  
shareholder is not considered personal as he or she is suing for a wrong caused to the  
corporation and not to the shareholder. Secondly, the damages caused to the shareholder  
are considered indirect and thus unrecoverable in civil law.  
74  
Paul MARTEL, La société par actions au Québec: les aspects juridiques, special edition, volume 1,  
Montréal, Wilson & Lafleur/Martel, 2021, paras. 24 to 247; Charles CHEVRETTE and Pierre-Christian  
COLLINS HOFFMAN, Responsabilité des administrateurs de sociétés par actions du Québec: sources  
supplétives de responsabilité civile et pénale, Montréal, Éditions Yvon Blais, 2016, paras. 5 and 21.  
P. MARTEL, supra, note 74, paras. 1-28, 1-28.1, 31-19 and 31-22.9.  
Brunette, para. 27; Frédéric PÉRODEAU (as he then was), “Le sort réservé à la réclamation d’un  
75  
76  
actionnaire pour la perte de valeur de ses actions: une revue de la jurisprudence québécoise” in  
Barreau du Québec, Les dommages en matière civile et commerciale (2006), vol. 255, Cowansville,  
Éditions Yvon Blais, 2006, pp. 5 and 6.  
77  
Groupe d’action d’investisseurs dans Biosyntech v. Tsang, 2016 QCCA 1923, paras. 23 to 27;  
Backman v. Canadian Imperial Bank of Commerce, [2004] R.R.A. 776 (C.A.), at pp. 797 and 798;  
Abattoirs Laurentides (1987) inc. v. Olymel, J.E. 2003-1262 (C.S.), paras. 129 to 134; Tardif v. Huot,  
B.E. 2001BE-454 (C.S.) (Out of court settlement (C.A., 2001-08-07) 500-09-010695-013);; Cartier v.  
Tessier, J.E. 99-1350 (C.S.); Moulin v. Aconvenbec Ltée, [1990] R.R.A. 577 (C.S.), p. 580; White c.  
Banque Nationale du Canada, [1986] R.R.A. 207 (rés.) (C.S.) (Discontinuance of appeal (C.A., 1986-  
09-16) 200-09-000240-868); Charland c. Banque canadienne impériale de commerce, J.E. 86-142  
(C.S.); Crevier c. Paquin, [1975] C.S. 260, p. 264; Silverman v. Heaps, [1967] C.S. 536, p. 539.  
500-11-059300-208  
3.2.2.1 Insufficient Interest  
PAGE: 20  
[105]Because the company has its own right of action for breaches of contract and to  
redress delictual faults committed against it, no cause of action vests in the shareholder  
for such claims. As the English Court of Appeal observed: “When the shareholder  
acquires a share he accepts the fact that the value of his investment follows the fortunes  
of the company and that he can only exercise his influence over the fortunes of the  
company by the exercise of his voting rights in general meeting.78 If a shareholder  
believes that the people who control the company are neglecting to take action, he or she  
can obtain permission to file a derivative action.79  
[106]This rule also protects the interests of other creditors of the corporation. When the  
company successfully sues a wrongdoer, all of its stakeholders benefit. The proceeds of  
the lawsuit can be used to pay the company’s creditors. Only the surplus enhances  
shareholder value. Allowing shareholders to sue directly for prejudice suffered by the  
company would permit them to circumvent the rights of company creditors.80  
3.2.2.2 Indirect damage  
[107]A party is entitled to damages that are the “immediate and direct consequence of  
the debtor’s fault”.81  
[108]As a corollary, damages which are indirect are not recoverable. Damages are  
considered indirect when they are caused, not by the act of the wrongdoer, but rather by  
the damage which the wrongdoer caused.82  
[109]For example, when shareholders claim damages against third parties further to the  
insolvency of the corporation in which they own shares, these damages are considered  
indirect. Such damages were not caused directly by alleged breach of the wrongdoers  
who contributed to the insolvency but rather by the insolvency itself which in turn caused  
the shares to lose value.83  
78  
Prudential Assurance Co. v. Newman Industries Ltd. (No. 2), [1982] 1 All E.R. 354, p. 367, cited with  
approval by the Supreme Court of Canada in Hercules Managements Ltd. v. Ernst & Young, [1997] 2  
RCS 165, para. 59.  
79  
Canada Business Corporations Act, R.S.C. 1985, c. C-44, s. 239; Business Corporations Act, CQLR,  
c. S-31.1, s. 445; P.MARTEL, supra, note 74, paras. 31-26.  
Brunette, para. 53; Groupe daction d'investisseurs dans Biosyntech c. Tsang, supra, note 77, para.  
80  
25.  
81  
Art. 1607 CCQ.  
82  
J.-L. Baudouin, P. Deslauriers and B. Moore, supra, note 48, no 1-684.  
Groupe d'action d'investisseurs dans Biosyntech c. Tsang, supra, note 77, para. 23.  
83  
500-11-059300-208  
PAGE: 21  
3.2.2.3 Claims for injury caused to the shareholders and suffered by the  
shareholders  
[110]While it is theoretically possible for shareholders to possess their own right of action  
against a defendant who committed a fault against the corporation, such an exceptional  
claim requires two conditions:  
110.1. that the defendant breached a distinct obligation owed to the shareholders;  
and  
110.2. that the breach resulted in direct damage suffered by the shareholders,  
independent of the damage caused to the corporation.84  
[111]This is the scenario that the Supreme Court of Canada analyzed in Houle v. Banque  
Canadienne Nationale. In Houle, the court concluded that because the bank was aware  
that the shareholders had received an offer to purchase their shares, the bank owed a  
distinct legal obligation to the shareholders, in addition to its contractual obligations owed  
to the company. This obligation was to act reasonably and more specifically not to  
prejudice the imminent sale of shares by exercising its contractual rights (i.e. demanding  
payment of the loan) in an abusive manner. The shareholders completed their sale at a  
price far lower than the offer they had received prior to the bank demanding repayment.  
