Executive Summary: Key Legal and Evidentiary Issues

• The plaintiff accused a former employee and business partner of unlawfully taking a complete client list and sought $31,500 in damages.

• The defendant counterclaimed for $63,897.28 in unpaid commissions, business expenses, and moral/reputational damages.

• The court examined whether a letter of intent created enforceable rights and obligations regarding business structure, client ownership, and compensation.

• The plaintiff failed to prove that the client list was confidential, complete, or proprietary, and could not establish any quantifiable damages.

• The court rejected claims of defamation and abuse of process due to insufficient evidence of malice or recklessness.

• The defendant was awarded a partial amount of $4,895.93 for unpaid commissions and expenses, while all other claims were dismissed.

Facts of the case

In 9384-5709 Québec inc. c. Marchand, 2025 QCCQ 2122, the plaintiff, a travel agency operating under the name Voyage Vasco Rive-Nord (VVRN), sued Isabel Marchand, a former employee and business partner, for $31,500 in damages. The company alleged that Marchand misappropriated its entire client list shortly before resigning. Marchand, who operated her own agency, Voyage Vasco Ste-Agathe (VVSA), counterclaimed for $63,897.28, including unpaid commissions, reimbursement of expenses, and compensation for moral and reputational harm.

In 2020, both parties signed a letter of intent outlining a phased integration project. Phase 1 allowed VVSA to operate as a branch of VVRN to avoid license renewal costs, while Phase 2 envisioned forming a cooperative of agencies. However, Phase 2 was never formalized: no shareholder agreement was signed, and no shares were issued to Marchand. Despite this, Marchand began working under the VVRN umbrella and transferred some of her operations into VVRN’s system.

The court’s analysis and findings

The central dispute involved whether Marchand unlawfully took confidential data. The plaintiff claimed she downloaded the full client list (“Passagers.xls”) from VVRN’s system and shared it with third parties. Marchand admitted to downloading client data but asserted that it pertained only to her Ste-Agathe clientele and that the letter of intent explicitly allowed her to retain her clients if the partnership ended.

The court reviewed testimony and documents, finding that the list contained only Ste-Agathe clients (marked “AGA”) and not clients from VVRN’s Blainville location. The court also emphasized that Marchand had contractual grounds to retain her client information upon departure. As a result, the claim of data theft was dismissed. Additionally, VVRN failed to establish actual losses, with no financial documents or persuasive testimony to support its alleged damages.

Marchand’s counterclaim included unpaid commissions, expenses, and a claim to dividends. The court ruled she was owed $4,600.34 in commissions and $295.59 for unreimbursed expenses. Claims for dividends were dismissed because she was never formally recognized as a shareholder. Similarly, her claim for $10,000 in reputational damages was rejected; although the plaintiff’s cease-and-desist letter was strongly worded, it was found to be a reasonable protective measure, not defamatory. The court also declined to find that VVRN’s lawsuit constituted abuse of process, stating that while the claim failed, it was not malicious or reckless.

Outcome

The Court of Québec dismissed the plaintiff’s $31,500 claim in its entirety, finding that it failed to prove any confidential information was taken or that damages were sustained. The court accepted in part the defendant’s counterclaim, awarding her a total of $4,895.93—comprising $4,600.34 in unpaid commissions and $295.59 in unreimbursed expenses—along with legal interest and the additional indemnity provided under the Civil Code of Québec, starting from October 23, 2022. However, the court rejected the remainder of her claims, including the demand for dividends, $10,000 in moral and reputational damages, and the allegation of abuse of process. The plaintiff was also ordered to pay the legal costs of the proceeding.