Executive Summary: Key Legal and Evidentiary Issues

• The dispute arose from a tenant’s refusal to pay disputed portions of commercial rent, depositing the funds in trust instead.

• The landlord sought a safeguard order compelling full payment of rent and arrears pending final judgment.

• The trial judge denied the safeguard order due to lack of evidence of serious or irreparable harm or urgency.

• MLC Investments appealed, requesting leave under article 31(2) of Quebec’s Code of Civil Procedure.

• The Court of Appeal emphasized the high threshold for appealing interim decisions, especially safeguard orders.

• Leave to appeal was denied as the lower court's reasoning was deemed reasonable and no urgent prejudice was demonstrated.

Background and facts of the case

In this Quebec commercial leasing dispute, MLC Investments Inc. (the landlord) applied for a safeguard order against its tenant, the Institut de recherche Robert-Sauvé en santé et sécurité du travail (IRSST), which leases space in a building owned by MLC. The conflict centers around the calculation and payment of operating expenses under their lease agreement. Starting in November 2022, IRSST refused to pay certain increases and adjustments to the operating costs for the years 2021–2023. Instead of paying those sums to MLC, the tenant deposited them monthly into its lawyers’ trust account, pending resolution of the disagreement.

In October 2024, MLC Investments filed a motion for a safeguard order in the Superior Court, seeking an order compelling IRSST to remit all withheld amounts immediately and to pay full rent moving forward without withholding any portion. The Superior Court, presided over by Justice Simon Chamberland, denied the motion on February 28, 2025, finding no proof of serious or irreparable harm or urgency justifying interim relief.

Procedural context and legal framework

MLC then sought leave to appeal the decision under article 31(2) of Quebec’s Code of Civil Procedure (C.p.c.), which requires that leave be granted by a judge of the Court of Appeal when the decision is interlocutory—such as a ruling on a safeguard order. The applicable standard requires the applicant to show: (1) that the judgment causes irreparable harm or partially disposes of the dispute, (2) that the judgment appears to be erroneous in a way that could warrant intervention, and (3) that granting leave is in the interests of justice and respects proportionality.

The Court of Appeal reiterated that appeals of safeguard orders are rarely granted, especially due to their temporary and discretionary nature. The case law establishes that only exceptional circumstances—such as urgent and irreparable harm or a clear and compelling error—will justify appellate intervention at this stage.

Reasons for decision and outcome

Justice Stephen W. Hamilton, writing for the Court of Appeal, reviewed the lower court's findings and upheld them as reasonable and supported by the evidence. The trial judge had noted that the withheld amount represented only 6.56% of the total rent and that MLC had not demonstrated that this relatively minor shortfall jeopardized its economic viability or caused irreparable harm. Notably, MLC admitted in court that its viability was not threatened. Furthermore, the disputed sums were safely held in a trust account, so there was no realistic risk of non-recovery at a later stage.

The Court also emphasized that MLC had waited nearly two years to bring its safeguard motion, undermining its claim of urgency. In the absence of compelling evidence of serious or irreparable prejudice, and given that the case could proceed to a final judgment where monetary relief could be ordered if warranted, the Court held that appellate intervention was not justified.

Conclusion

The motion for leave to appeal was dismissed with costs against MLC Investments. The ruling underscores the cautious approach Quebec courts take in reviewing discretionary, interim procedural rulings, particularly in landlord-tenant financial disputes. Parties must clearly establish both harm and legal error to obtain early appellate intervention.