The bank was held liable for the difference.  
[112]It is worth noting that Justice L’Heureux-Dubé was very careful to point out that her  
decision was confined to this particular set of circumstances:85  
The respondentsfamily and the family business had a financial relationship with  
the bank encompassing more than fifty years. […] While this may indicate that the  
banks relationship was not only with the companyitself, but with the  
shareholders personally, these facts alone would not be sufficient to create a legal  
obligation on the part of the bank towards the respondent shareholders,  
independent from its contractual obligations to the company. When banks enter  
into financial relationships with small, family-owned companies, the above facts  
are usually present. Generally speaking, contractual obligations do not entail a  
general legal obligation to act reasonably towards third parties, but only contractual  
obligations towards the parties to the contract.  
[…] Although the obligation to repay the loan and the right to recall the loan formed  
part of the contract between the bank and the company, no obligation of diligence  
towards the shareholders arose from the contract itself. Such obligation arose from  
the law (art. 1053 C.C.L.C.) in the light of the facts of this case.  
[Underlining in the original text]  
84  
Brunette, paras. 29 to 31; Houle v. Banque Canadienne Nationale, [1990] 3 S.C.R. 122 (hereinafter  
« Houle »).  
Houle, p. 184.  
85  
500-11-059300-208  
Discussion  
3.3.1 Duhamel  
PAGE: 22  
[113]With regard to Duhamel, at the hearing, Defendants conceded that Duhamel has a  
sufficient interest to claim for his loss of revenue and loss of salary (para. 355 of the  
Damage Proceedings).  
[114]As a motion to dismiss for lack of interest cannot be filed for part of a claim only, this  
concession with regard to Duhamel’s standing brings about the dismissal of Defendants’  
motion with regard to Duhamel.  
[115]With regard to the Trusts however, the motion must succeed.  
3.3.2 The Trusts  
[116]The corporate structure of Bluberi is described by Plaintiffs86 as follows:  
86  
Exhibit P-4.  
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PAGE: 23  
[117]The Trusts directly or indirectly own shares in the Bluberi corporations. Duhamel  
does not own shares. He is the trustee of the Trusts and the partial beneficiary of them.  
[118]A trust creates a patrimony by appropriation. Once the settlor of trust transfers  
property from his patrimony to the trust, this trust property becomes autonomous and  
distinct from the property of the settlor. It is also separate and distinct from the property  
of the trustees or of the trust beneficiaries. The settlor, the trustees or the beneficiaries  
have no real right in the trust property.87  
[119]Applying the principles discussed by the Supreme Court of Canada in Brunette and  
Houle, the Trusts cannot claim damages suffered by Bluberi or corresponding to the loss  
of value of their shares in Bluberi.  
[120]In order to demonstrate a sufficient interest, the Trusts were bound to allege precise  
facts to establish that they had an independent cause of action in civil liability against the  
Defendants. This required them to show: 1) that the Defendants breached a distinct legal  
obligation owed to the Trusts; and 2) that this breach caused the Trusts to suffer a direct  
injury distinct from the damages suffered by the Bluberi corporations.  
[121]They have failed to do so.  
[122]On the one hand, Plaintiffs do not allege an independent obligation owed to the  
Trusts nor do they allege an independent fault that Defendants would have committed  
towards them. Rather, the Damage Proceedings either:  
122.1. deal with the faults in a bulk fashion as if each breach represents a fault of  
the Defendants as a whole committed towards the Plaintiffs as a group; or  
122.2. focus on abuse within the contractual relationship between the lender  
Callidus and the borrowing Bluberi entities.  
[123]For example:  
123.1. Defendants have engaged in what can be characterized as “predatory  
lending practices” in respect of the Plaintiffs (para. 7).  
123.2. Callidus attempted to unilaterally modify the terms of the financing (paras.  
85 and 105).  
123.3. Callidus dispersed funds late forcing Bluberi to languish in overdraft and  
incur interest and penalties (paras. 126, 141, 144 and 165) and forced  
Bluberi to agree to different and more onerous terms (paras. 134, 159 and  
226).  
87  
Art. 1260 and 1261 C.C.Q.; Yared c. Karam, 2019 SCC 62, para. 17; Levasseur v. 9095 9206 Québec  
inc., supra, note 65, para. 74.  
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PAGE: 24  
123.4. Callidus thwarted Bluberi’s growth by blocking new projects and ideas  
(paras. 152, 188 and 194).  
123.5. Callidus replaced several key players within Bluberi and took control of the  
board of directors (paras. 175, 180, 199 and 239).  
123.6. Callidus prevented Bluberi from paying its suppliers on time (paras. 209 and  
210).  
123.7. Callidus demonstrated bad faith in the course of the CCAA Proceedings in  
an attempt to prevent Bluberi from restructuring (paras. 297 and 316).  
123.8. Defendants all participated in the conspiracy to provoke and unduly benefit  
from the demise of Bluberi, to ultimately take ownership of the business,  
and then attempt to stifle Plaintiffs’ ability to pursue this recourse (para.  
304).  
123.9. The tactics employed by Callidus against Bluberithe incremental  
stranglehold over and hemorrhaging of borrowers; the insidious takeover of  
the operating borrowing entities; the replacement of managers and  
directors; the provocation of insolvency situationshave been alleged in  
other proceedings, by other borrowers of Callidus and is part of a pattern  
(paras. 305 and 306).  
