Eric Lalanne

In this appeal, the Court considered whether a creditor’s unsuccessful seizure attempt still interrupts the 10-year extinctive prescription period for rights resulting from a judgment under Quebec civil law.

The Court held that filing and serving a notice of execution under the Code of Civil Procedure forms part of the judicial application for seizure and is sufficient to interrupt prescription under art. 2892 C.C.Q. even if no property is ultimately seized.

Because the seizure proceedings were suspended by a bailiff rather than dismissed by a court, art. 2894 C.C.Q. did not retroactively cancel the interruption.

The debtor’s prescription defence therefore failed.

This appeal addressed whether acquisitive prescription of an immovable, once completed by effective possession, can be set up against a subsequent purchaser whose title is published before the possessor seeks judgment.

The majority held that Quebec's publication regime remains primarily declarative and does not displace rights already acquired by prescription.

It concluded the judicial application under art. 2918 C.C.Q. serves to recognize pre-existing ownership rather than constitutively create it for priority purposes in this context.

Because the respondent's possession was peaceful, continuous, public, and unequivocal for the required period, her prescriptive right prevailed over the appellants' later registered title.

The appeal was dismissed, with a dissent treating judgment as constitutive and non-retroactive.

The trustee in bankruptcy of a wholly-owned subsidiary sued the directors of the subsidiary, alleging they breached their fiduciary duty and duty of care under the Canada Business Corporations Act by implementing a joint inventory procurement policy that favoured the parent company to the detriment of the subsidiary's creditors.

The Supreme Court of Canada held that directors owe a fiduciary duty to the corporation, not to its creditors, even when the corporation is in the vicinity of insolvency.

The Court also held that while directors owe a duty of care to creditors, the directors' actions in this case were reasonable business decisions protected by the business judgment rule.

The trustee's claim under the Bankruptcy and Insolvency Act for reviewable transactions was also dismissed.