Executive Summary: Key Legal and Evidentiary Issues

• Dispute over conflict of interest arising from a lawyer’s past involvement with both parties in a failed franchise project.

• The lawyer allegedly received confidential information while incorporating the plaintiff company and advising its principal.

• Central question of whether the lawyer’s past role created a presumption of access to relevant confidential information.

• The lawyer and his firm denied extensive involvement, claiming their role was limited to basic incorporation services.

• Tribunal analyzed whether confidential information could be used to the detriment of the former client in ongoing litigation.

• Disqualification granted to preserve the integrity of justice and uphold ethical standards in legal representation.

Background and commercial context

9441-1170 Québec inc. brought legal action against 9413-9862 Québec inc. (Wagram Finances Canada) in connection with a failed attempt to operate a Columbus Café franchise in Montreal. Arthur Le Doujet, a French national and president of 9441 inc., intended to immigrate to Quebec with his partner to invest in the franchise. On the recommendation of Maxime Mayant, vice-president of 9413 inc., Mr. Le Doujet retained Me Arnaud Fraticelli to incorporate 9441 inc. for the project.

A deposit of $42,431.36 was paid by 9441 inc. to 9413 inc. for the lease of the commercial space. However, due to immigration delays, the franchise was temporarily operated by a new entity, 9446-7370 Québec inc., allegedly set up by 9413 inc. The couple eventually ceased operating the franchise, and 9413 inc. continued it through another entity. 9441 inc. then sued to recover the deposit and additional damages.

The disqualification motion

The focus of this decision is not on the merits of the reimbursement claim but on a motion filed by 9441 inc. to disqualify Me Fraticelli and his law firm from representing 9413 inc. The plaintiff alleged that Me Fraticelli had acted as Mr. Le Doujet’s personal lawyer, incorporated 9441 inc., advised on the franchise project, and had knowledge of confidential information, including personal and strategic details related to the investment and immigration. It was further argued that Me Fraticelli had participated in discussions concerning the setup and structuring of the franchise and the companies involved.

Me Fraticelli denied these allegations, stating he only performed basic corporate services and did not provide legal advice on immigration or franchise matters. He also denied any knowledge of confidential information and rejected any personal legal relationship with Mr. Le Doujet beyond the incorporation task.

Legal framework and tribunal’s reasoning

The tribunal analyzed the request under article 193 of the Code of Civil Procedure and articles 87 and 88 of the Code of Ethics of Lawyers. The court emphasized that when an attorney has previously represented a party and then acts against that party in a related matter, a presumption of access to confidential information arises if there is a sufficient connection between the mandates.

The court found that there was indeed a close link between the services Me Fraticelli provided to Mr. Le Doujet and the subject of the present dispute. It accepted that Mr. Le Doujet shared sensitive information about his investment plans, motivations, and immigration-related challenges with Me Fraticelli, even if not explicitly required for incorporation. The tribunal noted that the lawyer’s involvement in constituting related corporations and managing parts of the franchise plan further deepened the connection.

The lack of transparency in billing records, absence of documentary evidence to disprove the plaintiff’s claims, and inconsistent recollections regarding meetings and email exchanges weakened Me Fraticelli’s position. The tribunal was particularly concerned about the appearance of fairness and the risk that confidential information might be used, even inadvertently, to the plaintiff’s detriment.

Decision and outcome

The court granted the motion to disqualify Me Arnaud Fraticelli and his firm, Leroux, Côté, Burrogano, from continuing to represent 9413 inc. in this case. It concluded that the risk of prejudice, the potential breach of confidentiality, and the need to preserve the integrity of the judicial process warranted their removal. 9413 inc. was ordered to appoint new counsel by September 13, 2025. Costs were awarded to the plaintiff.