123.10. Defendants’ conduct in this matter was premeditated, deliberate, animated  
by bad faith and an intent to injure in order to provoke and then unduly and  
unlawfully profit financially from Bluberi’s demise, as well as from the fruits  
of Plaintiffs’ labour and investments (para. 311).  
123.11. Defendants acted in bad faith in the context of: a) the implementation and  
execution of the contractual and business relationship between Callidus and  
Bluberi; b) in the context of the performance of the credit facility agreements  
concluded between Callidus and Bluberi; and c) in the context of the  
extinction of such obligations and contracts (paras. 319 to 321).  
[124]Even when the Damage Proceeding highlights faults committed by one Defendant  
in particular (paras. 63, 66 and 68), it does not distinguish between the fault committed  
towards the Trusts and the faults committed towards Bluberi.  
[125]Therefore, as was the case in Brunette, Plaintiffs confuse the obligations owed by  
the Defendants to Bluberi and those owed to the Trusts.88  
[126]The same comment can be made with regard to the damages claimed.  
88  
Brunette, para. 37.  
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[127]With regard to the loss of value of the Bluberi business, the claim makes no  
distinction between the damages suffered by Bluberi and the damages suffered by the  
Trusts.  
353. Accordingly, accounting for the loss of enterprise sustained, less the moneys  
effectively advanced by Callidus, Plaintiffs claim from Defendants (…) in solidum,  
the sum of $198,600,000, sauf à parfaire.  
[128]The Damage Proceedings contain no allegation that the Trusts suffered any  
independent and direct injury as a result of faults committed by the Defendants which  
would be independent from the faults purportedly committed against Bluberi.  
[129]The modification made on the day of the hearing and in response to Defendants  
motion to dismiss (changing solidarily to in solidum) is insufficient to satisfy the  
requirement that the damages claimed by the shareholders be distinct from the damages  
caused to the corporation. In fact, the inescapable conclusion is that Plaintiffs have failed  
to distinguish the damages because these damages cannot be distinguished.  
[130]That is not to say that Duhamel and the Trusts have not suffered from the potential  
injury caused to Bluberi. Because the Trusts are the shareholders of Bluberi and Duhamel  
is the beneficiary of the Trusts, any damage to Bluberi would have had consequences on  
them. However, this impact is an indirect damage that cannot justify a sufficient interest.  
[131]As the Supreme Court of Canada noted in Kosmopoulos v. Constitution Insurance  
Co., “[h]aving chosen to receive the benefits of incorporation, [they] should not be allowed  
to escape its burdens.89  
[132]Thus, the Trusts’ claim does not satisfy the requirements for an autonomous cause  
of action on behalf of the shareholders for losses suffered by the corporation.  
[133]Plaintiffs plead that the existence of the SSP is a circumstance that brings the  
present matter closer to the factual situation present in Houle rather than the situation  
present in Brunette.  
[134]This argument has no merit.  
[135]Unlike the very particular factual situation in Houle, the Trusts had no offer on the  
table for the purchase of the Bluberi shares. While Plaintiffs are correct that the SSP did  
“not place limits on the form of transaction that may be put forward by a Qualified  
Bidder”,90 given the indebtedness of Bluberi at the time, the SSP could not realistically -  
and in fact did not - contemplate a sale of the Bluberi shares. The SSP specifically defines  
89  
Kosmopoulos v. Constitution Insurance Co., [1987] 1 S.C.R. 2, p. 11 cited with approval in Brunette at  
para. 39.  
90  
Exhibit P-71, Sale Solicitation Process, p. 3, para. 1.  
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PAGE: 26  
the assets that are subject to the process as the “movable and immovable assets, rights  
and undertakings” belonging to Bluberi91 not those belonging to the Trusts.  
[136]The same conclusion applies to punitive damages. As there are no allegations of  
faults committed directly against the Trusts, there can be no punitive damages attached  
to such faults.  
[137]Moreover, punitive damages are exceptional. They can only be awarded when they  
are “provided for by law.”92  
[138]Section 49 of the Charter of human rights and freedoms provides for this possibility  
if there has been unlawful and intentional interference with a right protected by the  
Quebec Charter. This requires: 1) that the wrongful behaviour constitute a violation of a  
right protected by the Charter; and 2) that this interference be intentional, that is to say  
that the consequences of the behaviour must have been intended or, at the very least,  
that the immediate, natural or extremely probable consequences of this conduct must  
have been known.93  
[139]Plaintiffs allege that they have been intentionally deprived of their right to peaceful  
enjoyment and free disposition of property, in violation of article 6 of the Quebec Charter.  
[140]As discussed above, Bluberi’s property is distinct from that of its shareholders. With  
regard to the Trusts, there are no allegations to support a conclusion that they were  
deprived of their property.  
[141]The Trusts still hold their shares even though the value of the shares may have  
suffered.  
[142]The punitive damages claimed by the Trusts and Bluberi are one and the same. The  
last-minute change to add the words “divided equally” do not deter from this conclusion:  
356. Moreover, Plaintiffs are entitled to claim and do hereby claim the following  
sums for punitive damages to be divided equally between the Plaintiffs, including  
damages pursuant to the Quebec Charter of Rights and Freedoms and article 1621  
CCQ:  
(a) From Callidus: the sum of $10 million;  
(b) From Catalyst: the sum of $10 million;  
(c) from Defendant Glassman: the sum of $5 million;  
(d) from Defendant Reese: the sum of $2 million;  
91  
Exhibit P-71, Sale Solicitation Process, p. 1, Introduction.  
Art. 1621 CCQ.  
Cinar Corporation v. Robinson, 2013 CSC 73, para. 114.  
92  
93  
500-11-059300-208  
(e) from Defendant Riley: the sum of $2 million.  
PAGE: 27  
[143]This court has not hesitated in the past to reject, even at a preliminary stage, claims  
seeking punitive damages where the allegations of the claim do not support such an  
award.94  
The Motion to Strike  
Conclusion  
[144]The motion to strike is granted in part.  
[145]While the allegations regarding other potential abusive conduct by Callidus (paras.  
305 to 307) could be minimally relevant, the Court is convinced that the time required to  
investigate these allegations would infringe the rule which requires that pleadings be  
proportionate, in terms of the cost and time involved, to the nature and complexity of the  
matter and the purpose of the application.  
[146]The allegations with regard to the appointment of the CRO (para. 283), the dispute  
between Boyer and Callidus (paras. 308 to 310) as well as the allegation to the effect that  
Bluberi was justified in refusing some of Callidus’ proposals (para. 112) all have a logical  
connection to the dispute and their evaluation is best left to the trial judge.  
Legal Principles  
[147]Article 169 C.C.P. allows a party to ask that allegations or exhibits95 that are  
immaterial to the dispute be struck. The purpose of the rule is to circumscribe the debate  
between the parties and prevent it from being diverted or tainted by irrelevant allegations.  
This benefits the parties as well as the judicial system as a whole as it avoids the  
unnecessary costs and delays involved to refute or explain facts which are considered  
immaterial or merely tangential to a dispute’s resolution.96  
[148]In general, evidence of any relevant fact is admissible.97 Evidence is relevant when  
it aims at proving or refuting a fact in dispute or when it can help the court to assess the  
probative value of testimony.98 As such, relevance of allegations must be measured by  
94  
Parisien c. Hôtel du Lac Tremblant inc., 2018 QCCS 2068 (Appeal dismissed, 2018 QCCA 2217); CFG  
Construction inc. c. Régie du bâtiment, 2017 QCCS 5686, paras. 87 to 91; Singer c. 1867054 Alberta  
Inc., paras. 92 to 96 (Motions for leave to appeal and to suspend the provisional execution of the  
Superior Court judgment dismissed, 2017 QCCA 718).  
Desmarteau c. Ontario Lottery and Gaming Corporation, 2013 QCCA 2090, paras. 26 to 31.  
Thouin c. Ultramar ltée, 2014 QCCS 3946, para. 6.  
95  
96  
97  
Art. 2857 C.C.Q.  
98  
Groupe Ledor inc., mutuelle d'assurances c. Bourret, 2014 QCCA 1331, para. 2; Association des  
propriétaires de Boisés de la Beauce c. Monde forestier, 2009 QCCA 48, paras. 19 and 20; St-Onge-  
Lebrun c. Hôtel-Dieu de St-Jérôme, [1990] R.D.J. 56 (C.A.), para. 9; Domaine de la Rivière Inc. c.  
Aluminium du Canada Ltée, [1985] R.D.J. 30 (C.A.), para. 15.  
500-11-059300-208  
PAGE: 28  
their degree of connection with the subject matter of the dispute. When dealing with a  
demand, one must consider the allegations in light of the cause of action and the  
conclusions sought. When dealing with a contestation, allegations are material if they are  
logically connected to the denial of plaintiff’s allegations.99 When in doubt as to whether  
an allegation is relevant, one must usually trust the party making the allegation.100  
Prudence is all the more warranted in the presence of a complicated case that raises a  
myriad of issues.101  
[149]Conclusions, arguments, opinions, speculations or innuendoes in connection with  
alleged facts are generally not useful.102  
[150]Moreover, even if a fact is logically relevant, a court retains the right to refuse  
otherwise admissible evidence when its probative value is low and the evidence risks:  
a) causing confusion with regard to the issues in dispute; b) unduly prejudicing a party, a  
witness or a third party; or c) if it involves an inordinate amount of time which is not  
commensurate with its probative value.103  
[151]This often quoted rule is even more important today when considered in light of the  
guiding principles which require the Court to safeguard the principle of proportionality  
(article 18 C.C.P.), ensure proper case management and “confine cases to what is  
necessary to resolve the dispute” (article 19 C.C.P.).104 As justice Gaudet wisely  
observes,105 the importance of these principles must be kept in mind when reviewing  
jurisprudence that predates 2016. While such decisions are still generally relevant and  
useful, one must ensure that the solutions they provide are compatible with the principles  
established by the current Code of Civil Procedure, taking into account its general  
philosophy and the shift it seeks to impose on judicial culture.  
[152]As the Supreme Court of Canada106 reminds us [e]nsuring access to justice is the  
greatest challenge to the rule of law in Canada today. In order to create an environment  
promoting timely and affordable access to the justice system, “a culture shift is required  
99  
2733-4077 Québec inc. c. Kingsey Falls (Municipalité de), [2002] no AZ-50112289 (C.S.); Jolin c.  
Montreal Trust Company of Canada, [1997] no AZ-50376640 (C.S.).  
100  
Groupe Ledor inc., mutuelle d’assurances c. Bourret, supra, note 98, para. 2; Corp. McKesson Canada  
c. Losier, [2004] R.J.Q. 1178 (C.A.), paras. 21 to 23; St-Onge-Lebrun c. Hôtel-Dieu de St-Jérôme,  
supra, note 98, para. 10.  
Hydro-Québec c. Litostroj/Arno, s.e.n.c., 2015 QCCA 874, para. 2.  
101  
102  
St-Gédéon (Municipalité de) c. Côté, 2016 QCCS 1950, paras. 13 to 17; Mercier c. Massé, 2011 QCCS  
4834, para. 38.  
103  
Jean-Claude ROYER and Catherine PICHÉ, La preuve civile, 6th ed., Montréal, Éditions Yvon Blais,  
2020, para. 218; Claude MARSEILLE, La règle de la pertinence en droit de la preuve civile québécois,  
Cowansville, Éditions Yvon Blais, 2004, paras. 41 and following; R. c. Mohan, [1994] 2 R.C.S. 9; 9217-  
4887 Québec inc. c. Yves Rocher Amérique du Nord inc., 2016 QCCS 5123, para. 32; Thouin c.  
Ultramar ltée, supra, note 96, para. 9.  
C. PICHÉ et J.-C. ROYER, supra, note 103, para. 211;  
9217-4887 Québec inc. c. Yves Rocher Amérique du Nord inc., supra, note 103, para. 25.  
104  
105  
106  
Hryniak v. Mauldin, 2014 SCC 7, paras. 1 and 2 (Request for a new hearing at the Supreme Court  
rejected, 34641).  
500-11-059300-208  
PAGE: 29  
in order to create an environment promoting timely and affordable access to the civil  
justice system”. This requires “moving the emphasis away from the conventional trial in  
favour of proportional procedures tailored to the needs of the particular case. The balance  
between procedure and access struck by our justice system must come to reflect modern  
reality and recognize that new models of adjudication can be fair and just.”  
[153]According to our highest court, the proportionality principle, enshrined in many  
provincial procedural rules acts “as a touchstone for access to civil justice”. Applying this  
rule requires “taking account of the appropriateness of the procedure, its cost and impact  
on the litigation, and its timeliness, given the nature and complexity of the litigation”.107  
[154]Notwithstanding the above, at a preliminary stage, the concept of relevance should  
be appreciated generously as the court then only has a superficial glimpse of the evidence  
that a party intends to provide. A court seized with a motion to strike allegations must thus  
proceed with caution.108  
[155]With regard specifically to similar fact evidence, there is no cardinal rule that allows  
or excludes this type of evidence.  
[156]Evidence of similar conduct has been admitted (or at least allegations of this type  
have been allowed to remain) in the following cases:  
156.1. Where the evidence establishes something other than the character of the  
defendant, such as a system or modus operandi in the way he or she does  
things;109  
156.2. To prove entitlement to punitive damages;110 or  
156.3. To prove gross negligence where evidence of prior negligent conduct in  
similar circumstances might strengthen the case.111  
107  
Ibid, paras. 31 and 32; Szeto v. Dwyer, 2010 NLCA 36, para. 53.  
Hydro-Québec c. Litostroj/Arno, s.e.n.c., supra, note 101, para. 3; Desmarteau c. Ontario Lottery and  
108  
Gaming Corporation, supra, note 95, para. 32; Thomas c. Transport Watson Montréal ltée, supra, note  
29, para. 14; Poulin c. Groupe Jean Coutu (PJC) inc., 2006 QCCA 49, para. 9; Corp. McKesson Canada  
c. Losier, supra, note 100, para. 23.  
109  
C. PICHÉ et J.-C. ROYER, supra, note 103, para. 238; Rozon c. Les Courageuses, 2020 QCCA 5,  
para. 94 (Application for leave to appeal to the Supreme Court dismissed (S.C. Can., 2020-11-16)  
39115); Caron c. Voyer, 2013 QCCA 1335, para. 77 (Motion to dismiss appeal dismissed, 2011 QCCA  
14); Thouin c. Ultramar ltée, supra, note 96, para. 16; Ébénisterie classique inc. c. Société en  
commandite Gaz Métro, 2013 QCCS 1107, para. 44, Lescoat c. Bisson, [1989] R.J.Q. 2807 (C.S.), pp.  
4 and 5.  
110  
Ébénisterie classique inc. c. Société en commandite Gaz Métro, supra, note 109, paras. 48 and 49;  
Caron c. Clément, [2005] no AZ-50346603 (C.S.), paras. 18 to 20.  
111  
Thomas c. Transport Watson Montréal ltée, supra, note 29, para. 13.  
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PAGE: 30  
[157]However, similar fact evidence is exactly the type of evidence that is at risk of  
offending the principle of proportionality. Indeed, its probative value is often limited and  
yet it involves an inordinate amount of time which is often incommensurate with its  
usefulness. Thus, similar fact evidence has been refused when:  
157.1. Its sole purpose is to show bad character and lead the court to conclude  
that one of the parties has a propensity to act in a reckless manner;112  
157.2. A party is attempting to plead a case for other plaintiffs who are not a party  
to the litigation;113  
157.3. Admitting the evidence would have the effect of rendering the proceedings  
unnecessarily long and cumbersome and transform a claim for damages  
into a commission of inquiry.114  
Discussion  
4.3.1 The Allegations with Regard to Other Loan-to-Own Strategies  
[158]The disputed allegations read as follows:  
8. Although the Plaintiffs did not know it at the time, the behaviour described above  
is consistent with the treatment that other borrowers have been subjected to by  
Callidus, which has been the product of what can be described as a "loan-to-own”  
strategy.  
305. The tactics employed by Callidus against Bluberithe incremental  
stranglehold over and hemorrhaging of borrowers; the insidious takeover of the  
operating borrowing entities; the replacement of managers and directors; the  
provocation of insolvency situationshave been alleged in other proceedings, by  
other borrowers of Callidus.  
306. Callidus’ approach to Bluberi appears to be part of a discernable pattern.  
Callidus has been accused of operating in a very similar manner in cases involving  
Groupe Arsenault Inc. (Trois-Rivières, Québec); Fortress Resources, LLC  
(Kentucky, USA); Xchange Technology Group LLC (Toronto, Ontario); ESCO  
Marine, Inc. (Texas, USA); and Alken Basin Drilling Ltd. (Calgary, Alberta). Certain  
principal proceedings pertaining to these matters, in which a similar pattern of  
behaviour on the part of Callidus is alleged, are communicated en liasse as Exhibit  
P-75.  
112  
C. MARSEILLE, supra, note 103, para. 96; 9219-9397 Québec inc. c. Steinberg, 2012 QCCA 725,  
para. 10.  
113  
Poulin c. Groupe Jean Coutu (PJC) inc., [2005] no AZ-50308512 (C.S.)), para. 28 (confirmed by the  
Court of Appeal, 2006 QCCA 49).  
Ibid, para. 12; 9176-8531 Québec inc. c. Quizno's Canada Restaurant Corporation, 2016 QCCS 2233,  
114  
para. 22.  
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PAGE: 31  
307. Callidus has denied all allegations of wrongdoing and has, in many instances,  
sued various parties, including journalists and claimants, for defamation and other  
causes of action.  
[159]Defendants allege that these allegations are irrelevant and would infringe the  
proportionality rule.  
[160]They also raise specific arguments with regard to two of the alleged cases.  
[161]The ESCO Marine case was settled out of court.115 It is a well-established principle  
that settlements or settlement discussions cannot be alleged against a party. The purpose  
of settlement privilege is to promote settlements. The privilege applies even when the  
negotiations have been successful.116 Thus, where a proceeding has been settled out of  
court, no inference can be drawn from this settlement in a subsequent case.117  
[162]The allegations made in the Groupe Arsenault case were dismissed by the court.118  
[163]Thus for these two cases, the motion to strike is well founded as the allegations are  
irrelevant.  
[164]Plaintiffs allege that the allegations with regard to the other three cases are relevant  
for two reasons:  
164.1. First they demonstrate a pattern with regard to Callidus’ ultimate objective;  
164.2. Secondly, they can be useful to demonstrate intentional, malicious or  
vexatious” conduct necessary for the conclusion related to punitive  
damages.  
[165]With regard to the first point, the relevance of similar allegations raised against  
Callidus in other proceedings is minimal at best.  
[166]For one thing allegations in other proceedings are not facts. A lawsuit is a unilateral  
act that has not been submitted to the scrutiny of the court. Mere evidence of the  
existence of a lawsuit - or even several lawsuits - against Callidus (although the alleged  
facts may have some similarity to those alleged in the current proceedings) does not allow  
conclusions to be drawn. There is no indication whether these lawsuits have any merit.119  
115  
Callidus Capital Corporation v. Esco Marine, Inc., 1:2014cv00280 | US District Court for the Southern  
District of Texas | Memorandum and Order denying #141 MOTION to Reopen Case for Purpose of  
Enforcing Settlement Agreement Against Defendant Andrew Levy (January 28, 2020).  
Sable Offshore Energy Inc. v. Ameron International Corp., 2013 SCC 37, paras. 3 and 17.  
116  
117  
Chubb du Canada, Cie d’assurances c. Ste-Foy (Ville), 2000 7681 (QC CA), para. 24; Juneau  
c. Maison de lEspoir Saguenay-Lac St-Jean Inc., [2005] no AZ-50333406 (C.S.), para. 21.  
118  
Groupe Arsenault inc. (Avis d'intention de), 2015 QCCS 898, para. 33.  
Sécurité (La), compagnie d'assurances générales du Canada c. Venmar Ventilation inc., J.E. 2001-468  
119  
(C.S.) para. 29; Petitclerc c. Dubois, J.E. 2000-685 (C.S.), para. 9.  
500-11-059300-208  
PAGE: 32  
The fact that some of the alleged cases have been settled or dismissed supports being  
careful about such allegations.  
[167]Moreover, even if the cases did have merit, the probative value of such evidence is  
limited. To be considered relevant similar facts require the use of a pattern. The number  
of similarities, the time frame, the identity of the protagonists, etc. need to be taken into  
consideration. Here, the alleged cases concern other borrowers, in different industries  
and located, for the most part, in other jurisdictions which have their own legal rules.  
[168]All is a question of context. A creditor is not at fault for exercising security. If this  
option is one that is made available by the lending documents, a bank can seize assets  
or give a notice of taking in payment without incurring liability. Proof of abusive conduct  
in one case does not necessarily make it more likely that abuse took place in another.120  
[169]As the Court of Appeal points out in Poulin c. Groupe Jean Coutu (PJC) inc.:121  
[11] La cause d’action des appelants contre les intimés Coutu repose  
essentiellement sur des actes fautifs commis par ceux-ci à leur endroit, qui leur  
ont causé des dommages. La preuve que ces mêmes intimés ont pu utiliser les  
mêmes tactiques illégales envers d’autres personnes, ailleurs dans la province,  
est étrangère au litige.  
[170]With regard to the second point, it is true that previous conduct is a factor that courts  
can take into consideration when assessing the severity of a fault.122 Repeated conduct  
can also have weight in evaluating the quantum of punitive damages.123  
[171]Thus, viewed in the generous context that applies at this stage, the allegation may  
be relevant.  
[172]However, the main issue in not so much whether the allegations in question could  
be relevant, but rather whether it is justified, in accordance with the principle of  
proportionality, to maintain them for the sole purpose of allowing the Plaintiffs to be able  
to prove similar faults.124 Even in cases where punitive damages125 or a modus  
operendi126 were alleged, courts have not hesitated to strike allegations when the  
probative value of the similar facts was outweighed by the prejudice that would be caused  
120  
9176-8531 Québec inc. c. Quizno's Canada Restaurant Corporation, supra, note 114, para. 22; Juneau  
c. Maison de l'Espoir Saguenay-Lac St-Jean Inc., supra, note 117, para. 9.  
Poulin c. Groupe Jean Coutu (PJC) inc., supra, note 108, para. 11.  
Thomas c. Transport Watson Montréal ltée, supra, note 29, paras. 12 and 13; Petitclerc c. Dubois,  
121  
122  
supra, note 119, para. 5.  
123  
Ébénisterie classique inc. c. Société en commandite Gaz Métro, supra, note 109, paras. 48 and 49;  
Caron c. Clément, supra, note 110, paras. 18 to 20.  
9217-4887 Québec inc. c. Yves Rocher Amérique du Nord inc., supra, note 103, para. 28.  
Juneau c. Maison de l'Espoir Saguenay-Lac St-Jean Inc., supra, note 117, paras. 8 and 10; Poulin c.  
124  
125  
Groupe Jean Coutu (PJC) Inc., supra, note 113, para. 14.  
9176-8531 Québec inc. c. Quizno's Canada Restaurant Corporation, supra, note 114, para. 28; Poulin  
126  
c. Groupe Jean Coutu (PJC) Inc., supra, note 113, para. 18.  
500-11-059300-208  
PAGE: 33  
to the parties, to other litigants or to the judicial system in terms of the costs and delays  
required to deal with the allegations.  
[173]The evidence at issue in the present case is not typical of similar fact evidence  
admitted in other cases. We are not concerned here with similar boating transportation  
accidents127 or misrepresentations preceding the sale of an investment.128 Plaintiffs allege  
the abusive exercise of a contractual right. Bad faith in the exercise of a right requires a  
thorough analysis of the context of each situation before inferences can be drawn. Such  
a thorough analysis undoubtedly takes time.  
[174]For example, to allow the court to fully appreciate the context of Callidus’ conduct  
toward Bluberi, Plaintiffs have filed a proceeding that comprises 357 paragraphs. The  
alleged facts span a period of approximately ten years (2012 to 2022). Thus, one can  
expect that a trial on the issues raised in the Damage Proceedings will take a significant  
amount of time.  
[175]One must assume that a similar amount of time would be required to analyze the  
context of the five other cases alleged by Plaintiffs. There are simply not enough judicial  
resources available to allow Plaintiffs to conduct a trial of five other situations of loan-to-  
own abusive conduct.  
[176]One must also be mindful of the fact that the borrowers in these other cases are not  
parties to the present litigation. They themselves may not appreciate that their case is  
argued in their absence or worse that they may be called to testify on these facts before  
or after they have done so in their own litigation.  
[177]Therefore, the Court will strike the words “the treatment that other borrowers have  
been subjected to by Callidus, which has been the product of” in paragraph 8 as well as  
paragraphs 305, 306 and 307. The striking of these paragraphs entails the striking of  
exhibit P-75 as the motion to institute proceedings no longer contains allegations to  
support them.129  
[178]If any of the alleged lawsuits give rise to judgments against Callidus, Plaintiffs can  
attempt to file the related judgments and the relevance of these decisions can be  
assessed by the trial judge.  
4.3.2 The Allegations with Regard to the Chief Restructuring Officer  
[179]Callidus asks that the following underlined portion of paragraph 283 be struck:  
127  
Thomas c. Transport Watson Montréal ltée, supra, note 29.  
Caron c. Voyer, supra, note 110.  
Centre hospitalier régional du Grand-Portage c. Michaud, J.E. 2004-1917 (C.A.), para. 4.  
128  
129  
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283. The appointment of Pernica was ultimately the result of a compromise, seeing  
as Bluberi was faced with a risk that the Court might be persuaded to appoint  
another CRO, Mr. Scott Sinclair (“Sinclair”), whose candidacy was vigorously  
challenged by Bluberi. Sinclair is a defendant in at least one lawsuit where he is  
alleged to have helped Callidus in its loan-to-own initiative against another  
borrower of Callidus: Alken Basin Drilling Ltd. v. Callidus Capital Corporation, Scott  
Sinclair et al. (Alberta Court of Queen’s Bench, no. 1801-06399), which is  
communicated herewith as Exhibit P-69.  
[180]This allegation relates to the appointment of Mr. Joe Pernica as CRO. Callidus asks  
that the allegation be removed for the same reason it opposed the reference to the other  
lawsuits.  
[181]With regard to paragraph 283, the situation is different. In this paragraph, the Alken  
Basin Drilling proceedings are not alleged as similar fact evidence but rather to explain  
why Bluberi opposed the appointment of a potential CRO. While the relevance of why  
Bluberi opposed the candidacy of Mr. Sinclair is somewhat limited given that he was not  
appointed, keeping the allegation does not require the parties to delve into the merits of  
the Alken Basin Drilling allegations. Indeed, whether they are true or not is not the issue  
as Bluberi simply invokes the allegation to justify its discomfort with the proposed  
appointment of Mr. Sinclair.  
[182]As such, the allegation in paragraph 283 and Exhibit P-69 can remain for the  
purpose of explaining why Bluberi opposed the appointment of Mr. Sinclair.  
4.3.3 The Allegations with Regard to the Legal Proceedings between Craig  
Boyer and Callidus (the “Boyer Proceedings”)  
[183]Defendants seek to strike the following allegations regarding a lawsuit between  
Craig Boyer who was Callidus’ principal representative with Bluberi:  
308. One of the lawsuits against Callidus was actually filed by Craig Boyer, one of  
Bluberi’s point of contacts, who has now left and alleges a series of mistreatments  
and faults in the context of his departure from Callidus, claiming $100,000. Boyer  
alleges that “the management style of [Callidus] is driven by the Chief Executive  
Officer of Catalyst Capital Corporation, Newton Glassman” and that “unfortunately,  
that management style focuses on taking hyper-aggressive positions with third  
parties.” Callidus has countersued for $150,000,000.  
309. The allegations levelled by each of the parties against the other in that lawsuit  
are relevant in the present matter in that they set out that Boyer reported directly  
to Reese; that Boyer resigned from Callidus or that, alternatively, he was dismissed  
for cause for having breached fiduciary duties. Boyer alleges that Callidus’  
counterclaim is “vexatious” and is “raised for ulterior purposes” since Callidus is,  
according to Boyer and other media reports, “subject to multiple complaints and  
regulatory investigations with respect to its material nondisclosure to fund  
members and the public as to the status of its various investments.  
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310. A copy of the claim and counter-claim are communicated en liasse as Exhibit  
P-76.  
[184]Mr. Boyer is mentioned numerous times in the Damage Proceedings. He is referred  
to as Duhamel’s “principal point of contact” (para. 64). He is one of the main actors in the  
dispute between Bluberi and Callidus. There is little doubt that he will be a witness when  
this case comes to trial.  
[185]In view of the allegations made by Bluberi and in view of the allegations made by  
both Boyer and Callidus in the Boyer Proceedings, there is no escaping that allegations  
of the Boyer Proceedings will likely be used to impeach the credibility of Boyer or other  
Callidus witnesses.  
[186]Thus, even if the allegation were struck it would not preclude Defendants from  
establishing grounds of reproach against Mr. Boyer.130 With regard to this allegation, the  
ultimate use of the Boyer Proceedings is best left to the trial judge.  
[187]The motion to strike the allegations in paragraphs 308 to 310 as well as exhibit P-76  
is dismissed.  
4.3.4 The Allegation in paragraph 112  
[188]Defendants wish to have the following underlined part of paragraph 112 struck:  
112. In hindsight, in early August, Callidus was purporting to be prepared to extend  
credit facilities of $24 million, and indeed up to $34 million, despite having an  
appraisal ranging from $12.9 million to $17.8 million. Had Bluberi agreed to allow  
Callidus to retain all excess cash, as Callidus demanded at various points at the  
attempted closings, Callidus would have been in a position to invoke insufficient  
valuation to support the loan any further, thereby provoking a liquidity crisis and  
ultimately Bluberi’s demise very shortly after contracting with Bluberi.  
[189]Defendants allege that the statement is pure speculation and irrelevant.  
[190]It is true that the underlined portion does not add much to the dispute since Callidus  
never retained the excess cash. Nonetheless, the allegation is part of Plaintiffs’ narrative.  
At this stage, prudence dictates that its evaluation be left to the trial judge.  
CONCLUSION  
[191]Defendants’ Motion to dismiss is granted in part.  
[192]The Court dismisses all claims by the Trusts but dismisses Defendantsmotion with  
regard to the other claims.  
130  
Ste-Anne-de-Beaupré (Ville de) c. Hamel, 2007 QCCA 371, paras. 14 and 16.  
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[193]Defendants’ Motion to strike is also granted in part.  
[194]The Court strikes part of paragraph 8, paragraphs 305 to 307 and exhibit P-75.  
[195]The balance of the motion to strike is dismissed.  
[196]Given that each party was partially successful and that the motions were filed late,  
no costs are awarded.  
[197]During a case management hearing held on February 24, 2022, the Court had asked  
the parties to provide a draft protocol which could be approved at the same time as the  
present judgment was rendered.  
[198]At the hearing, the parties rightly observed that they could not foresee when the  
judgment would be rendered and that some of the next steps would be contingent upon  
the ruling on the Defendants’ motions.  
[199]Both parties declared themselves ready to file a protocol within thirty days of the  
judgment.  
[200]The Court will pray act of this undertaking.  
FOR THESE REASONS, THE COURT:  
[201]GRANTS the Motion to dismiss in part;  
[202]DISMISSES the claim with regard to Plaintiffs Fiducie Gérald Duhamel, Fiducie  
Familiale Gérald Duhamel OPCO and Fiducie Familiale Gérald Duhamel HOLDCO;  
[203]ORDERS that the following allegations and exhibits be struck:  
203.1. The underlined portion of paragraph 8:  
8. Although the Plaintiffs did not know it at the time, the behaviour described  
above is consistent with the treatment that other borrowers have been  
subjected to by Callidus, which has been the product of what can be  
described as a "loan-to-own” strategy.  
203.2. Paragraphs 305, 306 and 307;  
203.3. Exhibit P-75;  
[204]PRAYS ACT of the parties undertaking to file a complimentary case protocol setting  
a fixed schedule for any remaining pre-trial matters before June 30, 2022;  
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[205]THE WHOLE, without legal costs.  
__________________________________  
MARTIN F. SHEEHAN, J.S.C..  
Mtre Christian Lachance  
Mtre Léon Moubayed  
Mtre Amélie Lehouillier  
DAVIES WARD PHILLIPS & VINEBERG S.E.N.C.R.L, S.R.L.  
Counsel of the Plaintiffs  
Mtre Billy Katelanos  
Mtre Geneviève Cloutier  
Mtre Mary-Pier Marcheterre  
Mtre Samuel Maheu Savard  
GOWLING WLG (CANADA) S.E.N.C.R.L., S.R.L.  
Counsel of the Defendants  
Hearing dates:  
April 20 and 21, 2022  



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